Solar Thermal Takes Step Back in Spain
I don’t track every political decision around the world with respect to renewables, but here’s an event that I guess I should have seen coming: the reduction in beneficial feed-in tariffs for concentrated solar power (CSP, aka solar thermal) coming out of Spain.
Each region of the world has its own issues, and as Europe struggles with its debt crisis, one can expect changes in policy that favor low-cost electricity, regardless of its source. Looks like Spain, which for a long while led the charge to solar energy, has taken a regrettable step backwards.
The issue with Spain is not one of reducing the incentives for renewable energy – is entirely understandable given the country’s financial position, rather it is one of going back on existing agreements!
The Spanish government has repeatedly got itself into difficulties by attempting to reduce agreed contracted payments for existing projects!
It simply is not on to make such retrospective changes, and as a result the Spanish government has been subject to court actions in the European courts. What’s more, after one proposal, the financial markets made it clear that such a retrospective reduction in contracted payments for existing plant would be seen as tantamount to the state defaulting on its national debt!
Regarding future potential, provided that confidence can be maintained – which is potentially doubtful, there is huge potential for photovoltaic solar power in Spain as generation cost is now able to directly compete with other sources of power – as a result of which, there is a pipeline of 37.5 GW of capacity currently applied (admittedly much will probably never get built) this in spite of there no longer being any incentives for new solar power!