warm colour spanish peaks hillside

Spain’s funding of power plants faces legal challenge

Spain’s been reported to the European Commission over hundreds of millions of Euros in allegedly unlawful subsidies given to power plants.

With the support of ClientEarth, Spanish organisations IIDMA and Px1NME have submitted a complaint to the Commission about unlawful State aid under two capacity mechanisms – amounting to around €700 million per year.

The capacity mechanisms are paid for by every consumer to guarantee electricity supply even at times of peak demand.

IIDMA director Ana Barreira said: “These capacity mechanisms breach EU State aid law on multiple grounds: there is no common interest objective, the aid is disproportionate and there is no need for state intervention, among other reasons. Why should we pay these extra costs in our electricity bill?”

Are capacity mechanism payments justified?

Capacity mechanisms in Spain are among the largest and most expensive in Europe. According to this complaint, this State aid is not justified to cover Spain’s electricity demand.

Piet Holtrop, lawyer for Px1NME, said: “Despite the overcapacity of electricity generation in Spain, the owners of coal and gas plants have unduly received multi-million Euro subsidies since 1997.”

Renewable energy is excluded by law from receiving this kind of aid, which exclusively benefits the most polluting technologies.

The Spanish government also failed to notify the European Commission about the aid to gain the necessary approval.

If the Commission finds the aid is unlawful, the electricity companies will have to pay back more than €3 billion, the amount received between 2011 and 2015, according to the Comisión Nacional de los Mercados y la Competencia (CNMC).

Share this...
Share on Facebook! Tweet this! Share on LinkedIn! Email!

Rafael Ibáñez Fernández

Related articles

More from

  • Logs

    European Parliament votes to burn wood unsustainably

    The European Parliament failed today to set more ambitious rules dictating how wood is burned for energy in the EU.

  • Image shows electricity pylons at sunset

    UK renewables investment plunges

    Investment in renewable energy production in the UK has dropped dramatically for a second consecutive year. The government must improve the legal framework for renewables.

  • hazy-grey-sky-smokestacks

    Bulgaria’s move to overturn EU pollution laws a “terrible political signal”

    The Bulgarian government is doubling down on its efforts to shirk environmental responsibility.

  • violet sky countryside stile

    We must make sure UK coal phaseout does not mean gas lock-in

    UK Government’s coal phaseout plans risk seeing natural gas rush to fill coal’s shoes.

  • Follow us

    You can help

    Your support helps us use the law to protect your environment.