EXPRESS #4 - October 30, 2018
“Spain has scrapped a tax widely criticised for undermining solar power in Europe’s sunniest country, in the latest energy policy reversal by the country’s new socialist government which has also dimmed the outlook for coal power”, writes analyst Gerard Wynn in an article for the Institute for Energy Economics and Financial Analysis (IEEFA).
According to Wynn, “The full scale of the new government’s plans will be revealed by the delayed publication of a draft climate change and energy transition law, expected in early November, and the government’s forthcoming National Energy and Climate Plan.”
He notes that “the new energy outlook in Spain is being driven by Teresa Ribera, the government’s minister for ecological transition, a new position that merges energy and environmental policy. Since taking office after the Spanish Socialist Workers’ Party won last June’s election, Ribera has moved quickly to overturn a number of the previous government’s policies.”
“First, Spain switched sides in a European Union debate on the ambition of new EU renewable energy targets. Previously, the government had aligned with Poland against more ambitious targets, but Ribera pushed for a renewables target of more than 30% of energy use in 2030. In the end, the EU adopted a goal of 32%.”
The decision to scrap the solar tax “underlines the government’s support for renewables and should boost the country’s long-suffering solar energy industry.”
Under the tax, “all new and existing solar systems bigger than 10kW had to pay a generation charge, even when the electricity was consumed on site, and all rooftop installation projects faced prohibitive red tape”, notes Wynn. “As well as scrapping the tax, the new decree simplified the technical and administrative requirements for installing small-scale renewables.”
Next, says Wynn, “Ribera may turn her attention to coal, where the government has already made some significant moves. In June, Ribera hinted at a Spanish coal phaseout, mentioning a 2025 date proposed by a panel advising the government. Then, in September, Spain flipped from opposing an EU ban on state aid for coal power plants under so-called capacity markets to supporting such a ban.”
He notes that “Indicating the scale of the reversal, Spain’s previous government had proposed a veto on coal power plant closures, apparently to prevent Spanish utility Iberdrola from closing its last two remaining coal power plants. That proposal was recently dropped, after failing to win a majority in Parliament.”
“The new government has doubled down on an expected end to coal mining, under a longstanding EU policy to end mining subsidies. On Wednesday, the government signed a “just transition” agreement with the mining regions of Spain, which would see all mines in Asturias, Aragon, Castilla and Leon close by the end of this year.”
Belgium, meanwhile, is still frantically trying to find new electricity sources to make up for its expected power capacity shortage which could hit the country early in November as a result of the problems at its nuclear power stations. Six of the country’s seven nuclear power stations are not operating at the moment.
Belgian media report that Belgium has signed an agreement with Germany for the supply of additional power. However, Belgium and Germany have no direct interconnection (the first cross-border connection is expected to be ready in 2020), so the electricity would have to be transported through the Netherlands, Luxemburg or France.
Engie, Belgium’s largest electricity producer, has signed an agreement with chemical company Bayer, which could make its CHP plant in Antwerp available if shortages arise. Engie will also re-start its gas power stations in Vilvoorde and Genk-Langerlo, which were both about to be torn down. Each has a capacity of 44 MW. Altogether, Engie has now found cover for 485 MW of the 750 MW of expected capacity shortage.
Remarkably, Belgium in October also signed a cooperation agreement in nuclear energy with China.
The agreement was one of several accords signed in Brussels on 17 October during a meeting between Chinese Premier Li Keqiang and Belgian Prime Minister Charles Michel.
“Li said the two countries could boost cooperation in technology and innovation and expand nuclear cooperation on the basis of abiding by international laws and meeting international obligations,” China’s Ministry of Foreign Affairs said in a statement. “The two countries can deepen practical cooperation in infrastructure development and the digital economy while actively exploring third-party market cooperation.”
Since Belgium plans to shut all its nuclear power stations by 2025, such an agreement would seem to be not very useful. Unless of course the Belgian government changes its mind …