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Renewable energy subsidy cuts rattle Spain’s wind energy businesses

Story by Ian Debevoise

Until now, wind power has been a success story like few others in this country.

Turbines meander over hilltops and through fields. They can be seen in the same frame as a crumbling castle on the southeast coast of Valencia. They’ve even been proposed as part of a large wind farm off the shore of the Atlantic Ocean, on the site of the famous 1805 Battle of Trafalgar.

But advocates and industry leaders fear that political decisions brought on by the country’s struggling economy could slow progress considerably only a year after wind power was rated Spain’s top energy source.

The Spanish government announced it would be cutting subsidies for renewable energy from 8.77 billion euros or $11.9 billion in 2010 to 7.63 billion euros, or $10.4 billion. This, as the country tries to meet goals set for 2020 as part of the Climate and Energy Package, which the EU approved in 2007. The package aims to reduce greenhouse gas emissions by increasing the amount of energy from renewable resources.

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