Spanish reform to deliver further blows

SPAIN: Spain's wind sector predicts "a torrent of financial problems" following Friday's approval of the Spanish government's power sector law, retroactively slashing returns on wind power generation.

The law eliminates the support mechanisms, across all renewables sectors, that have attracted long-term investments since 1999.

Details are yet to emerge on new pay mechanisms, but the government stated on Friday that further retroactive cuts would be made.

Wind generators are already stretched to the limit, claimed wind association AEE. The organisation isengaged in a legal battle with the government against February's retroactive changes to wind sales mechanisms.

The reform also comes on top of the 7% tax clamped on all power generation introduced in December 2012. This year alone, AEE calculates the government's "tremendously unfair" retroactive tampering to have cost wind operators EUR 255 million.

AEE has long-since warned that these austerity measures could push operators to default on loans. It said the new measures will undoubtedly pass the burden of Spain's EUR 26 billion electricity sector deficit on to the country's cash-strapped banks.

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