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Act Released on a New Energy Generation Tax

Again bad news for the energy sector. On December 27th the law 15/2012 on tax for energy sustainability was passed. In short, the Act introduces a new tax of 7% for any type of power generator, independently if it is in special or ordinary regime.

This measure, combined with earlier ones, remembering RDL 14/2010 establishing the hour limit for the regulated photovoltaic tariff as well as establishing a grid access toll (irrespective of if you had to finance the evacuation facilities for the distributor) and RDL 12/2012 concerning the expense limit for financing companies, do nothing but harm investments that were realized since 2005 in Spain.

aBalados as asset manager and technical advisor for financial institutions and foreign investment funds, can only deplore these measures as besides altering the activity and the spirit of the business in the  long term, the legal uncertainty in Spain makes it in the short run scarcely possible to recover. It seems investors will consider in the future if investing in a country which in a little over four years changed the regulatory framework frequently and worse, retroactively.

Hopefully, the future will bring better news.