A group of investors in solar power has hired lawyers to study the possibility of filing an international lawsuit against Spain after Congress on Thursday approved a law that cuts subsidies for alternative energy technologies.
The investors charge that Spain’s back-peddling on its push toward green power will break the terms of the 13 billion euros in contracts they have already signed.
Changes to the government’s subsidy policies were considered necessary to help push down the accumulated 28-billion-euro deficit in the electricity tariff system, said Industry and Energy Minister José Manuel Soria. For years, the government held down electricity prices to a level that didn’t cover the real costs of production, including renewable premiums.
Allen & Overy, an international business law firm, told Reuters that it is representing a group of solar-plant investors that could file a suit against Spain under the terms of the international Energy Charter Treaty. In July, a group of 11 investors sent a letter to Prime Minister Mariano Rajoy to protest his administration’s energy reforms.
“International investment funds are consulting with legal advisors on how to proceed with action,” said Luis Crespo, secretary general of the Spanish solar thermal association. “There will be various lawsuits.”
Drawn to generous subsidies during a decade-long economic boom, foreign investors poured money into wind and solar projects.
One leading investor, who is studying possible claims and asked to remain anonymous, said: “I don't know why anyone would put another penny in investment into the sector in Spain.”