Support to polluting plants may breach EU state aid rules, warns think-tank IEEFA
Spain is propping up old coal and gas-fired power plants with payments for staying open, regardless of how much they generate.
The support, worth €1 billion a year, is a needless burden on consumers, according to a report from the Institute for Energy Economics and Financial Analysis (IEEFA).
It is likely to fall foul of EU state aid guidelines issued earlier this month, author Gerard Wynn told Climate Home.
Following an inquiry into “capacity mechanisms” being brought in by a dozen member states, the European Commission warned they must not be used as “backdoor subsidies” for fossil fuels.
“The Spain scheme fails almost the entire check list of criteria the Commission uses for judging whether a capacity mechanism is necessary, or is instead a scheme for propping up favoured industries,” said Wynn.
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After a period of political instability, Mariano Rajoy in October returned as Spain’s prime minister, leading a minority government. Alvaro Placed leads the energy department, which did not respond to a request for comment.