Spanish Senate backs 7 per cent tax on power production

• 11 years ago (2012-12-15)
• David Flin

Europe 1061 Renewables 751

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Spain’s Senate has approved a reform of its energy sector that includes a 7 per cent tax on electricity generation that is likely to cost power producers hundreds of millions of euros.

The majority Popular Party of Prime Minister Mariano Rajoy pushed through an amendment to the legislation that increases the levy to 7 per cent from the 6 per cent that had originally been proposed. The government said that the levy is needed to address Spain’s tariff deficit. Spain’s energy system has amassed a €25 billion deficit because the government has not allowed utilities to charge consumers the full price of electricity.

The Spanish wind energy association, AEE, said that at the higher rate, the new tax would hit the sector by about €300 million annually. Senator Jesus Alique from the opposition Socialists described the new tax as “confiscatory.”

Spain’s lower house, Congress, will vote next week on whether to give its final approval to the higher rate for the new generation tax, which would start on 1 January, 2013.