A Solar Bubble in Spain?
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- Aug 21, 2019 11:41 pm GMT
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Spain is set to finish 1st in solar installations among E.U. countries this year. In 2019, the Mediterranean nation is projected to put up 4 gigawatts, up from just 288 megawatts last year. The sudden influx of solar investment was brought on by the success of the center left’s (Spanish Socialist Workers' Party (Partido Socialista Obrero Español, or PSOE)) success in the most recent elections. PSOE, unlike the the center-right PP that held power before, is decidedly pro-renewables.
Despite initial enthusiasm about the revitalization of Spain’s long dormant renewables landscape, regulators are now worried about a bubble. By this past June, the national grid regulator had gotten applications that amounted to 196 gigawatts of capacity since January, meaning the the demanded capacity is going up 15 gigawatts a month. To give you some idea of scale, Spain’s national energy consumption has never exceeded 45.5 gigawatts.
This sudden frenzy recalls problems Spain had with solar investment last decade. You see, back in 2007, a very generous feed-in tariff was passed that led to tons of investment in solar. So much so, in fact, that a bubble formed, ultimately compounding the public debt crisis following the global financial melt-down. Retroactive cuts were made to correct the bubble, but the industry all but flat lined until this year as a result.
Fearing another meltdown, the country’s energy regulator has made moves to tighten PV plant grid connection rules. For example, developers who can’t meet tight schedule requirements will have 6 months to renounce their projects if they want to get their deposits back. What’s more, they will also have to present environmental impact projections and 48 months to get authorization.
Spain has crawled at a painfully slow pace back from the depths of 2008’s financial crisis. I’d hate to see their hard earned growth curtailed by a solar bust.