“The goal is to rationalize the cost structure of the electricity system, so not just the consumers contribute to resolving the problem of the tariff deficit,” Industry Minister Miguel Sebastian said after the weekly cabinet meeting.
The green energy initiative was one of the largest in the world, with subsides paid to green energy providers. The subsidies were so generous, that it paid to have diesel generators run lights to power the solar farms at night, in one case. The program is one of the major economic issues facing Spain, as its economy is bankrupted, its people are unemployeed and its government in long term payments to green energy providers.
“From a macroeconomic point of view Iberdrola hopes the application of these measures helps to return confidence to the Spanish economy as it deals with one of the pending structural reforms,” the company said.
Spanish utilities currently have 16 Billion in debt on their books, which is backed by the nation of Spain for these energy programs. These funds are going to be competing with government issued debt for funding in the future, as they are guarantied by the government as sovereign debt.