Rajoy gov’t loses another renewables arbitration case

Solar panels in Zaragoza. Photo: Fernando Tomás / Wikimedia Commons

► Panel orders Spain to pay €53mn to NovEnergia over solar energy changes ►

The Partido Popular (PP) government of President Mariano Rajoy has suffered a second loss in international abitration over its unilateral decision in 2013 to change the terms of Spain’s purchase of electricity from producers of renewable energy.

The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) has ordered Spain to pay the Luxembourg-based NovEnergia solar energy company 53 million euros in damages for losses sustained as a result of changes made by the government in policies relating to the pricing and purchase of solar energy for distribution on Spain’s electricity grid.

The ruling follows a similar decision in May 2017 by the World Bank’s Washington-based International Center for Settlement of Investment Disputes (ICSID), which ordered the Rajoy government to pay 128 million euros compensation to the energy company Eiser for losses incurred as a result of the government’s unilateral cuts to solar energy purchases during the same period, despite Spain’s binding commitments under the 1994 Energy Charter Treaty governing cross-border investment in energy projects.

► Click to read more news about Renewable Energy in Spain …

In the most-recent decision, the SCC arbitration panel said NovEnergia, which built and operates photovoltaic plants in Castilla-La Mancha, Extremadura, Murcia and Catalonia, saw its energy sales fall from 24-32 percent during the years 2013-2016 as a result of Spain’s decision to cutback on solar energy purchases, effectively changing the terms under which it had previously agreed to purchase solar-generated electricity. The SCC said the result was “a substantial deprivation of the plaintiff’s investment due to the drastic and unexpected actions of the Kingdom of Spain”.

In addition to the 53 million euros compensation, Spain must also pay costs and interest of 1.5 percent from the date of the claim’s filing until the full amount is settled. Spain is believed to currently face nearly 40 additional lawsuits from solar energy companies claiming similar damages, with the total amount being demanded by the companies estimated at 7 billion euros.

► Read More in Spanish at El Confidencial, Diario Sur and Noticias de Navarra …