European Commission supports Spanish subsidies for coal-fired power

Citation

(2011), "European Commission supports Spanish subsidies for coal-fired power", Management of Environmental Quality, Vol. 22 No. 1. https://doi.org/10.1108/meq.2011.08322aab.003

European Commission supports Spanish subsidies for coal-fired power

Article Type: News From: Management of Environmental Quality: An International Journal, Volume 22, Issue 1

The European Commission has approved Spanish subsidies for electricity producers using domestic coal. The state aid, intended to support struggling coal mining firms in Spain, will end in December 2014. The Spanish measure was announced in February 2010. The government cited the increased production of wind and hydropower and a drop in electricity demand as reasons for low domestic coal sales. Foreign coal imports are also cheaper.

The commission says that Spain complies with EU state aid rules, which allow member states to subsidise power production from domestic fuels to ensure the security of energy supplies if they are below 15 per cent of electricity use. The subsidies would affect around 9 per cent of consumption, says the commission. The measure will not result in over-compensating electricity generators, it adds. It agrees with Spain that because its high share of renewable energy supply is highly intermittent, it is important to maintain a domestic fossil fuel supply. Spain has promised the scheme will not go beyond 2014.