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Spain’s government offered mixed news for the energy sector on Wednesday, as it extended the maximum period needed to gather all permits for new renewables by three years, but also told the high-income earners in the energy industry they would have to pay the windfall tax for another year.
At its last cabinet meeting of the year, the government approved a proposal by the ministry for the ecological transition to relax the permitting timetable established in June 2020, which set nearly impossible deadlines for renewable energy permits that had to be extended twice since then.
Wednesday’s measure modifies the June 2020 law by giving renewable energy developers six more months to obtain the construction permit for their project. When the previously approved extraordinary extensions are added, namely more time to obtain the environmental licence, developers have up to 49 months to get the construction permit.
The countdown starts from the date the grid access permit was granted during a two-and-a-half-year window before the June 2020 law entered into force.
The deadline to obtain the final permit, the power plant operation licence, was also extended, so the maximum period to collect all permits now stretches to eight years instead of five. The maximum total permitting period for offshore wind and pumped hydro projects is nine years, the Spanish ministry for the ecological transition said.
Spain’s solar photovoltaic sector association Unef welcomed the decision, saying that, thanks to the extension, developers will have more time to secure funding and to deliver the projects at the highest possible social and environmental standard.
Among the slew of measures the government adopted, balancing between fostering renewables and supporting vulnerable citizens amid inflation and high energy costs, was the decision to not let the windfall tax on energy companies expire at the end of the current year.
Large energy companies, including those in the renewables sector, will face another year of the unpopular tax on revenues exceeding EUR 1 billion (USD 1.11bn). The temporary 1.2% levy, initially targeted at 2022 and 2023 revenues, will now cover 2024 takings as well.
The energy sector was given a small relief in the form of tax deduction for strategic investments in renewables-related industrial and decarbonisation projects, a tax adjustment that Spanish Prime Minister Pedro Sanchez announced in a TV interview earlier this month.
(EUR 1.0 = USD 1.111)
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