Thursday, 22 February 2018
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A report from S&P Global Ratings by Gonzalo Cantabrana Fernandez and Massimo Schiavo shows how the reduction of subsidies for new renewables in Spain may open up for a new era for renewables.
Subsidies for renewable energy have amongst other, been a mechanism to overcome the large investment costs relative to the available remuneration from power prices. With the fall in production costs across the supply chain and the increasing scale of production, new renewables are becoming more competitive compared to alternatives.
As a result, governments are now structuring auctions with lower subsidy rates. Spain has taken this one step further and awarded 8.7 GW of new renewables in 2016 and 2017 that may not receive any government subsidies.
“We see the shift from a subsidy-based remu...