chapter  8
18 Pages


On a rollercoaster of regulatory change – risks and uncertainties associated with renewable energy transitions
WithAlevgul H. Sorman, Cristina Pizarro-Irizar, Xaquín García-Muros, Mikel González-Eguino, Iñaki Arto

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Renewable energy in Spain has been promoted under a changing regulatory framework since the early 2000s. During the greatest renewable expansion period, from 2004 until 2013, renewable energy in Spain was supported by a combined system of tariffs and premiums. This scheme included payments, differentiated by technology, for the renewable electricity delivered to the grid stimulating the Spanish renewable energy sector. However, the income of the electricity system was not able to compensate for the growing regulatory costs, among other factors. This led to a profound energy reform including the gradual phase out of tariffs and premiums, and the enactment of a new remuneration scheme for renewable energy from 2014 onwards. The new law introduced retroactive measures which not only increased the risk of not achieving the climate policy targets but also reduced the legal certainty of the sector, jeopardising future investments. Moreover, the retroactive cuts of renewable energy sources resulted in over 25 cases brought to the International Centre for Settlement of Investment Disputes. Spain has lost its first international court case. In this chapter, the authors provide a comprehensive review of past and existing regulations on renewable energy in Spain, plus insights from an elaborate stakeholder engagement process based on in-depth interviews and surveys of over 200 respondents. Risks and uncertainties related to the overall political panorama and changes in the regulatory framework are explored. These factors are thereafter connected to rising energy justice concerns in terms of procedural, recognition, distributional, and restorative components. Subsequently, low-carbon pathways and policy mixes per sector, covering transport, building, and industry, are narrated through stakeholder perceptions in support of the elaboration of the Climate Change and Energy Transition Law of Spain.