Iberdrola hardens its pulse with the Government with the paralysis of renewable projects

Iberdrola has decided to halt the bidding processes underway for goods and services associated with the construction of new renewable projects in Spain until the economic viability of these projects is assessed in detail following the shock plan approved by the Government to reduce the price of electricity. This is what the company indicates in a communication made to suppliers involved in renewable tender processes in Spain to which Europa Press had access.

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It is not the first movement against the policies of reducing the electricity bill that has launched the Executive of Pedro Sanchez. The electricity companies, through the lobby Foro Nuclear, had already launched the threat of “cessation of activity of the nuclear park if the draft Law of CO2 goes ahead in the terms proposed” because, he says, leads to losses to the reactors, which provide 20% of electricity.

The company chaired by Ignacio Sánchez Galán is grateful for the participation of the companies that have submitted tenders for the different projects and assures that it will inform them of any decision taken in relation to these tenders. This communication has excluded projects that have a recognized remuneration framework through renewable auctions.

This decision by Iberdrola is the result of an initial analysis of the impact of Royal Decree Law 17/2021 on the profitability of renewable facilities.

The reduction of VAT to 10%, the suspension of the 7% tax on electricity generation, the reduction of the electricity tax to 0.5% and the deduction of 2,600 million euros from the income of electricity companies from the so-called ‘fallen profits’, are some of the measures taken by the Spanish government and included in the aforementioned decree.

The CEO of Iberdrola Renovables Energía, Julio Castro, said on Wednesday in San Sebastián that the measures adopted by the Government to lower the electricity bill are “the imperfect solution in which we all lose”.

He also stressed that Spain “has not reformed the tariff” of last resort (PVPC), so that every day “that wholesale market price is transferred to the small customer, and has triggered a tsunami of loss of confidence in renewables that threatens the ecological transition and the objectives of decarbonization”.

The average daily price of electricity in the wholesale market again set a record on Wednesday in Spain to reach 189.9 euros per megawatt hour (MWh). This new increase in light occurs in full escalation of the price of raw materials linked to energy in the world, such as gas, oil and coal, as well as CO2 rights, also at record highs.

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