Mariano Rajoy’s pledge to tax utilities and power consumers signals Spain is planning to raise cash from renewable energy for the first time, a blow to an industry already struggling with subsidy cuts.
The prime minister told Parliament [in July] he’d impose a levy to spread the expense of closing a gap between costs and revenue in the country’s electricity business, which has racked up debts of 25 billion euros ($31 billion). Details may be announced as early as tomorrow after the weekly Cabinet meeting.
Extending the treasury’s net to cover wind and solar power is part of Rajoy’s 65 billion-euro austerity package aimed at curbing the deficit. Fund managers from HSBC Holdings Plc (HSBA) to Deutsche Bank AG (DBK) and developers are lobbying the government to restrain the scale of the taxes, saying higher fees may tip companies into bankruptcy.