122 Alevgul H. Sorman et al.
up to 26% in 2015 (REE, 2004–2015). However, one of the most important political concerns at that time was the tariff deficit: the gap between the cost of electricity generation and what consumers pay. Theoretically, electricity revenues
should cover for costs, set by the regulator (Paz Espinosa, 2013) yet this deficit,
increasing from €0.25 billion in the year 2000 to €26 billion in 2013, had become
so big that it was triggering a financial black hole in the economy (CNE/CNMC,
2007–2013). The tariff deficit in Spain, gradually mounting since the 2000s, came
from generous subsidies to renewables under the special regime to support to
renewable and co- generation potentially linked to over- ambitious infrastructure
planning, but also from growing costs in extra peninsular islands, as well as
network costs (Johannesson Linden et al., 2014). Solving the deficit issue through
increasing consumer prices was difficult as electricity prices in Spain were already
high (Paz Espinosa, 2013). In turn, subsequent regulatory changes in the hope of
closing the tariff deficit have burdened the renewable energy sector due to retroactive subsidy cuts leading to great uncertainties, emerging risk factors, and
numerous examples of energy injustices that will be scrutinised throughout the
chapter.
Thus Spain, once a founding example of the roll out of renewables, followed
an overall retreat due to retroactive regulatory and economic conditions,
leaving concerns and uncertainties about future pathways within the Spanish
renewable energy panorama. In fact, before the phasing out of the FIT–FIP
system, Spain had ranked third in total renewable power capacity per capita
(excluding hydro) by the end of 2012 (REN21, 2013) on the global scale, but by
the end of 2016 it had recoiled to the fifth/sixth place (REN21, 2017).
In this chapter we explore energy transition strategies, particularly with respect
to regulatory changes affecting solar energy rollout in Spain. Stakeholder insights
based on past experiences are presented as ‘lessons learned’ focusing on perceived
risks including potential cases of energy injustices. This knowledge needs to feed
back into the creation of new low- carbon pathways, which we present as potential
policy mixes identified per sector (transport, building, and industry).
A rollercoaster ride: a review of regulatory changes in Spain
Renewable energy (RE) in Spain has been regulated since 1980, when Law
82/1980 (BOE, 1980) on energy conservation was enacted, which claimed an
increase in energy efficiency and a reduction in energy dependence. It happened
as a consequence of the second international oil crisis and represented the start
of the development of RES in the country. Since then, RE promotion has been
a national policy priority and legislation has been in constant change. In 1985,
the government firmly pledged its commitment to RE with the Royal Decree
916/1985 (BOE, 1985) supporting small- hydraulic energy, the only RES existing at that time.
After entry into the European Union, Law 54/1997 (BOE, 1997) liberalised
the electricity sector in Spain and established a plan for the promotion of RES
for achieving the goal of 12% of gross inland consumption of energy from
up to 26% in 2015 (REE, 2004–2015). However, one of the most important political concerns at that time was the tariff deficit: the gap between the cost of electricity generation and what consumers pay. Theoretically, electricity revenues
should cover for costs, set by the regulator (Paz Espinosa, 2013) yet this deficit,
increasing from €0.25 billion in the year 2000 to €26 billion in 2013, had become
so big that it was triggering a financial black hole in the economy (CNE/CNMC,
2007–2013). The tariff deficit in Spain, gradually mounting since the 2000s, came
from generous subsidies to renewables under the special regime to support to
renewable and co- generation potentially linked to over- ambitious infrastructure
planning, but also from growing costs in extra peninsular islands, as well as
network costs (Johannesson Linden et al., 2014). Solving the deficit issue through
increasing consumer prices was difficult as electricity prices in Spain were already
high (Paz Espinosa, 2013). In turn, subsequent regulatory changes in the hope of
closing the tariff deficit have burdened the renewable energy sector due to retroactive subsidy cuts leading to great uncertainties, emerging risk factors, and
numerous examples of energy injustices that will be scrutinised throughout the
chapter.
Thus Spain, once a founding example of the roll out of renewables, followed
an overall retreat due to retroactive regulatory and economic conditions,
leaving concerns and uncertainties about future pathways within the Spanish
renewable energy panorama. In fact, before the phasing out of the FIT–FIP
system, Spain had ranked third in total renewable power capacity per capita
(excluding hydro) by the end of 2012 (REN21, 2013) on the global scale, but by
the end of 2016 it had recoiled to the fifth/sixth place (REN21, 2017).
In this chapter we explore energy transition strategies, particularly with respect
to regulatory changes affecting solar energy rollout in Spain. Stakeholder insights
based on past experiences are presented as ‘lessons learned’ focusing on perceived
risks including potential cases of energy injustices. This knowledge needs to feed
back into the creation of new low- carbon pathways, which we present as potential
policy mixes identified per sector (transport, building, and industry).
A rollercoaster ride: a review of regulatory changes in Spain
Renewable energy (RE) in Spain has been regulated since 1980, when Law
82/1980 (BOE, 1980) on energy conservation was enacted, which claimed an
increase in energy efficiency and a reduction in energy dependence. It happened
as a consequence of the second international oil crisis and represented the start
of the development of RES in the country. Since then, RE promotion has been
a national policy priority and legislation has been in constant change. In 1985,
the government firmly pledged its commitment to RE with the Royal Decree
916/1985 (BOE, 1985) supporting small- hydraulic energy, the only RES existing at that time.
After entry into the European Union, Law 54/1997 (BOE, 1997) liberalised
the electricity sector in Spain and established a plan for the promotion of RES
for achieving the goal of 12% of gross inland consumption of energy from