SpainÂ’s watchdog halts solar subsidies

MADRID, SPAIN - Spain's energy watchdog ruled to provisionally suspend paying premiums to 304 solar plants which failed to show they were up and running before subsidies were capped in 2008.

Generous subsidies made Spain the world's fastest-growing solar power market in 2008 and its second-biggest solar producer, before the government imposed limits on plants entitled to support on September 30 that year.

Spain derives about 2 percent of its electricity from solar plants, mostly of the photovoltaic type, which use panels directly turning the sun's rays into electricity.

Solar power costs far more to produce than electricity generated by burning gas or coal, so producers receive so-called "feed-in tariffs" — above market rates — designed to gradually make it competitive.

The National Energy Commission CNE recalled in a statement that it had provisionally suspended another 347 solar plants on March 29.

Last year the CNE began investigating 9,041 photovoltaic plants, of which 840 have waived a premium of 475 euros US $683.9 per megawatt-hour and accepted one of 326 euros/MWh.

Spain's benchmark wholesale power market price on April 14 was 44.43 euros/MWh.

Of the remainder, 2,021 plants have been examined and 651 suspended. The government has the final say on suspensions.

The International Energy Agency, an adviser to industrialized nations on energy policy, estimates solar power could provide up to a quarter of the world's electricity by 2050 but will need government support before the technology becomes cost effective.