Spain subsidy cuts seen threatening thousands of jobs

Spain's decision to cut subsidies for clean energy production puts at risk the creation of hundreds of thousands of jobs in a sector in which it is a global leader, industry leaders warned Tuesday.

The sector shed 20,000 jobs between 2008 and 2010 due to cuts to the subsidies made by the previous government and the end of new subsidies announced Friday will likely lead to the loss of a similar number of jobs this year, said the head of lobby group Fundacion Renovables, Javier Breva.

"But what worries me more are the hundreds of thousands of jobs which would be generated and which now will not be," he said, adding that the previous government had predicted the sector would generate 300,000 jobs by 2020.

Spain's new right-leaning government passed a decree on Friday that will "temporarily suspend" subsidies for all new wind, solar, co-generation or waste incineration plants as part of its bid to curb the public deficit.

"Who is going to invest in the renewable energy sector after this decree?" Breva said. "It is an attack on the competitiveness of the Spanish economy."

Spain was an early mover in developing clean energy, especially wind power, and generous government subsidies helped Spanish firms to become global leaders in the sector.

Spanish power giant Iberdrola is the world's biggest producer of clean energy, with plants in Brazil and the United States, while Gamesa is one of the world's top wind turbine groups.

But the previous Socialist government started scaling back subsidies for clean energy at the end of 2008 as the global economic crisis began to bite and Spain headed into recession.

"There are many companies that are not going to be able to make it until the end of the year because of the end of the new subsidies," said Jose Antonio Gonzalez, the head of FENIE, which represents power and telecoms firms.

The loss of jobs in the clean energy sector would add to Spain's already dire unemployment situation.

The country's jobless total soared above five million people at the end of 2011, pushing the unemployment rate to 22.85 percent, the highest in the industrialised world.

Renewable sources provided Spain with a third of its electricity last year, according to the industry ministry.

The government says the cuts will not affect Spain's contribution to reaching European renewable energy targets. The European Union wants to have 20 percent of its total energy use covered by renewable sources from 2020.

Source - Solardaily