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The Warsaw Voice » Business » April 29, 2009
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Spain Likes Renewable Energy
April 29, 2009   
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José Guardo, partner in Garrigues law firm, talks to
El¿bieta Wrzecionkowska.

Does the law in Spain favor funding of projects aimed at developing renewable energy sources?
Spanish regulations, similarly to those in other countries, acknowledge the need to develop renewable sources. The most notable regulations include a system of (presumptive) regulated energy prices used by producers of renewable energy. There is also a stable regulation framework to facilitate investment in the sector.

The very fact of producing renewable energy entitles enterprises to sell all the power generated at prices previously agreed on throughout the time their facilities are in use. This regulation assures satisfactory, long-term income from investment in the sector and enables producers to achieve appropriate profitability.

Does the legal system in Spain have incentives to attract investors interested in carrying out renewable energy projects?
Apart from the system of (presumptive) regulated energy prices I mentioned, there has been a variety of tax allowances on environment-related projects, specified in the Royal Legislative Decree 4/2004 which approves the new wording of the corporate tax act and allowances on corporate tax and various local taxes. But in my opinion, the best incentive is to create a transparent system capable of foreseeing the needs of entrepreneurs and eliminating the uncertainty typical in such projects. A system like that would work out active processes that will not take longer than necessary. Any investor is best encouraged by the stability and certainty of the system and the ability to anticipate difficulties that may occur in the course of projects of this kind.

How can local government authorities be encouraged to be friendly to renewable energy projects?
The most important thing is to make them realize the benefits inherent in renewable energy. You could, of course, argue that investment in renewable energy affects landscapes, but it also comes with a number of benefits. For example, it stimulates employment in the area such projects are carried out and in many cases, it also improves the local infrastructure. What actually happens in Spain is that programs are devised to auction windy sites in order to hand them over to companies with the best plans to stimulate local economies. This enables optimal use of available natural resources.
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