MADRID — Spain’s push to become a world leader in renewable energy risks collapsing after the government slammed the brakes on generous subsidies as part of an austerity drive.
Prime Minister Mariano Rajoy’s government passed a decree on Friday to “temporarily suspend” subsidies for all new wind, solar, co-generation or waste incineration plants as it seeks to curb the public deficit.
The measure will save at least 160 million euros ($210 million) this year, for which the government has received subsidy requests for projects to install 500 megawatts of new capacity, Industry Minister Jose Manuel Soria said.
But industry leaders say the halt to the subsidies, combined with uncertainty over how long the suspension will last, will deflate investor interest in what was once one of Spain’s most dynamic sectors.
“This decision is one of the biggest blows ever to the sector,” said the head of lobby group Fundacion Renovables, Javier Breva.
“Who is going to invest in the renewable energy sector after this decree?”
The subsidies introduced by the previous Socialist government, which pushed renewable energy as a new source of economic growth and jobs, fueled the development of wind parks and
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