Since 2018, Spanish socialists have removed a controversial seven per cent sun tax, pledged EUR 220m to re-skilling miners, and committed to a 100 per cent renewable future by 2050.
The pro-climate Spanish Socialist Party (PSOE) recently strengthened its grip on government after emerging victorious from the country’s third national election since 2015.
After claiming 29 per cent of the vote and 123 of the 350 seats in the Spanish parliament, the Socialist Party headed by current Prime Minister, Pedro Sànchez, fell short of a parliamentary majority. Yet despite needing to form a coalition in order to govern and push its green agenda, political analysts believe that the PSOE’s victory over its rivals was largely due to its clean energy agenda and ‘Green New Deal’ social reforms.
In order to position itself as a renewable energy leader amongst European Union member states, the PSOE has pursued a Green New Deal as way of reducing Spain’s reliance on traditional energy sources such as coal power.
Related article: 20% of EU population in ‘energy poverty’
Furthermore, Spain’s Ministry for Ecological Transition has found that 32 million Spaniards are affected by global warming. Summers are now five weeks longer than they were during the early 1980s, which is due to CO2 levels constantly increasing. These levels reached a record high in 2018.
Since coming to government last year, the PSOE outlined that it aims to move Spain to 100 per cent renewable electricity by 2050 via a “new social contract [-] a pact between capital, work and the planet”, which focuses on the development of lesser polluting technologies – especially renewables – and the creation of clean energy jobs.
By the end of 2018, the PSOE had closed down 10 of Spain’s coal mines but pledged 220M EUR as way of retraining and pensioning 60 per cent of the 1000 coal industry professionals the decision affected. In order to reduce utility bills for Spanish homes, which ranked amongst the top five highest in the EU, it also removed the controversial “sun tax,” implemented by the previous government. The tax stated that Spanish homes with solar panels would have to pay a 7 per cent tax in order to remain connected to the electricity grid.
Spain’s ‘Green New Deal’ also presents stable opportunities for investors seeking to make investments in Spain’s solar energy market which grew by 94 per cent between 2017 – 2018. In January 2019, the PSOE drafted a piece of legislation that could give solar plant owners the opportunity to earn a guaranteed return on investment (ROI), which states that they would earn a 7.39 per cent return rate over the next 12 years.
Sun Investment Group (SIG), is a solar energy development business that is strategically partnered with Spanish EPC PV company I+D Energias, and has Spain as a priority market alongside Poland and Italy. Following the result of the recent Spanish election, it commented that the PSOE’s election victory is a turning point for renewable energy politics in the EU, as well as investors.
Related article: Renewable energy now powering one third of the world
“By providing green-friendly electoral policies, investors will become more and more attracted to renewables as they are backed up by government legislation and support,” SIG’s chief business development officer Andrius Terskovas said.
“The PSOE’s election win shows that electorates are becoming more conscious to ever-increasing CO2 levels, and are starting to feel a responsibility towards fighting climate change. Therefore votes for political parties offering a ‘green agenda’ in their election programmes are likely to gain further traction during the coming years.”
Despite the election victory, the Sánchez administration faces a number of challenges. In addition to having to find coalition partners in order to form a government, Spanish municipal elections on May 26 will determine to what extent the PSOE can implement its green agenda. EU countries with upcoming elections alongside investors will be paying close attention to the success of the Green New Deal.