The EU Commission has told Spain that it will not pay in a long-running case of renewable subsidies

The European Commission gave Spain a win on Monday when it told the country that they would not be paying any compensation for claims in the billions of Euros for renewable energy subsidies cut over a decade earlier.

After the conservative government of Spain cut renewables subsidies to reduce an artificially low power tariff deficit that had been built up over years, foreign investors, mainly investment funds, filed a lawsuit against Spain.

In 2018, French infrastructure-focused private equity firm Antin won an arbitration procedure against Spain for losses allegedly suffered as a consequence of the policy change, and Spain was ordered to pay 101 million euros ($109.39 million) in compensation.

The Energy Charter Treaty is an international treaty which allows energy companies and governments to sue each other over policies that harm their investments.

The Spanish Energy Ministry did not name the fund. Later, Antin sold compensation rights, along with other companies and funds who had invested in Spain expecting subsidies and filed lawsuits.

After a lengthy investigation, the EU Commission said Monday that paying for arbitration would violate EU state aid regulations, which prohibit governments from giving unfair benefits to one company over its competitors.

The decision instructs Spain to not pay any compensation based upon the arbitration award, and to ensure that it cannot be claimed any other way.

This is great news for Spain which has a green agenda that is among the most ambitious in Europe.

The Spanish energy ministry said that it welcomed the decision and hoped it would help them defeat similar claims.

According to the Ministry, 51 arbitrations were filed by international investors over the cancellation of Spanish subsidies for renewables worth 10,6 billion Euros. Eight of them are still pending.

The ministry said that Spain had been ordered to pay approximately 1.5 billion Euros in different cases. Some funds have attempted to enforce arbitration awards with lawsuits outside EU, in countries like United States, Australia or Britain.

A London court ruled two years ago that investors can seize Spanish assets in order to enforce a 120-million-euro judgement in a similar case.

(source: Reuters)