Spain’s Power System Posts First Surplus in More Than 10 Years

  • Energy reform slashed subsidies for renewable-energy companies
  • Surplus comes as renewable giant Abengoa comes under pressure

Spain’s power system registered its first surplus in more than a decade, as sweeping changes to energy regulation begin to pay off for the euro zone’s fourth largest economy.

Revenue exceeded electricity-system costs by 550 million euros ($529 million) in 2014, the Spanish Energy Ministry said in an e-mailed statement.

“This confirms that the electricity-tariff deficit that put the system on the brink of collapse has been eliminated definitively,” the ministry said, adding that the shift will lead to a decline in energy bills “progressively” as previous debt is paid off.

Spain’s power system racked up debts of more than 20 billion euros through 2013 as the revenue power companies were allowed to book under the government-controlled system exceeded the amount raised from customers. As part of the 2013 reforms, the government cut back on subsidies to renewable-power generators, roiling the clean-energy industry.

Abengoa SA, a Seville-based solar-power producer, sought protection from creditors this week after the loss of subsidies coupled with a slowdown in Brazil and slumping oil prices left it struggling to service its debts.

Before it's here, it's on the Bloomberg Terminal.