Abengoa sues government over concentrated solar power premium cut

Abengoa has not only taken legal action in the Spanish courts but, taking advantage of the ownership of some of its core is a subsidiary in Luxembourg, has raised international arbitration.

"In June 2013 , we filed a demand for arbitration on behalf of our subsidiary CSP Equity Investment Sarl against the Spanish Government as a signatory of the Treaty of the Energy Charter," said the document filed with the commission of the stock market of the USA (The SEC , for its acronym in English).

"Our demand for arbitration alleges that the electricity sector regulatory reform approved by the Spanish Government has broken the legitimate expectations of CSP Equity Investment ( … ) and an expropriation " adds Abengoa in the brochure. CSP Equity Investment is the investment holder of Abengoa solar thermal power plants Helioenergy 1 and 2 , Solaben 2 and 3 , and Solacor 1 and 2.

The arbitration will be held in The Hague in accordance with the rules of the Arbitration Institute of the Stockholm Chamber of Commerce. The court will settle the lawsuit with three referees, two of which have already been delivered to the supervisor nombrados. Abengoa does not specify the amount claiming, but sources indicate that the company would be around 60 million euros per year while not resolve the situation. The amount is equivalent to a cut of 33 % in revenue from the CSP. Litigation can take years and no overtones of that negotiation with Industry will move faster. Concessions for solar thermal plants are up to 40 years, so that the amount in dispute is billionaire.

In parallel, Abengoa has taken legal action in a court of Seville with respect to the CSP plant Helios I. The court rejected the action with the reasoning that Abengoa must first exhaust administrative remedies with the Ministry of Industry and the company has appealed that decision to the Audiencia Provincial de Sevilla.

"When are difficult financial situations , governments focus on resolving the short term and leave a little more future problems" he says. So you think that as the situation stabilizes," expect to see a growing concern about climate change and the search for alternative sources."

The manager of Abengoa group also mentioned that the Spanish economy is beginning the process of recovery and therefore he believes it is a good time for investors to start taking positions. "It’s getting the money ," he said , as on the eve Emilio Botin said in New York , " the worst is over."

The major energy reform beneficiaries will be the lawyers. Enterprises have begun to introduce a flood of resources and demands. While traditional power raise the bulk of the Spanish court battle, several investors renewable energy sector have chosen the path of international demands.