First Read: Iberian Utilities "Spanish government proposes gradual..."

Research evidence excerpt

First Read: Iberian Utilities "Spanish government proposes gradual..."

Global Research

30 June 2026ab

First Read

EquitiesIberian Utilities

Spanish government proposes gradual Europe including UK

elimination of 7% power generation tax Utilities

Gonzalo Sanchez-Bordona

Analyst

gonzalo.sanchez-bordona@ubs.com

Gradual reduction of generation tax until YE27, down to 0% in 2018 +34-91-745 4147

Yesterday, the Spanish Government approved a Royal Decree Law (RDL) that includes a Anna Webb

number of relief measures for citizens and companies related to energy prices. Most of Analyst

the measures are linked to oil and oil derivative products, but the government includes anna.webb@ubs.com

the gradual removal of the current 7% tax that applies to revenues received by power +44-20-7568 8293

generation plants. The rate is set at 5% for the rest of 2026, cut to 3.5% in 2027 and Wanda Serwinowska, CFA

removed entirely in 2028. The RDL is enforceable directly, but will have to be validated by Analyst

Parliament within 30 days. The tax had been temporally suspended since 20 March, and wanda.serwinowska@ubs.com

was also modulated during the energy crisis related to the Russia-Ukraine situation. The +44-20-7568 3980

energy Minister said after the cabinet's meeting that this is the only structural (i.e. not Mark Freshney

temporary) measure of those announced yesterday. Analyst

mark.freshney@ubs.com

Tax removal possible due to tariff deficit gradual phase out +44-20-7568 3989

This tax was created in 2013 as part of a wide range of adjustments in the sector aimed Christabel Kelly

at tackling the mounting tariff deficit that would peak at >€30bn. The system has been Analyst

in surplus for several years now and the cumulative tariff deficit is now close to zero, christabel.kelly@ubs.com