Spain yet again - electricity subsidies

We've seen before that the Spanish economy is rickety under the surface - its local authorities, its mortgages, the increasing separatism of its more prosperous regions.

Now the WSJ has turned its attention to Spain's power prices, as the government plans to raise some household electricity prices by 9.8%. Evidently the Spanish government has been subsidising households' electricity so that small consumers pay less than the utilities charge. The government (that is, taxpayers) make up the difference, enabling utilities to provide power to consumers at a price lower than the cost of production.

This deficit financing has been rising over the past decade, we are told, as successive governments failed to increase power prices fast enough to keep pace with rising oil and gas prices, and now stands at over €15 billion.

The deficit has also widened because of a surge in expensive renewable energy production—in particular wind and solar power—that has gone from almost zero to over 16% of Spain's power generation in 10 years.

Renewables are evidently a particular drain on government finances. Even after the recent cuts to renewable energy subsidies, wind-power generation remains twice as costly as average-electricity generation, and solar power is close to nine times as expensive.

Our ineffable government can't say they weren't warned.

If the Spanish economy is as rickety as it's looking, and starts to crumble, would the country phlegmatically accept Irish sized cuts? If not, Spanish taxpayers may start to ask if continuing renewables subsidies are good value for money.