The Spanish Government has announced the gradual elimination of the Tax on the Value of Electricity Production (IVPEE), the 7% levy applied to electricity generation since 2013, which will be fully abolished by 2028.
The measure предусматриes a gradual reduction of the tax over the next eighteen months. From 1 July 2026, the tax rate will be reduced, will continue to decrease throughout 2027, and will be completely eliminated in 2028.
The IVPEE was introduced to help finance the electricity system’s tariff deficit and has been the subject of ongoing debate due to its impact on generation costs and the competitiveness of the energy sector. During the energy crisis of 2021 and 2022, the tax was temporarily suspended as part of measures to curb electricity prices.
According to the Government, the gradual removal of the tax is intended to promote the electrification of the economy, improve industrial competitiveness and help reduce electricity costs for households and businesses. The Government estimates that the measure could lead to a reduction of up to 6% in electricity bills, depending on market conditions.
For the renewable energy sector, the elimination of this levy represents a significant change in the regulatory framework for electricity generation and responds to a long-standing request from various stakeholders across the energy industry.
Source: El País | Photo: Javier Lizón (EFE).
