Spain’s solar boom prompts concerns over corporate manoeuvres is authored by Ricardo Ginés* and Angus MacInnes*
The sun-soaked town of Jimena de la Frontera on the edge of Spain’s Los Alcornocales Natural Park has become a litmus test for Europe’s solar development program.
The region around Jimena, parts of which see more than 3,000 hours of sunshine annually, is set to become the heart of Europe’s massive investment in photovoltaic power generation.
But the push towards alternative energy sources is already raising concerns among those on the frontline as companies scramble to cash in on a glut of EU subsidies and recovery funds.
Threats of expropriation and huge land purchases in the area have pushed some local administrations to breaking point and have cast a shadow over solar farm projects, some of which have received significant investment from China.
Companies, speculators and green recovery
Three major energy firms are leading the push into solar in Spain: Acciona, Cepsa and France’s TotalEnergies (through its Spanish developer, Ignis). Up for grabs is a share of the 140 billion euros ($143 billion) investment Spanish Prime Minister Pedro Sánchez has announced will be allocated to the country’s “green” Covid recovery.
Cepsa and TotalEnergies did not respond to requests for comment for this article. Ignis Energia shares a street with Acciona in the north of Madrid. This is a circular road called Cardenal Marcelo Spinola, an elegant business park area that is notable for its modern construction and dark glass facade. On a Friday in October, nobody in this enclave is up to the task of doing an interview with a journalist.”
Andalucia’s production of solar power has shot up since 2019, from 85 megawatts to 22 gigawatts. Another 54 gigawatts of capacity are set to be added by 2030 under the National Integrated Energy and Climate Plan (NIECP). In effect, this would mean Andalucia will be producing almost 40% of Spain’s total renewable energy.
In 2021, almost half of all of Spain’s electricity production came from renewable sources, according to the country’s national grid operator, REE. Photovoltaics now make up about 8% of the national electricity production, a figure estimated to rise as the objective of the NIECP is to add another 39 GW of solar power by 2030.
All of this has a sizable footprint. According to one report, these solar megaparks once completed will cover an area up to 28 times the size of Madrid, or as much as 3.3% of the country.
But amid this land rush, the government’s climate ministry, MITECO, has raised concerns over excessive land purchases. In a 2020 report, the ministry noted that companies had acquired more than thirteen times the land area for solar power generation needed to meet the 2030 goals.
In Jimena, at least 2,600 hectares (6,400 acres) of land — about 30% of the municipality outside of the protected national park — is being converted to solar production, according to local association Plataforma SOS Campiña Jimena and the city’s mayor, Gómez.
“Of course they’re twisting people’s arms. They’re giving them lots of money for this land.,” says Antonio, a local resident, adding that companies have used the threat of expropriation to negotiate lower land prices.
Records obtained by the two investigators from the property registry in San Roque (to which Jimena de la Frontera belongs) provide grounds for concern for locals. Large areas that have not been officially allocated for photovoltaics have been taken over by speculators seeking to apply for a share of the investment funds slated for “decarbonized” Covid recovery investment in Spain.
Several hundred hectares of farms and arable land were acquired by Ignis in 2020.
Some land speculators have sent letters to landowners announcing planned expropriation before approvals have been granted, or sought to apply pressure on local authorities to process paperwork.
“Why are so many companies focused on this valley? Because we have three exit points,” says Mayor Gómez, referring to routes between the surrounding hills the companies will run transmission lines through.
In September 2020, Gómez announced the creation of 1,500 new jobs and an investment of 360 million euros ($369 million) in photovoltaics. The town has received a flood of interest in recent months, with companies engaging in public relations campaigns to curry favour with residents, including by sponsoring local hiking clubs.
The wave of proposals for solar parks has led to the paralysis and in some cases the collapse of local governments, according to Gómez. Likewise, UNEF, an energy industry association with over 700 member companies, says 86 megawatts of projects are in danger of cancellation, as local administrations do not have the capacity to process the backlog of paperwork.
“The companies obviously bombard the territory to see which projects are more feasible, which are more economically viable…this is the problem,” Gómez says.
The rush for the manna from Brussels
Pascual Collado, a former mayor of Jimena, says due to the EU’s investment program in photovoltaics, renewable energy now has high-profit potential for those able to secure land in a desirable location. “There are many more projects than aid and that explains the rush, the competition, of the different project developers to be able to get there in time,” he says. “We are talking about millions of euros, a lot of money.”
Of the total public investment announced by Prime Minister Sánchez, more than a third — about 51.8 billion euros ($53.1 billion) — was allocated for climate change-related projects. Most of it will likely be invested in renewable energies.
Most of the funds for these projects are co-financed with the European Union, which provides non-repayable grants to successful applicants.
Andalucian municipalities, Collado adds, are being pressured by land speculators into processing paperwork quickly to allow them to apply for EU grants, which is contributing to the collapse of local administrations.
Salvador Campos Moreno, a lawyer and activist on the Aliente platform, an environmental association, says the solar land rush has effectively led to a disregard for longstanding and strict conservation codes. “People who have spent years putting up with these limitations in terms of conservation of the territory are suddenly seeing how 10 million square meters of photovoltaic plants are built on plots next to their houses and farms without having involved local government, nor having done any type of planning.”
Overwhelming supervisors with paper attacks
Acciona listed its renewable energy subsidiary on the stock exchange in February 2021, hoping to secure up to 7 billion euros ($7.1 billion) of the recovery funds.
The three firms vying for the grants have created numerous subsidiaries, critics say, in a deliberate strategy to overwhelm administrators whose job it is to monitor environmental and social issues in the hope that projects may be approved without proper oversight.
Collado, the former mayor of Jimena, said that, as each application can easily run to more than 100 pages, there are currently no resources to provide sufficient oversight of the process.
There are also allegations of close relationships between EU institutions and project developers in the area.
For example, Chemist Isabel C.B., a member of the Ignis Group’s management committee since February 2021, joined the firm after eight years at the European Commission as an evaluator for Horizon 2020, a research and innovation programme criticized for increasing funding rates for large companies.
Tax havens not too far off
The three major corporations leading the push into solar in Spain — Acciona, Cepsa and France’s TotalEnergies — also operate from tax havens, prompting further concerns from those opposed to the projects that Spanish and EU funds will be misused.
In the case of Cepsa, its owners, Abu Dhabi’s Mubadala Investment Company and The Carlyle Group, based in Washington, D.C., is that they are, or at least have been, linked to tax havens. Carlyle Group Limited was active as an offshore company in the British Virgin Islands (1996-2001), until it changed its agent in 2002.
Likewise, all three – the Carlyle Group (2010) and the sovereign wealth fund Mubadala (2009) as well as the “Abu Dhabi Investment Authority” – sought tax-exemption systems through secret and possibly illegal contracts in Luxembourg, according to documents made public in 2014 and belonging to the ICIJ’s “Luxembourg Leaks”.
Or take Acciona—until 2017 an estate located in the same municipality of Jimena de la Frontera was connected to a scheme linked to an offshore company in Malta (a place known as the “European Panama”) as a tax haven that helped the company stash 3.5% of its profits.
It is called Finca Sambana, which is now used for “sophisticated weddings”, and remains the domicile of the Sambana Agropecuaria company, which is still connected to Acciona through several firms.
Or take Total Energies—its Spanish developer Ignis shares a street with Acciona in the north of Madrid that appears up to six times as an address on the website of “Offshore Leaks”, a page that focuses on investigations into tax havens – most of them naming the firm Entrecanales y Tavora (linked to Acciona).
China, also present in Jimena
In any case, the promise of profitability is such that even a company having Chinese capital participation has dove into temporarily colonizing a space under the sun in Jimena. It is called Tayan Energy Group and, according to its own description, is “a joint venture between leading Spanish solar investor and portfolio manager, Eland Private Equity, and Shanghai Electric”, a multinational and, at the same time, a state-owned energy company in China, a country governed by a single-party regime.
In its bi-monthly report, “Bilingual Bimonthly Journal” 2020.2 NO. 25, published in Shanghai, the union between the two companies to create Tayan Energy is confirmed, and it is noted that “both parties will develop and invest in the European market for new energy through this cooperation. This represents another stunning step by the (Shanghai Electric) Investment Company advocating for its entry into the European market after opening an office in Great Britain. Tayan Energy is based in Madrid, Spain, and its project development team has extensive experience in the areas of solar energy and renewable energies from biomass. So far, the joint venture has purchased its first solar energy project, which has been registered and approved in all required forms. In addition, there are a number of projects under development with a total capacity of 2 GW as a reserve of projects, many of which are in Spain. Over the next three years, it will focus on photovoltaic and energy storage”.
Interestingly, Shanghai Electric is mentioned twice in the computer files belonging to Daphne Caruana Galizia, the Maltese journalist killed by a car bomb in October 2017 in Bidnija, 11 kilometres north of the island’s capital, Valletta.
According to various media investigations (Reuters, Times of Malta, Süddeutsche Zeitung, and the Global Anti-Corruption Consortium, OCCRP), a Chinese executive belonging to a global consulting firm – the US company Accenture – directly linked to Shanghai Electric, was at the centre of the alleged Maltese corruption schemes linked to the journalist’s murder.
In fact, Chen Cheng also negotiated investments in Malta on behalf of China’s state-owned Shanghai Electric Power, linked to alternative energy projects, in particular wind power in Montenegro. As stated in the European Parliament resolution on the assassination of Daphne Caruana Galizia (2021/2611(RSP)), “the Chinese family (Cheng) allegedly played a central role in the negotiations for an investment worth EUR 380 million by China’s state-owned Shanghai Electric Power in Malta’s state power company Enemalta”.
In Spain, the strategic consultancy chosen by Tayan Energy and through which it has placed 50 million euros in network deposits is the Spanish company Isemaren, with extensive experience in the sector. According to specialised periodical pv-magazine.es, “Isemaren is helping Tayan Energy in the search for new opportunities and is advising on the joint venture formed by Shanghai Electric and Eland Advisors”.
Once more, the step taken by the Chinese energy company through Isemaren in Jimena de la Frontera again reflects how the big energy companies, from global to local ones, are turning their gaze toward the Andalusian sun.
This report was supported by a grant from Investigative Journalism for Europe (IJ4EU).