The European Commission has opened a new investigation into the awards for the cutbacks in renewable energy premiums. On this occasion, the Community Executive has announced that it has launched a thorough investigation to assess whether the compensation of 23.5 million euros (about 32 million euros including interest) paid by Spain to the Japanese JGC Corporation, as mandated by a ruling from the International Centre for Settlement of Investment Disputes (ICSID), the World Bank’s arbitration court, may constitute state aid contrary to European regulations.
Brussels opens this second investigation after exempting Spain in March 2025 from paying the 101 million euro compensation related to the Luxembourg fund Antin (whose rights in this lawsuit were transferred to Centerbridge), considering that this compensation recognized by an award is “illegal state aid” incompatible with European rules on the matter.
Incentives for electricity production from renewable energies in 2007 were a great attraction for foreign investors. But the regulatory change in 2013, through the reform of the electricity sector aimed at mitigating a high tariff deficit with the electric companies, caused these remunerations to be cut. Investors understood that Spain had broken its promise of large profits, so, relying on the Energy Charter Treaty (ECT) — which both Spain and the EU have abandoned — they rushed to various arbitration courts to claim multimillion-dollar compensations.
Since then, 51 claims have been filed against Spain, of which, to date, 29 have been resolved in favor of investors and 18 have ruled in favor of Spain. Of the more than 10 billion euros initially claimed, arbitration courts have recognized compensations of around 1.8 billion euros, an amount that rises to 2.3 billion when considering late payment interest, legal costs, and other surcharges.
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Among these compensations is the one recognized to JGC, which is a special case. Spain has refused to pay these compensations, arguing that European justice vetoed arbitrations between European investors and EU Member States; and that the European Commission must authorize such payments. After the Community Executive supported the Spanish position by vetoing the payment of the award won by Antin, as it is an investor from an EU Member State, representatives of the Spanish Government and the Blasket Renewable Investments fund, which holds the legal representation and collection rights of many of these lawsuits (including JGC’s), began a negotiation path to at least compensate the damages of non-EU investors.
In this vein, the Government agreed to pay the first and only compensation, related to the Japanese company JGC, which invested in two solar thermal plants located in Andalusia. Sources from the Ministry of Ecological Transition explained in June 2025 that the payment was made after receiving approval from the European Commission.
However, the European Commission now preliminarily considers that the award issued by ICSID in 2021 and its execution “constitute state aid” incompatible with the provisions of the Treaty on the Functioning of the European Union (TFEU), “as they grant JGC an advantage equivalent to those provided in the Spanish 2007 scheme,” a plan which, it recalls, was not notified as required by European regulations.
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