This week: Spain - Acciona considers legal action against energy reforms

Energy reforms represent 5,600 million euros less for renewable energy while polluting energy revenues have grown by 2,500 million euros.Legal security in Spain is lower than in Argentina. Acciona, Endesa, and many other companies study sue the Spanish government: fails all commitments of the European Union to promote renewable energy and legal uncertainty is worthy of a banana republic.

Acciona estimated that only reform passed this year has an impact of 2,000 million euros for the entire renewable energy sector in Spain.

Acciona halved the amount of the investment plan on renewable energy such as wind energy and concentrated solar power compared to initially expected.

Government measures such as a power generation tax and subsidy cuts designed to mend a deficit in the utility sector have a significant impact on renewable energy firms like Acciona, which said it was studying legal action.

Spanish building and energy firm Acciona is cutting investment and dividends because of energy sector reforms it estimates will wipe about 165 million euros ($216 million) from annual pretax  earnings.

Spanish concentrating solar power company Abengoa has also threatened legal action though Spanish firms are considered to have little recourse because the laws were passed as decrees.

Foreign investors may have a better chance of compensation through an international energy treaty that protects their interests.

Acciona said it will cut its dividend by 20 percent this year and next, scale back investment to about 600 million euros and sell up to 1 billion euros of assets, including a small stake in its energy business.

The company is targeting flat growth in net profit and underlying earnings this year, it said, after posting a 6 percent year-on-year fall in net profit to 189 million euros in 2012.

Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 9 percent to 1.43 billion euros thanks to a strong contribution from its energy arm.