While international investors measure the wind speed in southern Gran Canaria, the local municipalities—San Bartolomé de Tirajana and Santa Lucía—are fine-tuning their tax calculations. Offshore wind energy, already a legal and technical reality in the Canary Islands, could also become an unexpected source of revenue for local coffers, always thirsty for cash. The key lies not in the sea, but in the land: ditches, poles, sidewalks, subsoil, cables, and, above all, the occupation of public land.
A report prepared by the Garrigues law firm, entitled "Taxation Applicable to Offshore Wind Farms in Spain," surgically details the tax opportunities open to Canary Islands municipalities. While jurisdiction over territorial waters is reserved for the State, what happens on land—where the cables end and local interests begin—is a different story. And one with many zeros.
Ditches, sidewalks and subsoils: every meter counts
Any offshore wind infrastructure requires a power line from the sea to the onshore substations. That's where the regulatory hurly-burly begins: the Tax on Construction, Installations, and Works (ICIO) can reach up to 4% of the material execution budget, which for a €500 million wind farm can translate into up to €20 million to be collected by the competent city council, if its tax ordinance so provides.
But there's more. Each opening of trenches, ditches, or pits on locally owned land may incur specific fees. The overhead and subsoil are also taxed, including the overhead use of public roads for poles or cables, as provided for in the Law Regulating Local Taxes. If the wind farm requires a 10-kilometer line in municipal public land, and a fee of €10/m² per year is established for the occupation of the subsoil or overhead, we're talking about up to €100.000 annually for each municipality involved.
The State's share: fee for the occupied sea
The Ministry for Ecological Transition is also demanding its share: the occupation of territorial waters to install offshore platforms or wind turbines carries a fee of €0,006 per square meter per year. For a plant occupying 1 million square meters (1 km²), the fee would be €6.000 per year. At first glance, this is a modest figure, but it is complemented by other, more significant fees: 8% of the value of the land or facilities occupied, including estimates of future profit.
In fact, if the concessionaire estimates an annual return of 20 million euros from electricity sales, and the total investment exceeds 300 million euros, the state fee can exceed 24 million euros annually for the duration of the concession, generally 30 to 50 years. And that's not even considering the Tax on the Value of Electricity Production, with a fixed rate of 7% on gross income, which swells state coffers but is considered an operating cost for the developer.
The south of Gran Canaria as a fiscal border
The coastal municipalities of southern Gran Canaria have a new planning tool in their hands: specific tax ordinances for offshore wind power. Although they cannot directly tax offshore installations, they can regulate the conditions for access to land. This includes demanding urban planning compensation, fees for the occupation of rural or tourist land, and even negotiating within the framework of the Coastal Development Plan, which falls under municipal jurisdiction.
Some legal experts are already comparing this new context to the implementation of hotel infrastructure in the 70s: whoever controls the land controls the flow of money. The difference is that now it's not about sun and sand, but wind and copper.
The political dilemma: between the green push and the cash register
Not all is enthusiastic. Some sectors within the local and regional PSOE warn of an "excessive oversight" that could deter investors. But others, such as representatives of Nueva Canarias and Primero Canarias, see an opportunity to revert the benefits of wind energy to the affected municipalities, even more so if a final rate of return close to 15% of the total investment is achieved, including direct taxes, fees, charges, and urban development concessions.
The battle, as always, will be played out in the offices and in the municipal plenary sessions. Meanwhile, the wind continues to blow. And southern Gran Canaria is beginning to understand that, this time, the money won't come from tourists, but from windmills.
