Green energy companies off the government teat in Spain, take off

English: PS20 and PS10 in Andalusia, Spain

English: PS20 and PS10 solar plants in Andalusia, Spain (Photo credit: Wikipedia)

Spain Ejects Green Energy Lobby

by Alex Morales and Ben Sills, Bloomberg

Spanish renewable-energy companies that once got Europe’s biggest subsidies are deserting the nation after the government shut off aid, pushing project developers and equipment-makers to work abroad or perish.

From wind-turbine maker Gamesa Corp. Tecnologica SA (GAM) to solar park developer T-Solar Global SA, companies are locked out of their home market for new business. These are the same suppliers that spearheaded more than $69 billion of wind and solar projects since 2004 that today supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.

Saddled with a budget deficit more than twice the European Union limit and a ballooning gap between income and costs in its power system, Spain halted subsidies for new renewable-energy projects in January. The surprise move by Prime Minister Mariano Rajoy one month after taking office helped pierce investor confidence in stable aid for clean energy across Europe.

“They destroyed the Spanish market overnight with the moratorium,” European Wind Energy Association Chief Executive Officer Christian Kjaer said in an interview. “The wider implication of this is that if Spanish politicians can do that, probably most European politicians can do that.”

Spain’s $69 billion of investment in power capacity from 2004 to 2011 was about triple the spending per capita in the U.S. in that period, according to Bloomberg New Energy Finance data and U.S. Census Bureau population estimates. Most of the 2012-2013 spending will be for the legacy of projects approved before the aid cuts to wind, solar, biomass and co-generation.

After four successive reductions in subsidies since then, the government on Jan. 27 this year announced the moratorium on aid for new projects. The next month Spain saw itself drop out of the 10 most attractive markets for renewable-energy investors for the first time, due to reduced aid, on an Ernst & Young ranking. Spain led the list from October 2003 through July 2006.

“What happened in Spain is that abruptly, they changed the industry by changing the policy, and that doesn’t help build a sustainable industry,” said Stephan Ritter, general manager of General Electric Co.’s European renewables unit.

Full story here at Bloomberg

===============================================================

Regarding that last line from Stephen Ritter….who seems clueless about “sustainability”…

A sustainable industry is one that stands and competes on its own, not one that is dependent on the government teat.

Advertisements

  Subscribe  
newest oldest most voted
Notify of
greg holmes

Perhaps economic reality is sinking in folks, why pay more for less?

pbittle

“…companies are locked out of their home market for new business.”
Locked out?! How’s that work? No it just means that the gov’t spigot has been shut off. If you were at all commercially viable this would have no bearing on your business, if anything it would be better.

Epoxological Paradox: How can Sustainable Green Energy be sustainable if you remove taxpayer subsidies and it fails?

Leo Morgan

Whale Oil is sustanaible, petroleum isn’t.

“Green energy companies off the government teat in Spain, take off”
No…they just changed teats…

DJ

The words sustainable and renewable have apparently been redefined. They seem to mean now that the grant funding and subsidies are renewable, and the government will sustain them.

Jenn Oates

I really don’t get how people can call an industry “sustainable” when it costs billions in taxpayer dollars to keep it afloat. First rule of government spending: if it won’t happen without government intervention, it’s not a good business plan.
Well, it should be the first rule of government spending.

David

Save this article. In two or three years, you can just change every occurance of “Spain” to “Germany” and reuse it.

Jeff in Calgary

“What happened in Spain is that abruptly, they changed the industry by changing the policy, and that doesn’t help build a sustainable industry,” said Stephan Ritter…
To build a sustainable industry, all government subsedies must be witheld.
government subsedies = unsustainable

Let’s give credit where credit is due. The Green Energy industry successfully tapped into a vast reserve of an enormously flexible & adaptable resource. Unfortunately that resource has turned out to be more finite than supposed. The name of the resource? Gullibility.

vboring

If this were an intentional strategy, it would be brilliant:
1) Temporarily subsidize capital-intensive renewables with a feed in tariff to get lots of stuff built.
2) Stop the subsidies for all projects, existing and new
3) let companies go BK and let banks silly enough to lend to them eat the losses
4) solar and wind plants get bought from bankrupt companies for their fair market value and produce low cost energy

Owen in GA

Leo Morgan: That depends on whether the Earth is continuously producing oil or not. There is an argument being put forward about that but I don’t know if it is good or bad, the data will tell in time. If that is true however your point is wrong and the science is not settled. The question then becomes at what rate is it produced and what would be a sustainable usage rate. Which is a totally different economic question. Also we could send missions to Jupiter’s moons, I understand there are oceans of distillable fuel products there. Just need to build a space super tanker to go suck it up.
I was being a little sarcastic, but it seems each time we improve our drilling technology and look a little deeper we find another 100+ years supply. Of course getting the government to approve going to get it under public lands seems to depend on the administration in charge and how well the CAGW meme supports their geopolitical theories.

Mike Smith

That famous line is absolutely true…
Sooner or later you run out of other peoples money.
Already happened in Ireland, Greece, Italy, Portugal, Spain. When the fit hits the shan in France, Germany, and the USofA, this gig will finally be over and we might actually start rebuilding a sustainable economy.

Disko Troop

Gas rebranded as green energy by EU (guardian.co.uk)
This article referenced above at the foot of the story shows that there might be a sneaky back door return to sanity going on. The Guardian, of course, is spitting blood.

hunter

Only in the world of AGW madness is the loss of direct government operating subsidy associated with an unsustainable industry. This perspective demonstrates that non-rational thinking is at the heart of AGW.

johanna

vboring says:
May 30, 2012 at 9:10 am
If this were an intentional strategy, it would be brilliant:
1) Temporarily subsidize capital-intensive renewables with a feed in tariff to get lots of stuff built.
2) Stop the subsidies for all projects, existing and new
3) let companies go BK and let banks silly enough to lend to them eat the losses
4) solar and wind plants get bought from bankrupt companies for their fair market value and produce low cost energy
————————————————
“produce low cost energy”? If they were producing low cost energy, they would not be going broke. Do you believe in the Tooth Fairy as well?

Joachim Seifert

The US can LEARN from Spain after the election: Applying a
“Moratorium” = Freezing (putting on hold) of executing
previous bad legislation……also putting on hold of subsidies
and green hand-outs
…… I hope they will do it…

“that today supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.”
50%??
Is that correct?

Stephanie Clague

The reality of ‘sustainable energy’ is that it is in fact unsustainable, it does not provide the energy a nation needs at the quantity or price needed to sustain a vibrant economy. That is the lesson of Spain and it could not be simpler or plainer to see. Spain is just at the start of its painful journey from fantasy economics encouraged by Brussels to a return to reality based economics. But then again the Brussels plan has always to effectively destroy each regional economy in turn in order to efect and enable their total absorption.
To escape from a disaster like the CAGW fraud and its ‘sustainable’ lies and deceptions you have to comprehend and then accept where you went wrong, this admission has yet to be made and only the realisation that Spain has no money left and that in itself will not fix the problem. Nations like Spain are going to confront the same issues, the UK is heading towards that cliff and shows no signs of heeding the lessons of Spain.

Owen in GA

Ken Smith: I think that’s related to the one of the two items Einstein said are infinite, that he was sure about. Human stupidity.

AnonyMoose

“The wider implication of this is that if Spanish politicians can do that, probably most European politicians can do that.”
Nobody is safe while the legislature in session. Some people seem to not know that.

glen martin

I hear the subsidies for solar power in Spain were so high in you could make money by aiming electric lights at your solar panels.

Ted

The Spanish energy policy’s over the last 10+ years were the equivalent of a man shooting himself in the head. Now a brain surgeon is attempting to remove the bullet, repair the damage tissue and retrain the brain functions. A long and tedious job with no guarantee of success.
Good luck with that Spain.
This same story can apply to many other County’s, States and Provence’s, that many of us live in. The scramers, white collar crooks and government allies have taken raided the treasures and financial earning ability’s of the people, made a few wealthy and impoverished the many.
It’s a crime!

ddpalmer

I like this statement;
” …that today supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.”
Notice the qualifiers ‘on the most breezy and sunny days’.
The World Bank says total Spanish production of alternative energy is 14.8% of total use. With a normal 30% capacity factor for alternative energy, 50% when operating becomes about 15% annualized. But of course the 50% number looks so much better for the Greens, just hope people don’t catch the qualifier.

Jeroen B.

“that today supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.”
My BS-o-meter started ticking like crazy when I read this … so correct me if I’m wrong but …
Usually when it’s windy, it’s overcast
Usually when it’s sunny, there’s not a lot of wind.

cedarhill

Just think how many nuclear power plants and/or natural gas power plants would have been built for 69 billion. Back of the envelope calculations mean they’d have around 34,500,000 kilowatts that works even at night with no wind using a capital cost of about 2K per kilowatt.

The subsidies were so high you could run dieselgenerators on your solar farm at night to mimic output and still make money. If some smartaleck hadn’t noticed the weirdness of a solarfarm producing energy at night they’d still be doing it when the cord was cut.

George E. Smith;

Well the photograph demonstrates the problem with thermal solar farms of that type (mirror-furnace systems. Their efficiency is abyssmal. I doubt that they collect even 5% of the total solar energy that lands inside the boundary fence. They have the “Solyndra problem” ; the individual collectors shadow each other so you have to put them widely apart, so most of the solar energy simply hits the ground and is lost. Wind turbines have the same problem.
When land becomes free, and land improvements are immune to property taxes, then this could be a winner.

woodNfish

“…wind and solar projects since 2004 that today supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.”
This is probably pure BS, and if it is ever true, is so infrequent as to be inconsequential.

kent Blaker

We hear that fossil fuels are not renewable… but one could say that charcoal grows on trees and methane is biological waste. They tell use we need to think outside the box for sustainable energy, well when I think outside the box i realize that when we extract energy from fossil fuels we are simply adding oxygen. The Carbon, Nitrogen, and Hydrogen are simply oxidized. If those molecules are stripped of their Oxygen and recombined (under pressure) then they can be used again as a portable energy source. Cheap energy from Thorium reactors, could be used to take atmospheric gases and make them back into fossile fuels.

Gail Combs

vboring says:
May 30, 2012 at 9:10 am
If this were an intentional strategy, it would be brilliant:
__________________________
Of course it was intentional, at least in the USA. Remember the government is GUARRENTEEING those bank loans!
In the USA

The REAP Guaranteed Loan Program encourages the commercial financing of renewable energy (bioenergy, geothermal, hydrogen, solar, wind and hydro power) and energy efficiency projects. Under the program, project developers will work with local lenders, who in turn can apply to USDA Rural Development for a loan guarantee up to 85 percent of the loan amount.
http://www.rurdev.usda.gov/rbs/busp/9006loan.htm

In the EU

Public funding is very important for enterprises to finance energy saving investments. 39% have
availed themselves of current assistance programmes (central government, federal states, EU,
etc.)…
Section 4 analyses the results of the survey of financing mechanisms for energy efficiency in the
Member States and points to some successful and innovative financing schemes, while Annex I
contains detailed country files on financing for energy efficiency available in all Member States.
Policies that leverage increased investment are considered too, such as financial incentives
(grants, production or user tax credits, rebates, white certificate schemes, etc.), as well as funding
from the Structural and Cohesion Funds (SCF) and via the European Investment Bank (EIB).
http://ec.europa.eu/energy/efficiency/doc/financing_energy_efficiency.pdf

Do not forget where those loan dollars actually come from.

Appendix E – Money Is Created by Banks Evidence Given by Graham Towers
Some of the most frank evidence on banking practices was given by Graham F. Towers, Governor of the Central Bank of Canada (from 1934 to 1955), before the Canadian Government’s Committee on Banking and Commerce, in 1939….
Q. But there is no question about it that banks create the medium of exchange?
Mr. Towers: That is right. That is what they are for… That is the Banking business, just in the same way that a steel plant makes steel. (p. 287)
The manufacturing process consists of making a pen-and-ink or typewriter entry on a card in a book. That is all. (pp. 76 and 238)
Each and every time a bank makes a loan (or purchases securities), new bank credit is created — new deposits — brand new money. (pp. 113 and 238)
Broadly speaking, all new money comes out of a Bank in the form of loans.
As loans are debts, then under the present system all money is debt. (p. 459)
Q. When $1,000,000 worth of bonds is presented (by the government) to the bank, a million dollars of new money or the equivalent is created?
Mr. Towers: Yes.
Q. Is it a fact that a million dollars of new money is created?
Mr. Towers: That is right.
Q. Now, the same thing holds true when the municipality or the province goes to the bank?
Mr. Towers: Or an individual borrower.
Q. Or when a private person goes to a bank?
Mr. Towers: Yes.
Mr. Towers: Yes.

Tax money however is not created out of thin air like bank money. It is earned by exchanging labor for government blessed bank created fiat currency. Therefore unlike bank loans. Tax money represents real wealth (your labor) not a fairy dust computer entry.
CAGW has been a giant pump moving tax payer wealth into the hands of certain corporations and banks.

Phillip Bratby

“The wider implication of this is that if Spanish politicians can do that, probably most European politicians can do that.”
Let’s hope so; in the UK preferably and as soon as possible. Like today.

Paul Marko

The Greens in the U.S. are working overtime to terminate the fossil fuel industry
The Sierra Club, is mounting a major campaign to kill the natural gas industry.
Wall Street Journal 5/30/2012: Review and Outlook
“The battle plan is called “Beyond Natural Gas,” and Sierra Club executive director Michael Brune announced the goal in an interview with the National Journal this month: “We’re going to be preventing new gas plants from being built wherever we can.” The big green lobbying machine has rolled out a new website that says “The natural gas industry is dirty, dangerous and running amok” and that “The closer we look at natural gas, the dirtier it appears; and the less of it we burn, the better off we will be.” So the goal is to shut the industry down, not merely to impose higher safety standards.”
We can’t wait for Solar Cycle 25 to drive home a point.

If something can only exist due to subsidy, the market is telling you one of two things. Either the item being subsidized is not needed by the economy or the general economic conditions are so bad that very little of anything is able to grow.

Lars P.

How variable is this supply?
ddpalmer says:
May 30, 2012 at 10:31 am
“The World Bank says total Spanish production of alternative energy is 14.8% of total use. With a normal 30% capacity factor for alternative energy, 50% when operating becomes about 15% annualized. But of course the 50% number looks so much better for the Greens, just hope people don’t catch the qualifier.”
So if the output varies high between 0 and 50% with an average of 14,8% then this might be a serious disturbance to the grid. Does anybody have the output data to give an overview?

Patrick

““They destroyed the Spanish market overnight with the moratorium,” European Wind Energy Association Chief Executive Officer Christian Kjaer said in an interview. ”
Well, it’s obvious why this guy runs an association and not a company – because he has not idea what a “market” is. Only an economic moron would make the statement he made. There’s a market there, it’s just not for really expensive, undependable energy.

Sean

“…wind and solar projects since 2004 that today supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.”
How about they provide some unequivocal facts instead of this vaguely qualified bull. What percent of Spain’s total power demand is met by solar and wind, without any caveats for time of day or local weather.

MarkW

If it took subsidies in order to create “the market”, then there never was a market to begin with.

Ian Hoder

“…supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.”
I’m not buying this one. I think the author saw that “Renewable Energy” provided up to 50% of Spain’s power demand on some days and forgot that it includes hydroelectric and geothermal as well.

Robertvdl

http://www.cincodias.com/bolsas/
http://www.cincodias.com/cotizacion/PETROLEO-ENERGIA/46634/
( click on 5 años ) should be minus 62.11 %
Spain just doing great only 52% of the young people can’t find a job can’t start a future.And most of the 48% with a job working for less than 1000 euros per month.

George E. Smith;

Sounds a bit like the Solyndrome; we can’t compete with those fire sale Communist Red Chinese child labor prices, with our inefficient solar down the tubes; but then neither can they compete with already existing practical energy technologies; but we’ll take your subsidy money anyway, till our cover is blown !

George E. Smith;

“”””” kent Blaker says:
May 30, 2012 at 11:39 am
We hear that fossil fuels are not renewable “””””
So where did the fossil fuels come from; certainly not from the sun ? Fossil fuels by definition ARE renewable until life goes extinct.
On the other hand it is not at all proven that hydrocarbon fuels other than coals are indeed fossil sourced; and it certainly is not proven that methane is a fossil fuel; they are just gaseous, and liquid “rocks”, aka minerals.

Stephen Richards

Mike Smith says:
May 30, 2012 at 9:20 am
That famous line is absolutely true…
sooner or later you run out of other peoples money.
Already happened in Ireland, Greece, Italy, Portugal, Spain. When the fit hits the shan in France, Germany, and the USofA, this gig will finally be over and we might actually start rebuilding a sustainable economy.
Don’t wait for the Clegg camaron government. His wife’s father is making a fortune from his son in laws great work 😉

Ian W

If you are in Spain at the moment you have far far more pressing concerns than ‘sustainable’ energy that isn’t …
“Spain is facing the gravest danger since the end of the Franco dictatorship as the country is frozen out of global capital markets and slides towards an epic showdown with Europe. “
http://www.telegraph.co.uk/finance/financialcrisis/9301270/Spain-faces-total-emergency-as-fear-grips-markets.html

rogerknights

Remember when Spain was the poster boy for renewables, the model for the rest of us? It was less than four years ago that Obama officials were pointing to it as a success story.

Big D in TX

kent Blaker says:
May 30, 2012 at 11:39 am
… The Carbon, Nitrogen, and Hydrogen are simply oxidized. If those molecules are stripped of their Oxygen and recombined (under pressure) then they can be used again as a portable energy source. Cheap energy from Thorium reactors, could be used to take atmospheric gases and make them back into fossile fuels.
*****************************************
I would like to pre-order your perpetuum mobile, please.
It has been said before and is worth repeating. There is literally no such thing as sustainability. It does not exist. We live on a finite world with limited resources. Given sufficient time, natural processes will recycle most everything into relatively base constituents. We just happen to live far too short. One day (hopefully) we will harvest more resources from the moon, asteroids, other planets, even exoplanets. In a thousand years we could be all over the galaxy or in another one, if we don’t let petty differences consume us. But we will *always* use resources faster than natural processes can recycle them.
You can watch the hydrologic cycle happen in an afternoon, but stars can take billions of years to create heavy elements and disperse them.
Our time is now, our place is here. Please, let’s make the most of it, folks. Given all the evidence against the malignment of humanity, why aren’t we partying in the streets that we are not, in fact, cooking our planet? I refuse to feel guilty for being alive, free, and fortunate to be American. Sure, we celebrate earth day, but what about human day? Electricity day? Petrochemical day?
Personally, I have my hopes for the future currently riding on the Dragon capsule. I think I will forever celebrate the day of the first truly commercialized human space flight (yes, the purchaser will be government, but let’s not mince meanings on this one).

KnR

The days of very easy money have come to end , and let us remember the money so easy that could run diesel generators at night sell it has ‘solar’ power and make a ton of cash . Now suddenly CO2 matters not a dam to the renewable gang once the buckets of cash are taken off them .

jayhd

johanna, when vboring says low cost energy, he is disregarding all the original cost. He is only factoring in the cost of plant acquisition and electricity generation after bankruptcy. And, depending on the condition of the plant and equipment, and depending on the acquisition cost, he may be right. The acquisition cost would certainly be less than building a natural gas fired plant.
Jay Davis

Athelstan.

These are the same suppliers that spearheaded more than $69 billion of wind and solar projects since 2004 that today supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.

If those figures are correct and i firmly believe that the 50% figure is a figment – then honestly $69 billion – for maybe 50% power [on a good day!] is a pathetic return on taxpayer ‘investment’.
No wonder they are bust.

DesertYote

“…wind and solar projects since 2004 that today supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.”
or so the models say ….