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.
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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
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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.
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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.
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.
“…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.
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.
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
In the EU
Do not forget where those loan dollars actually come from.
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.
“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.
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.
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?
““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.
“…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.
If it took subsidies in order to create “the market”, then there never was a market to begin with.
“…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.
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.
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 !
“”””” 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.
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 😉
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
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.
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.
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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).
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 .
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
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.
“…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 ….