Spain: Sorry about this, but some of these renewable-energies subsidies have got to go

posted at 6:31 pm on June 9, 2013 by Erika Johnsen

Over the past decade, Spain has taken to offering pretty huge subsidies and other various incentives to actively encourage the growth of wind and solar energy — the result of which is that the country is overrun with more wind and solar farms than the country knows what to do with, and yet both types of energy are still too expensive and companies have consistently failed to make enough money to stand on their own two feet. Unfortunately for them, the government can’t afford to keep subsidizing the charade, and the time has come to make a serious change. From the WSJ:

Under a broad energy-sector overhaul to be announced as early as June 21, Spain’s government will reduce subsidies to renewable-energy producers by 10% to 20%, people familiar with the plan said Thursday.

The move could drive tens of thousands of struggling solar-energy companies and individual investors like Mr. Cabrero into default at a time of deepening recession and eventually boost loan losses for banks that financed the projects. …

Spain’s electricity system has registered deficits during most of the past decade. By May, the total accumulated deficit had reached about €26 billion ($34.04 billion). The government has promised to narrow the annual gap this year as it struggles to bring down its budget deficit and limit the rise in household electricity bills.

Spain began offering large subsidies and other incentives in the late 2000s to promote the growth of solar-energy projects. In addition, banks loaned the renewable-energy companies an estimated €30 billion. As a result, the amount of solar-power capacity installed in Spain far surpassed official government targets, increasing the tariff deficit.

Not only has the Spanish government been directly paying out the nose for the development and operation of its politically preferred forms of green energy, but the most pricey wind and solar sources have been driving up electricity costs for Spanish consumers — neither of which Spain can afford, with their financially crippling budget deficit and their 26 percent unemployment rate.

In the long run, all of these ‘favors’ and subsidies and payouts to the so-called renewable energies that politicians have so magnanimously determined will be ‘the way of the future’ are actually a major disservice to these very same technologies. Engineering the market from the top down and trotting out these projects before they are actually ready, and continuing to throw them bones as they repeatedly fail to pass the test of competition, is no way to encourage the price efficiency that could actually earn them a place in the mainstream energy market.

The end result of Spain’s years of meddling isn’t a gloriously redesigned and ‘cleaner’ energy scheme, but thousands of people taking dire losses on their investments and the opportunity cost of countless resources and dollars that could have been more productively spent elsewhere. Remind me why the Obama administration is so convinced we need to keep following Spain’s and others’ example, again?


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Comments

Spain needs a new Franco, end of story.

abobo on June 9, 2013 at 6:37 PM

Mythical conservative beings!

yubley on June 9, 2013 at 6:41 PM

Spain needs a new Franco, end of story.

abobo on June 9, 2013 at 6:37 PM

Is he still dead?

The Rogue Tomato on June 9, 2013 at 6:41 PM

Undo the damage that Zapatero and his Socialist Workers Party have done to dear España.

thebrokenrattle on June 9, 2013 at 6:41 PM

If a business cannot exist without subsidies, it shouldn’t exist at all.

lorien1973 on June 9, 2013 at 6:41 PM

Spain has little in the way of traditional energy sources. So it did not build the only one that made sense. Nuclear.

pat on June 9, 2013 at 6:53 PM

If a business cannot exist without subsidies, it shouldn’t exist at all.

My sentiment exactly.

hawkeye54 on June 9, 2013 at 6:58 PM

But why. There are SOOOO many other olive tree and sunflower plantations.

WryTrvllr on June 9, 2013 at 7:00 PM

Is he still dead?

The Rogue Tomato on June 9, 2013 at 6:41 PM

I don’t think so. I heard he was guiding tours at Graceland.

Mimzey on June 9, 2013 at 7:19 PM

Bayam, what percent of your total external/non-corporal energy consumption… is met by solar power?
 
rogerb on October 6, 2011 at 7:54 PM

 
I have no idea, but why does that matter? What does the present have to do with the future?
 
bayam on October 7, 2011 at 12:44 AM

 

So we’ll mark you down for “0% (zero percent) personal investment in solar.”…
 
You’re a bright fellow. You still can’t see the problem?
 
rogerb on October 7, 2011 at 6:00 AM

rogerb on June 9, 2013 at 7:39 PM

Spain needs a new Franco, end of story.

abobo on June 9, 2013 at 6:37 PM

Solution – right out of the gate.

OldEnglish on June 9, 2013 at 7:42 PM

Undo the damage that Zapatero Obama and his Socialist Workers Democratic Party and RINO enablers have done to dear España. the U.S.

thebrokenrattle on June 9, 2013 at 6:41 PM

bw222 on June 9, 2013 at 7:56 PM

The Socialist Green government in Spain completely collapsed. This was a case study in the folly of green energy as a foundational and economically sensible source of energy. A highly inconvenient parable for the Left but a very useful one for the Right, which of course they have failed to exploit.

rrpjr on June 9, 2013 at 7:56 PM

Solyndra is Spanish for “stupid friggin’ idiots”…

hillsoftx on June 9, 2013 at 7:57 PM

How about that post on Tesla Erika? $25 a share to $102 as of last Friday.

HotAirLib on June 9, 2013 at 7:59 PM

HotLips on June 9, 2013 at 7:59 PM

…Trollcot …the rotting diCk!

KOOLAID2 on June 9, 2013 at 8:05 PM

rogerb on June 9, 2013 at 7:39 PM

Don’t know about bayam but some of us are doing extremely well owning American Solar companies. First Solar $8 to $52, Sunpower $3 to $19 and Tesla $25 to $102. All within a year.

HotAirLib on June 9, 2013 at 8:06 PM

Solyndra is Spanish for “stupid friggin’ idiots”…

Oh, not so stupid…. while the company failed, and one suspects its failure was an insignificant issue with the founders, the CEO and fellow execs made out like bandits, personally enriched with taxpayer monies for the enterprise. They walked away with boatloads of money for the effort….one need not wonder who the real “stupid idiots” were in this case….the American voters who happily elected and reelected a for pResident, a crooked Chicago marxist and his cabal, who time and again rob the taxpayers to enrich their corporate cronies regardless of any actual success at all.

hawkeye54 on June 9, 2013 at 8:14 PM

Reuters) – Shares of Tesla Motors Inc, which makes electric cars that are widely praised for performance, could fall more than 50 percent unless the company can get stronger, cheaper batteries that will allow it to cut the $90,000-plus vehicle sticker price in half, Barron’s said.

The company’s current Model S is too expensive to attract the hundreds of thousands of buyers each year needed to support the stock price, Barron’s said

For the troll.

Barred on June 9, 2013 at 8:28 PM

Bayam, what percent of your total external/non-corporal energy consumption… is met by solar power?

rogerb on October 6, 2011 at 7:54 PM

I have no idea, but why does that matter? What does the present have to do with the future?

bayam on October 7, 2011 at 12:44 AM

So we’ll mark you down for “0% (zero percent) personal investment in solar.”…

You’re a bright fellow. You still can’t see the problem?

rogerb on October 7, 2011 at 6:00 AM

rogerb on June 9, 2013 at 7:39 PM

Willfully vomit-brained & emotion-driven fascists like bambam can’t be bothered to consider the consequences of their actions.

ebrown2 on June 9, 2013 at 8:41 PM

This: 2.2 real jobs lost in Spain for every green job created. And the real jobs were not subsidized by the leftist government….vs…..

http://www.juandemariana.org/pdf/090327-employment-public-aid-renewable.pdf

The best thing is there is all sorts of 2008 debunking of these results but then Spain hits the skids harder than any country proving that the old green energy scam is …well…total BS.

That is all.

Surprise surprise it was hard to find this as all my bookmarks were dead links. Hi PRISM!!!

jukin3 on June 9, 2013 at 8:52 PM

rogerb on June 9, 2013 at 7:39 PM

 
Don’t know about bayam but some of us are doing extremely well owning American Solar companies…
 
HotAirLib on June 9, 2013 at 8:06 PM

 

What percent of your total external/non-corporal energy consumption is met by solar power, HotAirLib?

rogerb on June 9, 2013 at 8:53 PM

When you go against Physics and Economics the end results will be a disaster… That is what liberals do all the time… Go against Physics and Economics… and of course they always go against Human Nature…

mnjg on June 9, 2013 at 8:56 PM

What can’t go on, won’t

tmitsss on June 9, 2013 at 9:13 PM

Erika, of the four regular bloggers at this site (Ed, Allah, Jazz and yourself), you’re the one who appears most interested in what’s going on in Europe. I’m very happy you keep us informed with regular posts as you do. It’s fascinating stuff and definitely part of the big picture. So, thanks!

Burke on June 9, 2013 at 9:37 PM

Remind me why the Obama administration is so convinced we need to keep following Spain’s and others’ example, again?

Because the green crowd give big domations and votes to Democrats

Conan on June 9, 2013 at 10:55 PM

Remind me why the Obama administration is so convinced we need to keep following Spain’s and others’ example, again?

I am coming to the bitter realization that Democrats either don’t care about economic vitality or actually want to create a dependent class of people and businesses who will become an enslaved group under their, not domination but “state defined subjection”. They will be independent but in a real sense, props, tools, safe deposit boxes and sources of shock troops.

Spain has a 26 to 28% unemployment rate and a restive German aunt so they have to start worrying about feasible energy and profits.

IlikedAUH2O on June 9, 2013 at 10:59 PM

I am coming to the bitter realization that Democrats either don’t care about economic vitality or actually want to create a dependent class of people and businesses who will become an enslaved group under their, not domination but “state defined subjection”.

Its a bit of both.

The economic vitality only rewards the “producers” so its unfair and the economic benefits must be redistributed to the “takers” which the dems need as a perpetual class of dependent to remain in constant power.

BigBusiness wants to buy out and/or squash the competition so to have only a relatively few International megacorps with monopolies in their market segment are supporting the proponents of BigGov. to ensure the most desirable outcome.

hawkeye54 on June 9, 2013 at 11:11 PM

Don’t know about bayam but some of us are doing extremely well owning American Solar companies. First Solar $8 to $52, Sunpower $3 to $19 and Tesla $25 to $102. All within a year.
HotAirLib on June 9, 2013 at 8:06 PM

Easy, short answer: stock bubble. Lots of libs/proggies buy these stocks because they feel good about supporting solar. Demand drives up price. I’ll bet the P/E ratios have been skyrocketing as well – unless they’re already at infinity because the ratio denominators are ZERO.
Are you 100% invested in these companies? If not, where’s your faith? You could be earning even more! ;)

Marcola on June 10, 2013 at 1:13 AM

Good for Spain. I thought they would go bankrupt before seeing reality on the real economics of solar and wind.

See that story about the state wanting to charge hybrid owners an extra tax for the gas they are not buying? Remember when hybrids used the fast lanes for free? Gone in California. It’s not easy being Green.

Meanwhile SoCal Edison turned off the San Onofre nuclear plant and laid off 1100 people because there is no sign they will get permission to re-open after a trivial spill. Barbara Boxer and environmental activists were celebrating the shutdown.

virgo on June 10, 2013 at 2:50 AM

Also, watch Tesla. They miraculously bought their plant for $4M and unexpectedly paid back their $465M loan. Waiting for part 2 of their accounting.

virgo on June 10, 2013 at 2:55 AM

Remind me why the Obama administration is so convinced we need to keep following Spain’s and others’ example, again?

Because The failure is theUSofA is what they want.

Slowburn on June 10, 2013 at 3:47 AM

Did you know there are global warming believers who are effectively against wind and solar?

Dr. Barry Brook, climate science chair at Adelaide University in Australia crunched the numbers on how one of Spains solar plants would scale versus a Westinghouse AP-100 nuclear reactor:

Let’s use a half-way figure from above — 2.4 — as a scaling constant. This gives 3,127 tonnes of concrete, 974 tonnes of steel, and 300 tonnes of glass per MWe delivered at a 90% capacity factor. Scaled up to the size of an AP-1000 reactor (1,154 MWe at 90 % CF), this is 3.61 million tonnes of concrete, 1.12 million tonnes of steel, and 0.34 million tonnes of glass, with the total plant covering ~101 km2 of desert. By comparison, the reactor would require 0.24 million tonnes of concrete and 0.015 tonnes of steel, and occupy 0.04 km2 of land. So, the comparative solar : nuclear ratios comes out as follows:

Ratio of materials/land requirements, for equivalent solar thermal : nuclear (both calculated at 90 % capacity factor):

Concrete = 15 : 1
Steel = 75 : 1
Land Area = 2,530 : 1

This is why Spain is giving up. Even if we assume Global Warming is real, solar and wind simply cannot provide power on the scale a civilization like ours needs.

Putting Global Warming aside, human civilization has existed for 6000+ years. Fossil fuels won’t last anywhere near another 1,000. The future of technological civilization is nuclear or nothing.

And every penny spent on solar panels and windmills is a pure and utter waste.

Alberta_Patriot on June 10, 2013 at 4:16 AM

How about that post on Tesla Erika? $25 a share to $102 as of last Friday.

HotAirLib on June 9, 2013 at 7:59 PM

How much energy is consumed in making a Tesla?

How much energy is consumed by a Tesla?

How much energy does a Tesla generate?

If it does not produce energy it is not part of the ‘Green’ energy generation system.

That is before you even get into questions of ‘sustainability’ of the current electrical grid to run such vehicles. Cute little electrical stations may look nice, but they put loads on the electrical system that solar, geothermal, wind and any other ‘Green’ energy source can’t create due to their limitations in power production, storage and transportation. And if you can’t hook up two 240 W solar panels to the vehicle and get a full charge with a net 50% sunlight, then you are talking a major problem for home use.

I’m glad that people trade based on dreams and grand visions of the future: it is their money to waste.

You want a ‘Green’ energy system? Then you want nuclear or space based solar. Plus that will move the industrial manufacturing sector out of the biosphere. Are you investing in THAT future, or just one that requires government subsidies?

ajacksonian on June 10, 2013 at 7:50 AM

Remind me why the Obama administration is so convinced we need to keep following Spain’s and others’ example, again?

Because the green crowd give big domations and votes to Democrats

Conan on June 9, 2013 at 10:55 PM

Because actually following -France- on this issue would help the United States. These collectivist thugs only want to adopt European programs that are demonstrable failures.

ebrown2 on June 10, 2013 at 7:55 AM

Because actually following -France- on this issue would help the United States. These collectivist thugs only want to adopt European programs that are demonstrable failures.

ebrown2 on June 10, 2013 at 7:55 AM

I know that it’s popular among conservatives to bash France for its socialist policies, its weakness against its own labor unions, and its pacifism regarding the Iraq war, but France does get about 75% of its electricity from nuclear power plants. Part of this is due to the fact that France doesn’t have much fossil fuel resources, but extensive development of nuclear power is a smart policy for a fuel-starved industrial nation.

America has had an irrational fear of nuclear power ever since the minor accident at Three Mile Island, and the “China Syndrome” film, and the Fukushima disaster has reinforced that fear.

Steve Z on June 10, 2013 at 11:50 AM