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Madrid cuts subsidies for solar power plants
The Financial Times ^ | 8/1/2010 | Victor Mallet in Madrid

Posted on 08/01/2010 9:47:35 PM PDT by bruinbirdman

Spain will cut the subsidised electricity prices paid to new photovoltaic solar power plants by up to 45 per cent, the industry ministry has announced, in a move designed to increase efficiency and cut government spending at a time of austerity.

With the help of generous state subsidies and electricity prices as much as 10 times the rate paid for conventionally generated power, Spain has become one of Europe’s leading producers and consumers of alternative energy, but the policy has contributed to an €18bn ($23bn, £15bn) accumulated deficit that hangs over the electricity sector.

The alternative power comes mainly from wind turbines but also from costly panels of photovoltaic cells, which convert sunlight directly into electricity, and from the newer thermosolar plants, which use mirrors to focus the sun’s rays, turn water into steam through heat and so drive a turbine.

The ministry said guaranteed prices for large, ground-based new photovoltaic plants would be cut by 45 per cent, while those for large roof installations would drop 25 per cent and for small ones by 5 per cent.

“These percentages reflect the improved technologies and cost reductions that have occurred in the photovoltaic sector, which suggests the gains should be transferred to consumers while allowing attractive rates of return for investors,” the ministry said.

The government agreed in July with alternative energy associations on cuts for subsidies to wind and thermosolar plants, but an argument still rages over its plans to cut support for existing photovoltaic plants – a retroactive change that investors say would be illegal.

On Friday, the Photovoltaic Business Association (AEF) sharply criticised the government, saying it had failed to accept various proposals by investors during three months of talks, even though some of the plans entailed substantial financial sacrifices.

Juan Laso, AEF president, said in a statement that he was deeply concerned by “the insecurity that is keeping us in a state of paralysis” and that his organisation was ready to continue negotiating. “We are not going on holiday,” he said.

Investors in the €20bn Spanish photovoltaic sector – including foreign funds, individuals and the banks that have financed plants – have lobbied furiously against a 30 per cent cut in tariffs being mooted by the government for plants already built.

The government, which says €3bn was spent on photovoltaic subsidies last year out of a total renewable energy subsidy bill of more than €6bn, has said it wants to cut €1bn a year from the cost of producing and delivering electricity to consumers.

Among other cost-cutting measures, it has already announced a crackdown on fraud in the alternative energy business.

But it remains committed to renewable energy. Among the plans announced by the government was a new, cheaper electricity tariff for consumers between midnight and 6am, which would encourage future users of electric cars to charge their vehicles when overall electricity demand was low. Another proposal paves the way for small producers of alternative energy to sell any surplus over their own needs to the electricity grid.


TOPICS: Business/Economy; Crime/Corruption; Government; News/Current Events
KEYWORDS: spain

1 posted on 08/01/2010 9:47:37 PM PDT by bruinbirdman
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To: bruinbirdman
Jeepers. 18 cent power just doesn't seem to be that good of an idea anymore... how about sacking the stupid windmills next?
2 posted on 08/01/2010 9:50:48 PM PDT by April Lexington (Study the constitution so you know what they are taking away!)
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To: April Lexington

Spain probably is the most ideal country in Europe for solar because of the constant sunlight and fairly arid climate. i.e. if “it don’t” work there, “it won’t” work anywhere.


3 posted on 08/01/2010 10:05:50 PM PDT by Frantzie (Television controls the American people/sheep)
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To: bruinbirdman

It’s the green economy jobs bonanza and woe betide the economy that falls behind in investing in its clean energy infrastructure. Why I hear the Chinese are way ahead of us investing billions to upgrade their power grid to near stone-age production levels based on wind, sun, and great clouds of hot, stinky gas.


4 posted on 08/01/2010 10:09:07 PM PDT by casuist (Audi alteram partem.)
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To: Frantzie
Obama awards $2B for solar power, hails new jobs

Clock running out for solar firms

BP closing Maryland solar manufacturing plant

Solar thin film technology sees weaker hands going out of business

Robbinsville solar company in bankruptcy

OFT slams solar company

5 posted on 08/01/2010 10:11:40 PM PDT by MamaDearest
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To: bruinbirdman

Sucked in, solar power investors in Spain. Have a business model based on subsidies, and you could have the rug pulled out from under you at any time.


6 posted on 08/01/2010 10:17:29 PM PDT by spyone (ridiculum)
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To: April Lexington

Ha, with the blessing of the government commission in charge of such things, our state utility company is building yet another wind farm! Isn’t that peachy? I so love paying more for less.


7 posted on 08/01/2010 10:19:43 PM PDT by Pining_4_TX
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To: Frantzie

The biggest problem with solar power...is the cost and the wait for pay-back. It will be years and years before you reach a point of paying for apparatus to start with. The curious thing is that if you just go and buy two panels for your house in Spain...to heat water only...that would typically start paying back in just three or four years...and at the private level, it makes sense.


8 posted on 08/01/2010 10:25:23 PM PDT by pepsionice
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To: April Lexington
"18 cent power just doesn't seem to be that good of an idea anymore... "

Here's a good one.

Nevada passed legislation that by 2020 (or thereabouts) 20% of electricity "produced" in the state must be from renewable sources.

They do not say that electricity must be sold in Nevada.

Southern Nevada has huge transmission lines going to California from Lake Mead. So, in Boulder City, giant solar farms are being built, with rent paid to the city, and the electricity sold to California whose law says "electricity used" must be renewable.

In north Nevada, geothermal is big, with sales to California.

Nevada prefers cheap natural gas generated electricity and hydroelectric.

yitbos

9 posted on 08/01/2010 10:27:24 PM PDT by bruinbirdman ("Those who control language control minds.")
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To: spyone
"Have a business model based on subsidies"

The model is fine as long as Madrid subsidies continue.

Madrid guaranteed construction, distribution and subsidized rates.

Now the rate payer will pick up more of the same subsidy.

Anyone can get rich growing tomatoes in the desert as long as the government subsidizes the water.

yitbos

10 posted on 08/01/2010 10:34:22 PM PDT by bruinbirdman ("Those who control language control minds.")
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To: pepsionice

“The biggest problem with solar power...is the cost and the wait for pay-back.”

And.....I’d rather have a third floor walk up next to the L in Chicago - it would be less noisy.


11 posted on 08/01/2010 10:37:57 PM PDT by jessduntno (I wonder...how will third Manassas turn out?)
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To: bruinbirdman
Who woulda thunk that subsidizing a system that produces electricity at 10Xs the normal cost would create a deficit for the industry? /s

Is there anybody out there?

12 posted on 08/02/2010 12:04:40 AM PDT by TigersEye (Greenhouse Theory is false. Totally debunked. "GH gases" is a non-sequitur.)
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To: bruinbirdman

And coal. Most of eastern NV below Elko County is receiving power from a mine-mouth power plant in Delta, UT, and the Flaming Gorge hydro project.

Residential power was about $0.09/kWh, demand power was about $0.07/kWh, plus demand fees. The demand fees make it pretty steep costs for intermittent uses, but the residential power rate has been stable for over 15 years.

I had a chat with Guinn’s power advisory group in, what was it, 2003 or 4? And I was telling them then that their goal was basically out of reach. There isn’t enough wind power available in NV - the wind does blow, but intermittently. Not enough to pencil out. There’s sure lots of sunshine (> 300 days per year, most of it cloudless blue skies), but solar is expensive as we all know. I’ve seen some promising developments in using reflectors and Stirling engines, which have higher efficiencies than PV’s at this point, and there’s geothermal. Geothermal has the problem that most of the geothermal resources are on BLM lands, and the permitting to get access to it is a long process. Geothermal wells are also a very tricky thing to develop.


13 posted on 08/02/2010 12:21:38 AM PDT by NVDave
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To: NVDave
" Geothermal has the problem that most of the geothermal resources are on BLM lands,"

Of course all these renewables get some federal or state bucks somewhere down the line.

You know that Boulder City's 200,000 acres were bought cheap from the BLM with the express purpose of energy, conservation and recreation?

In the deed, all EPA regulations for energy were designated as complete. That's one reason the city can put for bid and lease post haste. We just signed another one last week with a Korean solar panel outfit.

The coal/electric deals have not gone through in Nevada, eh? Dirty Harry has nixed more than one.

yitbos

14 posted on 08/02/2010 12:44:46 AM PDT by bruinbirdman ("Those who control language control minds.")
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To: NVDave
"Residential power was about $0.09/kWh, demand power was about $0.07/kWh"

Pretty nice, living in the middle of the desert because of cheap power. Ours is a little cheaper because the dam has some little generators tied into the city when it was built and Sempra takes pretty good care of us because one of their plants is on city property with options to expand. Permits are no problem. No EPA evaluations necessary. Our assemblyman even took Boulder City out of the Las Vegas, what do they call it, air pollution control district? medical district?

yitbos

15 posted on 08/02/2010 12:55:30 AM PDT by bruinbirdman ("Those who control language control minds.")
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To: jessduntno
"And.....I’d rather have a third floor walk up next to the L in Chicago - it would be less noisy."

I had one of those in the 1970's.

16 posted on 08/02/2010 2:13:34 AM PDT by Neanderthal
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To: bruinbirdman

http://www.freerepublic.com/focus/f-news/2451245/posts

Spain curbs ‘millionaire’ pay for air traffic controllers (incredible salaries)
Breitbart.com
According to figures released by the transport ministry last week, 135 controllers earned more than 600,000 euros (830,000 US dollars) per year while 713 earned between 360,000 and 540,000 euros.
By comparison Prime Minister Jose Luis Rodriguez Zapatero earns just under 92,000 euros a year while the average salary in Spain is just over 18,000 euros per year, according to government figures.
In addition, the controllers can retire at the age of 52.
(Excerpt) Read more at breitbart.com ...

Incredible. The Fall of the West.

And, at age 52, if they make nearly a MILLION DOLLARS a year while they are working, then retire, don’t they get about $30,000,000 in retirement pay, if they live long enough??? Total of $30,000,000 each + salaries??? What country could ever support this?

Oh yeah: Spain, US, UAW, Obama, SEIU, they all want to try!!!


17 posted on 08/02/2010 2:38:41 AM PDT by DontTreadOnMe2009 (So stop treading on me already!)
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To: bruinbirdman

Dusty Harry’s blockage of the coal-fired power plant north of Ely has nothing to do with coal, power, pollution or anything else. It has to do with water.

The power company bought up several ranches and farms in the Steptoe Valley (that’s the long valley north of Ely/McGill) and put them into production to “seal” the water rights in this “un-designated basin” (ie, a hydrographic basin in which the NV state engineer will still allow irrigation well permits to be issued).

Harry’s son Rory is on the SNWA board - and they want to siphon all the water they can off the eastern side of the state, from Lincoln County north to the Elko County Line. That includes that water in the Steptoe Valley, *just* south of the Elko County line.

When we were selling the farm, I passed on a position to manage the farming operation on the power company’s 23 pivot hay operation to seal the water rights. That would have been something - really “big” farming, managing a team of no less than five other guys, and probably a trucker or two.

But I couldn’t ask the Mrs. to move out to Lages Junction, where there is literally nothing for miles in all directions. Great elk/mulie/pronghorn country, but little else in the way of humans to talk to.

The poor fellow EE who was put in charge of spinning up the farming operation met me one day in the diner in Eureka and looked completely bewildered when I went on for 90 minutes with all the things he was going to have to do to bring this land and water rights into compliance in one year’s time. The poor guy was older than I am, and a *very* experienced power engineer, especially in nukes. Try to find power EE’s these days who have nuke experience. You might as well go looking for Waldo. This guy’s expertise was in the $250/hour+ range - there ain’t much of his skillset around.

He looked at me and asked rhetorically “How the hell did I get sucked into this?” After he had told me of his background, I asked him the same question: “How the hell did you get pulled into this?” We agreed if one or the other of us discovered the answer to that question to let the other know. He could understand my retiring and wanting to farm, but he never wanted to farm. He was a hot power EE who did consulting gigs for power companies, and was thinking he was originally tasked with laying out a coal-fired power plant that was going to be state-of-the-art. Then they figured out how much cooling water they needed and down the rabbit hole he went... poor guy.

And after I coached him on all this stuff (and he got it done, to his credit), Dusty Harry realized that he could NOT allow those water rights for 15,000 +/- acre feet to slip out of his/Rory’s grasp - so Harry blocked the air permits for the power plant, which was going to tie into the Gonder substation just north of Ely. All the transmission infrastructure is “right there” (including a 345kv line out of the area) and another 345kv line was planned into UT a couple years ago) to get power to major regional markets.

In Nevada, where Harry is concerned, sit back and think very carefully what he’s up to. It isn’t always immediately obvious. But always consider the water angle on EVERYTHING in Nevada.


18 posted on 08/02/2010 3:01:10 AM PDT by NVDave
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To: bruinbirdman

I should add that this power was from the Mt. Wheeler rural electrical co-op. They don’t make anything on the power - they just build a reserve fund for maintenance. They buy power at very low rates from Flaming Gorge and Delta, UT in 10-year contracts because they can characterize their load *very* well. They know they have about 15MW of demand (peak) during the winter months and another 15MW of demand during the irrigation months of May to September. That’s been constant.

This co-op, BTW, electrified one of the last areas to receive electrical power in the lower 48. The rural areas of White Pine County and Eureka County had no power until, oh, 1976 or so. The city of Ely used to have their own gensets and Eureka had a little 3-jug Fairbanks-Morse genset for lights and reefers in town. Farmers had to irrigate with diesels. The last of the diesels were Jimmy Screamers - like 8V71’s with straight pipes. Our neighbors had one of the last ones. You could hear the thing in the night air from, oh, five miles away.

Electric motors you can’t hear from more than, oh, a half mile. Electrification was great for peace and quiet in the farming community.


19 posted on 08/02/2010 3:09:31 AM PDT by NVDave
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To: NVDave
Thanks for "the rest of the story" on nixing coal plants in NV.

I have read your other posts on NV water rights and ranching. The dots connect nicely.

yitbos

20 posted on 08/02/2010 11:36:22 AM PDT by bruinbirdman ("Those who control language control minds.")
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To: Frantzie
Spain probably is the most ideal country in Europe for solar because of the constant sunlight and fairly arid climate. i.e. if “it don’t” work there, “it won’t” work anywhere.

The only problem the greenie weenies cannot overcome is the reality of operating reserve. Spain is lying about the cuts. The economics are not there without a grid wide storage capacity. They are paying for their electricity twice. The only place some economics are justified is source demand at the individual level. This might include solar hot water and a load peak shaving system (invertor and small battery backup). Selling power back to the grid does not negate the need for fossil or nuclear generating capacity.
21 posted on 08/02/2010 11:47:58 AM PDT by PA Engineer (Liberate America from the occupation media. There are Wars and Rumors of War.)
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To: PA Engineer

Thanks for the analysis. I recall something in the UK Telegraph, which is a good paper, on a fellow in Scotland who figured out how to store excess wind power. I am not sure if it was with batteries.

I agree about source demand at the individual level - i.e. hot water heaters and maybe some solar attic fans and a few other things.


22 posted on 08/02/2010 3:41:34 PM PDT by Frantzie (Television controls the American people/sheep)
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To: PA Engineer
"The only problem the greenie weenies cannot overcome is the reality of operating reserve."

"Madrid . . .cheaper electricity tariff for consumers between midnight and 6am,. . ."

France has a massive overcapacity in nuke power at night. So much so that they discout the electricity to other countries, particularly other countries that emphasize alternative fuels, like Denmark and Germany and Spain.

yitbos

23 posted on 08/02/2010 11:59:06 PM PDT by bruinbirdman ("Those who control language control minds.")
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To: PA Engineer
Good point and good analysis. Individualy, the economics of solar hot water and solar radiant heating work for most of Spain, and photovoltaic might work for driving conditioning air systems at peak hours for some users.

Red Eléctrica, the Spanish grid operator, had to arrange new control systems and centers to cope with more than 15% of the electricity being generated by windmills, whose output is not constant. Please also remember that Spain has a lot of mountains, which enables the building of huge pumped-storage electricity plants, such as Cortes de Pallás 1200 MVA project.
24 posted on 10/22/2010 1:08:55 PM PDT by J Aguilar (Fiat Justitia et ruat coelum)
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