At the heart of the problem is a deficit of more than $26 billion in Spain's energy market, built up by subsidies to cover the gap between the cost of producing electricity and the price charged to consumers.well duh...
Posted on 06/23/2013 5:56:49 PM PDT by DeaconBenjamin
Spain's wind turbine manufacturers are laying off workers and farmers who installed solar panels are facing ruin as austerity policies afflict the long-protected green energy sector.
Further cuts are expected this summer.
State subsidies to clean energy producers have already fallen by between 12 and 40 percent on average in recent years, industry analysts say.
They could fall by another 10-20 percent in a new energy sector reform expected mid-July, according to the Spanish media.
"The punishment meted out to renewable energies in the past five years amounts to more than six billion euros ($8 billion)," said Sergio Otto, secretary general of the business group Renewables Foundation.
"In the wind turbine industry alone we have lost 20,000 jobs and in the solar energy sector it's probably more," he said.
At the heart of the problem is a deficit of more than $26 billion in Spain's energy market, built up by subsidies to cover the gap between the cost of producing electricity and the price charged to consumers.
"We are still singling out renewable energies as the main guilty parties for this deficit," Otto complained.
In the middle of the last decade when the economy was enjoying strong growth, Spain put a cap on the price of green energies and provided "fairly generous" subsidies, said Carlos Garcia Suarez, expert in the sector at the IE Business School.
The state aid boosted the appetite of investors and led to a "boom" in wind and, later, solar energies, making Spain a world leader in the industry, Suarez said.
"Not only have the subsidies come down but new projects have been explicitly banned, which is pretty unusual," he said.
The retroactive nature of some cuts even threw into question Spain's reliability for investors, Suarez said.
Indeed, several investment funds that bet on the sector are now taking Spain to international arbitration.
There is "political pressure", too, from the United States where some of the funds are based and the Spanish government is uncertain how to resolve the matter, he said.
"We gave excessive subsidies," said Rodrigo Izurzun, energy specialist at Ecologists in Action, an association which also criticised the radical change in policy since the economic crisis hit Spain in 2008.
"The current policy is harmful because the sector was maturing and close to becoming competitive without any aid but has suddenly totally collapsed," Izurzun said.
"That is without mentioning what the impact is in terms of braking the fight against climate change."
Investors in wind turbines no longer believe the outlook is attractive, said Heikki Willstedt Mesa, director of energy policy at the wind turbine association AEE.
"We have sued in the Spanish courts," said Miguel Angel Martinez-Aroca, president of Anpier, which groups Spanish solar energy producers. The sector is "barely surviving after so many cuts", he said.
His association has launched a campaign to highlight the unknown victims of the new austerity regime: people who put their savings into solar panels counting on the subsidies to make them profitable and, for example, to help finance their retirement.
"There are 55,000 individuals, small savers, many farmers and breeders, professionals, families and small businesses who simply believed what the state told them, which was to invest in solar energy," Martinez-Aroca said.
"Then we were ruined," he said, denouncing a "swindle and deception by the state" which lowered payments for such panels by 40 percent.
The consequences are far reaching.
"The solar energy sector's debt to banks is now $20 billion," Martinez-Aroca said.
Spain's banks are hardly in a state to withstand the blow; they have already had to take more than 41 billion euros from a European credit line to recapitalise balance sheets laden with bad loans since a 2008 property market crash.
As Obama fears the exposure of the financial impact of his proposed policies on the US.
NOBODY EXPECTS THE SPANISH DOWNTURN!
Pikers! How can they let a little $26 billion deficit in Spain’s energy market force them to slash 20,000 jobs? Don’t they know that every job is precious and must be preserved? Damn the “austerity” — we want jobs.
They have it backwards. Malinvestment in the wrong technologies caused the downturn.
I say, invest more in eco-boondoggles. “Question Reality.” Celebrate delusion. Follow your dream off the cliff.
It is my understanding that many Spanish solar power producers put diesel generators in their fields to reap the generous subsidies.
At the heart of the problem is a deficit of more than $26 billion in Spain's energy market, built up by subsidies to cover the gap between the cost of producing electricity and the price charged to consumers.well duh...
These type news stories show how green energy is NOT the energy of the future, at least at the current technology level. And it reveals one of the root causes of the malingering malaise - taking money from productive uses to subsidize green energy. People have less money for essentials while propping up wasteful industries.
$500 per person per year - we’ll say 1,500 per family per year. That’s enough money for a lot of consumer spending to prop up the productive economy, a house payment each year, or pay for food.
100%
"There are 55,000 individuals, small savers, many farmers and breeders, professionals, families and small businesses who simply believed what the state told them, which was to invest in solar energy," Martinez-Aroca said.
"Who simply believed what the "state" told them?" Politicians in the European Union are not as stupid and corrupt as American politicians?
A nation of children?
Ignorance and stupidity are not symptoms exclusively of an American affliction. The motivation is universal, greed, coupled with the entitlement mentality that trust must always result in rewards.
So much for the popularity of a monumentally expensive solution to an imaginary problem.
Can you document that?
You mean if green power sells for 4 times what conventionally-generated power sells for, diesel generators make the scam almost like unlimited free money!
I didn't know Holder's peeps were so numerous in the European Union, too.
And the E.U. won't prosecute the criminals?
Of course it is!
For the criminals.
If the claim in post #6 is true. Free, until recently, unlimited taxpayer money.
I am a spaniard and know my country too well. Spain has been a “fake rich country”...a fraud. The EU tricked spaniards by telling them all the wonders and benefits of joining the EU. In order to trick Spain into the EU, Brussels bought the spanish politicians, especialy the leftist ones, and gave them lots of money to create great things !! things not necessary to have a decent life, The consequences of having joined the EU are now clear to everybody.
Everthing has been a fake, a trick ..a trap.
and now what ?
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