Monday, August 06, 2012

Spain's and Germany's Green Blunders;

Spain's economy is in dire straits, in large part due to its government support and subsidies for big wind and big solar power.
During the first two years of his administration, President Barack Obama and top officials praised Spain as a successful model to create employment and improve energy security. So did everyone else, for that matter, but it’s time to heed the lessons.

For over a decade Spain has accumulated nearly 25 billion euro in debt –equivalent to more than half of the urgent capitalization needs of its distraught financial system- mostly in the form of subsidies for wind and solar energy.

...Spain’s generous subsidies already attracted more than twice as much installed capacity than its peak demand of 40 GW, and much cheaper fossil fuel and nuclear generators are being left idle to pay for renewable output. In this context, the country has no choice but to pull the plug on its renewable experiment. More than a decade of robust Spanish growth ended in 2008 as a construction boom went bust leaving millions without a job and as the global economic crisis further undermined the economy.

...Spain is the worst example, but not the only. A recent International Energy Agency outlook of renewable power this decade suggests how Spain’s model embodies the “wrongs” of unconditionally supporting the industry.

Now its renewable revision is going to eliminate thousands of jobs and billions in investment, and more critically become another agonizing drag on the economy.

Many countries overdid it, plain and simple. Renewable industries in OECD reached maturity and have become an economic drain, which is why countries are quietly backtracking, as the data shows. _EnergyTribune
These are sobering lessons for anyone who is paying attention. Unfortunately, it does not appear that the US Obama administration is paying attention to anything except those internal voices which never seem to waver or quieten.

Now, Germany is following the same devastating path that led Spain over the fiscal cliff. Even worse, Germany is shutting down its safe, affordable, and reliable nuclear plants in favour of exorbitantly expensive intermittent unreliables!
As far back as 1990, Germany enacted a feed-in tariff that guaranteed providers of solar electricity a price well above market level. Consequently, it has been very easy for solar producers to make a profit. The idea was to foster domestic industries but much of transfer has ended up going to Chinese firms.

The less obvious downside, however, is that consumers end up paying more for electricity. The high solar prices are averaged in with all other sources and consumers end up paying the bill, both as taxpayers and consumers.

... the German solar industry is about to suffer now that Germany has found it too expensive to maintain the feed-in tariffs. They say Spain has had a worse experience, with $50 billion in wind and solar-related debt now floating around the country. Spain's solar bubble, which soon popped, has played a large role in its overall debt crisis as well. _RCE
Denmark power customers pay the highest cost for energy in Europe, due largely to government support for big wind power.

Now it looks as if the UK may be tumbling down the same energy policy avalanche.

And if US President Obama is re-elected in November, you can expect his administration to double down on the stupid energy policies of Spain et al.

What is it about green politicians and bureaucrats that makes them so destructive to the countries they are supposed to serve?

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Blogger Carter said...

I'm as big a proponent of renewable energy that you will find anywhere but I'll agree with you that "excessive" feed-in tarriffs are very bad policy. Feed-in tarriffs should be very minimal if used at all because frankly, the economics of solar are good enough without them.

With prices where they're at right now, consumers can go off-grid and never have another electric bill again for the cost of a midsized German car these days. Too bad they can't get a federal loan guarantee and 2% financing like a nuclear developer.

Spains problems are a lot bigger than racing down the blind alley of ill advised, extreme feed-in tarriffs. I have no doubt that bad energy policy could have aggrevated Spain's economic woes but what about thier housing bubble, other excessive government spending, and oh ya, that record breaking, nasty little worldwide recession we just experienced that continues to linger. I suppose renewable energy development is to blame for all that as well.

Do you have any NUMBERS to support your contention that solar energy development is the root of all evil in Spain?

Objective minds want to know.

2:39 PM  

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