The rain in Spain may stay mainly on the plain, but it won’t be falling on giant solar panel arrays for very long: Spain is in full retreat on its ill-advised renewable push. That won’t come as a surprise to AEI readers, since I’ve been writing about Spain’s failing and corrupt renewables regime (along with the rest of Europe) for a good year now.
Spain has also found its foray into renewable energy unsustainable. As Bloomberg BusinessWeek reports, Spain has slashed subsidies for new solar power plants. Analyst Andrew McKillop observes in The Energy Tribune:
In Spain, where subsidies to the country’s massive windfarms and their dependent industries is estimated to have attained as much as 12 billion Euros in 2009, either directly or through “feed-in tariff” subsidy for power sales, government proposals target at least a 30% cut in subsidies. Major wind energy producer firms, such as Gamesa, have begun cutting their workforces, while trying to find sales outside Europe, helped by a weaker Euro. In addition and due to Spain’s highly exposed deficit finance status, making it a target for market speculators betting its bond rates must rise, the Spanish government is also likely to cut financial backing to existing renewable energy power plants, built with an expectation of guaranteed prices and government subsidies for 25 years.
Spain halted subsidies for renewable energy projects to help curb its budget deficit and rein in power-system borrowings backed by the state that reached 24 billion euros ($31 billion) at the end of 2011.
“What is today an energy problem could become a financial problem,” Industry Minister Jose Manuel Soria said in Madrid. The government passed a decree today stopping subsidies for new wind, solar, co-generation or waste incineration plants.
The system’s debts were racked up as revenue from state- controlled prices failed to cover the cost of delivering power. Costs have swollen in the past five years because of an increase in regulated payments for the power grid, support for Spanish coal mines and subsidies for renewable energy plants.
Watch for the same pull-back in other countries that foolishly believed the wind- and solar-hucksters, and threw their national fortunes behind these not-ready-for-prime-time technologies, including here in the good ol’ US of A. Given our political pig-headedness, and our slightly greater distance from the fiscal abyss, it’ll take us a little longer, but, I suspect, not a lot longer.