Bishop Hill Coming to a courthouse near you
Feb 15, 2013 Climate: Parliament Energy: wind Hat tip to Barry Woods for this story from World Environment News:
Foreign investors in renewable energy projects in Spain have hired lawyers to prepare potential international legal action against the Spanish government over new rules they say break their contracts.
It is unclear how much claims might be worth, but international funds have more than 13 billion euros ($17 billion) of renewable energy assets in Spain and say that the government has reneged on the terms of their investment.
The Spanish Parliament approved a law on Thursday that cuts subsidies for alternative energy technologies, backtracking on its push for green power.
One can hardly blame the businesses for trying, but for the hard-pressed poor in Spain's already ravaged economy, this will be a bitter pill to swallow. When the lights start going out in the UK, we might well see a similar retreat by UK politicians and similar attempts to prevent them in the courts.
Who'd want to be an environmentalist then?
Reader Comments (37)
Yeah looks like the government money green bubble is bursting (urgh snot?). I think there will come a day when, like the Dot-com bubble, an assessment is made trying to explain how greed outpaced genuine innovation and drove ridiculous expectations.
With Dot-com at least the investors had their own greed driving them; in this case it seems the public have been paying for crony capitalism and government hubris and only ended up with a damaged public energy capability.
According to my crude arithmetic anybody (eventually) winning a judgement against the Spanish state will have to go to the end of a
quitevery long queue. This looks like an attempt by m'learned friends to eke the last out of the situation - flogging a dead horse comes straight to mind.I know that nothing that the Greens do should astonish me any more. But the thought of them taking to the UK court system campaign to protect the rights of rent-seeking capitalist fatcats to forcibly extract cash from the pockets of poorer people should really be a step too far.
We know it won't be though.
And Scottish Power (owned by Iberdrola) wants more subsdies in the UK, according to the Times. I paraphrase:
I predict ( I know it's a loaded word but bear with me) that once the first blackouts occur there will be a full scale media storm. Politicians and environmentalists will feel the full force of People's ire and much spinning and damage recovery will ensue.
By the time that rolling blackouts are an accepted part of the British way of life (as they were in the seventies in the UK) confidence in the UK economy, which is bad enough without all this, will fall considerably. There will be a run on the Pound and unemployment will sky rocket.
It may even lead to a national crisis and at the very least the fall of the government.
Environmentalists will be seen by most folk as the new bankers.
I live in spain. My electricity bill is broken down. It clearly states that 48% is the cost of supply, and 52% is taxes and subsidies. The equivalent of VAT is only a very small proportion of the taxes and subsidies, so one can easily see how much the domestic consumer is paying to subsidise the green initiatives.
With the right political will, the cost of electrity could be almost halved overnight (ie., dispensing with the tax and subsidiies element of the bill). Overnight, that would put more than another €1,000 in the pocket of the typical Spanish consumer who may then be able to spend a bit more helping to promote growth and to drag Spain out of its depression.
Not that long ago, there were stories covering how some producers of solar energy (getting paid generous feed in tariffs) were producing 24 hours a day! At night, they hooked up diesel generators to supply feed in power. The cost of running a diesel generator being far less than the generous feed in tariff they were getting for their solar arrays.
The system is much abused and has needlessly pushed up energy prices beyond the reach of many consumers and of course, has increased expense for business rendering it less profitable.
All green taxes and subsidies should be cut immediately. Tough luck on the investors. They should be alive to the risk since when investing one risk is that government policy may change; indeed, this frequently happens when one party is kicked out and another party voted in.
And that is not the full extent of the debt as Spaniards were encouraged to buy into solar and get a return on their investment by way of a pay-back on energy sold. Of course, some cheated and ran arc lights at night to increase their returns but those aside, many private individuals are burdened by a zero to negative return on their investments since the last round of tariff reductions.
Investments may go down as well as..... This of course should not apply when you are Saving The World :-/
Phillip Bratby
"electricity market reforms to set new subsidies for gas plants" ??
That's a new one on me...
The Spanish establishment it seems to me - is only a short way from meltdown. Last I heard critical medications like Insulin were getting hard to find at pharmacies due to the Spanish state not paying its bills.
Ill starred Spanish projects like Castellon Airport litter the country and the renewables are patently of less use than the airport.
That Keith Anderson seeks to set up Spanish Practices in U.K. energy generation is pretty ripe. I'd be wondering about building them anyway and big time ransoming the bulk electrons when European energy directives come home to roost.
"13 billion euros ($17 billion) of renewable energy assets"
I hope Suzanne Goldenberg, she of the "Dark money funds climate sceptics" persuasion, is noting the disparity...
Long queue for the courts then (from link above)
In addition to Spain's uninhabited housing developments, millions of dollars in unused infrastructure is wasting away.
There's a $213-million airport in the town of Castellon, which hasn't had any scheduled flights since it opened in March, according to The New York Times. Another white elephant is the privately-held airport in Ciudad Real, which entered bankruptcy last year for lack of traffic.
Spain is similarly overstocked with highways -- after adding 5,000 kilometers in ten years -- and high speed rail -- after becoming Europe's biggest HSR network in December.
All told Spanish banks hold over $300 billion in toxic real estate assets, including $70 million in unreported exposure, according to El Confidential.
Read more: http://www.businessinsider.com/spain-airports-empty-2011-6?op=1#ixzz2Kxxs9qOP
Tomo: Under the "capacity mechanism", gas plants will be subsidised to be built and occasionally run as backup for intermittent renewables. As renewables have preferential access to the grid, all other plants become unprofitable and need subsidies, either to build them, or to operate them, or both. I recall that only the other day RWEnpower was threatening to moth-ball its two brand new CCGTs because they weren't profitable any more.
This wil be interesting. How do you break lifetime renewables contracts legally? One way, I suppose, might be to introduce the need for annual connection charges for all electricity generators (the big boys pay anyway). The subsidies remain, but they'd be clawed back in connection charges. Would that work?
Any time the government (or anybody else) makes an unsustainable contract with you, the promise will be broken. It does not just apply to electricity and renewables. It applies to all subsidy, and to your pension too. One day that promise will be broken, by reneging or by inflation. The numbers, the cold equations, always win.
I live in spain. My electricity bill is broken down. It clearly states that 48% is the cost of supply, and 52% is taxes and subsidies.
==============
Must be getting close to the point where its cheaper to run your own generator.
Phillip Bratby
thanks for that ...
I try to learn something every day. Seems like I haven't been paying attention. I hadn't realised that "they" had distorted the market in such a grossly perverse manner.
It's even worse than I could have imagined - in that DECC and the likes of Bryony Worthington have conjured up a monster.
I knew that German generators are close to revolt - for some reason I thought things were different in the U.K. = assumptions, road to hell and all...
Has Douglas Adams' "B Ark" landed without being noticed?
Arrange the following into a well-known phrase or saying:
Chickens Roost The Coming Are Home To
Shorter Rhoda
If a deal looks too good to be true...it is.
So the AGW scam is all about the money, just like many skeptics suspected.
How dare people want affordable power! How dare a government try and implement rational finances? The AGW kooks have a planet to save and pockets to line.
"The Spanish Parliament approved a law on Thursday that cuts subsidies for alternative energy technologies, backtracking on its push for green power."
/snigger
rhoda -
Thanks for the reference to that short story, put a smile on my face as I recalled it...
You're correct; but the difference is in the time horizon -- it takes longer to run out of resources (in this case other people's money) on a larger scale.
I have proposed 10 million domestic fuel cells/Stirling engines to break the power supply oligopoly.
I also propose that any politician or close relative who benefits in kind from renewable energy earnings be jailed for treason, typically for a decade, and their assets from that source seized as the proceeds of crime.
I also propose that any politician or close relative who benefits in kind from renewable energy earnings be jailed for treason, typically for a decade, and their assets from that source seized as the proceeds of crime.
=============
On the MP crime angle. I've been pushing for some time with FOIs about the state pension. ONS put the debt at 5,300 bn for the UK. However, its not on the books. Now I've got the reason of the OBR (office budget responsibility). There's less than a 50% chance it will be paid, so its a contingent liability, so they omit it from the accounts.
'....the government has reneged on the terms of their investment...'
Yeah, ok - but what about wind and solar farms not lasting the 25 years which are presumably also in the 'terms of their investment' - what happens then..? Can the government sue the investors..?
Just askin' - just in case the above turns out to be true (any time soon)...
Outrageous tough it seems I think the environmentalists (and their establishment allies) will welcome blackouts as an opportunity to say 'I told you so'.
The public will be told that fossil fuel scarcity is the real problem, and the answer - of course - is more renewable investment.
Some figure well short of the estimated financial costs of windfarms to consumers over the projected (ho ho) lifetimes of the turbines would still make an attractive sop to the owners and other beneficiaries of the existing ones ahead of a cancellation by act of parliament of all further obligations to them. We know they are in it for the money, so it just a question of agreeing the price. As in:
I hope that those doing the haggling will not forget to insist upon lock, stock, and barrel removal of the turbines, concrete plinths, approach roads and associated pylons as a precondition for getting the one-off payment.
It just goes to show the stupidity of entering a contract for supplying a low quality product to a bankrupt state. Governments always move the goal posts. Spain's real problem was to join the Euro, inherit the interest rate suitable to Germany and spend too much especially on green energy. Not only wind but solar. One solar producer produced more energy at night that during the day. His fiddle was a big diesel generator working overnight with lots of subsidy/MW for that as well.
Spain is now trying to recoup monies wasted. Stable doors and horses come to mind.
Tax. Retrospective taxation. Leave the contracts in place and then tax the gross income of the generators. They do it to oil firms, so why not windmills? Tax is sovereign, not subject to contract law, and so the procedure would be perfectly legal.
Then tax the solar panels.
JF
h/t Sir Pterry, 'tax the rat farms'.
His Grace wrote:
When the lights start going out in the UK, we might well see a similar retreat by UK politicians and similar attempts to prevent them in the courts.
Who'd want to be an environmentalist then?
There will probably be enough environmentalists around to keep our greedy lawyers in business and enough brainless judges to ensure that taxpayers have to foot the bill for massive compensation to the environmentalists.
And Germany also acts to curb. WSJ viewable through GWPF
http://www.thegwpf.org/germany-spain-move-curb-green-energy-lobby/#
And Cameron
"Energy policy must be about bringing down bills, not green preaching"
Interesting times.
Will this time eventually be know as the 'Renewabubble'?
Hmm ... I suggested some time ago that this would become a problem. A Government offers a 25 year 'renewable energy' contract that will pay X over the lifetime of the contract. Situation changes and said Government needs to cut back. Tough - contract is a contract. The 'Supreme Court' of the EU (ECJ) will be their next stop.
This is where 'Government decides' falls flat on its a**e. Public sector employment (and public sector contracts with the outside world) suffers from the 'ratchet effect'. In the 'good times' they multiply. In the bad ... they multiply more slowly. Under no circumstances do they ever contract.
Subsidy farmers throughout the EU saw their opportunity and took it. The ECJ will decide in their favour - a contract is a contract. Doesn't much matter that LST may fall like a stone over the next few decades. You were signed up in the good times and you will still pay in the bad. You all voted for these idiots and almost joined 'The Euro' - It's different this time.
3x2
There are only two types of debtor - can pay won't pay and can't pay won't pay.
No amount of legal huffin n puffin can change that (assuming anybody wants to pay for it).
I have a suspicion that the Spaniards would try some kind of jiggery pokery to achieve effective limited sovereign default.
I think that paying off Green speculators versus buying critical medicines (that people feel they've already paid for) would precipitate some rather full on nastiness in the Iberian peninsula.
News , from the country whose subsides were so generous that solar farms could get away with supply 'at night' by using diesel generators .
[Snip - raise the tone. Last warning]
Most renewable energy sources are like the pampered daughters of a dictator. These would-be opera divas (dive) have to be given any minor, and not too demanding, roles for which they consider themselves suitable (and for which they will receive star billing) whilst the regular company must stand aside as they underperform. And since these little darlings are only suitable for the role of off-stage donkey or on-stage decoration the burden of keeping the show on the road must be carried by the dependables.
John Marshall: 'Stable doors and horses come to mind..'
Shouldn't that be 'Stable doors and beef substitutes....'
SORREE....! Couldn't resist...
Tomo, you may recall that the B Ark has already landed and it was crewed by our ancestors.