Spain’s Green Energy Industry Collapses After Subsidies Ended
Back in 2009 President Obama was selling his “investments” in green energy here in America by referencing the success of such government “investments” in Spain.
But Spain became an inconvenient example of everything that’s wrong with government “investment” into green energies. That country’s “investments” brought them to the edge of fiscal collapse, and what did the Spanish taxpayers get in return for all that spending? Almost nothing, as the green power industry in the country has dried up as the subsidies ended.
Saddled with a budget deficit more than twice the European Union limit and a ballooning gap between income and costs in its power system, Spain halted subsidies for new renewable-energy projects in January. The surprise move by Prime Minister Mariano Rajoy one month after taking office helped pierce investor confidence in stable aid for clean energy acrossEurope.
“They destroyed the Spanish market overnight with the moratorium,” European Wind Energy Association Chief Executive Officer Christian Kjaer said in an interview. “The wider implication of this is that if Spanish politicians can do that, probably most European politicians can do that.”
Spain’s $69 billion of investment in power capacity from 2004 to 2011 was about triple the spending per capita in the U.S. in that period, according to Bloomberg New Energy Finance data and U.S. Census Bureau population estimates. Most of the 2012-2013 spending will be for the legacy of projects approved before the aid cuts to wind, solar, biomass and co-generation.
Investment in solar photovoltaic alone is headed to skid to as little as $107 million in 2013 from $879 million this year and $1.5 billion last year, New Energy Finance estimated. For new wind projects, investment should plunge to $963 million in 2013 and $244 million in 2014 from $2 billion this year.
Goods and services that work, for which there is actual market demand, don’t need subsidies. What needs subsidies are goods and services that don’t work. Like green energy.
Tags: green energy, spain
