Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

Where will the "green scissors" cut? (copy)

by afew Wed May 19th, 2010 at 05:37:21 AM EST

This is a diary by ManfromMiddletown, deleted accidentally and restored thanks to Google cache, h/t Migeru and det - afew

Spanish business daily Expansion recently published an article that explains much of the recent fight over feed in tariffs (FITs) in the country.  There are two very different views of when renewables will become profitable without FITs. The graphic below illustrates this clearly.

On the left is the view from the government.  Industry expects Photovoltaic (PV), concentrated solar, and wind to pass through the band of market prices to be profitable without FITs between 2014 and 2016.

On the right is what business is saying. The solid blue line is fossil fuels with a CO2 emission cost, and the dotted light blue line is fossil fuels with no emission cost. The deep black is solar technologies, and the grey is wind. If CO2 emissions costs are included, wind will become profitable without FIT sometime around 2013.  If not, this will take until 2015. The story is even more dramatic for solar.  With CO2 emissions included in electricity costs, solar becomes profitable without FIT around 2018.  Without, this will take until 2026 or 2027.

Promoted this time without deletion - afew

In discussing these cuts it's important to remember that Spain is a country that just experienced a €15 billion budget cut, that has provoked large demonstrations against it.  While FITs are drawn from energy bills themselves, so that they do not have any impact on the government budget, I seriously doubt that distinction is going to be made by the public.  They're experiencing budget cuts and VAT hikes, yet see billions of euros being handed out to energy companies.

I honestly think that Industry has tried to be honest about this, focusing on the argument that the high FIT level is driving up home electric bills, and creating a burden for industry.  The gap between industrial and home electricity rates in lower in Spain than most elsewhere in the EU. So, again, the focus from Industry has been on the idea that electric rates are being driven up by the FITs.  As Industry notes:

In Spain, FITs comprise 24% of electric bills.  This is more than in countries like Italy (14.7%) or Germany(10.4%). But this isn't the most important factor. There are other components that have greater weight, like distribution and transmission.

As large as those numbers look, the merit order effect (MOE) may be either larger or smaller.  It seems like a letter to the editor of Expansion or Cinco Dias (the other major business daily in Spain) from a respectable source in the wind energy sector on the MOE would do a lot of good.

Industry would have the resources and the information on hand to conduct a study of the cost of FITs to the benefit from the MOE.  This would seem to be one of the stronger cards that the renewables business associations could pull out.  Saying, "show me the money" would do a lot to shut down the crowd that is trying to use this to attack renewables more generally, and wind specifically.

Despite statements from the Industry minister that wind is not the problem, there are already attacks on the further expansion of wind in the country. There are up to 5,000 MW of planned wind farms in the air until this planned FIT cut is figured out. Current capacity is 19169.81, so that would be a 26.1% increase in capacity.  It's not just the volume that matters.  3 areas (Galicia and both Castillas) have seen the bulk of wind farm construction until now.  However in the last year there has been new construction in Catalunya, Valencia, and Andalucia.  If the wind FIT gets hit, so will new construction in those areas.

It's all a matter of where the "green scissors," e.g. the FIT reductions, cut.  

Seed comment by ManfromMiddletown:

I've found a new toy.

Interactive wind map for the Iberian Peninsula.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue May 18th, 2010 at 04:43:39 AM EST
Please recommend to put the diary back where it was.
by afew (afew(a in a circle)eurotrib_dot_com) on Tue May 18th, 2010 at 04:44:31 AM EST
Do you know anything about a report that says something to the effect that wind projects in Spain have caused a net job loss? I've seen it referred to on the toobz a couple of times but nothing on a "real" site.
by jam on Thu May 20th, 2010 at 08:44:52 AM EST
Aznar's think-tank hack job gets smackdown. (none / 0)
Los expertos de la agencia de EE UU niegan que las energías limpias destruyan empleo · ELPAÍS.comThe experts of a US agency deny that clean energies destroy employment - ElPaís.com
El estudio de un profesor de la Universidad Rey Juan Carlos que acusaba a las energías renovables de destruir empleo y que causó un gran impacto en EE UU ha sido respondido por los expertos del Laboratorio Nacional de Energías Renovables de Estados Unidos (NREL, en sus siglas en inglés). El estudio español fue usado por los republicanos para azotar a Obama y su apuesta por las energías renovables. Su autor es Gabriel Calzada, colaborador de la fundación FAES y miembro de un instituto que niega el cambio climático, fue entrevistado en programas televisivos de EE UU tras concluir, en contra de la mayoría de estudios previos, que por cada empleo creado por las renovables se dejan de crear otros 2,2 trabajos. El informe de EE UU asegura que el estudio de Calzada tiene "limitaciones técnicas", "no tiene en cuenta el potencial exportador" de las renovables, es poco transparente y fallan las estadísticas que lo apoyan.The study by a professor from the Universidad Rey Juan Carlos which accused renewable energiesof destroying employment and which had a great impact in the USA has been rebutted by the experts of the US National Renewable Energy Laboratory. The spanish study was used by the Republicans to attack Obama and his commitment to renewable energies. Its author, Gabriel Calzada, a collaborator of [Former Spanish PM Aznar's] FAES foundation and member of an institute which denies climate change, was interviewed on US TV after concluding, against most previous studies, that for each job created by renewable energies 2.2 other jobs were not created. The US study claims that Calzada's report has "technical limitations", "doesn't allow for the export potential" of renewables, lacks transparency and is supported by faulty statistics.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Thu May 20th, 2010 at 08:58:44 AM EST
[ Parent ]
The AWEA (American Wind Energy Association) refuted the report.

An analysis by the Center for American Progress said, "The Spanish study... does not even attempt to offer an analysis of the full range of jobs under consideration in the United States. The study is limited only to an analysis of one restricted slice of the larger clean-energy portfolio in Spain: public investment in renewable energy projects. ... [T]he report assumes that every $1 spent by the public sector represents $1 less spending by the private sector. Using this assumption the report "proves" that Spain's investment in clean energy resulted in a net job loss because the authors assume that public spending completely crowds out private spending and that public spending creates fewer jobs on average than private spending--in this case, public spending on promoting energy investments...The report takes the amount of money that was spent to stimulate clean-energy independence in Spain, derives the number of jobs that were created as a result of this effort, generates a number of other jobs which could have been
created with the same investment, and then reports the difference as a finding."

This totally ignores the merit order effect, which shows that in most cases FITs pay for themselves through reduced energy costs, and the role the component purchases from the industry play in keeping other industries aloft. Plus, it completely ignores that Spain has little in the way of coal, and even less natural gas and oil, the alternatives to the expansion of renewable energy.  Natural gas in particular has skyrocketed in the past decade.  I think that it's ridiculous to argue that money sent to Algeria (Spain's main gas supplier) for gas would somehow create more jobs than producing wind turbines in country.

FAES is laughable.  Like when they called for Israel and Columbia to be invited into an expanded NATO......

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Thu May 20th, 2010 at 11:51:32 AM EST
[ Parent ]
If wind projects caused the effect of job losses, it would be a worldwide fact about wind projects, not a rare event in a country, so it sounds like crosstimed signals about loss of jobs and news of wind plans.  

Our knowledge has surpassed our wisdom. -Charu Saxena.
by metavision on Thu May 20th, 2010 at 11:43:33 AM EST
[ Parent ]

Go to: [ European Tribune Homepage : Top of page : Top of comments ]

Top Diaries