Posts Tagged energy
Spain’s electrical supply industry is caught in a decade long death spiral of failed energy policy, over-reliance on imported fuels, and massive debt. Their new taxes on nuclear energy, an attempt to reduce utility debt, are likely to worsen their economy.
Spain imports fuel for about 51 % of their electricity production in the form of coal and natural gas. Payments for these imported commodities contribute to a debilitating trade imbalance. Nuclear energy makes up the lion’s share (47%) of Spain’s domestic energy production. Their eight nuclear energy facilities add tens of thousands of jobs and billions of euros per year to the national economy while reducing the need for imported coal or gas. At the same time Spain’s nuclear plants provide reliable, predictable energy without greenhouse gas emissions.
The amount of renewable energy generated in Spain has increased considerably over the last several years. In fact, in 2012 wind energy production exceeded nuclear energy production for brief periods when demand was low, some nuclear plants were out of service, and wind conditions were nearly optimal. Unfortunately, Spain’s methods of encouraging investment in renewables have contributed to their current financial crises. The Spanish electricity industry is carrying $32 billion of debt, putting serious strain on an already faltering economy.
Spain began deregulating their electricity supply system in the late 1990′s. Their approach was eerily similar to the failed California experiment; they removed price controls to allow power generators to compete among themselves, but they limited rates paid by customers. As wholesale energy prices rose utilities were unable to recover the higher costs through higher rates to customers. The result was predictable: electric utilities began loosing money on a grand scale. Since 2005 annual “energy deficits” have been in the billions of euros per year. With slight-of-hand economics, the Spanish government allowed utilities to “bank” their annual deficits against future earnings. Unfortunately those future earnings never materialized and deficits ballooned.
A the same time Spain (like California) began a heavily subsidized renewable energy program that included “feed-in tariffs” which guaranteed wind and solar generators above market prices for all of the energy they could produce. Consequently utilities were forced to buy wind and solar energy at inflated rates, but were not allowed to recover the costs because of those same price controls. Solar and wind energy investors raked in billions of euros per year while the utility deficit grew even faster. By some accounts electric utility debt in Spain now stands at $32 billion.
These out-of-whack energy policies cost Spanish workers dearly; for every renewable energy job created more than five existing jobs were lost and unemployment soared to over 20%. According to the Canada Free Press:
For each megawatt of wind energy installed, 4.27 jobs were lost, and for each megawatt of solar energy installed, 12.7 jobs were lost.
Eventually it became clear the Spanish government would have to act to curtail the exploding debt and rescue the utilities from bankruptcy. Earlier this year they stopped granting requests for new feed-in tariffs. Beginning in January 2013 they’re implementing a new 6% flat tax on all electricity production. In addition, they’ve singled out nuclear energy for “special” taxes they are calling a “nuclear waste generation and storage tax.”
Let’s get this straight: Spain’s national energy policies enriched wind and solar energy investors while bankrupting utilities and contributing to massive job losses. Now they’re calling on nuclear energy operators, their largest source of domestic energy to foot the bill! Not only is this course of action irrational and unfair, it punishes the domestic energy production and job creation they desperately need and it perpetuates favoritism for expensive renewables that created the problem in the first place.
The first victim has already fallen to the anti-nuclear tax; the Santa María de Garoña nuclear plant is being forced out of business. Garoña is a 446 MW BWR that began commercial operation in 1971. The plant’s owner says the new 153 million euro tax that will go into effect in January is more than ten times the plant’s annual profit. They have no choice but to shut the plant down for the last time on Sunday, December 23. Hundreds of jobs will be lost at the plant and in surrounding communities. Since Garoña provides about 1.4% of Spain’s electricity, utilities will be forced to import more coal and natural gas to make up for lost base load generation.
With lost jobs, lost revenues, and rising energy imports Spain’s energy death spiral continues.
Mis oraciones por mis amigos de Garoña. Buena suerte en el Año Nuevo, y le deseo todo lo major.
This has been a deadly year for fossil fuels in the United States. In February five workers lost their lives in an explosion at the Kleen Energy natural gas power plant in CT. Then in April 29 coal miners perished in a mining accident at the Massey Energy coal mine in West Virginia. Of course that was followed by the disaster on the Deepwater Horizon oil platform that killed 11 workers and caused a massive oil spill that is contaminating hundreds of miles of coastline.
With events like these (and others similar events around the world), and our growing reliance on huge quantities of imported oil and natural gas, it is time for America to expand its domestic supply of uranium.
On this show I was joined by a panel of experts who discussed efforts underway in Virginia to unlock the vast potential of uranium resources that have been discovered there. My guests were:
- Aaron Ruby from the Virginia Energy Independence Alliance
- Patrick Wales, the project manager and geologist for Virginia Uranium, Inc, and
- Lisa Stiles, a nuclear engineer with many years experience in the nuclear industry, and a former president of NA-YGN and the International Youth Nuclear Congress.
Topics we discussed included why allowing safe uranium mining in Virginia is so important, the huge untapped Coles Hill uranium deposit, uranium mining safety, and the many benefits that developing the Coles Hill mine would bring to an economically depressed region.
Sitting in the audience at the 1st Thorium Energy Alliance Conference, I could not help but think about the people who stood around that pile of uranium and graphite in a squash court almost 70 years ago at the site of the first man-made self-sustained nuclear chain reaction. Most were visionaries, brilliant scientists, some engineers, and a few reporters. I wondered how many of them truly understood the significance of what they were doing that day and how their work would change the world.
The mix of talent was the same here today; engineers, physicists, and media. They clearly have a vision for the future and a compelling case for getting there. This podcast is an audio recording of the keynote address for the conference provided by Kirk Sorensen of Energy from Thorium, a passionate engineer with a vision that is best told in his own words.
I’ve been reporting events from the conference using Twitter. If you are not following me on Twitter you might want to give it a try. You can follow me here or on the link on the right side bar of this page.
I’ve been preaching long and hard that a combination of plug-in hybrid vehicles and nuclear energy can help solve two problems at once; energy independence and CO2 emissions. It seems The Weekly Standard in the UK has reached the same conclusion.
In the United States there are 104 remodeled conventional nuclear power generating plants. … On average they produce more than a gigawatt (a billion watts) each or about 22 percent of total U.S. electrical consumption, without sending a single drop of greenhouse gas into the atmosphere. … By upgrading our own 100-plus plants to that level, we could produce enough cheap electricity to competitively replace gasoline and charge the batteries of every potentially electrified car and light truck in the United States. An additional 40 such plants would be sufficient to power all our buses, heavy trucks, and trains. With 200 plants, augmented by existing and upgraded hydropower, we could replace all hydrocarbon-based power-generating plants and virtually eliminate the U.S. carbon footprint. If this seems too big a task, one need only look at France which gets 80 percent of its electrical power from nuclear plants.