Irrational Pro-Renewable Policies, Nuclear Energy Tax Hikes Harm Spain’s Economic Recovery
Dec19

Irrational Pro-Renewable Policies, Nuclear Energy Tax Hikes Harm Spain’s Economic Recovery

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%....

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Was it Lots of Wind or Lots of Hot Air in Spain Last Sunday Night?

 Fast Fission Podcast #16 – mp3 file Renewable energy supporters were spreading the word today that this past Sunday wind energy in Spain produced 53% of the country’s electrical demand. The Spanish wind power industry broke a record on Sunday morning, when turbines nationwide met 53% of the nation’s demand for electricity with production of around 10,170 megawatts (MW), according to La Asociacion Empresarial Eolica (AEE), the Spanish wind industry alliance. This was certainly an achievement, but before we get too excited we need to read carefully and consider the situation. This was an intermittent peak in wind energy output that happened to achieve 53% of the electricity demand when the total demand was very low.   This occurred during a 5 ½ hour window in the early morning hours of a Sunday morning in November. Everyone was asleep, there virtually no lighting load, no cooking, few factories were running, no air conditioning, and probably very little heat.  As a result, total demand was relatively low. Before we declare renewables a resounding success, take a look at a more telling statistic:  the 11.5% overall contribution of wind to Spain’s grid during all of 2008. That means that day in and day out 88.5% of Spain’s electricity came from nuclear, gas, oil, and coal. Of that, the only carbon-free source was nuclear. John...

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