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Spain ends subsidies to nearly 40 percent of its wind energy capacity

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Michael Bastasch DCNF Managing Editor
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Spain has sparked the anger of the wind industry by ending all price subsidies for wind power projects that came online before the end of 2004.

More than 8.4 gigawatts of wind power came online in Spain by the end of 2004, meaning they will no longer get subsidized electricity prices.  More than 37 percent of the country’s 22.6 gigawatts of wind power will no longer be subsidized.

The wind industry calls Spain’s 1,700-page resolution “retroactive looting.” Investors in Spanish wind power were lured into the industry by the government’s promise that it would maintain generous feed-in tariffs for 20 years.

“It is the most harmful policy dictated against wind in any country,” said the the Spanish wind lobby AEE, which is calling for the European Union to intervene.

Feed-in tariffs are used to accelerate green energy generation by offering operators above-market rates for their power. Under Spain’s new rules, 8.4 gigawatts of wind capacity will only receive wholesale prices for its power.

It’s not only older wind capacity that’s seeing its subsidy ended — remuneration for younger wind capacity is also being reduced.

Windpower Monthly reports: “The proposed regulation, to take immediate effect, establishes 1,600 parameters for calculating renewables remuneration. It fleshes out a June 2013 law replacing all renewables feed-in tariffs with a remuneration based, instead, on a ‘reasonable profit’ of 7.5 percent across plant lifecycle.”

A lagging economy and budget woes means Spain can’t afford to maintain its green subsidy regime — the country has joined the ranks of other European nations suffering from green fatigue.

Germany and the United Kingdom have also been suffering from green fatigue as efforts to repeal renewable energy subsidies and taxes have gained momentum.

UK Prime Minister David Cameron backed off his promise to run the “greenest government ever” last November when he told aides to “get rid of all the green crap” from UK energy bills to help bring down costs — which are spiraling out of control.

Cameron and his cabinet have been critical of wind farm subsidies along with solar subsidies as well. In 2011, his Chancellor of the Exchequer George Osborne said: “If we burden [businesses] with endless social and environmental goals — however worthy in their own right — then not only will we not achieve those goals, but the businesses will fail, jobs will be lost, and our country will be poorer.”

Germans are burdened by some of the highest power costs in Europe. The German newspaper Der Spiegel even went so far as to describe electricity as a “luxury good.”

“The promotion of green electricity costs will cost our citizens [$32.5 billion] next year, which is a lot of money that could otherwise be spent on buying new cars, furniture or on restaurant visits,” said Michael Fuchs, deputy leader of Germany’s Christian Democratic Union.

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