Spain’s Green Energy Production Crippled Without Subsidy Crutch

REUTERS/Marcelo del Pozo

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Andrew Follett Energy and Science Reporter
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Spain did not install a single new megawatt of wind power capacity last year for the first time since the 1980s.

The Spanish Wind Energy Association admitted Tuesday the country did not install any wind power last year after Spain effectively eliminated costly green energy subsidies in 2014. The installation standstill has left Spain needing to install another 6,400 megawatts of wind energy capacity to meet legally binding European Union renewable energy targets.

Spanish wind and solar power companies once reaped Europe’s largest subsidies until the country’s new center-right government overhauled the subsidy system in 2014 and capped earnings from subsides for solar and wind companies. The Spanish Wind Energy Association called for an end to the earnings cap and other parts of the overhaul.

Spain’s previously high subsidies attracted twice as much installed green energy capacity as peak green energy demand, leaving much cheaper conventional energy generators idle to pay for green power output.

Spain accumulated $27 billion in debt subsidizing wind and solar power, which greatly damaged the country’s economy. Green energy programs in Spain are estimated to have destroyed 2.2 jobs for every green job created, according to a study by a Spanish scholar funded by the Institute for Energy Research. Spanish economists determined that each green job created in the country cost taxpayers $770,000. Each wind industry job in Spain was estimated to cost $1.3 million to create. Only one out of 10 green jobs created in Spain was permanent.

The impending default of the major Spanish green energy firm Abengoa poses a major threat to Spanish banks and American taxpayers, who are the firm’s single largest creditor with up to $2.34 billion in the company. Abengoa asked Spanish courts for protection from creditors in December.

President Barack Obama frequently pointed to Spain as a success story of subsidies, claiming the government’s policies would jump-start green energy, create new industries, and help the environment. Obama even included $80 billion for green jobs in the 2007 stimulus package.

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