Scientists projected explosive growth and a “feeding frenzy” in Spain’s green energy sector in a report published Sunday, but neglected to examine the recent bankruptcy of one of the country’s, and the world’s, largest green energy companies.
“Companies and investment funds have been on a buying spree, taking advantage of the know-how and growth prospect,” says the report, published by Phys.org on Sunday. “The spending frenzy is unlikely to die down.”
The report focuses on how Spain’s economic recovery is improving the country’s green energy sector, but didn’t acknowledge the bankruptcy of one of Spain’s largest green energy companies, Abengoa. The report blames Spain’s green energy problems on a reduction in subsidies in 2011 by the country’s newly elected conservative government, but the previous socialist government lost an election after spending so much on green energy subsidies it nearly bankrupted the country.
Abengoa filed for Chapter 15 bankruptcy protection in the U.S. in March, after getting $2.7 billion in subsidies and loan guarantees from the Obama administration to build solar power and biofuels plants. Additionally, Abengoa and its subsidiaries received over $300 million in loans and loan guarantees from the U.S. Export-Import Bank in more than a dozen transactions approved from 2007 to 2015.
Abengoa was worth $29 billion at the end of 2014, but took on nearly $17 billion in debt. In 2014, Abengoa and subsidiaries employed approximately 20,250 people, operating in more than 80 countries, but now plans to shrink by 30 percent to avoid a financial disaster.
Abengoa’s bankruptcy was shortly followed by SunEdison, the world’s largest green energy company, going bankrupt. The company’s shares fell 95 percent in the past 12 months, and SunEdison’s market value fell from $10 billion in July 2015 to less than $400 million.
SunEdison and its subsidiaries got nearly $650 million in subsidies and tax credits from the federal government since 2000 and was the 13th most heavily-subsidized company in America.
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