Spain halted subsidies for renewable energy projects to help curb its budget deficit and rein in power-system borrowings backed by the state that reached 24 billion euros ($31 billion) at the end of 2011.
“What is today an energy problem could become a financial problem,” Industry Minister Jose Manuel Soria said in Madrid. The government passed a decree today stopping subsidies for new wind, solar, co-generation or waste incineration plants.
The system’s debts were racked up as revenue from state- controlled prices failed to cover the cost of delivering power.
Costs have swollen in the past five years because of an increase in regulated payments for the power grid, support for Spanish coal mines and subsidies for renewable energy plants. . .
The Spanish action follows Germany’s announcement last week that it would phase out support for solar panels by 2017 and the U.K.’s legal battle to reduce its subsidies for the industry.
Meanwhile, Barclays Bank announced last week that it is closing its U.S. emissions trading desk, which had been a cornerstone of the northeast’s Regional Greenhouse Gas Initiative (RGGI, or “reggie”):
Investment bank Barclays Capital has closed its US emissions trading desk in New York, sources said Wednesday, a move that takes one of the primary traders of California carbon allowances (CCAs) out of the emerging market.
The London-based bank has decided to focus on more standard markets in the U.S. like power, coal and oil, said Kedin Kilgore, the former head of US Emissions Trading at Barclays, who has left the bank to explore other opportunities.
But wait! Isn’t California, which is trying to launch an emissions trading program, going to save us?
“Clearly, if they thought California was going to be a liquid, viable program anytime soon they wouldn’t be shutting down,” he said.
How times have changed. Back in 2007, Barclays said: “The market fluctuated greatly during 2006, but we believe in its long-term importance.”
The face plant of the green energy sector wholly dependent on subsidies and government mandates is one the easiest calls you could make the last few years.