BIG CAN BE BAD (SCANDAL IN SPAIN’S NEW ENERGY BOOM) AND...
Scandal sullies Spain's clean energy; The arrest of 19 people accused of corruption highlights the dirty by-product of the country's booming economy in renewable fuel
Giles Tremlett, 22 March 2009 (UK Guardian/Observer)
The New Energy boom has apparently been just a little too much for Spain’s reportedly shifty real estate and construction sectors.
The Mayor and 18 citizens in La Muela, Spain, (including 1 of the Mayor’s sons and town councillor Juan Carlos Rodrigo) have been arrested for “eco-corruption.”
The boom in wind has been La Muela’s temptation. There are 500 wind turbines lining the windy hillsides above and around the town. It earns €1 million ($1.33 million) a year in rent and taxes. Landowners earn a combined €0.5 million a year. Each turbine earns ~€3,000 ($3,987)a year.
Reportedly, the corruption stems not from the wind projects but from the construction boom that followed the wind boom. Development of projects has been ongoing for 8 years. La Muela’s population has tripled. 5,000 residents now have 3 museums, a theatre, a bull-ring and a new sports and swimming center.
Mayor María Victoria Pinill denies any wrongdoing. Nevertheless, she owns 3 new houses and her supporters have vacationed in Mexico, Brazil, and the Caribbean.
A Spanish magistrate is investigating.
This kind of growth is hard to manage. (click to enlarge)
Similar accusations follow Spain‘s boom in solar power plant development, a boom driven a Spanish feed-in tariff (FiT) that guarantees a 12% return on solar project investment for 25 years.
The FiT made Spain one of the leading solar producers in the world in a span of a few years. In 2004, the country was installing 2 megawatts of solar every 3 months. In 2008, it was installing 2 megawatts a day.
Growth like that brings fast money. Fast money often brings dreams of easy money.
Solar power plants require a lot of land. Gaming land sales is reportedly an excitement Spanish real estate players couldn’t resist.
Officials are alledgedly taking bribes to grant the precious licenses to build “solar gardens” and to connect to the national grid and allowing the licenses to be trafficked illegally. And for the right price, it is said, inside knowledge about where grid connection points are to be built can be purchased.
Land around grid connection points is extremely valuable to solar power plant developers. Installations there, because they do not require expensive extra transmission to deliver solar generated electricity to the national system, are less expensive to build. Real estate players who buy such strategically located land just before transmission plans are announced can turn it over quickly and profitably.
The value of land around connection points has been known to multiply 10 times over.
In Castilla y León, in the sunny northwest, some dozen public officials whose relatives turned up owning licenses were dismissed. José Joaquín Moya, socialist mayor of Bigastro, in eastern Spain, was arrested for allegedly granting licenses to those who crossed his palm.
The inadequately designed FiT may be one of the reasons Global Green downgraded Spain. (click to enlarge)
The wind installations have brought new riches to many landowners whose families have for centuries owned but never prospered from the hard lands around La Muela.
Many say the practices of which the La Muela Mayor and others have been accused are not uncommon in newly rich Spanish wind country boomtowns.
Spain's wind industry is now one of the world's biggest. (click to enlarge)
In the Canary Islands, former wind industry department chief Celso Perdomo is accused of taking millions in bribes for identifying in advance the lands where projects would be approved.
In the solar sector, business grew ninefold in 2 years. The country built 29,000 “solar gardens” in 3 years and now has the world’s 2nd-biggest solar energy installed capacity.
It is hard to regulate that kind of growth. The Spanish National Commission for Energy inspected 30 solar gardens and found only 13 had been built properly. Many were dumping electricity into the grid.
The redesigned FiT. (click to enlarge)
Corruption was not the only problem created by Spain’s FiT. It wrought havoc in the international solar marketplace. The subsidized Spanish price was so high and growth was so rapid that there were supply shortages almost everywhere else and the price of solar cells and modules went up around the world.
The original Spainish FiT was designed without a satisfactory degression rate that would drop the subsidized price as installed capacity grew. By the time the government stepped in and established new rates with a tighter degression, Spain had 10 times the solar capacity it had targeted.
Nevertheless, despite corruption and market craziness, Spain has positioned itself as a world power in New Energy. In February 2009, Spain got nearly 1/3 of its power from its New Energy sources.
Spain's Acciona Solar is at the cutting-edge in solar power plant technology. From interacciona1 via YouTube.
- La Muela local: "She has done fine things for La Muela…People are just envious."
- Another: "She has been making fools of us for 22 years…"
- Spanish solar energy professional: "Entire boatloads of panels from China were being auctioned before they even got to port," said one dealer.
- Juanma Redondo, Spanish New Energy expert: "It became an instrument for speculators…Solar gardens were being sold like pension funds. It was a risk-free investment."
- Luis Gómez, journalist, Spain’s El País: "Who got the licences? That is where the shadow of doubt appears. There have been no public tenders and no transparent decision-making…"