EU MONEY CRISIS AND INCENTIVES CUTS
Spain Suspends Subsidies for New Renewable Energy Power Plants
Ben Sills, January 27, 2012 (Bloomberg News)
"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…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…"
"We are living with terribly challenging and hugely consequential economic choices." Timothy Geithner, January 29, 2012 (click to enlarge)
"Spain’s decision is a “first step” to rein in debts, and officials are working on a broader package of measures, Soria said. The nation isn’t planning a levy on hydropower or nuclear plants, nor will it take on power-system liabilities…
"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… [Governments are] wrestling with competing priorities…"