Tag Archives: Taxpayer subsidies

The Real Cost of Wind and Solar, by Norman Rogers

Take the numbers in this article with a grain of salt, but there’s no disputing the central argument—wind and solar can’t stand on their own two feet yet economically, they need government subsidies. From Norman Rogers at americanthinker.com:

The main problem with either wind or solar is that they generate electricity erratically, depending on the wind or sunshine. In contrast, a fossil-fuel plant can generate electricity predictably upon request. Blackouts are very expensive for society, so grid operators and designers go to a lot of trouble to make sure that blackouts are rare. The electrical grid should have spare capacity sufficient to meet the largest demand peaks even when some plants are out of commission.  Plants in spinning reserve status stand by ready to take over if a plant trips (breaks down). Injecting erratic electricity into the grid means that other plants have to seesaw output to balance the ups and downs of wind or solar.

Adding wind or solar to a grid does not mean that existing fossil fuel plants can be retired. Often, neither wind nor solar is working and at those times a full complement of fossil fuel plants, or sometimes nuclear or hydro plants, must be available. Both wind and solar have pronounced seasonality. During low output times, as for summer wind, the fossil-fuel plants are carrying more of the load. Of course, solar stops working as the sun sets.

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Meet Solyndra 2.0: This US-Taxpayer-Subsidized Spanish “Renewables” Firm Is Collapsing, by Tyler Durden

Another day, another government-funded boondoggle. From Tyler Durden at zerohedge.com:

News that bonds and stocks of Abengoa SA – the Spanish renewable-energy company – plunged after a plan to shore up capital failed to reassure investors that it can stop burning cash is likely to have passed many by. But coming just one day after President Obama unleashed his Clean Power Plan, the fact that the company – that is now facing significant liquidity concerns – received over $230 million in US taxpayer subsidies in 2014 – despite two ongoing federal investigations – may raise an eyebrow or two as images of Solyndra’s government-sponsored farce come to mind… as Diane Feinstein, Ken Salazar, and Bill Richardson – with the help of subsidies and Ex-Im bank loans alledgely exerted their influence to keep this zombie alive.

In 2014, as FreBeacon reports, the Spanish renewable energy company under investigation by at least two federal agencies unveiled a new biofuel production facility on Friday that will receive hundreds of millions of dollars in federal subsidies.

Former employees of the company have alleged that it routinely engages in violations of U.S. immigration, environmental, and workplace safety laws and uses taxpayer funds to hire foreign workers in violation of federal regulations.

The company received a $132.4 million loan guarantee and a $97 million grant to build a new biofuel plant Hugoton, Kansas. Energy Secretary Ernest Moniz and Kansas Gov. Sam Brownback attended its ribbon-cutting ceremony on Friday.

The announcement of additional subsidies came even as U.S. Customs and Immigration Service and the Department of Labor conduct investigations into potential legal violations by the company.

Both agencies have policies against commenting on ongoing investigations.

In addition to direct taxpayer support for the company, Abengoa benefitted tremendously from federal mandates for biofuels, according to CEO Manuel Sanchez Ortega.

“This would have been simply impossible without the establishment of the Renewable Fuel Standard,” Ortega said, referring to a federal regulation that mandates the use of certain levels of bio energy in transportation fuels.

And now, less than one year later, as Bloomberg reports,

Abengoa SA’s bonds and shares plunged after the Spanish renewable-energy company’s plan to shore up capital failed to reassure investors that it can stop burning cash.

Abengoa said on Monday that it’s seeking to raise 650 million-euros ($713 million) of capital and dispose of 500 million euros of assets, according to a regulatory filing. The Seville-based company stepped up disposal plans from 400 million euros as recently as Friday, when it also told investors that corporate free cash-flow for 2015 will be as much as 800 million euros lower than previously forecast.

The predicted shortfall is the latest in a series of announcements that have eroded trust in Abengoa’s accounting methods and ability to generate sufficient cash to service its debt. The company, which spooked the market by reclassifying some bonds in November, has consolidated net debt that exceeds 6.5 billion euros.

“There were liquidity concerns before and this downward revision of corporate free cash flow guidance is disappointing,” said Felix Fischer, a credit analyst at Lucror Analytics Pte Ltd. in Singapore. “The capital increase more or less just covers the shortfall. There are serious liquidity concerns for this company and bondholders believe this measure isn’t sufficient.”

It’s ugly!!

To continue reading: Meet Solyndra 2.0