Amateur Climate Change

Last chapters in Spanish energy politics regression

I started this post many time ago. And every now and then there are novelties, so it is like an never-ending post. Therefore, I have decided to stop and publish.

There was a time, not so far ago when Obama considered Spanish energy politics as a good example. A favourable Feed-in-tariff helped the development of a strong industry capable of exporting technology and an amazing 44% of electrical generation from renewables in January 2013 is an example of what was done. But this panorama, quite succesful, in fact, started to decline some time ago, concretely with the previous socialist government. And the current one, from the conservative party is deepening the problem and forcing the companies to look only abroad for new contracts.

After stopping feed-in-tariff for new installations the subsequent changes have attacked the installed solar panels and wind mills. The suggestion of removing the TUR tariff (the fixed tariff for most small consumers 99.6% of the consumers but only 50% of the KWh) was just a step. The general 6% new tax for all electricity generation followed.  And, last week a new change in feed-in-tarif for the active installations was designed with the tariff deficit in mind again.

But it does not stop there, efficiency measurements have been stopped too in a way quite difficult to understand. In one way european building efficiency directive has not been converted in law (it should be long ago) and this could be clearly an impulse for a collapsed building sector and certainly a help to save petroleum and gas expenditure and many of the programs from IDAE institute have been cancelled to support car sales (PIVE plan). The result is a record expenditure in fossil fuel imports. Is it not a bit contradictory with tariff deficit reduction philosophy? The only two good news are that el Hierro will not be affected nor a thermosolar central (just one).

It is clear from the beginning that Soria (industry and energy minister) has been mainly worried to reduce a very strange concept called “tariff deficit” , i. e. the difference between the attributed energy production costs and the final market value (TUR for most of the consumers). This difference has been steadily increasing in the last years and it is considered a debt of the consumers (or government I am snot sure) towards energy producing companies. Even if they have earned considerable money in spite of not getting all the attribution costs. Nowadays, with a terrible financial crisis this kind of debt is a heavy burden and Soria blames the renewables for it. Yet, there are data that  say the blame should be shared by many others as gas. Meanwhile the electricity demand continues falling with the economy and Soria is afraid this will continue to harm main energy companies.

I agree that the system was flawed, and that currently installed renewables are more expensive than some other energy types in direct costs but at the same time I think the whole electricity production and paying system should be redefined. It should be more transparent, clear and new renewables should have a reasonable possibility to enter as currently they are cheaper than ever, had a consolidated industry behind and produce many other benefits as jobs and reduction of CO2 footprint (Spain’s vulnerability to climate change is not low). By the way:

• why not electrify transport to increment electricity demand but not energy demand?
• or, why so much delay in self-supply regulation? If solar panel are expensive only the really convinced will install them and it they are not.
• or, even better, why not simplify the system and introduce a carbon tax instead of the many other taxes to rightly account for actual externalities of the  different energy production processes?

Finally, the biggest problem with all this is the uncertainty it produces for other countries to start ambitious programs of  renewable energy. Spain was an example for energy transformation and it is at risk of becoming an example about how such a process could be spoiled. Nevertheless, the game is not over yet, a 44% of renewable electricity production in January (not based on Hydro power) is still a great number.