By Marc Roca - Jul 12, 2012 5:12 AM ET
Mariano Rajoy’s pledge to tax utilities and power consumers signals Spain is planning to raise cash from renewable energy for the first time, a blow to an industry already struggling with subsidy cuts.
The prime minister told Parliament yesterday he’d impose a levy to spread the expense of closing a gap between costs and revenue in the country’s electricity business, which has racked up debts of 25 billion euros ($31 billion). Details may be announced as early as tomorrow after the weekly Cabinet meeting. There’s about 40 billion euros of wind and solar power-related debt in Spain, most of which is owned by local banks.
Wind and solar power come at a premium; setting quotas for energy produced from these sources is going to drive prices up. This is what happens when you try and prop up technologies not ready to compete on their own merits. You become less competitive with regions that haven’t handicapped themselves.
The US, you’ll notice, has seen electricity prices drop over the past seven years, largely because of the shale energy revolution. Shale isn’t zero-carbon, but it does burn cleaner than coal, and it’s providing American consumers and industry with cheap energy….To Read More….