Acciona Hits the Wall

cortes-1

Cortes – another Spaniard who knew how to quell community outrage.

Spanish wind conquistadors, Acciona set the benchmark in generating community outrage in Australia with the way it has ridden roughshod over the hard-working locals at Waubra in Victoria – where it runs a wind farm that the Victorian government and the Clean Energy Regulator know full well does not and can not comply with the noise conditions of its planning permit.

STT hears that Senator John “Marshall” Madigan is still on their trail – and is keen to make sure operatives from the CER start giving some straight answers during Senate Estimates about what they intend doing about the REC fraud scandal at Waubra and elsewhere.

But – with the Spanish government pulling the plug on its phenomenally generous subsidies to wind power – it looks as if Acciona is in even bigger trouble at home.

Subsidy cuts force Spain’s Acciona into third party energy deals
Reuters
Tracy Rucinski
14 February 2014

*Draft energy rules force energy downsizing, focus on water
*Writedown on energy assets could trigger first-ever loss
*Company already scrapped dividend payment for first time (Adds share movement after Fidelity stake hike)

MADRID, Feb 14 (Reuters) – When Acciona’s Jose Manuel Entrecanales diversified his family’s construction business into renewable energy ten years ago it looked like a smart move, but now that Spain is cutting subsidies he is being forced to rethink, sources say.

Once a strong supporter of renewables, the Spanish government is expected to put forward within days regulation on wind farm subsidies that will help reduce its 30-billion-euro ($41 billion) electricity tariff deficit.

Acciona, one of the first Spanish builders to move away from its core business before the 2008 downturn, is now facing a yearly hit of as much as 250 million euros ($340 million) – or nearly 20 percent of 2012 core earnings.

To offset that, Acciona will try to sell more renewable energy assets abroad, having already sold wind farms in Germany and Korea, find international partners to finance energy projects abroad – where competition from U.S. and Asian rivals is on the rise – or even bring in partners for its Spanish operations, two sources with knowledge of the matter said.

If co-financing is hard, the global leader in wind energy – with a presence in more than 30 countries – will simply build energy projects for clients, such as its wind farm in Canada and a photovoltaic plant in Australia, the sources said.

“The old model was owning, developing, investing, and operating assets. As the elimation of incentives dents capacity for investment, the energy business will become more like the construction side of Acciona: building stuff for clients,” one of the sources said.

Entrecanales, 49, is also considering tendering for long-term operating and management as well as building and engineering contracts on the installations, the source said.

To drive further growth, he may beef up Acciona’s water treatment business, which accounts for about 3 percent of EBITDA versus 80 percent for energy, the sources said.

Acciona is building the world’s largest waste water treatment plant in Mexico and water sanitation is seen as a major growth area, particularly in Latin America and Asia.

Shares in Acciona rose 7 percent to 52.65 euros on Friday, leading gainers on Spain’s blue chip index after U.S. fund Fidelity doubled its stake to 2 percent.

HARD TIMES

Acciona has already issued bonds and scrapped a dividend payment, a first for the company, to shore up its finances in anticipation of the renewables reform, the broad thrust of which was announced by the government in July.

But draft details revealed last week are harsher than expected on mature wind assets, in which Acciona, along with domestic rival Iberdrola, is a major player with 4,500 megawatts of capacity.

Iberdrola’s traditional electricity and gas businesses, which have suffered less from the government’s energy overhaul, will mitigate the impact.

But the cuts, reversing policy that created a deep gap in regulated prices and costs over several years, are far more serious for Acciona and may push it into a rights issue to help refinance debt that matures in 2014 and 2015, analysts said.

Brokerage Fidentiis said it expects and impairment charge of as much as 2 billion euro in 2013 results, due by Feb. 28, given the destuction of value of its energy assets, potentially triggering the company’s first-ever net loss.

Acciona declined to comment.

GONE WITH THE WIND

Spain plans to eliminate subsidies on wind capacity installed before 2005 while assets installed between 2005 and 2008 will receive the wholesale price plus a separate remuneration that will be lower than originally promised.

Analysts say nearly 40 percent of Acciona’s wind installations were built before 2005.

The wind sector will bear 70 percent of an estimated 2.1 billion euros of cuts to renewable energy subsidies as part of the draft measures, which will now calculate remuneration by megawatts rather than by output.

Although critics agree reform was needed, they argue the measures have been haphazard and deeply damaging to businesses.

“One needs to ask whether this reform was necessary right now at the expense of a loss of value for private companies and investors,” Rafael Mateo, CEO of Acciona Energia, whose sole business is renewable energy, said at a business event.

Spain’s U-turn on energy policy has angered foreign investors who have filed international arbitration claiming the changes renege on their contracts. ($1 = 0.7353 euros) (Additional reporting by Jose Elias Rodriguez; Editing by Louise Ireland and Julien Toyer)
Reuters

This couldn’t be happening to a nicer bunch of lads.

spain_bullfighting_2

Spaniards love a big finish.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Keith Staff says:

    I was present at a community meeting, the locals were protesting against an Acciona planning approval. The two Acciona representatives [salesmen] present were virtually hounded out of the hall by a very hostile crowd.

    The one gesture that said everything, is that as these two guys made their hasty exit, they turned around and shouted to the crowd “we have a planning permit” – it was effectively giving everyone there the one finger salute as they left.

    The wind weasels have no morals, they deserve everything coming their way.

  2. East of Eden says:

    There are the corporate bullies Next Terror in Canada.

    An Acciodent waiting to happen in Spain.

    And they are now saying in Denmark, Hasta la Vesta, baby to those Acting like Fascists.

    The lying and corrupt international wind industry’s days are clearly numbered – It is now the role of responsible governments around the world to heed the words of Gaia creator, James Lovelock and have them removed immediately. “We need to take care that the spinning windmills do not become like the statues on Easter Island, monuments of a failed civilisation”.

  3. Acciona, lately of Molonglo Ridge fame. I hope they and their investors lose their money, sleep and health – all the things we lost when they blew into our neighbourhood, disrupted our lives, split our community, then blew out again as if nothing had happened. I hope they lose the shirts off their backs. If they go belly up and end up in bankruptcy, it will be worth the cost of the plane fare to Spain to watch them squirm. Not that a six year fight with these bast#$@* has left me bitter and twister or anything!

  4. Jackie Rovenksy says:

    This industry is seeing its ‘giants’ begin to fall. When they cannot pay the bills, it’s sweet justice for those who are finding it difficult to feed themselves and pay their energy bills.

  5. What a pack of opportunistic shonks.

  6. Jim Hutson says:

    Filing for International Arbitration and claiming that the changes renege on their contracts? Give us all a break. Buyer beware…..

    There are no financial claims for fraud.
    Similarly, there is NO SOVERIGN RISK.

    These people have ripped off our Country and it’s citizens, big time. Send them packing. But before they go, make them to pull the damn things down.

Trackbacks

  1. […] the thousands of promised “green” jobs failed to materialise and the money ran out (see our post here). He even cites Germany as a model for energy policy – no, seriously – we’re […]

  2. […] performance of outfits like Acciona (its Spanish parent in diabolical trouble back home – see our post here) and Infigen aka Babcock and […]

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