European Governments Rip Up Wind Power Contracts

jerry maguire

“Show me the subsidies”.


In recent weeks there has been a cacophony of wind industry rent-seeker bleating. Turbine makers, like America’s GE have been running hard in the press touting the “merits” of retaining the mandatory Renewable Energy Target – a scheme that will see $50 billion added to Australian power bills and directed to wind power outfits over the next 17 years (see our post here): a whopping proportion of which would end up in the pockets of fan makers like GE – no self-interest there.

Retaining the RET would allow GE to line up for a double-helping. Not only does it make giant fans, it also makes the Open Cycle Gas Turbines that provide the “fire-up-in-a-heartbeat” back-up essential to accommodate daily collapses in wind power output – that can’t be predicted, but which happen on a routine basis (see our posts here and here and here and here and here and here and here and here). The greater the installed capacity of wind power, the more OCGTs that are needed to balance the grid and back it up when it goes AWOL (see our post here).

The wind industry and its coterie of parasites, consultants and hangers-on are in a flat panic about what the RET Review Panel is going to recommend; seizing on every recent breath and utterance from Panel head, Dick Warburton – and dissecting it with the earnestness of a Witch Doctor looking for omens in entrails. Here’s a little piece from The Australian that suggests the omens aren’t what the wind industry was looking for.

AEMO report ‘a very large part’ of RET Review
The Australian
John Conroy
11 August 2014

Dick Warburton, the head of the federal government’s panel reviewing the Renewable Energy Target, has told journalists that a report finding Australia would not need to add any generation capacity to meet demand in the next 10 years had formed “a very large part” of his panel’s findings, Fairfax Media reports.

According to the news service, Mr Warburton, a businessman and climate sceptic appointed by the Abbott Government to head the review, was referring to an Australia Energy Market Operator analysis finding there will be more electricity generation than required until 2024.

“It’s hard to interpret those remarks any other way – that they’re likely to recommend that the [target] be scaled back,” Hugh Saddler, of consultants Pitt & Sherry, told Fairfax.
The Australian

Just what Dick Warburton’s views on climate change have to do with the RET review is a little puzzling?

The largest current (and potential) beneficiary of the RET rort is the wind industry and (assuming “climate change” is all down to carbon dioxide gas) it’s yet to produce any credible evidence that wind power has reduced CO2 emissions in the electricity sector, which is probably because studies based on actual data point in the opposite direction (see this American article here; this European paper here; this Irish paper here; this English paper here; and this Dutch study here). If CO2 emissions are the cause of “climate change”, then wind power sure ain’t the solution.

With the current 41,000 GWh target set by the mandatory RET almost certain to get the chop, the wind industry has been wailing louder than ever about “sovereign risk” and the need to be “compensated” for any change to the target; as if Renewable Energy Certificates were some God-given-right. In this post, WA Senator, Chris Back slammed that one straight over the long-boundary, based on Parliamentary advice which, funnily enough, reflects what STT has already said on the issue (see our posts here and here).

Meanwhile in Europe, governments – being bled to death by the obscene subsidy streams set up by their renewables policies – are tearing up contracts with wind and solar power outfits – apparently unmoved by the howls of outfits that would have never existed, but for the unwilling largesse of taxpayers and power consumers. The Spanish, Italians, French and Belgians have all woken up to the fact that these schemes are simply unsustainable and have to go. Here’s the Financial Post on the great renewables retreat.

Governments rip up renewable contracts
Financial Post
Brady Yauch
19 March 2014

Companies ‘do not have a right [to expect the compensation] not to be changed’. 

Governments across Europe, regretting the over-generous deals doled out to the renewable energy sector, have begun reneging on them. To slow ruinous power bills hikes, governments are unilaterally rewriting contracts and clawing back unseemly profits.

In Italy, one of Europe’s largest economies and one that lavished billions in subsidies on the renewable sector, the government in 2013 applied its so-called “Robin Hood tax” to renewable energy producers. Under the new rule, renewable energy producers with more than €3 million in revenue and income greater than €300,000 must now pay a tax of 10.5%.

That follows a 2012 move to charge all solar producers a five cent tax per kilowatt hour on all self-consumed energy. The government also told solar producers that it would stop taking their power – and would offer no compensation – when their output overwhelms the system.

The result of these and other changes, says the solar industry, has been a surge in bankruptcies and a massive decrease in solar investment.

In Belgium – where both regional and federal bodies hand out renewable subsidies – a number of retroactive changes have capped the largesse renewable producers once received. In one region the price for “green certificates” – which producers received for renewable energy – was slashed by 79%. The government original committed to buy green certificates at a benchmarked price for 20 years, then cut it to 10 years.

Belgium’s regulators tried to impose a fee on all energy added to the grid from small- to medium-sized solar producers. While the country’s court of appeals struck down that fee, a defiant regional government plans to reintroduce it next year, forcing all solar producers to pay an annual fee that varies with the power they pump into the grid. Various municipalities, meanwhile, are introducing taxes on new and existing wind turbines.

As in Italy, Belgium’s renewable sector in the country has gone dark –“imploded” in the view of a solar industry publication. Many companies shrank or went bankrupt.

In France the government last year cut by 20% the “guaranteed” rate offered to all solar producers, and retroactively applied it to projects connected to the grid in the previous three months. The government is also considering ending an 11% tax break on solar energy producers.

Perhaps the most dramatic moves occurred in Spain, for years the poster child for those touting a transition to green energy. Since 2000, Spain has given renewable producers $41-billion more for their power than it has fetched on the open market.

To recover those subsidies, the Spanish government recently killed its Feed In Tariff (FIT) program for renewables, which paid them an outlandishly high guaranteed price for their power, replacing it with the market price for their power plus a subsidy deemed more “reasonable.” Companies’ profits are now capped at a 7.4% return, following which they must then sell their power at market rates. That measure is retroactive, with renewable energy producers who got too fat off their profits now being starved until they reach the 7.4% cap.

For example, if a company spent $100-million on a solar installation in Spain and was posting a return of 14%, or $14-million, annually on that investment, then the government would cut it off from subsidies until its total return – starting from when it was first built – fell to 7.4%, or $7.4 million, a year.

Wind projects built before 2005 will no longer receive any form of subsidy – a move a wind energy trade group called a “sacking” of the sector that will see more than a third of wind producers lose their subsidy.

The fallout in Spain was immediate. Its solar sector, which once employed 60,000 workers, now employs 5,000. The wind sector is estimated to have laid off 20,000 workers. Ikea – the Swedish furniture retailer that became enamoured of renewables – announced it was cutting its losses and abandoning a solar plant it had built in Spain. Investment in the sector also collapsed. In 2011, Spain attracted $10 billion in solar investment. In 2013, the level of investment dropped by almost 90%.

Spain’s Supreme Court offered no sympathy to the solar industry, in ruling against its argument that the government’s retroactive changes were wrong. “The evolution of the energy sector … was putting the financial sustainability of the electricity system at risk,” the court decided, adding that the companies “do not have a right [to expect the government compensation regime] not to be changed.”

Europe’s renewable energy investors are facing a harsh reality – that the promises from politicians can be taken away at any moment. Canada’s renewable energy investors may soon face that same reality.

Brady Yauch is an economist and executive director of Consumer Policy Institute, a division of Energy Probe Research Foundation.
Financial Post


Other peoples’ money: easy come, easy go.

About stopthesethings

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


  1. Unfortunately the stupidity of Ontario voters is bottomless.
    Crooked and inept is not enough to get Liberals ejected.
    The gullible continue to believe in windmills and unicorns.
    Sadly it is my world.

  2. I hope you folks in Australia are able to stop this scam from destroying your economy as they have destroyed ours in Ontario, Canada. We have seen our power bills increase by 50% and large companies are leaving our Provence in droves due to these high costs. Do whatever you need to stop this from happening to you.

  3. E Griffiths says:

    In my next reincarnation I want to be a giant fan – I’ll get paid a lot more for not working than for working. Wouldn’t we all like a job like that 🙂

    Footnote: If we all got paid a lot more for working less our “civilization” would be up the provervial creek without a paddle.

  4. The weasel and greentard goons are dumber than dog sh1t if they think the fans are the way to go, as we always knew the fans are crap and always will be crap. The quicker they are dropped to the ground the better. The fans are only good for the scrap metal dealer.

    • Bruce , Bruce , Bruce…..very little metal in the fans, they are constructed of fiberglass and epoxy. The towers would be good tho’.

  5. Jim Hutson says:

    Humpty Dumpty sat on a wall.
    Humpty Dumpty had a great fall
    All the Kings horses and all the Kings men
    Couldn’t put Humpty together again.


  1. […] Faced with an employment calamity, the Spanish government has moved to dramatically slash the subsidies to renewables: tearing up wind farm contracts; retrospectively stopping subsidies for wind farms built before 2005; reducing the insanely high rates paid for wind power (previously guaranteed for 20 years) – capping the (subsidised) profits wind power outfits can make at 7.4%, above which the outfit must sell at the (unsubsidised) market rate (see our post here). […]

  2. […] policies by winding back subsidies and tearing up wind power contracts (see our posts here and here). And Australia won’t be far behind […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: