Library filed under Taxes & Subsidies from Europe
The government announced in July that it would bring in a new system to replace feed-in tariffs, which grant above-market rates for power from clean sources. ...Payouts under the new system will be calculated for each project, taking into account hundreds of parameters that will be published in a separate ministerial order. The order’s draft in February showed that wind plants would be the worst affected, with those completed before 2004 losing the right to subsidies.
Irish wind-farm operators receive payouts from other electricity providers in respect of "constraints" or "curtailments" where a transmission or distribution line is down for maintenance or where there is a local fault, or when there is high wind at a time of low-energy demand (for example, in the middle of the night) and turbines are shut down due to over-capacity.
Green groups in Germany warned on Wednesday that plans to scale back subsidies for renewable power would slow down the country's so-called 'energy revolution', saying last minute concessions to help wind farm companies were not enough.
Michael Fallon, a Conservative energy minister, said that onshore wind still had a role to play in helping Britain meet its energy needs and renewable energy targets but that the industry no longer required government subsidies.
Green power generators in Scotland raked in more than £600million in public subsidies last year, with 91.5 per cent coming from electricity bills in the rest of the UK. However, the drive to become the “Saudi Arabia of renewables” is expected to push that figure to about £3billion a year by 2020.
George Osborne quietly moved to kill off Britain's renewable revolution in Wednesday's budget as he stealthily enacted David Cameron's rumoured call to his cabinet to kill off the "green crap". ...Osborne at a stroke abolished a key tax break that has attracted hundreds of millions of pounds of private money to help build Britain's green energy future.
Electricity prices in Germany are already among the highest in the world. The price of industrial electricity has risen about 37 percent since 2005, according to the Federation of German Industries. The price in the United States has fallen by 4 percent over about the same time. The rise in energy prices has already cost Germany $52 billion in net exports and could prove even more damaging if steps are not taken to keep prices in check.
Europe’s renewable energy investors are facing a harsh reality – that the promises from politicians can be taken away at any moment. Canada’s renewable energy investors may soon face that same reality. ...Governments across Europe, regretting the over-generous deals doled out to the renewable energy sector, have begun reneging on them. To slow ruinous power bills hikes, governments are unilaterally rewriting contracts and clawing back unseemly profits.
The door appears to be shutting on a popular means of lower risk tax-efficient investment as the government clamps down on vehicles that benefit from both public subsidies and tax breaks. Investment schemes that benefit from Renewables Obligation Certificates are set to lose their tax relief status upon the passage of the Finance Bill, scheduled for July.
Under the new scheme, companies will have to sell their electricity to the national grid under a competitive bidding system. The new scheme will limit the total amount of subsidies available for green energy; previously the subsidy budget was effectively limitless. The change has led to developers scrapping wind farm schemes amid claims that the new system will make future wind farms unprofitable.
Critics say it has not attracted investment, but has handed windfall profits to green plants built before it was introduced. Most damagingly, they say, it makes UK manufacturers uncompetitive and pushes up consumer energy bills.
In their annual report, Harhoff and his colleagues have called for the abolition of the EEG altogether. They concluded that the promotion of renewable energy makes electricity more expensive, and doesn't even lead to enhanced climate protection or more innovation. ...The EEG hinders innovation because the risk of investing in new technologies is not rewarded by the market.
Acciona posted a net loss of €1.97bn (£1.62bn, 2.8bn US$) in 2013, which it says is a result of the impact of regulatory reforms to Spain’s energy sector that were approved, with retroactive effects, last year. ...Acciona Infrastructure revenues fell 17.8% in 2013 to €2.73bn, as a result of a fall in construction activity in Spain and abroad. EBITDA fell 49.6% to €82m.
Germany should scrap its clean-energy subsidies because the system has driven up electricity costs for consumers and hasn’t spurred innovation or reduced greenhouse gases, a group of government advisers said. The uncapped aid provided by the system known as EEG "isn’t a cost-efficient instrument for climate protection nor does it have a measurable impact on innovation,” the commission said in the report. “That’s why there is no basis for the continuation of the EEG.”
Wind farm firms have been accused of building huge, ineffective turbines to exploit a lucrative loophole funded by the taxpayer. Labour MP Sir Tony Cunningham, who represents Workington in Cumbria, recently quizzed the Westminster Government to find out what action it was taking. In response to his parliamentary question Energy Minister Michael Fallon revealed he was aware that eight of 110 turbines installed at the higher 100kw to 500kw FIT rate up to September 2013 had been de-rated.
"One risk is that other countries copy what Spain is doing," the European Wind Associaiton (EWEA) policy department told Windpower Monthly in a statement. "Already we see renewable-energy support systems being changed or threatened with change, scaring off investors in several countries," it added, citing Poland, Bulgaria and "even Germany".
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.
Former ABN Amro chief executive Rijkman Groenink is among a group of senior banking officials who have been handed back millions of euros by the tax office after investing in sustainable energy, the Volkskrant reported on Saturday.
Currently, public support for Energiewende is still high but the rising cost has become a growing concern, and last month the new energy minister, Sigmar Gabriel, vowed to cut subsidies for wind, solar and other renewables ...Unless the new government manages to reconcile national priorities with the dynamics of its federal system, the mood could quickly turn against Germany's green revolution.
The Spanish government said it plans to end all price subsidies for wind capacity online before end-2004, while slashing remuneration for younger capacity. ..."It is the most harmful policy dictated against wind in any country," said the AEE, which is calling for EU intervention.