Articles by ecothrust at Technorati Headline Animator

Tuesday, December 8, 2009

Why Emitters gain while Solar Energy looses in a Carbon Economy : The Free Permit system

http://bit.ly/7XwAG


A 2004 ministerial ruling in Spain , the Royal decree 436, changed the course of events dramatically. Sensing the unique benefits that Solar energy can give to this sunshine state that must import all its oil, the Government against advice of the EU, World Bank and other financial advisors established a lifelong subsidy scheme for the early solar projects. It created two alternative payment schemes, both guaranteed over the 25 year life-cycle of thermal solar plants, and diminishing thereafter. The first is a fixed, guaranteed payment of 300% of the Average Reference Tariff (ART) for electricity. The second induces operators to compete on the national wholesale electricity market, where the generating company received 250 % of the ART plus a 10 % additional incentive


President Obama recently referred to Germany, Japan and Spain as three countries that have made a "real investment in renewable energy." Spain's effort has meant that the Spanish market has grown tremendously over the last eight years. The development of a favorable feed-in tariff, under Royal Decree 436/2004 and subsequently revised to the Royal Decree 661/2007, created a perfect environment to develop renewable energy "special regime" projects.
The Spanish government authorized a feed-in tariff (FIT) under which renewable energy producers could sell the energy they produce to the system directly through distributors; they could choose between selling electricity at the market price with a premium or at a given — very attractive — regulated tariff. Consequently, initiatives to develop projects arose across country, most of those using photovoltaic (PV) and wind have succeeded making Abengoa, ACS Cobra and Iberdola house hold names.

Portugal and Germany both followed the Spanish lead and have established themselves as world leaders in renewable energy with only credible competition from the Japanese in the Asian markets. But the fact remains that solar or wind energy projects are given a cold shoulder by the EU ETS under the carbon Trading scheme.
Why ? Do they not add energy without Carbon. Do they not reduce the effect of green house gasses. Do they not provide growth for nations without emissions.

Why must Arcelor Mittal profit by GBP 1 Billion from free permits issued to them to be energy efficient and reduce carbon. The company is reported to have lobbied hard with the EU for a right to be paid at a emission limit of 90 million tonnes of Carbon per annum for the period 2008 - 2012. This means that since Arcelor Mittals emissions were lower at 68 million tonnes this year the company got a bonanza of 22 million Carbon credits . At the current rate of GBP 12.70 per unit , this gives the company a fabulous gain of 280 million Pounds during the current year. With Arcelor Mittal emissions expected to fall to 43 million next year, the carbon profits for next year will exceed 500 million pounds.

While arcelor gained its Carbon profits by reducing emissions, Abengoa Solar or Iberdola or AC S Corus the renewable energy firms in Solar segment diod get no advantage to bring zero carbon energy to add to Spains installed energy capacity
Why ? Why is this bias against renewables. Possibly because the Politicians areond the world are puppets of the Coal & Oil lobby. The people who have liberally splurged money to sponsor COP conferences and other climate change platforms
globally. It is obvious these meets will be designed to benefit the lobby not go against their basic interests

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