Sunday, November 29, 2015

Crony Capitalism At Work——$29 Billion “Green Energy” Boondoggle Flops in Spain | David Stockman's Contra Corner

Solar energy has surely come a long way in recent years, as technological progress has undoubtedly improved its economics. Evidently though, the improvement isn't sufficient yet to make it actually viable. One would think that it makes sense to deploy it in places that are sunny most of the time (such as, well, Spain), but even there, it evidently depends on subsidies.
People often forget that it actually costs energy to produce solar panels. Whether they will in turn produce enough energy during their lifetime to make this investment viable remains questionable. It remains questionable precisely because so many companies in the sector depend both directly and indirectly on a vast variety of government subsidies (including the introduction of inane trade barriers to the detriment of consumers).
With the subsidization scam in Spain reaching its limit, it turns out that not even sunny climes can keep solar boondoggles afloat. In the current case, a cool $29 billion (€17.3 bn.) in liabilities have just been exposed to intense vaporization danger, as "green energy" company Abengoa has finally filed for bankruptcy.

http://davidstockmanscontracorner.com/crony-capitalism-at-work-29-billion-green-energy-boondoggle-flops-in-spain/

"It remains questionable precisely because so many companies in the sector depend both directly and indirectly on a vast variety of government subsidies (including the introduction of inane trade barriers to the detriment of consumers)."  

Hmmmm.  So when the government intervenes in the free market, scams and bubbles and all sorts of nonsense seems to mysteriously and unexpectedly happen.