The renewable energy 'trap'
The truth is that when the boom of renewable began in 2007, the electrical system had accumulated a deficit approaching the 10,000 million Euros, but in later years increased an additional 4,000 to 5,000 million Euros each year.
And indeed, the debt had been fed by the government regulation itself, which contained an element of perverse effects: the ability of the renewables to contain the price of electricity on the wholesale electric market caused that the part of the costs recognized by the system went up due to the profitability obtained by the green energy agents and that regulations guaranteed, thus increasing the financial overall debt. Green technologies fell into a regulatory trap difficult to escape and went on to become the main generator cost of the tariff deficit. They were doomed to be the scapegoat of the electrical mistake. The more the renewable electricity lowers the prices in the electric whole sale market, the more deficits were created.
The final push to disaster.
The economic crisis was the final push for the system accounts to be completely inoperable. With all system costs growing, the fall in electric consumption caused by the economic slowdown made the system totally unviable. Electricity demand in 2013 returned to the levels of 2005. The disproportionate spending made a few years, the curse of the economic crisis, it is true that the country had a shiny new electrical infrastructure, but little money to pay the debt which it was created, even using the very large increases in the electricity bill the debt was growing.
And finally came the Rajoy electricity reform.
The Electrical reform undertaken by the Rajoy’s Government was hard and put into effect part by part. The measures were being fed over the entire governing period. The aim was to plug in the bleeding debt and to stop the increases in the tariff deficit, which happened for the first time last year.
A good reform but at a high cost.
To carry out this reform, the government applied very strong cuts in almost all regulated costs (specially to the renewable energies, and were applied to all sectors, including the traditional electric power installations) new taxes were created an applied to all technologies, to raise revenues; in the early years of legislature the government continued to rise the electricity bill paid by consumers (with timid rises in 2015, the election year); it ended with the quarterly electricity price auctions and the prices were to be decided every day in the daily market price; the door opened to the hourly rate based smart meters (which will not be fully implemented throughout Spain until the 2018).
To top it all the Ministry of Industry, José Manuel Soria Front, applied just at the beginning of this legislature a moratorium on renewables, and then inventing a retroactive compensation model, leaving in check mate much of the green sector industry (mainly those linked to the solar energy). Another blow to renewable was provided through the well-known, 'sun tax' was created to control (stop?) the expansion of the family self-generating electric industry.
These measures are the source of dozens of national and international judicial appeals that have put on hands of the courts (again) the Spanish energy policy.
Among the most unpopular measures, was the 12% raise on the cost of the fixed part of our electricity bill paid by all of us on our receipt, so that users paid more although consumption may be reduced?
Apart from the crisis and the consequent fall in demand, the rest of the consequences are the result of political decisions, either by excessive planning for electioneering or connivance with some major Spanish electric companies. And now that the monster was created, it seems, that at least it will not continue to grow, but it will cost to kill it, because that debt of nearly 30,000 million Euros, will have to be paid by all of us, with interest, for the next fifteen years. Amen