2/28/11, "Solar `Gold Rush' in U.K. May Die With Fastest Price Roll-Back," Bloomberg, Morales, Roca
"Cornwall, the poorest county in England, said five months ago it expected a “gold rush” of $1.6 billion in solar energy investments. Now, the U.K. government may get in the way."...
- (The government "may get in the way?" It was the government who set up a make believe job market to begin with. The pressure of the climate "community" and proximity to the monarchy may have been too much to resist. ed.)
(continuing): "The central government said this month
- it’s considering cutting incentives and reducing the size of projects,
concerned that the above-market rates it promised through April 2012 may lead to too many solar farms.
Britain is moving faster than any other European country
- to contain a surge in solar power and prevent the boom-and-bust
“It’s going to completely kill the market,” said Tim German, renewable energy manager for the local government in Cornwall at the U.K.’s southwest tip.
- “Investors are starting to get cold feet.”
Sharp Corp., the Osaka-based electronics maker which employs 1,100 U.K. workers after doubling the size of its panel factory in Wales, says the government may cripple the industry. Already, companies are scaling back. Matrix Group Ltd. and Ingenious Media Holdings Plc
- suspended solar funds seeking 55 million pounds ($89 million).
Low Carbon Solar Ltd. says it can’t spend the 70 million pounds it secured from pension funds.
At Good Energy Group Plc, a clean electricity retailer based in Chippenham, England, Chief Executive Officer Juliet Davenport says she may only get 4 percent of the 100 megawatts of solar power-purchase agreements she wanted. It was an industry that for the first time was moving fast and attracting investment,” Davenport said. “Suddenly, the rug has been pulled and everybody’s saying ‘What’s the future? Should we go off to North Africa and develop there and forget about the U.K.?’”
The solar surge began April 1, when the government brought in so-called feed-in tariffs guaranteeing prices as much as 12 times the market rate for electricity generated from the sun. Last year, developers doubled the capacity of solar power generation in the U.K. to 66 megawatts, enough for 9,000 homes.
That’s a fraction of the 16,800 megawatts installed in Germany, 3,700 megawatts in Spain and 2,500 megawatts in the U.S. Only one of last year’s 26,000 U.K. projects had a capacity greater than 50 kilowatts."...
- (Comparing megawatts installed from one country to the next is not helpful. It is a make believe industry, at least on a large scale. ed.)
(continuing): "It was the bigger ground-mounted projects in the works that triggered alarm bells in London,
- not families tacking solar panels on their roofs.
The council in Cornwall, where per-capital economic output is a third below the national average, in September predicted a solar “gold rush” worth up to 1 billion pounds. By February, local officials were scoping 150 sites for about 50 companies planning solar farms. Nineteen had applied for planning permission, and seven had been granted it.
“What has spooked people is the 150 planning applications in Cornwall,” Daniel Guttmann, director of renewable energy at global accountancy firm PwC in London. “If you multiply that up, it’s a reasonably large number.” The renewable-energy subsidies, paid by utilities,
- [translation: ratepayers]
were designed to spur not only roof-mounted panels. Wind turbines, small hydroelectric plants and biomass projects were also covered -- all intended to generate jobs. The Renewable Energy Association said the solar industry would employ 17,000 people by the end of this year, up from 10,000 in 2010.
Projects as large as 5 megawatts were eligible for the incentives. That left room for solar farms on open land.
On Feb. 7, the Department of Energy and Climate Change said it’s reviewing tariffs. The surprise was the speed and scale of the probe: By July authorities plan to decide on new rates for solar plants bigger than 50 kilowatts, or just 1 percent of the 5-megawatt eligibility maximum.
- Projects for wind, hydropower and the smallest solar plans will be reviewed by year-end, with new rates coming in April 2012.
“I don’t want large-scale solar installations to be claiming money meant for householders, small businesses and communities,” U.K. Climate Change Minister Greg Barker said in an e-mailed response to questions.
- Barker later today is due to speak with representatives of the industry at a reception in London with two trade groups, the Micropower Council and the British Photovoltaic Association.
It’s the earliest formal review of feed-in tariffs by any European nation, said Martin Simonek, a solar analyst at Bloomberg New Energy Finance. In Slovakia, authorities stopped issuing licenses after six months, though prices weren’t reviewed until 15 months after the program began.
- The Spanish system lasted a year before being scaled back.
In the Czech Republic, about 1.7 gigawatts of panels were installed last year. After tariffs were cut, New Energy Finance [Bloomberg's carbon trading company] forecast about 400 megawatts this year. In Spain, installations fell to 69 megawatts in 2009 from 2.8 gigawatts in 2008 after incentives were changed.
Already, U.K. investors are retreating. At NextEnergy Capital Ltd. in London, Chief Executive Officer Michael Bonte- Friedheim scaled back plans to develop solar farms, saying three are in the works, down from as many as eight.
Low Carbon Solar CEO Mark Shorrock said that of a planned pipeline of 80 megawatts, the Cirencester-based company can now only develop 3 megawatts.
- Two funds worth up to 30 million pounds that his company was working on with asset manager Ingenious
- are suspended.
Six solar farms planned for Cornwall can’t be built, and there’s nowhere to invest the funds he has from pension plans, he said.
“It’s absolute sabotage,” Shorrock said.
The 50-kilowatt threshold would cause “huge shrinkage” in the market, Ian Lucas, the lawmaker who speaks on business for the opposition Labour Party, said in an interview. A limit that low would “cripple” the industry, said Andrew Lee, the
head of European sales for Sharp solar.
“This puts a hole in school installations, small community installations, social housing installations -- all of which the feed-in tariff was originally intended for,” Lee said in an interview in Wrexham, where Sharp in the past year boosted capacity to 500 megawatts of panels, adding 300 jobs and
- a training academy for installers.
Some companies are less concerned about the review. Robert Goss, solar panel maker Conergy AG’s head of U.K. sales, said the Hamburg-based company hasn’t downgraded its forecast. Jamie Richards, a partner at Foresight Solar, said the company will spend all 20 million pounds it’s raised on rooftop projects.
In Cornwall, German is less sanguine, saying
- “the so- called solar gold-rush will not happen.”
The danger for the government is investors won’t have confidence in other incentive programs, said Good Energy’s Davenport and Shorrock at Low Carbon Solar.
“You won’t get offshore wind money, you won’t get tidal energy money, you won’t get carbon capture and storage money because
- it’s all got to come from these same pension funds
and they won’t trust the government,” Shorrock said."...
- (The government doesn't create anything, it just moves around what others create. ed.)
(continuing): "“That’s the kind of seed of doubt the government has now sown, and it’s very, very damaging.”"
(It was smoke and mirrors on the backs of the people from the beginning. Someone said energy policy should never be combined with job/economic policy). ed.)
via Tom Nelson