Crony Capitalism and Corruption Claim Another Solar Failure. Solyndra, Abound, Ivanpah, Abengoa…the campaign finance billionaire payola list never seems to end..
– “The U.S. Department of Energy clearly did zero due-diligence in handing out cash. If it did any due diligence, it was only to diligently make certain that only campaign billionaires got the cash while all others got locked out!”
The Ivanpah and Abengoa failures are making Solyndra look like a drop in the bucket.
Collapse of Spain’s ‘Solyndra’ poses election-year embarrassment
Jerome R. Corsi, a Harvard Ph.D., is a WND senior staff writer. He has authored many books, including No. 1 N.Y. Times best-sellers “The Obama Nation” and “Unfit for Command.” Corsi’s latest book is “Who Really Killed Kennedy?”
NEW YORK – The collapse of a Spanish-based multinational renewable energies company could cause election-year embarrassment not only to President Obama, Hillary Clinton, the Clinton Foundation and the Democratic Party, but also to Republican presidential candidate Ted Cruz and his wife Heidi, through their ties to Goldman Sachs.
Announced Tuesday, Seville-headquartered renewables multinational firm Abengoa plans to sell off four solar photovoltaic power plants in Spain for a collective value of $65.13 million, $57.26 million and a net cash flow of $13.9 million, helping the company meet its debt-restructuring targets set out in its feasibility plan.
The asset sale announced Tuesday comes after the company sold in February its 20 percent share in the 100MV Shams-1 concentrated solar power plant in the United Arab Emirates to the Abu Dhabi-based renewable energy company Masdar.
The Abengoa selloff, which has included selling the company’s office headquarters in Madrid, is part of a non-strategic divestment plan announced after the company went into bankruptcy in November. The move is designed to reap approximately $112 million in operating cash to stay in business until December.
The bankruptcy, the largest in Spain’s history, was triggered after Gonvarri, an arm of Spain’s industrial group Gestamp, decided in November 2015 against a plan to invest $371 million into the company.
Last November, after the Abengoa bankruptcy was announced, Reuters reported the company’s bonds were “virtually worthless,” as its share price plummeted 54 percent in a single day.
In a separate move Tuesday, a local court in Mexico ordered the seizure of all Abengoa assets in the country in an effort to settle an action by bondholders seeking to prevent the company from selling the Mexican assets without paying the bondholders.
Abengoa’s stock closed Tuesday at $1.49 per share, down 68.46 percent since Sept. 4, 2015, underperforming S&P 500 by 75.78 percent.
Obama invested billions in Abengoa
Abengoa was a renewable energy company that scripted perfectly the Obama administration’s shift from carbon-based fuel, providing a European counterpart to the U.S.-based Solyndra.
Solyndra was earmarked for funding in the Obama “economic recovery” stimulus efforts that began in 2008 at the end of the George W. Bush administration after the bank failures and economic downturn occasioned by the collapse of the subprime mortgage market.
Last November, the Washington Times reported Abengoa had received at least $2.7 billion in federal loan guarantees since 2010 to build several large-scale solar power projects in the United States. There was no certainty any of the government loans would be paid back amid a collapse that dwarfed the $530 million loss to the U.S. taxpayer with the collapse of Solyndra in 2011.
An exposé by Town Hall on Aug. 4, 2012, found that the then-estimated $2.8 billion Abengoa received in U.S. federal grants and loans made the company the second largest recipient of the $16 billion doled out through the Department of Energy Section 1705 loan guarantee program, the same DOE program that had funded Solyndra.
Hillary Clinton, the Export Import Bank and Abengoa
In her 2016 presidential campaign, Hillary Clinton has argued for the reauthorization of the Export-Import Bank, insisting she wants to be “the small business president.”
Last June, Breitbart reported that under the Obama administration, Export-Import Bank lending has increased 248 percent, with U.S. taxpayers now holding nearly $140 billion in Export-Import Bank exposure.
The same article noted Abengoa has obligations of more than $225 million in Export-Import Bank support.
The article further observed that Bill Richardson, appointed by President Bill Clinton as secretary of energy from 1998-2001, was both an advisory board member to the Export-Import Bank and a member of the Abengoa advisory board at the time the Export-Import Bank loan commitments were made to Abengoa.
The Washington Free Beacon reported in January 2013 that the Export-Import Bank had approved a $78.6 million direct loan to Abengoa in December 2012, as well as a $73.6 million direct loan to a wind farm owned by Abengoa in Uruguay, noting Richardson’s conflict of interest.
The Free Beacon pointed out that the Export-Import Bank, as a function of extending taxpayer-backed loans to foreign buyers of U.S. exports, estimated approximately 510 American jobs would be supported by the Abengoa transactions.
“These two transactions demonstrate the strength of American energy technology and highlight the importance of this growing sector,” Export-Import Bank Chairman and President Fred P. Hochberg said in a statement, as reported by the Free Beacon.
“In order for the U.S. to compete globally, our companies must continue to produce cutting-edge energy technology,” the statement continued. “President Obama set an ambitious goal of doubling U.S. exports in five years, and these types of projects will help us meet that goal in 2015.”
In an update to the Free Beacon article, an Export-Import Bank spokesman insisted that Richardson “had no communication with anyone at the bank” regarding the Abengoa-related transactions.
Goldman Sachs, Ted Cruz and Abengoa
The fascination of Democratic Party politicos with Abengoa began in 2007, when former vice president Al Gore’s U.K. Generation Investment Management bought a stake in Abengoa, a company Gore touted as “the largest solar platform in Europe.”
Gore’s GIM was started in 2004 with several Goldman Sachs’ executives, including David Blood, Mark Ferguson and Peter Harris.
Today, Goldman Sachs has an Alternative Energy Group that specializes in investments of $10 million or more in renewable energy projects, including solar energy.
In November 2015, Goldman Sachs announced plans to invest $150 billion in renewable energy projects, including solar and wind farms, and energy efficiency upgrades for buildings and power grid infrastructure.
In a move typical of Wall Street, Goldman Sachs has turned the Abengoa bankruptcy into a profit alternative.
In 2014, Abengoa spun off a “yieldco” under the name “Abengoa Yield” as a NASDAQ-listed company that has taken “sufficient separateness provisions to insulate itself from the bankruptcy of the parent company, Spain’s Abengoa SA,” according to a report by rating agency Moody’s in March.
A “yieldco,” or “yielding company,” is a relatively new Wall Street innovation that has sprung up in the renewable energy sector since 2014, with strong support from Goldman Sachs.
A new “yielding company” is created to separate from the parent a dividend growth-oriented subsidiary company that bundles renewable energy operating assets to generate predictable cash flows to investors, even if the parent company is dissolved in bankruptcy liquidation.
The concept behind a yielding company is that the parent company developing renewable energy resources faces high risk, including insolvency. But renewable energies, once developed, should produce low-risk cash flows, especially if government subsidies remain in place.
Goldman Sachs, one of the Wall Street innovators in the “yieldco” phenomenon, is one of the 113 institutional shareholders owning Abengoa Yield shares, currently worth more than $45 million.
Today, Goldman Sachs’ enthusiasm for investing in renewable fuels mirrors Ted Cruz’s position on alternative energies. Cruz argues renewable fuels have a place in an “all of the above” energy economy, with the presumption they will succeed with consumers even if government price and policy intervention in the energy marketplace are phased out.
During the Iowa primary campaign, Cruz supported the Renewable Fuel Standard, RFS, through 2022, arguing for the retention for six more years of requirements set by the Environmental Protection Agency. The EPA requires transportation fuel sold in the United States to contain a minimum proportion of renewable fuels, including cellulosic biofuel, biomass-based diesel and advanced biofuel.
“My view on energy is simple: We should pursue an ‘all of the above’ policy,” Cruz wrote in the Des Moines Register on Jan. 6. “We should embrace all of the energy resources with which God has blessed America: oil and gas, coal, nuclear, wind, solar, and biofuels and ethanol. But Washington shouldn’t be picking winners and losers.”
He asserted his tax plan would phase out all subsidies and mandates, including renewable fuel standards and the RFS requirements, arguing that antitrust laws would ensure that the oil and gas industry would not be able to block market access for ethanol producers.
Cruz’s argument depended on a presumption that U.S. consumers, allowed full market access, would find “quite popular” mid-level ethanol products like E25 or E30. Should that proposition prove false, Cruz proposed no alternative to rescue renewable fuels from losing in the open competition of a fuel market absent government intervention.
While Cruz has criticized the Obama administration guaranteed loans to Solyndra, he has been silent on the Abengoa bankruptcy and the development of Abengoa Yield, which generates profits today for investors like Goldman Sachs while the U.S. taxpayer takes millions of dollars of losses on government-subsidized loans.
Copyright 2016 WND
Clouds gather over solar power after golden years of success
After a day in which Britain generated more power from the sun than from coal for the first time, the industry should be rejoicing. But the mood is fearful
Given that the government is determined to avoid playing a financial role in the planned new nuclear plant at Hinkley Point, it is perhaps surprising that it is involved in the UK’s largest solar array.
The 70-megawatt Lyneham photovoltaic farm – big enough to provide light and heat to 20,000 homes – is located at a former RAF base in Wiltshire owned and rented out by the Ministry of Defence.
Lyneham opened last summer with the help of private operator British Solar Renewables, but is only one of a series of projects that were planned for publicly owned sites. And it is good business.
Many associate Whitehall with the government’s recent cuts to solar subsidies, but the state has cashed in on a wider solar boom by providing land – as well as benefiting from the low carbon emissions that come from green energy.
Last week a milestone was passed when it was revealed that, for the first time, the sun provided more UK electricity from photovoltaic panels than heavily polluting coal-fired plants over a full 24-hour period. Just under 30 gigawatt hours – or 4% of national demand – was met by solar, the latest in a series of records set by the wider renewable energy sector in recent months.
In December wind turbines supplied 17% of Britain’s electricity demand while clean power sources in total provided almost a quarter of UK electricity in the first three months of this year.
Solar power sets new British record by beating coal for a day
The latest solar milestone was particular symbolic, as it was announced on the day that the world’s largest coalmining group, Peabody Energy, applied for bankruptcy protection in the US. And it is less than a month since Longannet, the last coal-fired power station in Scotland, closed its doors after half a century of power generation and the last deep coalmine in Britain shut at Kellingley.
The energy world is being revolutionised by a variety of factors, but undoubtedly the most important are based around the need to beat global warming and move away from fossil fuels and towards cleaner technologies. Governments of all hues have incentivised solar, wind and biomass while increasingly tightening regulations and costs around carbon-heavy coal.
Wind power has had the faster take-off in Britain, with the government continuing to provide major subsidies to support huge projects offshore. Solar – made up of many smaller facilities including thousands of household rooftop arrays – has been on a slower burn.
The record set when solar put coal in the shade resulted from the enormous decline in coal usage as much as the enormous growth in solar. But sun power has more than 9GW of installed capacity in place, out of a total of 80 to 90GW of total power capacity in Britain.
Peter Atherton is a hard-nosed energy analyst at Jefferies investment bank in the City of London with a keen interest in whether Britain can keep the lights on, and even he admits that solar growth in the country has been “explosive”.
And it is not just in Britain. Worldwide solar investment topped $160bn (£113bn) last year – more than gas and coal together. China alone is expected to add 100GW of new capacity in the years to 2020 while India will not be far behind.
The latest edition of the Economist declares solar could be a world-beater: “The intermittency of the sun will remain an issue. But if storage costs continue to decline, the possibility of combining batteries on land with energy from the giant battery pack in the sky could be unbeatable.”
The success so far has been driven by a combination of falling product prices – solar panels are 80% cheaper now than they were five years ago – but also by generous subsidies ultimately paid for by the consumer.
The British solar industry barely existed at the turn of the decade, with a tiny 65MW of capacity installed across the country. The introduction of the generous feed-in tariff (FiT) aid scheme in 2010 kickstarted a revolution. By 2011 around 1GW of solar had been installed, with this figure doubling over the next 12 months even though FiT rates had been cut in half.
By 2013, helped in part by the use of another subsidy scheme set up for wind, the renewables obligation (RO), large ground-mounted arrays began to be put in place. Solar capacity had burst through the 3GW level, rising to 9.2GW by the end of 2015. The industry now believes the figure is close to 10GW and could hit 11GW by the end of 2016.
But over the last year both the RO and FiT support mechanisms have been either removed or wound dramatically further down – with the government arguing the industry should largely be fending for itself while bill payers should be spared unnecessary cost.
A spokesperson for the Department of Energy and Climate Change (Decc) said: “Solar, nuclear, offshore wind and shale gas all have an important part to play in our future energy mix – this diversity is essential so we can deliver secure, affordable and clean energy for future generations.
“The costs of solar continue to fall and we are working to create a sustainable industry that delivers without subsidy.”
But the solar industry argues it is being abandoned at the worst possible moment – just a few years before becoming self-sufficient, and at a time ministers seem prepared to back much more expensive nuclear or offshore wind power projects.
As many as 2,000 solar jobs are estimated to have been lost over the last 12 months and Decc’s own worst case scenarios warn of 18,700 jobs on the line.
Lightsource Renewable Energy, the largest owner of solar assets in Britain, cut 25% of its staff last week, while other companies such as Absolute Renewable Energy and Eco Juice have just called in the liquidators. The biggest collapse came last autumn, when the Mark Group failed, leaving almost 1,000 jobless.
Rooftop solar panels could provide nearly half US power
The industry that will come together on 26 April for a clean energy summit at Twickenham stadium is angry.
“Solar is highly reliable. It can be deployed rapidly and it can be accurately forecast ahead,” said Leonie Greene from the Solar Trade Association lobby group.
“The current UK policy of suppressing solar’s potential needs an urgent rethink if we are serious about saving bill-payers money while modernising our power system at the pace climate change demands.”
The key to any debate about solar is cost – but assessing like-for-like figures is complex and hotly disputed. The price of energy from any new Hinkley nuclear reactors has been pinned at £92.50 per megawatt hour (MWh) over a 35-year period.
By comparison, Lightsource says it won a “contract for difference” deal in a recent auction under a government scheme at the competitive subsidy price of £79.82 over 15 years. But Decc estimated in 2013 that large solar will generally cost about £160 per MWh, offshore wind £115 – and gas only £80.
Nick Boyle, the chief executive of Lightsource, is unhappy about the way some solar subsidies were hacked back and the fact that even government now only expects 13GW of capacity to be installed by 2020, but says the row has obscured a much better story.
“No one believed that this industry could be built up so efficiently and so fast. To go to 10GW from almost a standing start in a couple of years and at a cost lower than any other European country should be celebrated. Solar in Britain has been an amazing success.”
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