By Dan Clements host of Back II Basic
December 1, 2015
Abengoa
on verge of largest bankruptcy filing in Spanish history, is
the title of an article I shared on my radio show Tuesday. They are
trying to restructure $14-15 billion in debt with their creditors.
Spain has long been a world leader in renewable energy, which is
heavily subsidized by the Spanish government. Most of the renewable
energy projects around the world are being subsidized by governments,
It makes me wonder why the free markets aren't doing more in this
sector of the economy.
The chart below show how much in
subsidizes each sector of energy generation receives from the
government and then how much each sector produces;
You
can see that wind and solar get 50% of the subsidizes but are only 2%
of the generation puzzle. Why is that? The free markets are
investing in renewable energy projects, just not the government
approved ones. Wind and solar use to much space, upfront cost are
too high, and the down the road maintenance cost are too high. Also
the return on investment is low to non existent. Projects
that involve hydrogen are where the free markets are looking
to invest their money. Totally scalable, and portable, hydrogen fuel
cells can generate electricity cheaper and easier with out the
upfront cost and long term maintenance costs.
So getting back to the Spanish story
above, this is just another example in a long line of examples of
when governments get involved in the economy that they have no
business being in, things don't go as planned. And not to mention
the big problem of crony capitalism! Free markets have worked for
the betterment of mankind longer than there have been governments.
Someday we may all learn this lesson, to the betterment of ourselves
and the society in which we live!
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backIIbasic.com. Permission to reprint in whole or in part is
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