Spain, Wind Power, and 20 Percent Unemployment

Updates

January 2, 2012:  GE will acquire wind farms in Spain and France.

In its concerted effort to reduce debt and maintain investment grade credit rating, Iberdrola SA, the biggest utility firm in Spain, has decided to divest its French wind parks to a consortium of companies led by General Electric Company for about $529 million. The divested portfolio includes 32 wind parks with total installed capacity of 321.4 megawatts that are directly or indirectly controlled by Iberdrola Renovables France, the French subsidiary of the Spanish utility company.

The strategic move is aimed at reducing its huge debt burden, which has been consistently on the rise as the Spanish government failed to pay the bills for selling power at regulated prices due to the continued sovereign debt crisis. To add to its woes, Iberdrola presently has a dismal credit rating by S&P at just a notch above the ‘junk’ rating. With the asset sale likely to bring in additional liquidity, the company hopes to remain afloat at least for the time being, although some experts anticipate an imminent dividend cut.

Don tells me that he used $2.25 million for megawatt costs when determining profitability. The above: $530/320 --> $1.65 million which is about 75% of $2.25 million -- and Don says "maybe" one could make money at that cost ($1.65 million/megawatt.

Original Post

When I think of Spain, I think of wind power. Remember all the stories about Spain's success with wind power?

Today I see on the Drudge Report, Spain's unemployment rate has soared to 20 percent. It is amazing all the comments at that link that called attention to the same issue.

This reminds me of the Harvard University study that shows wind energy results in few new jobs and higher utility costs in the US.