If you wish to bail out someone in dire financial straits, then you’ll want to make sure that the party receiving the bailout funds will break its old spending habits and not continue its wasteful ways.
This is the case with insolvent Portugal, as the IMF, European Commission and the European Central Bank prepare a bailout package for the country. These bailout institutions are demanding that Portugal, among other measures, take a hard look at all its renewable expensive energy subsidies.
The author of the climate website Ecotretas informs us that the offical Portugal-bailout Memorandum Of Understanging (MOU) has been released by the above-named institutes. You can read it HERE.
Here we have the de facto financial branch of the European Union certifying that renewable energies are financially non-sustainable – a waste of money. Yes, so-called sustainability helps lead to fiscal non-sustainability.
The relevant parts on energy are on pages 24 and 25. Under Additional costs associated with electricity production under the ordinary regime; the conditions call for (emphasis added):
5.6. Take measures in order to limit the additional cost associated with the production of electricityunder the ordinary regime, in particular through renegotiation or downward revision of the guaranteed compensation mechanism (CMEC) paid to producers under the ordinary regime and the remaining long-term power-purchase agreements (PPAs). [Q4-2011]
And written under Support schemes for production of energy under the special regime (cogeneration and renewables):
5.7. Review the efficiency of support schemes for co-generation and propose possible options for adjusting downward the feed-in tariff used in co-generation (reduce the implicit subsidy) [Q4-2011]
5.8. Review in a report the efficiency of support schemes for renewables, covering their rationale, their levels, and other relevant design elements.[Q4-2011]
5.9. For existing contracts in renewables, assess in a report the possibility of agreeing a renegotiation of the contracts in view of a lower feed-in tariff. [Q4-2011]
5.10. For new contracts in renewables, revise downward the feed-in tariffs and ensure that the tariffs do not over-compensate producers for their costs and they continue to provide an incentive to reduce costs further, through digressive tariffs. For more mature technologies develop alternative mechanisms (such as feed-in premiums). Reports on action taken will be provided annually in Q3-2011, Q3-2012 and Q3-2013.
5.11. Decisions on future investments in renewables, in particular in less mature technologies,will be based on a rigorous analysis in terms of its costs and consequences for energy prices. International benchmarks should be used for the analysis and an independent evaluation should be carried out. Reports on action taken will be provided annually in Q3-2011, Q3-2012 and Q3-2013.
In a nutshell, for Portugal to stop wasting money on renewables, as the IMF, EC and ECB request, the country really ought to stop renewables altogether. Obviously renewable energy are for rich countries who have money to burn. But when you’re broke – then you ought to stop using it.
After all in the end, what good is “energy sustainability” if it leads the world to real financial ruin?