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Meet Solyndra 2.0: This US-Taxpayer-Subsidized Spanish "Renewables" Firm Is Collapsing
News that bonds and stocks of Abengoa SA - the Spanish renewable-energy company - plunged after a plan to shore up capital failed to reassure investors that it can stop burning cash is likely to have passed many by. But coming just one day after President Obama unleashed his Clean Power Plan, the fact that the company - that is now facing significant liquidity concerns - received over $230 million in US taxpayer subsidies in 2014 - despite two ongoing federal investigations - may raise an eyebrow or two as images of Solyndra's government-sponsored farce come to mind... as Diane Feinstein, Ken Salazar, and Bill Richardson - with the help of subsidies and Ex-Im bank loans alledgely exerted their influence to keep this zombie alive.
In 2014, as FreBeacon reports, the Spanish renewable energy company under investigation by at least two federal agencies unveiled a new biofuel production facility on Friday that will receive hundreds of millions of dollars in federal subsidies.
Former employees of the company have alleged that it routinely engages in violations of U.S. immigration, environmental, and workplace safety laws and uses taxpayer funds to hire foreign workers in violation of federal regulations.
The company received a $132.4 million loan guarantee and a $97 million grant to build a new biofuel plant Hugoton, Kansas. Energy Secretary Ernest Moniz and Kansas Gov. Sam Brownback attended its ribbon-cutting ceremony on Friday.
The announcement of additional subsidies came even as U.S. Customs and Immigration Service and the Department of Labor conduct investigations into potential legal violations by the company.
Both agencies have policies against commenting on ongoing investigations.
In addition to direct taxpayer support for the company, Abengoa benefitted tremendously from federal mandates for biofuels, according to CEO Manuel Sanchez Ortega.
“This would have been simply impossible without the establishment of the Renewable Fuel Standard,” Ortega said, referring to a federal regulation that mandates the use of certain levels of bio energy in transportation fuels.
And now, less than one year later, as Bloomberg reports,
Abengoa SA’s bonds and shares plunged after the Spanish renewable-energy company’s plan to shore up capital failed to reassure investors that it can stop burning cash.
Abengoa said on Monday that it’s seeking to raise 650 million-euros ($713 million) of capital and dispose of 500 million euros of assets, according to a regulatory filing. The Seville-based company stepped up disposal plans from 400 million euros as recently as Friday, when it also told investors that corporate free cash-flow for 2015 will be as much as 800 million euros lower than previously forecast.
The predicted shortfall is the latest in a series of announcements that have eroded trust in Abengoa’s accounting methods and ability to generate sufficient cash to service its debt. The company, which spooked the market by reclassifying some bonds in November, has consolidated net debt that exceeds 6.5 billion euros.
“There were liquidity concerns before and this downward revision of corporate free cash flow guidance is disappointing,” said Felix Fischer, a credit analyst at Lucror Analytics Pte Ltd. in Singapore. “The capital increase more or less just covers the shortfall. There are serious liquidity concerns for this company and bondholders believe this measure isn’t sufficient.”
It's ugly!!
As Caixabank ominously warns, "we see [Abengoa's] capital increase as necessary to recover confidence in its balance sheet and liquidity."
Which would normally be shrugged off by an American public - meh, what do we care about the bankruptcy of some Spanish energy firm?
Well... combine political influence... US taxpayer subisides... and corruption... and maybe Americans should care... (as Free Beacon details)
Mike Alhalabi, a former senior lead mechanical engineer at Abengoa subsidiary Abener who worked on the Mojave facility, said the company routinely skipped right to international hiring, preferring to bring in workers from its native Spain.
It did so even for menial jobs, Alhalabi recalled.
“They [hired] people to move furniture around and they were all Spanish,” he said. “I mean, this is work that you can hire Americans to do. Why would you bring people from Spain to move furniture around?”
Potentially illegal hiring practices caught the eye of another employee, who said the company was well aware that it was violating U.S. immigration laws.
“What I came to realize, and it took me a while because I didn’t want to realize it, is that they understood. They knew the law. They didn’t care,” said Lydia Evanson, the former human resources director at an Abengoa subsidiary in Arizona.
“I really came to believe that they’re so politically connected that it’s just hubris and arrogance,” Evanson said.
Alhalabi also saw political connections at work. He noted the involvement of former vice president Al Gore, whose company, Generation Investment Management, bought a stake in Abengoa in 2007.
“Behind the scenes, what brought Abengoa to the United States, based on my research, [was] Al Gore,” Alhalabi said in an interview. “He promised to bring U.S. dollars to the company.”
Alhalabi also singled out Sen. Diane Feinstein (D., Calif.), saying she was part of Gore’s team working behind the scenes to support Abengoa’s activities in her home state.
Feinstein in 2010 asked then-Interior Secretary Ken Salazar to expedite an environmental review of one of its stimulus-backed solar plants, despite concerns that it could impact endangered species in the area.
The month after she sent a letter to Salazar making the request, Interior’s Fish and Wildlife Service signed off on the project.
Salazar attended Friday’s ribbon-cutting ceremony for Abengoa’s new biofuel facility.
The company’s political connections are emblematic of an industry that remains reliant on taxpayer subsidies, according to William Yeatman, a senior fellow specializing in energy policy at the Competitive Enterprise Institute.
“It could not be more clear that this company could not survive without access to government favors from political friends,” Yeatman said, citing its reliance on the Renewable Fuels Standard and continued financial support from DOE.
“Alas, the same can be said for the green energy industry as a whole, which would fast wither and die absent a steady diet of taxpayer and ratepayer subsidies,” Yeatman said.
In addition to its DOE subsidies, Abengoa received $185 million in financing in 2012 and 2013 through the U.S. Export-Import bank as former New Mexico Gov. Bill Richardson (D) sat on the boards of both the federal agency and the company it was subsidizing.
Despite extensive federal support for the company, Alhalabi described a culture of disregard for workplace safety and environmental contamination. Concern over high costs has led to lackluster engineering work at the company’s Mojave facility that could result in an “environmental disaster,” he said.
Solyndra 2.0? Another one off? Or another symptom of the Oligrachic ignorance of where the money comes from...It appears US taxpayers can kiss that money goodbye...
“The equity increase gives the impression that the company urgently needs cash,” said Fischer. “They’ve not done enough to win back investors’ trust.”
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Beyond subsidies for their business, the company failed because there weren't even MOAR government subsidies to their customers to buy solar panels!
obama explained this yesterday. green energy companies that recieve tax subsidies (which are always the ones run by cronies) can end up making more money (for campaign contributions) than traditional energy companies. Even if they fail.
ABENGOA = Ah BEEN GOING A (south) for a long, long time...
Yea, that shows a real viable product,,, needs government stolen money to make a profit.
It's the American way
I would like to do a photovoltaic system on the home but subsidized panels just like subsidized education makes it very cost ineffective.
Of course you would think it would be a grand goal to incentivize southern states to do so but the leaders of the green movement know full well that it is about the money and how they can CAPITALIZE.
Yes, let's pay for fraud in other countries. USA! USA! USA!
Peeps never learn.
I remember all the businesses moving to Development Zones back in the 70's.
As soon as the five year subsidy's expired, so did the businesses.They were never viable without
them.Mal investment writ large.
im sick of the US government propping up loser companies and loser people
So am I. Paraphrasing T. Becket: will no one rid me of this meddlesome ecologist?
Isn't that par for the course for the Nobel Prize Winner?
The US spent $6 trillion in wars in Iraq and Afghanistan and they have collapsed and US troops are back in Iraq and will never leave Afghanistan.
The Nobel Prize Winner spent $5 billion destabilizing Ukraine only to find Nazis rising to control it.
Losing your money - that's what he does best.
Forward
Don't forget the Community Organizer's successes in Libya.
http://www.reuters.com/article/2015/06/01/us-libya-security-economy-idUS...
What about Iberdrola? They are the US and canadian affiliate.
http://instituteforenergyresearch.org/analysis/political-entrepreneurshi...
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aElP..Gdw9jo
Sept. 1 (Bloomberg) -- Iberdrola SA, a Spanish company, will get most of the more than $500 million in economic recovery funds the Obama administration said today it is distributing to U.S. renewable-energy projects.
Bilbao, Spain-based Iberdrola will get $236 million for wind farms in Texas, Oregon and Minnesota and an additional $59 million for a Pennsylvania wind project, U.S. officials said.
Twelve projects in total will get funds, with 59 percent of the money going to Iberdrola’s Penascal project in Texas, the Hay Canyon and Pebble Springs wind farms in Oregon, Locust Ridge II in Pennsylvania and the Morraine II wind farm in Minnesota.
The money is part of President Barack Obama’s economic recovery plan. The entire plan contains about $3 billion that will be given in lieu of tax credits to support about 5,000 biomass, solar, wind and other types of renewable energy production facilities.
“This renewable energy program will spur the manufacture and development of clean energy in urban and rural America,” Treasury Secretary Timothy Geithner said in a written statement.
Obama has set a goal of doubling renewable energy production in three years. He also has said that development of cleaner energy sources would create jobs.
“We are delighted and we are right now putting the stimulus money to use,” said Jan Johnson, a U.S. spokeswoman for Iberdrola.
She said the company plans to spend $6 billion over four years on renewable energy projects in places such as Arizona, Texas, Illinois, North Dakota and Oregon.
84 Turbines
The Penascal wind farm, near Sarita, Texas, the biggest project covered by the grants, is to receive $114 million. It began operating in April, using 84 turbines supplied by Japan’sMitsubishi Corp., and produces 202 megawatts, or enough to power 70,000 South Texas homes, according to an April statement by the company.
The grants will help develop 840 megawatts of capacity, or about 3 percent of total U.S. wind power, said Matt Rogers, an adviser at the Energy Department. Except for $2.7 million of the grants that went to solar projects, all the $502.6 million in grants support wind technologies.
seems scams like solar are perfect fit for the .gov gangsters..crime families aka politicians and banksters.
Their motto: Think of the children/planet while we pick your pockets.
I thought there motto was "bite the pillow."
If Chicago and Detroit had a solar company...
Talk to David Shaw (DE Shaw) and Larry Summers about UPC/First Wind.
http://www.whiteoutpress.com/articles/q12012/obama-contributors-and-the-...
[snip]
First Wind – Received $232 million in stimulus funds. An audit revealed the money only created 125 jobs.
David Shaw: Founder of DE Shaw. Obama bundler and one of the top 3 donors to the Democratic Party. Largest shareholder of First Wind.
Larry Summers: Part owner of First Wind. Obama’s Chief Economic Advisor.
David Canning: Part owner of First Wind. George W. Bush bundler, Barack Obama donor, Rahm Emanuel donor.
http://bjdurk.newsvine.com/_news/2010/02/23/3941508-who-are-these-guys-c...
http://dailybail.com/home/is-daleys-sudden-departure-linked-to-solyndra-...
Watch these guys...
http://cleantechnica.com/2015/01/30/sunedison-terraform-close-first-wind...
Chicago has plenty. This is connected to Summers et.al.. The name is so very appropriate.
http://www.goldwindamerica.com/project_profiles/shady-oaks-wind-farm/
I am a former supplier for this company; we supplied around 5,000 tons of steel to them to build a solar farm. They are the most inept, innefficient lumbering retard zombie I have ever worked with.
They literally did everything wrong, almost nobody spoke english which is good when you work in America. Half of the engineers were green boys from Spain pretending they weren't completly lost. It's enraging to think that money was coming out of my salary to pay them.
this is why a consumption tax is better than an income tax. In a free market they can try to produce a product. if it is good, people will buy it. tax will be collected, and the government can reap the rewards by truly picking a winner.
When they fail like this, not only was your work product squandered on junk piling up on mother earth, but you were esentially forced to pay for the worthless end product beause of the tax on your labor. With traditional corporate law they can still go bankrupt and not suffer for taking a risk. Assets liquidated. Banks print money and write off the same ammount. Just ask Donald Trump.
Free will and free markets will always produce better results for everyone than a beast tax system like we have now.
that's "Racist" and "weightist" discrimination
/s
no tax is better than any tax---fixed it for ya--
btw govt's are obsolete----
moral trepidation is wearing thin------when it is whats holding one back from seeking retribution for past crimes TPTB should be quaking intheir boots---but they are not because they believe their own propagada about divine destiny--
Well then there is that, but there is also/always their goons with guns who will get their 2-4 pensions and cadilac benefits that keep TPTB in power.
We double posted some folks
Yes but how much did they donate to the Democratic party...that is all that matters....
You have to grease both rails to make the train run.
Fuck - I think I've finally figured out Obama's logic on this energy crap. Burning money is cleaner than coal or oil. THERE YOU HAVE IT!!
Slight Correction.....Burning other peoples money is cleaner than coal or oil.....
Has there ever been a solar, wind, geothermal or any other new energy firm that has not been propped up by huge government subsidies? None of them appear to ever be able to stand on their own with out government funding. So the answer in Obamas fucked up mind is to make electric and conventional power more expensive so these energy forms can be competitive. Only a deranged liberal progressive comes to this conclusion.
I think there are a few wind power projects in Germany that are minimally propped up by direct subsidies.
But then again, the cost of their power is 3 to 4 times HIGHER, so as you say, increase conventional power costs and it makes the atrociously expensive SEEM reasonable.
Jesus Fucking Christ they are not even trying to hide the blatant corruption anymore.
We need a global carbon tax, so the Bill Richardsons of the world have a retirement plan (board appointments) after their political careers.
The only way to save the planet from man made madness and the stranglehold of fossil's cum Pax Americana's Oil run Oligarchy is to STOP immediately all government subsidies on fossil growth world wide fed on Petromonarchy + Bushist cabalista hold and initiate immediate CArbon tax on all polluters PRONTO; as well as financial taxes on Casino financial speculators; along with reinstating world wide Glass Steagall type fire wall between deposit and investing banking; all the while shutting down HFs and Zirp/QE links.
No more financial derivative and carbon imprint free soup for these Oligarchs. No more fossil fuel subsidies.
Even the IMF has a large brief on this issue and ZH should mention it.
+1 the sum of all subsidies on this planet for oil and oil-derived products are around five trillion bucks. that's really amazing, if you think about it
https://www.imf.org/external/np/sec/pr/2013/pr1393.htm
Al Gore was interviewed yesterday on my local radio. It is so very hard to take him serious when you know he stands to profit immensely from the clean energy initiatives he is pushing!
If I am elected president, I promise to end it all by nuking the planet, preferable from space (to be sure).
I agree with with everything you said except the implementation of a carbon tax. Giving the gov more money and power, yeah that will solve our problems.
The cost of pollution is not included in traditional accounting/economics. Until it is, "green" energy will always require Government subsidies to be competitive. As for whether pollution has a cost you can ask the Chinese.
Like this?
http://www.dailymail.co.uk/home/moslive/article-1350811/In-China-true-co...
Thank you for proving my point. China has an authoritarian gov that can do anything it wants, and was it willing or able to stop the pollution, no. Why would it be any different here. The gov doesn't care about anything except the gov. We the people care and will take care our selves and our communities. I will not entrust this task to the gov.
http://qz.com/357332/chinas-wind-farms-can-now-produce-more-energy-than-...
http://business.financialpost.com/fp-comment/why-chinas-renewables-indus...
You sound like a pinko commie socialist .... or at least that's what you will be called. You don't remember that mantra Free Markets Good, Free Markets Good, Government Bad, Governement Bad.
gov'ts plus their military are the biggest polluters on the planet.
From the link:
“This would have been simply impossible without the establishment of the Renewable Fuel Standard,” Ortega said, referring to a federal regulation that mandates the use of certain levels of bio energy in transportation fuels.
Looks like it was impossible with the "Renewable Fuel Standard" too.
I wish we could see the original business plan and then contrast it to what really happened. Either the business plan had no chance of success in the first place or execution of the plan did not go as expected. We never see these comparisons so we keep throwing good money after bad ... and I don't mean " we the government"; I mean "we who operate in this midmanaged Medium of Exchange".
Do you think gold backed money would have prevented this? Remember, railroads weren't financed by gold backed money either. They have been perpetual failures (as have the airlines), yet we would not be functioning at all right now without them.
How can that be? How do these industries, that prove later to be absolutely essential, fail to succeed? Inquiring minds want to know.
as far as the railroads you have to look no further than Detriot (auto/truck) and Akron (synthetic rubber)-----big business during and after the war--got the gov't (read bribed) to pull up a million miles of rail so that trucks and rubber tires needed to be used to get to every town instead of the rail that was there before.
Eisenhower's interstate highway gov't project was a result of the need for replacement of the rail---as always the gov't is at the root of corruption.
as far as the railroads you have to look no further than Detriot
I was looking about 75 years earlier ... before automobiles even existed.
In the same vein you cite, the railroads were coopted in a major way by Rockefeller in the early 1900's ... and he didn't even have ownership in them.
Latest study shows cost of solar residential to be 40 cents/kWh commercial 33cents/kWh. It saves burning about 3 cents/kWh of Natual Gas (2 cents in summer). US uses 3.8 trillion kWh so if we generated all our electicity from solar is would add a trillion dollars to our energy bill.
Nice going government- picking a solution that costs 10 times as much-and is less reliable.
A little too pessimistic, you're comparing end-use cost of solar to marginal, generation cost of utility. Even if I wanted to burn natural gas at home to generate power I'd have to amortize the equipment. Remember, the marginal energy cost for solar is zero!
Residential rates are about 20c/kWh hereabouts, up 30% from last year. Because of the tiered system that punishes heavy users many people find that home solar pays for itself within about three years. Well, utilities are getting wise to this and starting to charge a healthy monthly fee just to stay on the grid, as it costs the utility bigtime to have all that capacity standing by for nights and rainy days.
But apparently the system costs of residential solar, for locations like Los Angeles, are pretty close to break-even, and it is healthy for the system to use as much solar as it can, and this doesn't even count the 50,000 megawatt/hours of industrial solar LADWP gets on a daily basis.
http://www.forbes.com/sites/larrybell/2012/02/16/you-thought-solyndra-wa...
the marginal energy cost for solar is zero!
No it's not ... not any more than the marginal energy cost of wind or waterfalls is zero.
ZH Radio?
http://www.wcbm.com/includes/news_items/34/news_items_more.php?section_i...
neocon radio---fixed it for ya
My Spanish is a little rusty, is this really a meatball company?
Donde esta El Bribo?
Maybe you have a worldwide carbon tax paid to the Pope who will use it wisely to save the planet. sarc
(No, POTUS, just because you have Nobel doesn't mean you can run for Popeship after you leave office)
It is a joke to call Abengoa a renewable energy company. The Mojave CSP facility uses nearly 1 billion gallons of water a year. This deal always smelled of political corruption when there were better alternatives for the desert state of CA.