Apparently, cutting the feed in tariffs to already built solar power plants will mean the solar power plants cease to exist:
France at risk of losing 2 GW of solar capacity due to retroactive FIT cuts
How will that work?
The French parliament began, on Saturday, the discussion about France’s upcoming budget law, including an amendment which, if approved, would introduce retroactive FIT cuts granted to PV projects between 2006 and 2010 with capacities exceeding 250 kW.
“If approved by the members of parliament, this measure would mean the immediate termination of contracts for the majority of the 800 impacted PV plants,” Xavier Daval, CEO of French solar technical advisory KilowattSol, told pv magazine. “This decision would force them to file for bankruptcy, as these plants were built with non-recourse financing.”
According to Daval, banks and lenders behind these projects will be those who will suffer the most because the remainder of the borrowed money will never be repaid. “But the most disastrous consequence is that these plants, which will no longer have an operator and no longer have a purchase contract, will stop producing power,” he further explained. “And France will thus see its deployed solar capacity fall by nearly 2 GW. At a time when Europe is calling for a Green Deal, we must once again speak of a French exception.”
Isn’t that a fun piece of idiocy.
What goes bust is the legal wrapper – company, charity, partnership – that owes the money secured on the power plants. The power plants continue to exist. And become the property of the creditors of course.
Meaning that the creditors will now own and operate the power plants in order to try to get their money back.
Capitalism means that capitalists lose money, not that we blow up perfectly good operating assets.
Sheesh.
But do the creditors WANT fields of solar collectors, delivering balky power that presumably wasn’t competitive except for the government racket? Bad government, including reneging on commitments, often is like blowing up capital assets.
All true of course, but retrospective legislation that screws up companies ought to be a complete no-no.
This could be a way of nationalising via bankruptcy, the way Sark (I think, one of the tiny islands) forced the sole local leccy supplier bust by legislating prices below cost, and then took over the bankrupt stock.
An easier grift than running an electric company would be to simply put your constituents on notice that it behooves them to make larger campaign contributions next time.
They must be worth something as scrap metal?
Reminds me of when the South Australian government blew up the coal burning power station at Port Augusta. Presumably they thought that when the voters tossed them out for increasing electricity prices, the wicked opposition would simply start it up again.
To be fair, I understand this sort of thing did happen in Ontario. When the ratbags were tossed out, the new government fulfilled its promise to drastically reduce CO2 emissions by restarting the nuclear power stations.
France has an overcapacity of electricity production thanks to its 59 nuclear reactors which have never run at full capacity because demand is not high enough. There is talk of shutting some of the older ones as being not needed. France therefore is a net exporter of electricity. Losing 2GW is of no consequence and nuclear power is ‘green’ in fact but not in the Alice in Wonderland World of Climatistas. Therefore the idiocy is France will close down nukes which provide base load and are dispatchable, and replace them with wind and solar which cannot and are not.
That would be idiocy; but here, we’re just killing subsidies for solar, which might ruin these plants their owners won’t want to administer and maintain, and evidently France never needed. Who says there’s nothing more permanent than a temporary government program?!
By the way, windpower etc. isn’t “green” either. Think about actually building a wind farm and new gadflies will spring up with aesthetic objections backed by “studies.” The only thing certain about environmentally correct energy is that you can’t measure and you can’t plan.
Getting the generating hardware dropped into in your lap as a creditor is all very well. Yes, sure, try to get an income out of it. But there are still running costs. There might be no way to make a go of it.