EurActiv - Letters to the Editor

Sir,

Regarding ‘Alcoa halts Italian plants after EU electricity ruling‘:

European Union taxpayers must welcome the news here that its money is being used to subsidise big industry!

The reference here puts it plainly: the EU executive has ruled that the ”preferential electricity tariffs offered to Alcoa by Italy for aluminium smelters in Sardinia and the Veneto have no other purpose than to reduce the company’s operating costs” (November 19th 2009) and that ”Alcoa has thus been enjoying an unfair advantage over competitors that have to buy their electricity at higher prices, it said at the close of an investigation opened in July 2006′.’

However dear MEPs and commissioners, perhaps you should take note and be aware that this issue of subsidising electricity costs is being abused (yes ABUSED) much more widely than this through the misuse of the renewable energy route as well.

You will know that the issue of the subsidies given to renewable energy (and in particular the move towards that which is renewable electricity) through various ”obligations” has been misused for years by mega-industry and their subsidiaries and they get away with it. The public know this as much as you do and one wonders why it is allowed to happen so blatantly.

The issue is nothing to do with renewable energy or the start-up of a fledgling industry to meet targets for renewable energy or the support of Jobs whatsoever, it is all about big industry benefiting and making even larger profits at the EU taxpayer’s expense.

The Alcoa issue is but one of a whole plethora of big companies who are milking the EU for anything it can get to bolster their own finances and deliver even better dividends for their shareholders! Let us quote some further examples from within the European Union so that you really understand what is going on.

Firstly, consider the case of Pre-Energy, where an enormous subsidy is to be paid to them for making a so-called renewable energy – in this case electricity from burning wood – for a doubly-subsidised (green) tariff rate which will guarantee them making over three times the sale price of the electricity made from the plant irrespective of whether they use any of this electricity for internal needs.

This plant is supposed to generate 300 MW of electricity a year for which it will receive nearly £300 million per year in subsidies from UK taxpayers! If it was not so lucrative, how come the company is being sold off and onwards to others even before it is built? Something smells and it is not a rat! Now add to that the MGT project in Teeside, which will also get a subsidy of equal proportions. And now add to that the SSE proposals for Scotland which will be further subsidised by the Scottish electricity consumer for projects in Edinburgh, Dundee and elsewhere.

But it does not stop there: remember that the EU raised the issue of Alcoa in Sicily, well here is the analogy in Anglesey in North Wales. Anglesey Aluminium, which is owned by Rio Tinto (51%) and Kaiser Aluminium & Chemical (49%), plans to build a UK £600 million (€675 mullion) 300 MW wood (biomass)-fired power station to stave off final closure of its plant there. And just like Alcoa, it is also seeking renewable electricity subsidies for this proposal.

As a so-called renewable energy facility, this subsidy will give it a UK £300 million (€340 million) per year of hard-earned UK taxpayers’ money in a 20-year UK £7 billion (€8 billion) gift to two of the world’s richest companies. Surely this is wrong as we all know that this money will end up in shareholders’ pockets. These companies are not benevolent and this issue must be referred to the EU Commission.

It should also be borne in mind that there are other companies in the same game who are also attempting to get in on the act as well. Consider Ineous, which has been applying for approval of waste incineration plants in the NW of England, as a company it again is one of the largest in the big business league, and applying for a waste-to-energy plant.

It has been made to fit the criterion of an output which is above the 50 MW threshold of being considered small and has thus been placed above the threshold of local objections to be called in by the UK government for strategic issues so that it can be approved without recourse to objections. This is likewise being copied by WRG (part of FCC – Fomento de Construcciones y Contratas – SA) to do the same thing for a waste-to-energy plant in Bedford. These companies do not care one iota about the business: their only interest is to capture the renewable electricity benefits. As companies, they should not be allowed to apply for such heavy subsidies as these were never intended for this purpose.

However, just to show that I am not singling out the UK in this issue, look at French and Spanish companies as well, which build so-called waste-to-energy plants across the EU. This is not what the European Union should be doing in its mandate to serve the public and it needs to take immediate action to rectify these issues just as it has done for Sicily.

Alcoa in Sicily must not be seen as a one-off penalty against one company: actions needs to be taken against the companies Veolia and Suez, which build incineration plants to burn waste, and WRG (part of a municipal solid waste-to-power plant in Zabalgarbi, Bilbao).

The European Commission needs to look at all of these projects and others and thoroughly investigate them and deal with the issues properly. The Alcoa issue is but the tip of the iceberg here, and we expect this issue to be addressed with these other companies equally and thoroughly.

Geraldine Edwards

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Comments

  1. Very interesting letter Geraldine, I am unable to understand logic in massive subsidies being paid to biomass combustion projects and UK Gov have now announced further subsidies . In Sep 2006 UK.Gov produced a report detailing biomass combustion systems produce hazardous emissions higher than oil and far higher than equivalent gas especially with regard to NOX and fine particles which we know WHO rate most hazardous air pollutant. Plant efficiency appears to be much lower than alternatives with useful power output between 15-34% and current projects display NOX burden between 3-7 times higher than gas per unit of electricity.
    I note current burning proposals will require import of 70 m tonnes of biomass per year from Nth and Sth Americas, Sth Africa and Baltic regions.It would appear all environmental credibility will be lost before biomass reaches UK, we are informed shipping emissions are 38 times higher than land transport per tonne per km. Each tonne of import brings risk of pests and diseases that could devastate indigenous crops. What is the predicted impact on Countries of origin and environment? 7 million plus Ha to be dedicated to biomass for burning in UK when it could be used for local food or ethanol for local transport use.
    Hope this adds to discussion.
    Kind Regards
    Brian Wilson

  2. “This plant is supposed to generate 300 MW of electricity a year”

    Either the plant has a nominal power capacity of 300 MW (which is the most likely), or it produces 300 MWh of electrical energy per year .

    MW per year is a meaningless unit in this context. If you want to get taken seriously, get your units right.

  3. Well spotted Sir. You are correct Pete: it is 300 MW output on a continuous base. The error (mine) was as stated in the information hand out provided in the planning application.

    Even more to the point though is the fact that there are other projects of similar misused subsidies. Here are two others:

    1) The Greater Manchester Waste Disposal Authority (Project for Municipal Solid Waste Incineration/Gasification) is also going to be the recipient of huge subsidies for the sale of electricity and enhanced gate fees (to be paid for by the Residents of the Area) for treatment of the waste which will exist for over 35 years.

    Isn’t this a case where the subsidies are forcing the costs of these projects up? It appears so!

    2) The Dublin (Poolbeg) Incineration Programme where the Corporation of Dublin together with the neighbouring Local Authorities have joined up to create an over-sized project to treat (BURN) waste from the area to make electricity and heat. This project which is already flouting European Union Procurement Rules under the Services Directive and which has had its scope changed several times has failed to take on board the implications of the needs for a thorough Environmental Impact Assessment as well as the Stockholm Protocols on POPs is proposed to handle over 400,000 tonnes per year of Solid Waste from Municipal Sources and at a budget of €380 million is phenomenally expensive. It again will receive huge subsidies for the sale of electricity as well as a hike in Gate Fees for treatment that will exceed €85-00 per tonne (December 2009 rate) and does not even include an allowance for the disposal of the residue of between 50,000 to 80,000 tonnes per year toxic ash produced from the process which has now been costed at €190-00 per tonne!

    So what does the EU do about these projects? Ireland in particular cannot afford this, it is a country that is on its needs financially and the Tax Payers will be paying subsidies to a major US Company for a service they do not want and for which there is no need.

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