quinta-feira, 21 de outubro de 2010

Not so fine, Mr. Gore!

Al Gore was today in Lisbon, Portugal. He made a talk at the SAP Business Forum, and as can be seen in the video below, he seems to believe that everything is fine in Portugal. He brought along with him his old cow joke, but given the situation here in Portugal, the cow joke is just an excellent example!

Someone should tell Al Gore that Portugal is not coming out of the Great Recession. In fact, Portugal's economy is getting worse, as can be seen by the high sovereign risk, usually one of the highest 10 in the world in the last months. This is so because major bad economic decisions have been made in the last years, namely in alternative energy. Portugal has traditionally a lot of hydroelectricity, and this year a lot of energy was based on hydropower. Confusion has arisen about how much green energy is really produced, but greater values are typically associated with greater rainfall.

The truth is that more wind energy has been produced, but since storage is very limited, a lot of energy has been exported at zero cost. Water pumped storage with water had to be discharged because of heavy rain in the beginning of the year, with a duplicate loss. All this energy was lost, while paying the wind operators, due to feed-in tariffs. The total cost for Portuguese consumers and taxpayers is estimated at 700 million euros this year. But costs are growing exponentially. Electricity costs have risen in the last year, while they have gone down in European countries where alternative energy is less used. And they will have a mean rise of 3.8% next year, motivated essentially by alternative energy price rises, as the independent Energy Services Regulatory Authority has justified.

The truth is that the Green Economy is a black signal for the Portuguese Economy. EDPR, which owns Horizon, is on it's way down. The Portuguese Government has proposed major cuts for the 2011 budget, unseen since Portugal regained a democratic regime, in 1974. Just like Spain, we're going down, while unemployment keeps going up, and the promised green jobs are one of Europe's lowest. So, Mr. Gore: If some Portuguese told you that "I feel fine", I can bet he felt like the farmer in your nasty story! And I can't wait that he sues you in court, in a nearby future.