Europe Pulls The Plug On Its Green Future

solar panelAs country after country abandons, curtails or reneges on once-generous support for renewable energy, Europe is beginning to realise that its green energy strategy is dying on the vine. Green dreams are giving way to hard economic realities.

Slowly but gradually, Europe is awakening to a green energy crisis, an economic and political debacle that is entirely self-inflicted.

The mainstream media, which used to encourage the renewables push enthusiastically, is beginning to sober up too. With more and more cracks beginning to appear, many newspapers are returning to their proper role as the fourth estate, exposing the pitfalls of Europe’s green-energy gamble and opening their pages for thorough analysis and debate. Today, European media is full of news and commentary about the problems of an ill-conceived strategy that is becoming increasingly shaky and divisive.

A study by British public relations consultancy CCGroup analysed 138 articles about renewables published during July last year in the five most widely circulated British national newspapers: The Sun, The Times, The Daily Telegraph, Daily Mail and Daily Mirror, which enjoy a combined daily circulation of about 6.5 million.

“The analysis revealed a number of trends in the reporting of renewable energy news,” the study found. “First and foremost, the temperature of the media’s sentiment toward the renewables industry is cold. More than 51 per cent of the 138 articles analysed were either negative or very negative toward the industry.”

More than 80 per cent of the articles appeared in broadsheet titles The Times, The Daily Telegraph and the Daily Mail, the report says, “but 55 per cent of these articles were either negative or very negative about the industry”.

EU members states have spent about ‚Ǩ600 billion ($882bn) on renewable energy projects since 2005, according to Bloomberg New Energy Finance. Germany’s green energy transition alone may cost consumers up to ‚Ǩ1 trillion by 2030, the German government recently warned.

These hundreds of billions are being paid by ordinary families and small and medium-sized businesses in what is undoubtedly one of the biggest wealth transfers from poor to rich in modern European history. Rising energy bills are dampening consumers’ spending, a poisonous development for a Continent struggling with a severe economic and financial crisis.

The German Association of Energy Consumers estimates that up to 800,000 Germans have had their power cut off because they couldn’t pay the country’s rising electricity bills; among them, German newspaper Der Spiegel reported last October, are 200,000 long-term unemployed.

As The Washington Post writer Charles Lane observed at the time: “It’s one thing to lose your job because a competing firm built a superior mouse trap; it’s quite another, justice-wise, to lose it because a competitor talked the government into taking its side.”

Two weeks ago, the Czech government decided to end all subsidies for new renewable energy projects at the end of this year. “The reason for this law amendment is the rising financial burden for electricity consumers,” Prime Minister Jiri Rusnok said. “It threatens the competitiveness of our industry and raises consumers’ uncertainty about power prices.” In recent years, almost all EU member states also have begun the process of rolling back and cutting green subsidies.

Spain is a particularly cautionary tale. By failing to control the cost of guaranteed subsidies, the country has been saddled with €126bn of obligations to renewable-energy investors.

Now that the Spanish government has dramatically curtailed these subsidies, even retrospectively, more than 50,000 solar entrepreneurs face financial disaster and bankruptcy.

Germany, however, is the nation that has pushed the renewables agenda furthest and is struggling most with the unintended damage of the green energy shift, its so-called Energiewende.

Germany’s renewable energy levy, which subsidises green energy production, rose from ‚Ǩ14bn to ‚Ǩ20bn in just one year as a result of the fierce expansion of wind and solar power projects. Since the introduction of the levy in 2000, the electricity bill of German consumers has doubled.

German households will pay a renewables surcharge of ‚Ǩ7.2bn this year alone. In addition, consumers will be affected by indirect costs because industry, trade and commerce pass on their rising energy costs in product prices. And because green energy subsidies are guaranteed for 20 years, the costs threaten to rise exorbitantly as more schemes are being agreed. Energy bills are going through the roof, fuel poverty is rising and renewable energy policies face a growing public backlash. What is more, governments are increasingly concerned about the threat to Europe’s industrial base.

Germany has the most expensive electricity in Europe, with an average price of 26.8 euro cents (40c) a kilowatt hour. No wonder Chancellor Angela Merkel has warned that the rapid expansion of green energy programs is weakening Germany’s competitive advantage in the global economy.

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