Filed under: Economy, Europe, Energy, Capitalism, Junk Science, The United States | Tags: Germany's Energiewende, Subsidies Don't Work, Distorting Markets
Country after country in Europe is abandoning, curtailing or reneging on once-generous support for renewable energy. Green dreams are giving way to hard economic realities. In a time of straightened budgets and recession, they are beginning to recognize that their ill conceived projects have been a self-inflicted economic and political debacle.
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 have a combined daily circulation of about 6.5 million.
The study found a number of trends in the reporting of news about renewable energy. The media’s sentiment toward the renewable industry was cold. More than 51 percent of the articles published were negative or very negative toward the industry.
EU member states have spent about €600 billion ($882 billion) on renewable energy projects since 2005, Germany’s green energy transition alone may cost consumers up to €1 trillion by 2030. These billions of Euros are being paid by ordinary families in what is certainly one of the biggest wealth transfers from the poor to the rich in modern European history. Rising energy bills are dampening consumer spending, a poisonous development for a Continent struggling with a severe economic crisis.
Germany has Europe’s most expensive electricity at 26.8 euro cents a kilowatt hour. Angela Merkel has warned that the rapid expansion of green energy is weakening Germany’s competitive advantage in the global economy. More than half the world’s solar panels are installed in Germany, meeting almost 40 percent of the nation’s peak electricity demand. But during many weeks in December and January, Germany’s 1.1 million solar power systems generated almost no electricity. Solar panels just stopped generating, and Germany had to import nuclear energy fro m France and the Czech Republic.
Siemens, one of Germany’s biggest companies is abandoning the industry. They announced in June that they are closing the entire solar division, at a loss of about €1 billion. Last month they fired the chief executive. Interestingly, as I was writing this I was startled to hear a commercial extolling the wonders of solar energy — from Siemens. They’re going to unload their excess stock on us?
One of the unintended consequences of Germany’s Energiewwende has been that preferential treatment for wind and solar has meant that natural gas plants have become unprofitable, and are being mothballed. Governments are not successful in picking winners and losers, Competition and the free market will do a far better job of directing investment. Government subsidies simply suppress the information that the marketplace is trying to send.
Would someone please explain this to President Obama?
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