Filed under: Capitalism, Democrat Corruption, Economy, Energy, Global Warming, Junk Science, Regulation, Science/Technology, Taxes | Tags: Decarbonization Fail, End User Energy Cost, Public Subsidy Forever
The German energy giant RWE just pulled the plug on one of the world’s largest wind parks, the £4 billion Atlantic Array in the Bristol Channel. RWE did so for the stark reason that “the economics do not stack up”. It’s a mantra that well reflects the entire chaotic, incoherent and frankly competing elements at the heart of Europe’s energy policies.
Big renewable energy projects will always require state intervention and public cash in pursuit of the illusory aims of decarbonization. Private investment and business venture capital, are of sounder mind, and not inclined to take on the monumental risks involved, without the safety net of government guarantees and continuing public subsidies. Often better known as crony capitalism.
A democratic electorate views its key priorities with a combination of skepticism and common sense, particularly when their first priorities, like an improving economy have gone a glimmering. RWE had complained that the government was treating environmental subsidies as a “political football” which is an accurate representation of the ideological differences at the heart of the coalition.
The British Liberal Democrat energy secretariat is philosophically committed to paying for renewable energy, apparently whatever the cost to the end energy user. George Osborne’s Conservative Treasury, on the other hand, is quite aware of the political cost of the consumer’s energy bills. Britain has been dealing with “energy poverty,” for a number of years. But the whole thing goes back to Germany’s panicked knee-jerk reaction to abandon nuclear power in the wake of Fukushima. That led to the early closure of perfectly operational power stations, many owned by RWE. That short-sighted reaction now threatens Germany with a serious power shortage. RWE knew that the Atlantic Array needed more, not less government subsidies, and there is no prospect of that happening. They have embarked on a fast track divestment of their assets, divested itself of part of its UK gas and electricity sector and are outsourcing 1,400 jobs from Europe to India.
This is a stark warning to the rest of the world that renewable energy projects come with a need for constant government subsidy. These projects do not pay for themselves. Australia is drafting legislation to abolish the country’s carbon pricing mechanism to assuage the consumer anger over soaring energy prices. Green Dreams are all very well, but business is business, and the public has had enough of governmental green dreams. Somebody really needs to tell President Obama.
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