European Union’s official backpedaling on green-energy subsidies really picking up speed
posted at 2:01 pm on November 6, 2013 by Erika Johnsen
It wasn’t so very long ago that European bureaucrats were so confidently and overwhelmingly convinced that the hassles and expenses of forcibly integrating more and more renewable (read: wind and solar) energies into their various infrastructures were unquestionably worth it — but one major recession and the subsequently ongoing months of stagnation and joblessness later, the tide of popular opinion has already begun to turn the other way. European consumers are largely in a state of outrage as they reap the consequences of the energy policies put in place by their elected officials, coming in the form of costly energy bills that are increasingly comprised of charges, taxes, and subsidies, these days by a rough estimate of about half. Reuters reports:
Europeans are paying the steepest energy bills in four years and face ever higher payments as governments pile on extra charges to help finance a 1 trillion euro ($1.4 trillion) modernisation of Europe’s energy infrastructure. …
Legally binding targets to lower carbon emissions by 2020 mean that energy markets need to become cleaner, but the utilities say they cannot afford to finance the costs, so these will increasingly find their way onto customers’ bills. …
RWE npower, the British unit of German utility RWE , said it expected the share of commodity prices as a component of energy bills to drop to 35 percent in 2020, down from 50 percent three years ago.
“The cost of funding government policies for renewable energy, social support and energy efficiency is increasing faster than any other part of an energy bill,” said Paul Massara, chief executive of RWE npower.
“These initiatives are all important, but consumers need to be aware that delivering them is causing energy costs to increase and will continue to do so for some time.”
The regressive economic impact of these skyrocketing prices and fees is getting so unavoidably huge that it’s actually becoming politically advantageous to advocate for the reduction of these once-holy green subsides and taxes, if you can believe it, and politicians are started to make promises about rolling back all of these mandates en masse. Reuters also reports on a new statement of retrenchment on the issue on Tuesday, not from individual countries as we’ve already witnessed, but from the European Commission, the message of which amounts to: “EU energy prices will rise unless European governments stick to strict guidelines on when subsidies are justified.”
Following intense political debate and a storm of protest over energy prices, the Commission, the EU executive, is revising rules to guide the European Union’s 28 member states. …
The Commission says the subsidies should be phased out and meanwhile made more flexible. Instead of feed-in tariffs, which are fixed-rate incentives, it favours a “feed-in premium”, which would rise or fall depending on market conditions.
“The ultimate aim of the market is to deliver secure and affordable energy for our citizens and business. Public intervention must support these objectives. It needs to be cost-efficient and be adapted to changing circumstances,” EU Energy Commissioner Guenther Oettinger said in a statement.
“If public interventions are not carefully designed, they can severely distort the functioning of the market and lead to higher energy prices,” the statement added.
Europe is worried that the meager few tenths of a percentage point they have finally achieved in economic growth are going to dip back down for yet another period of extended stagnation and even (triple-dip? quadruple-dip?) recession, and unemployment is still at record highs. Economic growth helps those who help themselves, you know. One wishes the Obama administration would take notice.
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