Europe is a green energy basket case with surging prices, fleeing industry, falling economic and population growth, growing dependence on Russian energy, and rising fuel poverty.
It’s quite telling that COP21 took place in Paris. Western leaders, environmental groups, and international institutions are convinced that Europe is the model for the rest of the world to install more renewable energy and efficiency. Entered into force in 2005, Europe has been a mainstay of the failed Kyoto Protocol, the first agreement for country-by-country reductions in greenhouse gas emissions. And the European Union Energy Roadmap 2050 wants the EU to cut its emissions 80% below 1990 levels by 2050, setting milestones for reductions of the order of 40% by 2030 and 60% by 2040.
But, the truth is much different. Europe is a “green energy” basket case with surging prices, fleeing industry, falling economic and population growth, growing dependence on Russian energy, and rising “fuel poverty,” where even the Middle Class often can’t afford the most basic energy services. “Soaring energy costs make Europeans poor.”
To illustrate, Denmark and Germany are the proud wind capitals of Europe, but they also have the highest home electricity prices on Earth, 42 and 40 cents per kWh, respectively, against just 12.5 cents in the U.S. Germany has embarked on a $1.4 trillion energy transition (“Energiewende”) that has resulted in recent Der Spiegel headlines like: “Germany’s Energy Poverty: How Electricity Became a Luxury Good.”
Naturally intermittent and more expensive, wind and solar power have surged under Germany’s very expensive energy plan, and the goal remains to get as much as 60% of power from renewables in 2035, versus 28% today. Undeniably non-sensically, Germany has been paying over $26 billion per year for electricity that has a wholesale market value of just $5 billion (see here).
Yet, the influential Bloomberg, one of the biggest renewable energy promoters and investors in the world, still declared in August: “On Clean Energy, the U.S. Should Be More German.” As a side note, I’ve noticed that Manhattanites can afford ridiculously high costs for pretty much….everything.
German Electricity Prices are Surging
The direct loss of industry because of higher cost electricity is particularly destructive. Manufacturing jobs are very high-paying and the manufacturing business greatly advances nations with a massive “multiplier effect,” where 1 new manufacturing job can create as many as 6 or 7 across the overall economy.
While the manufacturing sector in the EU now employs about 30 million persons directly, down from 37 million 10 years ago, the real devastation is far worse because manufacturing is a building block of a strong economy.
Moreover, energy dreams that are based on more renewable energy at all costs, exacerbated by a refusal to more realistically produce as much domestic coal, oil, and natural gas as possible, have upped Europe’s dependence on Vladimir Putin’s more reliable hydrocarbons. Russian gas, for instance, now supplies 65% of Europe’s natural gas imports, compared to 45% in 2010. More reliable coal and gas still supply 5 times more electricity than wind and solar do in the EU, even after tens of billions in subsidies for renewables. […]
Europe’s Ridiculously High Industrial Electricity Prices (1st half, 2015)
Source: Eurostat; EIA