The Global Warming Policy Forum (GWPF) has warned policy makers in London and Brussels not to draw the wrong lessons from Europe’s looming energy crisis or face growing public outrage and upheaval.Governments that turn a blind eye to the economic devastation of Net Zero policies are unlikely to survive the coming storm.
The European Commission’s Vice-President Frans Timmermans told the European Parliament in Strasbourg on Tuesday that record high power prices show that the EU should speed up the transition to renewable energy.
Despite a record surge in hundreds of €billions in renewable energy subsidies and record high carbon prices, Timmermans claimed that Europe’s green policy costs were not the main culprit for soaring energy costs.
As a matter of fact, policy-driven costs are much more important than market prices as is evident when US and European energy prices are compared. In fact, natural gas prices in Europe are more than three times as high ($18/MMBtu) as they are in the US ($5/MMBtu) where fracking is widely used and shale gas is cheap and abundant.
The European Commission’s knee-jerk response to it’s self-inflicted energy crisis is a topsy-turvy misinterpretation of the underlying factors that are driving up prices which risk exacerbating the looming economic and social upheaval,” Benny Peiser, the GWPF director, warned.
Most European governments have effectively banned the extraction of the continent’s huge shale gas resources while hundreds of €billions in subsidies for renewable energy investors continue to drive up energy bills all over Europe.
Despite the fact that Europe will need natural gas for decades to come, the ban on fracking and the curtailing of conventional gas exploration has led to serious shortages of domestic natural gas production. The result is super-charged electricity prices and rising inflation, a growing cost burden Europe’s already struggling households now have to foot.
Add to that that utilities have to pay record-high prices to buy carbon permits for generating power from natural gas and the result is relentless rises in electricity and heating prices.
Markets throughout Europe are severely distorted by policies to support renewable energy. These distortions and other regulatory coercions have destroyed price signals that would otherwise encourage investment in a diverse portfolio of fuels and generation types.
In effect, the European system has become critically reliant on subsidised renewables and a declining, residual but indispensable conventional and mostly fossil-fuelled generation fleet, clinging to existence at the edge of the market.
The result is that the systems are fragile and easily disturbed by fluctuations in prices for the remaining fossil fuel generators, which guarantee security of supply in the absence of unreliable renewables.
Dr John Constable, the GWPF energy editor, said:
Those claiming that the current high prices for gas show that even more renewables are required only betray their ignorance of the realities of system operation. The weaknesses of European energy supply result from mistaken attempts to “plan” a low carbon economy based on physically incompetent wind and solar.”
This winter, European governments are facing a growing public backlash as the combined effect of Net Zero plans and disastrous green energy policies will hit tens of millions of low-income and ordinary households.
Governments that turn a blind eye to the economic devastation of Net Zero policies are unlikely to survive the coming storm.