Ambitious plans to greatly boost renewable energy to cut carbon dioxide emissions have collided with political and economic reality in Britain, Germany and the US.
The newly re-elected Conservative government of David Cameron has started to cut billions of pounds from renewable energy subsidies.
For several weeks British newspapers, including The Financial Times, The Independent, The Times and The Daily Telegraph have detailed the Cameron government’s determination to stop runaway electricity prices and check green energy spending. Britain has announced ambitious plans to cut emissions by boosting renewable energy, on a similar scale to those now proposed by the ALP.
But as in Australia with the carbon tax, there has been a strong backlash to rising electricity costs, which now include £4.3 billion ($9bn) of green scheme subsidies.
British Energy and Climate Change Secretary Amber Rudd has taken the knife to subsidies for onshore wind farms, ending existing schemes early and putting future funding in doubt.
She has said the Cameron government would not support large-scale solar farms and there have been reports that the government’s main auction scheme to encourage low-carbon power will be delayed or possibly scrapped.
Ms Rudd told the British parliament this week: “We want subsidies to be the way to get the low-carbon economy going and then for the state to step back”.
Renewable energy companies have said the withdrawal of subsidies will cripple the industry.
In Germany, which Bill Shorten cited as an inspiration for Labor’s move, the Merkel government has been forced to scrap a plan for an environmental levy on coal producers. A compromise plan was agreed this month giving a six-year lifeline to some of the dirtiest coal-fired power plants.
Germany is considered to have led the green energy transition with a plan to cut carbon emissions by 40 per cent from 1990 levels by 2020. Despite the billions spent on wind and solar projects, Germany still generates 44 per cent of its electricity from coal. And a report by Roland Berger and the World Energy Council says at least €280bn ($413bn) will be needed in the next 15 years to meet Germany’s green energy targets.
Managing the cost of the transition in terms of household power bills and industry competitiveness is proving difficult. German manufacturers say they are becoming less competitive against the US, which has cut greenhouse gas emissions through technological advances in the production of shale oil and gas, which has increasingly replaced coal.
Despite Barack Obama’s declared global ambitions on climate change, renewable energy targets and subsidies in the US are under pressure.
The US President’s green energy plans face a hostile Senate and the US Supreme Court has struck down some attempts to use the Environmental Protection Agency to force curbs on emissions from coal-fired power stations without first undertaking a cost-benefit analysis. State governments are also backtracking on announced renewable energy mandates, which act like Australia’s Renewable Energy Target to force non-fossil fuel generators into the electricity market.
According to a report in The Wall Street Journal, Kansas has effectively repealed its Renewable Energy Portfolio Standard, which required 20 per cent renewable electricity by 2020. The target is now voluntary.