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 reports Jude Clemente. (1)
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 headlines like “Germany's Energy Poverty: How Electricity Became a Luxury Good.” Undeniably non-sensically, Germany has been paying over $26 billion per year for electricity that has a wholesale market value of just $5 billion.
As a percentage of income, poor families pay 5 to 9 times more for electricity than rich families do. Predictably higher cost electricity in Europe is killing tens of thousands of people a year. Excess winter deaths where older residents on fixed budgets in particular are forced to turn their heat down to avoid overly expensive utility bills have been reported. For example, there were 44,000 excess winter deaths in England and Wales in 2014-2015. Critically, although we keep hearing about the dangers of a warmer world, cold kills 20 times more people than heat. (1)
The center piece of the European Union's climate plan, indeed the only major climate policy that acts across all member countries, is a slowly declining continent-wide cap on emissions. By allowing companies to buy, sell and bank permits to pollute under that cap, the program puts a price on European carbon dioxide emissions. Designed properly, the scheme should encourage companies and consumers to reduce the carbon intensity of the goods they purchase and invest in cleaner alternatives. But the Europeans didn't design the policy properly. For a variety of reasons that EU officials should have anticipated, the market for carbon permits has all but collapsed. (2)
Germany is irrationally shutting its nuclear power plants which produce lots of steady, reliable electricity and no carbon dioxide emissions, and promising that renewables will somehow pick up the slack. Perversely, that approach has led power companies to ramp up coal burning, the dirtiest fossil fuel, in a country that has also lavished its public money on the solar industry.
Germany has been paying over $26 billion per year for electricity that has a wholesale market value of just $5 billion. That's $21 billion that could have been spent on health or education that was used instead to feed the Green Machine. (3)
A recent proposed change: If the green energy plans by the German Federal Government are implemented, the expansion of onshore wind energy will soon come to a standstill and then go into reverse. In early March, German Economy Minister Sigmar Gabriel presented a draft for the amendment of the Renewables Energies Act. The new rules regulate the subsidy levels for renewable energy and are to be adopted in the coming months. A study by consultants ERA on behalf of the Green Party's parliamentary group concludes that under these provisions the development of wind energy will collapse fairly soon. (4)
Spain also has over invested in expensive renewables. The country did not install a single new megawatt of power capacity last year for the first time since the 1980s. This was because Spain effectively eliminated costly green energy subsidies in 2014. (5)
Spain accumulated $27 billion in debt subsidizing wind and solar power which greatly damaged the country's economy. Green energy programs in Spain are estimated to have destroyed 2.2 jobs for every green job created. Spanish economists determined that each green job created in the country cost taxpayers $770,000. Each wind industry job in Spain was estimated to cost $1.3 million to create. Only one out of 10 green jobs created in Spain was permanent.
President Barack Obama frequently pointed to Spain as a success story of subsidies., claiming the government's policies would jump-start green energy, create new industries and help the environment. (5)
Announcing government support for clean energy projects, Obama hailed Abengoa, a Spanish company, saying its new solar technology would supply tens of thousands of American homes with renewable power while spurring local employment. “It's good news,” Mr. Obama said in 2010, “that we've attracted a company to our shores to build a plant and create jobs right here in America.” (6)
Since then, Abengoa has built plants in Arizona and California, supplying electricity to more than 160,000 homes. It is a world leader in a technology known as solar thermal, with operations from Algeria to Latin America. But Abengoa's global ambitions are now the source of its troubles.
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Saddled with debt from its expansion, the company is scrambling to avoid what would be the largest bankruptcy in Spanish corporate history. Creditors and shareholders are taking the company to court as losses mount and crucial financial support disappears.
In Britain, utility SSE is rethinking its wind farms as the country cuts subsidies. (6)
The Canadian government has admitted that it was way off its already modest carbon dioxide emission targets. The numbers show that years of environmental efforts in Canada essentially had no impact. (7)
At the Copenhagen climate talks in 2009, Canada pledged to reduce its CO2 emissions by 17 percent over 2005 levels. Instead, Canada will likely increase its CO2 emissions by roughly two percent. It may be as high as 5 percent. The projections for 2030 are even further off. Canada pledged to reduce its emissions by 30 percent. Instead it's on track to increase those emissions by nearly 17 percent.
Wind and solar energy are often viewed by fossil fuel critics as the go-to-green energies. But careful analysis show that these energies are in reality impractical due to their haphazard supply and very poor efficiency. Most wind installations fail to reach 20% of their rated capacities: sun only provides power when it's daytime and not cloudy.
Citing the International Energy Agency, Bjorn Lomborg writes that so far only 0.4% of global energy comes from wind and sun despite tens of billions of dollars invested in these energy sources. Even in 2040, if all governments stick to their promises, sun and wind will cover only 2.2 percent of the world's total energy. Lomberg points out the reason why sun and wind will be no decisive solution against climate change is the energies' inability to be effectively stored.(8)
The problem remains that storage technologies today are cumbersome, horrendously expensive and thus unfeasible. Wind and sun remain a luxury for the rich. Lomborg explains how wind and energy are dependent on subsidies, and that without them they make no sense. Fossil fuel plants remaining on standby when the wind and sun go AWOL also require subsidies. He says that wind and sun can only save about half of the claimed CO2 emissions, and that under some circumstances they actually cause grater emissions. Planned expansion of green energies by the year 2040 will cost 2.3 trillion dollars and result in only a mere 0.0175 C less temperature rise by the end of the century. (8)
Final examples are the islands of El Heirro off the west coast of Africa and Tasmania off Australia's southern coast. Both of these islands were poster darlings for the renewable movement, getting high publicity for being the first islands to be entirely powered by renewables and be free of fossil fuels. (9, 10)
Then reality struck.
El Hierro replaced its diesel power plant with a hybrid wind power and pumped storage worth $94 million. The expensive system, however, provided an unpredictable amount of power and couldn't even electrify the entire island. During the high-wind period in the summer of 2015 the island got 51.7 of its power from the system, but a low wind period in December saw the system generate a mere 18.5 percent of the island's electricity. The sheer unpredictability of the system damages the island's electrical grid and forces the island to rely on the diesel power it was supposed to replace. (11)
An analysis estimates that it would take 84 years for El Hierro's wind and hydro power system to simply pay back its capital cost.
Tasmania had generated most of its electricity from hydro power and other green energy sources for more than a century. The island currently has 30 hydro power stations, supported by three wind farms. However, these sources proved to be unreliable due to weather, mismanagement, and technical issues. To make matter worse, the cable which allowed Tasmania to purchase electricity from Australia broke in December 2015.
The island's hydro power has been hurt by an extended dry period. Water reserves fell from 50.8 percent in November of 2013 to the current low of 14.8 percent. Tasmania is so desperate for water, the island has even resorted to seeding clouds for rainfall. Tasmania's energy system simply wasn't able to keep up with rising demand for power, and they've been forced to shut down portions of the island's industry and purchase 20 portable diesel generators to keep the lights on at a set-up cost of $44 million. (11)
Lessons Learned
- In many cases, the cost of renewables has been huge and should be cautionary tales to policymakers who want to tinker with the electricity systems we depend upon.
- Using 100% renewables is great for PR, but bad for the people who suffer the consequences: higher costs and less reliable power.
- For years, European leaders have flaunted their unwavering commitment to fighting climate change and chastened the United States for lagging behind. But the continent has become a green energy basket case. Instead of a model for the world to emulate, Europe had become a model of what not to do.
References
1. Jude Clemente, “Europe's energy and electricity policies are a bad model,” forbes.com, December 27, 2015
2. “Europe is becoming a green-energy basket case,” The Washington Post, April 21, 2013
3. Joanne Nova, “Green electricity in Denmark, Germany, costs three times as much as US,” joannenova.com, December 31, 2015
4. Benny Pieser, “German government plans to stop and reverse wind power,” Canada Free Press, April 8, 2016
5. Andrew Follett, “Spain's green energy crippled without subsidy crutch,” cfact.org, January 26, 2016
6. Raphael Minder, “Once a darling, Spanish solar company Abengoa faces reckoning,” nytimes.com, March 17, 2016
7. “Canada badly missing self-imposed CO2 targets,” junkscience.com, February 2016
8. Pierre Gosselin, “Top Danish economist Bjorn Lomborg declares wind and solar energies a 'fata morgana'...powerless and expensive,” notrickszone.com,, October 25, 2015
9. Lauren Frayer, “Tiny Spanish island nears its goal: 100 percent renewable energy,” npr.org, September 28, 2014
10. Giles Parkinson, “Tasmania looks to EVs as next step to 100% renewable energy,” reneweconomy.com, May 19, 2015
11. Andrew Follett, “Islands trying to use 100% green energy failed, went back to diesel,” cfact.org, March 20, 2016
Jack Dini is author of Challenging Environmental Mythology. He has also written for American Council on Science and Health, Environment & Climate News, and Hawaii Reporter.
