The luster of Europe’s recent green push is fading fast. Last month, Spain cut its green energy losses after government subsidies to renewable energy production resulted in a nearly €26 billion tariff deficit (the gap between the cost of producing electricity and how much utilities were allowed to charge consumers). In places like Germany, the cost of green programs is being passed on to consumers. All across Europe, the price of electricity is up, and many industries are fleeing the high costs of green policies and moving to the US to take advantage of cheap shale gas.Germany has plans to cut many of its flagship green programs. As Gerard Wynn writes for Reuters, the rest of Europe is also eying green retrenchment:
EU countries are likely to pare back support for renewable energy further after Spain’s recent proposed overhaul. […]Greece has a similar regulated power market [to Spain’s] and has also accumulated a tariff deficit which it has tried to reduce through cuts in support, including some retroactive measures. […]Besides Spain and Greece, there are at least three other countries which have imposed retroactive changes in renewable support—the Czech Republic, Bulgaria and Romania, usually through new taxes or grid fees for existing projects.
Wynn also points out that Britain and Italy have capped the amount of money they will spend propping up renewable energy sources that are too inefficient to compete on their own. Germany is considering following suit by limiting the green surcharge it passes on to electricity consumers.Caps like these are a smart form of damage control; environmentalist policymakers would push their green-at-any-cost agenda as far as possible if they had their way.[Wind turbine image courtesy of Shutterstock]