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Even The EU Can See Europe's Energy Policies Are Broken


So many European countries are getting energy policy wrong that even the green-minded EU is calling for change. The European Commission urged the EU’s member countries to be more judicious when intervening in energy markets, after overzealous green subsidies have sent energy prices into the stratosphere.

Germany is often held up by environmentalists as proof that renewable energy can thrive, but the country’s rapid renewables expansion has been driven largely by feed-in tariffs that guarantee prices paid for green energy. The costs of these tariffs are being passed on to consumers, resulting in sky-high energy prices for consumers and industry alike, and driving many businesses to greener pastures (like the shale-rich US). Similarly, Spain guaranteed above-market rates for green energy producers, sparking rapid and unsustainable growth in solar and wind farms. Ultimately, it was forced to cut its losses and roll back the subsidies.

As Reuters reports, now the EU would like to see energy policies that are more in line with reality:

The Commission says the subsidies should be phased out and meanwhile made more flexible. Instead of feed-in tariffs, which are fixed-rate incentives, it favors a “feed-in premium”, which would rise or fall depending on market conditions….

“If public interventions are not carefully designed, they can severely distort the functioning of the market and lead to higher energy prices,” [EU Energy Commissioner Guenther Oettinger said in a statement].

Green energy isn’t ready to compete with fossil fuels on its own merit, and these attempts to kick-start its growth have produced a deeply distorted energy market with consumers footing the bill. The sooner Europe can roll back these failed experiments, the better.

[Broken solar panel image courtesy of Getty Images]

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  • Gene

    My guess is that Guenther Oettinger, if he’s like most of the transnational bureaucracy of the EU, had to grit his teeth when saying bad things about “distorting the functioning of the market.” I’ll bet he’s spent most of his public career decrying every “market failure” he could find or fabricate, right before suggesting the latest trendy ways governments ought to be distorting market functioning.

    If I’m right about that at least I can derive some small pleasure at the EU’s discomfort when slapped hard by reality.

  • Jacksonian_Libertarian

    The development of solar and wind power should have been left to entrepreneurs who risk their own money when they see a profit opportunity. Governments are lousy at picking winners in the market place, and should butt out and leave the market to do its thing. Europe has now so warped its energy market, that it’s going to lose millions of jobs to low cost areas, in addition to impoverishing its citizens.

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