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