Those energy CEOs joined voices calling for an end to subsidies for wind and solar power, saying the subsidies have led to skyrocketing electricity bills for residences and businesses, and even risk causing continent-wide blackouts.
The companies unanimously pointed the finger at European governments’ poorly thought-out decision at the turn of the millennium to promote renewable energy by any means.
The plan seemed like a good one in the late 1990s as a way to reverse Europe’s reliance on imported fossil fuels, particularly from Russia and the Middle East. But it seems the execution hasn’t matched the good intentions, and the authors of the legislations didn’t understand the markets.Of course it is the customer who has to pick up the difference.
“The importance of renewables has become a threat to the continent’s supply safety,” warned senior global energy analyst, Colette Lewiner, referring to a recent report by a Europe energy firm, Capgemini.
“We’ve failed on all accounts: Europe is threatened by a blackout like in New York a few years ago, prices are shooting up higher, and our carbon emissions keep increasing,” said GDF Suez CEO Gérard Mestrallet ahead of the news conference.
Under these subsidy programs, wind and solar power producers get priority access to the grid and are guaranteed high prices.
The subsidies enticed enough investors into wind and solar that Germany now has almost 60,000 MWs of wind and solar capacity, or about 25% of that nation’s total capacity.That may make the global warming enthusiasts happy but not those responsible ensuring everyone has electricity.
The problems began when the global economic meltdown occurred in 2008. Demand for electricity fell throughout Europe, as it did in America, which deflated wholesale electricity prices. However, investors kept plowing money into new wind and solar power because of the guaranteed prices for renewable energy.Without the Gas plants to back up the renewables, electricity generation can be cut off or atleast slowed by dramatic weather effects, like an unusually cold winter when wind and solar can’t produce much.
Meanwhile, electricity prices have been rising in Europe since 2008, just under 20% for households and just over 20% for businesses, according to Eurostat.
Since renewable capacity kept rising and was forced to be taken, utilities across Europe began closing fossil-fuel power plants that were now less profitable because of the subsidies, including over 50 GWs of gas-fired plants, Mr. Mestrallet said.
Eventually those higher natural gas prices in Europe will effect the US
Within five years, the U.S. will be the major player in the world gas market. Of course, gas prices will double or triple in the U.S. because, like oil, the price will now be set by the global market, not by the U.S. market. And like oil, it doesn’t matter how much you produce in your own country, you pay the global price. Period. Just ask Norway.All this is happening while even the global warming theory's proponents admit there hasn't been climate change for 15 years. In fact there are many scientists now predicting the earth is heading for an ice age.