With Wind & Solar’s Days Over, Who Cleans Up Europe’s Renewable Energy Mess?

Across Europe, investment in new wind and solar is in freefall. So far this year, the Germans installed a measly 35 of these things onshore. As their massive subsidies get cut and furious rural residents revolt, the wind and solar industries are facing their inevitable Armageddon.

The inevitable surge in power prices and grid chaos that intermittent wind and solar deliver is only part of the banquet of consequences served up by wind and solar obsessed politicians.

Europe’s manufacturers face an existential crisis as industrialists send their manufacturing to places like the United States and China, which enjoy power prices a fraction of those suffered in ‘green’ energy obsessed Europe.

The results for European economies are as catastrophic as they were predictable, as Benny Peiser details in this presentation given a short while ago. The video is followed by transcript and his presentation slides.

Incredible Shrinking Europe – Between Climate Change Utopia and Green Energy Crisis
Heartland Institute’s 13th International Climate Change Conference, Washington DC
Dr Benny Peiser
25 July 2019

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Slides and Transcript

Benny Peiser: Good afternoon. Thank you very much to the Heartland Institute for inviting me. To send out a warning, don’t do what we are doing in Europe. We just heard from Myron that the American economy is doing very well, growing by 3%. Europe is doing the opposite. I just read the news today. German economy in free fall, manufacturing recession worsens, Europe’s weak economy is driving the continent into another loss decade.

The thing that is rising are the energy prices. I will tell you today that there is a link between the rising cost of doing things in Europe and the stagnation and the economic trouble Europe is facing.

The challenges Europe is facing are manifold, but as a result of policies adopted over the last 10, 20 years, energy prices are the highest in the world. They’re about three to four times higher than in the US, if you can imagine what that means.

Energy-intensive companies, industries are no longer investing in Europe, and they’re saying so openly, because it doesn’t make sense to invest in a place where you have to pay three or four times more for the energy you need. A lot of companies, even European companies, even Chinese companies, are now investing in the US because energy is cheap.

Europe is losing competitiveness. It’s stagnating. Industries are shifting production abroad where there are less stringent regulations, targets. Ironically, although Europe is sitting on very big shale deposits, which you can see there, the Europeans are so obsessed with climate change and other green issues that they have implemented a number of bans, fracking bans, and prefer to rely on lovely Russia for their gas rather than using their own gas.

These are the challenges. In terms of economic decline, people in Europe are not aware that their international standing and competitiveness is declining rapidly. We have to remember that global energy demand is going to double in the next 30, 40 years, mainly because the developing countries are developing rapidly. Their economic growth is 5%, 6%, 7%.

The 21st century will see a relegation of Europe, not to the third world but to the second world. The biggest economies in the next 30 years will be China, India, and the US, in that sequence. China has overtaken the US. India will overtake the US in the next 10 to 20 years. We will see a completely different map of the world economically, politically, and Europe doesn’t seem to want to play ball anymore.

I think they made a big mistake because their assumption was when they started to move to the climate agenda, which became the biggest agenda in their whole raison d’être, when they thought or were told by their advisors that the world is running out of oil and gas, and so we better move into renewables, because Europe will become the energy powerhouse of the 21st century.

Europe will sell this green technology to the Chinese. That was the idea. They forgot to think about the Chinese actually managing to produce solar panels much cheaper, and now Europe is basically buying Chinese solar panels.

That was the first mistake Europe made that they thought … And, remember, all of these concerns happened years before the shale revolution. Of course, the shale revolution has changed the whole global energy market, the whole geopolitical debate, and renewables are nowhere near to be competitive with cheap and abundant oil and gas.

Europe, the EU countries have now the highest electricity prices in the G20, nearly 50% higher for industrial users. As electricity prices go up, both for households and for companies, companies simply pass on the cost to consumers. Not only do Europeans have to pay more for electricity and their electricity bills, but they also have to pay more for goods and services because the companies are having to pay more for electricity, too. They just pass it on.

We just had European elections, and the political landscape is changing rapidly. The mainstream parties, both centre-left and centre-right, who jumped on this bandwagon, on this Green Climate bandwagon, had hoped that they could ride the tiger and that they would become more popular as a result. Of course, the opposite happened.

The centre parties in Europe are being squeezed, a, from the new populist parties on the right, who are opposing these very costly policies. There is public rebellion and concern about rising energy prices. A lot of people are, therefore, voting for these populist parties. On the left, people are voting for the Greens because they are the original.

Any mainstream party who think they can ride this tiger and make any gains should look at Europe, where both centre-left and centre-right parties are haemorrhaging votes left, right, and centre on this very issue, because it’s not very popular to tell people, “We’re going to make your energy more expensive every year and we’re making your life more burdensome everywhere.” It’s not a very popular policy.

What is now happening in Europe and in the European Parliament that the only way that the mainstream parties can still govern is that they can only govern in a grand coalition. Very often, you need the three main parties to have enough votes to govern.

It’s very similar in most European countries, as I said, as a result of this obsession and of making life miserable for millions of people. Mainstream parties are losing votes and losing support.

For instance, just to give you an example, the German Social Democrats, so the Democratic Party of Germany, who used to get about 35%, 40%, is down to about 12% to 15%. It’s a kind of mini party. The Christian Democrats, who is the other big party, is down in their low 20s. The Green Party in Germany is now the biggest party, partly as a result of the climate hysteria.

The only way the mainstream parties can now still keep in power is by working together. The new president of the EU Commission is a Christian Democrat. But she could only be elected with the votes of the Socialists. It’s a bit like Trump winning with the votes of Democrats.

Yeah. Even though they agreed a pact, she only won by nine votes in the European Parliament. There are deep, deep divisions.

The price she had to pay, and we’re talking here about a Christian Democrat, is that she had to promise the most radical policies. I don’t even think some of the green NGOs went as far as she did.

She now wants to introduce a green deal for Europe, which she wants to increase the emission targets for 2030. She wants to make Europe carbon-neutral. In other words, complete decarbonization by 2050. Most interestingly, she wants to declare a climate trade war on any country that hasn’t got similar targets.

In other words, she thinks by having kind of border taxes for Chinese, Indian, African, American products, she can keep the European industries competitive. She forgot that Europe also needs to export stuff. As if we haven’t had enough problems with the international trade situation, I think this won’t go down very well.

The problem, of course, she has is that no matter what the … the EU Parliament is not really a parliament in the traditional sense. So whatever they decide doesn’t mean anything, unless the leaders of these 28 or, hopefully soon, 27 countries, unless the leaders agree, the Parliament is a puppet show, because whatever the Parliament agrees is not binding, is not legally binding.

The only people who have a say are the leaders of the EU countries, and they are divided on this issue. Whatever she promised doesn’t mean that it will actually be done. Not only do the EU countries or the leaders of the countries have to agree, but they have to agree unanimously. That will be interesting to see.

In the meantime, while spending trillions of euros on this matter, CO2 emissions are rising, so something isn’t working. The reason why it’s not working, of course, is that a lot of countries are just paying lip service to these targets and to these policies because they know it’s very costly, it’s unpopular, and it hurts their economies.

All the easy bits, all the low-hanging fruit has been done over the last 10 years. Now it’s actually becoming very expensive. If you want to reduce CO2 emissions by 20%, you can somehow get away with it by simply closing old factories and taking old cars off the street and doing a little here and there. But once you want to radically decarbonize, it’s becoming very difficult and very costly.

You have seen what happened in France. France has essentially decarbonized its electricity, its power-generating system already because of the nuclear power plants France has. They generate a lot of electricity simply by nuclear energy.

If you want to further decrease CO2 emissions, you have to go and tell drivers to pay more, to drive less, and you have to tell people to pay more for heating and so on. Now really the hard bit is beginning to hurt. As a result, you see the growing populist opposition to these policies.

Governments themselves, as a result, are increasingly divided over this because they see it’s a vote-loser. No one really wins, apart from the Green Party. They obviously win. But anyone else is haemorrhaging votes on this issue. Governments are becoming unpopular and losing elections. They are beginning to struggle how best to advance this issue.

In the meantime, hardly any of the countries will achieve their targets. They’ve set these legally binding targets, but many countries are not able to achieve them for the reasons I’ve just given. There’s this growing discrepancy between what governments are promising and what they’re actually able to achieve.

We always hear renewables are now so cheap that they are competitive with conventional forms of energy. However, if you look at the graph on the left, investment in renewables in Europe is coming down rapidly because governments are beginning to cut subsidies left, right, and centre. Once people are not paid for putting up wind turbines, no one’s going to put up a wind turbine because it doesn’t make any economic sense.

Here we have last year, half of the EU didn’t put up a single wind turbine because, as I said, once you don’t get subsidies for renewables, it doesn’t actually make any sense. Both the wind and the solar industry is struggling in a big way because governments are beginning to cut subsidies.

You’ve all seen what happens in France. This is just the taste of what to expect if this were to … This problem of rising energy prices, if we’re to accelerate, it’s very likely that you would see similar protest movements around Europe.

We have about 50 million Europeans living in fuel poverty already, 50 million, and numbers are rising fast. As energy prices go up, expect more energy revolts.

Finally, just to finish up this talk, Europe is split and remains split between the West, where the climate issue has become a quasi-religious movement, and Eastern Europe, which is still heavily reliant on cheap energy.

The West Europeans are telling the Poles and the Czechs and the Hungarians, “You know what? Why don’t you give up on this coal and just buy some Russian gas instead?” and it doesn’t go down well. Somehow because they are climate deniers, they don’t like Russian gas, of course. But there is this deep divide between Eastern Europe, Western Europe.

Of course, people are saying, “If the price is right, we might actually sign up to what you want us to sign up to.” It’s all about money, of course. The question is: will the Europeans have enough money to buy off the Eastern European states? I very much doubt it. But that’s the situation in Europe.

To sum it up, really, is if you want the Green New Deal to succeed, then in 10 years’ time, you might have similar problems than we have. If you don’t want to go down this route and you want to keep your economy growing and you want to keep up with the rest of the world, who doesn’t give much about this, be warned. This is what the price is of doing it wrongly. Thank you.
Heartland Institute