Grid pro quo: Green power not green light for citizens’ pockets
Overgenerous subsidies for
green energy are driving the EU towards an energy-crisis, the
Europe's top utilities firms warned in September.
The problem, they say, is that billions in taxpayer hand-outs are killing innovation and competitiveness, and as a result Europe’s energy security is no longer guaranteed, carbon emissions are on the rise and fuel bills are rising.
RT:The biggest argument here is that Green energy is pushing power prices up. Just briefly, how does that work?
Fred Roeder: Yes, so let me try to explain the simple example. Imagine you have various consumers going to a grocery store. One them wants to buy a bottle of beer for 1 euro. Other would like to buy a bottle of champagne for 30 euros. In normal life people would just pay 1 euro for the beer and the other will pay 30 euros for champagne. German energy markets actually are different: people wanting the champagne would pay 2 euro for it and [those who] want the beer would also pay 2 euros. They subsidize the champagne buyers.
The same is in the energy market. If you buy energy from the legacy energy carries such as core nuclear power you subsidy those who demand energy for much higher price, that is renewable energy such as wind or solar power.
RT:Transitioning to new power sources was never going to be easy... surely a few hiccups were to be expected?
FR: I wouldn't call it a hiccup. The German Minister of
Environment even who is a big fan of this transition into
renewable energies even put the price on this change of 1
trillion euros. One trillion euros means that all companies and
all individuals in Germany have to work 180 days just to pay that
sum. In these 180 days they earn no money to pay for their
healthcare, to pay for their food, or housing.
RT:As for costs... German green energy taxes amount to roughly an Irish bailout per year. That's a lot of money, isn't it? And why is Germany so adamant? France, the UK have no problem with conventional and nuclear power. Why does Berlin?
FR: It happens when policies especially energy policies conducted with ideological beliefs not commonsense understanding how actually supply and demand works. Let me explain that: if you produce renewable energies in Germany you have a guaranteed price the consumers have to pay for this energy. That means you can produce even if no one wants to have your energy. You are obliged and entitled to sell it. And that created in Germany the so-called energy bubble. A lot of people like farmers or municipalities are producing energy no one actually needs, but they are entitled to sell it. And in the end consumers pay for it. It was reported that the industry has to pay higher costs, but at the end it’s consumers that have to pay for the higher costs. Products will be more expensive if the energy to produce these products is more expensive.
RT:Who is profiting?
FR: It’s a bulletproof investment at the moment to build a windmill in your yard or put some solar panels on the roof. The government is subsidizing the loans you need to afford these things and then you get a guaranteed price for every kilowatt you produce. It is a bulletproof investment and a lot of people are doing this because it is a good way to make money. But at the end it is us consumers who pay for it.
Germany actually has all the supply of energy at the moment. There’s often way too much energy in the power grid, so Germany has to get rid of this energy. And they pay other countries to actually accept this energy. Countries like the Czech Republic and France have to take Germany’s energy, especially when it is very windy or sunny. And in other days, for example in the winter, the more we get rid of fossil power or nuclear power there may be even no wind, so Germans have to buy French nuclear power to actually light a Christmas tree. So it’s not getting rid of nuclear power, it’s actually outsourcing it.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.