The Energy of Nations

So, what is causing Western energy consumption to collapse? Regrettably, it is due to environmental policy and its far-reaching unintended consequences. Of these interventions, the most damaging are emissions trading schemes and the unprecedented investment in renewable energy, both of which are significantly increasing consumer costs and causing consumption to plummet. The EU s emissions trading scheme adds about ¬17 billion a year to energy costs within the bloc, and the UK s newly independent version is expected to cost a staggering ¬6.7 billion in the current financial year. In addition to this, the EU has spent an incredible ¬800 billion providing income support to renewables since 2008, a total that is still increasing at ¬69 billion a year. The UK alone is paying over ¬12 billion every year topping up incomes for wind and solar. So far, the US is a relatively minor player, having spent a mere ¬120 billion from 2008 to 2018, which is probably part of the reason that things are not as bad on that side of the Atlantic.

The expectation was that these subsidies would bring down the cost of renewable energy and reduce emissions of greenhouse gases at an affordable cost. Both hopes have been disappointed. Capital and particularly operating costs have remained stubbornly high, while grid system management costs are rising sharply. Because green electricity is still extremely expensive, the cost of preventing the emission of a tonne of carbon dioxide by switching to wind or solar vastly exceeds even high-end estimates of the Social Cost of Carbon, which is a monetised value of the harm done to human welfare by the climate change arising from that carbon dioxide. The conclusion is obvious. The cure is worse than the disease.

The intentions may have been good, but by committing these vast subsidies to renewables, politicians have failed to provide an economically compelling example of a low-carbon energy transition and have succeeded only in making energy much more expensive, resulting in price-rationing and falling consumption.

via quillette.com

Super ungood.