German flagship daily Frankfurter Allgeneine Zeitung has an analysis of the German Energiewende (transformation to renewable energy) and its consequences. It writes that the Energiewende “has lost its magic” among the public and that, “The new electric bills in August could be a catastrophe, both politically and economically. […] Now they [industry] are setting off the alarms.” In a nutshell: The Energiewende is costing a bundle.
European policy created its own unlevel energy playing field
Not long ago environmentalist Green Party leader Jürgen Trittin once told German consumers that the switch to renewable energies would be cheap and affordable, costing about as much as the price of a single scoop of ice cream each month. That scoop has since turned into gallon-buckets of Ben Jerry’s.
All told there are approximately 1.3 million solar power generating systems installed in Germany, and all are guaranteed a fixed exorbitant rate for the power they feed in. The added costs from the high rates paid to these producers are simply passed along to industry and ultimately the consumer. Now energy prices are sky high and German industry in many sectors cannot compete globally. The playing field is no longer level, the companies complain.
So far Germany has coped by granting many of its energy intensive industries exemptions from paying the renewable energy levies. A total of 2245 companies have been exempted from the feed-in surcharges, leaving the consumers to pick up the tab. But now Brussels is questioning these exemptions, claiming they represent an illegal subsidy for the companies. If revoked, companies once again will be facing high costs and a competitive disadvantage internationally. The solution: Either make energy cheaper for European countries, or insist the rest of the world makes its energy more expensive.
Europeanization of American energy prices
Currently German industry pays more than twice as much for its electricity than in the USA, and three to four times more for natural gas (USA is now exploiting its massive reserves of shale gas using fracking technology as Europe moves to ban fracking).
This increasingly unlevel energy playing field (created by Europe itself) is precisely what is driving Obama’s newly announced energy policy. Europeans have long complained that their competitiveness has been hampered by the USA’s “irresponsibly” low energy and electricity prices, and have insisted that Obama level the playing field by increasing prices in the USA. Somehow (using climate), Europe has convinced the USA to make its energy more expensive. Obama is happy to oblige.
Over the next decade Americans need to expect a Europeanization of American fossil energy prices. This is the what’s behind the plan announced by Obama yesterday. Obama is more than willing and ready to implement any scheme that is designed to punish Americans, it seems. This is only the first step.
Europe tells America: please repeat our blunders
Creating high prices for fossil fuels is only one component in “leveling the energy playing field”. Europe also expects America to repeat its renewable energy folly as well. America too must have a truly shoddy patchwork of inefficient and unpredictable renewable energy sources, like wind and solar, and an unstable power grid. Only this way can the playing field between America and Europe truly be level. European companies will then surely think twice about moving their operations to the USA.
Declaration of war on blue-collar workers
Ironically not long ago the stated objective of western politicians was to generate prosperity for its citizens. Today it’s precisely the opposite. Obama’s plan is nothing less than an assault on American industry and millions of blue collar workers.