NCPA - National Center for Policy Analysis

Europe's Renewable Energy Lesson

February 4, 2014

The average electricity price paid by European industrial firms rose by 16.7 percent between 2008 and 2012, says Rupert Darwall, author of "The Age of Global Warming -- A History."

  • In 2007, the European Union set out to cut greenhouse gases by 20 percent and generate 20 percent of its energy from renewables.
  • As a result, Europe has seen rising electricity prices, with the European Commission expecting an increase of 31 percent, before inflation, between 2011 and 2030.

At the end of 2012, the European Union had installed 44 percent of the world's renewable capacity, thanks to policies that incentivized investment in renewables. But as a result, the challenges that come along with renewable energy generation (unreliability, as renewables depend on wind and solar power) have only been compounded. This type of power needs conventional backup. But because of the large amount of subsidies for wind power, investors have not been investing in conventional energy generation.

The European Commission has suggested phasing out subsidies for more mature energy technologies as well as making renewable energy targets after 2020 not binding on states, in an effort to deal with these problems.

Source: Rupert Darwall, "Europe's Stark Renewables Lesson," Wall Street Journal, January 28, 2014.


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