This Is What's Getting Europe in Trouble
Although it's a little hard to read, the above graph, first published at The Carbon Brief, shows what has gotten European countries in trouble of late. The bars represent subsidies of renewable energy as a percentage of the retail price of electricity in selected countries. There are four bars for each country, representing the years 2009-2012.
Germany is the leader, with subsidies reaching 16 percent of the price in 2011 and 2012. The country, of course, is trying to close down its reactors, which provide almost 30 percent of its electricity, and substitute renewables. The wind and solar are costing a fortune and the main thrust of the Energiewende has been a return to cheaper coal. Spain is in second place, with subsidies also in the 16 percent range.
Spain went on a solar binge in the last decade and then had to pull back on subsidies when the whole thing became too expensive and industries were fleeing to France, where nuclear keeps prices low. The Czech Republic, Latvia and Estonia have recently ramped up renewable subsidies, although it may still be too early to read the effects. France has jumped its efforts under Socialist President Francois Holland but Sweden, which is all hydro and nuclear, has cut back to below 2 percent. Interestingly, Denmark, which claims to get nearly 40 percent of its electricity from wind, has not subsidized heavily but only encourages construction. Still, Denmark has the most expensive electricity in Europe, with Germany right behind.
This week the International Energy Agency warned that because of Europe's reluctance to frack and pursuit of renewables, a huge price gap has opened between the U.S. and Europe that threatens to "de-industrialize" the continent over the next 20 years. Interestingly, none of this has discouraged advocates of renewable subsidies in this country, who still insist that there will be huge cost advantages to wind and solar.