The question posed here about renewables is whether endless subsidies for a so-called ‘energy transition’ are affordable for those forced to cover the costs, especially when the things being subsidised are creating daily problems for electricity supply and grid stability due to the erratic nature of the technology? The Europe section of an OilPrice.com opinion piece follows.
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Now, it’s easy to blame President Trump [for renewables struggling in the USA], but it pays to ask an uncomfortable question: is a technology that is so overwhelmingly dependent on federal policies even worth considering as a cornerstone of any country’s energy supply security?
Certainly, there are plenty of industries that rely on state subsidies, but how many of these, it’s worth asking, rely on these subsidies for their very survival?
The answer is inconvenient for the transition lobby. These are the only industries that literally cannot survive without massive and consistent state financial support. And that essentially makes them unviable in a natural market environment.
For recent proof, look no further than Europe. There is no anti-transition government in Europe. There is no Trump or anything like him at the helm of any European country. And yet it was in Europe that the chief executive of Danish Ørsted insisted that the government step up their financial support for the offshore wind industry to ensure its survival.
As reported by the Financial Times, which spoke to Rasmus Erbroe, “European capitals to commit to consistent annual support for the industry in order to meet offshore wind targets and help reverse rising costs.”
“If you want to deliver on energy security, energy independence, affordability for Europe for the coming decades and meet the targets, then we need to make this change,” the executive said, quite likely believing every word that came out of his mouth was the holy truth. In fact, there is nothing affordable about an energy that cannot absorb its own costs and turn in a profit without government guarantees of that profit.
Yet there are other problems with the transition, too, and Europe is once again the place to look at for proof that these problems are beginning to erode enthusiasm for that transition.
One not inconsiderable problem are negative electricity prices. They made headlines last year, and they are making headlines again as spring arrives and solar generation goes up. France, Bloomberg reported earlier this month, is already struggling with negative electricity prices because of the pick-up in solar generation.
This is what solar proponents sometimes mean when they say solar is cheap: it is cheap, indeed. Alas, this means no profits for operators and a major headache for baseload generators forced to adjust their own output at a not inconsiderable cost.
The surge in intermittent generation is a problem in the UK as well, although it is not famed for its many days of sunshine. Yet even then, solar is turning into an issue. “One of the great engineering challenges of decarbonisation is managing our system when there is lower demand coinciding with higher levels of generation from renewable sources,” the head of resilience and emergency management at the country’s grid operator, the National Energy System Operator, told Bloomberg this week.
All these developments are from Europe. There is no Trump there, no DOGE to axe transition financing, and no plans to cancel the local equivalents of the Inflation Reduction Act—all reasons noted by that WSJ report as examples of how the Trump administration is trying to stop the transition.
Yet the transition in Europe is running into trouble because its problems are fundamental rather than policy-related. Many transition proponents—including the author of that WSJ report—claim the transition is unstoppable, whatever Trump does to it. The above examples, however, suggest this may not be the case.
Full article here.
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Image: Crazy world of climate finance [credit: renewableenergyfocus.com]
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April 21, 2025 at 03:50AM
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