Governments ignoring the economic devastation of Net Zero policies unlikely to survive the storm

Benny Peiser, Director at The Global Warming Policy Forum

The Global Warming Policy Forum (GWPF) has warned policy makers in London and Brussels to draw lessons from Europe’s looming energy crisis with growing public outrage and upheaval.

The European Commission’s Vice-President Frans Timmermans told the European Parliament that record high power prices show that the EU should transition to renewable energy. 

The Global Warming Policy Forum on NetZero policies

Despite a surge in renewable energy subsidies and record high carbon prices, Timmermans claimed that Europe’s green policy costs were not the main culprit for soaring energy costs. 

As a matter of fact, policy-driven costs are much more important than market prices as is evident when US and European energy prices are compared.

In fact, natural gas prices in Europe are more than three times as high ($18/MMBtu) as they are in the US ($5/MMBtu) where fracking is widely used and shale gas is cheap and abundant. 

“The knee-jerk response to Europe’s self-inflicted energy crisis is a topsy-turvy misinterpretation of the underlying factors that are driving up prices which risk exacerbating the looming economic and social upheaval,” Benny Peiser, the GWPF director, warned. 

Most governments have banned the extraction of huge shale gas resources while subsidies for renewable energy investors continue to drive up energy bills all over Europe. 

The Global Warming Policy Forum’s assessment

Europe will need natural gas for decades to come. The ban on fracking and curtailing of conventional gas exploration has led to serious shortages of domestic natural gas production.

The result is super-charged electricity prices and rising inflation, a growing cost burden Europe’s already struggling households now have to foot. 

Add to that that utilities have to pay record-high prices to buy carbon permits for generating power from natural gas and the result is relentless rises in electricity and heating prices. 

Markets throughout Europe are severely distorted by policies to support renewable energy.

These distortions and other regulatory coercions have destroyed price signals that would otherwise encourage investment in a diverse portfolio of fuels and generation types. 

The European system is reliant on subsidised renewables and a declining conventional and mostly fossil-fuelled generation fleet, clinging to existence at the edge of the market. 

The systems are fragile and easily disturbed by fluctuations in prices for the remaining fossil fuel generators, which guarantee security of supply in the absence of unreliable renewables. 

Way forward form a GWPF executive

Dr John Constable, the GWPF energy editor also contributed his vital opinion. 

“Those claiming that the current high prices for gas show that even more renewables are required only betray their ignorance of the realities of system operation.”

“The weaknesses of European energy supply result from mistaken attempts to “plan” a low carbon economy based on physically incompetent wind and solar.” 

This winter, European governments are facing a public backlash as the combined effect of Net Zero plans and disastrous green energy policies will hit low-income and ordinary households. 

It is therefore imperative to assert that governments that turn a blind eye to the economic devastation of Net Zero policies are unlikely to survive the coming storm.