It should send a shiver down an already-cold spine, when the regular media starts running an article headed “The path to cheap power will be very expensive”.
So warm up your neurones with the latest from Reuters, which explains why current net zero strategies are failing – on their own terms.
The current line for politicians is to say that the latest policy contortions will reduce your energy bills. It’s worth clocking that this statement elides modelling based on lower consumption of more expensive energy. Think of it as the equivalent of Kim Jong Un’s pledge to lower the cost of motoring in North Korea by eliminating private cars.
So how is legacy media adapting to the realities of the state-designed transition to net zero in Europe? Some good points emerge from the Reuters narrative:
First, the scale of state-led investment in Europe is already huge:
“The share of renewables in the EU’s power sector rose to 47% in 2024 from 34% in 2019”.
Secondly, there’s no end in sight:
“The Commission last week issued guidance for developing electricity networks in which it estimated the bloc will require 730 billion euro of investments in power distribution and another 477 billion euro in transmission grid developments by 2040.”
Thirdly, it seems to be conforming to the historical pattern of rosy thinking, obfuscating failures and warning signs, and ending up much more expensive than predicted:
“The underinvestment in grid infrastructure has created strain in many systems, a risk that was laid bare on April 28, with the catastrophic blackout in the Iberian Peninsula.
Regulators are still investigating exactly what triggered the collapse of the power systems in Spain and Portugal.”
Fourthly, technological innovation is miraculous – but it still has to obey the laws of physics:
“Another reality check for Europe has been the realization that offshore wind – once heralded as a potential renewables game changer – simply has lousy economics today.”
(And note that if global capital gets more expensive, it gets even worse.)
Fifthly, it gets worse anyway:
“ … ageing Western power systems – especially those in Europe – will increasingly experience problems unless trillions are spent in grid upgrades.”
Which really raises the delivered system cost of cheap renewable generation.
Might there be a way out? After all:
“ … the long-term costs of inaction to mitigate climate change will be far higher, and the EU is already spending over 100 billion euros annually on fossil fuels subsidies.”
Alas it takes only minutes on the internet to find out that the European Union already taxes fossil fuels by 244 billion euro; that more than half of its ‘subsidies’ of 111 billion euro are tax cuts to benefitvoters consumers; while roughly three-quarters of its 61 billion euros of renewable energy subsidies go to producers so they can afford to produce relatively expensive energy (in full system terms).
So in addition to the contradiction, the road ahead has more pain and taxpayer subsidy:
“Ultimately, if European governments want their populations to have cheap, green energy, they will need to accept the reality that getting there will be more expensive and more government-driven than previously advertised.”
And if you’re not already cheerful enough, reflect that this inflexible and expensive centrally planned model is the antithesis of the low-cost, high-consumption, AI-driven electricity model, which some people think might be the basis of the next industrial revolution.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton. This article was sourced HERE
So how is legacy media adapting to the realities of the state-designed transition to net zero in Europe? Some good points emerge from the Reuters narrative:
First, the scale of state-led investment in Europe is already huge:
“The share of renewables in the EU’s power sector rose to 47% in 2024 from 34% in 2019”.
Secondly, there’s no end in sight:
“The Commission last week issued guidance for developing electricity networks in which it estimated the bloc will require 730 billion euro of investments in power distribution and another 477 billion euro in transmission grid developments by 2040.”
Thirdly, it seems to be conforming to the historical pattern of rosy thinking, obfuscating failures and warning signs, and ending up much more expensive than predicted:
“The underinvestment in grid infrastructure has created strain in many systems, a risk that was laid bare on April 28, with the catastrophic blackout in the Iberian Peninsula.
Regulators are still investigating exactly what triggered the collapse of the power systems in Spain and Portugal.”
Fourthly, technological innovation is miraculous – but it still has to obey the laws of physics:
“Another reality check for Europe has been the realization that offshore wind – once heralded as a potential renewables game changer – simply has lousy economics today.”
(And note that if global capital gets more expensive, it gets even worse.)
Fifthly, it gets worse anyway:
“ … ageing Western power systems – especially those in Europe – will increasingly experience problems unless trillions are spent in grid upgrades.”
Which really raises the delivered system cost of cheap renewable generation.
Might there be a way out? After all:
“ … the long-term costs of inaction to mitigate climate change will be far higher, and the EU is already spending over 100 billion euros annually on fossil fuels subsidies.”
Alas it takes only minutes on the internet to find out that the European Union already taxes fossil fuels by 244 billion euro; that more than half of its ‘subsidies’ of 111 billion euro are tax cuts to benefit
So in addition to the contradiction, the road ahead has more pain and taxpayer subsidy:
“Ultimately, if European governments want their populations to have cheap, green energy, they will need to accept the reality that getting there will be more expensive and more government-driven than previously advertised.”
And if you’re not already cheerful enough, reflect that this inflexible and expensive centrally planned model is the antithesis of the low-cost, high-consumption, AI-driven electricity model, which some people think might be the basis of the next industrial revolution.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton. This article was sourced HERE
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