Lawrence Solomon: Green power failure
Lawrence Solomon May 11, 2012 – 10:24 PM ET | Last Updated: May 11, 2012 10:59 PM ET
A wind farm in the U.K., which now has 12 million people living in fuel poverty.
Global-warming-related catastrophes are increasingly hitting vulnerable populations around the world, with one species in particular danger: the electricity ratepayer. In Canada, in the U.K., in Spain, in Denmark, in Germany and elsewhere the danger to ratepayers is especially great, but ratepayers in one country — the U.S. — seem to have weathered the worst of the disaster.
America’s secret? Unlike leaders in other countries, which to their countries’ ruin adopted policies as if global warming mattered, U.S. leaders more paid lip service to it. While citizens in other countries are now seeing soaring power rates, American householders can look forward to declining rates.
The North American exemplar of acting on the perceived threat of global warming is Ontario, which dismantled one of the continent’s finest fleets of coal plants in pursuit of becoming a green leader. Then, to induce developers to build uneconomic renewable energy facilities, the Ontario government paid them as much as 80 times the market rate for power. The result is power prices that rose rapidly (about 50% since 2005) and will continue to do so: Ontarians can expect power prices that are 46% higher over the next five years, according to a 2010 Ontario government estimate, and more than 100% higher according to independent estimates. The rest of Canada may not fare much better — the National Energy Board forecasts power prices 42% higher by 2035, while some estimates have Canadian power prices 50% higher by 2020.
The story throughout much of Europe is similar. Denmark, an early adopter of the global-warming mania, now requires its households to pay the developed world’s highest power prices — about 40¢ a kilowatt hour, or three to four times what North Americans pay today. Germany, whose powerhouse economy gave green developers a blank cheque, is a close second, followed by other politically correct nations such as Belgium, the headquarters of the EU, and distressed nations such as Spain.
The result is chaos to the economic well-being of the EU nations. Even in rock-solid Germany, up to 15% of the populace is now believed to be in “fuel poverty” — defined by governments as needing to spend more than 10% of the total household income on electricity and gas. Some 600,000 low-income Germans are now being cut off by their power companies annually, a number expected to increase as a never-ending stream of global-warming projects in the pipeline wallops customers. In the U.K., which has laboured under the most politically correct climate leadership in the world, some 12 million people are already in fuel poverty, 900,000 of them in wind-infested Scotland alone, and the U.K. has now entered a double-dip recession.
The U.S., in contrast, will see power rates decline starting next year, according to the U.S. Energy Information Administration, dropping by more than 22% by the end of the decade and then staying flat to 2035. Why the fall? Mainly because the U.S. will rely overwhelmingly on fossil fuels in the years ahead, not just coal, which dominates the current power system, but increasingly natural gas, which is expected to account for 60% of all new generating capacity in the future. Thanks to fracking, the U.S. effectively has limitless amounts of inexpensive natural gas to add to its limitless coal.
While the rest of the developed world was in thrall to global-warming rhetoric, the U.S. talked the talk but balked at following through. In 1997, then president Bill Clinton and his vice-president, Al Gore, happily signed on to the Kyoto Treaty, which coerced the countries of the developed world into compromising their economies in order to save the planet. While other nations then dutifully complied, the U.S. Senate — as Clinton and Gore knew it would — refused to ratify Kyoto by a 95-0 vote. Clinton’s successor, George W. Bush, did an equally superb job of talking but balking at taking economy-killing measures. Bush successor Barack Obama, although a global-warming true believer, also put global warming on the back burner, preferring to make Obamacare, rather than climate change, his signature issue.
With the Republicans all but certain to control the purse strings following the November elections by dint of a majority in the House of Representatives, European-style legislation in the U.S. in aid of global warming will be impossible, even if the Republicans don’t also capture the Senate and the White House, as polls now indicate they will. In the event of a Republican sweep, the gap between power prices in the U.S. and the rest of the developed world will increase even more as “Drill, baby, drill” Republicans remove the existing restraints on the U.S. fossil-fuel industry, and slash the remaining subsidies on the U.S. renewable-energy industry.
Lawrence Solomon is executive director of Energy Probe .
To see how high power prices are in the EU countries, click here .
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