Sunday, January 27, 2008

EU's Energy Plans & Economic Insanity

I posted below on how Britian's EU membership portends to be an economic disaster. The EU is responsible for the UK's out of control immigration and the costs associated therewith - including rising taxes, crime and the burden on the infrastructure. The EU is in large measure responsible for huge jump food costs with their emphasis on bio-fuels which is taking arable land out of production. Then there are the regulatory costs, the transfer of wealth to the EU, and lastly, the production and cost of energy. Today, Chistopher Booker at the Telegraph and Richard North at EU Referendum both look at the looming catastrophe of the EU driven energy policy and costs for Britain.

It was appropriate that, just as our MPs were voting last week to hand over yet more of the power to run this country in the EU treaty, the EU itself should be unveiling easily the most ambitious example yet of how it uses the powers we have already given away. The proposals for "fighting climate change" announced on Wednesday by an array of EU commissioners make Stalin's Five-Year Plans look like a model of practical politics.

Few might guess, from the two-dimensional reporting of these plans in the media, just what a gamble with Europe's future we are undertaking - spending trillions of pounds for a highly dubious return, at a devastating cost to all our economies.

The targets Britain will be legally committed to reach within 12 years fall under three main headings. Firstly, that 15 per cent of our energy should come from renewable sources such as wind (currently 1 per cent). Secondly, that 10 per cent of our transport fuel should be biofuels. Thirdly, that we accept a more draconian version of the "emissions trading scheme" that is already adding up to 12 per cent to our electricity bills.

The most prominent proposal is that which will require Britain to build up to 20,000 more wind turbines, including the 7,000 offshore giants announced by the Government before Christmas. . . .

At £2 million per megawatt of "capacity" (according to the Carbon Trust), the bill for the Government's 33 gigawatts (Gw) would be £66 billion (and even that, as was admitted in a recent parliamentary answer, doesn't include an extra £10 billion needed to connect the turbines to the grid). But the actual output of these turbines, because of the wind's unreliability, would be barely a third of their capacity. The resulting 11Gw could be produced by just seven new "carbon-free" nuclear power stations, at a quarter of the cost.

The EU's plans for "renewables" do not include nuclear energy. Worse, they take no account of the back-up needed for when the wind is not blowing - which would require Britain to have 33Gw of capacity constantly available from conventional power stations.

. . . This is crazy enough, but the EU's policy on biofuels is even more so. The costs - up to £50 billion by 2020 - would, as the EU's own scientific experts have just advised, "outweigh the benefits". To grow the crops needed to meet the target would require all the farmland the EU currently uses to grow food, at a time when world food prices are soaring. Even Friends of the Earth have called on the EU to abandon its obsession with biofuels. Yet the Commission presses on regardless.

As for the "emissions trading scheme" (a system originating with the Kyoto Protocol, whereby businesses can buy or sell "carbon credits", supposedly to allow market forces to ensure that targets are met), the Commission last week predicted that by 2020 this could be raising £38 billion a year from electricity users. Of this, £6.5 billion a year would be paid by the UK, equating to £260 for every household in the country.

The Commission itself predicts, in recently leaked documents, that this will have major consequences for the EU's economy, and that heavy industries, such as steel, aluminium, chemicals and cement, will have to raise their prices substantially, some by as much as 48 per cent. Yet when it was pointed out that this will put EU industries at a competitive disadvantage, the Commission's only response was to suggest tariffs on imports from countries such as China or America that are not signed up to Kyoto.

It looks like the most expensive economic suicide note in history. But just as alarming is how little this madness has been exposed to informed analysis. It seems, finally, that the price we pay for membership of the EU and the price of our obsession with global warming are about to become very painfully synonymous. And no one seems to have noticed.

Read the entire article. And do see the EU Referendum's take on all of this. Dr. North's post is notable for his exploration of the subsidies associated with wind farms.

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