Europeans are coping with paying their monthly energy bills as prices continue to soar.
A survey by a European retail group Kingfisher found that “[h]omeowners in Europe are more worried about energy bills than paying the rent or mortgage,” reports the BBC. Kingfisher surveyed 17,000 European households and found that many families are worried they won’t be able to pay their soaring energy bills.
“There is a staggering increase in the number of people who intend to prioritise energy efficiency,” Kingfisher head Sir Ian Cheshire, told the BBC. “It is soaring bills that is driving this agenda.”
So what’s happening in Europe? For years now, European nations have been aggressively funding renewable energy programs. These programs largely focus on deploying more wind and solar energy sources through mandates and feed-in tariffs that charge customers a fee to pay for green energy production.
These programs were meant to tackle global warming, but the unintended consequence has been that consumer energy bills have been skyrocketing as green surcharges on their energy bills have grown and Europe begins to use fewer fossil fuels for power production.
For example, Germany’s “Energiewende” has cost the country $412 billion over the last decade. But the much vaunted energy revolution did “not provide net savings to consumers, but rather a net increase in costs to consumers and other stakeholders,” according to the Switzerland-based FAA Financial Advisory AG.
“Over the last decade, well-intentioned policymakers in Germany and other European countries have created renewable energy policies that have slowly revealed themselves to be unsustainable, resulting in profound, unintended consequences for all industry stakeholders,” according to the report which was prepared for the Edison Electric Institute and some European groups.
The German media has called electricity a “luxury good” as prices have more than doubled “from €0.14/kilowatt hour (kWh) ($0.18) in 2000 to more than €0.29/kWh ($0.38) in 2013,” according to FAA. The report adds that German consumers will pay $31.1 billion for energy subsidies this year alone.
But it’s not just consumers in Germany that have felt the pain from green subsidies, customers in Spain and Italy have also been hit hard by green subsidies.
The Spanish government set new energy rates for green energy producer which effectively ended green subsidies that have been in place since the 1990s. The country spent $68 billion over 25 years to increase power production from green energy, but ran into financing problems that led to the country building up huge amounts of energy debt. Last July, the country’s energy debt stood at $35 billion.
The Italian government took similar action earlier this year to rein in soaring energy taxes by lower subsidies given to solar energy producers. The left-wing government cut green subsidies by 10 percent to spur economic growth.
Cutting green subsidies will lower the amount consumers are forced to pay for solar energy production. These subsidies are projected to cost Italians $272 billion over the next 20 years even with the 10 percent cut.
“That’s a lot of money for consumers to pay. Retroactive cuts have happened in Spain, Greece and Bulgaria. The operators can’t not have seen this coming,” a manager at a top energy trading association told Reuters.
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