• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 34 mins Iran Loses $130,000,000 Oil Revenue Every Day They Continue Their Games . . . .Opportunity Lost . . . Will Never Get It Back. . . . . LOL .
  • 11 hours Shale Oil will it self destruct?
  • 1 day Berkeley becomes first U.S. city to ban natural gas in new homes
  • 20 hours Iran Captures British Tanker sailing through Straits of Hormuz
  • 4 hours Renewables provided only about 4% of total global energy needs in 2018
  • 5 hours EIA Reports Are Fraudulent : EIA Is Conspiring With Trump To Keep Oil Prices Low
  • 1 day Drone For Drone = War: What is next in the U.S. - Iran the Gulf Episode
  • 2 days Today in Energy
  • 9 hours Oil Rises After Iran Says It Seized Foreign Tanker In Gulf
  • 2 days Why Natural Gas is Natural
  • 2 days LA Solar Power/Storage Contract
  • 3 days Populist, But Good: Elizabeth Warren Takes Aim at Private-Equity Funds
  • 1 day U.S. Administration Moves To End Asylum Protections For Central Americans
Alt Text

Clean Energy Is Doomed Without More R&D Spending

Climate change is a growing…

Alt Text

What’s Behind The Drop In Renewable Spending?

Renewable spending is dwindling across…

Vanand Meliksetian

Vanand Meliksetian

Vanand Meliksetian is an energy and utilities consultant who has worked with several major international energy companies. He has an LL.M. from VU Amsterdam University…

More Info

Premium Content

Energy Transition Under Fire As Power Bills Soar

For a long period of time, the energy transition was primarily a technical topic concerning the transformation of the energy grid. Technological developments and the decreasing costs of renewables have made it a viable alternative to fossil fuels. The integration, however, of these new systems requires considerable investments meaning money that directly or indirectly will be provided by ordinary citizens through taxes or their energy bill.

In most parts of Europe, the energy transition is in full swing for a carbon neutral future. The EU has set itself the goal of fulfilling at least 20 percent of its total energy needs with renewables in 2020. Currently, the percentage of renewables in the overall energy production differs between member states such as 10 percent in Malta and 49 percent in Sweden.

Denmark was one of the first countries in the EU to seriously start planning for the energy transition. Early planning, broad societal support, and political will have fostered a strong domestic energy industry. Danish company Vestas is the largest wind turbine producer in the world with approximately 16 percent of the global market share. The energy transition is not cheap which requires the allocation of precious resources that could be spent otherwise. The rising energy bill, however, threatens to derail the process in several countries.

In recent weeks, France was shaken up by major demonstrations led by the so-called ‘yellow vests’ movement which was triggered by the rising costs of living. The French government intended to raise taxes for transportation fuels in order to discourage car usage and pay for the energy transition. The protests escalated into a nationwide movement that eventually forced the government to backtrack on the intended tax hikes.

The German public opinion has shifted dramatically after the nuclear disaster at Fukushima Japan. The Energie Wende policy was born out of the necessity to produce clean electricity which is safe at the same time.  Despite the enormous costs totaling an estimated $181 billion to build the foundations of a carbon-neutral economy, Germans still overwhelmingly back the energy transition. However, Germany is facing difficulties as it’s not on track in reaching its self-imposed goals despite massive investments. This could erode the public’s support for additional costs. Also, the ambitious goals of Berlin and Copenhagen have created the two most expensive electricity markets of the EU. Related: Oil Prices Rise On Small Crude Draw

In most European countries the energy transition is just starting to take off while prices are already very high compared to historic averages. When rising costs start to influence voting behavior, politicians could also backtrack on their self-imposed goals. In most Western European countries populist parties have become a real threat to the establishment. Besides anti-globalist and anti-immigration views, these contenders also share skepticism on global warming and their country’s intention to decarbonize the economy. In the Netherlands the PVV and FVD parties oppose mass investments in the renewable sector, in France Marine Le Pen of the Front National has called the Paris agreement “flawed”, and the AfD is against Germany’s energy transition. The electoral success of these parties is a threat to the energy transition.

In the Netherlands, the energy bill is expected to increase by an average of €327 next year. Taxes and subsidies to stimulate electric car usage, install solar panels on rooftops of household and additional costs to discourage natural gas consumption are triggering a public debate on the fairness of the energy transition. The wealth gap between high- and low-income households risks becoming even wider as policies favor those with excess resources to invest in financially beneficial arrangements in order to decarbonize the economy.

Despite the impressive drop in costs concerning wind turbines and especially solar panels, the public’s support for the energy transition is being shaken up by higher electricity prices and ethical issues. Eventually, the bill for the energy transition will be paid by ordinary citizens. Ensuring that everybody benefits from this transformation without leaving certain groups behind, will determine the speed and eventually success of the transition.

By Vanand Meliksetian for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment
  • Ronald C Wagner on December 27 2018 said:
    The use of natural gas in the Netherlands is commendable and is probably just as environmentally friendly as the use of wind and solar. All factors must be taken into consideration. Solar panels and wind turbines are aesthetically less attractive than natural surroundings and provide a large disposal problem.
  • Lee James on December 28 2018 said:
    This article is fairly balanced. I believe, however, fossil-fuels boosters will conclude that their suspicions are confirmed; pricing carbon pollution is not viable or advisable.

    I believe the main take-away from this article is that pricing carbon pollution needs to be done carefully, to protect those most vulnerable to higher fuel costs. Riots in France are mostly over their disappointment in Macron. I believe they perceive him as being elitist and out-of-touch.

    We should consider the revenue-neutral proposal of the Citizens Climate Lobby for pricing carbon. This is a bipartisan approach that Republicans can embrace since it amounts to no additional tax, and yet creates a needed price signal to consumers in our energy marketplace. Check out the details on CCL's web site!

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play