Energy will remain expensive in the European Union even under a best-case net-zero scenario, the bloc's business association, BusinessEurope, has warned.
According to a study by the association, electricity prices in the European Union would be at least 50% higher than the same prices in the United States and China by 2050 under a best-case scenario.
In a scenario where the transition to net zero is delayed beyond 2050, BusinessEurope has estimated electricity costs in the bloc could surge to three times the prices in China or the United States, Bloomberg reported, citing the association's study.
The reasons for the price surge, BusinessEurope said, were demand growth and what the Bloomberg report called "inherent disadvantages".
"This will put European companies at a serious competitive disadvantage with these key competitors, which is why we need urgent action at EU level," Markus Beyrer, director general for BusinessEurope, told the publication. "Securing energy at competitive prices will be central to preserving Europe's industrial base."
This is essentially what the "inherent disadvantages" come down to: lack of affordable energy to power industries and economic growth. Unlike the U.S., Europe is overwhelmingly reliant on energy imports and the riskiness of that reliance, especially with regard to foreign policy, became painfully clear back in 2022 when the EU's sanction barrage against Russia for its invasion of the Ukraine led to retaliation in the form of reduced gas flows.
Since then, despite 24 sanction packages approved by Brussels, Europe continues importing Russian natural gas-and oil, indirectly-with Russia even overtaking the United States as biggest exporter of gas to the bloc in May.
The energy transition promise is for affordable and reliable energy but sceptics have repeatedly noted that satisfying both of these conditions with wind and solar, even with the help of batteries is physically impossible.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More