By Paul Homewood
h/t Dennis Ambler
The EU is going to plough on with Net Zero insanity, regardless of the cost:
The EU is looking to front-load massive anticipatory investments into its energy infrastructure, shifting risk from industry to consumers and risking a landscape with unneeded or under-used pylons.
Amid its green transition, Europe needs almost €600 billion in investments into high-voltage power lines, transformers and wires by 2030—an unprecedented need for investments into the grid.
Zsuzsanna Pató, senior advisor at clean-energy think-tank RAP, says the transition “has caused a massive mismatch” between power generation and transport capacity.
She explains that the traditional challenge of connecting power demand to generation is exacerbated by the energy transition, which involves “shifting where power is generated while boosting demand through electrification.”
Energy-rich, windy, and sunny sites are often far away from where older coal or gas plants are located.
Timing matters, too. “There is a big pressure to speed up grid building to prevent a widening of the lead time gap between renewables and new loads,” said Pató.
Brussels is betting on a fresh approach to solving the problem: “anticipatory investments.” Unlike regular investments, which are more closely tied to immediate and short-term expected demand, anticipatory investments deliver power lines and wires multiple times larger than what is needed today.
Ghost pylons
However, Europe could be left with unused ‘ghost pylons’ littering the countryside if renewable projects do not materialise or if power demand forecasts are incorrect.
However, Europe could be left with unused ‘ghost pylons’ littering the countryside if renewable projects do not materialise or if power demand forecasts are incorrect.
There are many examples of massive investments in infrastructure that were subsequently underutilised or unused. In the 1980s, the US built $100 billion of unused nuclear power plants, and Spain boasts major airports that never welcomed more than a handful of passengers, which were built during the credit-fuelled boom of the 2000s.
The anticipatory approach’s proponents say these big investments, taking the plunge, are indispensable if the EU is to meet its decarbonisation goals.
“We need to invest more. That is inevitable. And regulators should act accordingly,” stresses Nicolò Rossetto, a research fellow at the Florence School of Regulation.
Normally, Europe’s energy regulators closely monitor which investments grid operators can make, and only approved investments can be recouped from consumers via higher grid tariffs.
None of this massive expenditure would be needed if it were not for EU net zero policy. And as with the similar grid expansion here, it is the public who will pay the bill.
And the will end up being much more than the 600bn euros quoted. Projects like these always cost more than budgeted, particularly where the EU is concerned. And if they want to spread the cost over say 20 years, there will be the interest cost to add.
Two trillion will probably be an underestimate.
And just as with the UK, EU citizens will get no say in the matter.