The report into Australia’s expensive Renewable Energy Target scheme which distorted the energy market and cost consumers with its expensive subsidies found that the RET ignored low-cost carbon abatement schemes in favour of expensive subsidised projects that were impossible to justify.
It found that the current RET would require a $22 billion cross subsidy to the renewables sector in addition to the $9.4 billion spent over the past 12 years, “diverting resources from more productive uses elsewhere in the economy, lowering productivity and national income”.
Germany’s flagship green energy policy, for example, is in tatters, according to a new report by the consultancy firm McKinsey which says many of its goals are “no longer realistic”. The McKinsey report says Germany is so far behind its key commitment to cut CO2 emissions that it is no longer realistically achievable.
Mrs Merkel’s government has committed to cut CO2 emissions by 40 per cent by 2020 compared to 1990 levels. To achieve that, McKinsey argues, Germany would have to cut emissions by an average of 3.5 per cent a year.
But so far, they have only fallen at an average of 0.7 per cent a year, leaving Germany so far behind it would have to increase emissions cuts by a factor of five to reach its target on time.
“Despite the massive expansion of renewable energies, achieving the key objectives of the energy revolution in Germany by 2020 is no longer realistic” says the report.
“If you can’t achieve your own targets, you can hardly be a credible advocate for stricter CO2 cuts in Europe or elsewhere in the world,” said a comment piece in Welt newspaper.
The expensive switchover has also left Germans with some of the highest energy bills in Europe. Household electricity prices are 46 per cent above the European average and rising, according to McKinsey.