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The European Union eyes savings of over $47 billion in crude oil and natural gas imports with its new plan to bring down energy prices across the bloc.
The plan includes measures such as faster permitting of wind and solar projects, a new formula for electricity tariffs, and a greater amount of subsidies for wind and solar, Reuters reported, citing the draft document of the European Commission that is due to be presented formally this week. Per the Commission, this could see savings of 45 billion euros this year alone. By 2030, the measures could reduce the energy import bill by as much as 130 billion euros, or over $13 billion.
“They (renewable energy projects) also entail a lot of investments, that goes without saying. But we have to remember that it’s also expensive not to do anything,” the EU’s Energy Commissioner, Dan Jorgensen, said. “So we save money by not buying fuel from outside,” he clarified. Jorgensen also pointed to energy consumption savings as an expected result of the Commission’s measures.
The argument that locally produced energy is cheaper than imports has been made before and while it certainly carries weight when it comes to local oil and gas as opposed to imports, it is harder to make this argument for wind and solar, especially now, after an extended period of windlessness prompted Germany to scramble to get its hands on any and all hydrocarbons it could find to keep the lights on. Gas prices in Europe also suggest wind and solar may not be up to the task, especially in winter.
Yet the Commission believes that building even more wind and solar will help fix the lack of wind and reduce the bloc’s demand for oil and gas, saving billions for European consumers. The question remains, however, where the higher subsidies are going to come from. The usual source of government income is taxes.
