Green Energy Fails the French

A Shocker! Who knew? Government intervention into the market place is, and has always been, a nightmare. That the French are watching their entire energy system fall into the grips of debt driven policy is what we, here in the United States, will see if we don't demand the government get out of our lives.

Remember what Obama said before the election, 'under my policy of cap and trade, coal fired plants will have to make changes that will drive cost up to their customers and necessarily make electric rates skyrocket'. This isn't exactly what he said but close enough to get the point across he will drive out conventional sources of energy production though regulation and mandate. And as Europe has proven, 'Green Energy' does not provide the necessary power needed for contemporary demand.

This is exactly what has happened in France. It will happen here if we don't pay attention.


France's Solar Bubble Pops
Source: Carl Shockley, "France's Solar Bubble Pops," National Review Online, January 20, 2011.

Two years ago, the French National Assembly adopted a solar "feed-in tariff" -- a misnomer for a mandate that forces utilities to buy expensive renewable electricity at ridiculously high prices. The legislature set the price at 546 euro ($745) per megawatt-hour, almost ten times the market price of 55 euro ($75) that customers pay for electricity from other sources.

Electricitie de France (EDF), the national utility, was obligated to buy from all comers, covering the costs with a special levy on other customers, says the National Review Online.
The result was an avalanche of expensive rooftop projects.

Whereas EDF had received only 7,100 applications a year for such connections before 2008, by last December it was fielding 3,000 per day.

Now costing 1 billion euro ($1.4 billion) per year, the program does not expire until 2017 and has put the utility in trouble, says the National Review. EDF's stock declined 20 percent last year, compared to only a 3.7 percent decline for the rest of Europe's Stoxx 600 Utilities Index.
The utility is now 57 billion euro ($78 billion) in debt, and plans to upgrade its aging fleet of 53 nuclear reactors -- which provide 75 percent of France's electricity -- have been thrown into doubt.

The utility has been forced to raise the renewables levy on other customers from 4.50 euro ($6) to 7.50 euro ($10) per megawatt-hour, but financial analysts say they will have to pay up to 12.90 euro ($18) -- almost 25 percent above the market price -- for EDF to break even.