Dive Brief:
- The chief executives of 10 European electric utilities that control half of Europe's generating capacity want to end subsidies for wind and solar power, which they say have led to a dangerous overcapacity that threatens grid reliability and could lead to brownouts or blackouts. The group, which includes GDF Suez, E.ON, Iberdrola and Enel, unveiled their plan at a news confenrece in Brussels, Belgium.
- The utilities argue that subsidies for wind and solar have led to so much renewable capacity that more than 51 gigawatts of natural gas-fired power plants have been forced to close as wholesale power prices fell. The problem is the gas-fired power is needed to balance the intermittent nature of renewable supplies.
- The utilities want the European Union to put in place a capacity mechanism that would pay utilities for keeping generation on standby and to boost its program to cut carbon emissions to make natural gas and nuclear power more attractive.
Dive Insight:
Similar concerns about renewables have been expressed by some U.S. utility industry leaders and is one reason that discussions about extending the production tax credit—the chief federal subsidy for wind power—are focusing on a phase-out of the credit. Moreover, there is some irony in the fact that some of the large European utilities that are calling for an end to subsidies are invested in renewables projects across the U.S.
