European energy rationing is a dire warning for net zero Britain

Telegraph

11 hours ago

It was the first country to develop a stock market. And it was among the first to create joint stock companies, global banking, and trading houses that could span continents.
The Netherlands has always been one of the pioneers of business and capitalism, a place where new ideas are perfected.
The trouble is, it is now pioneering something entirely different in electricity rationing, a policy that will make it very hard for companies to operate in and impossible to expand.
And let's not kid ourselves. Now that rationing has been imposed by the Dutch, it will almost inevitably be imposed in Britain as well, with catastrophic consequences for the economy.
If you are running a restaurant in Amsterdam, a factory in Rotterdam or a shop in Eindhoven, it is probably the worst news you could have feared. The power you need to keep your business running is no longer just expensive – it might not be available at all.
Why? The Netherlands, like so many European countries, is rushing ahead with ambitious green energy targets, while failing to make sure that adequate supplies of electricity are available as older systems are shut down.
The massive Groningen gas field was closed down last year, and while that might make sense once the wind and solar needed to replace it are on stream, it means in the meantime, there is not enough juice to keep all the lights switched on.
The result? More than 11,000 businesses are stuck in a queue for access to the network, and it is growing longer all the time. If you need power, forget it. It is even worse for private individuals, with thousands of new homes waiting to be connected to the grid.
It is, of course, not just the Dutch.
Spain and Portugal suffered a massive blackout earlier this year, with the entire power system shutting down for the day. While the reasons for the failure are still not entirely clear, it looks as if relying on solar power without enough back-up capacity may have been a big part of the problem.
Likewise, shortages are emerging in Belgium and France, and Germany may not be far behind. We should not kid ourselves that this is an issue restricted to the Netherlands or to continental Europe.
The UK will almost certainly be next in line, and we are already seeing the early warning signs of that.
Industrial electricity prices have soared to the highest level in Europe, and that has forced many heavy industries to close. It is a form of rationing, except by price.
The electricity companies have already imposed smart meters on households in the hope that a nagging little dial in the corner of the kitchen warning how much power the dishwasher is using might persuade you to use less, as well as experimenting with off-peak rates to encourage us to use less power in the main part of the day.
Indeed, given that the Dutch are generally a lot more organised than we are, they might simply be getting on the front foot by putting formal rationing in place early in the process.
In the UK, it is more likely that there will be sudden blackouts, with towns and cities potentially plunged into darkness. This could then be followed by rolling blackouts for 'non-essential' industries on a sporadic basis. Whichever form it takes, the main point is the same.
But hold on. This is crazy.
It is inconvenient for a household, but most of us can have a sandwich for supper and read by candlelight if we have to. We can live without power for a day or two.
However, a restaurant, shop, warehouse or factory simply can't operate without electricity. If rationing does become the new normal, there are two big problems.
First, it will push many businesses over the edge.
We already know that pubs and restaurants are closing at record rates, hammered by the rise in employers' National Insurance. If they have to close down a couple of nights a week because their zone is offline, it may well finish them off.
After all, their costs will remain the same, but a couple of days' takings will be lost.
Likewise, many retailers are struggling to survive as they struggle with rising business rates, new packaging levies, as well as fines if customers don't buy enough healthy food.
A day or two of trading lost every week will be the final straw. As for industry, it is already in full-scale collapse. With rationing to contend with, it is hard to imagine that anything will survive.
Next, it will deter investment. What is the point of spending tens of millions on a new factory or warehouse if you can't guarantee power supplies? Or building new homes if they won't be connected to the grid.
In reality, this needs to be stopped in its tracks.
Most of us agree that climate change is a serious issue and one that needs to be addressed. But we need to plan the transition to green energy in a way that makes sure it is affordable and reliable, as it has been for the last 100 years.