Businesses will welcome yesterday’s sensible decision by the European Commission to drop nationally-binding targets for renewable energies. Germany, one of the countries which has gone furthest in pursuit of the target, pays out around €24bn (£19.66bn) a year in subsidies for renewables. This has pushed up energy prices to the point where households are suffering and intensive energy users are being forced to leave the country, the German industry federation has warned. They are not the only ones to be alarmed. The International Energy Agency recently suggested Europe could lose 10 per cent of its energy-intensive industries over the next decade because of high energy costs. Energy policy must be much more agile, allowing the UK to make decisions on its energy mix including developing shale resources. The ultimate aim has to be lower emissions, a broad mix of energy sources and, most importantly, competitive businesses.
James Sproule is chief economist at the Institute of Directors.