WIND

Will right-wing surge in the EU derail wind?

Conservative and right-wing parties increased their influence in the European parliament in the European Union elections last week, while the Greens sustained losses. This could lead to significant changes to pro-renewables policies and investments at both the EU level and in countries including France, Germany and the Netherlands.

RICHARD HEAP

June 12, 2024

  • Right-wing parties have increased their vote share in EU elections
  • French President Emmanuel Macron responded by calling an election
  • The shift could mean changes to net zero and renewable energy policies

 

On Sunday evening, France’s President Emmanuel Macron called a snap election for the country’s parliament to be held on 30th June. The shock move followed the poor showing for his Renaissance party in the elections to the European Union parliament last week, where it secured just 15% of the national vote.

By contrast, the right-wing National Rally party, which is led by Marine Le Pen and is part of the Identity & Democracy group of parties in the EU parliament, won 31% of the vote in France. Macron said he wanted to give people the opportunity to vote on the country’s parliamentary future, but it is a big risk for his party and him personally ahead of France’s next presidential vote, which is due in early 2027. Analysts have forecast that National Rally will win this month’s vote election but without an overall majority.

Such an outcome could derail France’s renewable energy policies. National Rally is strongly opposed to wind and solar power, and could reverse policies including the commitment last month for France to achieve 18GW of offshore wind by 2035.

But the emergence of conservative parties at the expense of those towards the left of the political spectrum, which tend to be more liberal and pro-renewables, is not just a risk for renewables investors in France. The EU parliamentary election last week has shown it is a challenge for those in other key EU member states – and in the UK too.

 

EU parliamentary dynamics

At EU parliamentary level, the conservative European People’s Party (EPP) is still the largest group, and as of Wednesday lunchtime had secured 189 of the 720 seats in the EU parliament. This is up by 13 compared to the last election in 2019, and strengthens the position of Ursula von der Leyen, who is European Commission president and part of Germany’s Christian Democratic Union. This means the EPP secured 26% of total seats.

The second largest group was the Progressive Alliance of Socialists & Democrats, which saw its number of seats fall by four to 135 (or almost 19% of the total). But it is in the smaller groups where the lurch to the right in the EU parliament becomes clearer.

The European Conservatives & Reformists, which is a right-wing party led by Italian prime minister Giorgia Meloni of the Brothers of Italy party, won 73 seats (up four); and the Identity & Democracy group, which counts Le Pen’s National Rally among its most high-profile members, won 58 seats (up nine).

Meanwhile, the biggest losers were the centre-left Renew Europe group, which won 79 seats (down 23); and the Greens, which won 53 seats (down 18). This reflects the increased concerns among voters about issues such as the rising cost of living; how much countries invest in supporting Ukraine; and the perception that EU-wide policies to reduce carbon emissions are making life harder and more expensive for businesses.

Manfred Weber, leader of the EPP group, said the first policy he wants to change is the EU Green Deal’s proposed ban on sales of combustion engine cars by 2035. He said the planned ban was a “mistake”. Others in the EPP group are seeking changes to make the Green Deal less restrictive, which could lead to the watering down of the deal’s commitment to achieving net zero carbon emissions by 2050, for example.

The changes could also lead to heated debates about policies such as the EU’s pledge that renewable sources should make up 42.5% of final energy consumption in the EU by 2030, as well as making it harder for the EU parliament to push through new green policies. We expect corporate demand for renewable power to stay strong, but any potential weakening of EU environmental targets must be negative for wind investment.

In addition, the EU election highlights the debates happening at national level.

 

National policies in focus

France’s Macron was not the only national leader to have a bad night.

In Germany, Chancellor Olaf Scholz’s Social Democrats won just the third-largest vote share (14%) and lost two seats, while their coalition partners the Greens lost nine seats on a 12% share. The far-right Alternative for Germany surged into second place with a 16% share of the national vote, and while the coalition of the Christian Democratic and Christian Social parties secured 30%. Analysts see this as a response to Scholz’s economic and energy policies, and bodes ill for him before Germany’s 2025 election.

Conservative and far-right parties also did well in Austria, Italy, the Netherlands and Poland, as well as Belgium, where Alexander De Croo resigned as prime minister on Monday. This suggests that public support for climate action and renewable energy has been getting weaker in these countries, despite high-profile renewables tenders and investments. Left-leaning parties did better in Denmark, Finland and Sweden.

And while the UK is not part of the EU, we see similar antipathy to renewables from some parts of the electorate in the UK’s current election campaign. The left-leaning Labour Party is on course to win the election, and this is partly due to the pressure the ruling Conservatives are facing from the right-wing party Reform UK, which has emerged as a political force in recent weeks and threatens to split the conservative vote. Reform UK’s policies include an end of net zero and support for renewables.

Right-leaning parties may not have the majority at national level in many countries in Europe, but their surging support can only represent a headache for wind investors.