The Myth About Renewable Energy Subsidies

Renewable Energy (Other Energy Resources) / Economics, Batteries

Date posted: 04/18/17

Giles Parkinson opines with the question .... Ever hear the story about why renewable energy can not compete without a subsidy? You hear it all the time from the fossil fuel industry, he says. And the response from renewables? Take away fossil fuel subsidies, and they would be glad to compete on level terms. David Hochschild, a commissioner with the California Energy Commission, at the Energy Productivity Summer Study in Sydney, illustrates why the fossil fuel and nuclear industries do not want that to happen. Studies by the International Energy Agency point out that global subsidies for fossil fuels outstrip those for renewable energy nearly 10-fold. The International Monetary Fund said if climate and environmental costs were included, then the fossil fuel subsides increased another 10 times to nearly $5 trillion a year. The accumulated energy subsidies in the U.S. are under federal programs. Oil and gas dominate, followed by nuclear. Federal renewable energy subsidies, in the form of investment and tax credits, are a small fraction.....? The fossil fuel industry hates to talk about that, Hochschild told RenewEconomy in an interview after his presentation. There is a myth around subsidies, but there is no such thing as an unsubsidised unit of energy. He said the oil depletion allowance had been in place for the oil industry since 1926, and would be ongoing, despite the fact it was one of the most profitable industries in the world. He cited insurance costs for nuclear plants, met by taxpayers, without which there would be no nuclear plants. For natural gas, it was the drilling, or fracking, which had been made exempt from compliance with the safe drinking water act ..That is subsidy, he said. And he pointed to taxpayer funded rail networks that have helped coal over decades. The large-scale wind and solar industries in the U.S. have had to content with repeated changes to their federal support. The tax credits have been changed seven times in a decade.