When I posted a story last week about the closure of traditional generators due to renewables by one of Germany’s largest electricity utilities, it created a passionate response and some good debate on one site that picked up the story.

The reaction was pretty standard; “renewables only compete because they are subsidised”, “tax payers are the losers” etc etc etc.

But the world of renewables is increasingly loaded with facts from all parts of the value chain that back up the story about how renewables really can and do compete, if externalities, subsidies and recent project costs are considered.

One example is a report released recently by Greenpeace Energy (Germany) and the German Wind Energy Association. Though they are logically going to be accused of producing a  biased view, the report  was produced by independent research organisation Forum Ökologisch-Soziale Marktwirtschaft, and leans predominantly on data derived from European budget analysis.

This report busts the myth that Renewables are over-subsidised; in very transparent terms it demonstrates that yes, renewables are supported but also, accurately and succinctly compares the level of subsidies to other energy forms and looks back at how subsidies for different energy forms wax and wane as new technologies emerge and go through an evolution of development and acceptance. The report summarises that “Despite its increase since 2008, (cumulative) support for renewables (around 54 billion euros) falls far short of the state subsidies for the electricity sector from 1970 –2012, with lignite coming in at 65 billion, hard coal at 177 billion, and nuclear at 187 billion.”. The graph below, taken from the report highlights in no uncertain terms that all energy forms are subsidised and that Renewables not only deserve it, but have received relatively little.

euopean energy subsidy history

Internationally, the latest study on this topic by the International Monetary Fund valued global fossil fuel subsidies at a staggering $1.9 trillion, or 2.5% of global GDP. That is a chunk of support, despite what the non-renewables sector would have you believe.

Locally in Australia, the ACF commissioned a study in 2010/2011 that assessed our position with respect to subsidisation too. It concluded that all climate related program subsidies in 2010/2011 were worth $1.078Billion, compared to $12.173Billion in non renewable subsidies.

And today, more local evidence of this rapid transition to cost effective renewables was highlighted by Giles Parkinson’s RenewEconomy. Citing the Australian Energy Market Operators recent report which looked at the potential for 100% renewables in Australia, Parkinson noted that AEOMO, the UNSW, CSIRO and others are all now predicting a similarly narrow band of costs for renewables in the range of $100/MWh to $130/MWh in 2030, and $110/MWh to $150/MWh in 2050.

More importantly in a recent “community summary” of the 100% Renewables study, published by the Federal Government, it says (amongst other things) that “In general, the operational issues identified in the report appear manageable and with the assumed technology development, it is likely to be technically feasible for the NEM to be fuelled entirely by renewable resources.”

So in summary, almost all forms of energy receive some form of subsidy (and/or have historically) and renewables are universally being considered a cost-effective solution (even in the absence of support) by those looking at the issue objectively.


The post Energy costs shift; solar, externalities and subsidies appeared first on Solar Business Services.