Fossil Fuel Subsidies Dwarf Those for Renewables
June 28, 2012
Ah, FOX News and GOP politicians at the federal level will harp on clean energy subsidies all day… but won’t drop fossil fuel subsidies for anything (note: many local- and state-level Republicans are actually supporting clean energy industries). But the fact remains: fossil fuel subsidies are much larger than clean energy subsidies.
Julian Scola of the European Wind Energy Association (EWEA) writes: “It makes me wonder — how do politicians and media can get away with talking about removing subisidies from renewables without even mentioning the existence — let alone withdrawal — of much larger subsidies for much more established energy technologies? It is hard to understand.” [sic]
It is a wonder. Julian goes on to point out the difference between fossil fuel and wind power subsidies:
… public subsidies for wind power are dwarfed by those channelled to fossil fuels and nuclear. OECD figures show that coal, oil and gas in the UK were subsidised to the tune of £3.63 billion in 2010, while onshore and offshore wind received only £700 million in the year to April 2011 — that’s more than five times less than fossil fuels.
Moreover, International Energy Agency figures show that coal, oil and gas subsidies in 37 countries received a total of $409 billion in 2010, compared to $66 billion for renewables.
Shockingly different, eh?
And, another critical point is that fossil fuel industries are largely mature industries, which shouldn’t be receiving subsidies, while clean energy industries are largely nascent industries that should be receiving subsidies!
Government support has already played an important role in expanding Europe’s use of wind power. And while the industry aims to be competitive in a fully liberalised market, wind power needs subsidies to get it on a level playing field with dominant fossil fuels which have received subsidies for decades.
The industry is working hard to become fully cost-competitive with fossil fuels. And that is setting aside the fact that much of the environmental and human health cost of extracting, transporting and burning fossil fuels to make electricity is not included in the cost of fossil fuels. Costs have already fallen over recent years — largely due to improved turbine design and the increased efficiency of blades and other components. A recent report by the Grantham Research Institute found that onshore wind power will be cost competitive with fossil fuels by 2016 in the UK. Meanwhile, the biggest and best-sited wind farms in the world are already cost competitive, and onshore wind is already considerably cheaper than nuclear power.
In some places, wind power is actually now cost competitive with or significantly cheaper than fossil fuels.