Renewable Energy costs have fallen to such a level over the past ten years that it now competes, sans subsidies in some locations, against heavily-subsidized fossil fuel power generation, nuclear power generation and hydro-electric dams which receive billions of dollars of subsidies every year.
Many people might be surprised to hear that; It certainly hasn’t been reported by a majority of the mainstream media.
Historically, the reason given for subsidies was to allow new industries to move past the typically turbulent first few years of operation, until they reached a sort of ‘steady-state’ when the business model was fully functional and profits alone could sustain the business, yet the conventional energy industries that have been an important and profitable part of the energy sector are still receiving billions in subsidies annually — while the new kid on the block finds that their much-smaller subsidies are tapering.
Since the first oil wells were struck in Pennsylvania in the late 1890’s, subsidies of one form or another have been an important factor in our primary and secondary energy world.
After the coal price crash in 2014 and the oil price crash of 2016, total volumes of coal and oil deliveries dropped significantly, while the actual subsidy regimes in place for those fuels did not change significantly. Therefore, any perceived subsidy drop must be viewed in the context of lower production which affected the total subsidy amounts received by those industries.
At the same time, many countries that have supported the development of renewable energy have lowered or eliminated their renewable energy subsidies. Germany is an telling example of an early-adopter that discontinued their renewable energy Feed-In Tariffs, while the United States has canceled their lucrative Production Tax Credit for wind energy projects.
And nobody seems to notice! Renewable Energy installations are continuing, the rate of new RE installations is at an all-time high and increasing on a month-to-month basis.
Renewable Energy vs. Conventional Energy
Global Energy Subsidy Totals WEO-2016
The value of subsidies to fossil fuels fell sharply in 2015 to $325 billion, down from almost $500 billion in 2014. Lower fossil-fuel prices were the main reason for the drop, but lower prices have also given additional impetus to pricing reforms in many countries, both fossil fuel importers and exporters. Even with the drop in 2015, the amount going to subsidise fossil fuels is still more than double the $150 billion spent on subsidies to renewable energy.
Renewable energy is the growth story of WEO-2016
In our main scenario, nearly 60% of all new power generation capacity to 2040 comes from renewables and, by 2040, the majority of renewables-based generation is competitive without any subsidies. In a scenario compatible with 2°C, significantly faster growth means that, in the four largest power markets (China, the United States, the European Union and India), variable renewables become the largest source of generation. — International Energy Agency | Fact Sheet: World Energy Outlook 2016
“According to a new report from the U.S. Department of Energy, solar power employs more people than coal, oil and gas combined.
Last year, solar power accounted for 43 percent of the Electric Power Generation sector’s workforce, while fossil fuels combined employed 22 percent. The statistic will be welcomed with open arms by those trying to refute Donald Trump’s assertion that renewable energy projects are bad news for the U.S. economy.
Around 374,000 people were employed in solar energy, according to the report while generation through fossil fuels had a workforce of just over 187,000. The solar boom can be attributed to construction work associated with expanding generation capacity.
The report states that the employment gap is actually growing with net coal generation decreasing 53 percent over the last 10 years.
During the same period of time, electricity generation through gas expanded 33 percent while solar went up by an impressive 5,000 percent.” — Niall McCarthy | Statista
Power to the People!
Conventional energy producers in business for over a century can’t seem to survive without huge subsidy amounts — while Renewable Energy barely topped $150 billion globally, and those RE subsidies are now disappearing.
It’s one more reason why it’s a great time to be a Renewable Energy blogger!