Paris climate summit: subsidies v green competitiveness incompatible
Here in Paris, there are many well-meaning people who believe that we need strong carbon cuts and green energy production subsidies now and for many years to come, to get the world to move towards tackling climate change.
But at the same time, these same people argue that solar and wind is already competitive, or that this moment is just around the corner.
Those two arguments are incompatible and many people who seem to be making both points are simply wrong on one or the other.
Part of the over-optimism on carbon cuts is this claim that in just a few years, solar and wind will be so cheap they’ll take over the world. If that were the case, then this treaty would actually be rather pointless. We will have solved global warming. There is really no need to do more.
United Nations
climate chief Christiana Figueres says: “Combined with investments in battery storage, renewables are now truly competitive with fossil fuels even for grid-connected electricity”.
If her claim is true, solar and wind should dominate energy markets soon. After all, people do not burn fossil fuels to annoy people like Figueres. They do so because it is cheap and reliable. If Figueres’ claim is true and it no longer makes economic sense to use fossil fuels, people will switch.
But that leaves the question of why Figueres is urging “
a clear commitment to century-long action” on climate change?
Quite possibly it is because the claim that renewables are competitive simply isn’t true.
We’ve heard it before. Back in 1976, famous environmentalist Amory Lovins said that for
solar energy, competitiveness was just around the corner: “a largely or wholly solar economy can be constructed in the United States with straightforward soft technologies that are now demonstrated and now economic or nearly economic.” In 1984, the Worldwatch Institute informed us that wind subsidies “will not be needed within a few years.” A more recent example comes from the UK Solar Trade Association, which had
predicted it could live without subsidies by 2020. A short while later, they postponed that date and asked for subsidies at least until 2028.
We are often told that green energy is competitive in Africa. Green energy, especially wind, can indeed help African countries, for example, to get electricity to remote, rural areas.
But that is only a small part of the big picture. The grid will by far do the most good for the most people.
According to a 2011 World Bank study,
renewable energy “will be the lowest cost option for a minority of households in Africa, even when likely cost reductions over the next 20 years are considered.”
Popular solar lights cost almost $2 per kWh. Using hydro, gas, and oil, the grid cost for the main population centers in Ethiopia, Ghana, and Kenya will likely be $0.16-25 per kWh. In South Africa, where coal powers 90 per cent of electricity, the cost is just $0.09 per kWh.
This is even more true for India. Despite both wind and solar coming down in price, even in 2040 the International Energy Agency estimates that both will be more costly than the average energy production.
Green energy costs $168bn in subsidies right now each year, and by 2040, we’ll actually be paying even more at $206bn per year.
It is, however also interesting - and surprising to many - to note that even with these massive subsidies and very green policies, doing everything governments are now promising, we’ll get just 2.4 per cent of our energy from green sources in 2040, according to the IEA.
You really have to put on a pair of green-tinted spectacles to see a world in which renewable energy is about to become competitive – or, as Figueres claims, already is. But if you insist on arguing that, you cannot also coherently urge for long term subsidies.
Either solar and wind will need support for many years to come, and not be a significant contributor to solving climate change in the years to come. Or it is just about to become competitive and we can scale back the subsidies.
http://www.theaustralian.com.au/opinion/columnists/paris-climate-summit-subsidies-v-green-competitiveness-incompatible/story-fni1hfs5-1227635376986?from=google current_rss ?from=public_rss&utm_source=The Australian&utm_medium=email&utm_campaign=edito
