LONDON — A sudden U-turn on renewable energy subsidies by governments facing economic austerity measures could fatally wound the industry, the International Energy Agency has warned.
In its annual World Energy Outlook, which was published today, the IEA forecast that renewable energy subsidies will quadruple from $64 billion last year to $250 billion by 2035.
But it added that some of these subsidies “cannot be taken for granted in this age of fiscal austerity”.
IEA chief economist Fatih Birol told a press conference in London this morning: “Governments are giving a second look at renewable energy subsidies. If these are cut once, it might be very difficult for the renewable energy industry to come back to life later.”
However, assuming all subsidies stay in place, the IEA predicts that renewables, along with natural gas, will be the biggest growth sector between now and 2035.
The IEA states that while “the age of fossil fuels is far from over, their dominance will decline” and predicts that renewable energy technologies, led by hydropower and wind, will account for half of new capacity installed by 2035.