The Truth about Renewable Subsidies – We are going to need them for a long time

Green energy advocates and renewable energy industry representatives often justify various financial and non-financial support mechanisms for renewable energy sources by stating that they are only needed on a temporary basis.  The contention is that as the technology matures renewables will become cost competitive with non-renewable sources of electricity generation.

Comparing renewable and non-renewable energy costs is a fool’s errand in my opinion.  Many smart people have spent a lot of time looking at various subsidies provided to the oil and gas industry, the health effects of burning hydro-carbons, and the long-term impact on climate change.  But in the end, it is truly impossible to put an accurate figure on these costs and therefore trying to present a fair and objective comparison between the current state and a sustainable energy environment is pointless.

I like to keep things simple.

Hydro-carbons are being depleted at a very rapid rate and that will only accelerate as the emerging economies gain strength.  Long before the last drop of oil is produced the price will go up very dramatically.  We will always need hydro-carbons for many purposes such as aviation fuel, plastics, and lubricants – much more intelligent uses than burning the stuff to generate electricity.  So, from a common sense perspective, it just doesn’t seem like burning oil and gas is a very smart thing to do.

So I have no issue with supporting renewables.  In my mind we really don’t have a choice.  But I think we all have to realize that these supports will become more and more expensive over time as we add extensive transmission upgrades, utility-scale energy storage, and capacity payments to keep some non-renewable generation on standby as “spinning reserves”.  That is a reality that we all need to face head-on.  I have provided a more detailed analysis in my latest blog posting at:



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Davis started his career working with the Geological Survey of Canada and has spent more than 20 years working in the Oil & Gas Industry in Calgary, Alberta. For a number of years he was the energy policy advisor to the leader of the official opposition in the Alberta Legislature.More recently Davis has been involved in alternative energy research, focused primarily on grid stability and overcoming the problems of variability and dispatchability with renewable sources such as solar and win.

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