Renewable Energy and Fossil Fuel Subsidies

While the real costs of fossil fuels are increasing the costs of renewables are declining. The International Renewable Energy Agency (IRENA) released a study the shows the cost of onshore wind power generation has dropped 23 percent since 2010, while solar electricity saw a decrease of 73 percent.  Cheaper renewable energy also decreases the cost-effectiveness of fossil fuel subsidies.

Private entities are taking advantage of the ongoing price decline in renewables energy. This is driving clean energy despite the unwavering support the fossil fuel industry receives from both governments and businesses.

A recent Forbes article quotes Simon Buckle as saying, “Subsidies tend to stay in the system and they can become very costly as the cost of new technologies falls. Cost reductions like this were not envisageable even 10 years ago. They have transformed the situation and many renewables are now cost competitive in different locations with coal.” Simon Buckle is the head of climate change, biodiversity and water division at the Organization for Economic Co-operation and Development.

Renewable energy will win the energy wars but subsidies are slowing the transition. While 100 percent renewable energy is a goal worth striving for, we could accelerate this transition by redirecting fossil fuel subsidies to renewable energy.

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