Today’s guest post by Whaleoil reader Bruce Alan Forbes is part of an article he wrote called The Future of Energy with predictions for 2040. As it is an in-depth analysis I divided it into six posts so that we could discuss each part separately.
Worldwide, hundreds of billions of dollars per year are spent on subsidising wind and solar electricity generation, and on pursuing the development of marine power technologies based on waves, tidal currents and tidal barrages. In most countries, renewable energy is subsidised by the taxpayer and/or electricity consumer. “Feed-in tariffs”, “Production Tax Credits”, “Renewable Portfolio Standards” and “Renewables Obligation Certificates” are all forms of subsidy. The developers or investors benefit from subsidies and tax breaks that, in some cases, result in them getting their money back in very short periods. In nearly all cases, the cost of paying these subsidies is either added to the cost of electricity paid for by all consumers, or is derived from governments’ other tax revenues or increased government debt. It is these subsidies, not economic merit, that have produced the explosion in renewable energy projects over the past decade. Without subsidies, constructing wind and solar farms for connection to the grid would be a hugely loss-making business.