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Renewables: Fewer subsidies and more R&D please


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There’s a good article in Slate which lays out a case for shuttling some of the funds spent on subsidies for renewable energy into R&D instead. The article’s main point is that the use of solar and wind power is crawling up at a snail’s pace while there is little indication that the price of these sources will become competitive. One point which not everyone appreciates is that when you are talking about “renewables” right now, you are mostly talking about biomass, a resource that is neither efficient nor clean; it shows what a tiny percentage of renewables solar and wind power currently comprise. But that’s how humanity lived for most of its modern existence, until fossil fuels caused a revolution in energy use that moved us toward orders of magnitude higher efficiency, mobility and energy density (fossil fuel also had a few important environmental benefits that aren’t always appreciated, like saving whales from extinction).

Advocating the use of renewables is a good thing, but for now that dream seems far from being realized. As the Slate article describes it,

To be sure, wind and solar have increased dramatically. Since 1990, wind-generated power has grown 26 percent per year and solar a phenomenal 48 percent. But the growth has been from almost nothing to slightly more than almost nothing. In 1990, wind produced 0.0038 percent of the world’s energy; it is now producing 0.29 percent. Solar-electric power has gone from essentially zero to 0.04 percent…Moreover, solar and wind will still contribute very little in the coming decades. In the IEA’s optimistic scenario, which assumes that the world’s governments will fulfill all of their green promises, wind will provide 1.34 percent of global energy by 2035, while solar will provide 0.42 percent. Global renewables will most likely increase by roughly 1.5 percentage points, to 14.5 percent by 2035. Under unrealistically optimistic assumptions, the share could increase five percentage points, to 17.9 percent.

Interestingly, Europe now gets less from wind than what it got before industrialization. But the crux of the matter is that 0.29% and 0.04% are hardly fighting figures. It’s one thing to extol a future based on renewables, quite another to envision how this minuscule percentage can be ramped up to even something like 10% in a few decades. As eminent climatologist James Hansen put it, “Suggesting that renewables will let us phase rapidly off fossil fuels in the United States, China, India, or the world as a whole is almost the equivalent of believing in the Easter Bunny and [the] Tooth Fairy.”

So what’s holding back the rapid expansion of renewables? Subsidies for one thing, according to the Slate article:

We are paying through the nose for these renewables. In the last 12 years, the world has invested $1.6 trillion in clean energy. By 2020, the effort to increase reliance on renewables will cost the European Union alone $250 billion annually. Spain now pays almost 1 percent of its GDP in subsidies for renewables, which is more than it spends on higher education. At the end of the century, Spain’s massive investment will have postponed global warming by 62 hours. Current green energy policies are failing for a simple reason: renewables are far too expensive. Sometimes people claim that renewables are actually cheaper. But if renewables were cheaper, they wouldn’t need subsidies, and we wouldn’t need climate policies.

I am thinking that it would really be a good idea if Spain spent more on education and less on renewables, but no matter how you slice the matter that’s a lot of money. And it’s not being spent on R&D either. Germany’s solar subsidies are well-known; a recent Forbes article calls them “too large too fast”. In the United States, the Energy Information Administration reports that 2010 subsidies for solar and wind were $1 billion and $5 billion respectively (compared to $2.5 billion for nuclear – which however includes loan guarantees- and $2.9 billion for natural gas).

The result is basically a massive amount of non-R&D expenditure on renewables without much to show for it. The Slate article makes the point that we need to shift much of this money to actual R&D. Trends in R&D funding on clean energy certainly seem to bear out this need; as the figure below shows, the US is spending much less on renewables than what the International Energy Agency recommends (and much less in general than what’s recommended).

There is still a substantial gap to be filled when it comes to funding renewable energy (Image: IEA)

Meanwhile, polls show that for the near future, the public at large is more concerned about job creation than about the environment and therefore seems to align itself with supporting natural gas expansion above everything else.

The Slate article ends with a plea for innovating the price of renewables downward instead of subsidizing it. China seems to provide a good example of what can be done:

The solution is to innovate the price of renewables downward. We need a dramatic increase in funding for research and development to make the next generations of wind, solar, and biomass energy cheaper and more effective. Consider China. Despite the country’s massive investment in solar and wind, it mostly sells solar panels to Western countries at subsidized prices. Wind makes up just 0.2 percent of China’s energy, and solar accounts for 0.01 percent. Meanwhile, China has 68 percent of the world’s solar water heaters on rooftops, because it is a smart and cheap technology. It needs no subsidies, and it produces 50 times more energy than all of China’s solar panels.

Heavily pushing renewables right now is like trying to push a flawed model of a new computer into the market. It might feel good at the beginning but it’s only going to be hugely inefficient, expensive and pointless for the future. Better to slow down the expansion and fire up the innovation.

Ashutosh Jogalekar About the Author: Ashutosh (Ash) Jogalekar is a chemist interested in the history and philosophy of science. He considers science to be a seamless and all-encompassing part of the human experience. Follow on Twitter @curiouswavefn.

The views expressed are those of the author and are not necessarily those of Scientific American.





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  1. 1. Sisko 2:41 pm 08/29/2013

    A well written analysis.

    Link to this
  2. 2. M Tucker 4:16 pm 08/29/2013

    We should increase solar and wind R&D AND continue subsidies. You have not demonstrated that solar and wind are flawed, only relatively expensive at the moment. We need to support these new technologies. Solar costs are declining on a regular basis. What we should do is END subsidies for natural gas and oil. It is ridiculous to continue to subsidize these highly profitable industries. We should also end subsidies for corn ethanol. We should end that program altogether.

    [from World Policy.org]
    “To be sure, solar power isn’t quite there yet. It still survives on subsidies in most places and only accounts for a fraction of global energy production. But this month’s announcement that utility giant RWE will close several gas- and coal-fuelled power plants in Germany shows how far renewable energies have come. RWE’s explanation, as quoted by The Wall Street Journal, reads: “due to the continuing boom in solar energy, many power stations throughout the sector and across Europe are no longer profitable to operate.”

    This fall, solar energy in Germany will become cheaper to produce than nuclear energy – for the first time in history. This has a lot to do with German energy prices being among the highest in the world, but solar energy is nevertheless becoming competitive on a global level.

    Since 1977, the price of photovoltaic cells, needed to produce solar power, has fallen from $ 76.67 per watt of installed capacity to forecast $ .74 in 2013, according to Bloomberg. This follows the so-called Swanson’s Law, which states that the cost of producing such cells falls by 20 percent every time production capacity doubles, thanks to both technological advances and economies of scale. With no signs for a slow-down in global demand for solar power, this trend looks likely to continue. Recently the Chinese government raised its target solar-power capacity for 2015 to 35 gigawatts, up from 21.”

    Yes we are generating a very small fraction of electricity from solar but that is no reason to end subsidies. Home installation is increasing and global demand is not slowing down. We should also invest in R&D for new nuclear. As long as China continues to build coal plants and the world continues to delay on a GHG reduction agreement wind and solar are the only avenue that makes sense.

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  3. 3. sault 4:28 pm 08/29/2013

    Ash,

    You need to check that bias of yours at the door. Your articles are CONSTANTLY tilted against renewable energy and towards nuclear energy.

    First of all, Bjorn Lomborg is a repeated huckster, spreading the myth that all we need is more R&D for renewables to become viable:

    “Lomborg loves to play the nit-picky ‘I’m the honest statistician’ role and then use this stance to imply that doing much of anything except R&D is a waste, ignoring the huge body of evidence that pricing GHG emissions can have large net benefits.”

    -William Shobe, Director of the Center for Economic and Policy Studies and a Professor of Public Policy at the University of Virginia

    “Lomborg’s allusions to hurricane response to climate change are misleading in a number of respects.

    Independent analyses based solely on satellite data show that the proportion of high intensity hurricanes has been increasing in most places.”

    – Kerry Emmanuel, Professor of Atmospheric Science in the Department of Earth, Atmospheric and Planetary Science at MIT

    http://thinkprogress.org/climate/2013/01/25/1495691/bjorn-legacy-lomborg-urges-climate-inaction-with-misleading-stats-in-murdochs-wall-street-journal/

    Regardless of all the misinformation you are reading about energy markets, renewables are already viable. How many times do I have to link to that DoE report that showed wind power purchase agreements averaging 4 cents per kWh before you stop ignoring it? Do you even know how many people live in areas where solar PV has hit grid parity currently and how many more will reach it in the coming years? And so what if an industry is small right now? Given current growth trends (that show no signs of slowing down, btw), solar and wind will be the dominant energy players by the 2040′s.

    And it is disingenuous to lump ethanol subsidies in with “renewables” to make them look expensive. How about we bring up all the inflation-adjusted spending on the Manhattan Project and other nuclear research that led to civilian nuclear power? How about we try to determine how much the nuclear industry would have to pay for adequate liability insurance since the government provides coverage because the industry CANNOT buy it on the private market for ANY price? What about the opportunity cost of all those billion$$$ sunk into reactors that were never finished? Sound fair?

    Look, just because your pet technology – nuclear power – is failing badly, with ballooning costs, abandoned reactor builds and multi-billion-dollar mistakes all in the face of immense government largesse, doesn’t mean that you need to trash talk renewable energy all the time. These blog posts you keep making already look silly given the facts on the ground and they will look downright ridiculous in the coming years as you are proved even more wrong.

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  4. 4. curiouswavefunction 4:49 pm 08/29/2013

    Sault: Read the post carefully. In it I advocate increased R&D spending on renewables and say nothing about nuclear power or Bjorn Lomborg. Sorry, but this is your final warning; the next time you accuse me of things I haven’t said and include ad hominem attacks as part of extended comments, you are out of here. Seriously, if you don’t like what I have to say you should go someplace else; nobody is forcing you to comment.

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  5. 5. Mark656515 7:09 pm 08/29/2013

    100% agreed. The solar, wind, wave and geothermal that will one day power the world will look like the current ones like this year’s a Porsche looks like a Model T.

    One thing we can reap vast improvement from is by not converting in between types of energy, keep kinetic (wind) as kinetic (in flywheels), directly used for kinetic purposes (on vehicles, industrial machinery, etc), heat as heat (solar concentration for foundries, etc).

    I used to defend thorium (good for nonproliferation as does not make plutonium if used in one of its two possible cycles, and far, far more abundant than uranium) as a complement to ultra-deep geothermal, but the garbage issue really renders nuclear unviable for universal use.

    As I have said often before, we need more JIP (joint industry projects) as in the mainstream industries.

    Green power industries of the world, unite: all you have to lose are your glitches.

    Cottage green power industries, in particular, being small and unaccustomed to JIPs, could vastly benefit from an international green JIP promotion agency, liaising also with universities (physics, engeneering and design departments, really).

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  6. 6. Louise Stonington 7:11 pm 08/29/2013

    How disappointing that Scientific American prints this blog entry without warning the reader that the opinions repeated here are those of a notorious political scientist, Bjorn Lomborg.
    We prefer to read opinions based on actual, peer-reviewed data, presented without cherry picking or bias. We expect conclusions that follow logically from the facts presented and arguments that accurately portray the issues. Not this. Please.
    Cherry picking. The article discusses subsidies for alternatives from 2010, and ignores the massive historic subsidies for other energy industries, such as $185 billion in subsidies the nuclear industry has received. We subsidize the competition, and then complain that the new companies are not growing more than 48%??
    Inaccurate portrayal of the issue. The article argues that the increase in growth of renewables is small, and therefor there we should not continue to try to expand them in scale, although that has been a major reason for their of expansion.
    Conclusion not following from the facts. The article argues that people are concerned about jobs, and therefor support natural gas. In fact, green energy and efficiency create many times more jobs than continuing with the monopolistic fossil fuel development, which information has been overwhelmed by the advertising by the powerful and deep pockets of the fuel lobby, aided by a strategic market manipulation of natural gas prices just as wind energy began to provide serious competition for lower electric generation.

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  7. 7. rkipling 11:41 pm 08/29/2013

    I still think you should get equal billing with the black rhino.

    Link to this
  8. 8. Scienceisnotagenda 7:53 am 08/30/2013

    Well written and welcomed reality check.

    A billion dollars invested in more efficient use of fossil fuels is much better in environmental return than subsidies for renewables.

    The best return of all…100billion pumped into physics, chemistry and engineering education. For the long term this is a Better return than investment in R&D.

    Link to this
  9. 9. curiouswavefunction 11:07 am 08/30/2013

    #6: Here’s a 2008 analysis of federal energy expenditures from 1959 to 2006; it found that of the $725 billion that was expended, 73 percent ($530 billion) went to oil, natural gas and coal; 18 percent ($130 billion) to hydro and renewables; and 9 percent ($65 billion) to nuclear. Thus nuclear got less subsidies than renewables and far less than oil and coal.

    Nobody is arguing that we should end subsidies, only that we should switch some of that money to R&D which seems to be sorely lagging behind. To me that is a cogent argument.

    Link to this
  10. 10. Ronald Patrick Marriott 1:59 pm 08/30/2013

    Winged disc is dark energy created by micowaving hydrogen. …pyramid tech 101. Relativistic Perturbation Mantle is a self contained sphere of antihydrogen fusion. Mantle produces Sprites above storms. Antimatter is neutral to lightning both being negative energies. When lightning hits the hydrogen atom the positive side is burned off while the negative side is collected into a sphere starting the fusion event. This fusion series is …
    Energy …helium to the moon… continuing to a Carbon ring sealing in the fusion continuing to Oxygen in massive amounts creating a ring of Liquid Oxygen slowing the fusion process back to a Carbon ring sealing its self into a 12 foot bulls eye sphere. Mantle then has no place for the energy to go and coverts the first carbon ring to high energy photons which will be Dark Energy as soon as the frequency of the entire sphere equalizes and disappears as Dark Matter. This does return to our world when the first carbon ring is burned thru to allow the LOx to rush in cooling the fusion and discharging as a sprite. Sprite’s are producing Gamma Rays when releasing its energy while converting the Liquid Oxygen to air and water and electrons to build the ionosphere. This is antihydrogen in a newly discovered form… but reproducible.. When reproduced attaching to the carbon rings of Mantle will allow that object to be converted to Dark matter and travel at WARP speeds. Everything I just wrote is backed by existing video..science from NASA JPL Italian Space agency and a dozen or more universities up to the point of reproducing this energy sphere. Im working on that now. The basis is atmospheric science and not the usual route for physicists or CERN’s investigations. My paper is coming soon. I witnessed this as a child with my NBC newsroom writer producer director father and again 2004 and gave chase. I then found it on youtube as strange lights and then on NASA sprite film. This has been seen but not totally understood until I came along. This is a destiny for me as its ability to change the world will be the need everyone desires to not only change technology but repair society and earth. I am very grateful…. Theres more to this discovery ….

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  11. 11. edkellyus 2:07 pm 08/30/2013

    The idea of putting more into energy R&D is best discussed as a separate topic from the subsidy of alternative energy. As you can see from some comments already, when discussed together this is seen as an insidious threat to renewables and the debate becomes instantly polarized.

    We need to try some better energy solutions and some of them will seem like science fiction.
    I have such a solution. Its a realistic idea based on solid engineering. My experience pitching it leads me to believe that the polarization of opinion has removed peoples ability to have an open mind on the topic of energy. If you have an open mind check out http://www.stratosolar.com

    Link to this
  12. 12. OgreMk5 2:53 pm 08/30/2013

    I’m confused. According to the EIA energy outlook (estimates), wind power is already cheaper than every form of fossil energy except combined cycle NG (without carbon capture). It’s been this way since I’ve been reviewing these estimates over the last 4 years. Now, these are lifecycle costs (including construction and decommissioning).

    I’ll add that renewables need subsidies to compete with the subsidies for fossil fuels. Why not just cancel ALL subsidies and put that money into R&D?

    I’m sorry, but I don’t buy what your selling.

    Link to this
  13. 13. jackelope64 5:55 pm 08/30/2013

    Solar only makes sense when individual houses and businesses are utilized through tax exemption status where solar resources are adequate in addition to large solar farms being used. Similar reasoning applies to the use of wind in such areas such as Maine where offshore wind banks could be placed. R & D in areas such as energy conservation needs exploration increasing the efficiency of buildings and reintroduction of mass transportation. Most importantly the public must be educated in a much more serious and convincing manner.

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  14. 14. jpdickey 1:41 pm 08/31/2013

    I agree that more funding should go to R&D, and basic research related to energy production. We need to change to renewable energy, and need to do it more efficiently. However, we should not prematurely withdraw existing subsidy programs for renewables.

    One of the biggest problems with our national budget is that the government can’t make up its mind. Projects are started and cut off half way through. Large amounts get spent on programs that never get completed. Programs just get off the ground, and a policy change in Washington sends them crashing. Also, businesses adapt to existing programs, and there are huge disruptions with abrupt changes ordered by Congress or agencies.

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  15. 15. sethdayal 1:52 pm 08/31/2013

    Actually if you look at what Big Oil’s DOE calls nuclear subsidies virtually none of them apply to nuclear power – just nuclear weapons and weapon systems. There are no nuclear power loan guarantees.

    There is now about $250M per annum R&D on the US Gen IV HTGR which is forecasted for post 2030 service all of it wasted as the Chinese are actually building an HGTR for 2017 service promising modular construction at 1 cent a kwh and efficient production of synfuels. There is now a minuscule amount of additional funding on small sized conventional PWR reactors.which will be obsolete long before attaining service.

    Compare that miniscule number to the $tens of billions spent on solar wind battery and utterly worthless biofuel and carbon capture tech.

    In fact rather than nuclear subsidies, it is the nuclear industry that is subsidizing the US government with close to $100B today in never to be used funds, for nuke waste disposal costs (will be reused as Gen IV fuel), decommissioning funds (nuke site will always be a nuke site) and liability funding (nuke accident less likely than an asteroid strike on NYC)

    Since all solar and wind operations are massively subsidized at the state federal and by the ratepayer, the subsidy there is many times the narrow federal funds devoted to that cause.

    The actual cost of wind power is 15 cents a kwh based on the last large wind build at Shepherds flat in a market set by massive Chinese dumping. To that we need to 8 cents a kwh for the cost of 5 times sized wind transmission plant (per New England ISO) and 10 cents for gas backup and 8 cents for the cost of dumping wind power as it is seldom around when needed (Ontario Auditor Generals report). Add a buck a kwh for storage if we want to replace gas.

    So wind 40 cents a kwh.

    For solar based on NREL’s open PV project with average installed cost’s in America of over 5 cents a peak watt – a figure hardly changed in 3 years and reflecting massive Chinese dumping – we need to add another 50 cents a kwh to the wind cost.

    So solar 90 cents a kwh

    With economies of scale all in and massive Chinese subsidy due to end, that cost is due to increase without R&D breakthroughs.

    Sault’s 4 cent a kwh subsidized wind contracts fail to include the 9 cents a kwh subsidy the wind operator gets for selling renewable energy credits and wind power production credits, bringing wind sales pricing up to Ontario’s 13 cents a kwh feedin tariff. Since wind/solar loan guarantee’s come without fees unlike nuclear’s most of nation wind/solar is built without any risk to private capital.

    Keep in mind that wind/solar power must be backed up to 100% nameplate by inefficient fossil fuel plant run inefficiently. Less GHG’s less gas installing efficient gas plant in the first place. With massive investments in wind and solar Germany’s GHG production has increased two years in a row not including 100 times a potent as CO2 methane leaks from all that imported Russian gas.

    In 20 years the West’s third world bankrupt ghg spewing economies will be running on 40 cents a kwh wind and 90 cents a kwh solar but getting all its energy from 17 cents a kwh gas, while the BRIC country’s zero GHG populace will be laughing at our dumb butts while running their prosperous zero ghg countries on penny a kwh Gen IV nuclear.

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