WASHINGTON, DC, US.
Federal subsidies to renewable energies in the US rose to US$4,875
million in 2007, from US$1,417 million in 1999.
This total includes US$5m in direct expenditures, US$173m in federal
electricity support, US$727m in research & development, and US$3,970m in tax
expenditures, explains the Energy Information Administration in the report
,'Federal Financial Interventions and Subsidies in Energy Markets 2007.’ The
report was requested by Senator Lamar Alexander, to show federal subsidies
and support for electricity last year.
Last year, subsidies to renewables constituted the largest expenditure of
the US$16,581m provided by the federal administration, followed by US$2,828m
for end use, US$2,370m for refined coal, US$2,149m for natural gas and
petroleum, US$1,267m for nuclear, US$932m for coal and US$926 million for
conservation.
In 1999, federal subsidies of US$8,194m were allocated to end use
(US$2,135m), natural gas and petroleum (US$2,077m), renewables (US$1,417m),
federal electricity programmes (US$753m), nuclear (US$740m), coal (US$567m),
non-specific electricity (US$314m) and conservation (US$191m).
Energy subsidies and support from the federal government has been growing by
9.2% per year, although corresponding consumption is increasing at 0.6% per
annum and energy production remains flat. Support related to power
generation is estimated at US$6,700m, or 41% of total energy subsidies, and
a significant portion of subsidies and support (US$1,200m) is directed to
plant or infrastructure such as transmission.
Electricity production subsidies and support per unit of production vary
widely by fuel. Total support amounted to US$1.65 per MWh of output, with
refined coal at US$29.81 (72 billion kWh of net output), solar at US$24.34
(1 b-kWh) and wind at US$23.37 (31 b-kWh). When all renewables are included
(hydro, geothermal, landfill gas, MSW), the sub-total for renewables is
US$2.80 of subsidy per MWh.
The report notes that 59% of energy-related subsidies are associated with
end-use applications or with fuel consumed outside the electric power
sector, and totalled US$9,800m last year. About one-third of subsidies not
related to electricity are directed to the promotion of alternative fuels,
particularly ethanol and biodiesel.
Non-fuel specific subsidies of US$3,600m focus on energy efficiency and
conservation, which the report notes can affect power consumption in the
long run by reducing the need for investment in additional generating
capacity and a resulting decline in fuel use. While such subsidies can
affect electricity markets, they do not provide a direct or indirect subsidy
to electricity generation and are outside the scope of the report.
Of the R&D for renewables, support for wind has increased from US$42m in
1999 to US$58m last year, while solar went from US$120m to US$187m and
biomass from US$116m to US$246m, while geothermal declined from US$35m to
US$6m. Total R&D for renewables went from US$412m to US$727m over the
period.
Total federal energy-specific subsidies and support to all forms of energy
reached US$16.600m in 2007, more than double the level (in real terms) of
the US$8,000m in the last EIA report on subsidies completed in May 2000. Tax
expenditures, one of four types of subsidies examined, have more than
tripled since 1999, rising from US$3,200m in 1999 to US$10,400m in 2007.
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