Today’s lead editorial in the New York Times (“Remember renewable energy?”) calls for more “generous subsidies” to support renewable energy sources.
There’s no doubt that to meet the world’s growing energy needs, we will need to develop all economic sources of energy, and renewables will play a growing part of the mix. But, as you saw in my post about ethanol subsidies from Tuesday, the key is developing economic sources – those that compete in the marketplace without relying on taxpayer subsidies. There is a role for government support of pre-commercial research and development in the energy field, but open-ended subsidies for existing energy technologies simply shift the costs to taxpayers without making the technologies more competitive or sustainable.
Currently, renewables are receiving significant subsidies. Wind energy, for example, received taxpayer subsidies of $23.37 per megawatt hour of energy in 2007, as the chart below from the U.S. Energy Information Administration shows. Solar energy topped that at $24.34.
What’s really missing from the editorial – and from much of the public discussion about renewable energy at large – is the need for continued investments in pre-commercial research and development. Innovation – not subsidies for existing technologies – is the key to driving long-term technological changes in production and use of all energy types.
For example, the work being done at the Global Climate and Energy Project at Stanford, which ExxonMobil helped establish and continues to support, is taking solar, wind, and biofuels research and technology to the next level. Algae biofuels is another area of renewables research and development we are spearheading, in partnership with Synthetic Genomics, Inc.
Instead of calling for more “generous subsidies” for current technologies, a better approach would be to support the research necessary to develop the breakthroughs that could fundamentally change our energy landscape in years to come.