Business | General

Fossil fuel subsidies cause everlasting expenses and pollution

Costs of solar energy has gone down 60 per cent in past two years

  • By Binsal Abdul Kader and Samihah Zaman, Staff Reporters
  • Published: 18:07 January 13, 2013
  • Gulf News

  • Image Credit: Irena
  • Frank Wouters

Abu Dhabi: Decreasing costs of renewable energy sources may convince the world governments to minimise subsidies on polluting fossil fuels, a senior official of International Renewable Energy Agency (Irena) said here on Sunday.

The costs of installing solar energy sources have gone down by 60 per cent in the past two years, Frank Wouters, Deputy Director General of Irena, told Gulf News in an interview.

The agency is raising the awareness of this trend to prompt the governments to frame proper policies in energy sector, he said.

World governments were ignoring the fact that although renewable energy sources require big initial investments, their long-term operational and maintenance costs are minimal, he pointed out.

Generally less initial investment on fossil fuels has been enticing the world governments to give huge subsidies for them, he pointed out. But they have to bear huge costs of long–term operation and maintenance costs [of fossil fuel energy sources], apart from environmental and social issues, Wouters said.

He said that is why Irena is stressing the need of right policies instead of subsidy-based support for the promotion of renewable energy.

Renewable energy does need support in the form of subsidies but it should be based on the right policies, the official said.

Effective policies are more important than subsidies for countries to scale up renewable energy on a large scale, experts participating in the assembly also pointed out.

Anywhere in the world, investment in renewable power generation depends on stable regulatory frameworks, transparent planning processes and clear procedures for connection to the grid, said the participants at a workshop as part of the assembly.

“Today, renewable energy is more cost-competitive than fossil-based energy if you have the right policy framework,” said Yannick Glemarec, Director of Environmental Finance at the United Nations Development Programme (UNDP). “Renewables are the best way for oil-importing countries to save money.”

The workshop included discussions of tariff schemes, including feed-in tariffs, auctions and feed-in premiums, with presenters from Germany, Cyprus, Malaysia and South Africa sharing the experiences of those countries with various feed-in system specifications.

Participants also discussed ways Irena could assist its member countries through the Renewable Energy Policy Advisory Network (REPAN).

Another session highlighted support policies for wind energy, based on research by Irena, the Global Wind Energy Council (GWEC) and UNDP, while a third focused on adapting renewable energy tariffs to immature energy markets in developing countries.

Irena, established in 2011, has become the policy hub for efforts to double the share of renewables in the global energy mix by 2030 and provide sustainable energy for all.

“For me, one of the most pleasantly surprising things about this workshop was the convergence of views of all the participants, from different institutions, on what it will take to upscale renewable energy,” Glemarec said. “And it isn’t subsidies. It’s to establish an enabling policy environment to reduce investment risk,” he said.

 

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