FRIDAY, March 29, 2024
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Oil subsidies sap drive for renewable energy

Oil subsidies sap drive for renewable energy

Government subsidies and low spending on research and development are the two main obstacles to the transition from fossil fuels to renewable energy, said Ralph Sims, an expert on sustainable energy.

 

Sims made the remarks in a speech yesterday during the International Conference on Sustainable Energy and Environment: A Paradigm Shift to Low Carbon Society, at a time that global oil prices are heading towards US$120 per barrel and beyond. The conference was held by the Joint Graduate School of Energy and Environment, King Mongkut’s University of Technology Thonburi, and Kyoto University. 
Sims, professor of sustainable energy at the School of Engineering and Advanced Technology, Massey University, New Zealand, said during his speech titled “Clean Energy Technologies – Too Costly? Too Little? Too Late? Or Two Degrees?” that the world was being driven by high oil prices towards switching to renewable energy, but many governments still subsidised petroleum consumption. These subsidies work against people’s awareness that low oil prices are not sustainable. 
“If we want to make the transition from fossil fuel to renewable energy, why do we still subsidise oil prices?” he said. 
Sims said that in some countries, governments had subsidised fossil-fuel prices indirectly by absorbing the costs of investing in such facilities as pipelines, whereas investors in renewable energy have to pay the cost of the power grid. This means there is not a level playing field for all investors. 
“Those countries that have fossil-fuel reserves can enjoy affordable energy. Their people therefore will not aware of high oil prices, and they will not realise the benefits of renewable energy,” he said. 
He added that R&D investment was also important to drive consumption of alternative energy. While oil prices rose, so did government’s R&D spending, but now it is tending to decline. Some countries have set policies to increase the contribution of renewable energy without any target; some have set such targets, have no policies; and some have both. Meanwhile, spending by the private sector is increasing, but this is not enough to push the transition.
He said R&D spending by the state sector in many countries was high after the oil crisis in 1980. After that, the figure declined hugely. Although spending by corporations is increasing gradually at the moment, it is still lower than that in 1980. 
“The termination of subsidies has to go along with major spending on renewable-energy R&D, if we truly want to change to the low-carbon society,” he said. 
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