Subsidies for electricity-generating technologies: A review

Abstract

This paper presents estimates of the extent of subsidisation globally, via selected mechanisms, for a number of different electricity-generating technologies. The technologies covered are coal-fired, nuclear, wind, solar PV, concentrating solar, geothermal, biomass and hydroelectric power. To the knowledge of the authors, this study provides the most complete and comprehensive collation of energy subsidies so far at a global level. Our series of information allows a comparison of subsidies for electricity-generating technologies, based on the respective states of development and deployment during different time periods. To date, on average, hydropower receives the least subsidies per unit of electricity it generates and geothermal and nuclear power receive an equally low level of subsidies per kWh generated. Amongst renewables, wind power has registered a spectacular success story in reducing the need for subsidisation. The same cannot be said for the two solar technologies, and for biomass. Coal-fired power has the highest subsidisation level, despite its high level of global deployment, which is mainly because of external costs due to climate change impacts. Our study demonstrates that accounting for subsidies under an agreed framework can be important for informing future policy decisions on subsidisation.