November 29, 2011
Despite the common opposition argument that renewable energy is not cost
effective without subsidies, a growing number of governments around the
world have begun to invest in that area. Now Reuters reports that the
International Energy Agency believes that renewable energy sources will
become increasingly cost-effective in coming years.
The report, entitled "Deploying Renewables 2011: Best and Future Policy
Practice," especially emphasizes the important role that government
subsidies will play in bringing down the cost of the currently expensive
clean energy prices. However, it argues that some better-established
technologies are already competitive with traditional fossil fuels.
"The portfolio of RE technologies, which includes established hydropower,
geothermal and bioenergy technologies is now, therefore, cost-competitive in
an increasingly broad range of circumstances, providing investment
opportunities without the need for specific economic support," the report
Environmental Finance notes in particular the comparison of feed-in tariffs,
common in Europe and Asia, and renewable energy certificate markets. The
reports finds that both policies encourage substantial investment in
renewable energy technology, but RECs tend to cost substantially more for
the impact that they produce.
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