2000

Federal Energy Subsidies

A new report released by the Renewable Energy Policy Project (REPP) of
Washington, D.C., examines U.S. government spending on energy technologies,
and finds that those to nuclear power have far outdistanced spending on
solar and wind energy.

According to "Federal Energy Subsidies: Not All Technologies Are Created
Equal," the U.S. government has spent approximately $150 billion on energy
subsidies for wind, solar and nuclear power, with 96.3% of the total going
to nuclear.

"What's really surprising is the relative start up costs for these
technologies," said Roby Roberts, REPP's executive director. "Nukes
received much higher levels of government support per kilowatt-hour when
they first started than either wind or solar power. And subsidies heaped on
nuclear power have not been cheap. Since 1947, cumulative subsidies to
nuclear power had an equivalent cost of $1,411 [1998 dollars] per U.S.
household, compared to $11 for wind, for example."

According to the report, "Analyses of subsidies during the first 15 years
of federal support versus electricity generated reveals surprising
differences. Notably, commercial, fission-related nuclear power development
received subsidies worth $15.30 per kilowatt-hour (kWh) between 1947 and
1961. This compares with subsidies worth $7.19/kWh for solar and 46
cents/kWh for wind between 1975 and 1989.

"In their first 15 years, nuclear and wind technology produced roughly
the same amount of energy (2.6 billion and 1.9 billion kilowatt-hours,
respectively), but the subsidy to nuclear outweighed that to wind by a
factor of over 40, at $39.4 billion to $900 million. It may be that this
differential contributed to a more mature nuclear sector, as reflected in
its much more rapid growth; by 1999, nuclear generation totaled 727.9
billion kWh annually, while wind generation totaled 3.5 billion kWh."

Marshall Goldberg of MRG & Associates, an environmental and economics
consulting firm, wrote "Federal Energy Subsidies." The report provides a
qualitative analysis of hydropower development and offers charts and graphs
to illustrate over 50 years of government spending.

Findings also indicate that subsidies themselves are often an essential
component in technology development. "It requires a great deal of money to
establish an energy technology," said Dr. Adam Serchuk, research director
for REPP, "and very few have reached maturity without public investment. Of
course, it takes more than subsidies to develop a technology. In the case
of common consumer products, such as the fax machine, recycled paper or the
cell phone, more subtle public policy measures such as setting standards or
government purchasing have often made a big difference."

REPP-CREST explores the emerging relationships among markets, policy and
public demand for renewable energy.
The full text of the report is
available on the Web at http://www.repp.org .