Are Governments Doing Enough To Encourage The Use Of Green Energy?

While maybe to a lesser extent today, the historic opinion of green technology is one which bleeds the taxpayer dry and can very often lead to increased energy costs. In years gone by the public have seen little or no direct benefit to their lives by utilising green technology to create green energy. The situation regarding businesses is slightly different because a perception of being “green” is seen as a vital part of any business today. So, do governments really do enough to encourage the use of green energy?

Subsidising green energy

There is nothing more off putting for the public and businesses than seeing millions of pounds in subsidies handed out to green energy companies. This gives the perception that these companies, and in some cases the sector, are not able to stand on their own two feet. Against this background it is not difficult to see why there has been significant public apathy towards green technology which is often seen as “just another fad”.

Very often the way in which green energy subsidies are “sold” to the public gives the impression that green energy companies and the government are fleecing the taxpayer. In reality this is not the case but it is a difficult perception to shake off.

Investing in the future

It is a little ironic that the green energy industry is often criticised for “wasting taxpayer’s money” when in reality this is an investment in a long-term project. Directly, via tax rebates, and indirectly, via the protection of oil supply lines around the world, governments have been subsidising the oil industry for decades. The US government regularly spends billions of dollars a year protecting US oil supplies which are in effect an indirect subsidy for the industry. So, if the oil industry is profitable and receiving subsidies why is there so much criticism of the green technology sector which is still in its infancy?

It is also worth noting that green technology now supports hundreds of thousands of jobs in the UK, directly and indirectly, which is in turn increasing (although at a relatively slow rate) the tax revenue of the UK government. The government need to address the idea that green technology/green energy is a fad and something which will be here today and gone tomorrow – along with billions of pounds of taxpayer’s money!

More transparency

While the information is readily available, there is still a perceived lack of transparency when it comes to handing out subsidies and supporting the green energy industry. Some of the more disruptive press often pick up on these subsidies when in fact in reality they are simply an investment in the industry going forward.

The production of wind energy is a very controversial area because just a few years ago it was costing £130 per megawatt hour for offshore wind farms against the wholesale price of between £40 and £50 per megawatt hour. This rate has now fallen dramatically to around £97 per megawatt hour with the latest approved offshore windfarm citing a cost of just £57 per megawatt hour. Unfortunately, this latter project will not be online until 2022/23 but this perfectly illustrates how the significant subsidies of years gone by will fall dramatically in the future.

Squabbling over climate change

Unfortunately, the constant squabbling between governments over climate change and the impact of carbon emissions regularly overshadows the green energy industry. There are so many lies and untruths out there, it is difficult to understand exactly what is going on. We also seem to see new emission agreements every year between the largest countries around the world but relatively little in the way of action.

If countries, apparently pulling in the same direction, are not able to get their act together on an international scale it is difficult to see how they can put together a domestic structure. In some ways it is like a game of poker, waiting for the first person to blink, give in and ramp up their green technology/green energy investment. We all know that green technology is a long-term project and will not create a return on investment overnight.

Surely companies should take a little more risk?

In many ways the government is damned if it does and damned if it doesn’t with regards to investment in green technology/green energy. There have been calls for the risk/reward ratio to be balanced a little more between governments and companies operating in these fields. At this moment in time it does sometimes feel as though these companies have a guaranteed future when in reality no business should be guaranteed. It may be a little unfair to expose these companies to the full challenges of the private sector just yet but then again if these companies were taking more risk with their own money would they perhaps be a little more focused?

Thinking of the future

The government has been very proactive in the world of green technology/green energy although unfortunately in many cases it is the consumer who has been forced to pick up the tab. At this moment in time, if we take offshore wind energy as an example, it does cost more to produce the energy than the wholesale purchase price. This will change, has changed, and ultimately is a long-term investment by both the  government and taxpayers. If things were perhaps a little more transparent, companies were seen to take a little more risk themselves, then perhaps the public would be more inclined to entertain green energy and support long-term investment?