The shift in electric generation from fossil fuels to wind and solar is being driven by a disparity in federal energy subsidies, according to a new study.
The study, released by the Energy Alliance, found that renewable energy subsidies have rapidly increased in recent years, as subsidies for fossil fuels have decreased.
From 2010 to 2019, renewable subsidies doubled subsidies for fossil fuels, $74 billion to $37 billion. However, in the current decade, renewable subsidies are expected to more than triple to $244 billion, while subsidies for fossil fuels will decline to $22 billion.
Bill Peacock, the author of the report, said, “There is no question that the federal government—not benefits from renewables–is driving the green energy transition.”
The report also determined that “subsidies are the only reason that wind and solar generation exist on the U.S. grid at commercial scale.”
Renewable energy generation has grown rapidly over the last 20 years in Texas, which generates more electricity from renewables than any other state.
Peacock believes that this is causing significant problems with the Texas electric grid.
“Continuous subsidies for renewable energy have compromised grid reliability and increased costs,” said Peacock.
Over the last 10 years, wind and solar generators have received $16 billion in federal, state and local subsidies, according to Peacock. Due to increased renewable subsidies in the Inflation Reduction Act signed by President Joe Biden in 2022, they are expected to total $24 billion over the next five years in Texas.
The Texas Legislature has responded to the reliability problems of the Texas grid by subsidizing electric generation from more reliable sources, particularly natural gas.
Some of the new subsidies come from the Texas Energy Fund, created by the Texas Legislature in 2023. Commissioners at the Public Utilities Commission of Texas recently approved applications for $5.4 billion in loans from companies who want to build more generation in Texas.
Peacock believes this is the wrong approach.
“Eliminating all subsidies, instead of increasing them, is the only path toward a reliable, affordable supply of electricity for Texans,” said Peacock.
