Time for Fossil Fuel Feed-in Tariffs

Joe Romm explains that solar and wind now are beating fossil fuel power generation on price without any subsidies, citing recent reports by the UN and Bloomberg.

That’s not surprising to anyone who paid attention. Kees van der Leun predicted this to happen in 2011.

But there is an interesting quote in that article. Romm quotes Micheal Liebreich with this statement:

It’s a whole new world. Instead of having to subsidise renewables, now authorities may have to subsidise natural gas plants to help them provide grid reliability.

Exactly. If you want to help coal miners and coal companies, you need to introduce a feed-in tariff for coal.

Just like a feed-in tariff helped phase in renewable energy (mostly paid for by Germany back when solar was expensive), now a feed-in tariff is needed to phase out coal in a orderly and responsible way.

Set a minimum price for coal generation. Combine it with a ceiling on how much can be generated each year, and have a long-term reliable plan on how that ceiling is reduced until coal is phased out completely.

That way you can keep present coal miners employed until their retirement age and adjust plans for hiring new ones to the reality of the phase-out plans.

Do the same for gas, and where there is oil generation, for oil.

Renewable energy would indirectly profit from such a phase-out plan as well. Going full speed ahead with the transition to renewable energy is much easier if the fossil fuel industry is on board.

2 Comments

  1. Volkmar Lauber

    For a feed-in tariff for fossil fuel generation to make sense, it must help accelerate fossil fuel phase out. In countries where the fossil fuel lobby is strong politically at present (e.g. the lobby for coal-based generation in Poland or Germany), the generous feed-in tariff likely to be adopted would for many years protect coal against market forces which currently represent the main incentive for advancing the phase-out of domestic coal and/or lignite mining, and of coal-based generation. Good idea in principle, but likely to miscarry.

    • Karl-Friedrich Lenz

      I don’t know much about Poland, but I have followed German policy quite closely since the Fukushima accident that got me interested in these questions in the first place. It looks like policy in recent years is massively slowing down renewable energy. As far as that is caused by concerns for coal interests, getting them on board should help speed things up.

      The basic deal is getting a faster Energiewende in exchange for a phaseout that is profitable for the coal industry. Obviously it depends on the details how much this would help to speed up things, but policy can’t get much worse than it is in Germany right now.

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