Government Policy Support
- 01:31
Government Policy Support in renewable energy project finance.
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Glossary
Project finance Renewable EnergyTranscript
Governments around the world try to encourage investment in renewable energy because they believe it to be a source of job creation, and maybe more importantly, it will help towards meeting net zero carbon emissions targets. Many countries are targeting net zero emissions by 2050. Different governments have different schemes. Some schemes have already expired and been replaced by other ones. Other schemes are still in operation, but they may change in the future. Different countries offer different types of support and different levels of support. Some governments offer direct subsidies to renewable energy producers. Some schemes require those who produce energy from fossil fuels to pay fees or tradable credits to renewable generators. So the fossil fuel industry effectively pays revenue directly to renewable energy producers. Some governments implement favorable tax regimes to encourage investment. Of course, these schemes change over time. In particular, over the past 10 years, we've seen subsidies direct and indirect dramatically reduce for wind farms and solar farms. That's because the technology has become much more efficient and substantially cheaper, and hence there's less need for a subsidy.