Dynamics of Renewable Energy Subsidies, Hydrogen Storage, and Emissions Reduction
Channel: Climate Interactive
Date: 2024-02-02

Why is it that when adding a subsidy to Renewables, greenhouse gas emissions get reduced in the short-term, then increase slightly, and finally get reduced again in the long-term?
Subsidizing renewable energy leads to its growth as a larger share of electricity demand, thereby reducing emissions. However, the increase in variable renewable energy from wind and solar requires more energy storage to accommodate the displacement of dispatchable energy sources. Consequently, the demand for energy storage drives up costs, slowing renewable energy growth. Over time, learning rates and economies of scale cause storage costs to fall, supporting higher levels of renewable energy adoption.

For more information about energy storage for wind and solar and hydrogen, read these FAQs: 
- How do I simulate energy storage for wind and solar?: https://support.climateinteractive.org/support/solutions/articles/47001149653-how-do-i-simulate-energy-storage-for-wind-and-solar- 
- How do I simulate hydrogen use?: https://support.climateinteractive.org/support/solutions/articles/47001147358-how-do-i-simulate-hydrogen-use-