I have explored money several times on the Net Hero Podcast and the reason is simple this is going to cost us all!
The real question is who pays, is it us the public via our taxes which become subsidy or should it be the commercial sector, private investors? The launch of GB Energy was supposed to do that – get private cash backing net zero because the government backs net zero. But the market turmoil lately the Trump push for fossil fuels, has caused confusion so is there cash for the transition?
Heiko gave me a short history of the subsidy picture across Europe.
“Markets like Germany, they have a long, stable support that goes down over time but has been very consistent. The same kind of support some would even say maybe has led to a little bit of too much focus on the production side, not enough on the grid. And then you have markets that have gone on of, on off and had huge corrections, for example, like the Spanish market, a very generous subsidy in the early years. Overbuild they had to retroactively change, which has a huge impact for the financing community and has basically brought this market to a standstill for many years. It is now producing projects on a pure commercial basis.
“You have markets that from the beginning had very low levels of so-called subsidies or support, like Scandinavia. All these markets have in common, is that there are good business cases to develop renewable energy projects in Europe.”
So subsidies can work but can be too wasteful as well.
“It’s the old infant industry argument. So what’s the right time to start phasing out because it’s like a nice little sweetener apiece of sugar. You get used to it. And the industry, the community, the business, get used to it. So you can’t just stop it. You need to phase it out in a controlled manner.
“I think this is where some markets are probably still have a way to go. But the general story around the economic case for renewables is one of great success. If you look at what happens beyond the so-called political noise, and we know in Europe probably a bit less, but in the US there is an enormous amount of political noise. But the business fundamentals for renewables, have been gone from strong to stronger.”
We discussed many things about capital markets and the appetite for investors, so listen to the full podcast for more but I had to ask one final question which sums it all up.
Is there plenty of money to fund net zero by 2050?
Heiko’s reply is clear:
Yes, in Europe and in the US. Is there enough incentive? Is there the right level of incentive to put the money into those projects, at the right stage? And what kind of money is it? That’s the point.”
Copyright © 2025 Energy Live News LtdELN