Subsidies for Renewables, Biofuels Dwarfed by Supports for Fossil Fuels

Bloomberg New Energy Finance Preliminary Analysis Highlights Wide Gap Between
Government Help for Clean, Dirty Power Sources
NEW YORK--(Business Wire)--
New research from Bloomberg New Energy Finance reveals that despite many
platitudes and pledges, governments of the world are spending substantially more
on subsidizing dirty forms of energy than on renewables and biofuels. In fact,
support for cleaner sources is dwarfed by the help the oil, coal, and other
fossil fuel sectors receive.

In all, governments of the world provided approximately $43-46bn to renewable
energy and biofuels technologies, projects, and companies in 2009, BNEF
concludes in preliminary analysis. This total includes the cost of
feed-in-tariffs (FiTs), renewable energy credits or certificates (RECs), tax
credits, cash grants, and other direct subsidies. (It does not include more
upstream support, such as subsidies to corn farmers to grow feedstock for use in
US ethanol plants, nor does not include any value transfer due to carbon
cap-and-trade schemes.)

The $43-46bn figure stands in stark contrast to the $557bn spent on subsidizing
fossil fuels in 2008, as estimated by the International Energy Agency last
month.

"One of the reasons the clean energy sector is starved of funding is because
mainstream investors worry that renewable energy only works with direct
government support," said Michael Liebreich, chief executive of Bloomberg New
Energy Finance. "Setting aside the fact that in many cases clean energy competes
on its own merits - for instance in the case of well-situated wind farms and
Brazilian sugar-cane ethanol - this analysis shows that the global direct
subsidy for fossil fuels is around ten times the subsidy for renewables. And
that is without taking into account the enormous security and public health
costs of fossil fuels, as well as the appalling pollution catastrophes on the
Gulf Coast, the Niger Delta and elsewhere."

The BNEF preliminary analysis suggests the US is the top country, as measured in
dollars deployed, in providing direct subsidies for clean energy with an
estimated $18.2bn spent in total in 2009. Approximately 40% of this went toward
supporting the US biofuels sector with the rest going towards renewables. The
federal stimulus program played a key role; its Treasury Department grant
program alone provided $3.8bn in support for clean energy projects.

China, the world leader in new wind installations in 2009 with 14GW, provided
approximately $2bn in direct subsidies, according to the preliminary analysis.
This figure is deceptive, however, as much crucial support for clean energy in
the country comes in form of low-interest loans from state-owned banks.
State-run power generators and grid companies have also been strongly encouraged
by the government to tap their balance sheets in support of renewables.

Feed-in-tariffs (FiT) subsidizing the purchase of clean electricity in Europe
accounted for roughly $19.5bn of the total 2009 spend, or just under half the
global total. Germany is home to what was the world`s single most expensive
clean energy subsidy program in 2009, BNEF's preliminary research found. Its FiT
cost Germany`s ratepayers an estimated $9.6bn in 2009 and is a reflection of the
extraordinary number of PV systems installed in the country in recent years.

The gap between what governments spend on subsidizing fossil fuels and clean
energy should narrow considerably in 2010 for two reasons. First, support for
renewables and biofuels will grow as disbursement of $188bn in global stimulus
funds for clean energy accelerates, based on BNEF research. Second, the amount
governments such as China spend to keep fossil fuel prices artificially low for
consumers has dropped as oil prices retreated from their mid-2008 peaks. Simply
put, less government support is needed to make these dirty sources of energy
more affordable to populations around the globe.

ABOUT BLOOMBERG NEW ENERGY FINANCE

Bloomberg New Energy Finance (BNEF) is the world`s leading independent provider
of news, data, research and analysis to decision-makers in renewable energy,
energy smart technologies, carbon markets, carbon capture and storage, and
nuclear power. Bloomberg New Energy Finance has staff of more than 130, based in
London, Washington D.C., New York, Beijing, New Delhi, Hyderabad, Cape Town, São
Paulo, Singapore, and Sydney.

Bloomberg New Energy Finance Insight Services provide deep market analysis to
investors in wind, solar, bioenergy, geothermal, carbon capture and storage,
energy efficiency, and nuclear power. The group offers Insight Services for each
of the major emerging carbon markets: European, Global Kyoto, Australia, and the
U.S., where it covers the planned regional markets as well as potential federal
initiatives and the voluntary carbon market. Bloomberg New Energy Finance`s
Industry Intelligence Service provides access to the world`s most comprehensive
database of investors and investments in clean energy and carbon. The News and
Briefing Service is the leading global news service focusing on clean energy
investment. The group also undertakes applied research on behalf of clients and
runs senior-level networking events.

New Energy Finance Limited was acquired by Bloomberg L.P. in December 2009, and
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