The Overseas Development Institute doesn't understand what a subsidy is

Not understanding what a subsidy is, and therefore who is getting it, is a bit of a problem if you decide to write a report about subsidies and who is getting them. Yet this is exactly what the Overseas Development Institute has just pleasured us with. A report which tries to look at subsidies to the use of coal in Europe and the UK. The specifically British numbers are here.

The two major numbers they tot up are not in fact subsidies to coal at all.

One is the reduced rate of VAT on the domestic use of heat and power. We can, if we like, call this a subsidy on the use of heat and power. We would hesitate to do so on the grounds that not taxing the hell out of something doesn't strike us as a subsidy but there we go. But given that this is specifically a totting up of subsidies to coal, as against other methods of energy generation, this isn't a subsidy to coal, is it? For nuclear, solar, wind power,  natural gas, all receive exactly the same subsidy. 

And we are really very sure indeed that the reduced VAT on domestic electricity usage is never recorded as a subsidy to wind or solar installations. We know this because we've been and looked and read the reports.

The second mistake is worse. They include capacity payments as a subsidy to coal. So also the balancing reserve. Sure, the payments go to coal plants but they're not a subsidy to coal at all. They're a subsidy to solar and wind.

For the reason for the existence of the payments is that the sun does not shine all the time (there's even something called "night" to be taken into consideration) and the wind does not always blow. It's thus the technical inefficiency of these two renewables which requires that we have some rusting hulk somewhere capable of giving us electricity when we desire it. Such payments thus need to be on the other side of our ledger, these are subsidies to that Green Power, not the old fossil fuels.

So, well done to the Overseas Development Institute there.

Still, four people got to collect wages from the Oak and Hewlett Foundations while producing this pap so that's alright then, isn't it?