Subsidizing renewable energy alone in En-ROADS leads to its growth as a larger share of electricity demand, thereby reducing emissions. However, this emission reduction is not constant throughout the century: in a scenario with only a renewables subsidy, CO2 net emissions decrease until the 2040s, then increase until the 2080s and finally start to decrease again after the 2080s. 

To understand the reasons for this behavior, consider what is driving these emissions and how the renewables subsidy affects them. The primary energy demand graphs for coal and natural gas exhibit the same behavior as observed in the emissions graphs, indicating that coal and natural gas are the sources of emissions affected by the renewable energy subsidy.

Until the 2040s in this scenario, the growth of renewable energy is crowding out (displacing) coal and natural gas. Subsequently, renewable energy growth, as a share of total electricity demand, slows until around the 2080s due to increasing costs of wind and solar. Higher shares of variable renewable energy from wind and solar require more long-term 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.

To avoid this resurgence of emissions from coal and natural gas, users can test a breakthrough cost reduction in storage technologies (click the three dots next to the Renewables slider to access the advanced view), and test the electricity storage and demand response sliders in the Assumptions pane. To learn more about these sliders, read “How do I simulate energy storage for wind and solar?” and “How do I simulate hydrogen use?” FAQs.

To learn more, view this video on the dynamics of renewable energy subsidies: