A report released by the European Commission on Monday in Brussels highlighted the relative cost of onshore wind versus fossil fuel technologies like coal and gas, proving it to be the cheaper form of electricity generation in the region “when externalities are stacked with the levelised cost of energy and subsidies.”
The report (PDF), conducted by leading renewable energy consultancy firm Ecofys, ordered and endorsed by the European Commission, is the first report to ever quantify the whole of the European Union’s energy infrastructure, and the respective government interventions (ie, subsidies) therein.
Onshore Wind Out On Top
Taking into account “externalities” — such as air quality, climate change, and human toxicity, among others — onshore wind has an approximate cost of €105 per megawatt-hour (MWh). This comes in much cheaper than gas (up to €164), nuclear (€133) and coal (between €162-€233), while offshore wind comes in at €186 and solar PV has a cost of around €217.
Government intervention for renewable technologies was not dissimilar from those subsidies provided to more traditional technologies. Solar topped the list with €14.7 billion in subsidies and other government help, followed neatly by onshore wind and coal, both of which netted €10.1 billion.
News regarding the report has been confused this week, due in part to the nature of the Commission’s own public response. No mention was made by the European Union in the two press releases published on Monday announcing the report, which dealt with the report’s results on energy integration across the European Union, and “government interventions,” respectively.
In fact, it was a spokesperson from the European Wind Energy Association, Oliver Joy, who provided the EWEA’s press release, which finally highlighted the news.
The UK’s The Guardian asked the question whether maybe the report was “unwelcome in some quarters of the commission,” given that both press releases published Monday “published selective results from [the report] that did not include external health and pollution costs.”
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The True Cost of Energy
“This report highlights the true cost of Europe’s dependence on fossil fuels,” said Justin Wilkes, deputy chief executive officer of the European Wind Energy Association. The report shows that not only are renewables unfairly “denigrated for being too expensive and a drain on the taxpayer,” according to Wilkes, but the report also shows “the alarming cost of coal” and how heavily reliant the industry is on similar government intervention as the solar industry.
Total support provided in the 28 Member States (in billion €2012), including EU level support.
As can be seen in the graph above, of the specific technologies receiving government support, coal and onshore wind line up quite neatly, with solar only a little ways out in front — one of the many reasons the renewable market is looking to solar for the greatest growth over the next few years.
“We are heavily subsidising the dirtiest form of electricity generation while proponents use coal’s supposed affordability as a justification for its continued use,” Wilkes continued. “The irony is that coal is the most expensive form of energy in the European Union.”
“Despite decades of heavy subsidies, mature coal and nuclear energy technologies are still dependent on similar levels of public support as innovative solar energy is receiving today,” added Frauke Thies, the policy director for the European Photovoltaic Industry Association, speaking to The Guardian.
“The difference is that costs of solar continue to decrease rapidly. If the unaccounted external costs to society are included, the report demonstrates that support to fossil fuels and nuclear even by far exceeds that to solar.”
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