Renewables scoop most of EU energy subsidies

 

Justin Wilkes, European Wind Energy Association
Justin Wilkes, European Wind Energy Association

A new European Commission study has revealed that the largest share of public intervention in member states goes to renewables – rather than nuclear and fossil fuels.

This is the first full dataset on energy costs and subsidies for the 28 member countries across the different power generation technologies

A breakdown of state-aid by countries and per unit of primary energy demand reveals that Sweden, Germany, the UK and Denmark are the countries with the highest degree of state intervention, while Croatia, Finland and Poland have the lowest levels.

The results show that in 2012, the total value of public intervention in energy in the member countries has been between €120-140 billion and the report finds that the largest amounts of current public support in 2012 went to:

  • Solar €14.7 billion
  • Onshore wind €10.1 billion
  • Biomass €8.3 billion
  • Hydropower €5.2 billion
  • TOTAL: €37.3 billion

Among conventional power generation technologies, coal received the largest amount in current subsidies in 2012, with €10.1 billion followed by nuclear (€7 billion) and natural gas (about € 5.2 billion) – totalling €22.3 billion

The figures specifying support across technologies do however not reflect the free allocation of emission certificates nor tax support for energy consumption.

A Commission spokesman said that the report was able to put an end to an “ideological dispute” on which energy sectors attracted the most subsidies.

However, generating electricity from onshore wind is cheaper than gas, coal and nuclear – if external costs are stacked with the levelised cost of energy and subsidies – according to an Ecofys study ordered and endorsed by the European Commission. Analysis of the data in the report by the European Wind Energy Association (EWEA) shows that:

  • Onshore wind has an approximate cost of EUR 105 per megawatt hour (MWh) which is cheaper than gas (up to EUR 164), nuclear (EUR 133) and coal (between EUR 162-233)
  • Offshore wind comes in at EUR 186 and solar PV has a cost of around EUR 217 per MWh.   

The total cost of energy production, which factors in externalities such as air quality, climate change and human toxicity among others, shows that coal is more expensive than the highest retail electricity price in the EU. The report puts the figure of external costs of the EU’s energy mix in 2012 at between EUR 150 and EUR 310 billion.

Justin Wilkes, Deputy Chief Executive of the European Wind Energy Association, said: “This report highlights the true cost of Europe’s dependence on fossil fuels.

“Renewables are regularly denigrated for being too expensive and a drain on the taxpayer. Not only does the Commission’s report show the alarming cost of coal but it also presents onshore wind as both cheaper and more environmentally-friendly.”

“Onshore and offshore wind technologies also have room for significant cost reduction. Coal on the other hand is a fully mature technology and is unlikely to reduce costs any further.

 

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