A report prepared for the European Commission has found that onshore wind power provides the cheapest source of energy once external factors such as air quality, health impacts and expenditure, and the costs of climate change are taken into consideration. The report’s authors found that onshore wind costs around $133 per MW/h to produce, whereas gas and coal cost up to $208 and $295 per MW/h each. However, continuing a controversy that shadowed the Commission last year, extracts from the report have already been published that fail to include the external costs, which is where many of the subsidies to coal, gas and nuclear are made.
The report was prepared for the EC by consultancy firm Ecofys and gives a detailed account of the historical subsidies paid to coal, gas and nuclear power generators. When these subsidies are not taken into account, fossil fuels and nuclear appear more cost-effective than they really are. As Frauke Thies, policy director for the European Photovoltaic Industry Association told the Guardian: “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. 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.” Solar, offshore wind and nuclear power all costed out at around $158 per MW/h in the report.
EU energy commissioner Gunther Oettinger says the report, titled “Subsidies and costs of EU energy,” is only “a first step” in gaining a better understanding of the impacts of energy subsidies and that further reports will follow. However, the EU has already released some results from the report without including the fossil fuel industry’s free carbon allowances. These figures showed that renewable energy took $48.5 billion of public subsidies in 2012, compared to $28.2 billion for gas, coal and nuclear. The EU release conceded the figures did “not reflect the free allocation of emission certificates nor tax support for energy consumption. Including these factors would reduce the gap between support for renewables and other power generation technologies.”
Controversially, last year German paper Suddeutche Zeitung reported that Oettinger had tried to have 2011 subsidy figures deleted from a report that showed that renewable energy received subsidies on a par with the fossil fuel and nuclear industries. The figures indicated fossil fuels received $33 billion in public subsidies, nuclear power $44.3 billion and renewables $38 billion. However, indirect support to cover the health and social effects of coal and gas came to another $50.7 billion, and the nuclear industry’s “calamity insurance” wasn’t included in its $44.3 billion.
Via The Guardian