Generating electricity from onshore wind is cheaper than gas, coal and nuclear when external factors are taken into consideration along with the levelised cost of energy and subsidies, according to an Ecofys study into subsidies and costs of EU energy.
According to the report, 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.
Commenting on the report, European Wind Energy Association (EWEA) Deputy CEO Justin Wilkes said that the report highlighted the true cost of Europe's dependence on fossil fuels. He said that renewables were regularly denigrated for being too expensive and a drain on the taxpayer but that the report not only showed the high cost of coal but also presented onshore wind as both cheaper and more environmentally-friendly.
While onshore and offshore wind technologies have room for significant cost reduction, coal is seen as a fully mature technology that is unlikely to reduce costs any further. In a comment to the UK’s Guardian newspaper, European Photovoltaic Industry Association Policy Director Frauke Thies said that, despite decades of heavy subsidies some mature energy technologies are still dependent on similar levels of public support as innovative solar energy is receiving today.
Wilkes concurred, noting that the affordability of fossil fuel-based generation is often given as a justification for its continued use, even though traditional forms of electricity generation are still heavily subsidised. “This report shows that we should use the 2030 climate and energy package as a foundation for increasing the use of wind energy in Europe to improve our competitiveness, security and environment,” he said.
For more information:
http://ec.europa.eu/energy/studies/doc/20141013_subsidies_costs_eu_energy.pdf