Coal subsidy equal to onshore wind across EU, report reveals

13th October 2014

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William Henry Collin

EU member states paid the coal industry around €10.1 billion in subsidies in 2012, which is the same as that paid to support onshore wind, according to the European commission.

The finding came in an interim report from the commission on costs and subsidies for all generation technologies used by member states. The total value of government subsidies in the energy sector, excluding transport, was €120-140 billion in 2012, the commission found.

The commission reports that subsidies to conventional power technologies in 2012 totalled €22.3 billion, with coal receiving the largest subsidy, at €10.1 billion, while nuclear received €5.2 billion and natural gas around €7 billion.

Overall, €38.3 billion was given renewable technologies. Solar generators received €14.7 billion, the onshore wind industry was given €10.1 billion, biomass received €8.3 billion and hydropower with €5.2 billion.

However, these figures do not take into account the free allocation of allowances under the EU emissions trading system, nor tax support for energy consumption. Including these factors would reduce the gap between total support for renewables and other power generation technologies, the commission said.

The commission’s work is ongoing, and the next step is to gather data on historical subsidies, which it says were “considerable” for coal and nuclear.

Vice-president for energy Günther Oettinger said the commission now had a more comprehensive set of data on energy subsidies and costs than ever before.

“But the task is not yet completed. This can only be a first step and there are still gaps in our knowledge. We have to continue to work on filling these gaps,” he said.

The report also compares the cost competitiveness of the different power generation technologies. The estimated ranges reflect costs of new power generation without public intervention, known as levelised costs.

The cost for producing one megawatt hour (MWh) of electricity from coal is around €75, while that for onshore wind was “only somewhat higher” at around €80, the commission said. Electricity from nuclear and natural gas cost around €100/MWh, while solar power costs around €100–€115/MWh, depending on the size of installations.

The commission has also attempted to price external costs, such as the cost of health and environmental impacts, including the affects of climate change. These come to between €150 and €310 billion across all technologies in 2012, the report says. However, the commission warns that this is merely an order of magnitude, as the methodology applied has a high degree of uncertainty.

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