Renewable energy cheaper than fossil fuels-EU study


Sheringham Shoal wind farm off the Norfolk coast, England. Image: Harald Pettersen/Statoil.
Sheringham Shoal wind farm off the Norfolk coast, England. Image: Harald Pettersen/Statoil.

Renewable energy is cheaper than dirty fuels when ‘external’ costs such as air quality, human toxicity and climate change are taken into account, according to an analysis commissioned by the European Union.

To begin with, direct subsidies for renewable energy are slightly less than those flowing to fossil fuel sector in Europe, according to the report , undertaken by the renewable energy consultancy, Ecofys. 

It said energy subsidies across the European Union topped €122 billion, with fossil fuels and nuclear making up 36% and renewables receiving slightly less at 34%. But the report finds renewable energy is the much cheaper option when the full cost of burning fossil fuels is added in. These external costs include the effects on the environment, human health and climate change – costs which are not reflected in market prices. When these charges are added to subsidies, figures show that fossil fuels and nuclear make up 70% of the costs, while renewables make only 18%.

For instance, for every megawatt hour of electricity generated, onshore wind power costs roughly €105 per MW/h, compared to gas and coal which can cost up to around €164 and €233 per MW/h, respectively.

“The study usefully breaks the myth that renewables get more subsidies and are more expensive than dirty energies – when in fact it’s the other way around,” said Tony Long, a European director at the World Wildlife Foundation in a blog post. “It seems Member States have still got completely wrong subsidy schemes for energy despite their claims and obligations. They are backing the wrong horse. Renewables and energy efficiency are the answer, not more demand for polluting and expensive energies.”

“The picture is even worse when external costs of energy – paid by us taxpayers – are added: dirty energies represent 70% of the costs, compared to 18% for renewables. The study makes clear that renewables are cheaper and dirty energies are unaffordable when all costs are properly factored in, especially the cost of climate change.”

The report was issued ahead of a pivotal European Council meeting on Oct 23-24 where leaders are “poised” to back

three tougher climate and energy goals for 2030, according a draft document, obtained by Reuters, the news agency.

The Oct 7 document said that the EU was considering a 40 percent cut in greenhouse gas emissions by 2030 compared with 1990 levels, as well as a 30 percent increase in energy savings. As well there will be a goal to generate 27 percent of energy from renewable sources, according to the Reuters story.

 

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