Wind turbines on land are cheaper than gas, coal or nuclear power plants when all external costs and subsidies are considered . This is the conclusion after a study of Ecofys, commissioned by the European Commission. One megawatt hour of electricity generated with a wind turbine on land costs about 105 euros while electricity generated from gas costs 164 euro and from coal 233 euro. Solar energy is also beneficial according Ecofys. With 125 euros per megawatt hour, the costs of this source are similar to the costs of nuclear energy per megawatt hour.
The report provides the most comprehensive overview of the European ‘energy system’ until now in terms of finance, but also related to social and environmental costs. It is published on the eve of a European summit where decisions are expected to be be made on the European climate and energy policy.
Even if externalities are excluded, renewable energy like solar and wind energy can still compete with the fossil fuels. To compare energy prices, Levelized Cost of Energy (LCOE) is used, this is the bare energy cost without government intervention. The LCOE of coal is, e.g. around 75 euros per megawatt hour, the LCOE for wind energy on land is a bit more expensive. The release of free emission certificates and tax reduction on energy usage is not included with these calculations. If that would be done, the difference in LCOE between fossil and renewable energy will be smaller, writes the EC.
Sustainable Industry Associations responded positively to the report. “It shows the real cost of seeing Europe’s dependence on fossil fuels. Renewable energy sources are regularly dismissed as too expensive, but the report by the Commission shows the alarming cost of coal, “said Justin Wilkes of the European Wind Energy Association.
Source: Bits&Chips, Paul van Gerven