EC puts true cost of energy in the spotlight

October 14, 2014 // By Paul Buckley
The European Commission has released a study that demonstrates the direct total cost of conventional energy technologies, such as coal and nuclear, is much higher than the direct cost for solar energy.

Entitled 'Energy subsidies and costs in the EU' the study proves that solar energy is cost effective today, and is improving competitiveness at a rate that conventional technologies will never be able to achieve.

The European Photovoltaic Industry Association (EPIA) says the EC study's finding should be a wakeup call for policymakers to prioritise the most cost effective energies. The EPIA has called upon the policymakers to stop protecting the past and begin to shape the future, which is clearly based on renewable energies on the evidence of the report.

"Despite decades of heavy subsidies, mature coal and nuclear energy technologies still rely on similar levels of public support as innovative solar energy is getting today. However, support to solar electricity is already coming down, in line with the rapid technology cost reduction, as opposed to coal and nuclear energy which remain locked into subsidies as they have been for the last 40 years," commented Frauke Thies, EPIA Policy Director. "With its increasing cost-effectiveness, solar is set to overtake conventional technologies in the short term".

The EC study pointed out that since 1970, conventional energy generation (in particular nuclear and coal) has benefitted from substantial direct and indirect subsidies.  The study recognized that significant support to solar power was introduced only recently and probably reached its peak in 2012.

The study calculated that the total aggregate external costs of all energy sources added up to around €200 billion in 2012, with an uncertainty range from €150-310 billion. If these costs were taken into account, total costs of energy from nuclear, gas and coal in 2012 would by far exceed those of solar.

If broken down into support given per unit of energy generated, direct support for solar was around €110/MWh in the peak-year 2012. When external effects of different energy technologies are taken into account, the total societal costs per unit of coal were almost the same or even higher


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