Europe subsidises the production of Renewables Energies with 40 Billion (short scale), twice as much as the sum allocated to conventional energies

The European Commission released yesterday a report on the costs and subsidies supporting the various energy technologies of the 28 member countries of the European Union (EU), according to which, the aggregate of all the renewable energies received a total of approximately 39.7 billion euros in grants, nearly double the amount granted to conventional resources.

These figures are in contrast with those reported yesterday by Greenpeace in newspaper El Periódico de la Energía.  The environmentalist NGO pointed out in its report that in Europe renewable energies receive around 30 billion euros a year whereas nuclear power and fossil fuels are estimated to receive 61 billion euros in grants, specially due to the payment by capacity system.

EC Vice-president and Energy Commissioner, Günter Oettinger, stated in a press release that, thanks to this first report, “we now have a set of data on subsidies and costs in the field of energy that is more solid and comprehensive than anyone before”, but he also warned that this was only “a first step” and “there are still gaps in our knowledge”.  And he added: “We have to continue to work on filling these gaps. More research is needed, in particular on historical subsidies in the energy market in all EU Member States and the EU overall”.

The study indicates that in 2012 over 700 public interventions were carried out in the 28 Member States in order to subsidise the energy industry for a sum of between 120 and 140 billion euros (excluding transport). 70% of these interventions were allocated to support the production of energy, and out of those grants, the largest share of the cake was distributed amongst solar power, which was allocated 14.73 billionwind power (11.48 billion) and coal (10.12 billion).

But solar and wind power are not the only beneficiaries of this orgy of profligacy. The “funds” of the Governments from Old Europe are also being allocated to other renewable energy resources such as biomass, which receives 8.3 billion euros and hydraulic power, which received 5.2 billion. With regards to conventional energy resources, after coal, nuclear power was the one receiving the largest sum (7 billion euros), ahead of natural gas (5.2 billion).

Spain, third in Europe

According to the report on the subsidies and costs of energy in 2012, which presents a detailed country-by-country analysis, Spain was the third State of the European Union (EU) to grant public support to the energy industry, with a total of 10.43 billion euros. Within this ranking of energy drains for money profligacy only omnipotent Germany with 25.47 billion euros and the UK with 13.28 billion are situated above Spain. In fourth position, closely following Spain, Italy ranks with a total of 10.36 billion euros in subsidies.

The report also mentions the costs and competitiveness amongst the various power generation technologies and in this sense, it highlights that the cost of producing a megawatt per hour (MWh) from coal is approximately 75 euros, in a similar range to wind power, which is a little above, whereas the average cost for a MWh to be produced with nuclear power or natural gas goes up to average levels reaching the 100 euros. With regards to solar power costs, it points out that “they have considerably decreased since 2008″ and they are currently in the 100 and 115 euros range per Mwh, depending on the size of the installation.

The study also presents estimates of external costs of power production technologies, which are not shown in the market price.  These are the cost of environmental impact, health or global warming. The external costs of the energy mix of the EU in 2012 would be between 150 and 310 billion euros, although according to the document, the methods used to quantify these costs are “highly uncertain”.

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