Headlines do not give full picture on end of subsidies for renewables

» By | Published 25 May 2012

By Julian Scola, EWEA Communications Director

“EU Plans to Phase Out Solar, Wind-Energy Subsidies” was the headline last weekend in Business Week – echoing a similar story in the Frankfurter Allgemeine Zeitung. The article claimed that a strategy paper Energy Commissioner Guenther Oettinger will present next month in Brussels would include plans to phase out solar and wind-power subsidies as soon as possible.

Three vital facts were missing:
1.         The European Commission Strategy paper being presented next month is about renewable energy policy after 2020. Therefore, it is safe to assume that it is looking at phasing out energy subsidies sometime after 2020.
2.         It is important to distinguish between mature renewable technologies like onshore wind, and newer ones like offshore wind which will need support for some time after 2020.
3.         What is needed is a phase out of subsidies for ALL mature energy sources. The European Commission itself acknowledges that fossil fuels receive four times the level of subsidy as all renewable energies. To give another example, the amount of money set aside by the British Government for decommissioning existing nuclear power plants alone is enough to build wind turbines to meet 40% of the UK’s electricity needs.

Having said that, wind energy is increasingly competitive, and onshore wind is already cheaper than nuclear. So a phase out of support could be possible for onshore wind in the years after 2020 IF:
•         it is done in a well-planned and transparent manner (not suddenly or retro-actively)
•         support for fossil fuels and nuclear is also phased out
•         there is real competition in a European-wide electricity market with the necessary grid
infrastructure to transport power from where it is produced to where it is needed.

The wind industry knows that Government support will and must come to an end. It would welcome the opportunity to compete in a fair and genuinely open electricity market – which sadly does yet not exist in the European Union. The wind industry has long encouraged the European Union to create a level-playing field in the electricity market, and urges faster progress to achieve it.  This includes a debate about support for renewable energy, but not only about support for renewable energy.

Categories: EWEA