Solar and nuclear costs converging, says EU report

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Large-scale solar and nuclear power have more or less the same levelised cost, according to a report by the European Commission.

The commission's internal energy market progress report looks at the levelised cost of energy. It found nuclear and gas to more or less match each other on €100/MWh with solar on €100-115/MWh depending on the size of the installation. Last week the European Commission approved state aid support for a new nuclear plant in the UK.

The research, which was conducted by consultancy Ecofys on behalf of the EU Commission, used 2012 values for the study. With a sharp cost reduction curve, solar’s real performance is likely to be much better.

The report noted that it did not account for the free allocation of carbon credits or tax support for energy consumption, which would “reduce the gap between support for renewables and other power generation technologies”.

“Together with the Commission's earlier report on drivers for energy prices, 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,” said vice-president Günther H. Oettinger responsible for energy.

“We are now better informed about the size of public subsidies in recent years and the costs for power generation across all technologies. But the task is not yet completed. This can only be a first step and there are still gaps in our knowledge. 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,” he said.

The cost of coal came out at around €75/MWh with onshore wind only marginally higher.

“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, policy director, European Photovoltaic Industry Association. “With its increasing cost-effectiveness, solar is set to overtake conventional technologies in the short term,” she added.

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