Report: In EU, renewable energy is the first recipient of state aid


The European Commission published a study on Monday (13 October) providing the first full dataset on energy costs and subsidies for the 28 member countries across the different power generation technologies, revealing that the largest share of public intervention in the energy sector has been in favour of solar and on-shore wind energy.

The results show that in 2012, the total value of public intervention in energy in the member countries has been between €120-140 billion.

The report finds that the largest amounts of current public support in 2012 went to renewables, in particular to solar (€14.7bn) and onshore wind (€10.1bn), followed by biomass (€8.3bn) and hydropower (€5.2bn). Among conventional power generation technologies, coal received the largest amount in current subsidies in 2012, with €10.1bn, followed by nuclear (€7 bn) and natural gas (about € 5.2 bn). The figures specifying support across technologies do however not reflect the free allocation of emission certificates nor tax support for energy consumption.

The functioning of energy markets and the size and effect of government interventions has been the subject of debate for years. However, no clear picture has existed so far. As Commission spokesperson Marlene Holzner explained, this has been an enormous task, because so far figures of the state intervention in the energy sector were simply not available.

The data was collected by independent consultants, who have tried to dig out as much information as possible for the study, which she called “a very first snapshot”, depicting the state of play in the year 2012.

Holzner explained that the collection of the data had been a daunting task, and that most of it came from government sources. The Commission invites experts, stakeholders, academia and member states to comment on these results and contribute with additional data, for example as regards historical subsidies.

She also said that the report was able to put an end to an “ideological dispute” on which energy sectors attracted the most subsidies.

Asked if the state aid to the energy sector is authorised, Holzner argued that the recent green light which the EU executive gave to the Hinkley Point nuclear power plant in the UK was the first ever state aid case for constructing a new nuclear power plant.

“If you have monopolies, if the state owns everything, the question of state aid and market didn’t even arise,” he said.

A breakdown of the state aid by countries and per unit of primary energy demand (page 9 of the report) reveals that Sweden, Germany, the UK and Denmark are the countries with the highest degree of state intervention, while Croatia, Finland and Poland have the lowest levels.

The Commission also circulated related documents. One of them provides insight on the price differences among member states in terms of wholesale gas prices (page 2 2of the Commission Staff working document) and of wholesale electricity prices across the EU (page 26 of the same document). The document clearly shows that Ireland and Greece pay the highest prices for electricity, and that Latvia, Estonia and Sweden pay the highest prices for gas. 

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