18.07.2013
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Forecasts and roadmaps

DIW says EU overestimates cost of renewables

Yesterday, Germany's premier economic research institute published a study criticizing EU estimates of the cost of nuclear, carbon capture and storage, and photovoltaics. The DIW says PV is already less expensive than the EU's projection for 2050.

 - Leading German economists point out that the EU assumes a price for PV in 2050 that already exists today.
Leading German economists point out that the EU assumes a price for PV in 2050 that already exists today.
DIW

The new study (PDF in German) does not beat around the bush: "Nowhere in the world has a nuclear plant ever been built under free-market conditions, with various types of subsidies having been offered," explains Christian von Hirschhausen, research director at the DIW. But perhaps "study" is the wrong word; the new publication is a critique of the European Commission's "2030 framework for climate and energy policies" published only last March along with the Energy Roadmap 2050, published in December 2011.

The German economists say that the EU expects nuclear generation capacity to increase from the current 120 to more than 140 gigawatts, a surprising finding (and this is my conclusion, not theirs) in light of the unscheduled nuclear phaseout that will occur by the 2030s across Europe. In other words, unless the EU begins massively building nuclear plants, there will practically be no generation capacity in the EU by 2040 as aging plants are decommissioned. At present, one plant is going up in Finland and another in France. As the DIW points out, the cost of nuclear has a steeply rising learning curve; in France, a kilowatt of generating capacity cost 1,000 euros in 1980, compared to 5,100 euros in the latest estimate from December 2012 for the EPR in Flamanville.

 - The learning curve for nuclear goes up, not down – contrary to EU estimates, which are already far below the current cost range.
The learning curve for nuclear goes up, not down – contrary to EU estimates, which are already far below the current cost range.
DIW

Plans to build a third ERP nuclear reactor in the UK reveal how expensive it will all be: a price guarantee is required for 40 years at levels higher than what solar now costs in Germany, and while solar will continue to get cheaper, the price guarantee for new nuclear in the UK is to be inflation-indexed – and even then, the market will not provide loans, so the British government will have to step in – a clear sign that banks agree with the economists at the DIW.

The DIW also criticizes the EU's expectations for carbon capture and storage. By 2020, just seven years from publication of the framework, the EU is to have some five gigawatts of CCS, "equivalent to around 10 midsize systems. In reality, the technology has not yet been used within the EU at all." (Craig Morris)

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3 Comments on "DIW says EU overestimates cost of renewables "

  1. Helene Connor - 23.07.2013, 19:46 Uhr (Report comment)

    DIW could also have a look at the NEEDS report commissioned by DG Research a few years ago. Nuclear costs are ridiculously underestimated. Even though it was denounced at the time, such studies must have misled a number of analysts over the years and played against renewable energy...

  2. Jo Brown - 19.07.2013, 11:40 Uhr (Report comment)

    Thank you for explaining the true costs of nuclear power we hope the UK government will also understand it and stop EDF from building new nuclear reactors at Hinkley C.

  3. James Wimberley - 18.07.2013, 15:25 Uhr (Report comment)

    If the EU were a functioning parliamentary democracy, Oettinger would be forced to resign. The history of nuclear and renewable costs is a matter of public record, and ignorance and misrepresentation of them by energy policymakers is a sacking offence. Fortunately the EU has no real means of compelling member states to follow its fantastic preions. The trouble is that this amateur analysis informs the renewable targets, which are binding.

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