Wind energy cost-ineffective without public financial support

18/11/2011 15:00

As yet, the production of wind energy is still cost-ineffective, but public financial support compensates for the losses. Over the past two decades, approximately 3 billion euro was invested in wind turbines.

Wind energy not profitable

Wind energy not profitable

Low electricity price jeopardises competitive position wind energy producers

Without financial support from the government, wind energy producers would still be in the red figures every year. The loss over 2010 amounted to approximately 150 million euro. On account of the economic crisis, electricity prices were relatively low and there was not much wind throughout the year. These factors had a negative effect on the competitive position of wind energy producers.

Losses were offset by the public stimulus package. Producers received public financial support to the amount of approximately 360 million euro last year.

Avoided CO2 emissions

Avoided CO2 emissions

Stimulus package renewable energy

The Dutch government promotes the production of renewable energy, because the Netherlands aspires to reduce fossil fuel dependency. Public support is also given with the intention to stimulate the energy sector to develop new, innovative ways of generating (renewable) energy.

Wind energy is an example of CO2-free power generation. Last year, avoided CO2 emissions approximated 1.2 percent of total CO2 emissions. Emissions are opposed to emission rights. CO2 emissions avoided by the use of wind energy represent a value of 36 million euro in emission rights.

Proven wind, oil and natural gas reserves, by the end of the year

Proven wind, oil and natural gas reserves, by the end of the year

Wind energy cannot compensate for diminishing oil and gas reserves

Wind is an inexhaustible source of energy, but conversion of wind energy into electricity requires wind turbines. Wind turbines have a limited life span. Expansion of the Dutch wind turbine parks has increased the amount of wind energy over the period 1990-2008, but the increase does not compensate for the depletion of oil and natural gas reserves in the Netherlands: last year, oil and gas reserves were more than 200 times as big as the wind reserves.

After 2008, wind energy reserves have diminished, because few new wind turbines were built and the existing wind turbines are based on obsolete technology. New projects were no longer subsidised in the period August 2006 - April 2008. Subsidies for running projects and subsidy applications submitted prior to August 2006 were still granted.

Maarten van Rossum and Roel Delahaye

Source:

Environmental accounts of the Netherlands 2010
   Chapter 8-Valuation of wind energy resources