Wind Power Is Actually Cheaper Than Coal, Says Leaked Government Report

If you count the cost of mining, pollution, and healthcare, wind power beats coal by a mile.

Oct 13 2014, 7:05pm

Image: Chris Lim / Wikimedia 

A leaked report shows that wind is the hands-down cheapest energy source in Europe, beating the presumably dirt-cheap coal and gas by a mile. Conventional wisdom holds that clean energy is more expensive than its fossil-fueled counterparts; politicians who oppose incentives for solar and wind routinely point to their cost as an omnipresent hurdle. 

Yet truly honest cost comparisons show that renewable energy sources are often cheaper than their carbon-heavy competition. The report, which was prepared for the European Commission, shows as much: it demonstrates that if you were to take into account mining, pollution, and adverse health impacts of coal and gas, wind power would be the cheapest source of energy, period. 

The Guardian, which examined a copy of the leaked report—it was completed for a study on energy costs for the European Commission, but was conspicuously omitted from the final draft—relays the findings: "for every megawatt hour (MW/h) of electricity generated, onshore wind costs roughly €105 (£83) [or $130 USD] per MW/h, compared to gas and coal which can cost up to around €164 [$208] and €233 [$295] per MW/h, respectively."

"Nuclear power, offshore wind and solar energy are all comparably inexpensive generators, at roughly €125 per MW/h," the report says. 

The problem is, those higher healthcare and environmental costs, which economists call externalities, aren't paid for by the fossil fuel companies, but the public. As in you, the taxpayer. This makes them very difficult to address.

Fossil fuel companies are used to using the atmosphere like a sewer and letting us pick up the tab. If you live near a coal-fired power plant and you've got lung disease or asthma, the coal company isn't paying for your doctor visits. You—or your insurance company, or the state—are. 

This isn't any great secret, either. In 2011, Harvard's Paul Epstein published a study that found that coal inflicted between $345-500 billion worth of damage on the US economy, annually, for largely the same reasons that the EU report found that wind was so comparatively cheap.

"This is not borne by the coal industry, this is borne by us, in our taxes," Epstein told Reuters at the time. "The public cost is far greater than the cost of the coal itself. The impacts of this industry go way beyond just lighting our lights."

More recently, EPA researchers found that fossil fuels (oil, gas, and coal) cost the nation up to $886.5 billion each year. It's hard to stress just how bad coal, gas, and oil emissions are for the environment, and for public health—and how insane it is that, for the most part, we give these legacy polluters a free pass for the damage they do.

This is what policymakers have tried to correct with carbon prices, which have been implemented in a handful of places, like the EU, the city of Vancouver, and a coalition of Northeastern US states. The practice has just not been widespread or aggressive enough yet. 

On its own, without externalities factored in, wind is already cheaper than coal in a number of places: Australia, which just so happens to be loaded with coal; parts of Europe managed by the behemoth utility EDP, which says wind and solar are cheaper than fossil fuels; and Denmark, where in a few years, wind will be twice as cheap as fossil fuels, according to its government officials

A sensible society would take all of the costs brought to bear on its citizens into account when selecting which power sources to rely on. That's why clean, cost-competitive wind and solar look increasingly to be the clean, cost-competitive energy sources.