World Business

Austria sees renewable energy as too expensive to be practical

(Xinhua)
Updated: 2010-04-01 17:18

CANCUN, Mexico: Austria generates 70 percent of its power via hydroelectric plants and sees solar and wind power as too expensive to be practical, a senior Austrian official said Wednesday.

"We have installed wind power capacity of about 1,000 megawatts, maybe 1 percent of our electricity," Alfred Maier, head of the energy and mining department of the economy ministry, told Xinhua on the sidelines of an International Energy Forum meeting.

"The price of electricity in Austria is about 40 euros ($54) per megawatt hour and (the price of) photovoltaics will be about 400 euros (540 dollars) per megawatt hour," Maier said.

Maier said solar power technology would not be competitive in the short term, though it is a very popular source of power.

The conference's final session had been on renewable energy. Other key topics were human development, a new charter for the organization and a search for more stable prices.

Maier also doubted the IEF's effort to stabilize energy prices via massively increasing the flow of market data.

"It is not as easy as we want," Maier said. "The link between the financial markets and the physical market of oil has been discussed, but it is really not easy."

The IEF has been trying to help ease volatility via its Joint Oil Data Initiative, which publishes statistics from the top 30 producers and 30 consumers among 100 government data providers.

"Transparency will shed a better light on things but I do not see a clear solution to the problem," Maier said.

In 2008, oil markets swooped to $150 a barrel because investors bought oil contracts seeking a place of safety as the United States experienced a severe financial crisis. When the crisis spread from financial markets to the rest of the economy and to the rest of the world, investors were forced to sell oil, triggering a crash in prices. Key contracts ended the year close to 30 dollars a barrel.

At the IEF, both producers and consumers have said the wild price gyrations did not help either side, but instead scared off investment needed to ensure future production and stable prices.

The two-day meeting, which ended Wednesday, attracted representatives from 64 countries and 16 international bodies to Mexico's resort of Cancun. The next similar meeting will take place in Kuwait in 2012.