While there may be future rewards in terms of diversification of energy supply, energy security and environmental protection, the American taxpayer currently is paying a high price for development of the power generation fuels of the future, according to a recent report by the Energy Information Administration (EIA).

Refined coal at $29.81/MWh, solar power at $24.34/MWh and wind power at $23.37/MWh racked up the highest per-unit federal subsidies in 2007, EIA estimated. The statistics were included in the report, “Federal Financial Interventions and Subsidies in Energy Markets 2007,” which was produced at the behest of Sen. Lamar Alexander (R-TN).

Refined coal also received the highest federal subsidy for electric power in absolute terms, at roughly $2 billion; nuclear was next at $1.3 billion, but with a much lower unit cost at $1.59/MWh. Total subsidies to power transmission and distribution were $1.2 billion, while renewables claimed $1 billion. On the low end of the federal power subsidy scale but the high end of total power production were regular coal at a total of $854 million (44 cents/MWh) and natural gas and petroleum liquids at $227 million (25 cents/MWh).

The top power producers in 2007 were regular coal at 1.9 trillion kWh, natural gas and petroleum liquids at nearly 1 trillion kWh and nuclear generation at 794 billion kWh. Hydroelectric power produced 258 billion kWh, refined coal 72 billion kWh, biomass and biofuels 40 billion kWh, wind 31 billion kWh, geothermal 15 billion kWh, municipal solid waste 9 billion kWh, landfill gas 6 billion kWh and solar 1 billion kWh.

EIA included in its calculations tax incentives, direct funding, research and development expenditures, loans and loan guarantees and federal commitments to agencies such as the Tennessee Valley Authority (TVA) and the Power Marketing Administrations (PMA), which include the Bonneville Power Administration and three smaller PMAs.

Total federal energy-specific subsidies and support to all forms of energy were estimated at $16.6 billion for fiscal year (FY) 2007, which is more than double in real terms (2007 dollars) the estimated $8.2 billion in FY 1999.

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