Assessment of Energy Consumption Externalities Lucie KARÁSKOVÁ NENADÁLOVÁ, Frédéric WERTZ Nuclear Fuel Cycle Department, Research Centre Řež, Czech Republic, lucie.nenadalova@cvrez.cz

Introduction Economic, social and environmental impact valuation depends on how much we value our dependency to foreign technologies and resources, our health and life, our biodiversity and our capacity to manage nuclear waste storage as well as future climate change Currently, for reducing CO2 emission, Europe is engaged to switch from mainly coal-based to low-carbon technologies This paper presents a tool that clearly distinguishes physical impacts from social parameters that are scenario-dependent, to be chosen by the user. It considers electricity variable value (peak/low demand) and relative costs of each technology as well as externalities

The Czech electricity mix consists of various sources and technologies About half of electricity is made out of coal in conventional thermal power plants, another 36% share is produced by Nuclear power plants While gas-fired and hydro power plants are used for peak- demand and compensate some intermittent production (mainly Solar Photovoltaic). Electricity production causes undesirable consequences which must be weighed against its societal benefits Externalities have impacts on the economic, social and environmental level and affect the whole society http://www.ceps.cz/ENG/Data/Vsechna-data/Pages/Vyroba.aspx

How can we evaluate externalities and compare them? First, a technology assessment must be made based on the entire life cycle, since impacts may occur at different stages of use (building, fuel extraction, operation, dismantling, and remnant effects). Life Cycle Assessment (LCA) is a requirement. LCA methods are still in development Different mid-point criteria are identified: Climate Change, Ozone depletion, Human toxicity (cancer, non-cancer), Particulate matter/respiratory inorganics, Ionising radiation (human, eco-systems), Photochemical ozone formation, Acidification, Eutrophication (terrestrial, aquatic), Ecotoxicity, Land use, Resource depletion (water, mineral, fossil and renewable)

How can we evaluate externalities and compare them?/2 Afgan and Carvalho (2002) compare different technologies – Pulverised Coal fired, Solar-thermal, Geothermal, Biomass, Nuclear, PV, Wind, Ocean, Hydro, Natural Gas – with a multi- criteria method based on 5 indicators: Efficiency, Installation cost, Electricity cost, CO2 emissions, Area A step further, Chatzimouratidis and Pilavachi (2009) evaluate ten types of power plants – Coal/Lignite, Oil, Gas Turbine, Gas Combined cycle, Nuclear, Hydro, Wind, PV, Biomass, Geothermal – using nine end node criteria – Efficiency coefficient, availability, Capacity, Reserve over Production ratio, Capital, Fixed O&M, Variable O&M, Fuel, and External Costs – properly structured under the Analytical Hierarchy Process. How to encompass all aspects and prioritise each different criterion? An exhaustive review of all potential externalities from electricity generation has been launched by the European Commission in 1995, and a series of projects grouped under the acronym “ExternE” (for External Costs of Energy) have issued different reports until 2005.

The ELEXTERN tool (for Electricity Externalities) ELEXTERN is a decision support tool to be further used by energy policymakers and completes previous studies like ExternE (EC 2005) and NEEDS (2009) The tool features default social values of the impacts, which are easily modifiable and scenario-dependent At the local scale, it can also be used to assess the economic, social and environmental viability of a specific plant and compare it with alternative projects, which can improve the social acceptability of the project through transparency of the decision processes. The ELEXTERN tool ( tool for Electricity Externalities) was developed under Susen project ( CZ.1.05/2.1.00/03.0108, realised in the framework of the European Regional Development Fund (ERDF)

Time discounting and costs levelling Time discounting aims at comparing costs occurring at different times. ELEXTERN considers the different stages where economic, social and environmental expenses or impacts can occur in the life cycle of a power plant: Construction of the plant, prior any electricity production, Operation, when the plant is producing electricity, Decommissioning, when the plant is dismantled, Long term consequences or liabilities, long after the activity of the plant has ceased Because these expenses and impacts do not occur at the same time for the different technologies, ELEXTERN uses a discount Rate R to compare financial liabilities at different times. The discount rate represents the preference for present; for a company it represents the expected return on investments, including a risk premium.

Social, economic and environmental impacts Stakeholders of the society pay different externalities induced by the social, economic and environmental impacts of the use of different technologies Social impacts are mainly induced diseases and deaths due to air pollution from fossil fuel power plants and radiation from the use of nuclear material, cost of lost work days, cost of deaths Economic impacts represent the non-sustainability and dependency of an energy resource towards the foreign or future world. The value of imported resources and technologies no longer benefits the local economy. By depleting natural resources, future generations won’t be able to benefit from their use. Environmental impacts are very difficult to describe and price. Use of land, water, rare metals and subsequent production of hazardous wastes are the main kinds of environmental impacts.

The ELEXTERN tool LCA - Elextern.eu (beta version released) ELEXTERN is a tool that computes the real costs of electricity making, including externalities. It clearly distinguishes physical impacts from social parameters that are scenario-dependent, to be chosen by the user

The ELEXTERN tool 2 possible views: chart or tables

The ELEXTERN tool Czech electricity technologies assessment with a 1% Discount rate

Conclusions Main features of ELEXTERN are the computation of LCOE (Levelised Cost Of Electricity) , flexibility yield, social, environmental and economic impacts, as well as long term liabilities of any electricity technology. ELEXTERN can then reproduce results from previous studies, in term of direct costs (LCOE) and externalities ELEXTERN assess the economic, social and environmental viability of a specific plant and compare it with alternative projects ELEXTERN can improve the social acceptability of the project through transparency of the decision processes EERA – Joint Program e3s - Economic, Environmental and Social Impacts of Energy Policies and Technologies

Thank you for your attention Acknowledgement This study has been funded by the SUSEN Project CZ.1.05/2.1.00/03.0108, realised in the framework of the European Regional Development Fund (ERDF).