While currently not included in standard electricity cost accounting schemes, decision makers should be aware of cost factors imposed on the public by the production and use of electricity. These costs are real and a fair share have directly and indirectly been compensated by the public purse (or resulted in reduced government revenue). Since investors normally do not consider externalities in investment decision making, it falls upon gov­ernment policy to ‘internalize the external costs’ of the health and environ­mental damages resulting from power generation. In fact, in the past, internalization has been imposed on electricity generation[99] but insuffi-

Wave and tidal CSP PV South PV Central Wind offshore Biofuel steam turbine Nuclear

Natural gas (with carbon capture and storage)

Natural gas

Lignite

Lignite LGCC Lignite LGCC (with carbon capture and storage)

Hard coal Hard coal IGCC

Hard coal IGCC (with carbon capture and storage)

0 10 20 30 40 50 60

Euro per MWh

15.12 External costs of different generating options. Adapted from Preiss and Friedrich (2009).

ciently by far for a full internalization.14 The most recent studies addressing life-cycle externalities from electricity generation show nuclear power as one of the technologies with the lowest externalities (Preiss and Friedrich, 2009; NRC, 2009). One of the externalities of nuclear power is the cost of a severe nuclear accident (e. g., Chernobyl or Fukushima). These are calcu­lated on a probabilistic basis (low probability — high consequence) and given the large amount of kWhs produced by nuclear power plants are still small despite the enormous damage costs of an accident. Figure 15.12 sum­marizes the findings of the NEEDS study (Preiss and Friedrich, 2009). Clearly, factoring these externalities into the price of electricity would fun­damentally change the merit order of generating options in favour of nuclear power and renewables.

Protection Administration (SEPA) in China, Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the Promotion of Electricity Produced from Renewable Energy Sources that mandates the integration of more expensive, non-dispatchable electricity from renewables, the European Emissions Trading Directive (2003/87/EC), the Price-Anderson Indemnity Act which governs liability-related issues for all non-military nuclear facilities in the United States, the EU Directive on Nuclear Safety (2009/71/EURATOM) and the Kyoto Protocol limiting greenhouse gas emissions in industrialized countries.

14 There is a host of issues yet to be resolved ranging from attribution of damages to their monetary valuation.

540 Infrastructure and methodologies for justification of NPPs