Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Externalities in the Energy SystemStefan Hirschberg
2009 IAEA Scientific Forum, Vienna, 15-16 September 2009
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Contents• Introduction - What are externalities ?
• Environmental impact and external costs assessment methodology
• Result examples
• Total costs and cost-benefit analysis
• Major limitations
• Multi-Criteria Decision Analysis (MCDA)
• Conclusions
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Externalities are changes of welfare generated by a given activity without being reflected in market prices. They may be positive (benefits) or negative (costs).
A cost (benefit) is external when it is not paid (enjoyed) by those who have generated it.
Negative externalities are borne by society: they should be reduced, and passed on to those who generate them (application of the “polluter pays principle” through internalisation).
What are externalities?
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Air pollution increases hospital admissions for respiratory illness• Costs of health care• Lost productivity• Own pain and suffering• Pain and suffering of others
Water pollution leads to loss of fish• Reduced recreational opportunity• Commercial losses• Impact on biodiversity
Congestion leads to loss of time, productivity
Examples of external costs
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Externalities included in current state-of-the-art EC (NEEDS)Impact Cat. Pollutant / Burden Effects Human Health mortality
PM10 SO2, O3 Benzene, BaP, 1,3-butad., Diesel part., radioact.,HM Noise Accident risk
Reduction in life expectancy due to short and long time exposure Reduction in life expectancy due to short time exposure Reduction in life expectancy due to long time exposure Reduction in life expectancy due to long time exposure Fatality risk from traffic and workplace accidents
Human Health
PM10, O3, SO2 Respiratory hospital admissions
morbidity PM10, O3 Restricted activity days PM10, CO Congestive heart failure Benzene, BaP, 1,3-
butad., Diesel part.,radioact.
Cancer risk (non-fatal)
PM10 Cerebrovascular hospital admissions, cases of chronic bronchitis, cases of chronic cough in children, cough in asthmatics, lower respiratory symptoms
O3 Asthma attacks, symptom days Noise Myocardial infarction, angina pectoris, hypertension,
sleep disturbance Mercury Loss of IQ of children Accident risk Risk of injuries from traffic and workplace accidents Source: NEEDS/RS1b, 2009Other heavy metals Diverse health impacts
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Externalities included in current state-of-the-art EC (cont.)Impact Category
Pollutant / Burden Effects
Building Material
SO2, Acid deposition Combustion particles
Ageing of galvanised steel, limestone, mortar, sand-stone, paint, rendering, and zinc for utilitarian buildings Soiling of buildings
Crops SO2 Yield change for wheat, barley, rye, oats, potato, sugar beet
O3 Yield change for wheat, barley, rye, oats, potato, rice, tobacco, sunflower seed
Acid deposition Increased need for liming N, S Fertilising effects Global Warming
CO2, CH4, N2O World-wide effects on mortality, morbidity, coastal impacts, agriculture, energy demand, and economic impacts due to temperature change and sea level rise
Amenity losses Noise Amenity losses due to noise exposure Ecosystems SO2, NOx, NH3 Eutrophication, Acidification Land Use Change
‘PDF’ of species
Source: NEEDS/RS1b, 2009
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
EIA – The Impact Pathway Approach
Impacts
Health impacts,
crop losses, ...[e.g. YOLL/kWh]
DispersionModeling
Increase of pollutant
concentrations[e.g. Δ μg/m3]
Valuation
Monetaryvaluation:
External Costs[e.g. €/kWh]
Emissionsdirect + LCA
SO2, NOx, particulates, ammonia, ...
[e.g. tons/year]
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
EcoSense Versions
Europe
Russia
ChinaBrazil
PSI+IER
EcoSense multi-source developed at IER Stuttgart (Heck et al.)
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Mortality in China due to Air PollutionEmissions from all SectorsEmissions from all Sectors Emissions from Power SectorEmissions from Power Sector
Source: Hirschberg et al., 2003
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Mortality from Normal Operation
Sour
ce: H
irsch
berg
et al
., 200
8
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Severe Accident Fatality Rates
Sour
ce: H
irsch
berg
et al
., 200
8
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Valuation – ExamplesHealth impact EU current*
(EUR 2000)
EU 1999**
(US $2000)
China***
(US $ 2000)
Value of Statistical Life 3’000’000 3‘000‘000 440‘000
Acute Years of Life Lost / reduction of life expectancy (per YOLL)
60’000 110‘000 15‘710
Chronic Years of Life Lost / reduction of life expectancy (per YOLL)
40’000 110‘000 15‘710
Restricted activity days (per case) 130 116 17
Chronic bronchitis (per case) 200’000 178‘000 25‘400
*NEEDS 2009 ** ExternE 1999 *** Hirschberg et al. 2003
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
External Costs: Today, Western Europe (NEEDS Results)
0
2
4
6
8
10
12
14
lignit
e
hard
coal
nat. g
as C
C
fuel c
ell, N
G
offsh
ore w
ind
photo
volta
ic
solar
therm
al
bioma
ss m
ix, C
HP
nucle
ar
ocea
n ene
rgy
hydro
gen,
electr
ol.
Exte
rnal
cos
ts 2
005
(Eur
o-ce
nt20
00/k
Whe
)
climate change, high - lowclimate change, lowother non-climate impactsregional health impacts
Source: NEEDS/RS1a, 2009
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
External Costs: Year 2050, Western Europe (NEEDS Results)
0
1
2
3
4
5
6
lignit
e
lignit
e, po
st CC
S
lignit
e, ox
y CCS
hard
coal
hard
coal,
post
CCS
hard
coal,
oxy C
CS
nat. g
as C
C
nat. g
as C
C, C
CS
fuel c
ell, N
G
fuel c
ell, w
ood g
as
offsh
ore w
ind
photo
volta
ic
solar
therm
al
bioma
ss m
ix, C
HP
nucle
ar
ocea
n ene
rgy
hydro
gen,
electr
ol.
Ext
erna
l cos
ts 2
050
(Eur
o-ce
nt20
00/k
Whe
)
climate change, high - lowclimate change, lowother non-climate impactsregional health impacts
Source: NEEDS/RS1a, 2009
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Full Costs of Electricity Generation Options (primarily CH)
Sour
ce: H
irsch
berg
et al
., 200
7
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Total Costs of Electricity – China
7.7
18.4
3.3
15.2
10.3
7.7 6.9 6.45.4
4.3
14.5
0.00
5.00
10.00
15.00
20.00
25.00
Shan
dong
avera
ge
Weiha
i Coa
l Ref
Heze
Coa
l Ref
Nucle
ar AL
WR
Jinan
Coa
l Ref.
Jinan
New
Coa
l, low
S
Jinan
Coa
l Dry
FGD
Jinan
Coa
l Wet
FGD
Jinan
Coa
l AFB
C
Jinan
Coa
l IGCC
Jinan
Gas
CC
US
Cen
ts p
er k
Wh
RadiationCO2-equivalentParticulatesNOxSO2Internal Costs
Source: Hirschberg et al., 2003
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
0 2 4 6 8 10 12 14 16Billion US $ in Year 2020
Cost
Benefit
Cost
Benefit
Coa
l, FG
DC
lean
Coa
l-Te
chno
logy
+D
iver
sific
atio
n
Additional internal costs Crops Morbidity Mortality
Cost-Benefit Analysis for Selected Electric Sector Simulation Scenarios, Province Shandong in Year 2020
Cost Benefit (avoided external damages)
compared to coal without FGD compared to coal without FGD
Source: Hirschberg et.al., 2003
15.4
0.9
10.2
0.5
incl. LCA
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Total Cumulative Damage (1990 – 2100) for Selected IPCC Scenarios
Source: Hirschberg & Burgherr 2002
1272
666
310
0
200
400
600
800
1000
1200
1400
A1F1 A1T B1
trillio
n US
D (2
000)
CO2 Air Pollution
Fossil-intensive Sustainable Conservation
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Examples of controversial/difficult to estimate external effects
• Severe accidents, terrorism, risk aversion• Visual intrusion• Resource depletion• Nuclear proliferation• Biodiversity losses• Security of supply• Social justice and conflict potential
Serious attempts to estimate the corresponding costs mostly lead to low estimates but this does nor resolve the controversy!
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
F-N Curves for Nuclear: Late Cancer Fatalities (LCF)
1.E-12
1.E-11
1.E-10
1.E-9
1.E-8
1.E-7
1.E-6
1.E-5
1.E-4
1 10 100 1000 10000 100000
Number of Late Cancer Fatalities (LCF)
Freq
uenc
y of e
xcee
danc
e per
GW
eyr
CH 2000
FR 2030 CH 2030
FR 2000
Sour
ce: H
irsch
berg
et al
., 200
8
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
NEEDS Survey I: Externality Concept, Results and UsesIn spite of the limitations, there is general acceptance of the concept of
externalities, of the internalisation of external costs and of most results, but…
0% 10% 20% 30% 40% 50% 60%
Coal and oil technologies have thelowest external costs
Natural gas technologies have quitelow external costs due to low air
pollution and moderate external costsdue to greenhouse gases.
Renewable technologies have mostlylow external costs
Nuclear energy has low external costs
I don’t know Fully agree Mostly agree Mostly disagree Fully disagree
Source: Faberi et al., 2007
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Sustainability Criteria
Sour
ce: H
irsch
berg
et al
., 200
7&20
08
Criterion RESOURCES Energy Resources Mineral Resources (Ores) CLIMATE CHANGE IMPACT ON ECOSYSTEMS Impacts from Normal Operation Impacts from Severe Accidents WASTES Special Chemical Wastes stored in Underground Depositories
ENVI
RO
NM
ENTA
L D
IME
NSI
ON
Medium and High Level Radioactive Wastes to be stored in Geological Repositories
IMPACTS ON CUSTOMERS Price of Electricity IMPACTS ON OVERALL ECONOMY Employment Autonomy of Electricity Generation IMPACTS ON UTILITY Financial Risks
ECO
NOM
IC D
IMEN
SIO
N
Operation SECURITY/RELIABILITY OF ENERGY PROVISION Political Threats to Continuity of Energy Service Flexibility and Adaptation POLITICAL STABILITY AND LEGITIMACY Potential of Conflicts induced by Energy Systems. Necessity of Participative Decision-making Processes SOCIAL AND INDIVIDUAL RISKS Expert-based Risk Estimates for Normal Operation Expert-based Risk Estimates for Accidents Perceived Risks Terrorist Threat QUALITY OF RESIDENTIAL ENVIRONMENT Effects on the Quality of Landscape
SOC
IAL
DIM
ENS
ION
Noise Exposure
Society
Environment
Economy
North
Today‘sgeneration
South/East
Tomorrow‘sgeneration
Society
Environment
Economy
North
Today‘sgeneration
South/East
Tomorrow‘sgeneration
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Tota
l cos
ts =
gene
ratio
n cos
ts +
exte
rnali
ties Nuclear Fossil Renewable
Worst
Best
Aver
age M
CDA
Rank
ing
€cen
ts /
kWh
0
2
4
6
8
10
12
14
16
18
EU P
ress
urise
d Rea
ctor
EU F
ast R
eact
or
Pulve
rised
Coa
l (PC
)
PC &
Pos
t com
b.CC
S
PC &
Oxy
fuel
CCS
Inte
grat
ed G
asifi
catio
n
Int.
Gasif
icatio
n &
CCS
Com
bine
d Cyc
le (C
C)
CC &
Pos
t com
b. C
CS
Inte
rnal
Com
b.
Stefan Hirschberg, 15. 09. 2009
Laboratory for Energy Systems Analysis The Energy Departments
2009 IAEA Scientific Forum
Conclusions• Health effects due to air pollution and global warming impacts dominate current estimates
of external costs.• External environmental costs may be substantial but large variety between technologies
and sites. Good technologies including advanced fossil have rather low pollution costs. • Uncertainties are large but ranking of technologies is relatively robust. • External costs of nuclear and renewables are low; external costs of natural gas are
moderate; external costs of coal and oil are highest.• Internalisation of external costs is economically and socially justified. It leads to more
efficient overall economy.• Total cost as a measure of economic and environmental efficiency of energy systems
favors nuclear but estimates for nuclear are controversial and are only partially accepted.• Social aspects of energy systems are represented to limited extent by current estimates of
external (and total) costs.• Broader inclusion of social factors in the multi-criteria decision analysis framework favours
renewables and is a challenge for future nuclear.