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Impact of a possible environmental externalities internalisation on energy prices: The case of the greenhouse gases from the Greek electricity sector

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  • Georgakellos, Dimitrios A.

Abstract

The present paper is concerned with the impact of the internalisation of environmental externalities on energy prices. In this context, its aim is to quantify the external cost of greenhouse gases (specifically carbon dioxide) generated during electricity production in the thermal power plants in Greece and to estimate the impact on the electricity production cost and on the electricity prices of a possible internalisation of this external cost by the producers. For this purpose, this paper applies the EcoSenseLE online tool to quantify the examined externalities. This research finds that the calculated external cost is significantly high (compared to the corresponding production cost) mainly in lignite-fired power plants. Specifically, a possible internalisation of this external cost would increase the production cost by more than 52% (on average), which, in turn, would affect similarly the electricity prices. This finding could be important for decision makers in the electricity sector to develop strategies for emission reduction and to develop environmental and energy policies. The general limitation of the external cost methodology applies to this work as it uses the standard method developed for the Externe project. Similarly, the data limitations as well as assumptions related to the costs and exclusions/ omissions of cost elements affect the results.

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  • Georgakellos, Dimitrios A., 2010. "Impact of a possible environmental externalities internalisation on energy prices: The case of the greenhouse gases from the Greek electricity sector," Energy Economics, Elsevier, vol. 32(1), pages 202-209, January.
    • Handle: RePEc:eee:eneeco:v:32:y:2010:i:1:p:202-209
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    10. Paes, Carlos Eduardo & Gandelman, Dan Abensur & Firmo, Heloisa Teixeira & Bahiense, Laura, 2022. "The power generation expansion planning in Brazil: Considering the impact of greenhouse gas emissions in an Investment Decision Model," Renewable Energy, Elsevier, vol. 184(C), pages 225-238.
    11. Blanca Moreno & María T García-à lvarez, 2017. "Analyzing the impact of fossil fuel import reliance on electricity prices: The case of the Iberian Electricity Market," Energy & Environment, , vol. 28(7), pages 687-705, November.
    12. Lin, Boqiang & Liu, Jianghua, 2011. "Principles, effects and problems of differential power pricing policy for energy intensive industries in China," Energy, Elsevier, vol. 36(1), pages 111-118.
    13. Despoina Dede & Eleni Didaskalou & Sotirios Bersimis & Dimitrios Georgakellos, 2020. "A Statistical Framework for Assessing Environmental Performance of Quality Wine Production," Sustainability, MDPI, vol. 12(24), pages 1-16, December.
    14. Rentizelas, Athanasios & Georgakellos, Dimitrios, 2014. "Incorporating life cycle external cost in optimization of the electricity generation mix," Energy Policy, Elsevier, vol. 65(C), pages 134-149.
    15. Selim Karkour & Yuki Ichisugi & Amila Abeynayaka & Norihiro Itsubo, 2020. "External-Cost Estimation of Electricity Generation in G20 Countries: Case Study Using a Global Life-Cycle Impact-Assessment Method," Sustainability, MDPI, vol. 12(5), pages 1-35, March.
    16. Jintao Lu & Chong Zhang & Licheng Ren & Mengshang Liang & Wadim Strielkowski & Justas Streimikis, 2020. "Evolution of External Health Costs of Electricity Generation in the Baltic States," IJERPH, MDPI, vol. 17(15), pages 1-22, July.
    17. Mojtaba Jorli & Steven Van Passel & Hossein Sadeghi Saghdel, 2018. "External costs from fossil electricity generation: A review of the applied impact pathway approach," Energy & Environment, , vol. 29(5), pages 635-648, August.
    18. Zhao, Xiaoli & Cai, Qiong & Ma, Chunbo & Hu, Yanan & Luo, Kaiyan & Li, William, 2017. "Economic evaluation of environmental externalities in China’s coal-fired power generation," Energy Policy, Elsevier, vol. 102(C), pages 307-317.
    19. Mojtaba Jorli & Steven Van Passel & Hossein Sadeghi & Alireza Nasseri & Lotfali Agheli, 2017. "Estimating Human Health Impacts and Costs Due to Iranian Fossil Fuel Power Plant Emissions through the Impact Pathway Approach," Energies, MDPI, vol. 10(12), pages 1-29, December.
    20. Bas Smeets & Guan Schellekens & Thomas Bauwens & Harry Wilting, 2021. "What’s the damage? Monetizing the environmental externalities of the Dutch economy and its supply chain," Working Papers 719, DNB.
    21. Aravena, Claudia & Hutchinson, W. George & Longo, Alberto, 2012. "Environmental pricing of externalities from different sources of electricity generation in Chile," Energy Economics, Elsevier, vol. 34(4), pages 1214-1225.
    22. Voumvoulakis, Emmanouil & Asimakopoulou, Georgia & Danchev, Svetoslav & Maniatis, George & Tsakanikas, Aggelos, 2012. "Large scale integration of intermittent renewable energy sources in the Greek power sector," Energy Policy, Elsevier, vol. 50(C), pages 161-173.

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