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Wind, coal, and the cost of environmental externalities

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  • Galetovic, Alexander
  • Muñoz, Cristián M.

Abstract

We compare the cost of generating electricity with coal and wind in Chile. On average, we estimate that the levelized cost of coal, including externalities, is $84/MWh. It is efficient to abate air pollutants (SOx, NOx and PM2.5) but not CO2. With abatement the cost wrought by environmental externalities equals $23/MWh or 27% of total cost. Depending on the price of coal, the levelized cost may vary between $72 and $99/MWh.

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  • Galetovic, Alexander & Muñoz, Cristián M., 2013. "Wind, coal, and the cost of environmental externalities," Energy Policy, Elsevier, vol. 62(C), pages 1385-1391.
    • Handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:1385-1391
    DOI: 10.1016/j.enpol.2013.07.140
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    References listed on IDEAS

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    Cited by:

    1. Astariz, S. & Iglesias, G., 2015. "The economics of wave energy: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 397-408.
    2. Zhihua Ding & Caicai Feng & Zhenhua Liu & Guangqiang Wang & Lingyun He & Manzhi Liu, 2017. "Coal price fluctuation mechanism in China based on system dynamics model," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 85(2), pages 1151-1167, January.
    3. Mardones, Cristian & Mena, Camilo, 2020. "Effects of the internalization of the social cost of global and local air pollutants in Chile," Energy Policy, Elsevier, vol. 147(C).
    4. Mardones, Cristian, 2023. "Economic and environmental effects of financing subsidies for non-conventional renewable energies with a carbon tax – A comparison of intersectoral models," Renewable Energy, Elsevier, vol. 217(C).
    5. Syrodoy, S.V. & Kuznetsov, G.V. & Gutareva, N. Yu & Nigay (Ivanova), N.A., 2022. "Mathematical modeling of the thermochemical processes of sequestration of SOx when burning the particles of the coal and wood mixture," Renewable Energy, Elsevier, vol. 185(C), pages 1392-1409.
    6. Jacqueline Adelowo & Mathias Mier & Christoph Weissbart, 2021. "Taxation of Carbon Emissions and Air Pollution in Intertemporal Optimization Frameworks with Social and Private Discount Rates," ifo Working Paper Series 360, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    7. Mardones, Cristian & Cabello, Martin, 2019. "Effectiveness of local air pollution and GHG taxes: The case of Chilean industrial sources," Energy Economics, Elsevier, vol. 83(C), pages 491-500.

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