WIND ENERGY ENVIRONMENTAL BENEFITS AND IMPACTS UNDER EXTERNAL COST ANALYSIS

This paper summarizes an economic analysis of the environmental benefits and impacts of wind energy based on external cost. The aim of such analysis is to show how by assigning an economic cost to both the impacts and the benefits of electricity supply systems a fair comparison showing the true cost (social cost) is achieved. Benefits of wind energy are precisely the avoidance of electricity from conventional energy systems (fossil fuel technologies) and their emission of pollutants into the environment. The results show that a kWh of fossil fuel energy systems replaceable by wind energy may lead to external costs from 3,6 to 34 c€/kWh in 2000. These values exceed notably those found in a European project (ExternE) for impacts of wind energy with values between 0,05 and 0,26 c€/kWh. Thus, 15 Mt CO2 have already been avoided by wind energy in Europe in 2000 and a total nearly to €1.8 billion avoided. In 2020 avoidable specific external cost will decrease to values between 3,2 and 17,3 c€/kWh representing a potential for saving more than €25 billion per year. This thanks to more than 450 TWh/a of wind energy production forecasted by EWEA in 2020 (22 TWh/a in 2000). It can be shown that the promotion of renewable technologies leads to lower overall cost to society! The core of the analysis and main contribution of this paper is found in chapter 5. There a methodology to determine the benefits of wind energy under consideration of external costs and to quantify the environmental and health costs of the different electricity generation technologies is given. Benefits of wind energy correspond to the substituted conventional electricity generation and these external costs need to be calculated. The net avoided external costs of wind power are the external monetary benefits of wind energy. Only if we combine these with the comparison of the internal costs of wind energy and conventional electricity generation substituted we get a fair picture of the competitive situation of wind energy. Such analysis was done for 28 countries in Europe and the methodology was applied to the situation today (year 2000 in the analysis) and to the year 2020 based on forecasts of the energy picture.