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Externalities of Different Electric Fuel Sources   arrow

What are Externalities?

Although levelized cost of energy (LCOE) is a simplified indicator of the price consumers will pay for generating electricity from different fuel sources at a given point in time, it does not account for ‘externalities’. An externality is a consequence of an economic activity that is not reflected in the price of that activity. Negative externalities related to electricity generation include air pollution and land use. It is important to look at the entire life cycle of a fuel source or generation plant – from extraction to operation to plant retirement – when considering externalities.

Greenhouse Gases

The National Renewable Energy Laboratory has taken results from thousands of life cycle assessments (LCAs) of various energy technologies to come up with reliable greenhouse gas (GHG) emission estimates for these technologies over their entire useful lives. It is clear from these estimates that ‘clean energy technologies’ are in fact much cleaner than coal when considering GHGs even over the entire lifecycle of the technologies. For wind (10 grams CO2e per kWh) and solar PV (44 grams/kWh), most of the GHG emissions are associated with raw material extraction, materials processing, and manufacturing. For coal plants (979 grams/kWh), the majority of GHG emissions are associated with operations (i.e. burning coal to generate electricity). Other technologies like natural gas, hydropower, geothermal, and bioenergy require further scrutiny before more definitive estimates of lifecycle GHGs can be made.

An LCA of natural gas is of particular interest at this time since prices are low and its market share is growing. Although it is accepted that burning natural gas emits approximately half of the GHGs as burning coal, so-called ‘fugitive emissions’ – leaks – of raw natural gas (mostly methane) during extraction and/or distribution may result in lifecycle GHGs even greater than coal-based electricity. Research is currently underway in this area.

Air Pollution

Beyond GHGs, air pollution from electric generation plants is an externality that can be harmful to human health. Burning coal and natural gas for electricity generation emits sulfur dioxide, nitrogen oxides, and particulates. Sulfur dioxide contributes to acid rain and respiratory illness, nitrogen oxides contribute to smog and respiratory illness, and particulates contribute to smog, haze, respiratory illness, and lung disease. Burning coal also emits mercury and other heavy metals. Although airborne mercury concentrations are low and of little concern, mercury entering water – either directly or through the air – can accumulate in fish and the animals and humans that eat fish.

The average emission rates in the United States from coal-fired generation are: 2,249 lbs/MWh of carbon dioxide, 13 lbs/MWh of sulfur dioxide, and 6 lbs/MWh of nitrogen oxides. Compared to the average air emissions from coal-fired generation, natural gas produces half as much carbon dioxide, less than a third as much nitrogen oxides, and one percent as much sulfur oxides at the power plant (U.S. EPA). Overall, emissions of SO2 and NOx from the electric power sector have decreased dramatically from almost 16 MST (million short tons) of SO2 and over 6 MST of NOx in 1990 to under 4 MST of SO2 and under 2 MST of NOx by 2012. This has been the result of 1990 amendments to the Clean Air Act which established a cap-and-trade program for SO2 and controls on NOx, federal rules, state regulations, and a recent shift toward natural gas from coal.

Land Impacts

Every utility-scale electric generating technology alters the land. Of course all technologies require materials for their construction – whether plants are made of concrete, steel, or other. In addition, wind farms require land for the turbines, for access when developing the site, and for mining of essential turbine components. Coal and nuclear require land for mining, land and often a water source for power plants, and often land for disposal of waste. Large-scale hydropower alters the land around the waterway when dams are constructed. Solar arrays take up land, and mining is required to extract minerals needed for the solar panels. Natural gas electricity generation requires land for drilling wells, for pipelines, and for the power plants. Land use for different energy technologies are estimated as follows, listed in square meters per gigawatt-hour of generation (Kammen, 2011 and Jordaan et. al., 2017):

  • Hydropower: 2,400
  • Onshore Wind: 2,000
  • Natural Gas: 620
  • Ground-Mounted Solar PV: 400
  • Western Surface-Mined Coal: 200
  • Nuclear: 100
  • Rooftop solar PV: negligible

Although onshore wind is estimated as taking up a large amount of land per unit of energy generated, the land around the turbines is still useable by agricultural producers, residents, and many species of wildlife.

Water Impacts

Although the cost for power providers to acquire and use water for plant operations is built into the LCOE, the fact remains that water use for electricity generation in the arid West is significant. Kammen also estimates water consumption of different energy technologies in liters per megawatt-hour as follows:

  • Hydropower: 5,300 (based on California data)
  • Recirculating Coal: 3,000
  • Recirculating Nuclear: 3,000
  • Once-Through Coal: 1,100
  • Once Through Nuclear: 1,100
  • Combined Cycle Natural Gas: 380 – 680

Wind, solar PV, and dry-cooled combined cycle natural gas plants consume 15 or fewer L/MWh. For perspective, this means that a 500 MW coal plant that recirculates water would consume about 13.2 million liters (3.5 million gallons) of water per day whereas the same size dry-cooled combined cycle gas plant would consume 180,000 liters (47,550 gallons).

Note that recirculating cooling systems consume more water than once-through systems since the water loop in recirculating systems is exposed to the air (in a cooling tower) before completing its cycle and some evaporation takes place when exposed. Although once-through systems initially withdraw more water than recirculating systems, they end up consuming less. Most thermal plants in the West utilize recirculating cooling systems. Also note that dry-cooled systems that use air as the cooling medium do not operate as efficiently as wet-cooled systems, so although they use less water they require more fuel per level of electricity output.

Last updated: October 5, 2017 at 16:45 pm