Estimated average EU external costs for electricity generation technologies in 2005

PBFC = pressurised fluidised bed combustion, CHP = combined heat and power, CCGT = combined cycle gas turbine, LWR = light water reactor, PWR = pressurised water reactor.

To calculate the external costs (Eurocents/Kwh) for the EU for each fuel/technology the following data were needed: 1) pollutant-specific emissions, for the EU, from each fuel/technology used for electricity production (from ExternE-Pol). Average emissions per unit of electricity generation include emissions from the operation of the power plant and the rest of the energy chain; 2) pollutant-specific (SO₂, NOX, NMVOCs and PM_2.5), EU-average (based on country-specific values), damage cost factors (high and low from CAFE); 3) pollutant specific, common to all countries, non-environmental social costs for non-fossil fuels (from ExternE-Pol and RECaBS for nuclear accidents); 4) ExternE-Pol damage cost factors for CO₂, common to all countries (low, from ExternE-Pol and high, from Watkiss et al. (2005). Damage cost factors are not fuel specific but pollutant specific (e.g. the same SO₂ factor applies to all fuels, lignite, hard coal etc). The external-costs estimate for a particular pollutant is different depending on the fuel because of different average emissions per kWh.

The external costs from nuclear have to be treated with caution, as only parts of the externalities are included. The costs reflect to a large extent the small amount of emissions of CO₂ and air pollutants, radioactive emissions (primarily from downstream radioactive emissions from mine tailings along with a minor portion from operation of the plant itself). A key issue is related to the treatment of potential damage from nuclear accidents:

• In 2005, ExternE "Externalities of Energy", Methodology 2005 Update http://www.externe.info/brussels/methup05a.pdf concluded that radiological impacts from emissions during power plant operation and final disposal were found to be only of minor importance for the overall results from the nuclear fuel cycle. In fact, the methodology to evaluate impacts due to accidents was risk-based (risk, being defined as the probability of accident multiplied by the consequences resulting from that accident). The report states that "it is sometimes argued that, for so-called Damocles risks, i.e. risks with a very high damage and a low probability, the risk assessment of the public is not proportional to the risk. The occurrence of a very high damage should be avoided, even if the costs for the avoidance are much higher than the expectation value of the damage. However past attempts to quantify this effect have not been successful or accepted, so there is currently no accepted method on how to include risk aversion in such an analysis. Consequently it is currently not taken into account within the ExternE methodology. Research on how to assess this, for example with participatory approaches, is clearly needed".
  • No external costs for nuclear accidents are included in the estimates from ExternE-Pol (2005) due to the complexities in estimating this, however, By only considering its low air pollutant and CO₂ emissions, and the level of non-accident related radioactivity, the external costs are considerably lower than fossil fuel generation, and broadly on a par with renewables.
• By contrast the RECaBs (2007) estimate used in this indicator (in addition to the other non-environmental social costs for nuclear from ExternE-Pol) is based on earlier analysis which, broadly speaking, takes historic data on nuclear accidents more directly into the assessment of the probability of a future accident occurring (e.g. Chernobyl and Three Mile Island) and its cost (primarily from data on Chernobyl). Whilst this gives a much higher probability, and by extension a higher external damage cost, the estimate is still highly uncertain for a number of reasons (as outlined in the RECaBS supporting documentation). For example:
  • It may overestimate the probability of an accident occurring in a new state-of the art nuclear plant in Western Europe due to the fact that: serious deficiencies have been identified in the former USSR PWR design1; there was a lack of a regulatory body in the former USSR and safety culture was problematic.
  • Alternatively it may underestimate the external cost due to: higher population densities (and hence impacts) in many Western European Countries; higher GDP - and hence greater economic consequences; increased threats of terrorism.

RECaBS states that the estimate of 0.25 Eurocents/kWh also takes into account that future plants are assumed to be considerably safer than existing plants and that public anxiety about nuclear power is assigned an economic value.