Environmental Engineering Reference
In-Depth Information
Chapter 6
Economics
I
NTRODUCTION
The question of economic efficiency is a major concern when planning
renewable power projects. Alleged poor economic efficiency is one of the main
arguments against renewable energy sources. The solution with the best
economic benefits is usually the one realized, whereas technical or ecological
aspects are of secondary importance. From the national economy's point of
view, accommodating these latter considerations often causes negative
consequences. Finally, effects on the environment are not considered
sufficiently in current practice. Therefore, the second part of this chapter gives
a critical analysis of common methods of valuation.
All the systems described in this topic are technical systems for energy
conversion. The aim of economic calculations is to find the one system out of
the various possible solutions that provides the desired type of energy at the
lowest cost. Therefore, different types or variants of renewable energy systems
are compared one against the other. Furthermore, renewable energy systems
are usually compared with conventional systems, although many such
comparisons do not consider the full benefits and costs for the national or
world economy.
The result of economic calculations is the
cost for one unit of energy
. For
heat-providing systems the costs are related to a kilowatt-hour of heat
(
/kWh
therm
). For electricity-generating systems the costs are related to a
kilowatt-hour of electricity (
€
/kWh
el
). For estimating specific final cost, all the
costs such as installation of the power plant, operating and maintenance costs
as well as disposal costs are divided by the total number of kilowatt-hours
generated during the plant's lifetime. For the estimation of costs, many
assumptions about future developments have to be made. In many cases,
reality is different from the predictions and this fact may change real costs
significantly. Often it is the taxpayer, i.e. the general public, who must pay for
these miscalculations. In these cases, certain costs are sometimes excluded from
the economic calculations so that the power plant appears profitable again.
Examples include the underestimation of costs for the shutdown and disposal
of nuclear power stations, ongoing inspection of final disposal sites or
restoration of exploited opencast coal mining sites.
When comparing costs, prices from different dates are often given (e.g.
over the lifetime of a plant). In this case
inflation
must be considered.
Therefore, it is necessary to always indicate the reference year for the cost and
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