Environmental Engineering Reference
In-Depth Information
€
0.133/kWh
el
. The power plant operators should pay these
costs when selling electricity to compensate for the external costs. However,
this would almost double the current electricity price. The external costs of
renewables are much lower. Neglecting external costs puts renewable energy
systems at a significant disadvantage. Therefore, renewable energy resources
are not used in a way that would be optimal for the long term national
economy and society in general.
A recent study by the European Commission estimated the external costs
for electricity generation in Europe (European Commission, 2003). The
external costs for fossil power plants are in the same range as those of the
Hohmeyer study. However, the external costs for nuclear power are estimated
to be much lower by the EC due to very different assumptions about accident
risks and exploitation of resources. This indicates not only the controversy
that can arise when estimating external costs but also the much lower costs of
renewables and the adverse competition conditions created if external costs
are neglected.
0.026/kWh
el
and
€
C
RITICAL
V
IEW OF
E
CONOMIC
C
ALCULATIONS
Several methods exist for the estimation of costs. Usually, economic models
are applied that include interest but no external costs. The previous sections
have already described the limits of such classical economic calculations. Even
if external costs are not considered to be important, there are some other
aspects for a critical view on classical methods for economic calculations.
Infinite increase of capital
A
numerical example
of Goetzberger is discussed here (Goetzberger, 1994). In
this example, one Eurocent is invested at an interest rate of 4 per cent at the
birth of Christ in the year 1 AD. The compound interest formula estimates
what this investment would be worth in the year 2000. With
0.01 · (1+0.04)
2000
=
1.166·10
32
c
2000
=
€
€
the result would be an incredible
10,500/kg
this amount corresponds to 1.1·10
28
kg of gold. The density of gold is 19.29
kg/dm
3
so that the gold would have a volume of 5.8·10
14
km
3
. For
comparison, the volume of the earth is only 1.1·10
12
km
3
. In other words, the
volume of gold would be 500 times greater than the volume of the earth.
This example shows clearly that the compound interest formula does not
work for long periods of time. A
continuous growth of capital
is not possible
over long periods of time because the compound interest formula
becomes
infinite
. Nobody on Earth would be able to carry the interest burdens. Hence,
all classical economical calculations that use the compound interest formula
do not work over long periods of time. If these economical models are to be
used, the question of over what period do they produce practical results must
1.166·10
32
. With a gold price of
€
€
