HKNIC - External costs
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External costs

The calculation of unit cost for electricity generation as charged to the consumer does not include costs incurred in relation to public health and the environment. In particular, the environmental and health costs of the emissions from the use of fossil fuels is not included as a cost in the electricity sold to the consumers.

Such costs are known as external costs and they can be significant. Adding the cost of removing carbon dioxide emissions, for example, will give a higher unit electricity cost for power generated using a carbon intensive fuel. The 2004 study by the Royal Academy of Engineering put the cost of carbon dioxide emissions at GBP30 per tonne, being the cost needed to sequestrate the carbon dioxide produced at a power station. The study also made some allowance for standby facilities, to cater for the intermittent nature of wind power.

Present Cost of Generating Electricity with Newly Built Plants in the UK -
Including Other Costs (RAE, 2004)
External costs
 
Other studies lead to the same observation. With the cost of nuclear electricity largely internalised, a more comprehensive allowance for external costs makes comparisons more meaningful and nuclear electricity can be seen to be more competitive
 
Present Cost of Generating Electricity with Newly Built Plants in the UK - Including Other Costs (RAE, 2004)