A Graphic Showing External Costs Of Various Generation Technologies

This is a great graphic that shows how distorted the electricity market is.  There are many who rule out renewable energy saying it has to make its way in the free market. But our current electricity market is not a free market, it is a rigged market.  Many of the costs of electricity are not reflected in its price.  For example, the added health expense of treating asthma from coal plant emissions is reflected in our insurance bills not our electricity bills.  Therefore that cost is external to the price we see on our electric bill.  As a result we get no price signal in our electric bill.  Wind and solar do not contribute to Asthma and yet that economy is not reflected in the price we pay for wind and solar.  In a perfect market the price signal from adverse health effects of coal power would be included in the price of electricity generated by coal.

The graphic below shows what studies have revealed in terms of the magnitude of costs that are not reflected in what we pay for various electric power sources.  It is important to point out that this graphic was done prior to the massive expansion in in horizontal, hydraulic fracturing (Fracking) in gas and oil exploration and prior to Fukushima, both of which I would expect would increase the externalized costs of the related electricity generation.

Generation Externalities

Generation Externalities

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7 Responses to A Graphic Showing External Costs Of Various Generation Technologies

  1. tiffany267 says:

    I love your post. I do wish the chart didn’t look so biased – it would support your case better. For instance, it could have compared the upfront costs of each one, as well as the ongoing costs, and then the externalities next to them, so that a consumer could get a genuine idea which one will save them the most over their lifespan. Also, it would have been nice if we knew exactly what externalities were considered. I’m not pointing out these flaws out of rejection of your principles; rather I am a stickler for truth and honesty, particularly in research. Charts in particular are so often deliberately misleading. A more academic approach would have been preferable.

    This having been said, I am absolutely in agreement with you, and I’m thrilled that someone is trying to break down the real costs of fossil fuel electricity in contrast to renewable sources. It saddens me that subsidies for green energy have left a sour taste in many libertarians’ mouths. I don’t support subsidies, but I do support the notion of green energy. And of course, as you mentioned, it’s not as though coal and oil aren’t enjoying special privileges in the market, either. If you live in a city, then you have to buy into whichever electricity source your local bureaucracy determines, which is ALWAYS fossil fuels. That’s why power companies have developed monopolies, which DO NOT HAPPEN in a free market.

    To me it’s rather obvious that more sustainable infrastructures are demanded if we are to enjoy a healthy environment for the rest of our expected lifespan. So, I think that information like this, if presented in an academic, non-biased type of way, would do wonders for spreading the message to those who support the free market.

    I encourage you to start following my blog. I post a lot of content related to this connection between capitalism and sustainability, between the free market and greener ways of doing things. Perhaps every now and then I may post something worth sharing with your own readers. At the least, I have a lot of other interesting content as well, which I hope you might enjoy.

    Thanks again for your post, and I look forward to reading more.

    In love of liberty.


  2. tiffany267 says:

    Reblogged this on Tiffany's Non-Blog and commented:
    Here’s an outstanding post from an entrepreneur, related to the TRUE costs of power from fossil fuel 🙂


  3. Clayton says:

    Thanks Tiffany. I will keep on the lookout for something better. This one was published by the UMASS Renewable Energy Research Laboratory so it has some academic cred. It is a powerpoint slide that is part of a larger deck. When the entire presentation is given it provides additional context. However I like your idea of putting the cost range for electricity generation from the various sources on the same slide. Here is another one I dug up. The data is presented in an AWEA paper but the data was drawn from a National Academies study. http://www.awea.org/learnabout/publications/upload/NAS_Hidden_Costs_of_Energy.pdf


  4. Pingback: Nice Up To Date Cost Curves | The Handleman Post

  5. Pingback: Externalities | The Handleman Post

  6. Pingback: Limitless Electrical Power from Magnet Electrical Power Generator - Alternative Energy HQ

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