The eco-costs of energy


The calculation method to determine the eco-costs of energy is based on the assumption that unsustainable energy carriers (energy from fossil fuels, and nuclear energy) will gradually be replaced by sustainable energy sources.
There is a difference between electricity and heat from fossil fuels, nuclear energy, and diesel and gasoline for transport, as explained below.

Electricity and heat from fossil fuels

The eco-costs of electricity are determined by the eco-costs of its actual emissions as calculated in the Life Cycle Inventory (LCI): ‘direct emissions’ (i.e. CO2, SO2, etc. of burning fossil fuels), plus ‘indirect emissions’ and ‘indirect materials depletion’ caused by building the

required infrastructure (e.g. windmills).
The marginal prevention costs of fossil based energy of modern power plants are highly related to the marginal prevention costs of CO2 (0,116 €/kg CO2 equivalent). This fossil based electricity will gradually be replaced by renewable energy systems. Such an energy transition is characterised by reduction of CO2 emissions in the electricity mix of a region or a country (In Europe, the power grid is interconnected for the ENTSO-E countries), resulting in less eco-costs. The eco-costs of CO2 as such, however, is not affected: the costs of replacement of a coal fired power plants by windmills at sea will not be changed by the transition as such. These eco-costs of CO2 are only affected by better efficiencies and economies of scale (e.g. bigger wind turbines), and not by higher market prices of electricity and/or subsidies. See also the tab eco-costs of emissions at this website.


Note that the eco-costs of fossil fuels scarcity are not counted in the eco-costs of electricity, since the CO2 emissions are counted. The reason is the system integrated solution: CO2 reduction goes hand in hand with reduction of use of fossil fuels (it is the same prevention measure). This avoidance of ‘double counting’ is in line with ISO 14044, section