The true cost of electric power
To support the Renewable Energy Policy Network for the 21st Century (REN21), Resources for the Future was asked to provide a critical review of methodologies for accounting for the true costs of electric power across the available generation technologies. By true costs, economists mean the social costs of electricity, accounting for private or market costs as well as the external costs. To the extent that policies in a country are designed to force investment and operating decisions in the market to account for true costs, as opposed to simply private or market costs, renewable energy sources are likely to be advantaged. This report is limited to a focus on the individual facility and asks, ultimately, what the social costs would be for an electric generation facility powered by coal, oil, gas, nuclear, hydro, solar, wind, and other fuels. To fully explore this topic, one would want to examine the entire energy system and address issues such as those arising from network effects, such as how to think about true costs when one needs to pair wind with other, less intermittent technologies.