NUCLEAR POWER VS. OTHER POWER TECHNOLOGIES

Nuclear power vs. other power technologies



Nuclear power vs. other power technologies

Differences among Energy Powers

If indeed market-based instruments are chosen to meet the objectives of the climate treaty, in principle the carbon value will be the same regardless of end-use, sector, or the technical details of processes producing carbon dioxide. The effect upon individual energy end-uses is difficult to predict with certainty - in fact this is precisely why market-based solutions are preferred by many economists. Rather than relying on centralized, command and control measures in specific end-uses, market-based solutions can be expected to adjust energy use patterns across all end-uses in a way which minimizes the overall cost of meeting the emissions goals.

However, some general observations can be made on the likely effects of establishing a cost to emit carbon dioxide.

The following factors are among those that will affect the price of energy-related services as a function of carbon value:

The fuel price increase due to carbon value;

The fraction of service price that is fuel input;

the ability to use fuels with lower carbon content and, hence, lower incremental cost increases due to carbon value (availability of substitute processes or equipment providing the same service);

The rate at which substitute processes or equipment can be introduced.

Notes: ‡ Electricity consumption releases no carbon dioxide at the point of use. Average carbon content of electricity is calculated based upon average carbon dioxide emissions per unit of IEA electricity production. Similarly, price increment is based upon increased production cost passed through to final consumer, assuming no change in generating plant mix. Fuel is assumed to represent one quarter of total electricity cost on average throughout.

Average steam coal price excludes Germany

Gasoline price assumed to be 0.70 US$/liter toe is tone oil equivalent, or 107 kilocalories Source: IEA, Energy Prices and Taxes: Secretariat calculations

Generally the denser the fuel, the higher the carbon content and the higher the production of carbon dioxide per unit of fuel energy. So a uniform carbon value would result in fractional price increases that vary by fuel, as shown in Table 1.

This table indicates that the heavier fossil fuels used most in industry and power production, coal and heavy fuel oil, are most sensitive to a carbon value. The prices of lighter fuels used in the residential and commercial sectors would be less affected by a carbon value.

The cost of providing energy-related services using the existing mix of processes and equipment would rise according to the particular fuel used and the contribution of energy to the final price. For example, using the figure from Table 1 for gasoline, the cost of providing personal mobility would rise by very little. The presumed carbon value does not result in a large gasoline price increase and, furthermore, gasoline's fraction of automobile life-cycle expenses is typically less than one third, so the net effect on total costs is quite small (2% x 30% = 0.6%). In contrast, the effect of the same carbon value on the cost ...