Utah State University

The Unseen Costs of Electricity

Modern energy plant

April 20, 2016

“In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.” —Frederic Bastiat, 1848

Introduction:

These reports explore both explicit and implicit factors that influence the cost of producing electricity from four different types of energy: coal, natural gas, wind, and solar. The explicit, or seen costs of electricity generated from these sources, include cost components such as power plant development and construction, operation & maintenance, and transmission infrastructure costs. Often overlooked, however, are the implicit costs of energy, caused by government subsidies, mandates, and regulations that distort the electricity market. These reports do not estimate an actual value for the cost of producing electricity , rather, they identify and analyze those factors that policymakers should consider.

Rather than creating a new cost estimate for each of these energy types, we analyze the findings of prominent cost studies by experts in the energy field. Each study includes different factors in its estimate of the cost of power produced from coal, natural gas, wind, and solar. We break down each of these factors and explain their significance within the reports. These factors include: capital costs, operation and maintenance costs, capacity factor, transmission costs, baseload cycling, social and environmental costs, and the cost of government subsidies. Other factors are more difficult to quantify, but nevertheless add to the cost of producing electricity using these sources. Such factors include: opportunity cost of taxpayer dollars, reduced reliability of the grid, and higher electricity prices. We conclude that, when estimating the cost of producing electricity, all of these factors should be included.

The Unseen Costs of Coal Powered Electricity:

Download Full Report here.

Download Condensed Report here.

The Unseen Costs of Natural Gas Powered Electricity:

Download Full Report here.

Download Condensed Report here.

The Unseen Costs of Wind Powered Electricity:

Download Full Report here.

Download Condensed Report here.

The Unseen Costs of Solar Powered Electricity:

Download Full Report here.

Download Condensed Report here.

Comments are closed.