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Impact of a possible environmental externalities internalisation on energy prices: The case of the greenhouse gases from the Greek electricity sector


  • Georgakellos, Dimitrios A.


The present paper is concerned with the impact of the internalisation of environmental externalities on energy prices. In this context, its aim is to quantify the external cost of greenhouse gases (specifically carbon dioxide) generated during electricity production in the thermal power plants in Greece and to estimate the impact on the electricity production cost and on the electricity prices of a possible internalisation of this external cost by the producers. For this purpose, this paper applies the EcoSenseLE online tool to quantify the examined externalities. This research finds that the calculated external cost is significantly high (compared to the corresponding production cost) mainly in lignite-fired power plants. Specifically, a possible internalisation of this external cost would increase the production cost by more than 52% (on average), which, in turn, would affect similarly the electricity prices. This finding could be important for decision makers in the electricity sector to develop strategies for emission reduction and to develop environmental and energy policies. The general limitation of the external cost methodology applies to this work as it uses the standard method developed for the Externe project. Similarly, the data limitations as well as assumptions related to the costs and exclusions/ omissions of cost elements affect the results.

Suggested Citation

  • Georgakellos, Dimitrios A., 2010. "Impact of a possible environmental externalities internalisation on energy prices: The case of the greenhouse gases from the Greek electricity sector," Energy Economics, Elsevier, vol. 32(1), pages 202-209, January.
  • Handle: RePEc:eee:eneeco:v:32:y:2010:i:1:p:202-209

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    References listed on IDEAS

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    Cited by:

    1. Georgiou, Isabella & Areal, Francisco J., 2015. "Economic valuation of an offshore wind farm in Greece: The role of individual׳s base-state influences and beliefs in the value formation process," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 717-724.
    2. Chen, Zhan-Ming & Liu, Yu & Qin, Ping & Zhang, Bo & Lester, Leo & Chen, Guanghua & Guo, Yumei & Zheng, Xinye, 2015. "Environmental externality of coal use in China: Welfare effect and tax regulation," Applied Energy, Elsevier, vol. 156(C), pages 16-31.
    3. Papagiannis, A. & Roussos, D. & Menegaki, M. & Damigos, D., 2014. "Externalities from lignite mining-related dust emissions," Energy Policy, Elsevier, vol. 74(C), pages 414-424.
    4. Zhao, Xiaoli & Cai, Qiong & Ma, Chunbo & Hu, Yanan & Luo, Kaiyan & Li, William, 2017. "Economic evaluation of environmental externalities in China’s coal-fired power generation," Energy Policy, Elsevier, vol. 102(C), pages 307-317.
    5. Ortega, Margarita & del Río, Pablo & Montero, Eduardo A., 2013. "Assessing the benefits and costs of renewable electricity. The Spanish case," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 294-304.
    6. Czarnowska, Lucyna & Frangopoulos, Christos A., 2012. "Dispersion of pollutants, environmental externalities due to a pulverized coal power plant and their effect on the cost of electricity," Energy, Elsevier, vol. 41(1), pages 212-219.
    7. repec:gam:jeners:v:10:y:2017:i:12:p:2136-:d:123105 is not listed on IDEAS
    8. Lin, Boqiang & Liu, Jianghua, 2011. "Principles, effects and problems of differential power pricing policy for energy intensive industries in China," Energy, Elsevier, vol. 36(1), pages 111-118.
    9. Aravena, Claudia & Hutchinson, W. George & Longo, Alberto, 2012. "Environmental pricing of externalities from different sources of electricity generation in Chile," Energy Economics, Elsevier, vol. 34(4), pages 1214-1225.
    10. Voumvoulakis, Emmanouil & Asimakopoulou, Georgia & Danchev, Svetoslav & Maniatis, George & Tsakanikas, Aggelos, 2012. "Large scale integration of intermittent renewable energy sources in the Greek power sector," Energy Policy, Elsevier, vol. 50(C), pages 161-173.


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