Internalizing of external costs in electricity generation

Abstract

This article seeks to describe methodology for taking into account the damage cost caused to the environment by electricity generation, so-called internalizing of external costs, i.e. ExternE, and presents examples of using it in Eastern European countries. The cost rates calculated on the basis of ExternE methodology are tested on data of Estonian oil shale-fired power plants. Also the issue of optimality of the external costs in electricity producer price is discussed. © 2007 Estonian Academy Publishers.