The performance of the small natural gas fired power technologies has improved remarkably over the last decade. This has aroused the interest of operators, regulators and legislators in natural gas fired distributed generation (gas-fired DG), namely, the integrated or stand-alone use of small, modular gas-fired power generation close to the point of consumption as an alternative to large power generation and electricity transport over long distances. The paper compares centralized and decentralized models in terms of the external environmental costs which are calculated by using the results of the available studies in this field (in particular the results of the dissemination process of the so-called ExternE project, one of the most recent and accurate methodologies, and the results of a meta-analysis, with regard to the marginal cost of GHG emissions). The uncertainty about external costs is substantial but not so large that it is not possible to say anything about the environmental raking of alternative technology solutions involving trade-off between the impacts of different pollutants (or between different kinds of impacts). The literature on external costs provides several studies accounting for a large part of uncertainty by means of appropriate statistical and sensitive analysis. By using and elaborating these results, the analysis described in this paper seems to support the conclusion that centralized supply, and especially the completely electric solution (based on the reversible electric heat pump), is still preferable to natural gas fired CHP distributed generation. This is not a definitive conclusion but, we hope, a useful (scientific based) contribution for policy decisions under the state of the art.
Social choice, uncertainty about external costs and trade-off between intergenerational environmental impacts: the emblematic case of energy supply decentralization
GULLI', FRANCESCO
2006
Abstract
The performance of the small natural gas fired power technologies has improved remarkably over the last decade. This has aroused the interest of operators, regulators and legislators in natural gas fired distributed generation (gas-fired DG), namely, the integrated or stand-alone use of small, modular gas-fired power generation close to the point of consumption as an alternative to large power generation and electricity transport over long distances. The paper compares centralized and decentralized models in terms of the external environmental costs which are calculated by using the results of the available studies in this field (in particular the results of the dissemination process of the so-called ExternE project, one of the most recent and accurate methodologies, and the results of a meta-analysis, with regard to the marginal cost of GHG emissions). The uncertainty about external costs is substantial but not so large that it is not possible to say anything about the environmental raking of alternative technology solutions involving trade-off between the impacts of different pollutants (or between different kinds of impacts). The literature on external costs provides several studies accounting for a large part of uncertainty by means of appropriate statistical and sensitive analysis. By using and elaborating these results, the analysis described in this paper seems to support the conclusion that centralized supply, and especially the completely electric solution (based on the reversible electric heat pump), is still preferable to natural gas fired CHP distributed generation. This is not a definitive conclusion but, we hope, a useful (scientific based) contribution for policy decisions under the state of the art.
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