Abstract

GOMEZ-RIOS, María del Carmen  and  JUAREZ-LUNA, David. Cost of electric generation accounting for environmental externalities: Optimal mix of baseload technologies. Rev. mex. econ. finanz [online]. 2019, vol.14, n.3, pp.353-377.  Epub Feb 18, 2020. ISSN 2448-6795.  https://doi.org/10.21919/remef.v14i3.308.

This paper aims to calculate the Total Levelized Cost of Generation with Externalities (CTNGE, in Spanish) of three baseload technologies: coal thermoelectric, combined cycle and nuclear power plant. Monte Carlo simulation is used to estimate the CTNGE probability densities. The portfolio theory is used to find the mix of technologies that provides the least risky CTNGE and with the lowest average. We find that the nuclear power plant has the lowest CTNGE. The coal-fired thermoelectric plant is thetechnology with the largest and riskiest CTNGE. The analysis suggests that, when generating electricity, it is convenient to leave out the coal-fired thermoelectric plant and focus on two technologies: combined cycle and nuclear power plant, assigning a higher participation to the latter. One limitation of the work is that the probability densities of the CTNGE estimated through the Monte Carlo simulation depend on the data used. The present analysis suggests that the CTNGE can be significantly modified by including the cost of CO2.

Keywords : CO₂ Emissions; Generation; Electricity; Levelized Cost; D81; G11; Q40; Q53.