ࡱ> OnBVj*VQP &P . A!"#$%IMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be cIMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be calculated using the so called impact pathway methodology, which relates to the sequence of events linking a burden to an impact, and subsequent valuation. This paper estimates, by means of the impact pathway methodology, external costs of the representative coal and gas fired power plants, determined as candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competetivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. Introduction External costs of electricity refer to the costs of damage imposed on society and the environment by the electricity generation chain, but not accounted for in the market price of electricity. Impacts include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includes meteorological conditions affecting dispersion and chemistry of atmospheric pollutants, functions linking exposure to a pollutant with the health effect it causes, population density and age structure in the observed area, and costs of the estimated health effects. Each of these steps inevitably incorporates a dose of uncertainty, however there is a consensus among experts that transference of input parameters and results is to be preferred to ignoring some impact categories. Software used for calculation of externalities associated with electricity generation is EcoSense (2(, developed within the European Community project ExternE (1(. It constitutes of several databases: technology, exposure-response functions and reference environment database. The reference technology database holds a small set of technical data describing the emission source that are mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure-response functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx, particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chemical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary values for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on YOLL. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on the willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life (VSL) dividing it by the change in risk. Morbidity impacts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness. Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are observed (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impacts on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts due to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-range dispersion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansion planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecasted electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, gas being by far the cheapest. Three cases are observed: (i) reference case no external costs added, (ii) case ext. CAND external costs added only on candidate units, (iii) case ext. CAND+EXIST external costs added on both candidate and existing units. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. Figure  SEQ Figure \* ARABIC 2 Optimal capacity mixes for two levels of external cost internalization, depending on natural gas availability Since gas fired power plants are the cheapest, they are the first to enter the optimal capacity mix, so if gas availability is unconstrained the optimal expansion plan will consist of gas fired units only ( REF _Ref471710591 \h Figure 2, fist bar on the left). If gas is constrained, large part of total capacity needs would have to be met by coal and nuclear units (fourth bar from the left). What happens if external costs are added? It can be seen that external costs would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions for two levels of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the candidates only variant, depicted by the thick black line, and candidates + existing units, depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion This paper elaborates on external costs of electricity and impact pathway method for their calculation. This method links environmental and health burdens caused by power generation chains with physical impacts they cause and asigns monetary values to those impacts. 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It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competetivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. 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A!"#$%IMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be calculated using the so called impact pathway methodology, which relates to the sequence of events linking a  burden to an  impact , and subsequent valuation. This paper estimates, by means of the impact pathway methodology, external costs of the representative coal and gas fired power plants, determined as candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competetivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. Introduction External costs of electricity refer to the costs of damage imposed on society and the environment by the electricity generation chain, but not accounted for in the market price of electricity. Impacts include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includ warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includes meteorological conditions affecting dispersion and chemistry of atmospheric pollutants, functions linking exposure to a pollutant with the health effect it causes, population density and age structure in the observed area, and costs of the estimated health effects. Each of these steps inevitably incorporates a dose of uncertainty, however there is a consensus among experts that transference of input parameters and results is to be preferred to ignoring some impact categories. Software used for calculation of externalities associated with electricity generation is EcoSense (2(, developed within the European Community project ExternE (1(. It constitutes of several databases: technology, exposure-response functions and reference environment database. The reference technology database holds a small set of technical data describing the emission source that are mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure-response functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx, particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chemical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary values for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on YOLL. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on the willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life (VSL) dividing it by the change in risk. Morbidity impacts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness.***++++>/$$/$$Tl0!.Z\|~**+++-0H3d3477D:F:r:t:::::::;;;;;;;;;;;<<4<6<8<:<ǼmH CJ OJQJj(OOJQJUmHj :OJQJUmHjbCJOJQJU CJOJQJj<OJQJUmH CJOJQJCJjUh55CJ5CJ hmH nHH*mHnH jUjBU6 Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are obs11728292A6B6C6N6888888ƞ>$$/$$Tl0! &P . A!"#$%IMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be calculated using the so called impact pathway methodology, which relates to the sequence of events linking a  burden to an  impact , and subsequent valuation. This paper estimates, by means of the impact pathway methodology, external costs of the representative coal and gas fired power plants, determined as candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competetivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. Introduction External costs of electricity refer to the costs of damage imposed on society and the environment by the electricity generation chain, but not accounted for in the market price of electricity. Impacts include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includes meteorological conditions affecting dispersion and chemistry of atmospheric pollutants, functions linking exposure to a pollutant with the health effect it causes, population density and age structure in the observed area, and costs of the estimated health effects. Each of these steps inevitably incorporates a dose of uncertainty, however there is a consensus among experts that transference of input parameters and results is to be preferred to ignoring some impact categories. Software used for calculation of externalities associated with electricity generation is EcoSense (2(, developed within the European Community project ExternE (1(. It constitutes of several databases: technology, exposure-response functions and reference environment database. The reference technology database holds a small set of technical data describing the emission source that are mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure-response functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx, particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chemical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary values for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on YOLL. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on the willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life (VSL) dividing it by the change in risk. Morbidity impacts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness.77778888HdDFrt468:tvxz|&ĽmH  j] j[mH CJ OJQJjOJQJUmHjOJQJUmHjCJOJQJU CJOJQJjOJQJUmH CJOJQJCJmHnHjvU jUh55CJ5CJ hmH nHH*5 Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are observed (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impacts on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts due to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-range dispersion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansion planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecasted electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, gas being by far the cheapest. Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existing units. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. Figure  SEQ Figure \* ARABIC 2 Optimal capacity mixes for two levels of external cost internalization, depending on natural gas availability Since gas fired power plants are the cheapest, they are the first to enter the optimal capacity mix, so if gas availability is unconstrained the optimal expansion plan will consist of gas fired units only ( REF _Ref471710591 \h Figure 2, fist bar on the left). If gas is constrained, large part of total capacity needs would have to be met by coal and nuclear units (fourth bar from the left). What happens if external costs are added? It can be seen that external costs would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions for two levels of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion This paper elaborates on external costs of electricity and impact pathway method for their calculation. This method links environmental and health burdens caused by power generation chains with physical impacts they cause and asigns monetary values to those impacts. External costs considered here are only those caused by health effects of airborne emissions  particulates, SO2 and NOx and their secondary forms, sulfates and nitrates. Regional dispersion analysis was conducted for almost all potential locations of future power plants, which resulted in the range of damage costs for a would-be power plant in Croatia. 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The referved (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impacts on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts erence technology database holds a small set of technical data describing the emission source that are mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure- &P . A!"#$%IMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be calculated using the so called impact pathway methodology, which relates to the sequence of events linking a  burden to an  impact , and subsequent valuation. This paper estimates, by means of the impact pathway methodology, external costs of the representative coal and gas fired power plants, determined as candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competetivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. Introduction External costs of electricity refer to the costs of damage imposed on society and the environment by the electricity generation chain, but not accounted for in the market price of electricity. Impacts include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includes meteorological conditions affecting dispersion and chemistry of atmospheric pollutants, functions linking exposure to a pollutant with the health effect it causes, population density and age structure in the observed area, and costs of the estimated health effects. Each of these steps inevitably incorporates a dose of uncertainty, however there is a consensus among experts that transference of input parameters and results is to be preferred to ignoring some impact categories. Software used for calculation of externalities associated with electricity generation is EcoSense (2(, developed within the European Community project ExternE (1(. It constitutes of several databases: technology, exposure-response functions and reference environment database. The reference technology database holds a small set of technical data describing the emission source that are mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure-response functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx, particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chemical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary values for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on YOLL. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on the willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life (VSL) dividing it by the change in risk. Morbidity impacts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness. ,.Z\|~BBCCCEHHKdKLOODRFRrRtRRRRRRRSSSSSSj CJOJQJU CJOJQJjOJQJUmH CJOJQJCJjWUh55CJ5CJ hmH nHmHnHjUH* jUmH jUmH jUmH;BBBCCCC>G$$/$$T0,9! Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are observed (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impacts on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts due to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-range dispersion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be alsoresponse functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx, particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chƅȅ“ēƓƶ>$$/$$Tl0! ,.Z\|~‘đēƓHdDFrtĹjOJQJUmHjӺOJQJUmHj+CJOJQJU CJOJQJjOJQJUmH CJOJQJCJjUh55CJ5CJ hmH nHmHnHj UmHH* jU6emical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary valu es for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on YOLL. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on the willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life (VSL) dividing it by the change in risk. Morbidity impacdue to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-range dispersion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansion planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecasted electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, gas being by far the cheapest. Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existing units. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. Figure  SEQ Figure \* ARABIC 2 Optimal capacity mixes for two levels of external cost internalization, depending on natural gas availability Since gas fired power plants are the cheapest, they are the first to enter the optimal capacity mix, so if gas availability is unconstrained the optimal expansion plan will consist of gas fired units only ( REF _Ref471710591 \h Figure 2, fist bar on the left). If gas is constrained, large part of total capacity needs would have to be met by coal and nuclear units (fourth bar from the left). What happens if external costs are added? It can be seen that external costs would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions for two levels of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion This paper elaborates on external costs of electricity and impact pathway method for their calculation. This method links environmental and health burdens caused by power generation chains with physical impacts they cause and asigns monetary values to those impacts. External costs considered here are only those caused by health effects of airborne emissions  particulates, SO2 and NOx and their secondary forms, sulfates and nitrates. Regional dispersion analysis was conducted for almost all potential locations of future power plants, which resulted in the range of damage costs for a would-be power plant in Croatia. 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The role of external costs in power system expansi```aaaee>e@eBeNePeReVfXf`fbfffhh2h4h6h8hhh i"ihiniiiiiiij j&j(j@jhjjjjj0k2k:kj$$$$$$[$$TUֈl  x>j@jjzkkkmmsst${&{*{$$$ & F <[$$TUֈl  x { {{{{ {"{&{({:{<{h{j{l{n{L|}}~~~(~*~,~؀L"$RT…ąƅօ؅ʷʩ jwUmH jlUmH jbUmH5 5H*mH5mHjtbUhmH nHjUhmH nHH*hmH nH hmH nHjaUmH jU j_WUmHmHmHnH jUmHjVUmH5*{,{L|JL…ƅ$$/$$Tl0!$$$ o# & F  9!$$Tl$ on planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecasted electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, gas being by far the cheapest. Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existing &P . A!"#$%IMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be calculated using the so called impact pathway methodology, which relates to the sequence of events linking a  burden to an  impact , and subsequent valuation. This paper estimates, by means of the impact pathway methodology, external costs of the representative coal and gas fired power plants, determined as candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competetivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. Introduction External costs of electricity refer to the costs of damage imposed on society and the environment by the electricity generation chain, but not accounted for in the market price of electricity. Impacts include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includes meteorological conditions affecting dispersion and chemistry of atmospheric pollutants, functions linking exposure to a pollutant with the health effect it causes, population density and age structure in the observed area, and costs of the estimated health effects. Each of these steps inevitably incorporates a dose of uncertainty, however there is a consensus among experts that transference of input parameters and results is to be preferred to ignoring some impact categories. Software used for calculation of externalities associated with electricity generation is EcoSense (2(, developed within the European Community project ExternE (1(. It constitutes of several databases: technology, exposure-response functions and reference environment database. The reference technology database holds a small set of technical data describing the emission source that are mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure-response functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx, particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chemical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary values for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on YOLL. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on ts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness. Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are observed (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impactsthe willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life (VSL) dividing it by the change in risk. Morbidity impacts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness. Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are observed (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impacts on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts due to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-range disperĝƝ֝؝ (*VXxz«HdDFrtjOJQJUmH CJOJQJCJj&Uh5CJ5CJ hmH nHmHnHjUH* jUmH jxUmH jqnUmH jdUmH5 5H*mH5mH<Ɲȝ«>@ & F $$/$$T0,9!sion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansiunits. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. Figure  SEQ Figure \* ARABIC 2 Optimal capacity mixes for two levels of external cost internalization, depending on natural gas availability Since gas fired power plants are the cheapest, they are the first to enter the optimal capacity mix, so if gas availability is unconstrained the optimal expansion plan will consist of gas fired units only ( REF _Ref471710591 \h Figure 2, fist bar on the left). If gas is constrained, large part of total capacity needs would have to be met by coal and nuclear units (fourth bar from the left). What happens if external costs are added? It can be seen that external costs would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions for two levels of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion This paper elaborates on external costs of electricity and impact pathway method for their calculation. This method links environmental and health burdens caused by power generation chains with physical impacts they cause and asigns monetary values to those impacts. External costs considered here are only those caused by health effects of airborne emissions  particulates, SO2 and NOx and their secondary forms, sulfL  !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKNOQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}~ on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts due to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-range dispersion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansion planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecasted electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, gas being by far the cheapest. Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existing units. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. Figure  SEQ Figure \* ARABIC 2 Optimal capacity mixes for two levels of external cost internalization, depending on natural gas availability Since gas fired power plants are the cheapest, they are the first to enter the optimal capacity mix, so if gas availability is unconstrained the optimal expansion plan will consist of gas fired units only ( REF _Ref471710591 \h Figure 2, fist bar on the left). If gas is constrained, large part of total capacity needs would have to be met by coal and nuclear units (fourth bar from the left). What happens if external costs are added? It can be seen that external costs would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions for two levels of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion This paper elaborates on external costs of electricity and impact pathway method for their calculation. This method links environmental and health burdens caused by power generation chains with physical impacts they cause and asigns monetary values to those impacts. External costs considered here are only those caused by health effects of airborne emissions  particulates, SO2 and NOx and their secondary forms, sulfates and nitrates. Regional dispersion analysis was conducted for almost all potential locations of future power plants, which resulted in the range of damage costs for a would-be power plant in Croatia. 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Px*'^N{77Urub_w.S}2'==xOqK泎ۏ83oG X & PǛxE7 syXaNu?f ^ 4rR9F97O`<#~^-2Y`$@ϫpJJ#~^łW ?jsjy+NV`Nu?aǫ1HwcNu?o5 :i4wf[9F'o=9yomĜF-M`6#~ӎ&xOcNu?oH g$@x/ ~yHw 9h$@K:Kb#~ˎwL^ƜcFwBc #~Ikn$@;x6x:t P#Kx1e-l3~#Wٌ@Y%p!WQ m˕rP[gR!l3\l`\e3ʷ6Cf m7<*p3Wٌo;*|Wl3{\e3?2 uolǶol϶ol϶o~g[7Bky$k(wlE)oq0vu';-3/F}K\/7K-J^eNSA-BU53>?LJ=Nh~eʯ^+ⷅQk6'm|nleeY|Vx|fNᓾzjyXy|^w;4#~87x.WٝK[k`צoa,'Mېؗ#lXfuA'ᩃL99?[۴~p+ʏiZ2}pbPP`c;pQd۪&zȗ[PJדoa4Vn7߇WAx1Fk1Gx .$!BR3}f]}fgf/Js3x"{onN 9@?*ܜ:g;39?>ܜ1ps:Tu&̶w߁eqxc,^s][׊} (sC7z)Q׭CBϫeAT߹5>#;#{ ߙ[bv Jsל'bv/IX B#\|Qv7Rz8W@ *;ٕ&Nrӌ^9cbyӌRت="%h5/j!{abf9uRT_n=@tu}t> \оduk|o 0Ü}۵Go':TGYV-Tˎ귵iM{ ;/f~#|J7W=oy]a}1kD"Bzp];qxI,\>x|Ժۊ%1{[VQ}GVf 9TCxluٜSOOS/Sr!c|j9>jKt5^q!te߈N/&l'x BtT]w=on planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecaste*,LJL$$/$$T0,9!$$$ o# & F  9!$$Tl$ d electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, gas being by far the cheapest. Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existing units. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. Figure  SEQ Figure \* ARABIC 2 Optimal capacity mixes for two levels of external cost internalization, &P . A!"#$%IMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be calculated using the so called impact pathway methodology, which relates to the sequence of events linking a  burden to an  impact , and subsequent valuation. This paper estimates, by means of the impact pathway methodology, external costs of the representative coal and gas fired power plants, determined as candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competetivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. Introduction External costs of electricity refer to the costs of damage imposed on society and the environment by the electricity generation chain, but not accounted for in the market price of electricity. Impacts include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includes meteorological conditions affecting dispersion and chemistry of atmospheric pollutants, functions linking exposure to a pollutant with the health effect it causes, population density and age structure in the observed area, and costs of the estimated health effects. Each of these steps inevitably incorporates a dose of uncertainty, however there is a consensus among experts that transference of input parameters and results is to be preferred to ignoring some impact categories. Software used for calculation of externalities associated with electricity generation is EcoSense (2(, developed within the European Community project ExternE (1(. It constitutes of several databases: technology, exposure-response functions and reference environment database. The reference technology database holds a small set of technical data describing the emission source that are mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure-response functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx, particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chemical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary values for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on YOLL. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on the willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life (VSL) dividing it by the change in risk. Morbidity impacts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness.))*222777R88888888^^^___$V/$$T0,9!Z8j88888^^___adHgdghkkDnFnrntnnnnnnnooooooooooopp4p6p8p:ptpvpxpzp|p·م} j] j[mH CJ OJQJj^ROJQJUmHj@=OJQJUmHj"CJOJQJU CJOJQJjrOJQJUmH CJOJQJCJmHnHjU jUh55CJ5CJ hmH nH CJOJQJ6CJOJQJ1 Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are observed (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impacts on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts due to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-range dispersion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be alsoates and nitrates. Regional dispersion analysis was conducted for almost all potential locations of future power plants, which resulted in the range of damage costs for a would-be power plant in Croatia. External costs >G@GHKJKdKOP&PRRR4SSSSSSS$$x$$x$E$$T8\|d $$$ & F SSSSSSTT4T6T8T:TtTvTxTzT|T&W\\\\]] ] ]bbbbXdZdi iLiNiPi\i^i`iritiiiiiJjjjjjjjjj&kkkkk.l0l4l jCJ6CJCJmH CJH*CJH*CJmHnHjWUH*mH  j] j[mH jU CJ OJQJjPOJQJUmH CJOJQJj;OJQJUmH>SSS|T[XdZddfiJjjjjj$$ & F<<$ $ & F<<$ <E$$T8\|d $$h$ included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansi depending on natural gas availability Since gas fired power plants are the cheapest, they are the first to enter the optimal capacity mix, so if gas availability is unconstrained the optimal expansion plan will consist of gas fired units only ( REF _Ref471710591 \h Figure 2, fist bar on the left). If gas is constrained, large part of total capacity needs would have to be met by coal and nuclear units (fourth bar from the left). What happens if external costs are added? It can be seen that external costs would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABon planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecasteIC 3 CO2 emissions for two levels of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion This paper elaborates on external costs of electricity and impact pathway method for their calculation. This method links environmental and health burdens caused by power generation chains with physical impacts they cause and asigns monetary values to those impacts. 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Px*'^N{77Urub_w.S}2'==xOqK泎ۏ83oG X & PǛxE7 syXaNu?f ^ 4rR9F97O`<#~^-2Y`$@ϫpJJ#~^łW ?jsjy+NV`Nu?aǫ1HwcNu?o5 :i4wf[9F'o=9yomĜF-M`6#~ӎ&xOcNu?oH g$@x/ ~yHw 9h$@K:Kb#~ˎwL^ƜcFwBc #~Ikn$@;x6x:t P#Kx1e-l3~#Wٌ@Y%p!WQ m˕rP[gR!l3\l`\e3ʷ6Cf m7<*p3Wٌo;*|Wl3{\e3?2 uolǶol϶ol϶o~g[7Bky$k(wlE)oq0vu';-3/F}K\/7K-J^eNSA-BU53>?LJ=Nh~eʯ^+ⷅQk6'm|nleeY|Vx|fNᓾzjyXy|^w;4#~87x.WٝK[k`צoa,'Mېؗ#lXfuA'ᩃL99?[۴~p+ʏiZ2}pbPP`c;pQd۪&zȗ[PJדoa4Vn7߇WAx1Fk1Gx .$!BR3}f]}fgf/Js3x"{onN 9@?*ܜ:g;39?>ܜ1ps:Tu&̶w߁eqxc,^s][׊} (sC7z)Q׭CBϫeAT߹5>#;#{ ߙ[bv Jsל'bv/IX B#\|Qv7Rz8W@ *;ٕ&Nrӌ^9cbyӌRت="%h5/j!{abf9uRT_n=@tu}t> \оduk|o 0Ü}۵Go':TGYV-Tˎ귵iM{ ;/f~#|J7W=oy]a}1kD"Bzp];qxI,\>x|Ժۊ%1{[VQ}GVf 9TCxluٜSOOS/Sr!c|j9>jKt5^q!te߈N/&l'x BtT]w=1ztm}2l`%_򟋕m`?ς?.J3}WO&}.fujгbJ)u7mtʿN7X/[\9+C2L$NJ}_1`ϳ y۽֬VcMw\]XX΂9V5{bS&OGߵ+^}DyK d electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, ates and nitrates. Regional dispersion analysis was conducted for almost all potential locations of future power plants, which resulted in the range of damage costs for a would-be power plant in Croatia. External costs References (1( ExternE - Externalities of Energy, EC DG XII, Brussels, 1995. (2( EcoSense, Version 2.0, IER, Stuttgart, 1997. @HJd&4$$x$$x$E$$T8\|d $$$ & F 468:tvxz|&  XZ LNP\^`rtJ&6CJCJmH CJH*CJH*CJmHnHjUH*mH  j] j[mH jU CJ OJQJjOJQJUmHjqOJQJUmHjɡCJOJQJU CJOJQJ;gas being by far the cheapest. Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existing units. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. Figure  SEQ Figure \* ARABIC 2 Optimal capacity mixes for two levels of external cost internalization, depending on natural gas availability Since gas fired power plants are the cheapest, they are the first to enter the optimal capacity mix, so if gas availability is unconstrained the optimal expansion plan will consist of gas fired units only ( REF _Ref4 &P . A!"#$%IMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be calculated using the so called impact pathway methodology, which relates to the sequence of events linking a  burden to an  impact , and subsequent valuation. This paper estimates, by means of the impact pathway methodology, external costs of the representative coal and gas fired power plants, determined as candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competetivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. Introduction External costs of electricity refer to the costs of damage imposed on society and the environment by the electricity generation chain, but not accounted for in the market price of electricity. Impacts include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includes meteorological conditions affecting dispersion and chemistry of atmospheric pollutants, functions linking exposure to a pollutant with the health effect it causes, population density and age structure in the observed area, and costs of the estimated health effects. Each of these steps inevitably incorporates a dose of uncertainty, however there is a consensus among experts that transference of input parameters and results is to be preferred to ignoring some impact categories. Software used for calculation of externalities associated with electricity generation is EcoSense (2(, developed within the European Community project ExternE (1(. It constitutes of several databases: technology, exposure-response functions and reference environment database. The reference technology database holds a small set of technical data describing the emission source that are mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure-response functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx, particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chemical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary values for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on YOLL. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on the willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life (VSL) dividing it by the change in risk. Morbidity impacts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness. Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are observed (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impacts on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts due to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-range disperȹʹb$V/$$T0,9!  :<hj(*,bdfhjzHdDFrtj~OJQJUmH CJOJQJCJjUh hmH nH55CJ5CJ6CJOJQJ j]CJOJQJ CJOJQJ j[CJOJQJmHnHjUH* jUmH;sion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansion planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecaste71710591 \h Figure 2, fist bar on the left). If gas is constrained, large part of total capacity needs would have to be met by coal and nuclear units (fourth bar from the left). What happens if external costs are added? It can be seen that external costs would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions depending on the level of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion This paper elaborates on external costs of electricity and impact pathway method for their calculation. This method links environmental and health burdens caused by power generation chains with physical impacts they cause and asigns monetary values to those impacts. External costs considered here are only those caused by health effects of airborne emissions  particulates, SO2 and NOx and their secondary forms, sulfates and nitrates. Regional dispersion analysis was conducted for almost all potential locations of future power plants, which resulted in the range of damage costs for a would-be power plant in Croatia. 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Expansion candidates are gas, coal, nuclear and hydro facilities, ,.N L(N()))))))$$/$$T0,9!$$$ o# & F  9!$$Tl$ T)V))))))))))))))))))))** * ****,,,X,Z,z,|,,,,555577777888R8T8V8X8Z8ܳ6CJOJQJ j]CJOJQJ CJOJQJ j[CJOJQJjxUH* jUmH jqUmH j@UmH jXUmH5 5H*mH5mHmHnHjUhmH nH hmH nHjUhmH nH4gas being by far the cheapest. Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existing units. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. Figure  SEQ Figure \* ARABIC 2 Optimal capacity mixes for two levels of external cost internalization, depending on natural gas availability Since gas fired power plants are the cheapest, they are the first to enter the optimal capacity mix, so if gas availability is unconstrained the optimal expansion plan will consist of gas fired units only ( REF _Ref4 &P . A!"#$%IMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be calculated using the so called impact pathway methodology, which relates to the sequence of events linking a  burden to an  impact , and subsequent valuation. This paper estimates, by means of the impact pathway methodology, external costs of the representative coal and gas fired power plants, determined as candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competetivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. Introduction External costs of electricity refer to the costs of damage imposed on society and the environment by the electricity generation chain, but not accounted for in the market price of electricity. Impacts include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includes meteorological conditions affecting dispersion and chemistry of atmospheric pollutants, functions linking exposure to a pollutant with the health effect it causes, population density and age structure in the observed area, and costs of the estimated health effects. Each of these steps inevitably incorporates a dose of uncertainty, however there is a consensus among experts that transference of input parameters and results is to be preferred to ignoring some impact categories. Software used for calculation of externalities associated with electricity generation is EcoSense (2(, developed within the European Community project ExternE (1(. It constitutes of several databases: technology, exposure-response functions and reference environment database. The reference technology database holds a small set of technical data describing the emission source that are mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure-response functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx, particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chemical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary values for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on YOLL. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on the willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life (VSL) dividing it by the change in risk. Morbidity impacts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness.GGHPPPUUUbVVVVVVV|||}}}$V/$$T0,9!(V*V,VbVdVfVhVjVzVVVV||}}}HdDFrt|u CJ OJQJjSOJQJUmHj>OJQJUmHj#CJOJQJU CJOJQJjOJQJUmH CJOJQJCJmHnHjCU jUh hmH nH55CJ5CJ j]CJOJQJ j[CJOJQJ6CJOJQJ CJOJQJ. Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are observed (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impacts on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts due to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-range dispersion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtaiernalities of Energy, EC DG XII, Brussels, 1995. (2( EcoSense, Version 2.0, IER, Stuttgart, 1997. __>c@cHgJgdgkl&lnnn4ooooo$$x$E$$T8\|d $$$ & F $ooooo|pwXZfJj$$ & F<<$ $ & F<<$ <E$$T8\|d $$h$$x$|p&sxxxxyy y y~~~~XZ LNP\^`rtJĆ&.048<dlrĔƔjYU jmCJCJH*CJ jCJ6CJCJmH CJH*CJH*CJmHmHnHjXU jUH* j] j[mH Ened damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansion planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecaste71710591 \h Figure 2, fist bar on the left). If gas is constrained, large part of total capacity needs would have to be met by coal and nuclear units (fourth bar from the left). What happens if external costs are added? It can be seen that external costs would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions depending on the level of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depictd electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, ed by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion This paper elaborates on external costs of electricity and impact pathway method for their calculation. This method links environmental and health burdens caused by power generation chains with physical impacts they cause and asigns monetary values to those impacts. 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Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existingms, sulfates and nitrates. Regional dispersion analysis was conducted for almost all potential locations of future power plants, which resulted in the range of damage costs for a would-be power plant in Croatia. External costs References (1( ExternE - Externalities of Energy, EC DG XII, Brussels, 1995. (2( EcoSense, Version 2.0, IER, Stuttgart, 1997. >@HJd&4$$x$E$$T8\|d $$$ & F $468:tvxz|&      XZ LNP\^`rtJ&6CJCJmH CJH*CJH*CJmHnHjUH*mH  j] j[mH jU CJ OJQJjjOJQJUmHjLOJQJUmHjCJOJQJU CJOJQJ; units. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. Figure  SEQ Figure \* ARABIC 2 Optimal capacity mixes for two levels of external cost internalization, depending on natural gas availability Since gas fired power plants are the cheapest, they are the first to enter the optimal capacity mix, so if gas availability is unconstrained the optimal expansion plan will consist of gas fired units only ( REF _Ref471710591 \h Figure 2, fist bar on the left). If gas is constrained, large part of total capacity needs would have to be met by coal and nuclear units (fourth bar from the left). What happens if external costs are added? It can be seen that external cost &P . A!"#$%IMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be calculated using the so called impact pathway methodology, which relates to the sequence of events linking a  burden to an  impact , and subsequent valuation. This paper estimates, by means of the impact pathway methodology, external costs of the representative coal and gas fired power plants, determined as candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competetivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. Introduction External costs of electricity refer to the costs of damage imposed on society and the environment by the electricity generation chain, but not accounted for in the market price of electricity. Impacts include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includes meteorological conditions affecting dispersion and chemistry of atmospheric pollutants, functions linking exposure to a pollutant with the health effect it causes, population density and age structure in the observed area, and costs of the estimated health effects. Each of these steps inevitably incorporates a dose of uncertainty, however there is a consensus among experts that transference of input parameters and results is to be preferred to ignoring some impact categories. Software used for calculation of externalities associated with electricity generation is EcoSense (2(, developed within the European Community project ExternE (1(. It constitutes of several databases: technology, exposure-response functions and reference environment database. The reference technology database holds a small set of technical data describing the emission source that are mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure-response functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx, particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chemical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary values for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on YOLL. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on the willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life (VSL) dividing it by the change in risk. Morbidity impacts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness. Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are observed (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impacts on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts due to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-range disper  :<hj "$&(*lnp     HdDFrtооокCJjUh hmH nH55CJ5CJ6CJOJQJ j]CJOJQJ CJOJQJ j[CJOJQJmHnHjUH* jUmH j{UmH?  "        $V/$$T0,9!sion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansion planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecasted electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, s would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions depending on the level of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion The impact pathway method links environmental and health burdens caused by electricity generation with physical impacts they cause and asigns monetary values to those impacts. External costs considered here are only those caused by health effects of airborne emissions  particulates, SO2 and NOx and their secondary forms, sulfates and nitrates. The largest share in damage costs accounts for mortality effects attributable to particulate matter, sulfates and nitrates. 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Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existing,=.=N>LFNFGGGGGGG$$/$$T0,9!$$<$ o# & F  9!$$Tl$ TGVGGGGGGGGGGGGGGGGGGGGHH H HHH:J@HJd&4$$x$E$$T8\|d $$$ & F $|ȕXZfJj$$ & F<<$ $ & F<<$ <E$$T8\|d $$h$$x$ned damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansion planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecasted electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, s would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions depending on the level of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, thagas being by far the cheapest. Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existingt are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion The impact pathway method links environmental and health burdens caused by electricity generation with physical impacts they cause and asigns monetary values to those impacts. External costs considered here are only those caused by health effects of airborne emissions  particulates, SO2 and NOx and their secondary forms, sulfates and nitrates. The largest share in damage costs accounts for mortality effects attributable to particulate matter, sulfates and nitrates. Regional dispersion of pollutants in the atmosphere was conducted for the majority of potential locations for future power plants in Croatia, which resulted in the range of damage costs for a woulO    C 7 !"#$%&'()*+,-./21345689:;<=>?@ADEFGHIJKLMNPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}~468:tvxz|&  XZ LNP\^`rtJĤ&.048<dlr jmCJCJH*CJ jCJ6CJCJmH CJH*CJH*CJmHnHjYUH*mH  j] j[mH jUH "$&FVdfxĀb:$$TlF 1 $ & F$  $$ & F$  $ & F$ :$$TlF 1 Хܥ&:<`P:$$TlF 1 $ & F$  $ & F$ :$$TlF 1 $$ & F$  <^`bdbP$ & FS< :$$TlF 1 $ & F$ :$$TlF 1 $$ & F$  $ & F$  lpVXܺ$$$$$$ & F  & FRn $ & FRS IJƲ>@BNPRVX`b2468ܺ "hn̻λ &(@hjмּ02:<RT\^tvzԼԼԼԼԹCJH*CJH*CJCJH*OJQJCJH*OJQJ6CJOJQJ CJOJQJCJmHH*jZUmHnHjlZU jUmH E "*24<DFpLP[$$TUֈl  x$$$$$$G$$TU4\l  pz@$$$[$$TUֈl  x$$$ »ĻƻȻлػH$$$$$$[$$TUֈl  x"*2>$$$$$$[$$TUֈl  x>@мz>@&(,$$$ & F <[$$TUֈl  x  "$(*<>jlnpN*,.N$&TVʷʩ} j]qUmH jugUmH5CJOJQJ5CJH*OJQJmH5CJOJQJmHjfUhmH nHjUhmH nHH*hmH nH hmH nHj{fUmH jU j[UmHmHnHjf[UmHmH jUmH0,.NLN$$/$$T0,9!$$<$ o# & F  9!$$Tl$ units. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. 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If gas is constrained, large part of total capacity needs would have to be met by coal and nuclear units (fourth bar from the left). What happens if external costs are added? It can be seen that external costd-be power plant: 0,7 to 3,6 mECU/kWh for the candidate coal unit i.e. 0,1 to 0,6 mECU/kWh for the candidate gas unit. References (1( ExternE - Externalities of Energy, EC DG XII, Brussels, 1995. (2( EcoSense, Version 2.0, IER, Stuttgart, 1997.  >@HJd&4$$x$E$$T8\|d $$$ & F $468:tvxz|&!&&&&'' ' ',,,,X.Z.3 3L3N3P3\3^3`3r3t33333J4444444CJH*CJH*CJmHnHj1UH*mH  j] j[mH jU CJ OJQJjOJQJUmHjоOJQJUmHj(CJOJQJU CJOJQJjOJQJUmH CJOJQJ9|%X.Z..f3J4j444$$ & F<<$ $ & F<<$ <E$$T8\|d $$h$$x$s would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to &P . A!"#$%IMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be calculated using the so called impact pathway methodology, which relates to the sequence of events linking a  burden to an  impact , and subsequent valuation. This paper estimates, by means of the impact pathway methodology, external costs of the representative coal and gas fired power plants, determined as candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competetivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. Introduction External costs of electricity refer to the costs of damage imposed on society and the environment by the electricity generation chain, but not accounted for in the market price of electricity. Impacts include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includes meteorological conditions affecting dispersion and chemistry of atmospheric pollutants, functions linking exposure to a pollutant with the health effect it causes, population density and age structure in the observed area, and costs of the estimated health effects. Each of these steps inevitably incorporates a dose of uncertainty, however there is a consensus among experts that transference of input parameters and results is to be preferred to ignoring some impact categories. Software used for calculation of externalities associated with electricity generation is EcoSense (2(, developed within the European Community project ExternE (1(. It constitutes of several databases: technology, exposure-response functions and reference environment database. The reference technology database holds a small set of technical data describing the emission source that are mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure-response functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx, particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chemical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary values for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on YOLL. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on the willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life (VSL) dividing it by the change in risk. Morbidity impacts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness.  :<hj     > @ B x z | ~      ..///14H7d78;;D>F>r>t>>>>>>ооокj Uh hmH nH55CJ5CJ6CJOJQJ j]CJOJQJ CJOJQJ j[CJOJQJmHnHjUH* jUmH j|UmH@   x       ...///$V/$$T0,9! Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are observed (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impacts on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts due to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-range dispersion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansion planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecasted electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions depending on the level of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion The impact pathway method links environmental and health burdens caused by electricity generation with physical impacts they cause and asigns monetary values to the latter. External costs considered here are only those caused by health effects of airborne emissions  particulates, SO2 and NOx and their secondary forms, sulfates and nitrates. Damages linked to coal power plants are much larger than those linked to gas fired facilities, since the latter are responsible only for NOx emission and nitrates. The largest share in damage costs accounts for mortality effects attributable to particulate matter, sulfates and nitrates. Regional dispersion of pollutants in the atmosphere was conducted for the majority of potential locations for future power plants in Croatia, which resulted in the range of damage costs: 0,7 to 3,6 mECU/kWh for the candidate coal unit i.e. 0,1 to 0,6 mECU/kWh for the candidate gas unit. 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Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existing,].]N^LfNfggggggg$$/$$T0,9!$$<$ o# & F  9!$$Tl$ $g&gTgVgggggggggggggggggggghh h hhh:j@HJd & F $$V"$&hjl HdDFrt|jTOJQJUmHj?OJQJUmHj$CJOJQJU CJOJQJj OJQJUmH CJOJQJCJmHnHjK U jUh hmH nH55CJ5CJ j[CJOJQJ6CJOJQJ CJOJQJ j]CJOJQJ.range dispersion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels usedan example, calculated external costs were applied in power system expansion planning. The analysis showed that external costs due to airborne emissions can influence both the optimal capacity mix and operation of the power system. The results showed that if external costs are to be introduced, they should be added both to the existing and candidate power plants. References (1( ExternE - Externalities of Energy, EC DG XII, Brussels, 1995. (2( EcoSense, Version 2.0, IER, Stuttgart, 1997. >@HJd&4$$x$E$$T8\|d $$$ & F $|ȵXZfJj$$ & F<<$ $ & F<<$ <E$$T8\|d $$h$$x$. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansion planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecasted electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, gas being by far the cheapest. Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate s would not affect the optimal apacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the optimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions depending on the level of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, thatand existing units. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. Figure  SEQ Figure \* ARABIC 2 Optimal capacity mixes for two levels of external cost inte are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion The impact pathway method links environmental and health burdens caused by electricity generation with physical impacts they cause and asigns monetary values to the latter. External costs considered here are only those caused by health effects of airborne emissions  particulates, SO2 and NOx and their secondary forms, sulfates and nitrates. Results show that damages linked to coal power plants are much larger than those linked to gas fired facilities, since the latter are responsible only for NOx emission and nitrates. 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However, if natural gas is limited, results change significantly. Where external costswhich resulted in the range of damage costs: 0,7 to 3,6 mECU/kWh for the candidate coal unit i.e. 0,1 to 0,6 mECU/kWh for the candidate gas unit. The largest share in damage costs accounts for mortality effects attributable to particulate matter, sulfates and nitrates. As an example, the calculated external costs were applied in power system expansion planning. The analysis showed that external costs due to airborne emissions can influence both the optimal capacity mix and operation of the power system. The results showed that if external costs are to be introduced, they should be added both to the existing and candidate power plants. References (1( ExternE - Externalities of Energy, EC DG XII, Brussels, 1995. (2( EcoSense, Version 2.0, IER, Stuttgart, 1997. are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the o &P . A!"#$%IMPACT PATHWAY METHODOLOGY IN ESTIMATING EXTERNAL COSTS OF ELECTRICITY GENERATION (CASE STUDY CROATIA) Tea Kovacevic Faculty of electrical engineering and computing, Zagreb, Croatia Abstract To allow for a fair comparison of various electricity generating options, it is necessary to account for environmental and societal impacts caused by electricity generation. Because of their diverse character, impacts are expressed in a common measure, so called external costs. External costs can be calculated using the so called impact pathway methodology, which relates to the sequence of events linking a  burden to an  impact , and subsequent valuation. This paper estimates, by means of the impact pathway methodology, external costs of the representative coal and gas fired power plants, determined as candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs of the facility, would affect the competitivness of fossil-fired plants compared to other electricity generation options, i.e. how they would influence the optimal expansion strategy of the Croatian power system. Introduction External costs of electricity refer to the costs of damage imposed on society and the environment by the electricity generation chain, but not accounted for in the market price of electricity. Impacts include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Only impacts of air pollution on human health, recognized as priority impacts of electricity generation, are dealt with in this paper. Method Description Impact assessment and valuation are performed using the 'damage function' or 'impact pathway' approach, which relates to a sequence of links between the burden and its impact. This approach assesses impacts in a logical and transparent manner, going stepwise as shown in  REF _Ref450186314 \h  \* MERGEFORMAT Figure 1. 1. Emission quantification2. Atmospheric transport and dispersion3. Environmental impact estimation (dose-response)4. Damage valuation (external costs)Figure  SEQ Figure \* ARABIC 1 Impact pathway methodology, (1( The impact pathway methodology consists of the following steps: (i) quantification of emissions, (ii) calculation of the associated ambient concentration increase by means of atmospheric dispersion and transport models, (iii) estimation of physical impacts using various exposure-response functions, and (iv) monetary evaluation of damages. Impact pathway method requires a detailed description of the reference environment, which in this case includes meteorological conditions affecting dispersion and chemistry of atmospheric pollutants, functions linking exposure to a pollutant with the health effect it causes, population density and age structure in the observed area, and costs of the estimated health effects. Each of these steps inevitably incorporates a dose of uncertainty, however there is a consensus among experts that transference of input parameters and results is to be preferred to ignoring some impact categories. Software used for calculation of externalities associated with electricity generation is EcoSense (2(, developed within the European Community project ExternE (1(. It constitutes of several databases: technology, exposure-response functions and reference environment database. The reference technology database holds a small set of technical data describing the emission source, mainly related to air quality modeling. The impact assessment module calculates physical impacts and the resulting damage costs by applying the exposure-response functions, based on receptor distribution and concentration levels of air pollutants from the reference environment database. EcoSense also provides two air transport models. One is a Gaussian plume model for dispersion of primary air pollutants (SO2, NOx and particulates) within 50 km of the source. The other is a trajectory model to estimate the concentration and deposition of secondary pollutants (sulfate and nitrate aerosols, sulfuric and nitric acid, tropospheric ozone), formed subsequently in chemical reactions on a larger spatial scale. Public Health Effects Incremental air pollution attributable to power generation is a mixture of primary and secondary pollutants. Quantitative relationships have been established that link air pollution with a number of health endpoints, such as premature mortality, hospital admissions due to respiratory and cardiovascular problems, emergency room visits due to exacerbation of asthma and chronic obstructive pulmonary disease (COPD), and restricted activity days. For example, unit increase of particulate matter concentration in the ambient atmosphere raises the number of acute mortality cases by 0,04% ( REF _Ref471649707 \h Table 1). Table  SEQ Table \* ARABIC 1 Exposure-response functions and monetary values for the observed health endpoints Impact CategoryMonetary value (ECU) (1)e-r factors for PM10 and nitrates (2)Receptor: Total populationAcute mortality155.0000,040%Chronic mortality83.0000,390%Hospital admissions7.8707,11(10-6Emergency room visits22313,7(10-6Receptor: AdultsRestricted activity days750,025Remarks to the above table: (1) mortality values given at a discount rate of 3%, based on years of life lost approach. (2) exposure-response factor is expressed as percentage change in annual mortality rate per unit of pollutant concentration increase (% change per (g/m3) for mortality, while in number of events per person per (g/m3 for morbidity, e-r factor for sulfates is 67% higher than for nitrates. Mortality impacts can be valued based on the willingness to pay (WTP) for reduction of the risk of death, or on the willingness to accept compensation (WTA) for an increase in risk. WTP or WTA is converted into the value of statistical life dividing it by the change in risk. Morbidity impacts are valued based on the cost of illness, that comprises the value of wages lost during the time of illness, the value of the utility lost because of pain and suffering and the costs of any expenditures on averting and mitigating consequences of illness. Calculation of Damage Costs for Croatian Power Plants The aim here is to apply the impact pathway method to estimate costs of air-pollution induced health damages caused by electricity generation in Croatia. Two types of fossil-fired power plants are observed (candidates for power system expansion): one coal and one natural gas fired facility, both with installed capacity of 380 MW. Thermal efficiency of coal unit is supposed to be 37%, while of gas unit 43%. Both facilities are assumed to comply with domestic emission standards, so the emission rates equal the upper emission limits (see footnotes in  REF _Ref471654972 \h Table 2). Incremental air pollution due to operation of those two units is calculated by a long-range trajectory model. Only impacts on receptors within Croatia are observed. The results are the following. Damage costs vary with the power plant location, mostly because the number of affected receptors in Croatia is different for each location. Thus, damage costs for the coal unit vary from 0,67 to 3,6 mECU/kWh, while for the gas unit from 0,19 to 0,61 mECU/kWh. Damage costs can also be expressed per ton of pollutant ( REF _Ref471654972 \h Table 2). It has to be stressed that the obtained external costs comprise only health impacts due to airborne emissions (particulates, SO2, NOx). Impacts of ground-level ozone caused by NOx and of global warming are not included in the calculation due to so far lack of reliable ozone models i.e. large uncertanties in impacts of global warming. Table  SEQ Table \* ARABIC 2 Country-scale external costs caused by referent coal and gas fired power plants* (1 ECU=1,25 USD)mECU/kWhECU/tminmaxminmaxCoal power plant (1)0,673,6PM103502.330SO2140765NOx1901.000Gas power plant (2)0,190,61NOx2001.025* Damage costs of NOx via ozone and of global warming are not included. (1) TSP (total suspended particulates) = 50 mg/m3; SO2 = 400 mg/m3; NOx = 650 mg/m3. (2) NOx = 100 mg/m3. Using the same approach and long-  " $ * , R"T""""""""++,+.+,,>3@3B3D3F3333333333$4,4.4XXYYY[^HadabeeDhh hmH nH55CJ5CJ6CJOJQJ j]CJOJQJ CJOJQJ j[CJOJQJmHnHjUH* jUmH j|UmH jerUmH j}hUmH5CJOJQJ; (((&3(3>33$4&4(4*4,4.4XXXYYYY>]@]HaJadae & F $$Vrange dispersion modelling, damage costs attributable to the existing power plants in Croatia were calculated. They are in the range of 0,65 to 21,5 mECU/kWh, i.e. somewhat higher than of the candidate units due to older technologies and dirtier fuels used. The obtained damage i.e. external costs can serve as a basis for various analyses, such as cost-benefit analysis of pollution abatement measures, determining the height of emission charges and taxes, selection of optimal power plant location, or comparison of energy technologies by their environmental performance. More sophisticated analyses can be conducted as well, such as least expensive dispatching of units in the power system if external costs are added to power plant operation costs. External costs can be also included in power system expansion planning, i.e. finding the optimal mix of new capacities that should be added over a certain planning period. The latter application will be here demonstrated in brief. The role of external costs in power system expansion planning Two scenarios of Croatian power system expansion are observed: one with unlimited and the other one with maximally limited availability of natural gas, those two spanning the range of expansion options. The question is how to meet the forecasted electricity demand at lowest possible cost, i.e. what kind of new units and in what dynamics should be built in the next 30 years, so that total costs over the period are lowest possible. Expansion candidates are gas, coal, nuclear and hydro facilities, gas being by far the cheapest. Three cases are observed: (i) reference case  no external costs added, (ii) case  ext. CAND  external costs added only on candidate units, (iii) case  ext. CAND+EXIST  external costs added on both candidate and existing units. Optimal capacity mixes in those three cases, for two extreme scenarios of gas availabilty are shown in  REF _Ref471710591 \h Figure 2. Figure  SEQ Figure \* ARABIC 2 Optimal capacity mixes for two levels of external cost inteptimal solution (last bar on the right-hand side). Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions depending on the level of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion The impact pathway method links environmental and health burdens caused by electricity generation with physical impacts they cause and assigns monetary values to the latter. External costs considered here are only those caused by health effects of airborne emissions  particulates, SO2 and NOx and their secondary forms, sulfates and nitrates. Results show that damages linked to coal power plants are much larger than those linked to gas fired facilities, since the latter are responsible only for NOx emission and nitrates. Regional dispersion of pollutants in the atmosphere was conducted for the majority of potential locations for future power plants in Croatia, which resulted in the range of damage costs: 0,7 to 3,6 mECU/kWh for the candidate coal unit i.e. 0,1 to 0,6 mECU/kWh for the candidate gas unit. The largest share in damage costs accounts for mortality effects attributable to particulate matter, sulfates and nitrates. As an example, the calculated external costs were applied in power system expansion planning. The analysis showed that external costs due to airborne emissions could influence both the optimal capacity mix and operation of the p2D1ower system. The results showed that if external costs are to be introduced, they should be added both to the existing and candidate power plants. References (1( ExternE - Externalities of Energy, EC DG XII, Brussels, 1995. 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If gas is constrained, large part of total capacity needs would have to be met by coal and nuclear units (fourth bar from the left). What happens if external costs are added? It can be seen that external costs would not affect the optimal capacity mix if the gas supply is unlimited (second and third bar from the left), because gas units still remain the cheapest. However, if natural gas is limited, results change significantly. Where external costs are added to candidate units only, optimal capacity mix includes altogether two nuclear units over the observed period (fifth bar from the left), while if external costs are added on both existing and candidate units, three nuclear units would enter the oOh+'0(4LXl     The expected accelerated development of transition countries (CEE/NIS) requires sufficient amounts of energy, particularly electricityhe Tea Kovacevicccea  Normal.dotiTea Kovaceviccc73 Microsoft Word 8.0r@A@,Aؾ@ V@>YG.0Program Files 0Microsoft Office0Templates2Normal.dots2000.docQ'L<@64=ḇ|1 ."( @rwCd&k ."(+JY"Tbxw& ."(H>`J,@:i+00/C:\0Program Files 0Microsoft Office0TemplatesLy,@J+ ՜.+,D՜.+,x hp  W FER-ZVNEtb8j The expected accelerated development of transition countries (CEE/NIS) requires sufficient amounts of energy, particularly electricity Title 6> _PID_GUIDAN{EB483273-A92F-11D2-872A-00609757A1E1}Microsoft Office0Templates2Normal.dots2000.docQ'L<@64=ḇ|1 ."( @rwCd&k ."(+JY"Tbxw& ."(H>`J,@:i+00/C:\0Program Files 0Microsoft Office0TemplatesLy,@J+ &P . 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Emissions to the atmosphere differ significantly in the observed cases. The comparison of the associated CO2 emissions is given in  REF _Ref471711907 \h Figure 3. CO2 emissionsFigure  SEQ Figure \* ARABIC 3 CO2 emissions depending on the level of internalization of external costs Comparing the two observed levels of external cost inclusion, namely the  candidates only variant, depicted by the thick black line, and  candidates + existing units , depicted by the thick grey line in  REF _Ref471711907 \h  \* MERGEFORMAT Figure 3, it can be noticed that emissions in the latter variant are lower throughout the period, regardless the natural gas availability. That means that the existing power plants, that are generally more polluting than the new ones, are dispatched less frequently since they are also affected by external costs. If however the external costs are added only to candidate units, emissions in the first half of the period are even higher than in the reference case, since the existing power plants (now uncharged) gain priority in the economic loading order. The analysis also showed that external costs should be introduced with care, because they can not only affect the choice of new1f1~111111ʠ1Π1Р1Ҡ111:1D1^1z1110011ʡ1̡110.1018111111£1B1121H111111111ƥ1Х1ܥ1111,1R0T1X1Z11111 power plants to be built in the system, but also operation of the system i.e. dispatching of units. Conclusion The impact pathway method links environmental and health burdens caused by electricity generation with physical impacts they cause and assigns monetary values to the latter. External costs considered here are only those caused by health effects of airborne emissions  particulates, SO2 and NOx and their secondary forms, sulfates and nitrates. Results show that damages linked to coal power plants are much larger than those linked to gas fired facilities, since the latter are responsible only for NOx emission and nitrates. Regional dispersion of pollutants in the atmosphere was conducted for the majority of potential locations for future power plants in Croatia, which resulted in the range of damage costs: 0,7 to 3,6 mECU/kWh for the candidate coal unit i.e. 0,1 to 0,6 mECU/kWh for the candidate gas unit. The largest share in damage costs accounts for mortality effects attributable to particulate matter, sulfates and nitrates. As an example, the calculated external costs were applied in power system expansion planning. The analysis showed that external costs due to airborne emissions could influence both the optimal capacity mix and operation of the power system. The results showed that if external costs are to be introduced, they should be added both to the existing and candidate power plants. References (1( ExternE - Externalities of Energy, EC DG XII, Brussels, 1995. 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