What is meant by “externalized costs”?
Externalized costs are real costs that are not quantified within the levelized cost calculations presented in the internalized cost articles. These costs are directly or indirectly paid by various sectors of the economy in forms such as pollution-related health costs, grid integration costs of intermittent renewables, and a reduction in the free services rendered by the biosphere.
Externalized costs of synfuels
Synfuel energy storage externalities arise primarily from the thermodynamic losses resulting from multiple low efficiency conversion steps. A recent study reviewed several literature studies on the subject and compiled the following graph of the global warming potential resulting from H2 production via different pathways:
Here we will assume that H2 is produced from renewable electricity resulting in equivalent CO2 emissions of about 2 kg/kg H2. When converting H2 back to electricity, the environmental impact will double primarily due to substantial thermodynamic losses, yielding CO2 emissions of 0.12 ton/MWh. Similar to the previous article on battery storage, we will assume a CO2 price of $36/ton and double the resulting cost to account for environmental impacts other than climate change. The result is a cost of $9/MWh – about the same as was the case for battery storage.
The externality per unit energy will probably be similar when storing energy in synthetic natural gas or liquid synfuels that can be directly used with existing infrastructure. For perspective, the internalized cost of power to gas to power energy storage was calculated as $330/MWh in an earlier article.
If you have a number that differs significantly from the $9/MWh estimate given above, please add it in the comments section below. Please start your comment with the keyword “DATA”, followed by a brief explanation and preferably a linked reference. Each DATA comment will be weighted by the number of “likes” when the data is ultimately processed.
Many comments are welcome. More data = greater accuracy.