Comprehensive Environmental and Economic Assessment of Low-Carbon Energy Sources

Dmitry Y. Dvinin, Alexey Y. Davankov

Chelyabinsk State University, Chelyabinsk, Russia

Abstract

The article presents the results of a study of various low-carbon energy sources based on a multi-criteria analysis for the purpose of a comprehensive environmental and economic assessment of the effectiveness of their use. The peculiarity of the study is that it analyzed both renewable energy sources and traditional fossil fuel based ones using innovative technologies for carbon dioxide capture and storage, as well as nuclear energy. The purpose of this work is to conduct a comprehensive assessment based on three criteria: normalized cost of electricity LCOE (Levelized Cost of Energy)/LEC (Levelized Energy Cost), specific value of carbon dioxide emissions and material intensity expressed in total MI (Material Input) numbers. The hypothesis of the study is as follows: the introduction of the criterion of material intensity in MI numbers into a comprehensive assessment will allow one to identify low-carbon energy sources with the greatest ecological and economic effect. As a result, it was found that in 2023, the global energy capacity of low-carbon energy sources reached 51.8%, but the share of energy produced by them is significantly lower, amounting to only 39.4%. The multi-criteria analysis made it possible to identify low-carbon energy sources that, at the lowest cost, provide the greatest reduction in carbon dioxide emissions, and at the same time reduce the overall environmental impact by reducing the disturbance of biospheric material flows. Wind farms have high ecological and economic efficiency, while solar energy sources and bioelectric power plants – slightly less so. Geothermal and hydroelectric power plants have a low normalized cost of electricity, but they have relatively high values of material intensity. The environmental and economic efficiency of nuclear power is higher than that of gas and coal-fired power plants using carbon dioxide capture technologies; it occupies an intermediate position between renewable and traditional energy sources. An unexpected established fact is that gas and coal-fired power plants with carbon dioxide capture technologies have the same environmental and economic efficiency. The results obtained can be useful in making decisions about the possibility of prioritizing the development of individual low-carbon energy sources.

Keywords

low-carbon energy sources; levelised cost of energy; specific carbon dioxide emission; material intensity; integrated environmental and economic efficiency

JEL classification

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Acknowledgements

The research was supported by the Russian Science Foundation grant No. 24-28-00900, https://rscf.ru/project/24-28-00900

About Authors

Candidate of Economic Sciences, Associate Professor, Senior Researcher, Associate Professor of the Department of Geoecology and Environmental Management, Chelyabinsk State University, Chelyabinsk, Russia (454001, Chelyabinsk, Kashirin Brothers street, 129); ORCID https://orcid.org/0000-0002-9451-4445 e-mail: dvinin1981@mail.ru

Alexey Yurievich Davankov

Doctor of Economics, Professor, Leading Researcher, Professor of the Department of Economic Theory and Regional Development, Chelyabinsk State University, Chelyabinsk, Russia (454001, Chelyabinsk, Kashirin Brothers street, 129); ORCID: https://orcid.org/0000-0002-0209-5301 e-mail: iserp@csu.ru

For citation

Dvinin, D.Yu., Davankov, A.Yu. (2024). Comprehensive Environmental and Economic Assessment of Low-Carbon Energy Sources. Journal of Applied Economic Research, Vol. 23, No. 3, 696-720. https://doi.org/10.15826/vestnik.2024.23.3.028

Article info

Received June 17, 2024; Revised July 18, 2024; Accepted July 24, 2024.

DOI: https://doi.org/10.15826/vestnik.2024.23.3.028

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