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How much does electricity cost? Life cycle thinking applied to the calculation of environmental externalities of the Italian electricity mix

Publications - Paper

How much does electricity cost? Life cycle thinking applied to the calculation of environmental externalities of the Italian electricity mix

The study combines LCA approach with the calculation of external costs of air emissions to define a unique indicator of environmental impacts due to electricity consumption in Italy. The methodology is applied to the current electricity mix (2019) and scenarios for 2030.

In this study, we combined the LCT approach, which allowed quantifying emissions throughout the life cycle of kWh consumed in Italy for the current situation (2019 data) and a scenario for 2030, with the assessment of environmental externalities. This required adapting an LCA model, inherently non-site-specific, to cost values that vary depending on the emission location. The results obtained were 0.057 €2019/kWh for 2019 and 0.019 €2019/kWh for 2030. This implies that if the costs related to the life cycle of electrical kWh were to be internalized, the price per kWh of energy would be approximately 11% higher than the current one. Despite a value chain spread across the globe, most externalities occur within Italy and are associated with direct emissions from thermal power plants. The decarbonization of the mix by 2030 also contributes to a reduction in externalities and a market price more aligned with the actual cost of the product.

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