Hidden costs

An extreme example of a "hidden" or "external" cost of fossil fuel generation was provided by UK consultant David Milborrow. A recent analysis claims the cost of electricity from new coal plant in Germany is ECU 0.059/kWh. But since the pithead price of coal in Germany is more than three times the world market price, the true generation price is over ECU 0.090/kWh. This extra cost is not paid by the utility sector, however, but by the taxpayer: subsidies to the coal industry amount to ECU 3811 million a year. The cost of wind power in Germany now averages ECU 0.097/kWh, said Milborrow, but costs less on good sites. "In Germany, where coal receives a subsidy, wind is now cheaper," he concluded.