Considering environmental costs in energy planning. Alternative approaches and implementation

This paper provides a brief overview of the developing role of environmental costing in electric resource selection. While unlikely to create overnight change in the way resources are selected, the consideration of these costs will likely continue to grow in importance, creating new opportunities for emerging technologies and new challenges for utility and regulatory decision-makers. As the definition of cost-effectiveness is broadened by environmental cost analysis, the menu of technologies will likewise be broadened. Increasingly, the question of environmental characteristics will be shadowed by issues of finance, operation, and dispatchability. This paper evaluates solar thermal first on a 'social cost' basis, and then evaluates it in terms of operational characteristics to describe the cost, environmental, operational, and other characteristics that make solar thermal a particularly attractive technology in the emerging utility environment. The hybrid nature of solar thermal facilities creates a major reduction in social costs while sacrificing little or nothing in terms of operational flexibility. Extremely flexible in terms of modularity; with applications from 25kW to 80MW currently technologically feasible. This flexibility further broadens the attractiveness of solar thermal for dispersed applications, for alleviating localized transformer/conductor overloads, and enhancing localized reliability. While at present most environmental cost analysis deals with future resource decisions, in the future it may be used to justify retro-active adjustments in resource mixes and prudency rulings; solar thermal technologies therefore have a 'hedge' value. The paper concludes that solar thermal can, in a number of select applications, provide a fitting compromise of environmentally benign power and operational and distributional flexibility. It behooves the solar thermal industry to track social cost developments, and focus them to support continued opportunities to foster the technology.