Optimized electricity expansions with external costs internalized and risk of severe accidents as a new criterion in the decision analysis

The external cost of severe accidents was incorporated as a new element for the assessment of energy technologies in the expansion plans of the Mexican electric generating system. Optimizations of the electric expansions were made by internalizing the external cost into the objective function of the WASP-IV model as a variable cost, and these expansions were compared with the expansion plans that did not internalize them. Average external costs reported by the Extern E Project were used for each type of technology and were added to the variable component of operation and maintenance cost in the study cases in which the externalises were internalized. Special attention was paid to study the convenience of including nuclear energy in the generating mix. The comparative assessment of six expansion plans was made by means of the Position Vector of Minimum Regret Analysis (PVMRA) decision analysis tool. The expansion plans were ranked according to seven decision criteria which consider internal costs, economical impact associated with incremental fuel prices, diversity, external costs, foreign capital fraction, carbon-free fraction, and external costs of severe accidents. A set of data for the calculation of the last criterion was obtained from a Report of the European Commission. We found that with the external costs included in the optimization process of WASP-IV, better electric expansion plans, with lower total (internal + external) generating costs, were found. On the other hand, the plans which included the participation of nuclear power plants were in general relatively more attractive than the plans that did not. (Author)