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Abstract The contribution of fossil fuels (mainly natural gas and oil) in electricity generation in Egypt accounts for about 89.93% of the total production in 2009/2010, the rest 10.07% is from hydro and wind power. However, the price of electricity in Egypt reflects only the direct cost of production. The supply and use of energy causes damage to a wide range of receptors, including human health, natural ecosystems, and the built environment. Such damages are referred to as external costs, as they are not reflected in the market price of energy. These externalities have been traditionally ignored. The externalities include the so-called social and environmental effects, i.e. costs that must be born by third party which are not incorporated in the production costs such as expenditures for impacts of human health, natural ecosystem, climate change and depletion of non-renewable resources. In order to achieve a rational economic decision regarding the choice of the energy sources, it is imperative that different options are evaluated. In the absence of systematic information based on quantifying externalities of competing energy sources and technologies, the Government of Egypt can not take necessary action for achieving optimal allocation of resources through market forces. Also, the need to avoid market distortions, caused by ignoring social & environmental externalities, for attaining healthy economy is becoming a necessity in day-to-day practice. On the other hand, present prices have turned back to be heavily subsidized. Costs of health impacts and environmental damage as well as costs handed on to the future generations are not included in pricing process.Evaluation and internalization of external costs of electricity production has to be based on clear understanding of the consequences on the environment that result from generation of the electrical energy. This will certainly include airborne pollutants and global warming impacts due to GHG emissions. Taking account of these impacts in energy policy, planning and operation could alter the magnitude and mix of resources used to meet energy demand with salutary effects for the environment, public health and long-term ecological and economic sustainability. In this context, this thesis aims at quantifying externalities linked to electricity generation in Egypt utilizing a variety of the available energy resources and technologies. The main objective is to establish externalities assessment on national level via using new methodological elements for integration into the existing cost accounting framework that reflects the new developments in the assessment of external costs. The present study comprises the following: a) Literarily analysis, which takes into consideration the various externalities studies conducted either for systematic research or within the framework of a country-level or regional-based analytical research projects. It also considers the variety of methodological approaches that have received a special importance alongwith research efforts exerted to externalities studies. b) Use of simple statistical relationships as well as series of complex models and database. This Work contains the following procedures: 5. Develop an effective ”bottom-up” methodology. 6. Assess fuel cycles (the entire cycle for each fuel type and technology) that are incorporated in the Egyptian Generation Expansion Plan and are potential to be mainstreamed soon in the Egyptian Power System, in comparison with the Egyptian most typical power plants.7. Assess different fuel cycles utilized in Egypt consistently, represented by selected most typical Egyptian power plants (this assessment includes evaluation of impacts associated with conversion phase only). 8. Perform reliable assessments of marginal costs. 9. Identify key externality issues for future policies. For each fuel cycle the accounting framework includes the application of methodology to that specific fuel cycle, detailed quantification of impacts and their evaluation in monetary terms. The term ”fuel cycle” refers to the chain of processes linked to the generation of electricity from a given fuel. The assessment of each fuel cycle includes evaluation of the impacts associated with: - construction of new plant; - resource mining; - transport of fuel, wastes, other materials; - power generation; - waste disposal; and - electricity transmission. Analysis begins with the identification of stages of fuel cycle under assessment. Burdens and impacts are then described for each stage. Priority areas for assessment are identified, based partly on the results of earlier studies and partly on expert judgment. Realistic sites and technologies are then selected for the full fuel cycle, in recognition of the fact that they determine the magnitude of many impacts. Impact assessment and valuation is performed using the ”damage function” or ”impact pathway” approach. This approach assesses impacts in a logical manner, using the most appropriate models and data available. Methods range from the use of simple statistical relationships, as in the case of occupational health effects, to the use of series of complex models and databases, as in the cases of acid rain and global warming effects. A detailed definition of both the fuel cycle and the system within which the fuel cycle operates is provided, with respect to both time and space. Typical data required include - Technological and emissions data - The legal framework governing emissions, health and safety, etc. - Specifications of the fuel used - Meteorological conditions affecting dispersion of atmospheric pollutants - Demographic data - Condition of ecological resources - The value systems of individuals which determine the valuation of non-marketed goods. The study has recognised the importance of selecting the most appropriate dose/ response functions and models for the assessment of pollution impacts. Previous studies as well as expert judgement are used to identify the functions to be used for damage assessment in the following areas: - Human health - Building materials - Crops - Critical resources The acquired conclusions interpret the externalities significance, which enhances the use of alternative power generation options, particularly renewables and climate-friendly power production, such as nuclear power and cleaner fossil technologies. It, also, guides to the required improvements in fuel cycles used, combustion systems and operational efficiency for maintaining the desired environmental and social quality at a minimum externality cost. The research considered here calls for transformative change from conventional power sector planning to integrated resource planning, which makes it possible to explore linkages, evaluate trade-offs, internalize externalities and compare consequences, thereby help develop an effective energy / power strategy that supports national sustainable development goals.Results are, thus, presented and discussed. Also, further research in this field is proposed. Based on the contents of this thesis, the following paper has been published: Prof. Dr. Tawfik, M. A.; Prof. Dr. Fahmi, K. M. and Eng. Bedrous, M. A. (2015). Quantifying Environmental Externalities in Egypt and its Impact for Enhancing Alternative Electricity Options. Magazine of Environmental Sciences, Institute of Environmental Studies and Research, Ain Shams University. |