The hidden costs of electricity

¹ UMR CNRS Art-Dev, Université de Montpellier (CREDEN), Espace Richter, CS 79606, 34960 Montpellier Cedex 2
² Société Chimique de France, 28 rue Saint Dominique, 75007 Paris

^* jacques.percebois@umontpellier.fr
^** stanislas.pommeret@societechimiquedefrance.fr

Abstract

The price of electricity must take into account all the costs, both direct and induced, which are often hidden. This is true when calculating the average production cost per kWh at the power station. It is also true in the context of the operation of the wholesale electricity market based on the merit order, which leads to power stations being called on the basis of the marginal cost per kWh. Ignoring these hidden costs leads to distortions of competition and sub-optimal choices.