Impact of social costing on the competitiveness of renewable energies: the case of Crete

Abstract One of the most important barriers hindering the large-scale exploitation of renewable energy sources (RES) is the higher cost of renewable systems compared to those relying on the combustion of conventional fuels. Such a comparison does not take into consideration the economic burden associated with the many environmental impacts of conventional systems. This paper tries to investigate the effect of social costing in energy decision making and more specifically in the comparison of alternative action plans to satisfy electricity demand. The examined case study refers to the autonomous electricity system of Crete. The results show that the higher the penetration of RES into the energy system, the lower the social cost (i.e. the sum of the private and external cost) of electricity imposed on the society as a whole.