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What is the affordability challenge?

Calculating the cost

Broadly speaking, energy sources fall into one of two categories. One consists of free or inexpensive fuels that must be harnessed using relatively costly machinery; the other consists of costly fuels that can be harnessed at relatively little expense.

The first category includes nuclear power and renewable energy sources like wind, sunlight and flowing water. The second includes fossil fuels like coal, oil and natural gas.

High-carbon energy sources like fossil fuels could become more costly as a result of increases in world demand, shortages of supply and taxes and levies on greenhouse gas emissions. Carbon capture and storage (CCS) technology could potentially reduce emissions from power stations, limiting the effects of these taxes; but CCS technology itself is expected to increase the cost of generating electricity using these energy sources.

The low-carbon electricity generating technologies that could present a solution to climate change – offshore wind farms and solar photovoltaic (PV) panels, for example – have typically been relatively recently developed, so their costs are relatively high and have not yet stabilised.


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