Value chain · CLM-0190
In plain terms
This European study finds that a full Europe-wide space solar power programme would cost about 418 billion euros in today's money but return about 600 billion euros in benefits once the value of avoided fossil fuel generation, avoided CO2 emissions and R&D spillovers are all counted - a net benefit of roughly 150 to 260 billion euros depending on assumptions, and a net loss of about 171 billion euros if all its costs doubled. The value put on avoided CO2 emissions (about 233 billion euros) is larger than the whole net benefit, so the result rests on that valuation rather than on the electricity itself.
The claim as recorded
The same ESA-commissioned study's central-case, Europe-wide, multi-system SBSP programme cost-benefit analysis (2022-2070, discounted at a 3% social discount rate) gives total SBSP system cost of EUR417.9bn NPV (CAPEX EUR382.5bn, R&D EUR10.4bn, O&M EUR24.9bn), avoided terrestrial generation cost of EUR302.4bn, and monetised externalities of EUR298.1bn (of which avoided social cost of CO2 is EUR233.2bn, i.e. 78% of all externalities, R&D spillovers EUR64.5bn, and opportunity cost of land EUR0.3bn), for total benefits of EUR600.5bn and a central net benefit of EUR182.6bn; the report states that net benefits fall in a range of EUR148.9bn to EUR261.8bn across sensitivity analyses on discount rates (2.5%-3.5%), fossil fuel costs, the social cost of carbon (EUR300-400/tonne CO2) and launch capacity, the upper bound being the higher-fossil-fuel-cost case; outside that range, Table 3-12 gives a net benefit of minus EUR170.8bn if all SBSP costs double, EUR14.3bn if costs double with a slower ramp-up, and EUR767.4bn under a Business-As-Usual counterfactual.
Scope and limits
This is a programme-wide, multi-decade, multi-system European buildout estimate, not a single-project cost-benefit figure, so it is not directly comparable in scale to the UK Frazer-Nash single-system figures (CLM-0173, CLM-0175). The positive net benefit is highly dependent on monetising CO2 avoidance at the assumed social cost of carbon - without any externality valuation, the programme's direct cost (EUR417.9bn) would exceed its direct avoided-generation benefit (EUR302.4bn) by about EUR115bn. On the study's own Table 3-12 the sign of the net benefit also turns on cost: doubling all SBSP costs gives minus EUR170.8bn, and the report's statement that net benefits "would remain positive, at EUR14.3 bn" holds only "if a smaller number of satellites were to be launched".
What it assumes
A social cost of carbon in the EUR300-400/tonne CO2 range is the right way to value avoided emissions; the "Net Zero achieved" counterfactual (rather than Business-As-Usual) is the relevant comparison for the central case.
Where it comes from
"the central estimate of net benefits of SBSP in Net Present Value terms amount to EUR182.6 bn... the Net Present Value of SBSP system costs total EUR417.9 bn... the Net Present Value of avoided costs attributable to terrestrial energy generation... is equal to EUR302.4 bn... the total Net Present Value of externalities... amounts to EUR298.1 bn. The biggest element is the social cost of CO2 that is avoided, which constitutes 78% of all externalities." Table 3-11: SBSP total cost (417.9), CAPEX (382.5), R&D (10.4), O&M (24.9); avoided terrestrial cost 302.4; externalities total 298.1 (CO2 saved 233.2, R&D spillovers 64.5, land 0.3); total benefits 600.5; net benefit 182.6. Table 3-12 sensitivity: base case 182.6; discount rate 2.5% 209.8, 3.5% 159.3; higher fossil fuel costs 261.8; social cost of carbon EUR300/t 148.9, EUR400/t 215.4; slower ramp-up 155.0; outside the 148.9-261.8 range: Business-As-Usual 767.4, double SBSP costs (170.8), double costs and slower ramp-up 14.3, the same in Business-As-Usual 457.7. Printed p.42: "sensitivity analyses across discount rates, fossil fuel costs, social costs of carbon, and launch capacity". (p.41-42).
Basis: EUR, NPV, 3% social discount rate, 2022-2070 period
Related records
- Answers question
- QST-037 not published in this release
Cite this
energyaperture.com/c/clm-0190
CLM-0190, Energy Aperture, as of 2022-07.
Connected records
Other published records linked to this one. A list, not a judgement.
- Also from SRC-078
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