‘Externalities’ of Overhead Power Lines

Commentary by Pigini

Public opposition and growing environmental awareness now make identifying corridors for new overhead lines an increasingly complex process – especially near densely populated or sensitive areas. Given this, it has become important to examine methodologies that can help quantify the social and environmental impacts of any proposed new line project. Doing so could improve many aspects of the collaboration needed between the power company involved and local public and environmental bodies. One of these aspects is external costs.


In economics, an externality is something not transmitted directly through prices. A benefit is a positive externality while a cost is a negative externality. Examples of positive externalities in the case of a new overhead line could include: decreasing system congestion; unlocking more efficient generation; reducing losses and load shedding; and increasing system reliability. In this column, however, the focus will be on the negative externalities of new lines and in particular how these relate to the environment.

Generation and transmission of electricity have potential visual as well as health impacts. Inasmuch as such negatives are not directly integrated into the pricing of electric power (nor into the cost evaluation of line projects), they should be viewed as ‘externalities’. Unfortunately, placing a monetary value on visual impact is not easy. Yet this must somehow be ‘constructed’ in the absence of an incremental market price by assigning some value to it. One of the most important cost externalities of a new line relates to visual impact. This can be evaluated by asking people how much more they would be prepared to pay to avoid such an impact, for example in protected or touristic areas. Apart from this is what could be termed ‘proximity effects’ and these include electromagnetic field, audible noise and radio interference. Their combined impact can be estimated by how they affect the market price of homes and properties located next to power lines.

380 kV line passing near Milan places emphasis on high aesthetics to reduce cost of negative visual impact.

As far as impact on wildlife and biodiversity, avian collisions and mortality can be considered another permanent impact of a transmission line. Some monetary valuation mechanisms have been proposed that take into account the costs of re-populating local bird life. Power losses during transmission are yet another externality due to the incremental air pollution and greenhouse gas emissions linked to them. Other such effects should also be considered, including the environmental impact of the full life cycle of a new line from construction to end-of-life.

Attempts to quantify these types of external costs were presented in CIGRE Brochure 616 by WG C3.08. Even if the results are rather arbitrary, quantifying these types of environmental externalities can prove helpful in arriving at a more complete cost/benefit analysis. Doing so also allows the relative impacts of different line alternatives to be compared. Fig. 1a, for example, looks at the external costs (in euro/km/year) of line alternatives in an area with a limited number of homes and also limited bird life but where visual impact plays a major role. In other situations, such as lines passing urban areas, the impact of proximity to residential areas becomes higher and results in much greater total external costs, e.g. approaching more than one million euro/km of line/year for a 380 kV line near Milan in Italy (Fig. 1b).

Overhead Power Lines
Figs. 1a & b: Data derived from CIGRE Brochure 616 by WG C3.08.

Designers of overhead lines, supported by manufacturers of insulators, can make an important contribution toward reducing visual impact and increasing the acceptance of a new line by mitigating the so-called ‘proximity effect’. A wide range of innovative such solutions can be found in CIGRE Brochure 416 by WG B2.08.

Alberto Pigini

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