A CLEAN COAL-SOURCE OF POWER

GENERATION COST BENEFIT ANALYSIS

 Outline
• Costs of Coal

• Benefits of Coal

• Analysis of Current Energy Use

• Cost Benefit Analysis and Alternatives in the

Future
 INTRODUCTION
• Using coal to generate electricity produces more
greenhouse gases per resulting watt than using oil or
natural gas
• coal is cheap. In countries where there are no limits
on emissions and where demand for power is
growing rapidly, such as India and China, coal is
booming
• . Energy lore has it that in developing countries like
India a new coal-burning plant is fired up every week
 WHY COAL?
• India's imports have been growing steadily for the
past 20 years. The International Energy Agency, an
energy watchdog for rich countries, projects that
demand for coal will grow by 2.2% a year until 2030
—faster than demand for oil or natural gas.
• But poor and fast-growing places are not the only
ones with a hunger for coal. In America, more coal-
fired generation is being built than at any time in
the past seven years, despite the threat of emissions
caps
• Coal is now by far the cheapest of the common fuels
for power stations relative to the amount of heat it
generates when burnt (see chart). At the very least
that is encouraging utilities to run their existing coal-
fired plants flat out. But it is also prompting some to
convert oil-fired plants to run on coal instead .
• To be fair, many of the coal-fired power stations
under construction in Europe and America are very
efficient, and so emit less carbon per watt of output
than existing plants
 INDIA AND COAL…
• India is world's 6th largest energy consumer, accounting for 3.4% of
global energy consumption.
• Due to India's economic crisis the demand for energy has grown at an
average of 3.6% per annum over the past 30 years.
•  In June 2010, the installed power generation capacity of India stood at
162,366 MW while the per capita energy consumption stood at 612 KWH.
• The country's annual energy production increased from about 190 billion
kWH in 1986 to more than 680 billion kWH in 2006.  
• The Indian government has set a modest target to add approximately
78,000 MW of installed generation capacity by 2012 which it is likely to
miss.  
• The total demand for electricity in India is expected to cross 950,000 MW
by 2030
 Facts
• About 70% of the electricity consumed in
India is generated by thermal power plant,
21% by hydroelectric power plant and 4%
by nuclear power plants.  More than 50% of
India's commercial energy demand is met
through the country's vast coal reserves.
Power generation
• As recently as 2005, companies were saying
that proposed coal-fired power plants would
cost as little as $1,500/kW to $1,800/kW.
However, the estimated construction costs of
new coal plants have risen significantly since
then.
• Now it has risen to $2100/KW to $ 1800/kw
due to significant rise in other economic
facors .(ju
 scenario
cost coal Natural gas stringent

$985 $2076 $1529

Financial cost

Health damage $3020 $388 $365

Environmental $371 $141 $48

damages

Total cost of $4377 $2605 $1942

generation
 Total Cost of Generation
• Total cost of electricity generation (i.e., financial
costs plus health and environmental damages)
• Environmental Damages .
• Financial Costs
• Uncertainty and Sensitivity Analysis
• Human life (most in India due to mishap in coal
mines).
• Opportunity cost
 Costs of Coal
• Non-renewable resource.
• Burning coal increases carbon dioxide.
• Environmental health (increasing sulfur, nitrogen
oxide, and mercury).
• Human health (particulate matter).
• Unsafe mining.
• “And we have little more than a century to
develop adequate, practical, and inexpensive
technologies to replace some of these sources”.
 Benefits of Coal
• Inexpensive and abundant.
• Potential for development to become safer, an example
being gasification.
• Upgrading coal is more cost effective than going to an
alternative source of energy.
• Upgrading would also lower dependence on foreign oil.
• Reduce dependence on foreign countries for supply of
other expensive fuel as raw material for power
generation.
 Benefits continue…
• Cheap electricity per unit(3rd cheapest India).
• Employment opportunity( more labor
engaged).
• Efficient utilization of resource as coal.
• Multiplier effect on economy.
• Government control hence stability in coal
prices.
 Gaps and Limitations
• Not all health and environmental damages have
been included in this analysis.
• estimation methodologies used in this analysis
have some known limitations.
• A qualitative assessment of their potential effects
on the estimated net benefit of each scenario has
been prepared.
• These gaps and limitations need to be carefully
considered when interpreting the results of this
analysis.
 Recommendations for Further
Analysis
• Health and environmental damages associated
with nuclear power generation should be
included in future analyses.
• Additional scenarios should be analysed involving
alternative proportions of nuclear, gas, renewable
and other electricity generation options.
• The effects on net benefit estimates of delays in
bringing new capacity on line should be analysed.
• Further analysis of the scenarios should be
undertaken incorporating the effects of expected
electricity market dynamics.
 Conclusion
• The results of this analysis suggest that Scenario 3
(Nuclear/Gas) is likely to yield the greatest net benefit of
the four scenarios analyzed.
• The government is actively pursuing a diverse range of
generation technologies including refurbishing nuclear
plants, increasing natural gas and renewable generation
capacity, development of conservation programs and
seeking contracts to import hydroelectric generation from
other provinces.
• As new information becomes available in the future,
further analysis will be able to refine the net benefits
estimates associated with potential electricity generation
alternatives.