Tuesday, August 21, 2012

The Health Effects of Coal Electricity Generation in India

Abstract: To help inform pollution control policies in the Indian electricity sector we estimate the health damages associated with particulate matter, sulfur dioxide (SO2), and nitrogen oxides (NOx) from individual coal-fired power plants. We calculate the damages per ton of pollutant for each of 89 plants and compute total damages in 2008, by pollutant, for 63 plants. We estimate health damages by combining data on power plant emissions of particulate matter, SO2 and NOx with reduced-form intake fraction models that link emissions to changes in population-weighted ambient concentrations of fine particles. Concentration-response functions for fine particles from Pope et al. (2002) are used to estimate premature cardiopulmonary deaths associated with air emissions for persons 30 and older. Our results suggest that 75 percent of premature deaths are associated with fine particles that result from SO2 emissions. After characterizing the distribution of premature mortality across plants we calculate the health benefits and cost-per-life saved of the flue-gas desulfurization unit installed at the Dahanu power plant in Maharashtra and the health benefits of coal washing at the Rihand power plant in Uttar Pradesh.
Coal washing reduces the ash content of coal and improves its heating value: it also removes small amounts of other substances, such as sulfur and hazardous air pollutants. The use of washed coal improves the combustion efficiency of a plant (less coal needs to be burned to produce electricity). Per unit of heat input, particulate and sulfur emissions are reduced, as are flyash disposal costs and the cost of transporting coal. Use of washed coal may also reduce plant maintenance costs and increase plant availability....

We examine the costs and benefits of using washed coal at the Rihand plant,... a 2,000 MW plant that in 2008 produced 17,000 GWh of electricity, using coal with a sulfur content of 0.39 percent and an ash content of 43 percent. We assume that using washed coal would reduce the ash content of coal burned to 35 percent and the sulfur content to 0.34 percent and would raise the heating value of coal by 17 percent. Based on information provided by the CEA, we calculate the levelized cost of electricity generation (lcoe) at Rihand using unwashed coal to be 1.206 Rs/kWh. We estimate that using washed coal increases the lcoe by 16.5 percent, to 1.405 Rs/kWh.... Our cost analysis focuses only on the yield and direct operating costs of washing. Other researchers have found that the use of washed coal leads to significant gains in generation plant availability and plant load factor and reductions in repair costs (see, for example, Zamuda and Sharpe 2007). Our estimates take no account of these economic benefits, nor of likely rail freight savings.

The health benefits of coal washing ... come from reductions in the ash content of coal, which reduces PM2.5 emissions, and reductions in sulfur emissions. Tons of PM2.5 and SO2 emitted are also reduced by the fact that less coal need be burned to generate electricity. Although coal washing is usually regarded as a measure aimed at reducing SPM emissions, our analysis indicates that benefits due to the reduction in SO2 far outweigh those of lower PM2.5 emissions.....

The net impact of coal washing on mortality associated with air emissions from the Rihand plant is to save 251 lives. The increased cost of coal washing is Rs 3.39 billion, implying a cost per life saved of approximately Rs 13.5 million. This figure falls within the range of estimates of the value of a statistical life (VSL) for India which, conservatively estimated, ranges from Rs 1 million to Rs 15 million.  Bhattacharya et al. (2007) report a preferred VSL estimate of Rs 1.3 million (2006 Rs) based on a stated preference study of Delhi residents. Madheswaran’s (2007) estimate of the VSL based on a compensating wage study of workers in Calcutta and Mumbai is approximately Rs 15 million. Shanmugam (2001) reports a much higher value (Rs 56 million) using data from 1990.
Only one Indian power plant—Dahanu, in Maharashtra—is currently fitted with a FGD (scrubber),...  a 500 MW plant located in an environmentally sensitive area.... In 2000, the Indian Supreme Court ordered that an FGD be installed at the plant.

In the United States wet scrubbing is the most common [technology]. The U.S. EPA’s AP-42 database indicates that a wet scrubber can achieve up to 95 percent SO2 removal; equipment suppliers claim SO2 removal efficiencies of up to 99 percent with additives in the flue gas stream. The Dahanu FGD is a seawater scrubber: this type is particularly cheap to operate but has a maximum removal efficiency of about 80 percent.

Capital costs of wet scrubbers range from $100 to $200 per KW while the auxiliary power required for operation ranges from 1.0 to 3.0 percent of plant output, depending on coal sulfur level and removal level (MIT 2007). Operating costs of FGD units in the United States average 0.16 cents/kWh23 and range up to 0.30 cents/kWh depending on sulfur level, removal efficiency and the costs (or potentially revenues) from disposal of sludge (MIT 2007). Our analysis of generation costs shows that the retrofitted FGD at Dahanu adds about 9 percent to the lcoe. The Dahanu FGD has very low operating costs, as it employs seawater as the reactant to absorb SO2 rather than purchased chemicals....

Assuming coal with 0.5 percent sulfur content and an SO₂ removal rate of 80 percent, the FGD at Dahanu saves 123 lives per year, at a cost of Rs 3.55 million per life saved.... The costs of scrubbing will be higher at plants employing conventional wet scrubbers—in the neighborhood of 15 percent of the levelized cost of electricity. Benefits will be lower at plants burning coal with sulfur content lower than 0.5 percent.... At the Rihand plant, approximately 990 statistical lives would be saved....

by Maureen L. Cropper, Shama Gamkhar, Kabir Malik, Alex Limonov and Ian Partridge
Resources For the Future (RFF) www.RFF.org
Discussion Paper 12-25; June, 2012

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