Costs of achieving emission limits in coal-burning power plants under the recent best available techniques regulation amendment: Evidence from national microeconomic data

Abstract

Emissions limits for coal-burning power plants are gradually being tightened around the world, with additional requirements and consequently significant costs placed on existing power plants. Design that conforms to regulatory requirements require credible estimation of the associated abatement costs. However, the existing methods for estimating abatement costs do not estimate those costs using microeconomic data or take the need to retrofit current abatement technologies into sufficient consideration. Therefore, they fail to calculate the actual costs of compliance accurately and thus are not suitable for assessment of cost proportionality, which is the key principle of regulatory design. This paper introduces a straightforward and innovative methodological approach to quantification of abatement costs that can reflect the real-world situation at an individual power plant and allows assessment of proportionality in meeting emission standards. The approach is based on collection of detailed data at the level of individual plants and on the comparison of costs associated with various levels of emission reduction in defined scenarios. The approach is demonstrated by application to nearly 50% of the installed thermal power capacity of the Czech Republic. The results show that recent European regulations for coal-burning plant emissions incur high abatement costs for most power plants, despite having very little effect in terms of emission reductions.