Impact Analysis of Internalizing Environmental Costs on Technical, Economic, and Environmental Performances for Power Plants

Electricity production has negative environmental effects. These effects cause costs (environmental costs) that are not considered in the calculation of the cost of electricity production. This study aimed to investigate the technical, environmental, and economic effects of internalizing these costs in total generation electricity costs. Accordingly, using historical data and the economic method of benefit transfer, the environmental costs associated with various methods of electricity generation were calculated for the environmental effects of existing power plants per kilowatt-hour of electricity generated. Then, the obtained costs were internalized into private electricity generation costs using mathematical modeling MATLAB software. The results showed that the environmental costs ranged from 0.052 to 0.135 C$/kwh in thermal power plants. Even though these costs were also present in renewable and clean energy power plants, they were relatively low. Also, internalizing these costs can change the electricity supply basket, with a predicted increase of 1.9% and 1.0%, respectively, in 2030 and 2050 in the share of clean and renewable technologies and decrease in fossil energy plants such as diesel. From 2017 to 2050, fossil fuel consumption is expected to decline by about 124 billion m(3) of natural gas equivalent, along with 136 MTCO2E reduction in pollutant and GHGs emission. Furthermore, the overall cost of producing electricity will decrease by 6337 billion dollars. Finally, it was found that the internalization of environmental costs would shift production away from power plants with higher investment costs and toward those with lower investment costs. However, thermal power plants, which produce an average of 85% for most electricity production. This is mainly due to other production costs, existing policies, and limitation on other sources of electricity production. [GRAPHICS]