How can Indian power plants cost-effectively meet the new sulfur emission standards? Policy evaluation using marginal abatement cost-curves

The first-ever SO2 emission concentration standards for Indian coal-power plants were notified on December 7, 2015. In light of the new stringent standards, this paper conducts a techno-economic policy evaluation of SO2 abatement options by building a system-wide marginal abatement cost curve (MACC) for India. An abatement cost model is developed, to estimate retrofit costs for three end-of-process (EOP) SO2 abatement technologies. A system-wide SO2 MACC is derived based on cost optimal allocation of EOP abatement technology to each boiler. Compliance with the new stricter emission standards is evaluated at 75% pollution reduction ( approximate to 4600 kt-SO2 reductions per year). Compliance with the new standard corresponds to a marginal abatement cost of INR 23,500 per ton of SO2 ( approximate to USD 368.50 per ton of SO2) and total system-wide abatement cost of INR 75 billion ( approximate to USD 1.2 billion) per year. Reduction in pollution is estimated to save 46,000 lives per year at the cost of about INR 1.63 million per life per year. Sensitivity analysis of the MAC curve shows that plant capacity utilization has the most significant impact on total lifetime compliance costs followed by equipment fixed cost, sorbent cost, and water cost in that order.