Environmental costs estimation and mathematical model of marginal social cost: A case study of coal power plants
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DOIhttp://dx.doi.org/10.21511/ee.12(1).2021.08
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Article InfoVolume 12 2021, Issue #1, pp. 90-102
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An increase in electricity production is proportional to environmental risks due to continuous energy production. The paper aims to quantitatively estimate the environmental costs and mathematically model the marginal social cost associated with the lifespan of the coal power plants. Results revealed South Africa Tier 1 company optimum level of electricity production per annum at around 2.15 gigawatts, considering the emission costs and reasonable profit. 85% of the total emissions during the combustion phase average cost of the C02 emission discharged by coal is calculated as 0.23c/KWh, 0.085c/kWh is calculated for NO2, while SO2 is 0.035c/KWh. Total emission cost represents 69.2% of the total cost of producing 1 MGW of electricity. The results confirmed the company losses to be insignificantly considerable to the evaluated environmental costs and capital investment. However, the use of this newly developed mathematical model depends on the source of energy production to confirm the feasibility and profitability of investment in coal-powered stations using environmental management accounting and marginal social cost approaches.
Acknowledgment
The authors would like to acknowledge the National Research Foundation and Durban University of Technology for financial support.
- Keywords
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JEL Classification (Paper profile tab)Q56
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References47
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Tables1
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Figures7
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- Figure 1. Electricity generation quantity and cost of production
- Figure 2. Environmental impact of electricity production
- Figure 3. Scatter plot of cost of electricity vs Total electricity produced (sold)
- Figure 4. Regression analysis of the TSB of electricity vs Electricity sold
- Figure 5. CO2 emission in Mt Vs Electricity sold in GWh (2020)
- Figure 6. NO2 emission in Kt Vs Electricity sold in GWh (2020)
- Figure 7. SO2 emission in Kt Vs Electricity sold in GWh
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- Table 1. Total costs and total revenue of electricity produced for the past 20 years
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