Thursday, March 03, 2011

The Cost of Coal

A group of researchers from Harvard have published a full life cycle accounting of the cost of coal power in the United States, and the results could be meaningful for Delaware.

The study, titled “
Full cost accounting for the life cycle of coal,” was just published in the Annals of the New York Academy of Sciences. The authors calculate the externalities (environmental and health costs) of coal power to be $345.3 billion annually. (The authors present a range for each calculation; I will report the “best” calculation to reduce clutter. For instance, the range for the total cost of coal power in the U.S. is $175.2 billion to $523.3 billion.)

The externalities include land disturbance, public health costs in Appalachia, air emissions, and climate costs. If the costs were factored into energy prices, electricity from coal power would be an additional 17.84 cents/kWh. The Harvard study’s authors calculate the national cost of air emissions (one component of the costs) to be $187.5 billion annually, which would add 9.31 cents/kWh rates if it were included in electric bills. The average residential price in Delaware in 2008, according to the Energy Information Administration, was 13.93 cents/kWh.

The effects vary greatly by locality, so there is no way to neatly break down the costs for Delaware. The most directly relevant effect for Delaware would be the costs of air emissions from burning coal. Delmarva Power’s draft Integrated Resource Plan (IRP) includes a calculation of the benefits (in avoided health costs) of $1.8 billion to $4.3 billion over ten years from reducing coal power and increasing renewable energy. But comparing these numbers is not a straightforward exercise; the Harvard study calculates total externalities, while the IRP number is avoided externalities. Even so the Harvard study could provide a useful benchmark for Delaware. Stay tuned.

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