Externality costs of the coal-fuel cycle: The case of Kusile Power Station

Abstract

Coal-based electricity is an integral part of daily life in South Africa and globally. However, the use of coal for electricity generation carries a heavy cost for social and ecological systems that goes far beyond the price we pay for electricity. We developed a model based on a system dynamics approach for understanding the measurable and quantifiable coal-fuel cycle burdens and externality costs, over the lifespan of a supercritical coal-fired power station that is fitted with a flue-gas desulfurisation device (i.e. Kusile Power Station). The total coal-fuel cycle externality cost on both the environment and humans over Kusile's lifespan was estimated at ZAR1 449.9 billion to ZAR3 279 billion or 91c/kWh to 205c/kWh sent out (baseline: ZAR2 172.7 billion or 136c/kWh). Accounting for the life-cycle burdens and damages of coal-derived electricity conservatively, doubles to quadruples the price of electricity, making renewable energy sources such as wind and solar attractive alternatives. Significance: The use of coal for electricity generation carries a heavy cost for social and ecological systems that goes far beyond the price we pay for electricity. The estimation of social costs is particularly important to the electric sector because of non-differentiation of electricity prices produced from a variety of sources with potentially very dissimilar environmental and human health costs. Because all electricity generation technologies are associated with undesirable side effects in their fuel-cycle and lifespan, comprehensive comparative analyses of life-cycle costs of all power generation technologies is indispensable to guide the development of future energy policies in South Africa.