Benefits and Costs of Controlling Emissions from Fossil-fired Power Plants: Region IV, Philippines

The study assessed the incremental benefits and costs of different options to control PM10 and SO2 emissions from fossil-fired power plants using two power plants in Region IV (Southern Tagalog), Philippines, as case studies. Benefits were estimated by modeling the changes in ambient concentrations arising from the control, estimating the improvements, and valuing these in economic terms. The study focused on adverse health effects, using dose-response function established in other studies, and economic values based on the benefit transfer technique. Control costs were estimated using the engineering cost approach. Impacts were assessed within 10 and 50 km radius from each plant. The study showed that existing controls for particulates met the emissions standard. However, the use of fuel with standard sulfur content was not sufficient to meet SO2 emissions standard. Thus, a review of the sulfur content standard in fuel was recommended. SO2 emissions from each of the two power plants translated to maximum predicted ambient concentrations that were significant relative to the maximum allowable ambient concentration. The value of the health effects avoided was much larger when the impact area was extended from 10- to 50-km radius, it was much larger for oil than for coal, with the value of mortality effects avoided dominating the total. Among the different options analyzed only the switch to cleaner fuel for oil and increased thermal efficiency for coal were justified. With a switch to cleaner fuel, the value of health damage avoided considering a 50-km impact area was 0.08% to 3.34% of the current average selling price of electricity, implying a 0.11 % to 4.31 % increase in the average cost of power service if the power plants were made to internalize the health damages.