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 fuelcycle 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.