Tuesday, December 18, 2007

Dollars and Sense

Since Santee Cooper recently became a patron of the economic impact business, Clean Energy for South Carolina thought it would be timely to point out a study conducted by the government of Ontario. In that Canadian province, the government is responsible for both providing power and health care. So when it came time for the government to find out if continued reliance on coal-fired electricity generation made financial sense, they didn't just rely on inflated jobs numbers, they included the environmental and health costs of coal in their study and compared it against other alternatives.

What did they find? They found that the levelized cost of coal is $37/MWh (presumably in Canadian dollars) if environmental and health damages are not included. But when health and environmental costs are included, the cost of coal inflates to $164/Mwh -- that's right, the cost more than quadrupled. In fact, health and environmental costs make up over three quarters of the true cost of coal.

But here's the rub. Unlike Ontario, Canada, where the government provides both power and health care, in South Carolina Santee Cooper doesn't have to pay the environmental and health costs of coal. But YOU DO. Oh and by the way, if you are a Santee Cooper customer, you'll also end up paying for that new coal plant too, through higher rates.

Still think coal is cheap? Still think its a good investment for South Carolina?

Ontario has taken this data and decided it's in its financial best interest to shut down its coal plants. One has already been demolished.

We're a long way from that in South Carolina; the least we could do it stop a new coal plant from being built.

If you support that, you're not necessary an environmentalist, or a someone concerned about your childrens' health -- you could just be someone interested in fiscal responsibility and sound economics for our state.

4 comments:

Anonymous said...

Wow!

It should be interesting to see how Santee Cooper and ABEC spin these numbers.

This is important information.

Great find!

Anonymous2 said...

Again, you guys are incredible spin masters. This report is over 2 years old. This is not some great news flash like you make it out to be.

Even the plant you link to that is being demolished was planned for demolition in 2005 and was not even part of the report. Did you even read the executive summary? Oh, but wait, you did, you just wrote the story to read like you wanted it to, so you left out some really inconvenient FACTS! Geesh!

These plants were being replaced because they were OLD. I could even let you guys call these plants "dirty coal." Did you even notice that one scenario in the report included upgrading these plants to current pollution control technology? Santee Cooper's proposed plant has BETTER technology than that proposed by the study.

This report was written prior to the Katrina storm, so natural gas prices were not assumed higher than $9 CAN/MMBtu. After Katrina, everything changed and those prices have been has high as $16/MMBtu US.

So if you were to read table I-1, page ii, the difference in total cost (including your mentioned health costs) between replacing these plants with all gas and upgrading to current emission control technology is almost nothing. If you add in the gas cost increase since Katrina, it would be more cost effective to improve the existing coal plants. As I read it, it is better to upgrade the pollution technology on the coal plants than switch to gas.

So, cannot wait to hear from Mike, the paid hit man, on this one!

Student said...

Are you saying that coal does not carry with it environmental and health costs that DWARF the cost to build and operate a coal plant? That DWARF the costs of other fuels?

From what I've read, Ontario still intends to dispense with its coal fleet (although Big Coal guys like you seems mighty angry about it).

YOU are the only one I see spinning the facts. (Thanks for granting the first commenter's wish. Of course, spin is the ONLY way to make a fuel like coal look good!)

Anonymous2 said...

From the below story that responds to this:

What I was talking about is TOTAL COST. Just like that displayed in the graph here.

To get these numbers, you have to add up the financial cost from table 4.9 on page 14, the health costs from table 6.7 on page 29, and the environmental costs from table 8.1 on page 33.

Let me make this perfectly clear for you. If you compare Old coal and gas you get the graph on the webpage. If you add the retrofitted coal plant option (modern emissions controls or "clean coal" technology added to the old coal plants) in the report to the graph, the total electricity cost for clean coal is 10.4 cents/Kwh vs the 9.8 for gas, so they are very close.

Now, if you take into account increased energy prices since the report was completed in 2005 and leave everything else the same, the TOTAL COST of gas becomes higher than clean coal.

I added 40% to the gas fuel cost (that takes it to $16/MMBtu vs the $9/MMBtu in the report - US $ is about = to CAN $ BTW, but I know you can look that up).

I also added 20% to coal fuel cost, as that has increased since the report was released as well.

If you do that, you get a TOTAL COST of 12.95 cents/Kwh for gas and 11.46 cents/Kwh for clean coal.

CLEAN COAL IS CHEAPER IN TOTAL COST!

That should make perfect sense for you.

Hey, I even went to the trouble of creating some charts for you (complete with references, unlike most stuff here). You can download them here:

http://www.mediafire.com/?aeznjxyn9ds

Let me know if you need anymore help!