Cost–benefit analysis of coal plant repurposing in developing countries: A case study of India

In the context of climate change, developing countries with sizeable coal capacities; such as South Africa, Chile and India; are exploring coal plants retirements by repurposing them for productive uses. However, a framework to establish the economic rationale for repurposing does not exist. We deve...

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Veröffentlicht in:Energy policy 2022-05, Vol.164, p.112911, Article 112911
Hauptverfasser: Jindal, Abhinav, Shrimali, Gireesh
Format: Artikel
Sprache:eng
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Zusammenfassung:In the context of climate change, developing countries with sizeable coal capacities; such as South Africa, Chile and India; are exploring coal plants retirements by repurposing them for productive uses. However, a framework to establish the economic rationale for repurposing does not exist. We develop a detailed cost-benefit framework for the same; for three applications – solar energy, battery energy storage and synchronous condenser; and apply it to a representative coal plant in India. Our findings reveal a strong economic rationale for repurposing. First, the present value of repurposing benefits outweigh corresponding decommissioning costs – the direct, indirect and total decommissioning costs are $58.11 million, $45.80 million and $103.91 million, respectively; the corresponding gross benefits from repurposing are $122.79 million, $468.03 million and $590.82 million, respectively. Second, even after excluding social benefits, net benefits of repurposing cover 10%–32% of capital expenditure of the repurposing options. Third, decommissioning costs are about 50% for coal plants in India (at $58 million) vis-à-vis plants in the US (at $117 million). Finally, we provide a methodology for selecting plants for repurposing; based on age, energy charges and qualitative factors. Our methods will serve as a template for coal plant repurposing in developing countries. •Repurposing coal plants for solar, battery storage and synchronous condenser combinations.•A cost-benefit framework of coal plant decommissioning vs repurposing in developing countries.•Decommissioning costs in India are approximately half of the corresponding costs in the US.•Direct, indirect, and total repurposing benefits outweigh corresponding decommissioning costs.•Repurposing benefits cover up to a third of capital expenditure of repurposing options.
ISSN:0301-4215
1873-6777
DOI:10.1016/j.enpol.2022.112911