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Economic comparison between coal-fired and liquefied natural gas combined cycle power plants considering carbon tax: Korean case

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  • Jeong, Suk-Jae
  • Kim, Kyung-Sup
  • Park, Jin-Won
  • Lim, Dong-soon
  • Lee, Seung-moon

Abstract

Economic growth is main cause of environmental pollution and has been identified as a big threat to sustainable development. Considering the enormous role of electricity in the national economy, it is essential to study the effect of environmental regulations on the electricity sector. This paper aims at making an economic analysis of Korea's power plant utilities by comparing electricity generation costs from coal-fired power plants and liquefied natural gas (LNG) combined cycle power plants with environmental consideration. In this study, the levelized generation cost method (LGCM) is used for comparing economic analysis of power plant utilities. Among the many pollutants discharged during electricity generation, this study principally deals with control costs related only to CO2 and NO2, since the control costs of SO2 and total suspended particulates (TSP) are already included in the construction cost of utilities. The cost of generating electricity in a coal-fired power plant is compared with such cost in a LNG combined cycle power plant. Moreover, a sensitivity analysis with computer simulation is performed according to fuel price, interest rates and carbon tax. In each case, these results can help in deciding which utility is economically justified in the circumstances of environmental regulations.

Suggested Citation

  • Jeong, Suk-Jae & Kim, Kyung-Sup & Park, Jin-Won & Lim, Dong-soon & Lee, Seung-moon, 2008. "Economic comparison between coal-fired and liquefied natural gas combined cycle power plants considering carbon tax: Korean case," Energy, Elsevier, vol. 33(8), pages 1320-1330.
    • Handle: RePEc:eee:energy:v:33:y:2008:i:8:p:1320-1330
    DOI: 10.1016/j.energy.2008.02.014
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    Cited by:

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    3. Armin Leopold, 2016. "Energy related system dynamic models: a literature review," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(1), pages 231-261, March.
    4. Park, Sangwon & Lee, Seungmoon & Jeong, Suk Jae & Song, Ho-Jun & Park, Jin-Won, 2010. "Assessment of CO2 emissions and its reduction potential in the Korean petroleum refining industry using energy-environment models," Energy, Elsevier, vol. 35(6), pages 2419-2429.
    5. Chen, Qixin & Kang, Chongqing & Xia, Qing & Guan, Dabo, 2011. "Preliminary exploration on low-carbon technology roadmap of China’s power sector," Energy, Elsevier, vol. 36(3), pages 1500-1512.
    6. Chae, Yeoungjin & Kim, Myunghwan & Yoo, Seung-Hoon, 2012. "Does natural gas fuel price cause system marginal price, vice-versa, or neither? A causality analysis," Energy, Elsevier, vol. 47(1), pages 199-204.
    7. Višković, Alfredo & Franki, Vladimir & Valentić, Vladimir, 2014. "Effect of regulation on power-plant operation and investment in the South East Europe Market: An analysis of two cases," Utilities Policy, Elsevier, vol. 30(C), pages 8-17.
    8. Nandini Das & Shyamasree Dasgupta & Joyashree Roy & Oluf Langhelle & Mohsen Assadi, 2021. "Emission Mitigation and Energy Security Trade-Off: Role of Natural Gas in the Indian Power Sector," Energies, MDPI, vol. 14(13), pages 1-17, June.
    9. Allan, Grant & Gilmartin, Michelle & McGregor, Peter & Swales, Kim, 2011. "Levelised costs of Wave and Tidal energy in the UK: Cost competitiveness and the importance of "banded" Renewables Obligation Certificates," Energy Policy, Elsevier, vol. 39(1), pages 23-39, January.

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