Incorporating Energy Cycle Externality Costs and Benefits in India's Power System Planning Mechanisms
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World Bank, Washington, DC
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The power sector in India plays a
fundamental role in the economic development process. The
country faces formidable challenges in meeting its energy
needs in an environmentally sustainable manner and at
reasonable costs. The planning and operation of the sector
has hitherto been conducted without due regard to the
environmental consequences. As a result, additions to
capacity in recent years have been sub-optimal. Moreover
different types of capacity are treated differently.
Hydropower is required directly to bear more of its external
environmental costs than other sources. The recent Supreme
Court ruling has reinforced this tendency. Looking forward,
much of the large capacity additions required over the next
few years are likely to be coal-fired, with concomitant
effects on the country's environment. Against that
background, the paper looks at India's power generation
planning process; whether and how it might adapt in the
light of increased attention to environmental costs and
benefits; and if there are other, better ways of
internalizing environment externalities. It takes as its
starting point the conclusions of the companion paper by
Anil Markandya. These are that the external environmental
costs of fossil fuel generation are as high or higher than
estimates derived for developed countries; that estimates of
the external costs of both fossil-fuelled and hydro for
India should now be determined more precisely and used at
the strategic level in planning, at the regulatory level in
setting standards, in designing economic instruments and in
plant sitting decisions; and that the polluter pays
principle, which currently applies in the case of hydro,
should also be applied in other power sector developments.
Palabras clave
ABATEMENT COSTS, AFFORESTATION, AIR, AIR EMISSIONS, AIR POLLUTANTS, AIR POLLUTION, AIR QUALITY, ALLOWANCE, ALLOWANCE PRICE, ALLOWANCE TRADING, AMBIENT AIR, AMBIENT AIR QUALITY, AMBIENT AIR QUALITY STANDARDS, APPROACH, ASH, ASH CONTENT, ASH DISPOSAL, BALANCE, BENEFIT STREAMS, BURNERS, CALCULATION, CARBON, CARBON CONTENT, CARBON MARKET, CENTRAL PLANNING, CLEAN COAL, CLIMATE, CLIMATE CHANGE, CO, CO2, COAL, COAL GAS, COAL PLANT, COAL PRICES, COALS, COMBUSTION, COMPLIANCE COSTS, CONTINUOUS MONITORING, CONVENTIONAL COAL, COST ESTIMATES, COSTS OF ELECTRICITY, DEMAND FOR ENERGY, DEMAND FOR POWER, DEVELOPED COUNTRIES, DIESEL, DIESEL GENERATORS, DOMESTIC COAL, DROUGHT, ECONOMIC COSTS, ECONOMIC DEVELOPMENT, ECONOMIC FACTORS, ECONOMIC GROWTH, ECONOMIC INSTRUMENTS, ECONOMISTS, ELECTRIC GENERATION, ELECTRIC POWER INDUSTRY, ELECTRICITY, ELECTRICITY DEMAND, ELECTRICITY GENERATION, ELECTRICITY SECTOR, ELECTRICITY SYSTEM, ELECTROSTATIC PRECIPITATORS, EMISSION, EMISSION CAP, EMISSION FEES, EMISSION RATE, EMISSION REDUCTIONS, EMISSION STANDARDS, EMISSIONS, EMISSIONS ABATEMENT, EMISSIONS ALLOWANCES, EMISSIONS CONTROL, EMISSIONS STANDARDS, EMPIRICAL EVIDENCE, EMPLOYMENT, END-USER PRICE, ENERGY NEEDS, ENERGY POLICY, ENERGY PRODUCTION, ENVIRONMENTAL, ENVIRONMENTAL BENEFITS, ENVIRONMENTAL CONSEQUENCES, ENVIRONMENTAL COSTS, ENVIRONMENTAL DEGRADATION, ENVIRONMENTAL ISSUES, ENVIRONMENTAL MANAGEMENT, ENVIRONMENTAL POLICY, ENVIRONMENTAL PROTECTION, ENVIRONMENTAL QUALITY, ENVIRONMENTAL REGULATION, ENVIRONMENTAL REGULATIONS, ENVIRONMENTAL RESOURCES, ENVIRONMENTAL TAX, ENVIRONMENTAL TAXES, EXPENDITURES, EXTERNAL COSTS, EXTERNALITIES, FEASIBILITY, FEEDSTOCK, FINANCIAL COMPENSATION, FINANCIAL CONDITION, FINANCIAL COSTS, FINANCIAL INCENTIVES, FINANCIAL RESOURCES, FISHERIES, FLUE GAS, FOREST, FOREST CONSERVATION, FOREST LAND, FOREST RESOURCES, FOREST TYPE, FORESTRY, FORESTS, FOSSIL, FOSSIL FUEL, FREE RIDER PROBLEMS, FUEL PRICES, FUEL TYPE, FUELS, GAS, GAS PRICES, GENERATING CAPACITY, GENERATION CAPACITY, GENERATION MIX, GENERATION OF ELECTRICITY, GLOBAL WARMING, GOVERNMENT REGULATIONS, GROWTH IN DEMAND, GROWTH IN DEMAND FOR ELECTRICITY, HARMFUL EMISSIONS, HEAT, HEAVY FUEL OIL, HIGH ASH CONTENT, HYDRO PLANT, HYDROELECTRIC POWER, HYDROELECTRIC POWER STATIONS, HYDROPOWER, INCOME, LEACHING, LIQUEFIED NATURAL GAS, LNG, LOAD SHEDDING, LOSS OF FOREST, MARGINAL ABATEMENT, MARGINAL ABATEMENT COST, MARGINAL ABATEMENT COSTS, MARGINAL COST, MARKET POWER, MONETARY TERMS, NATURAL GAS, NATURAL GAS PRICES, NATURAL GAS TRANSMISSION, NEGATIVE EXTERNALITIES, NEGATIVE IMPACTS, NOX, OIL, PARTICULATE, PARTICULATE EMISSIONS, PARTICULATE MATTER, PARTICULATES, PENALTIES, PETROCHEMICALS, PETROLEUM, PETROLEUM PRODUCTS, POLICY INSTRUMENTS, POLICY MAKERS, POLLUTERS, POLLUTION, POLLUTION ABATEMENT, POLLUTION CONTROL, POSITIVE EXTERNALITIES, POWER CORPORATION, POWER GENERATION, POWER GENERATION CAPACITY, POWER GENERATORS, POWER PLANT, POWER PLANTS, POWER PRODUCERS, POWER SECTOR, POWER SECTOR PLANNING, POWER STATION, POWER STATIONS, POWER SUPPLY, POWER SYSTEM, POWER SYSTEM PLANNING, PRESENT VALUE, PRICE OF ELECTRICITY, PRICE OF EMISSION ALLOWANCES, PRIVATE COSTS, PRODUCERS, PROPERTY RIGHTS, PUBLIC HEARINGS, QUALITY STANDARDS, REDUCING EMISSIONS, REGULATORY FRAMEWORK, RENEWABLE RESOURCES, RETAIL COMPETITION, RISK MANAGEMENT, SHADOW PRICE, SHADOW PRICES, SO2, SULPHUR, SULPHUR CONTENT, SULPHUR DIOXIDE, SULPHUR EMISSIONS, SUPPLY OF ELECTRICITY, TAX RATE, TAX REFORMS, TEMPERATURE, THERMAL CAPACITY, THERMAL PLANT, THERMAL PLANTS, THERMAL POWER, TRADABLE ALLOWANCES, TRADABLE EMISSION, TRADABLE EMISSIONS, TRADABLE PERMIT, TRADABLE PERMIT MARKETS, TRADABLE PERMITS, TRANSMISSION CAPACITY, TRANSMISSION LINES, TRANSMISSION SYSTEM, UNINTENDED CONSEQUENCES, UTILITIES, WASTE MANAGEMENT, WHOLESALE PRICE