Contents lists available at ScienceDirect Energy Policy journal homepage: www.elsevier.com/locate/enpol How can Indian power plants cost-effectively meet the new sulfur emission standards? Policy evaluation using marginal abatement cost-curves ☆ Anish Sugathan a, ⁎ , Ritesh Bhangale b , Vishal Kansal b , Unmil Hulke b a Business Policy Area, Indian Institute of Management Ahmedabad, 380015 Gujarat, India b Indian Institute of Management Ahmedabad, 380015 Gujarat, India ARTICLE INFO Keywords: Power-plant emission standards SO 2 control technologies Abatement costs SO 2 inventory Indian electric-power sector ABSTRACT The first-ever SO 2 emission concentration standards for Indian coal-power plants were notified on December 7, 2015. In light of the new stringent standards, this paper conducts a techno-economic policy evaluation of SO 2 abatement options by building a system-wide marginal abatement cost curve (MACC) for India. An abatement cost model is developed, to estimate retrofit costs for three end-of-process (EOP) SO 2 abatement technologies. A system-wide SO 2 MACC is derived based on cost optimal allocation of EOP abatement technology to each boiler. Compliance with the new stricter emission standards is evaluated at 75% pollution reduction (≈ 4600 kt-SO 2 reductions per year). Compliance with the new standard corresponds to a marginal abatement cost of INR 23,500 per ton of SO2 (≈USD 368.50 per ton of SO 2 ) and total system-wide abatement cost of INR 75 billion (≈USD 1.2 billion) per year. Reduction in pollution is estimated to save 46,000 lives per year at the cost of about INR 1.63 million per life per year. Sensitivity analysis of the MAC curve shows that plant capacity utilization has the most significant impact on total lifetime compliance costs followed by equipment fixed cost, sorbent cost, and water cost in that order. 1. Introduction The aggregate SO 2 emissions from Indian coal-fired power plants witnessed a 71% increase from 3350 kTons in 2005–5740 kTons in 2012 (Lu et al., 2013). Recent studies show that India is rapidly over- taking China to become the largest emitter of anthropogenic SO 2 (Li et al., 2017). Studies estimate that among the many large point an- thropogenic sources of SO 2 , coal-fired power plants are responsible for 46–69% of India's total SO 2 emissions (Lu et al., 2013, 2011; Garg et al., 2002, 2001). As a criteria pollutant, there is substantial empirical evi- dence of the hazardous impacts of SO 2 (EPA, 2016). In particular, SO 2 is a major precursor to fine ambient particulate (PM2.5) concentration and acidic deposition, posing a high risk to human health (EPA, 2016), and agriculture and vegetation (Emberson et al., 2001). In India, pol- lution from coal power plants is associated with increased incidence of respiratory illness – about 75% of premature cardiopulmonary deaths for persons 30 years and older living in the vicinity of power plants, and about 80,000 to 115,000 premature deaths in total (Gupta and Spears, 2017; Guttikunda and Jawahar, 2014). This recent spike in power plant building has led to widespread public outcry demanding stringent regulations on hazardous SO 2 emissions from power plants (Gupta and Spears, 2017; Guttikunda and Jawahar, 2014; Ramesh, 2014; GOI, 2013). As a result, the first-ever regulations on Indian coal power plant SO 2 emission concentration were announced on December 7, 2015. Despite the stringent timelines and limits set by the new standards, minimal progress has been reported in the adoption of the sulfur control norms. As per estimates, 90% coal power plants in India continue to violate the emission norms by the first compliance deadline of December 7, 2017 (Patel, 2017). Sethi (2017) argues that it will be easier for the government to enforce the new standards for the newer more efficient supercritical power plants. However, it is likely that Government may invoke the discretionary di- rective powers vested by the Section-5 of the Environment Protection Act, 1986 to consider the fleet of older power plants on a case by case basis. Consequently, the Central Electricity Authority has extended the deadline for compliance in a phased manner between 2020 and 2024. A recent survey of plant operators suggests that lack of clarity on the techno-economical viability of SO 2 abatement options suitable for the Indian conditions, and regulatory uncertainty on potential future benefits of investment in abatement — like revenue from emissions trading, etc. — are the most prominent factors responsible for slow adoption (Bhati, 2016). Nonetheless, as per our knowledge techno-economic policy https://doi.org/10.1016/j.enpol.2018.06.008 Received 23 February 2018; Received in revised form 31 May 2018; Accepted 4 June 2018 ☆ The corresponding author is thankful to Harvard's Sustainability Science Program for hosting the India Initiative and acknowledges funding support from SAP Labs India, and from Italy's Ministry for Environment, Land and Sea. Rama Mohana R. Turaga, Sarath K. Guttikunda, Amit Garg, and two anonymous reviewers provided invaluable intellectual inputs. ⁎ Corresponding author. E-mail address: anishs@iima.ac.in (A. Sugathan). Energy Policy 121 (2018) 124–137 0301-4215/ © 2018 Elsevier Ltd. All rights reserved. T