The trade-off between financial and environmental cost with generation expansion planning: A South African case study

摘要

Electricity Generation Expansion Planning (GEP) focuses on supply options with a holistic approach, which accounts for the technical nature of the electricity sector, and also considers social, economic, and environmental issues. In this paper a multi-objective GEP is undertaken to provide guidance to decision-makers on the trade-off between cost, quality of service, and environmental impacts in the South African electricity sector . Diminishing marginal returns are shown. Above a certain environmental cost weighting the optimal generation plan does not lead to further reductions in CO2 emissions. By considering the Social Cost of Carbon ($29/tonne CO2) a 5% environmental cost weighing is deemed suitable. This is considered a realistic starting point for the incorporation of environmental awareness with energy planning. The cost impact of even a ‘moderate' carbon tax is substantial. The lowest level considered at 10 $/tonne CO2 results in 16% overall electricity cost increase relative to the least financial cost scenario, yet does not materially change the resultant CO2 emissions.