The Mae Moh power plant, with its 2,625 megawatt (MW) installation capacity,
is the largest thermal lignite1
-fired power plant in Thailand and in Southeast Asia,
meeting approximately 18 per cent of the national power demand. There have been
substantial environmental and social concerns regarding the operation of the plant
especially after the first incidence of air pollution caused by it in 1992 when the
expansion of the plant reached the capacity of 2,025 MW – apparently hitting the
ecological carrying limit of the surrounding environment. An all-time high reading of
the hourly average ground level of ambient sulfur dioxide (SO2) concentration of 3,418
micrograms per cubic meter (µg/m3
) was observed as compared with the then hourly
average Thai standard of 780 µg/m3
.
This abnormal increase in SO2 emission levels caused many people in several
villages near the power plant to suffer from respiratory symptoms such as cough,
asthmatic attacks, chest tightness and wheezing. Many of them were hospitalized. In
addition to the health impacts, damage to crops, trees and livestock was also reported.
1
Lignite is also called brown coal, the lowest rank of coal in terms of quality.
3
Damage to rice, field crops and vegetables was obvious; the leaves of many trees
withered and dropped overnight.
Negative reactions from the public, the affected people, non-governmental
organizations (NGOs) and the media due to the 1992 and subsequent air pollution
occurrences caused by the plant, and the high level of sulfur dioxide found in the air in
the Mae Moh area accelerated the decision to retrofit FGDs to the eight remaining
power generation units (unit 4-11), starting in 1994. This has resulted in substantially
improved ambient air quality since the year 2000.
The primary objective of this study is to conduct a detailed retrospective study to
assess the economic viability of the investments of FGD technology for the Mae Moh
power plant, with the following specific objectives.
1. To identify and quantify in monetary values the relevant benefits
associated with the installation of FGD systems i.e., the reduction in
environmental damages.
2. To identify and assess economic costs of installing and operating FGD
systems, including the potential global damages of carbon dioxide
emissions generated by the FGD abatement process.
3. To conduct benefit-cost analyses of investments in FGD systems over
their lifespan using standard capital investment measurements, i.e., net
present value (NPV), benefit-cost ratio (BCR) and internal rate of return
(IRR).
4. To determine the optimal level of pollution abatement in the case of FGD
technology by assessing the benefits of pollution control and costs of
abatement.
The report is organized into seven main sections. After the introduction in
Section 1, Section 2 briefly considers the background of the environmental performance
of the Mae Moh lignite-fired power plant both pre- and post- installation of the FGD
systems in the power generation units. The relevant physical effects that could be
attributed to FGD control technology are identified for setting up an analytical
framework. Note that the study does not attempt to assess every possible damage caused
by sulfur dioxide emissions from the power plant. In most cases, the data was not
available and in some particular cases, we did not have strong evidence, such as loss of
life and material damages, to support the hypothesis. Particular attention is focused on
the benefits from improved morbidity health outcomes, and increase in productivity of
agricultural and forest resources. Carbon dioxide emissions as an indirect cost of the
desulfurization process are also considered. Section 3 presents details of research
methods employed in this study. This section attempts to lay out the conceptual issues
and theoretical framework to support our subsequent investigation of benefits and costs
associated with FGD abatement technology. Sections 4 and 5 then examine and assess
the benefits and costs attributed to FGD technology in the case of the Mae Moh power
plant, respectively. These two elements come together in a benefit-cost analysis, the
main subject in Section 6. Traditional measures including NPV and BCR are analyzed.
A sensitivity analysis is performed for effects and factors with high uncertainty. Section
7 finally provides a summary and policy implications. All the tables supporting the
contents are provided in Appendix A.