The Energy Commuity, the energy associaton of Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Moldova, Montenegro, Serbia and Ukraine, has published a study assessing the costs and potential benefits of modernizing large combustion plants in their countries to comply with EU environmental regulations. According to the study, the benefits of complying with EU environmental law are on average 17 times as large as the costs of compliance. This means that for every euro spent, there would be a seventeen euro return in terms of environmental and health benefits.
The Energy Community explains the background and findings of the study in a press release:
“Electricity and heat generation are major sources of air pollution all around Europe. To deal with the main air pollutants such as sulphur dioxide (SO2), nitrogen oxides (NOx) and dust – particulate matter (PM), the European Union adopted Directive 2001/80/EC on the limitation of emissions of certain pollutants into the air from large combustion plants (LCP Directive).
This Directive applies to combustion plants with a rated thermal input equal to or greater than 50 MW, irrespective of the type of fuel used (solid, liquid or gaseous). In December 2010, the EU adopted Directive 2010/75/EU on industrial emissions (Industrial Emissions Directive – IED) which entered into force on 6 January 2011 and which will replace the LCP Directive in the EU from 1 January 2016 onwards.
All Contracting Parties to the Energy Community Treaty, i.e. the eight countries mentioned above, have undertaken to implement the LCP Directive by 31 December 2017, which is a high priority politically and technically for these countries as well as the EU. According to a recent decision of the Ministerial Council, Contracting Parties will also need to implement the IED provisions in the case of new plants.
The purpose of the study is to deliver a first overall estimate on the amount of investment necessary for the modernization of thermal power plants located in the Contracting Parties as well as the benefits that could be obtained by implementing these pieces of the EU environmental acquis. The study’s analysis concludes that with the exception of Albania and Moldova, all Contracting Parties have a high level of estimated external costs of power and heat generation, mainly due to the average age of the infrastructure as well as a low level of maintenance over the past decades. It is also visible that major investments would be necessary in order to carry out the necessary environmental upgrades that could safeguard the proper implementation of the two directives.
Overall compliance costs are estimated at EUR 6,701.6 million for the LCP Directive and EUR 7,843.8 million for the IED. Nevertheless, according to the cost-benefit analyses carried out in the study, benefits significantly outweigh the costs in the case of each and every Contracting Party, reaching an average benefit/cost ratio of seventeen at Community level.
The study also includes a number of country-specific recommendations for reaching compliance with the requirements of both the LCP Directive and the IED which could be useful for strategic planning purposes for the Contracting Parties.”
The report can be downloaded here.