A bottom-up method to develop pollution abatement cost curves for coal-fired utility boilers

This paper illustrates a new method to create supply curves for pollution abatement using boiler-level data that explicitly accounts for technology cost and performance. The Coal Utility Environmental Cost (CUECost) model is used to estimate retrofit costs for five different NOx control configurations on a large subset of the existing coal-fired, utility-owned boilers in the US. The resultant data are used to create technology-specific marginal abatement cost curves (MACCs) and also serve as input to an integer linear program, which minimizes system-wide control costs by finding the optimal distribution of NOx controls across the modeled boilers under an emission constraint. The result is a single optimized MACC that accounts for detailed, boiler-specific information related to NOx retrofits. Because the resultant MACCs do not take into account regional differences in air-quality standards or pre-existing NOx controls, the results should not be interpreted as a policy prescription. The general method as well as NOx-specific results presented here should be of significant value to modelers and policy analysts who must estimate the costs of pollution reduction.