There is a growing concern that air quality has been deteriorated in Taiwan these years, which will damage our health and life quality. The issue of how to control air quality and protect environment has been raised to the public for attention. Air pollutants mainly consist of particulates and gaseous pollutants. The former contains TSP, PM10, and dust, and the latter includes SOx, NOx, CO, O3, and HC. According to the report of TEPA(Taiwan Environmental Protection Agency), the period with PSI greater than 100 is 19.4 days in 1997, which is far beyond the average of OECD countries. Moreover, the problem of greenhouse gases emissions seems to be out of control if no government interventions are involved to curtail the CO, emission. These may cause trade sanctions by UN FCCC agreed countries. We, therefore, should adopt preventative measures to mitigate the emission of both CO2 and standard air pollutants.
Referring to the statistics of TEPA, SOx mainly comes from fossil fuel burning by stationery polluters. Among them, power generation accounts for 50% of the emission. In addition, power generation also account for 20% of total NOx emission in Taiwan. In order to control air pollution effectively, the study of the emission mitigation policy for power generation is essential. The purposes of this study are: (1)to analyze the cost structure of various power generation units, (2)to explore the mathematical optimization models for electricity supply and demand, (3)to construct such model to internalize the environmental external costs, (4)to simulate the economic impact of the emission mitigation policies on the power generation sector, (5)to evaluate the effectiveness of the emission mitigation policies and (6)to recommend the future optimal fuel mix for power generation and planning.
To achieve the above objectives, this study firstly collects the relevant data about various mitigation policies and economic models. Then, a thorough study is carried out to determine an appropriate model for this project. Once the model is constructed, the routine tasks of model validation, parameterization, verification, simulation and sensitivity analysis will be done for later optimization analysis. The policy instruments for emission mitigation are designed to be incorporated into the model. They include carbon taxes, air pollution fee, fuel substitution, construction of nuclear power plant and cogeneration. A series of scenario analyses are proceeded under different settings of various policy instruments. The impact of these policies are analyzed in terms of economic concepts such as generation costs, fuel mix, mitigation costs and consumer and producer surplus. Furthermore, the effectiveness of various emission policies ia evaluated. Finally, the recommendations and suggestions from the result of this study are presented for policy makers.
