Scopes for Early Retirement of Coal-Based Power Plants: What Strategies Can be Adopted?

Khondaker Golam Moazzem and Shiyan Sadik

No 37, CPD Report from Centre for Policy Dialogue (CPD)

Abstract: It is evident that coal has been detrimental to a sustainable future, and the Bangladesh government has decided to make a transition from coal to an alternative fuel source. However, the transition pathway from coal to an alternative is not without challenges. The early retirement of coal-based power plants is an option that has been researched at theoretical and empirical levels. This study focuses on the abandonment decision of a coal plant from the economic perspective and discusses the necessary guidelines that the government can adopt as long-term plan. Based on the data analyses and results on a domiestic coal power plant, it appears the decision of abandoning coal plants for the futuristic approach can be justified. It reveals that with the estimated value of the future cash flow, the financial investors can decide whether to abandon a project or sustain it. The adopted approach in the study for calculating the abandonment value based on different variables can be applied to other coal plants which are in operation in the country. Moreover, this framework can be used to apply to the coal power plants which are in the planning or under construction stages.

Keywords: Coal-Based Power Plants; Bangladesh (search for similar items in EconPapers)
Pages: 23 pages
Date: 2023-06
New Economics Papers: this item is included in nep-ene, nep-env and nep-ger
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https://cpd.org.bd/resources/2023/08/Scopes-for-Ea ... sed-Power-Plants.pdf

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Persistent link: https://EconPapers.repec.org/RePEc:pdb:report:37

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