Econonomics of Energy and Environmental Policy

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Inland Hard Coal Transportation Costs in the European Union—A Model Based Approach

Although some EU countries have already ceased coal-fired electricity generation, coal will still be a relevant topic within the European electricity mix in the medium term. A hard coal power plant competes in the merit order mainly with other hard coal power plants and also with gas power plants. One of the main cost drivers of fuel supply is the transport costs of steam coal from import harbors to the power plant sites. These costs consist either of freight rates of the barges, charges for transport by train, or a combination of both, and additional transshipment costs that arise during transport. The resulting costs differ considerably depending on the country and the region within a country. This work aims at determining country-specific regional transport costs for hard coal to power plant sites in the European Union. The geographical resolution for this work is at the municipal level of each country, in which each municipality is characterized by specific costs, depending on distance and means of transport. In total, transport costs are modelled for 119,978 municipalities. The results show a clear ranking of preferred locations with regard to transport costs, starting with locations close to the open sea followed by inland locations near riverbanks. Locations remote from both sea and waterway access are the most expensive sites. The resulting data basis can be used as an input for energy system models.
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Keywords: Hard coal transport costs, Steam coal

DOI: 10.5547/2160-5890.10.1.nleh

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Published in Volume 10, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


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