Expanding electricity generation is driving economic activity in the developing world. Increasing energy demand, largely met through the combustion of coal and natural gas, poses significant trade-offs between development objectives and environmental well-being. In this dissertation I examine the Indian electricity sector.

Chapter 1 studies the impact of regulatory changes affecting state-owned electricity utilities on the efficiency of coal-fired power plants. The results indicate that the unbundling of generation companies from state-owned utilities improved operating reliability at coal-fired power plants. The improvements were, however, restricted to states that restructured their electricity utilities prior to the Electricity Act of 2003. The results also show that the reforms did not result in an improvement in thermal efficiency or capital utilization at these plants.

Chapter 2 estimates the health impacts from PM2.5, SO2 and NOx emissions from coal-fired plants in India. I derive estimates of the total premature mortality impact from each plant in my sample associated with each of the three pollutants. I find that the majority of the impact, about 70%, is due to SO2 emissions--a pollutant currently unregulated in India due to the low sulfur content of Indian coal. I also conduct a cost benefit analysis of two pollution control options currently available in India--coal washing and the installation of an flue-gas desulfurization unit (FGD). The results from the case study show that both options pass the cost-benefit test using reasonable estimates of the Value of a Statistical Life (VSL) for India.

Chapter 3 more thoroughly examines the benefits and costs of FGD retrofit at coal-fired power plants in India. Using emissions estimates and output from a medium-range Lagrangian puff (atmospheric) model I estimate the net benefits of FGD installation for a sample of power plants. The results show that a substantial proportion of power plants pass the cost-benefit test for an FGD installation using reasonable estimates of the VSL for India. The results indicate a substantial scope for FGD installation to control SO2 emissions in the Indian power sector and suggest that it should be considered as a viable option for pollution control policy.