For reducing CO2 emissions, what is the most effective: making power plants more efficient or developing renewable resources?

The present study evaluated carbon reduction policies (decarbonization) by comparing energy efficiency improvement in thermal power plants and the incremental development of renewable and clean power plants in different scenarios in the power generation sector. For this purpose, the optimal portfolio for power generation expansion was considered until 2050. Likewise, regarding environmental considerations, the values of environmental emissions and their external costs in different power generation methods were modeled for the first time in an inclusive electricity system. Then, the Matrix Laboratory and Long-Range Energy Alternative Planning software were used to model electricity supply and demand toward long-time planning and estimate and solve technical, economic, and environmental functions. The modeling outcomes showed that, under the Steam Power Plant repowering scenario, the efficiency-improving actions in thermal power plants were prioritized over the development of clean and renewable power plants, including large hydroelectric and nuclear power plants, and could reduce the total power generation cost by 38% until 2050 and environmental and greenhouse gases emissions by 3,572 MMT and 2,624 MMTDCO2E compared to the BAU scenario. It was also found that although developing renewable energies could decrease the external environmental costs by 73,188 million U.S dollars in the 2017–2050 period relative to the other scenarios, its development would not be optimal technically and economically since it was a function of technical, economic, environmental, and political factors and was not the sole approach to reducing carbon emissions in all countries.