There have been various estimates of exactly how many deaths are caused, and dispute over whether this justifies installing pollution controls to clean up the problem.

Research just published by Mandana Mazaheri from the NSW government Department of Planning, Industry and Environment sheds light on the issue.

The research found that in NSW 31 people a year die from the effects of fine particle pollution due to power stations, although this may well be as high as 68 people per year when they used an alternate credible estimate of how dangerous the fine particles are.

They went on to use the Value of a Statistical Life Year to place a dollar value on how much this harm is worth to the people of NSW.

While it may come as a shock to many readers to have a dollar value placed on human lives, this is a standard economic method when governments are considering things such as better roads that will prevent injury deaths.

The outcome is that each megawatt hour (MWh) of electricity generated from coal causes harm valued at $4.28, or $9.33 if the higher risk estimate is used.

As the average wholesale price of electricity is $64.18 per MWh the health damage is 6.7 per cent, or as much as 14.5 per cent of the wholesale price.

This new information is crucial to understanding the implications of potential changes to operating licences of power stations close to Newcastle.

At the south end of Lake Macquarie, we have both Eraring and Vales Point power stations.

Eraring upgraded its furnaces some years ago with low NOx burners to reduce the output of nitrogen dioxide.

Per MWh of output, Vales Point nitrogen dioxide is 182 per cent of that from Eraring so it is considerably more polluting.

Every five years Vales Point requests an exemption from the stricter pollution limits that apply to Eraring, and every five years up to now the regulator, the NSW Environment Protection Authority (EPA), has granted it to them.

Fine particle pollution forms in the atmosphere from the gases nitrogen dioxide (NO2) and sulphur dioxide (SO2).

It has been established that 73 per cent of the power station health burden across NSW is from NO2, while 27 per cent is from SO2.

From the annual production figures of Vales Point it is easy to calculate that if a further five-year licence exemption is granted, during that time it will cause health harm valued at $52 million, (high estimate $113 million) beyond what would occur if it was required to match the pollution intensity of Eraring.

This calculation is sure to underestimate the harm because it does not include non-fatal illness such as asthma, dementia, diabetes and low birth weight for babies.

It's also an underestimation because many more people live close to the Lake Macquarie power stations than those at Muswellbrook or Lithgow.

In most countries of the world, the pollution limits for coal-fired power stations allow only one fifth or one tenth of what is allowed by the regulations in NSW.

The NSW generators frequently make public statements that they operate within licence conditions.

The problem is that the licences are much too generous.

Technology to clean up power station exhaust gases is well established and not overly expensive.

A good analogy is the filters and catalytic converters on every car exhaust system.

New cars this decade are much less polluting than those sold in the 1980s, and while the pollution controls add to the cost of a new car, as a community we accept it is money well spent to have cleaner air.

Power stations from the 80s, however, are being allowed to continue operations as if science and technology had not advanced over the past four decades.

Now that the problem has been so rigorously quantified by the NSW government's own scientists it is time for the Environment Protection Authority to take action by refusing to issue Vales Point power station another licence exemption, and insisting that they install modern pollution control technology.

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