New proposed coal-fuelled power plants can significantly increase the power generation capacity of Pakistan but in the absence of emission reduction technology such generators cause pollution in the surrounding environment. An approach has been developed to meet national environmental quality standards for environmentally friendly operation of coal plants. Software developed for this article is shown to be an adequate tool for estimation of per kWh emissions of nitrogen oxides, sulphur oxides, carbon oxides, and particulate matter from coalfired power plants. The software also calculates and compares electricity production costs with and without emissions charges. Work presented in this article determines that although the proposed implementation of emission reduction technologies increases electricity production cost it does not change the merit order of coal on the supply curve.