Energy conversion systems generate pollution that causes damages to the environment and the society. The objective of this work is to study the dispersion of pollutants and assess the environmental and social cost due to pollution from such a system. For this purpose, a pulverized coal power plant is selected. Using thermodynamic principles combined with empirical techniques, the quantities of pollutants emitted by the plant are estimated. Then, using the EcoSenseWeb software, which is based on the results of the ExternE project, the external environmental cost (externalities) of pollution is assessed. The plant is considered as located in four different cities in Poland and the externalities are calculated for each city separately. It is shown that the external environmental cost has a strong influence on the unit cost of electricity. In addition, the dispersion of pollutants is presented for the plant located in Olsztyn city. Furthermore, the plant is considered as located near the capitals of European countries and the environmental externalities are calculated for each city. The neighboring countries that are strongly affected by the plant in each particular city are identified. The sensitivity of the unit cost of electricity to certain important parameters is investigated. (C) 2011 Elsevier Ltd. All rights reserved.