TA Project: “Improving Emissions Control”

Session 2

Scenarios for Emissions Management

Dr Russell C FrostProject Team Leader

Contents

• Scenarios – an introduction• Three scenarios– Without Measures (WoM)– With Measures (WM)– With Additional Measures (WAM)

• WoM Scenario– General – based on planning assumptions– Indicative potential damage costs – Example – electricity generation

• WM and WAM Scenarios• Cost-benefit analysis and economic appraisal

Scenarios - General

• Alternative visions of the possible future considering– Population change– Economic development– Environmental management

• Basis for estimating emission projections 2011 to 2025 and for identifying possible emission ceilings: NOx, NMVOCs, SO2, NH3

• They force planning assumptions to be made– Assumptions need to be assessed and reviewed

Three Scenarios

Scenario Definition

Without Measures (WoM)

Also known as ‘Business as Usual

1. Adopts baseline data and planning assumptions common to all scenarios

2. Adopts national commitments pre 20113. Adopts national energy policy 4. Adopts National Climate Change Action Plan

2011-2023

With Measures (WM) As WoM but assumes the implementation of1. EU Directives transposed in 2010 and 2011

With Additional Measures (WAM)

As WM but assumes the implementation of 1. EU Directives expected to be transposed in

2012 and beyond

WoM Scenario - Population Growth

• Assumption: linear annual growth in population of 1.15% of 2010 population

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20101.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

Percent year-on-year Population Growth 2000-2009 (OECD)

WoM Scenario - Economic Growth (1)

• Basis: – 7.5% growth in 2011,

expected– 2.75% growth forecast

in 2012: slowdown in European economy

– Rebound to average long-run rate of growth of 4.5 % through 2013-2025

2008 2010 2012 2014 2016 2018 2020 2022 2024 20260

1

2

3

4

5

6

7

8

9

10

GDP % annual growth – actual, forecast and long-run potential

WoM Scenario – Economic Growth (2)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20250

200

400

600

800

1000

1200

1400

GDP in 2010 Increase over year 2010

Billi

on U

SD

WoM Scenario – Growth in Emissions and Impacts

• Economic growth without measures to curb emissions will result in emissions growth– Strength of the relationship between economic

growth and emissions growth will vary between sectors

• Emissions do have negative impacts on human health, agriculture and the environment– The impacts impose damage costs on society – often

termed externalities because it is not the polluter who directly pays the costs

Estimated Marginal Damage Costs (€/tonne emission)

• Data from study undertaken for EEA, reported Nov 2011• Marginal damage costs are at year 2005 price levels• Damage costs are related to source location and population

distribution• Damage costs are regional i.e. not confined to the country source of

emission – but excludes effects outside the region

NH3 NOx SO2 NMVOCs PM2.5

Highest 27200 18800 13500 1930 44600

Lowest 1330 647 1400 - 7130

Turkey 4 600 1918 3060 8 19100

Indicative Additional Damage Costs Associated with WoM

• Assumption: increase in emissions from 2010 is directly proportional to the forecast increase in GDP

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20250

2

4

6

8

10

12

14

16

NH3SO2NMVOCNOxBi

llion

USD

WoM – Electricity Generation (1)National Policies

• National energy and related policies – Security of supply

• Develop renewable sources to full economic extent – hydro, wind, geothermal, biomass, solar

• Natural gas (imported) to be limited to 30% of electricity generation/supply by year 2023

• Use of domestic lignite to expand - use of imported hard coal to be constrained

• Nuclear to provide 5% of supply by 2020

– Privatisation of generation and transmission systems– Energy efficiency to reduce growth in generation capacity– National Climate Change Action Plan 2011-2023

Per capita electricity consumption and GDP – selected OECD (2009)

- 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 -

5

10

15

20

25

f(x) = 0.000284137267080082 x + 1.96157432578994R² = 0.452982436507794

Per Capita GDP (2000 USD)

MW

h/pe

rson

.y

WoM – Electricity Generation (2) Potential Demand & Generation

• Basis and assumptions:– Association of per capita electricity consumption

with per capita GDP – selected OECD countries– Growth of population and GDP in Turkey as indicated

previously – Reduction in own use and electricity transmission

losses from over 15 % in 2010 to 11.5 % by 2025

Potential electricity generated to meet demand 2011-25

2010 2012 2014 2016 2018 2020 2022 2024 2026 -

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

GW

h

WoM – Electricity Generation (3) Energy Mix to Meet Demand

• Structured approach and quantitative rules:– By 2023, hydro capacity 66% of NCCAP goal; wind at 50%

and geothermal at 50% – Nuclear comes on stream in 2020 to meet 5% of national

demand– Natural gas: year 2010 capacity maintained – no growth– Year 2010 ratio of lignite to hard coal generation capacity

maintained through to 2025– Closure of oil-fired generation capacity– Key performance parameters:

• GWh generated per unit of fuel (gas, coal, etc)• Effective number of hours/year plant runs at full capacity

Performance Parameter – GWh / unit of fuel consumed

Fuel Units 2009 2010 2011-25

Natural gas Million m3 4.69 4.57 4.60

Lignite – existing Ktonne 0.62 0.65 0.65

Lignite – new Ktonne - - 0.65

Hard coal ktonne 2.54 2.39 2.47

Performance Parameter – Effective plant hours/year

Energy Source 2009 2010 2011-25Hydro 2471 3272 2850

Wind 1889 2209 2050

Geothermal 5664 7106 7100

Nuclear - - 7446

Natural gas 5783 5400 5600

Lignite – existing 4820 4415 4620

Lignite – new - - 6500

Hard coal 7158 5011 6500

Ratio of electrical power generated (GWh) to installed capacity (GW)

WoM – Electricity Generation (4) Energy Mix: 2010 vs 2023

GWh generated Percentage

2010 2023 -

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Other

Wind

Hydro

Nuclear

Hard coal

Lignite - new

Lignite - exist-ing

Natural gas

2010 20230%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OtherWindHydroNuclearHard coalLignite - newLignite - exist-ingNatural gas

WoM – Electricity Generation (5) Potential Fuel Consumption

ktonne/year except natural gas – million m3/year

20092010

20112012

20132014

20152016

20172018

20192020

20212022

20232024

2025 -

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Natural gas

Lignite - ex-isting

Lignite - new

Hard coal

Other

WM Scenario: With Measures

Sectors Measures to be ImplementedElectricity generation LCP Directive 2001/80/EEC

OG 27605 (8/6/2010)

Industrial processes using large scale combustion plant

LCP Directive 2001/80/EECOG 27605 (8/6/2010)

Waste management Landfill Directive 99/31/EECOG 27533 (26/3/2010)

Waste Incineration Directive 2000/76/ECOG 27721 (6/9/2010)

WAM Scenario: With Additional Measures

Sectors Measures to be Implemented

Industrial processes IPPC Directive 08/01/EC and Solvent, Storage and Decopaint VOCs Directives - superseded by Industrial Emissions Directive (IED) 2010/80/EEC

Transport EURO 5 and EURO 6 / EURO V and EURO VI

Agriculture IPPC – large scale poultry rearingNitrates DirectiveGood practice in fertiliser application and livestock rearing/manure management

Cost-Benefit Analysis (CBA)

• CBA of the incremental costs and benefits provided by specific techniques and of scenarios– WM vs WoM– WAM vs WM

• Costs of techniques for implementing LCPD have been collected – others to follow– Costs comprise investment and operating expenditure

• Benefits recur for as long as plant are operated • Since costs and benefits arise over a period of time, CBA

requires economic appraisal using discounted cash flow (DCF) techniques – TA will provide basic introduction to economic appraisal