Assessment of potential GHG emission reductions from...

Enhancing Capacity For Low Emission Development Strategies

EC-LEDS Clean Energy Program



Assessment of potential GHG emission reductions from Energy sector

Presented by Mikheil Mumladze Head of Analytic Department at Ministry of Energy

with support from

August 17, 2015Tbilisi, Georgia

DecisionWare Group LLCPolicy Analysis for Energy, Economy and Environment



• Overview of the MARKAL-Georgia Energy SupplySector

• Selection of the Scenarios

• Review of Energy Supply Sector metrics

• Review and discussion of priority policies for analysis

Presentation Outline

Georgia Energy Sector Preliminary LEDS Analysis 2





What are the Key Inputs?Component Description

EnergyBalance

• Supply by energy source• Generation of electricity/heat by fuel, and T&D losses• Consumption by sector

Resources•Annual production maximum and associated price, and total proven

reserves• Imports & exports by fuel (and source)

Technologies

• Existing stock of power plants and devices• Fuels in/out, efficiency, availability, technical life duration• Investment, fixed and variable O&M costs, and “hurdle” rates• Emission rates• Start year and limits on technical potential (growth and total)

DemandServices

• Level of energy service to be met in each period• Simplified load curve, and timing of each end-use using electricity • Amount of fuel switching permitted over time

Global• Length of each season/time-of-day• Discount rate, electricity reserve margin

5Georgia Energy Sector Preliminary LEDS Analysis





What are the Key Outputs?Model Result Description

Total Energy System Cost

Total discounted cost of all payments for fuel, power plant builds, device purchases, operating & maintenance costs over the entire planning horizon

Resources Annual production level, and marginal price if constrained

Technologies

• Total installed capacity in each period• New power plant builds, total investment cost per period• Annual fixed and variable operating costs and fuel expenditures• Annual and season/time-of-day (for power plants) operation• Marginal cost, if constrained and limit reached

Energy Carriers• Annual amount consumed by each technology, and by sector• Marginal price (by season/time-of-day for electricity)

DemandServices

• Marginal price of meeting each demand• Change in level, if elastic formulation used [not currently in Georgia model ]

Emissions• Emission level by source/sector and fuel for each period• Marginal costs, if limited






Power Sector Structure

7

Sector fuels Technology Type Electric Transmission System

Existing

Hydropower plants

Wind

Hydropower

Solar

Electricity to each Demand Sector

New Solar power plants

New Coal fired plants

New Wind power plants

Coal

Natural Gas

Imports

Existing Natural gas power plants

New Natural gas power plants

New

Hydropower plants

Exports

Russia

Turkey

Azerbaijan

Armenia

Georgia Energy Sector Preliminary LEDS Analysis





EC-LEDS Clean Energy – Georgia LEDS/INDC Mitigation Analysis


Scenario ID Scenario Name DescriptionBAU_LEDS LEDS BAU "Business As Usual" Scenario

BAU-BLD-RCLT LEDS BAU w COM-RSD Lighting

The objective of the analysis is to determine the electricity savings and CO2 emission reductions achieved by phasing out incandescent bulls in the residential and commercial sectors

BAU-NRG-GCRL LEDS BAU w Gas PP & Lighting

The objective of the analysis is to determine the natural gas savings and CO2 emission reductions achieved by replacing the old inefficient natural gas-fired power plants with new high efficiency combined cycle plants (Including BAU-BLD-RCLT Scenario)

BAU-NRG-RGCL LEDS BAU w Gas & RNW PP & Lighting

The objective of the analysis is to determine the energy savings and CO2 emission reductions achieved by incentivizing greater use of renewable energy in the agricultural, commercial and residential sectors (Including BAU-NRG-GCRL & BAU-BLD-RCLT Scenarios)

LED-P18-XLL LEDS 18% PE w NRG-IND-BLD measures

The objective of the analysis is to force an 18% reduction in total primary energy use by 2025 to determine the sectors and applications where the most cost-effective energy reductions can be found and the level of CO2 emission reductions achieved (Including ALL above Mitigation Scenarios)

• Amounts are in 2012MEuro (Million Euro)• Volumes are in Kt (Kilo Tone)






66,400 66,600 66,800 67,000 67,200 67,400 67,600 67,800 68,000 68,200 68,400

BAU_LEDS

BAU-BLD-RCLT

BAU-NRG-GCRL

BAU-NRG-RGCL

LED-P18-XLL

2012MEuro

Total Discounted System Cost

Scenario ID Scenario Description System Cost Changes In SYS Cost Changes In %BAU_LEDS LEDS BAU 68,260.42 BASE BASE

BAU-BLD-RCLT LEDS BAU w COM-RSD Lighting 67,259.76 1,000.66 -1.5%

BAU-NRG-GCRL LEDS BAU w Gas PP & Lighting 67,156.22 1,104.19 -1.6%

BAU-NRG-RGCL LEDS BAU w Gas & RNW PP & Lighting 67,094.15 1,166.27 -1.7%

LED-P18-XLL LEDS 18% PE w NRG-IND-BLD meas 67,127.87 1,132.55 -1.7%






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BAU_LEDS BAU-BLD-RCLT BAU-NRG-GCRL BAU-NRG-RGCL LED-P18-XLL

Aggregate CO2-EQ BY Energy

CO2 - Energy Use Methane - Energy Use N2O - Energy use




Aggregate CO2-EQ BY - EnergyAggregate CO2-EQ BY Energy '2012 '2015 '2018 '2021 '2024 '2027 '2030 '2033 '2036

BAU_LEDS 8,888.19 9,762.43 12,174.03 13,766.01 16,120.32 18,167.14 20,313.01 22,283.54 24,397.08

CO2 - Energy Sector 7,030.65 7,669.81 9,508.36 10,862.08 12,792.66 14,458.15 16,220.34 17,816.44 19,529.55

Methane - Energy 1,805.47 2,039.83 2,610.64 2,846.36 3,267.08 3,645.58 4,026.05 4,397.59 4,794.89

N2O - Energy use 52.08 52.79 55.04 57.58 60.58 63.40 66.63 69.51 72.65

BAU-BLD-RCLT 8,888.19 9,760.24 11,931.67 13,635.18 15,817.60 17,859.63 20,092.32 22,128.46 24,209.44

CO2 - Energy Sector 7,030.65 7,668.27 9,337.92 10,770.10 12,581.89 14,241.92 16,065.34 17,707.37 19,397.57

Methane - Energy 1,805.47 2,039.18 2,538.72 2,807.52 3,175.16 3,554.33 3,960.36 4,351.58 4,739.22

N2O - Energy use 52.08 52.79 55.03 57.57 60.56 63.38 66.62 69.51 72.65

BAU-NRG-GCRL 8,888.19 9,762.43 11,075.18 12,872.71 15,004.86 17,009.85 18,811.60 20,818.67 22,911.55

CO2 - Energy Sector 7,030.65 7,669.81 8,735.53 10,263.94 11,982.56 13,611.31 15,131.43 16,786.19 18,484.76

Methane - Energy 1,805.47 2,039.83 2,284.61 2,551.19 2,961.73 3,335.16 3,613.54 3,962.98 4,354.14

N2O - Energy use 52.08 52.79 55.04 57.57 60.57 63.38 66.63 69.51 72.65

BAU-NRG-RGCL 8,888.19 9,762.43 11,087.07 12,594.57 14,712.34 16,705.85 18,481.04 20,399.08 22,473.33

CO2 - Energy Sector 7,030.65 7,669.81 8,747.42 9,975.85 11,686.21 13,302.20 14,803.66 16,359.31 18,044.78

Methane - Energy 1,805.47 2,039.83 2,284.58 2,561.12 2,965.52 3,340.23 3,610.72 3,970.26 4,355.90

N2O - Energy use 52.08 52.79 55.07 57.61 60.61 63.42 66.66 69.51 72.65

LED-P18-XLL 8,888.19 10,578.18 10,724.00 11,776.52 13,169.49 14,253.52 15,294.35 16,189.47 17,056.52

CO2 - Energy Sector 7,030.65 8,276.41 8,500.94 9,369.94 10,532.02 11,466.53 12,322.89 13,055.12 13,750.09

Methane - Energy 1,805.47 2,248.56 2,174.56 2,360.87 2,595.00 2,744.96 2,928.83 3,090.91 3,261.66

N2O - Energy use 52.08 53.22 48.50 45.71 42.47 42.03 42.63 43.45 44.78






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CO2 By Sectors

Agriculture Power Industry Transport Commercial Residential




CO2 By Sectors - EnergyCO2 By Sectors Energy '2012 '2015 '2018 '2021 '2024 '2027 '2030 '2033 '2036

BAU_LEDS 7,030.65 7,669.81 9,508.36 10,862.08 12,792.66 14,458.15 16,220.34 17,816.44 19,529.55

Agriculture 28.49 30.14 33.20 36.78 41.31 45.46 50.05 54.82 60.43

Power 1,312.94 1,533.42 2,170.72 2,174.57 2,524.02 2,708.87 2,917.06 3,089.97 3,276.70

Industry 1,665.64 1,778.08 2,060.15 2,408.56 2,817.55 3,210.80 3,658.29 4,167.68 4,750.83

Transport 2,532.58 2,655.16 3,077.44 3,549.47 4,101.12 4,632.93 5,298.86 5,721.63 6,159.26

Commercial 144.12 160.62 193.99 230.03 277.07 323.02 377.07 437.81 504.51

Residential 1,346.88 1,512.41 1,972.85 2,462.67 3,031.60 3,537.07 3,919.01 4,344.53 4,777.81

BAU-BLD-RCLT 7,030.65 7,668.27 9,337.92 10,770.10 12,581.89 14,241.92 16,065.34 17,707.37 19,397.57

Agriculture 28.49 30.14 32.76 36.78 41.31 45.46 50.05 54.82 60.43

Power 1,312.94 1,533.42 2,013.66 2,111.20 2,362.54 2,516.68 2,763.45 2,982.36 3,144.76

Industry 1,665.64 1,778.08 2,060.15 2,408.56 2,817.55 3,210.80 3,658.29 4,167.68 4,750.83

Transport 2,532.58 2,655.16 3,077.44 3,549.47 4,101.12 4,632.93 5,298.86 5,721.63 6,159.26

Commercial 144.12 160.62 193.98 229.50 276.58 322.90 377.03 437.81 504.56

Residential 1,346.88 1,510.87 1,959.93 2,434.59 2,982.80 3,513.15 3,917.66 4,343.07 4,777.73

BAU-NRG-GCRL 7,030.65 7,669.81 8,735.53 10,263.94 11,982.56 13,611.31 15,131.43 16,786.19 18,484.76

Agriculture 28.49 30.14 33.20 36.78 41.31 45.46 50.05 54.82 60.43

Power 1,312.94 1,533.42 1,391.84 1,588.83 1,733.59 1,881.70 1,829.29 2,059.08 2,231.70

Industry 1,665.64 1,778.08 2,060.15 2,408.56 2,817.55 3,210.80 3,658.29 4,167.68 4,750.83

Transport 2,532.58 2,655.16 3,077.44 3,549.47 4,101.12 4,632.93 5,298.86 5,721.63 6,159.26

Commercial 144.12 160.62 194.02 229.91 276.94 322.88 376.92 437.81 504.56

Residential 1,346.88 1,512.41 1,978.87 2,450.40 3,012.06 3,517.53 3,918.02 4,345.17 4,777.97

BAU-NRG-RGCL 7,030.65 7,669.81 8,747.42 9,975.85 11,686.21 13,302.20 14,803.66 16,359.31 18,044.78

Agriculture 28.49 30.14 33.20 36.78 41.31 45.46 50.05 54.82 60.43

Power 1,312.94 1,533.42 1,391.84 1,276.80 1,415.37 1,550.62 1,488.84 1,632.23 1,790.25

Industry 1,665.64 1,778.08 2,060.15 2,408.56 2,817.55 3,210.80 3,658.29 4,167.68 4,750.83

Transport 2,532.58 2,655.16 3,077.44 3,549.47 4,101.12 4,632.93 5,298.86 5,721.63 6,159.26

Commercial 144.12 160.62 206.05 242.10 289.13 335.09 389.14 437.81 506.04

Residential 1,346.88 1,512.41 1,978.72 2,462.14 3,021.73 3,527.30 3,918.48 4,345.15 4,777.97

LED-P18-XLL 7,030.65 8,276.41 8,500.94 9,369.94 10,532.02 11,466.53 12,322.89 13,055.12 13,750.09

Agriculture 28.49 29.89 32.76 35.96 39.49 42.45 45.64 44.36 39.53

Power 1,312.94 1,859.69 1,342.93 1,260.94 1,414.82 1,399.01 1,420.90 1,504.44 1,610.44

Industry 1,665.64 1,778.08 2,005.53 2,225.54 2,481.50 2,701.68 2,948.19 3,245.22 3,624.04

Transport 2,532.58 2,653.31 3,034.96 3,454.98 3,940.71 4,461.23 4,861.95 5,108.69 5,245.03

Commercial 144.12 179.43 204.63 213.71 268.09 322.29 390.68 416.14 433.13

Residential 1,346.88 1,776.02 1,880.12 2,178.81 2,387.43 2,539.87 2,655.54 2,736.26 2,797.91






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Power Sector’s Share In Total Energy Use CO2

Power Total



15

Power '2012 '2015 '2018 '2021 '2024 '2027 '2030 '2033 '2036

BAU_LEDS 1,312.94 1,533.42 2,170.72 2,174.57 2,524.02 2,708.87 2,917.06 3,089.97 3,276.70

BAU-BLD-RCLT - - 157.06 63.37 161.48 192.19 153.61 107.61 131.94

BAU-NRG-GCRL - - 778.88 585.74 790.43 827.17 1,087.77 1,030.89 1,045.00

BAU-NRG-RGCL - - 778.88 897.77 1,108.65 1,158.26 1,428.21 1,457.74 1,486.45

LED-P18-XLL - (326.27) 827.79 913.63 1,109.20 1,309.86 1,496.16 1,585.52 1,666.26

Power '2012 '2015 '2018 '2021 '2024 '2027 '2030 '2033 '2036

BAU_LEDS 1,312.94 1,533.42 2,170.72 2,174.57 2,524.02 2,708.87 2,917.06 3,089.97 3,276.70

BAU-BLD-RCLT 0% 0% 7% 3% 6% 7% 5% 3% 4%

BAU-NRG-GCRL 0% 0% 36% 27% 31% 31% 37% 33% 32%

BAU-NRG-RGCL 0% 0% 36% 41% 44% 43% 49% 47% 45%

LED-P18-XLL 0% -21% 38% 42% 44% 48% 51% 51% 51%

Total '2012 '2015 '2018 '2021 '2024 '2027 '2030 '2033 '2036

BAU_LEDS 7,030.65 7,669.81 9,508.36 10,862.08 12,792.66 14,458.15 16,220.34 17,816.44 19,529.55

BAU-BLD-RCLT - 1.54 170.44 91.97 210.77 216.24 155.00 109.07 131.97

BAU-NRG-GCRL - - 772.83 598.13 810.10 846.85 1,088.91 1,030.25 1,044.78

BAU-NRG-RGCL - - 760.94 886.23 1,106.45 1,155.96 1,416.68 1,457.13 1,484.77

LED-P18-XLL - (606.60) 1,007.42 1,492.13 2,260.63 2,991.63 3,897.44 4,761.32 5,779.46

Total '2012 '2015 '2018 '2021 '2024 '2027 '2030 '2033 '2036

BAU_LEDS 7,030.65 7,669.81 9,508.36 10,862.08 12,792.66 14,458.15 16,220.34 17,816.44 19,529.55

BAU-BLD-RCLT 0% 0% 2% 1% 2% 1% 1% 1% 1%

BAU-NRG-GCRL 0% 0% 8% 6% 6% 6% 7% 6% 5%

BAU-NRG-RGCL 0% 0% 8% 8% 9% 8% 9% 8% 8%

LED-P18-XLL 0% -8% 11% 14% 18% 21% 24% 27% 30%

Changes In %

Changes In Volume

Changes In Volume

Changes In %

Georgia Energy Sector Preliminary LEDS Analysis






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BAU_LEDS BAU-BLD-RCLT BAU-NRG-GCRL BAU-NRG-RGCL LED-P18-XLL (1,000.00)

(500.00)

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500.00

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1,500.00

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3,500.00

Investments In Supply & Demand Sides

Demand Side Investment Supply Side Investment

• Plus Figures Mean Investment Required• Minus Figures Mean Saving Exercised




Scenarios 2012 2015 2018 2021 2024 2027 2030 2033 2036 Total

BAU_LEDS - 4,383.67 7,045.70 8,044.18 8,557.70 7,653.74 8,022.00 7,235.54 10,283.56

BAU-BLD-RCLT - 4,386.50 7,078.97 7,834.79 8,434.24 7,772.07 7,991.30 7,493.88 10,216.74

BAU-NRG-GCRL - 4,386.11 7,311.64 7,908.80 8,588.81 7,765.26 7,688.20 7,332.79 10,677.31

BAU-NRG-RGCL - 4,386.11 7,316.48 7,860.50 8,565.73 7,771.35 7,679.94 7,484.06 10,665.39

LED-P18-XLL - 4,561.94 7,484.74 8,250.24 9,246.89 8,504.55 9,870.29 10,009.01 13,800.96

Supply Side Investment '2012 '2015 '2018 '2021 '2024 '2027 '2030 '2033 '2036 Total

BAU-BLD-RCLT - - - (244.07) (180.68) 37.55 (119.73) 167.96 (338.96)

BAU-NRG-GCRL - - 232.98 (167.11) (38.53) 35.59 (420.19) 6.83 463.57 113.16

BAU-NRG-RGCL - - 232.98 (211.55) (61.52) 41.23 (428.55) 157.04 452.73 182.36

LED-P18-XLL - 4.36 249.60 (207.18) (104.82) (252.83) (396.26) 73.64 340.70 (292.80)

Demand Side Investment Total

BAU-BLD-RCLT - 2.83 33.27 34.67 57.21 80.78 89.03 90.38 388.18

BAU-NRG-GCRL - 2.44 32.96 31.73 69.63 75.93 86.38 90.42 (3.00) 386.50

BAU-NRG-RGCL - 2.44 37.80 27.87 69.54 76.38 86.49 91.48 (4.08) 387.93

LED-P18-XLL - 173.91 189.45 413.24 794.01 1,103.64 2,244.55 2,699.83 3,243.52 10,862.16

Net Investment Total

BAU-BLD-RCLT - 2.83 33.27 (209.39) (123.46) 118.34 (30.70) 258.34 - 49.22

BAU-NRG-GCRL - 2.44 265.94 (135.38) 31.10 111.53 (333.80) 97.25 460.57 499.66

BAU-NRG-RGCL - 2.44 270.78 (183.68) 8.02 117.61 (342.06) 248.52 448.65 570.29

LED-P18-XLL - 178.27 439.05 206.06 689.19 850.81 1,848.29 2,773.47 3,584.22 10,569.36

Potential Investments & Savings By Following different scenarios




Scenario Name Change in System Cost CO2 Reductions Supply INV Demand INV

LEDS BAU BASE BASE 2012 MEuro 2012 MEuro

LEDS BAU w COM-RSD Lighting -1.5% 0.7% (338.96) 388.18

LEDS BAU w Gas PP & Lighting -1.6% 5.3% 113.16 386.50

LEDS BAU w Gas & RNW PP & Lighting -1.7% 7.6% 182.36 387.93

LEDS 18% PE w NRG-IND-BLD measures -1.7% 29.6% (292.80) 10,862.16

SUMMARY CUMULATIVE METRICS (2012-2036)



Thank You!





Aggregate CO2-EQ – Based on Available Energy Balances

Aggregate CO2-EQ BY Energy

' 2011 OECD 2012 OECD 2012 LEDS 2012 ADJ 2013 GEOSTAT 2014 MoE

SUPPLY SIDE - Domestic Supply 40.38 72.38 100.49 114.87 114.44 86.28

SUPPLY SIDE - Transformation Sector - Input 1,109.50 1,262.03 1,316.66 1,316.66 948.78 1,080.57

SUPPLY SIDE - Energy Sector - - - 2.40 1.79

SUPPLY SIDE - Transformation Sector - Production - - - - - -

SUPPLY SIDE - Distribution Losses 1,073.82 1,040.01 1,481.42 1,481.42 1,307.03 1,436.04

CONSUMPTION SIDE - INDUSTRY 1,105.94 1,152.97 833.28 1,664.58 1,707.12 1,625.17

CONSUMPTION SIDE - TRANSPORT 2,280.36 2,418.99 2,404.97 2,546.65 2,513.04 2,688.38

CONSUMPTION SIDE - OTHER 533.86 664.58 2,190.67 1,763.89 1,952.76 1,865.46

NON-ENERGY USE - Industry sector - - - 1.55 1.37 1.54

NON-ENERGY USE - Transport sector 17.90 15.82 17.87

NON-ENERGY USE - Energy sector - 3.99 3.53 3.99

Grand Total 6,143.85 6,610.95 8,327.49 8,911.51 8,566.29 8,807.09

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