GHG Accounting for Electricity Transmission and...

GHG Accounting for Electricity Transmission and

Distribution Projects

Marcelino MadrigalSr. Energy Specialist, ETWEN

The World Bank

Randal Spalding-FecherPöyry Energy Management Consulting

June 2010

1

Outline

• Study objective

• Background and rationale

• Basic GHG accounting principles

• Key GHG impacts and existing methodologies

• WB’s T&D project types categorization

• Recommended approach for assessing GHG impacts

• Case studies

• Conclusions

2 GHG impacts of T&D projects

Outline

• Study objective






• Case studies

• Conclusions


Objective: GHG impacts of T&D projects

• Contribute to the SFDCC goal of

improving GHG accounting in the energy

sector by reviewing, assessing and

recommending GHG accounting

methodologies for electricity T&D projects

• Examine and build on existing

methodologies to find out whether they

can feasibly and reliably provide

estimates of net project emissions

• Identify and conceptually design a

methodological approach for T&D

projects in the context of World Bank

lending operations


Outline

• Study objective






• Case studies

• Conclusions


Contribution of power sector to global emissions


Rationale for GHG accounting for T&D


-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009

US

$ M

illio

ns

World Bank Group Energy Financing, FY03-FY09, by Project Type

Regulation & Reform Transmission and Distribution Oil, Gas and CoalThermal Generation Energy Efficiency Hydro > 10MWNew Renewable Energy

• Less knowledge of the

implications of T&D on GHG

emissions

• Considerable importance to

WB portfolio

• Better understand the

implications of possible new

accounting approaches

Why T&D is important from the emissions point of view? The case of technical electricity losses


%50 loss reduction

8%

Share of SF60%

China Power Sector Emissions3070 MtCo2, 2007

Total losses 18.1 %

%50 loss reduction

13%

Share of SF60%

India Power Sector Emissions749 MtCo2, 2007

Total losses 29.4%

With data from IEA, USA EPA,

and own calculations

Outline

• Study objective






• Case studies

• Conclusions


GHG Accounting principles

• Gross emissions “inventory” versus project level “net impact”

– Inventory approach used for corporate or national “carbon footprints” in

a defined geographical area: companies, organisations, or countries (e.g.

IPCC inventories)

– Net emissions approach used to evaluate project impact on the entire

emissions system, by comparing “with project” to “without project”

scenarios

• Defining project boundary

• Generic principles

– Credibility/accuracy, Transparency

– Feasibility/ease of harmonization


Project boundary: Life cycle and value chain for power sector

11

Life cycle phase

Materials production

Construction

Operation

Decommission

Fuel Supply

Manufactuer of metal, etc

Construction of coal mine and

mining equipment

Mining of fossil fuel

Generation

Manufacture of metal, etc

Construction of power stations

Combustion in power plant

T&D


Construction of power lines/ substations

Transmitting power

Disposal of substations/ lines

Consumption

Manufature of materials

Construction of factory, home,

etc

Use of power in cement factory, home, school,

GHG impacts of T&D projects

Value chain

Example: Inventory Accounting by New Zealand Transmission Company

• Total emissions:

10,600 tons CO2e

(73% is SF6)

• SF6 used in circuit breakers in substations and other sealed electrical

equipment

• Transmission electricity losses not considered as part of the footprint


Example of net emissions approach: transmission interconnection between two countries

• 220 kV onterconnection between

Cambodia and Vietnam

• 156 km line (220 kV/200 MW) to export

from Vietnam to Cambodia, along with

local grid strengthening in Phnom Penh

• Vietnamese grid is 40% hydropower while

Cambodia is 95% fuel oil

• Estimated emissions reductions from

cleaner energy exports: 536,000 tCO2 over

10 years

• Combined margin emissions: Vietnam

0.678 tCO2/MWh and Cambodia 0.741

tCO2/MWh


Outline

• Study objective






• Case studies

• Conclusions


• Hypothetical project: 1000 km with 2 x 500 kV lines, clearing natural

tropical forest, aluminium and steel lines, in grid with emissions factor

of 700 kg CO2/MWh

• Direct emissions from transmission line

– Embodied emissions: 0.3 kg CO2/MWh

– Land clearing : 19 kg CO2/MWh

– Corona effect: ~1-3 kg CO2/MWh

– SF6: 2 kg CO2/MWh

• Impacts on generation emissions for different project alternatives

– Reduce technical losses from 15% to 10%: -35 kg CO2/MWh

– Expansion to serve suppressed demand: +700 kg CO2/MWh

– Expansion displacing diesel generators: -100 kg CO2/MWh

– Importing hydro power (EF100 kg CO2/MWh): -600 kg CO2/MWh


The different impacts of T&D on emissions: example

Existing methodologies and case studies have narrower scopes

Transmission and Distribution Guidelines

IPCC 2006 Guidelines for National Greenhouse Gas

Inventories, Vol 3, Ch 8.2 Emissions of SF6 and PFCs from

electrical equipment (2006c)

Tools applied within World Bank Group

IFC Carbon Emissions Estimation Tool (CEET) (IFC 2009)

Tools applied to generation, transmission and

distribution case studies

Transpower (New Zealand) carbon footprint (2008)

Life cycle assessment of aluminium smelter in Greenland

(Schmidt & Thrane 2009) (uses “EcoInvent” as the source

for T&D)

Eco-balance of a Solar Electricity Transmission from North

Africa to Europe (May 2005)

Life cycle inventories of energy systems: results for current

systems in Switzerland and other UTCE countries

(“EcoInvent”) (Dones et al. 2007)

Emissions of GHGs from the use of transportation fuels

and electricity, Argonne National Laboratory (DeLuchi

1991)

16

Power Sector Guidelines

GHG Protocol Project Accounting Standard (2005)

GHG Protocol Guidelines for Quantifying GHG Reductions from

Grid-Connected Electricity Projects (2007)

Greenhouse Gas Assessment Handbook (1998), Ch 3.6.2

Guidelines for Energy Conversion and Distribution Projects

GEF. Manual for calculating GHG benefits of GEF projects: energy

efficiency and renewable energy projects.(2008)

CDM baseline and monitoring methodologies

AMS II.A “Supply-side energy efficiency improvements –

transmission and distribution” (ver10)

AM0035 “SF6 Emission Reductions in Electrical Grids” (ver01)

AM0045 “Grid connection of isolated electricity systems” (ver02)

AM0067 “Methodology for installation of energy efficient

transformers in a power distribution grid” (ver02)

AM0079 ““Recovery of SF6 from Gas insulated electrical

equipment in testing facilities” (ver01)

NM0272 “International interconnection for electric energy

exchange”

NM0269 “Reduction of emissions through one way export of

power from lower to higher emission factor electricity system”


Outline

• Study objective






• Case studies

• Conclusions


What do World Bank T&D projects look like ?

• WB T&D interventions (loans) are not like most CDM or private sector

transactions, which are single projects with clear boundaries (e.g. a wind

farm, cement plant, or energy efficient boiler)

• Traditionally consist of several projects at different voltage levels pursuing

varied objectives

• May impact different areas of the client country electricity network (more or

less related)

• Components of an investment plan supported by country and multiple donors

• Different levels of technical detail at time of approval (e.g. a large

interconnection project may have more technical specs than a distribution

investment program)


WB T&D projects categorization by objective

• Technical loss reduction: Reduce technical losses in the transmission or

distribution system

• Increased reliability: Increase reliability so that consumers have fewer

and/or shorter supply interruptions

• Distribution capacity expansion: Increase the overall capacity to distribute

electricity

• Electrification: Connecting new consumers to the grid

• Transmission capacity expansion: Increase the overall capacity to

transmit electricity over significant distances

• Cross-border trade: Increase electricity trade between countries by

constructing inter-connectors between their national grids


Outline

• Study objective






• Case studies

• Conclusions


Three different GHG impact categories

Category of emissions impact Description

Direct nongeneration

Similar to standard corporate or national inventory.

Emissions that happen within the physical boundary of

T&D project, and possibly through the life cycle of that

equipment.

Direct generation

Effect on short-run and/or long-run generation

emissions that does not require any other actions

outside the physical boundary of the T&D project. This

would be the case for technical loss reduction projects.

Indirect generation

Effect on short-run and/or long-run generation

emissions that requires actions outside the physical

boundary of the T&D project. This would be the case for

increased reliability, capacity expansion, electrification

and cross-border trade.


Proposed approach: link project objectives to GHG impacts

• Project objectives drive current technical design, economic, and

environmental assessment

• All projects potentially have direct nongeneration impacts

• Link project objectives to direct and indirect emissions impacts on

generation

• Use decision trees to set baseline and project scenarios for each

project type


Project boundary for net emissions assessment

23

Life cycle phase

Materials production

Construction

Operation

Decommissioning

Generation


Construction of power plants

Combustion in power plant

T&D


Energy use in construction

Land clearing

SF6 fugitive emissions

Corona discharge

SF6 disposal emissions


Generation emissions impacts of T&D projects

Possible impacts on generation

Project category

Reduce

ma

rgin

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Incre

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ma

rgin

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Dis

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Dis

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Change p

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bu

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lan

Direct generation effects

Technical Loss Reduction Y N N N N

Indirect generation effects

Increased reliability N Y Y N N

Distribution capacity expansion N Y Y N N

Electrification N Y Y Y N

Trans capacity expansion – new lines within a grid N Y Y N Y?

Trans capacity expansion – connect grids Y Y N N Y

Cross-border trade Y Y N N Y


Recommended approach


Steps Description

Step 1 Determine which direct nongeneration emissions will be included

Step 2 Calculate direct nongeneration emissions: use calculation modules

Step 3Determine how baseline and project emissions should be calculated for

generation impacts: use provided flow-charts

Step 4 Calculate baseline generation emissions: use calculation modules

Step 5 Calculate project generation emissions: use calculation modules

Step 6 Summarize GHG emissions impacts

Baseline and project scenarios

Project category Project Scenario Baseline Scenario

Direct generation effects

Technical Loss

Reduction

Generated electricity lost through

technical losses after project

implementation

Generated electricity lost through

technical losses prior to project

Indirect generation effects

Increased reliability Additional generation during longer

supply hours

Power source used during power

outages or no emissions if alternative

is not available

Dist. Capacity

expansion

Additional grid generation delivered

to consumers, or generation from

new plant

Alternative power source displaced

by additional grid power or no

emissions if alternative not available

Electrification Additional grid generation delivered


new plant

Alternative power sources displaced



Trans capacity

expansion – new

lines within grid

Additional grid generation delivered


new plant

Alternative power sources displaced



Trans capacity

expansion – connect

grids

Marginal/surplus generation in

exporting grid, or generation from

new plants built for export

Marginal generation in importing grid

Cross-border trade Marginal/surplus generation in

exporting country, or generation from

new plants built for export

Marginal generation in importing

country


Module example Step 2: Land Clearing Module

• Similar equations to CDM methodologies:


PELC = Direct nongeneration emissions from land clearing

(tCO2)

Adef = Area of land deforested (ha)

BD = Biomass density per unit area (above ground, below

ground, soil carbon, litter and dead biomass) (tCO2/ha)

Parameter Source

Adef Project feasibility documents, or the product of default

right of way and line length

BD IFC CEET table (which is taken from IPCC 2006

Guidelines), shown in Annex A.1

PELC = A,def X BD

Where:

Flowchart example T&D Capacity Expansion Project


Is a system model

available?

BE1 = modeled w/out project

PE1=modeled with project

Identified source of

incremental supply?

Identified alternative to

addt'l electricity?

BE3=EFAE x IE

PE3=EFAS x IE

BE4=zero

PE3=EFAS x IE

Identified alternative to

addt'l electricity?

BE3=EFAE x IE

PE4=EFCM x IE

BE4=zero

PE4=EFCM x IE

Y

Y

Y

N

N

N

N

Y

Summary Example Step 6. Summary of GHG impacts

Direct Nongeneration impacts

Embodied emissions 5,000

Energy in construction 12,000

Land clearing 33,000

SF6 1,500

Direct Generation impacts Baseline Project Net

Technical Loss Reduction 30,000 10,000 -20,000

Indirect Generation impacts Baseline Project Net

Increased reliability N/A N/A N/A

Capacity Expansion 25,000 30,000 5,000

Electrification N/A N/A N/A

Cross-border trade N/A N/A N/A


Example of summary table (tCO2)

Outline

• Study objective






• Case studies

• Conclusions


Case study 1. Ethiopia-Kenya transmission interconnection project


Embodied emissions N/A

Energy in construction N/A


SF6 250,359

Baseline Project Net

Direct Generation impacts

Technical Loss Reduction N/A N/A

Indirect Generation impacts

Increased reliability N/A N/A

Capacity Expansion N/A N/A

Electrification N/A N/A

Cross-border trade 69,817,071 0 -69,817,071


Status Early stage of identification

Objective Save generation investment and

operation cost by exporting new

hydropower

Description 1200 km, 500 kV, AC and DC

Two phases 1000 MW and 2000 MW

(all tCO2 over project life)

Case study 2: Kenya, electricity expansion project




Land clearing 2,244

SF6 N/A


Direct generation impacts

Technical Loss Reduction 83,541 0 -83,541

Indirect generation impacts

Increased reliability 0 42,032 42,032

Capacity Expansion 0 66,255 66,255

Electrification N/A N/A

Cross-border trade N/A N/A


Status Approved

Objective Increase capacity, efficiency, reliability, access

Description:

Kisii-Awendo Line. Increase

transmission capacity


Case study 2: Kenya, electricity expansion project


Status Approved

Objective Increase capacity, efficiency, reliability, access

Description:

Eldoret-Kitale Line. increase

transmission capacity





SF6 7,490





Increased reliability 0 26,115 26,115

Capacity Expansion 0 470,029 470,029

Electrification 574,520 470,029 -104,491

Cross-border trade N/A N/A


Case study 3: Brazil, Electrobras distribution rehabilitation

Direct nongeneration impacts



Land clearing N/A

SF6 N/A


Direct generation impacts


Indirect generation impacts

Increased reliability 208,736 63,411 -145,325

Capacity Expansion N/A N/A N/A

Electrification N/A N/A N/A

Cross-border trade N/A N/A N/A


Status Approved

Objective Service quality improvement and

loss reduction

Description Replacement of transformers,

resizing conductors, meters,

improved CMS/RMS


Findings from pilot projects

• Methodology is easy to use

– Level of effort is small (e.g. 4 days for one component)

– Calculations implemented during technical and economic assessment

• Impacts on generation likely to be much larger than direct impacts

• Transmission projects that improve reliability, efficiency, and trade

between different emission factor systems can have positive impacts

on emissions

• Transmission and distribution projects to meet increased demand

can have negative impacts on emissions if no other sources are

available


• Study objective

• Background

– Importance of T&D for Bank and GHG emissions

– Rationale for GHG accounting

– GHG accounting principles

• T&D project type categorization



• Case studies

• Conclusions

Outline


Conclusions

• We have developed an approach to determine the most important

impacts of T&D projects that can be easily implemented in the

context of WB operations

• There were no available methodologies in the climate financing arena

that could comprehensively address all project types

• The methodology contributes to SFDCC’s commitment to study,

develop, and test methodologies on projects

• Applying the methodology for other purposes (business decisions)

may require further analysis. Consistency across sectors and

multilaterals


38

Thanks !

Step 5. Calculate project generation emissions for the T&D projects

• Similar equations to baseline emissions


Step 5

Results of case studies

Case 1 Case 2 Case 3

Project I Project II

Direct, Nongeneration impacts

Embodied emissions N/A N/A N/A N/A

Energy in construction N/A N/A N/A N/A

Land clearing 554,400 2,244 13,860 N/A

SF6 249,971 N/A N/A N/A


Technical Loss Reduction N/A -83,541 -37,961 -570,988


Increased reliability N/A 42,032 26,115 -145,325

Capacity Expansion N/A 66,255 470,029 N/A

Electrification N/A N/A -104,491 N/A

Cross-border trade -69,817,071 N/A N/A N/A


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GHG Accounting for Electricity Transmission and...

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