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Energy Use and Clean Development Mechanism Opportunities in Asia

Energy Use and Clean Development Mechanism Opportunities in Asia. Presentation Outline. Economic Growth, Energy requirement and CO2 emissions Sectoral Energy Related CO2 Emission in Asia Types of Energy Related CDM Projects Potential CDM projects by sector

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Energy Use and Clean Development Mechanism Opportunities in Asia

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  1. Energy Use and Clean Development Mechanism Opportunities in Asia

  2. Presentation Outline • Economic Growth, Energy requirement and CO2 emissions • Sectoral Energy Related CO2 Emission in Asia • Types of Energy Related CDM Projects • Potential CDM projects by sector • Marginal Abatement Costs of Some Cleaner Power Projects • Final Remarks

  3. Economic Growth, Energy requirement and CO2 emissions

  4. CO2 Emissions, Total Primary Energy Supply and GDP in OECD and Developing Asia during1990 -1999 OECD Developing Asia Source: IEA 2001

  5. CO2 Emissions: Share of Developing Asia, OECD and other Regions 1981 1999 OECD OECD Asia Asia Source: IEA 2001

  6. Average Annual Growth Rates of GDP, Energy Supply and CO2 Emission during 1990-2000 • TPES = Total Primary Energy Supply • Growth of energy requirement and CO2 in Asia is way above that of OECD countries Source IEA 2001

  7. CO2 and Energy intensities and Fossil fuel dependence (South Asia) • Energy and CO2 intensity in major countries much higher than OECD average Data source: EIA website, March 2004

  8. CO2 and Energy intensities and Fossil fuel dependence (South East Asia) Energy Intensity and CO2 intensity are not only higher but also increasing in most countries Data source: EIA website, March 2004

  9. CO2 and Energy intensity and Fossil fuel dependence (Other Asia) Energy and CO2 intensity of China and Mongolia are very high compared to OECD average, though show a declining trend Data source: EIA website, March 2004

  10. Projected CO2 emissions 2000-2025 Data source: EIA website, March 2004 • Without significant efforts in mitigation, Developing country contribution to total world emissions will be higher than Developed countries by 2020.

  11. Climate change and Sustainability • Climate Change could adversely affect many developing countries in the long run • GHG Mitigation would enhance sustainable development

  12. Cereal Production Impact of Climate Change CGCM1, 2080s Source: http://www.gfse.at/publ/Powerpoint/18%20Februar/18February_P2_01_IIASA_Shah.ppt

  13. Fossil fuel consumption increase has both long and short term implications • On Environment – e.g., increased air pollution • On economy – e.g., dependency on imports of energy

  14. PM10 concentration (1999) in selected cities in the world Source: World Development Indicators 2003 Out of 16 cities in the world with PM10 concentration > 100 micrograms/m3, 15 cities are in Asia and 14 of them are in China and India.

  15. SO2 concentration (1990-98) in the selected cities in the world Source: World Development Indicators 2003 Out of 30 cities exceeding WHO guideline in the world, 23 cities are in Asia and 20 cities are only in China.

  16. Energy and Urban Air pollution

  17. Implications of growth on DevelopmentEnergy import dependency, % Import dependency is increasing Higher important dependency can make economies vulnerable to fluctuations in energy prices This introduces long term growth uncertainties Data source: IEA (2002b)

  18. Fuel Import Dependency of Thailandunder CO2 reduction targets

  19. Primary Energy Mix under CO2 Emission Reduction Targets (1) • Significant Biomass use at all ER target Coal use under ER15 • Noticeable in Oil use under ER15. • Natural gas share

  20. What does Renewable Energy imply for Sustainable Development? • Biomass – example of sustainable energy resource • Biomass resource development helps mitigate GHG emissions and provides sustainable development benefits through rural employment generation • RETs like wind, solar, hydro also improve the local environment • CDM+Sustainable Development?

  21. Total cumulative NO2 emission in ER15 8.6% less than in Base case during 2000-2030 NO2, SO2 Emissions in Thailand under CO2 Reduction Targets Total NOx Emission Total SO2 Emission • Total cumulative SO2 emission in ER15 35.4% less than in Base case during 2000-2030 • SO2 reduction higher than NO2

  22. The Factors for high CO2 growth in developing countries • High growth in GDP • High dependence on fossil fuel • Inefficient use of energy resources • What prospects for CDM?

  23. Sectoral Energy Related CO2 Emission in Asian Countries

  24. Sectoral contribution to National CO2 eq. emissionsWhat are the sources of GHG emissions? And how big? GHG emissions from National Communications ( year 1994)

  25. Contribution to country CO2 eq emissions

  26. Elec. & Heat Unalocated. autoproducers Other Energy industries Manu. & Ind. Transport Other 100 90 80 % 70 2, 60 50 Sectoral share of CO 40 30 20 10 0 India World Nepal China OECD Pakistan Sri Lanka Bangladesh Sectoral Share in CO2 emissions in Selected countries in 2000 Source: World energy Council • Electricity, Manufacturing & Industry and Transport are the main source of energy related emissions • In Bangladesh, Pakistan, India, China and Thailand electricity sector contributes 30-50% of energy related CO2 emissions

  27. Sectoral Share in CO2 emissions in Selected countries in 2000 Transport sector contributes around 30% in Srilanka, Malaysia, Philippines, Thailand and Vietnam Manufacturing accounts for over 30% in China, Bangladesh, Nepal, Vietnam

  28. Types of Energy Related CDM projects • Energy efficiency improvement projects • Fuel switching to cleaner fossil fuels • Renewables projects • Cogeneration • Other projects

  29. What are the prospects for energy efficiency related CDM projects? • Gaps in energy efficiency can provide the answer

  30. Efficiency gaps in Power sector (1) • Supply Side • Generation efficiency gap • T & D efficiency gap • Demand side • End use energy efficiency gap

  31. Potential CDM projects in Power sector (2)Efficiency Gaps in Power Sector Generation Efficiency Gaps • Large gap in generation efficiency of coal fired plants between most Asian countries and the best practice country (BPC) in the world. Coal fired power generation in Asia are approximately 9% less efficient as compared to that in OECD. • The efficiency gaps are obviously much larger when they are measured with reference to the efficiency of the best available technology (BAT). • There exists a large potential for the reduction of coal consumption and CO2 emission if the electricity generation is based on BAT or best practiced technology (BPT) instead of the existing inefficient technologies.

  32. Electricity Generation Efficiency Gaps – Coal Best Practice efficiency Eff. gap Data source: IEA, 2002 Efficiency gain by 1% in China and India would reduce CO2 by 24 and 11.6 million tonne respectively in 2000

  33. Electricity Generation Efficiency Gaps - Gas Best Practice efficiency Eff. gap Data source: IEA, 2002

  34. Electricity Transmission and Distribution Losses Percent (%) • Large transmission and distribution efficiency gaps 0 5 10 15 20 25 30 35 OECD China Thailand Malaysia World Indonesia Asia Vietnam Phillipines Sri Lanka Pakistan India Cambodia Myanmar

  35. Potential CDM projects in Power sector (5)Electricity Transmission and Distribution Losses (contd..) • T&D losses as a percentage of total generation in some Asian countries range from 14 % in Vietnam to as high as 32 % in Myanmar. • T&D losses in a well designed system can normally be within 10%, reducing technical losses appears to be a promising option for reducing the generation requirements as well as reductions CO2 emissions. • 1% of T&D loss reduction in Pakistan from 1995 to 2018 would result in cumulative CO2 emission reductions of 24 to 26 million tons. • Gross savings per kW of power demand avoided due to T&D loss reduction could be in the range of $ 1372 to 1770, which are significantly higher than the new T&D capacity cost per kW. (Shrestha and Azhar, 1998)

  36. End-use Device Efficiency Gaps • Lamps: Lighting accounts for a large share in residential sectoral electricity consumption (e.g., 28% in India, 32.8% in Pakistan, 32% in Sri Lanka). Incandescent lamps, which use 3 to 4 times more electrical energy than compact fluorescent lamps (CFLs) are most widely used in many Asian developing countries, e. g. India, Pakistan, Sri Lanka, and Nepal. • Air conditioners (ACs): Air conditioning accounts for a major share of electricity consumption in the commercial sector. Its share varies from 20% in Pakistan to 70% in Thailand. However, the widely used ACs in Thailand till few years ago used about 45% more electrical power than the efficient ones. • Electric motors: Mostly, standard motors are used as industrial drives in India, Thailand, Pakistan, Vietnam, Indonesia and Sri Lanka. They are also used for agricultural water pumping in India. The efficiency of these motors is, however 3 to 7% less than that of energy efficient motors.

  37. What environmental Benefits from improved energy efficiency in the power sector? Source: Shrestha and Bhattacharya (1998) and Shrestha and Bhattacharya (2002)

  38. Marginal Abatement Cost (MAC) of Selected Cleaner Thermal CDM Projects in Selected Asian Countries Source: ARRPEEC (2003) • Wide variations in MAC for CTTs: • IGCC: 12 $/tonne (Thailand) to 83 $/tonne of CO2(Sri Lanka) • PFBC: 100 $/tonne (Thailand) to 115 $/tonne CO2 (Sri Lanka) • CC-LNG: 31 $/tonne CO2 (Sri Lanka)

  39. Incremental cost of CO2 Abatement ($/ton CO2) in Thailand during 2000 – 2030 • The average incremental cost of CO2 abatement (IAC) would increase from $28 per ton of CO2 in ER5 case to $111 per ton of CO2 in ER15 case. • At IAC of 28 $/tCO2, about 142 million tons of CO2 could be mitigated (cumulative) during 2010-2030. • At IAC of $46/ tCO2 and $111/tCO2, 468 and 978 million tons of CO2 (cumulative) could be reduced respectively.

  40. Marginal Abatement Cost (MAC) of Selected Renewable CDM Projects in Selected Asian Countries In a study of selected RETs based CDM projects in Yunnan- China, NREB-India, Sri Lanka, Thailand and Viet nam by ARRPEEC (2003) wide variations in MAC are observed: • Solar PV: 12 $/tonne to 364 $/tonne of CO2 • Wind:11 $/tonne to 36 $/tonne of CO2 • Geothermal: 5 $/tonne to 73 $/tonne of CO2 • BIGCC: 3 $/tonne to 94 $/tonne of CO2 • Mini-Hydro: 2.2 $/tonne of CO2 (Thailand) Limited prospect under presently relatively low CER price.

  41. Energy efficiency gap in steel making Bars for each country / region refers to years 1980, 1990, and 2000 in that order Source: www.worldenergy.org/ date 20th March 2004 Efficiency gap between Asian developing countries and Japan 0.4 toe/ton

  42. Energy efficiency gap in cement production Source: http://eetd.lbl.gov/ea/ies/iespubs/45292.pdf • Emissions reduction of 29.7 Million tonne of CO2 in India and 260 million tonne of CO2 in China if both countries can achieve best practice efficiency

  43. Potential for Cogeneration in ASEAN Source: www.cogen2.net Date: 16th March 2004

  44. Sugar industries: Fuel availability and cogeneration potential Bagasse = Sugar cane * 0.29; 1 kWh = 3 kg of bagasse (including steam for process) Source: www.cogen3.net (Date: 16th March 2004)

  45. Palm oil industries: Fuel availability and cogeneration potential Residue = Fresh Fruit Bunch * 0.42; 1 kWh = 2.5 kg of residues (including steam for process) Source: www.cogen3.net Date: 16th March 2004

  46. Rice industries: Fuel availability and cogeneration potential Rice husk = Paddy * 0.22; 1 kWh = 1.5 kg of rice husk (including steam for process) Source: www.cogen3.net Date: 16th March 2004

  47. Final Remarks • Energy efficiency gaps and high dependence on fossil fuel present challenges as well as opportunity: CDM as vehicle for Sustainable Development • Not all energy efficient and renewable technologies necessarily meet the economic criterion for CDM projects. • Economic viability also depends upon the market for Certified Emission Reductions (CERs). Presently, demand for CER is low hence the low price for CER (2 to 3 $/t CO2). • Several energy efficient technologies (EET) and RET projects may appear economically unattractive as CDM projects at present due to low market demand and price for CER. • However if countries like U.S. and Russia are to ratify the Kyoto protocol, market for CDM will grow significantly, resulting in higher CER prices and more CDM projects would than be economically attractive.

  48. THANK YOU

  49. Final Remarks (2) • Incremental CO2 abatement cost for a CDM project can vary across countries. • Regional level energy development may offer larger potential for CDM projects in South Asia. • Careful cost benefit analysis of potential projects necessary • Capacity building is essential for CDM project preparation and implementation in the South Asian countries.

  50. Specific energy consumption of various types of brick Kilns (tonnes of coal equivalent per 100, 000 bricks) Clamp Kiln: 30-48 Bull’s Trench Kiln: 20-24 Fixed Chimney: 16-20 Vertical Shaft Brick Kiln: 10-13

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