Transcript Electricity sector

Electricity Business Sector
Collaboration on Climate Change
29 May 2007
Gail Kendall
CLP Holdings Ltd.
Electricity Sector and Climate Change
Electricity is at the heart of global energy dilemma
How to provide energy necessary for social and economic
development, yet avoid serious climate change
Electricity sector
Generates 60% output from coal, natural gas and oil
Accounts for 40% of global emissions of Carbon Dioxide (CO2)
Plays a vital role in development and implementation solutions
for climate change
Solutions must be applied in concert to tackle the challenge
2
Stabilizing / Reducing Global Emissions
Climate “Stabilization Wedges”
Activity to reduce GHG emissions:
• starts at zero today
• increases linearly over time
• avoids one Gigatonne of carbon
per year after 50 years
(S Pacala and R Socolow, 2004)
3
Stabilizing / Reducing Emissions in the
Electricity Sector
Wedges in the Electricity Sector
Energy efficiency and conservation
Renewable energy
Clean coal technology with carbon capture and storage
Natural gas
Nuclear power
Plant efficiency
Substitution of electricity for direct use of fossil fuels
4
Types of Collaboration in the Electricity Sector
Technology Development
Technology Deployment
Voluntary Emissions Reporting & Reduction Targets
Policy Advocacy and Debate
5
Technology Development
6
Technology Development
Large scale and high capital cost of energy infrastructure
Pooling of resources for development was a practical means of
achieving shared objectives in the pre-competitive stage
Research programs
Central Research
Institute of the Electric
Power Industry (CRIEPI),
Japan
Electric Power Research
Institute (EPRI), US
7
Technology Development Needs
Plant Compatible with Carbon Capture:
Coal-fired Integrated Gasifier Combined Cycle (IGCC)
Oxy-fuel / oxy-firing pulverized fuel plant
Fluidized Bed combustion
Carbon Sequestration (CCS)
Geological sequestration
Ocean sequestration
Lower Emitting Power Generation
Renewables (solar photovoltaic and thermal, ocean power)
Capture-ready plants & Enhanced plant efficiency
Fuel Cells
8
Plants with Carbon Capture
FutureGen Project
275 MW zero-emission prototype plant
Produce electricity and hydrogen from coal
Capture and store CO2
Operation expected to begin in 2012
Digital images of FutureGen (Artist Concept)
(Source: US DOE)
GreenGen Project
Project done in phases
Final demonstration of 240 MW will
integrate a fuel cell for higher efficiency
Major partners: Huaneng and other 4 large
China gencos
9
Other Developments on Clean Coal
Canada – Canadian Clean Power Coalition
Business-led initiative of over $1 billion; require government support
Phase I Feasibility Study – CCS is feasible in Canada, with cost 50%
higher than conventional power
Governments – led collaborations with business
Australian Cooperative Research Centre for Coal in Sustainable
Development (CCSD) – 7 year A$61 million project
Canadian CANMET Energy Technology Centre
Japanese New Energy and Industrial Technology Development Office
(NEDO)
10
Carbon Sequestration
CASTOR
4-year initiative; to enable the capture and geological
storage of 10% of CO2 emission of Europe
Involving 6 power companies, 24 other business, and
research and academic partners from 11 European
countries
March 2006 – CO2 capture industrial pilot unit
inaugurated at 420MW Esbjerg power plant
(Denmark)
Esbjerg Power Plant
Source: ELSAM
Cooperative Research Centre for Greenhouse
Gas Technologies (CO2CRC)
Focus on CO2 capture and geosequestration in
Australia
Launched in 2003; received funding of A$140 million
Developed plans for a
demonstration project in the
Otway Basin
11
Carbon Sequestration Potential
US Department of Energy
Program of 6 regional partnerships for carbon sequestration
Phase I – characterisation of potential sequestration sites and
technologies
Phase II – conduct 25 field tests
12
Technology Deployment
13
Technology Deployment
Support is needed in the early stages of technology deployment
Business collaboration plays an important role in accelerating
deployment of new large and small scale energy technologies
Coal-fired Integrated Gasifier Combined Cycle, Oxy-fuel, etc
ultimately with Carbon Capture and Storage
Generation III Nuclear Power
Gas or Biomass-fired Combined Heat and Power (CHP)
Renewable Energy Systems (biomass, wind, geothermal, solar,
ocean, …)
Energy Efficiency (heat pumps, time-of use pricing, performance
standards, …)
14
Large Scale Power Plants
IGCC
EPRI’s CoalFleet 21 project – develop capability to assess the
feasibility of an IGCC plant
Nuclear Power
High cost overruns with unpredictable permitting requirements
Roadmap to deploy nuclear power developed in the US in 2001
NuStart initiative – leading members of the nuclear power industry
uniting their efforts to restart the industry
15
Distributed Power Generation
Combined Heat and Power (CHP)
USEPA – CHP Partnership
16
Renewable Energy & Energy Efficiency
Renewable Energy Systems
Electricity companies set up their own renewable funds to promote
and support renewables programmes
Energy Efficiency
Japan’s Top Runner Program – accelerate deployment of the most
efficient energy-consuming products into marketplace
Mandary compliance to performance of the best of its class (top
runner)
17
Clean Energy Investment
Carbon Trust
Venture capital approach to identify and invest in early stage
technologies
World Bank
Prototype Carbon Fund
Invest in Clean Development Mechanism (CDM) projects to produce
Certified Emission Reduction Credits (CERs)
18
Voluntary Emissions Reporting
and Reduction targets
19
Developing Reporting Schemes
Different jurisdictions – differences in
reporting schemes
Differences in schemes may create:
Confusion due to differences in
reported totals for a single entity
Omissions and/or double-counting
arising from different scopes of
reporting coverage
Higher costs of reporting
Effort to unify emissions accounting
WBCSD & WRI – Greenhouse Gas
Protocol
20
Voluntarily Reporting to Governments & Others
Provide business a platform to communicate with their
stakeholders about their emission reduction goals and progress
Canadian GHG Challenge Registry
 17 Electricity company participants
California Climate Action Registry
 34 Electric Power registry members
Carbon Disclosure Project (CDP)
 112 Electric Utilities responded to
CDP4 questionnaire (42% of 265 of the
largest publicly quoted Electric Utilities
globally by market capitalisation)
21
Voluntary Accreditation / Qualification
of Renewables
Australian Green Power Accreditation Program
Government standards to which renewable electricity
can be certified for sale as such to customers
 21 and 19 GreenPower providers selling different
GreenPower products to businesses and to homes
respectively
Canadian Environmental Choice Program
Offers qualification for various kinds of products,
including renewable electricity
 71 companies provides electricity products licensed by
the program
22
Voluntary Reduction Targets
Australian Greenhouse Gas Challenge Plus
Generator Efficiency Standards
US EPA
SF6 Reduction Partnership
 81 electric utilities participate
Climate Leaders Program
 More than7 electric power companies participate
US DOE
Climate Challenge Program
Chicago Climate Exchange (CCX)
Trade emissions to achieve least cost emissions
reductions
 8 electric power generation members
23
Emissions Reductions Targets
Power Sector
Reference Year
Target Year
Target
Exelon
USA
2001
2008
8% decrease in
total emissions
All Power Utilities
Japan
1990
2010
20% decrease in
emissions intensity
Scottish Power
United Kingdom
1990
2010
25% decrease in
total emissions
Endessa
Spain
1990
2007
30% decrease in
total emissions
Contact Energy
New Zealand
2006
2014
40% decrease in
total emissions
24
Policy Advocacy
25
Regulatory Risk and Policy Advocacy
Electricity sector – heavily exposed to risks of new regulations
limiting GHG emissions
Electricity business groups – advocate sensible climate policy
and call for government action
26
Electricity Industry Associations
Edison Electric Institute (EEI), US
EEI Global Climate Change Principles
Federation of Electric Power Companies of Japan
(FEPC)
Emphasise on importance of nuclear energy
Union of the Electricity Industry (EURELECTRIC),
Europe
Call for a roadmap to improved energy and
environment regulations
27
International Organisations
e8
World Business Council for Sustainable Development (WBCSD)
Business Action for Energy (BAE)
28
e8
Organisation of 9 leading electricity companies from member
countries of the G8
Aims to promote development of joint policy framework and
implement related initiatives in domestic and international
markets
Two key recommendations on international policy frameworks:
Flexible mechanisms should recognise all forms of electricity
generation
Policy should take into account the full costs and benefits for
reducing energy-related GHG emission regardless of their origin
29
WBCSD
Strong voice of the business
community in international
climate policy debates
Focus Area: Energy and Climate
Policy papers (trilogy)
Electric Utilities Sector Project
8 electricity sector companies
Complements the general work
of Energy and Climate Focus
Area
30
WBCSD (cont’d)
Electric Utilities Sector Project
“Powering a Sustainable Future”
Agenda for action:
1. Secure investments in infrastructure
2. Get more power to more people
3. Use end-use efficiency as a resource
4. Diversify and decarbonise the fuel mix
5. Accelerate research and development
6. Reinforce and smarten the grids
31
Diversify and Decarbonise the Fuel Mix
32
Accelerate Research and Development
33
Incentives & Regulatory Certainty for
Investments in new Infrastructure
34
WBCSD
Energy and Climate Focus Area
“Policy Directions to 2050”
Key concepts of a flexible and diverse climate
change policy framework
 Global 50-year target for GHG emissions
 Development and deployment of leading-edge,
low-carbon, new technology projects.
 Building upon lessons learned and national
policies
 Building upon sector participation
 Progressively including all countries and
sectors
35
Conclusions
Business collaborations on climate change issues in the
electricity sector
Have shown some early signs of success, but the greater
challenges lie ahead
Further & faster progress on wedge implementation will require
new policies and international frameworks that
promote uptake of energy efficiency;
take into account the costs and benefits of reducing or avoiding
GHG emissions in all energy-intensive sectors world-wide;
take into account the responsibility of prior emissions of
industrialized countries, and the development needs of emerging
economies of China, India, and others;
provide increased support for research, development and
deployment of low-emission and energy-saving technologies.
36