External costs from electricity generation of China up to 2030 in energy and abatement scenarios

This paper presents estimated external costs of electricity generation in China under different scenarios of long-term energy and environmental policies. Long-range Energy Alternatives Planning (LEAP) software is used to develop a simple model of electricity demand and to estimate gross electricity generation in China up to 2030 under these scenarios. Because external costs for unit of electricity from fossil fuel will vary in different government regulation periods, airborne pollutant external costs of SO₂, NO_x, PM₁₀, and CO₂ from fired power plants are then estimated based on emission inventories and environmental cost for unit of pollutants, while external costs of non-fossil power generation are evaluated with external cost for unit of electricity. The developed model is run to study the impact of different energy efficiency and environmental abatement policy initiatives that would reduce total energy requirement and also reduce external costs of electricity generation. It is shown that external costs of electricity generation may reduce 24–55% with three energy policies scenarios and may further reduce by 20.9–26.7% with two environmental policies scenarios. The total reduction of external costs may reach 58.2%.     

Nucs down in Germany—Prices up in Europe?

Current legislation on power production from nuclear energy in Germany defines certain remaining quantities of permitted electricity production for nuclear power plants. These quantities are defined for each nuclear power plant and are measured in TWh. In the discussion about climate protection and market trend of electricity prices, it is regularly stated by policy makers that the nuclear phase-out will result in an increase in electricity prices and CO₂ emissions. As a consequence a revision is proposed, especially from the Liberals (FDP) and Conservatives (CDU). The following article discusses this issue analysing the different options investors and operators under different scenarios have. It shows firstly that both emissions and power prices can indeed increase, and secondly that the mere discussion about potentially reversing the phasing-out decision can lead to an increase in electricity prices as investment behaviour may change based on expectations regarding future regulation. I conclude that – ceteris paribus – the nuclear phase-out is likely to result in an increase in CO₂ emissions and prices.     

CO2 emissions from electricity generation in seven Asia-Pacific and North American countries: A decomposition analysis

The Logarithmic Mean Divisia Index (LMDI) method of complete decomposition is used to examine the role of three factors (electricity production, electricity generation structure and energy intensity of electricity generation) affecting the evolution of CO₂ emissions from electricity generation in seven countries. These seven countries together generated 58% of global electricity and they are responsible for more than two-thirds of global CO₂ emissions from electricity generation in 2005. The analysis shows production effect as the major factor responsible for rise in CO₂ emissions during the period 1990–2005. The generation structure effect also contributed in CO₂ emissions increase, although at a slower rate. In contrary, the energy intensity effect is responsible for modest reduction in CO₂ emissions during this period. Over the 2005–2030 period, production effect remains the key factor responsible for increase in emissions and energy intensity effect is responsible for decrease in emissions. Unlike in the past, generation structure effect contributes significant decrease in emissions. However, the degree of influence of these factors affecting changes in CO₂ emissions vary from country to country. The analysis also shows that there is a potential of efficiency improvement of fossil-fuel-fired power plants and its associated co-benefits among these countries.     

Serbian energy development based on lignite production

Lignite, as an energy resource, is a mainstay of electricity generation in the Republic of Serbia. Installed capacity of lignite power plants represents 68% of the total installed capacity of Electric Power Industry of Serbia, the only company in Serbia, which manages electricity generation. In the future, with the increase in demand for electricity, both in Serbia and in Europe, we should expect more extensive and effective utilization of lignite as the main energy potential. In addition, due to increased emissions of CO₂, NO_X and other pollutants, the Republic of Serbia must accelerate the implementation of flexible mechanisms of Kyoto Protocol and the guidelines set by the European Union. Lignite in the future will retain its existential importance in the electricity generation in the Republic of Serbia.     

The potential impacts of climate-change policy on freshwater use in thermoelectric power generation

Climate change policy involving a price on carbon would change the mix of power plants and the amount of water they withdraw and consume to generate electricity. We analyze what these changes could entail for electricity generation in the United States under four climate policy scenarios that involve different costs for emitting CO₂ and different technology options for reducing emissions out to the year 2030. The potential impacts of the scenarios on the U.S. electric system are modeled using a modified version of the U.S. National Energy Modeling System and water-use factors for thermoelectric power plants derived from electric utility data compiled by the U.S. Energy Information Administration. Under all the climate-policy scenarios, freshwater withdrawals decline 2–14% relative to a business-as-usual (BAU) scenario of no U.S. climate policy. Furthermore, water use decreases as the price on CO₂ under the climate policies increases. At relatively high carbon prices (>$50/tonne CO₂), however, retrofitting coal plants to capture CO₂ increases freshwater consumption compared to BAU in 2030. Our analysis suggests that climate policies and a carbon price will reduce both electricity generation and freshwater withdrawals compared to BAU unless a substantial number of coal plants are retrofitted to capture CO₂.     

Valuation of marginal CO2 abatement options for electric power plants in Korea

The electricity generation sector in Korea is under pressure to mitigate greenhouse gases as directed by the Kyoto Protocol. The principal compliance options for power companies under the cap-and-trade include the application of direct CO₂ emission abatement and the procurement of emission allowances. The objective of this paper is to provide an analytical framework for assessing the cost-effectiveness of these options. We attempt to derive the marginal abatement cost for CO₂ using the output distance function and analyze the relative advantages of emission allowance procurement option as compared to direct abatement option. Real-option approach is adopted to incorporate emission allowance price uncertainty. Empirical result shows the marginal abatement cost with an average of €14.04/ton CO₂ for fossil-fueled power plants and confirms the existence of substantial cost heterogeneity among plants which is sufficient to achieve trading gains in allowance market. The comparison of two options enables us to identify the optimal position of the compliance for each plant. Sensitivity analyses are also presented with regard to several key parameters including the initial allowance prices and interest rate. The result of this paper may help Korean power plants to prepare for upcoming regulations targeted toward the reduction of domestic greenhouse gases.     

Exploring the ancillary benefits of the Kyoto Protocol for air pollution in Europe

An integrated approach to climate change and regional air pollution can harvest considerable ancillary benefits in terms of environmental impacts and costs. This is because both problems are caused to a large extent by the same activity (fossil fuel combustion). Substantial ancillary benefits were found for regional air pollution (SO₂, NO_x, VOC and particulate matter) of implementing the Kyoto Protocol (intended to control greenhouse gas emissions) in Europe. For instance, while three different scenarios on Kyoto implementation were found to reduce European CO₂ emissions by 4–7%, they also reduced European emissions of SO₂ by 5–14% compared with a no Kyoto policies case. The magnitude of ancillary benefits depends on how flexible mechanisms and surplus emission allowances are used in meeting the Kyoto targets. The total cost savings for implementing current policies for regional air pollution of the Kyoto Protocol are of an order of 2.5–7 billion Euro. In all cases, this is in the order of half the costs of the climate policy (4–12 billion Euro). Using flexible mechanisms reduces emissions of air pollutants for Europe as a whole even further than domestic implementation (e.g. 10–14% versus 5% for SO₂ emissions), but the reductions are shifted from Western Europe to Central and Eastern Europe and Russia. The use of surplus emission allowances to achieve the Kyoto targets decreases the ancillary benefits, in particular for the latter group of countries (e.g. unprotected area against acidification increases from 1.3 to 1.7 million ha).     

Development of a scalable infrastructure model for planning electricity generation and CO2 mitigation strategies under mandated reduction of GHG emission

In a power-generation system, power plants as major CO₂ sources may be widely separated, so they must be connected into a comprehensive network to manage both electricity and CO₂ simultaneously and efficiently. In this study, a scalable infrastructure model is developed for planning electricity generation and CO₂ mitigation (EGCM) strategies under the mandated reduction of GHG emission. The EGCM infrastructure model is applied to case studies of Korean energy and CO₂ scenarios in 2020; these cases consider combinations of prices of carbon credit and total electricity demand fulfilled by combustion power plants. The results highlight the importance of systematic planning for a scalable infrastructure by examining the sensitivity of the EGCM infrastructure. The results will be useful both to help decision makers establish a power-generation plan, and to identify appropriate strategies to respond to climate change.     

Fuel price and technological uncertainty in a real options model for electricity planning

Electricity generation is an important source of total CO₂ emissions, which in turn have been found to relate to an acceleration of global warming. Given that many OECD countries have to replace substantial portions of their electricity-generating capacity over the next 10–20 years, investment decisions today will determine the CO₂-intensity of the future energy mix. But by what type of power plants will old (mostly fossil-fuel-fired) capacity be replaced? Given that modern, less carbon-intensive technologies are still expensive but can be expected to undergo improvements due to technical change in the near future, they may become more attractive, especially if fossil fuel price volatility makes traditional technologies more risky. At the same time, technological progress is an inherently uncertain process itself. In this paper, we use a real options model with stochastic technical change and stochastic fossil fuel prices in order to investigate their impact on replacement investment decisions in the electricity sector. We find that the uncertainty associated with the technological progress of renewable energy technologies leads to a postponement of investment. Even the simultaneous inclusion of stochastic fossil fuel prices in the same model does not make renewable energy competitive compared to fossil-fuel-fired technology in the short run based on the data used. This implies that policymakers have to intervene if renewable energy is supposed to get diffused more quickly. Otherwise, old fossil-fuel-fired equipment will be refurbished or replaced by fossil-fuel-fired capacity again, which enforces the lock-in of the current system into unsustainable electricity generation.     

Evaluating carbon dioxide emissions in international trade of China

China is the world's largest emitter of carbon dioxide (CO₂). As exports account for about one-third of China's GDP, the CO₂ emissions are related to not only China's own consumption but also external demand. Using the input–output analysis (IOA), we analyze the embodied CO₂ emissions of China's import and export. Our results show that about 3357 million tons CO₂ emissions were embodied in the exports and the emissions avoided by imports (EAI) were 2333 million tons in 2005. The average contribution to embodied emission factors by electricity generation was over 35%. And that by cement production was about 20%. It implies that the production-based emissions of China are more than the consumption-based emissions, which is evidence that carbon leakage occurs under the current climate policies and international trade rules. In addition to the call for a new global framework to allocate emission responsibilities, China should make great efforts to improve its energy efficiency, carry out electricity pricing reforms and increase renewable energy. In particular, to use advanced technology in cement production will be helpful to China's CO₂ abatement.     

Comprehensive evaluation of industrial CO2 emission (1989–2004) in Taiwan by input–output structural decomposition

Taiwan currently emits approximately 1% of the world's CO₂—ranking it 22nd among nations. Herein, we use the input–output (I–O) structural decomposition method to examine the changes in CO₂ emission over a 15-year period. By decomposing the CO₂ emission changes into nine factors for the periods of 1989–1994, 1994–1999, and 1999–2004, we have identified the key factors causing the emission changes, as well as the most important trends regarding the industrial development process in Taiwan. The 5-year increment with the largest increase of CO₂ emission was that of 1999–2004, due to the rapid increase of electricity consumption. From the decomposition, the industrial energy coefficient and the CO₂ emission factors were identified as the most important parameters for the determination of the highway, petrochemical materials, iron and steel, the commercial sector, and electric machinery as the major sources of increased CO₂ emission during the past 15 years. From 1989 to 2004, the level of exports and the level of domestic final demand were the largest contributors to the increase in the total increment of CO₂ change. During 1989–2004, the industrial energy coefficient and CO₂ emission factors, being minimally significant during 1989–1994, became extremely important, joining the domestic final demand and the level of exports factors as the major causes of the increase increment of CO₂. This indicates a heavy reliance upon high-energy (and CO₂) intensity for Taiwanese industries; therefore, continuous efforts to improve energy intensity and fuel mix toward lower carbon are important for CO₂ reduction, especially for the electricity and power generation sectors. Relevant strategies for reducing carbon dioxide emissions from major industries are also highlighted.     

Solar energy powered Rankine cycle using supercritical CO2

A solar energy powered Rankine cycle using supercritical CO₂ for combined production of electricity and thermal energy is proposed. The proposed system consists of evacuated solar collectors, power generating turbine, high-temperature heat recovery system, low-temperature heat recovery system, and feed pump. The system utilizes evacuated solar collectors to convert CO₂ into high-temperature supercritical state, used to drive a turbine and thereby produce mechanical energy and hence electricity. The system also recovers heat (high-temperature heat and low-temperature heat), which could be used for refrigeration, air conditioning, hot water supply, etc. in domestic or commercial buildings. An experimental prototype has been designed and constructed. The prototype system has been tested under typical summer conditions in Kyoto, Japan; It was found that CO₂ is efficiently converted into high-temperature supercritical state, of while electricity and hot water can be generated. The experimental results show that the solar energy powered Rankine cycle using CO₂ works stably in a trans-critical region. The estimated power generation efficiency is 0.25 and heat recovery efficiency is 0.65. This study shows the potential of the application of the solar-powered Rankine cycle using supercritical CO₂.     

Reductions in emissions of local air pollutants and co-benefits of Chinese energy policy: a Shanghai case study

To better understand the reductions in local air pollution that will result from the implementation of current Chinese energy policy, as well as the co-benefit for greenhouse-gas emission reductions, a Shanghai case study was conducted. The MARKAL model was used to forecast energy consumption and emissions of local air pollutants under different energy policy scenarios and also to analyze the associated reductions in CO₂ emissions. The results show that energy policies in Shanghai will significantly reduce SO₂ and PM₁₀ emissions and will also achieve the co-benefit of mitigating the increase of CO₂ emissions. In energy policy scenarios, SO₂ emissions during the period 2000–2020 will maintain the same level as in 2000; and the annual rate of increase of CO₂ emissions will be reduced to 1.1–1.2%, compared with 2.7% under a business-as-usual scenario. The problem for the future will be NO_x emissions, which are projected to increase by 60–70% by 2020, due to expansion of the transportation system.     

Electricity sector reforms in four Latin-American countries and their impact on carbon dioxide emissions and renewable energy

This paper analyzes carbon dioxide (CO₂) emissions related to energy consumption for electricity generation in four Latin-American countries in the context of the liberalization process. From 1990 to 2006, power plants based on renewable energy sources decreased its share in power installed capacity, and the carbon index defined as CO₂ emission by unit of energy for electricity production stayed almost constant for all countries with the exception of Colombia, where the index reduced due to increase in hydroelectricity generation in the last years. The paper also presents a new set of policies to promote renewable energy sources that have been developed in the four countries. The paper concludes that restructuring did not bring about environmental benefits related to a decrease in CO₂ emissions because this depend on the existence of committed policies, and dedicated institutional and regulatory frameworks.     

Spatial variation of emissions impacts due to renewable energy siting decisions in the Western U.S. under high-renewable penetration scenarios

One of the policy goals motivating programs to increase renewable energy investment is that renewable electric generation will help reduce emissions of CO₂ as well as emissions of conventional pollutants (e.g., SO₂ and NO_x). As a policy instrument, Renewable Portfolio Standards (RPS) encourage investments in wind, solar and other generation sources with the goal of reducing air emissions from electricity production. Increased electricity production from wind turbines is expected to displace electricity production from fossil-fired plants, thus reducing overall system emissions. We analyze the emissions impacts of incremental investments in utility-scale wind power, on the order of 1 GW beyond RPS goals, in the Western United States using a utility-scale generation dispatch model that incorporates the impacts of transmission constraints. We find that wind investment in some locations leads to slight increases in overall emissions of CO₂, SO₂ and NO_x. The location of wind farms influences the environmental impact by changing the utilization of transmission assets, which affects the overall utilization of power generation sources and thus system-level emissions. Our results suggest that renewable energy policy beyond RPS targets should be carefully crafted to ensure consistency with environmental goals.     

Using LMDI method to analyze the change of China's industrial CO2 emissions from final fuel use: An empirical analysis

Based on time series decomposition of the Log-Mean Divisia Index (LMDI), this paper analyzes the change of industrial carbon emissions from 36 industrial sectors in China over the period 1998–2005. The changes of industrial CO₂ emission are decomposed into carbon emissions coefficients of heat and electricity, energy intensity, industrial structural shift, industrial activity and final fuel shift. Our results clearly show that raw chemical materials and chemical products, nonmetal mineral products and smelting and pressing of ferrous metals account for 59.31% of total increased industrial CO₂ emissions. The overwhelming contributors to the change of China's industrial sectors’ carbon emissions in the period 1998–2005 were the industrial activity and energy intensity; the impact of emission coefficients of heat and electricity, fuel shift and structural shift was relatively small. Over the year 1998–2002, the energy intensity change in some energy-intensive sectors decreased industrial emissions, but increased emissions over the period 2002–2005. The impact of structural shift on emissions have varied considerably over the years without showing any clear trend, and the final fuel shift increased industrial emissions because of the increase of electricity share and higher emissions coefficient. Therefore, raw chemical materials and chemical products, nonmetal mineral products and smelting and pressing of ferrous metals should be among the top priorities for enhancing energy efficiency and driving their energy intensity close to the international advanced level. To some degree, we should reduce the products waste of these sectors, mitigate the growth of demand for their products through avoiding the excessive investment highly related to these sectors, increasing imports or decreasing the export in order to avoid expanding their share in total industrial value added. However, all these should integrate economic growth to harmonize industrial development and CO₂ emission reduction.     

Internalisation of external cost in the power generation sector: Analysis with Global Multi-regional MARKAL model

The Global MARKAL-Model (GMM), a multi-regional “bottom-up” partial equilibrium model of the global energy system with endogenous technological learning, is used to address impacts of internalisation of external costs from power production. This modelling approach imposes additional charges on electricity generation, which reflect the costs of environmental and health damages from local pollutants (SO₂, NO_x) and climate change, wastes, occupational health, risk of accidents, noise and other burdens. Technologies allowing abatement of pollutants emitted from power plants are rapidly introduced into the energy system, for example, desulphurisation, NO_x removal, and CO₂ scrubbers. The modelling results indicate substantial changes in the electricity production system in favour of natural gas combined cycle, nuclear power and renewables induced by internalisation of external costs and also efficiency loss due to the use of scrubbers. Structural changes and fuel switching in the electricity sector result in significant reduction of emissions of both local pollution and CO₂ over the modelled time period. Strong decarbonisation impact of internalising local externalities suggests that ancillary benefits can be expected from policies directly addressing other issues then CO₂ mitigation. Finally, the detailed analysis of the total generation cost of different technologies points out that inclusion of external cost in the price of electricity increases competitiveness of non-fossil generation sources and fossil power plants with emission control.     

Grey forecasting model for CO2 emissions: A Taiwan study

Among the various greenhouse gases associated with climate change, CO₂ is the most frequently implicated in global warming. The latest data from Carbon Monitoring for Action (CARMA) shows that the coal-fired power plant in Taichung, Taiwan emitted 39.7 million tons of CO₂ in 2007 – the highest of any power plant in the world. Based on statistics from Energy International Administration, the annual CO₂ emissions in Taiwan have increased 42% from 1997 until 2006. Taiwan has limited natural resources and relies heavily on imports to meet its energy needs, and the government must take serious measures control energy consumption to reduce CO₂ emissions. Because the latest data was from 2009, this study applied the grey forecasting model to estimate future CO₂ emissions in Taiwan from 2010 until 2012. Forecasts of CO₂ emissions in this study show that the average residual error of the GM(1,1) was below 10%. Overall, the GM(1,1) predicted further increases in CO₂ emissions over the next 3 years. Although Taiwan is not a member of the United Nations and is not bound by the Kyoto Protocol, the findings of this study provide a valuable reference with which the Taiwanese government could formulate measures to reduce CO₂ emissions by curbing the unnecessary the consumption of energy.     

Impacts of CO2 emission constraints on technology selection and energy resources for power generation in Bangladesh

This paper examines the impacts of CO₂ emission reduction target and carbon tax on future technologies selection and energy use in Bangladesh power sector during 2005–2035. The analyses are based on a long-term energy system model of Bangladesh using the MARKAL framework. The analysis shows that Bangladesh will not be able to meet the future energy demand without importing energy. However, alternative policies on CO₂ emission constraints reduce the burden of imported fuel, improve energy security and reduce environmental impacts. The results show that the introduction of the CO₂ emission reduction targets and carbon taxes directly affect the shift of technologies from high carbon content fossil-based to low carbon content fossil-based and clean renewable energy-based technologies compared to the base scenario. With the cumulative CO₂ emission reduction target of 10–20% and carbon tax of 2500 Taka/ton, the cumulative net energy imports during 2005–2035 would be reduced in the range of 39–65% and 37%, respectively, compared to the base scenario emission level. The total primary energy requirement would be reduced in the range of 4.5–22.3% in the CO₂ emission reduction targets and carbon tax 2500 Taka/ton scenarios and the primary energy supply system would be diversified compared to the base scenario.     

Optimal operation of an integrated energy system including fossil fuel power generation, CO2 capture and wind

This study considers the optimization of operations for an integrated fossil-renewable energy system with CO₂ capture. The system treated consists of a coal-fired power station, a temperature-swing absorption CO₂ capture facility powered by a natural gas combustion turbine, and wind generation. System components are represented in a modular fashion using energy and mass balances. Optimization is applied to determine hourly system dispatch to maximize operating profit given energy prices and wind generation data. A CO₂ emission constraint, modeled after a California law, is enforced. Idealized and realistic scenarios are considered, along with several different system specifications. For a year of operation, simulated using available wind and energy price data, operating profit for optimized operation is shown to be approximately 20% greater than profit using a heuristic procedure. The benefit from optimization is positively correlated with electricity price variability and mean wind generation. The impact of different component specifications and different CO₂ absorption solvents on the optimal operation of the energy system is also assessed. In total, this study demonstrates that the effective operating cost of an integrated energy system operating under a CO₂ emission constraint can be substantially reduced via optimal flexible operation.