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March 4, 2019
Mr. Philippe Le Houérou,
Chief Executive Officer
International Finance Corporation
2121 Pennsylvania Avenue NW
Washington DC 20433
RE: Revisions to the EHS Guidelines for Thermal Power Plants
Dear Mr. Le Houérou:
We are writing to express our concern about the substance and delayed process of the proposed
revisions to the 2008 Environment, Health and Safety (EHS) Guidelines for Thermal Power
Plants.
We welcome IFC’s intent to harmonize these outdated guidelines with current best practices on
project design and selection, pollution control, climate mitigation, and other critical issues.
However, the most recent Draft Guidelines fall well short of best practices in a number of crucial
respects. Moreover, the process that IFC has employed to revise the Guidelines has dragged on
for over five years, and has been remarkably untransparent.
We therefore request that IFC (1) recommit to aligning the Guidelines with best practices; (2)
issue a new draft that identifies outstanding issues; (3) open the draft up to a final round of
public comment; and (4) specify a firm date for finalizing the new Guidelines.
Substantive Flaws in the 2017 Draft
The current Draft Guidelines are not fit for purpose, as they often fall well short of international
best practices and sound climate change policy in the energy sector. These shortcomings are
explored in more detail in our previous submissions, which are annexed to this letter.
In summary, these shortcomings fall into three broad categories.
First, the Draft Guidelines provide inadequate clarity on how they will inform World Bank
Group lending decisions, as they often do not set out clear performance benchmarks or describe
how IFC’s Performance Standards should be applied to thermal power projects. Most
importantly, the Guidelines should be clear that new fossil-fuel generation will be sponsored
only as a last resort, where there truly are no available alternatives.
Second, the Draft Guidelines do not adequately protect human health or the environment
because they adopt obsolete or incomplete standards for the emissions of carbon dioxide (CO2),
sulfur dioxide (SO2), nitrogen oxides (NOx) and particulate matter (PM) for coal-fired units, and
provide almost no useful information concerning the performance of natural gas-fired
combustion turbines (CTs) and combined cycle gas turbines (CCGTs).
Third, the Draft Guidelines do not set out the information needed by developers, host countries,
lenders and NGOs to evaluate thermal power plants proposals under applicable climate policies,
leading to potential confusion about the use of the Guidelines for future lending decisions.
To address these issues, the Draft Guidelines should be substantially revised to eliminate
confusion, provide more useful information, and better align IFC’s standards with emerging best
practices and the global imperative to dramatically reduce emissions in the electricity sector.
Transparency concerns
As this process has dragged on for years, it has become almost completely untransparent. IFC
has not promulgated any progress reports or explanations for the delay. It has not identified the
specific issues that have proven difficult to resolve, let alone solicited additional public comment
on those issues. Our repeated requests for updated information have been rebuffed or ignored.
We would welcome the opportunity to work with your staff as they finalize a new set of
Guidelines that reflect current best practices in the electricity sector and the urgency of the
climate crisis. Unfortunately, we have no reason to be confident that the revision process is on
track to deliver such Guidelines. To get this process back on track, IFC should (1) recommit to
aligning the Guidelines with best practices; (2) issue a new draft that identifies outstanding
issues; (3) open the draft up to a final round of public comment; and (4) specify a firm date for
finalizing the new Guidelines.
Sincerely,
Nezir Sinani Steven Herz Chris Littlecott
Director Senior Attorney Associate Director -
Bank Information Center-Europe Sierra Club Fossil Fuel Transition
E3G
cc: Ms. Kristalina Georgieva
Interim President of the World Bank Group
and Chief Executive Officer of the World Bank
COMMENTS ON THE IFC’S PROPOSED REVISION OF ITS EHS
GUIDELINES FOR THERMAL POWER PLANTS
Bruce Buckheit
Consultant, Sierra Club
Former Chief of Air Enforcement, U.S. EPA
b_buckheit@msn.com
Steven Herz
Senior Attorney, Sierra Club
steve.herz@sierraclub.org
Nezir Sinani
Europe and Central Asia Manager
Bank Information Center
nsinani@bankinformationcenter.org
Introduction
We welcome the IFC’s efforts to revise and update the 2008 Environment, Health and Safety
(EHS) Guidelines for Thermal Power Plants (2008 Guidelines).1 The evolution of global
standards since 2008, and more urgent attention to the risks of climate change and the central
role the thermal power sector plays in exacerbating those risks make this review both timely and
essential.
Because even high performing thermal power plants often present substantial environmental,
public health and climate risks, the decision whether to proceed with a thermal plant is as
important as the standards that will be applied. Thus, before applying the Guidelines for Thermal
Power Plants, the World Bank should follow alternative assessment requirements of the
Performance Standards, General EHS Guidelines and Criteria for Screening Coal Projects to
ensure a full consideration of low-carbon solutions, including renewables, storage and efficiency.
Based on our experience in Kosovo and other countries seeking new coal-fired generation,
consideration of end-use efficiency and transmission and distribution system improvements in
low income countries should be the highest priority for the foreseeable future. New fossil-fuel
generation should be sponsored only as a last resort, where the lack of available alternatives has
been demonstrated by comprehensive assessment.
1http://www.ifc.org/wps/wcm/connect/dfb6a60048855a21852cd76a6515bb18/FINAL_Thermal%2BPower.pdf?MO
D=AJPERES&id=1323162579734
The May/June 2017 Draft EHS Guidelines for Thermal Power Plants (Draft Guidelines)2 make
some limited improvements over the existing Guidelines. However, the Draft Guidelines often
fall well short of aligning IFC standards with international best practices and sound climate
change policy in the energy sector. These shortcomings fall into three categories. First, the Draft
Guidelines provide inadequate clarity on how they are to be applied, and create a potential
conflict with other World Bank policies and international best practice standards related to
funding proposals for new fossil fuel-fired power plants. Second, the Draft Guidelines do not
adequately protect human health or environmental values because they adopt obsolete or
incomplete standards for the emissions of carbon dioxide (CO2), sulfur dioxide (SO2), nitrogen
oxides (NOx) and particulate matter (PM) to be expected of well-performing coal-fired units, and
provide almost no useful information concerning the performance and application of natural gas
fired combustion turbines (CTs) and combined cycle gas turbines (CCGTs). Third, the Draft
Guidelines do not set out the information needed by developers, participating nations, lenders
and NGOs to evaluate proposals for new thermal power plants under applicable climate policies,
leading to potential confusion about the use of the Guidelines for future lending decisions.
To address these issues, the Draft Guidelines should be substantially revised to eliminate
confusion, provide more useful information, and better align IFC’s standards with emerging best
practices and the global imperative to dramatically reduce emissions in the electricity sector. In
this document the Sierra Club and Bank Information Center set out the major deficiencies in the
Draft Guidelines and recommend an approach that would better assist users in developing and
reviewing proposed thermal power plant projects potentially subject to World Bank policies.
Discussion
1. The Draft Guidelines should be much clearer about how they will inform World Bank
Group lending decisions.
The Draft Guidelines are supposed to establish clear performance benchmarks that thermal
power plants will be expected to achieve to be eligible for IFC support. Indeed, IFC’s
Performance Standards on Environmental and Social Sustainability makes clear that the EHS
Guidelines will be used for this purpose. Performance Standard 3 provides, “The EHS
Guidelines contain the performance levels and measures that are normally acceptable to IFC,
and that are generally considered to be achievable in new facilities at reasonable costs by
existing technology.”3 (emphasis provided).
To serve this purpose, the Draft Guidelines should set out clear performance benchmarks and,
where necessary, the narrow and well-defined exceptions in which clients will be allowed to
derogate from those benchmarks. The Draft Guidelines often do not do this. In many places, they
read as a survey of current practice, and do not actually clarify which options will be required or
2 https://www.ifc.org/wps/wcm/connect/9a362534-bd1b-4f3a-9b42-
a870e9b208a8/Thermal+Power+Guideline+2017+clean.pdf?MOD=AJPERES. In this comment “Guidelines” refers
to the 2008 Guidelines and the Draft Guidelines. 3 http://www.ifc.org/wps/wcm/connect/115482804a0255db96fbffd1a5d13d27/PS_English_2012_Full-
Document.pdf?MOD=AJPERES at ii.
even preferred. Indeed, with respect to efficiency and CO2 emission intensity, the Draft
Guidelines expressly disavow the notion that they should be used as a benchmark or limit value:
[t]hermal power plant efficiency and CO2 emissions performance are dependent
on a number of factors including, but not limited to, fuel type, technology, unit
size, local climatic conditions, altitude and cooling technology. Values presented
in this table are indicative and, due to the degree of variation in power plant
characteristics, may not be directly comparable to actual new facilities. For this
reason, values should not be interpreted as a benchmark or limit value and are for
guidance only.4
Thus, as proposed, project developers, lenders, governments and host communities would be told
that the efficiency and CO2 emission rate values in Table 4 (1) are indicative; (2) may not be
directly comparable to actual new facilities; and (3) should not be interpreted as a benchmark or
limit value; but nonetheless, may be used for guidance. What, then, are these values to be used
for? If the values do not “indicate” the Good International Industrial Practice (GIIP) that IFC
expects its clients to achieve, why include them at all? What “guidance” is the values intended to
provide?
Moreover, the Draft Guidelines often do not provide any meaningful guidance for professionals
and decision makers engaged in projects. The Draft Guidelines state that they set out examples
of the application of GIIP, which is defined as “the exercise of professional skill, diligence,
prudence and foresight that would be reasonably expected from skilled and experienced
professionals engaged in the same type of undertaking under the same or similar circumstances
globally.” Yet the Draft Guidelines often do not specify the “type of undertaking” that is at issue.
Absent a specification of the design brief, one cannot determine whether a particular design
represents GIIP. For example, GIIP may be significantly different depending on the desired
efficiency of the proposed plant. A professional engineer tasked with producing a plant with an
efficiency of 30 percent will make different choices than if she were asked to design a plant with
an efficiency of 40 percent, even though each design could reflect a high degree of professional
skill and could be achievable in new facilities at reasonable costs.
2. The Draft Guidelines should clearly explain how clients will be expected to apply the
“mitigation hierarchy” to the technology choices and pollution challenges they will confront
in building and operating a thermal power plant.
One of the most valuable concepts in IFC’s Sustainability Framework is its “mitigation
hierarchy” for addressing the risks and adverse impacts of project operations. The “mitigation
hierarchy” requires project sponsors “to anticipate and avoid adverse impacts on workers,
communities, and the environment, or where avoidance is not possible, to minimize, and where
residual impacts remain, compensate/offset for the risks and impacts, as appropriate.”5 This
4 Draft Guidelines, supra, at Table 4.
5 IFC (2012), Policy on Environmental and Social Sustainability, para. 6; Performance Standard 1: Assessment and
Management of Environmental and Social Risks and Impacts, “Objectives”. Performance Standard 3, para. 4.
Available at http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-
ifc/policies-standards/sustainability+framework
approach is a true “hierarchy” in that its elements are listed in descending order of acceptability.
Clients must “favor the avoidance of impacts over minimization, and, where residual impacts
remain, compensation/offset, wherever technically and financially feasible.6
In a number of places, the Draft Guidelines pay homage to the mitigation hierarchy by
discussing options to “prevent, minimize or control” various environmental impacts and risks.7
But in most of these cases, the Draft Guidelines do not differentiate between those approaches or
technology choices that must be prioritized as “avoidance” strategies, and those that can only be
used to minimize impacts where avoidance “is not possible.” Accordingly, the Draft Guidelines
do not provide sufficient guidance as to how the mitigation hierarchy should be applied to select
among technology options or to address specific pollution challenges. Given that the mitigation
hierarchy is the cornerstone of IFC’s entire approach to addressing environmental impacts, this is
major shortcoming that should be addressed in the final draft.
GIIP is to apply the mitigation hierarchy through a “best achievable control technology (BACT)”
approach, as under the U.S. Clean Air Act, or the similar “best achievable technology” approach
employed in the European Union. In the U.S., BACT is determined on a case-by-case basis
employing what EPA styles a “Top Down” approach,8 where the most effective technology is
employed, unless it is demonstrated that the most effective technology is infeasible for either
technical or cost reasons. This is exactly the analysis anticipated in the mitigation hierarchy.
Accordingly, the Draft Guidelines should make clear that clients will apply the mitigation
hierarchy through such an approach for all categories of pollutants and impacts.
In the thermal power sector, end-use efficiency and transmission and distribution improvements
should be prioritized as first-order avoidance strategies under the mitigation hierarchy. Such
efficiency measures eliminate adverse impacts associated with activities across the entire
production chain. They avoid impacts upstream by reducing resource inputs, and downstream by
reducing wastes and pollutants. What’s more, as the Independent Evaluation Group and
numerous other observers have noted, efficiency is the single most important strategy for
expanding and improving energy service delivery for the poor while facilitating the transition to
sustainable, zero/ultra-low-carbon energy systems at least cost and risk.9 Clients therefore should
be expected to apply efficiency measures along with other avoidance measures wherever
possible, and undertake efforts to minimize, or offset impacts only where such avoidance is
demonstrated to not be possible.
6 Performance Standard 1, para. 14.
7 These include air pollutants (paras. 14, 19, 21, 23, 25); carbon dioxide (para 27); water pollution and impacts
(paras. 36, 43, 48); solid waste and hazardous materials (paras.55, 57); noise pollution (para. 60); and occupational
hazards (paras 64, 69, 70, 71). 8 https://www.epa.gov/nsr/nsr-workshop-manual-draft-october-1990
9 World Bank Independent Evaluation Group, (2008). Climate Change and the World Bank Group, Phase I:
An Evaluation of World Bank Win-Win Energy Policy Reforms; UN Secretary General’s Advisory Group on
Energy and Climate Change, 2010. Energy for a Sustainable Future. Amory Lovins, 2005. Energy End-Use
Efficiency. www.rmi.org.
3. Paragraph 29 falls well short of GIIP in its treatment of acceptable performance in plant
efficiency.
Paragraph 29 attempts to encourage the use of more efficient technologies in two ways. First, it
directs project sponsors to “consider alternative solutions including technical suitability and
trade-offs between capital and operating costs involved in the use of different technologies with
documented reasoning of why the selected option is the most feasible.” Second, it provides that
“new facilities should be aimed to be in the top quartile of energy efficiency for the
country/region average plant of the same fuel type and capacity.” Both of these provisions fall
well short of GIIP and are inadequate to the task.
The direction to “consider alternative solutions” is too narrow in three ways. First, as explained
above, a proper alternatives assessment should not be limited to different thermal plant
technologies. Nor should it be limited to options that exist within the business model, corporate
priorities or competitive advantages of the proponent. Rather, it should include the full panoply
of energy sector interventions, including renewable energy, upgrading the transmission and
distribution system, insulating buildings, modernizing lighting and otherwise reducing demand,
and policy innovations that can fundamentally alter the alternatives calculus (such as elimination
of fossil fuel subsidies).
Second, the curious provision allowing proponents to select the alternative that is “most feasible”
would seem to justify the rejection of the most efficient feasible alternative. This is inconsistent
with the mitigation hierarchy, and more specifically, Performance Standard 3, para 4, which
requires project operators to employ all feasible resource efficiency and pollution prevention
techniques. Under this provision, a project sponsor cannot reject a feasible efficiency/pollution
avoidance approach because it believes a less efficient/higher polluting approach is “more
feasible.”
Third, we believe that the “top quartile of existing units in the country/region” test of efficiency
is too weak and should be abandoned as proposed. This test fails to account for the global nature
of the market of thermal power plants. Because the relevant equipment is produced by a limited
number of companies worldwide, the same technologies are “available” globally. Thus, rather
than looking backwards at the stock of existing plants in a given country or region, which may be
decades old, the Guidelines should look sideways at the latest commercially available relevant
technologies and performance outcomes. To properly account for these market dynamics, the
Guidelines should require plants to use the “best commercially available technologies” for
efficiency. At a minimum, this should rule out support for subcritical pulverized coal (“PC”);
supercritical pulverized coal (“SC”) and subcritical circulating fluidized bed (“CFB”) designs not
delivering the efficiencies of more advanced technologies.10
4. The Draft Guidelines should clarify the technologies that will be required to satisfy other
IFC and World Bank Policy Requirements.
The climate-related design constraints that the designers and engineers of proposed thermal
power plants must meet to be eligible for World Bank Group funding are not limited to those set
10
These technologies can be employed when combusting lignite, with somewhat higher emission rates.
out in the EHS Guidelines, but are also found in other documents. Under IFC Performance
Standard 3, the project must include technically and financially feasible and cost effective
measures for improving efficiency and reducing project related GHG emissions. Coal projects
must also meet the World Bank’s Criteria for Screening Coal Projects under the Strategic
Framework for Development and Climate Change11
which sets an additional benchmark that:
[c]oal projects will be designed to use the best appropriate available technology to
allow for high efficiency and, therefore, lower GHG emissions intensity.12
The extremely broad range of efficiencies and technologies presented in the Draft Guidelines
offer no guidance as to whether a proposed project would meet the requirements of Performance
Standard 3 or the Criteria for Screening Coal Projects, because they provide no useful
information about efficiency levels that have been demonstrated to be technically and financially
feasible and cost effective in similar settings, or how to determine what the “best appropriate
available technology” may be in the project context.
Performance Standard 3 also directs project developers to refer to “the EHS Guidelines or other
internationally recognized sources, as appropriate, when evaluating and selecting resource
efficiency and pollution prevention and control techniques for the project.” The OECD Sector
Understanding on Export Credits for Coal-fired Electricity Generation Projects13
clearly is an
“internationally recognized source” that provides specific guidance on the efficiencies and GHG
emission intensity that have been shown to be technically and feasible and cost effective. Under
the OECD Sector Understanding proposed units greater than 500 MW must employ Ultra-
supercritical (USC) technology, which is defined as having an operating pressure of greater than
240 bar and an operating temperature of greater than 593°C, or an emission rate of less than
750gCO2/kWh. In IDA-eligible countries proposed projects with units between 300 MW and
500 MW generating capacity may only be funded if they meet the OECD’s definition of
supercritical (SC) - an operating pressure of greater than 221 bar and an operating temperature of
greater than 550°C, or an emission rate of less than 850g CO2/kWh. Such units must also meet
the World Bank Screening Criteria discussed above. Finally, subcritical units less than 300 MW
gross generating capacity in IDA-eligible countries may be funded, but such units are also
subject to the “best appropriate available technology to allow for high efficiency” screening
criteria. The Draft Guidelines should incorporate these standards to ensure that the World Bank
Group is not supporting projects that are too inefficient to garner support from other leading
international financiers.
11
Criteria for Screening Coal Projects Under the Strategic Framework for Development and Climate Change
http://siteresources.worldbank.org/EXTENERGY2/Resources/CGN_20100331.pdf at Page 2 12
Id. at p.2. 13
See, OECD Sector Understanding On Export Credits for Coal-fired Electricity Generation Projects,
TAD/PG(2015)9/FINAL 27-Nov-2015, Section 2, Table 1, supra, and OECD Council’s Recommendation of the
Council on Common Approaches for Officially Supported Export Credits and Environmental
and Social Due Diligence (referred to as "the Common Approaches") including the updated ANNEX VI related to the
coal-fired power plants valid as of 1st January 2017 TAD/PG(2017)1, accessed at
http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?doclanguage=en&cote=tad/pg(2017)1
5. The Draft Guidelines do not provide useful examples of Good International Industry
Practice (GIIP) with respect to efficiency and GHG emission rates of coal fired power plants.
The Draft Guidelines set out the values in Table 1 as “guidelines” or “guidance” for net
efficiency on a lower heating value basis and for CO2 for coal-fired power plants.
Table 1: Net Efficiency (LHV) for Thermal Power Plants (from Table 4 EHS Guidelines):
Efficiency (net-LHV) CO2 (g-kWh)
Ultra-supercritical (USC) 39-48 676-934
Supercritical (SC) 40-46 748-938
Sub-critical (PC) 37-39 798-970
The efficiency and emission rates within each class of coal-fired power plant overlap
significantly. A 500 MW USC unit may have an efficiency as low as a subcritical PC unit and a
GHG emission rate higher than a sub-critical unit. Note also that the minimum “acceptable”
efficiency for a USC unit (39 percent, net LHV) is lower than the minimum “acceptable”
efficiency for a SC unit (40 percent, net LHV). Thus, a project developer could claim that a sub-
critical unit with an efficiency of 39 percent and an emission rate of 934 g/CO2/kWh has been
determined by the IFC to represent GIIP for a USC power plant.
Table 2: Gross Efficiency (LHV) for Thermal Power Plants (from Table 4, EHS Guidelines):
Efficiency (gross-LHV) CO2 (g-kWh)
Ultra-supercritical (USC) 47 728-777
Supercritical (SC) 44 781-834
Sub-critical 41-42 821-889
The gross efficiency values presented in the Draft Guidelines are from a single source
(ESMAP)14
and identified as “typical” design values that are not linked to any particular unit.
The associated emission rate estimates for the SC and USC categories are listed as having been
calculated from the ESMAP “typical design” efficiency values and nominal conversion factors
rather than unit specific values. Table 4 of the Draft Guidelines provides only generic citations
(e.g. USEPA 2006). For this reason, it is not possible to determine the quality of the data or
whether the unit in fact represents good practice and there is nothing in the record to demonstrate
that any evaluation was made as to whether a particular unit in fact met GIIP. It is indeed
difficult to accept the notion that a well-designed USC, even one combusting lignite, would emit
at a rate of 934 g/CO2/kWh.
The Draft Guidelines do not include the full suite of design criteria—such as minimum fuel
quality, number of reheat cycles, and conventional pollution controls—that it expects to be
14
http://www.esmap.org/sites/esmap.org/files/Technical%20and%20Economic%20Assessment%20of%20Off-
grid,%20Minigrid%20and%20Grid%20Electrification%20Technologies_Report%2012107.pdf?_sm_au_=i5VFMS
H14FTFWD4r.
employed at “good” subcritical, SC or USC units. Further, Table 4 does not distinguish between
lignite-fired units, which, will have lower net efficiency and higher specific GHG emission rates
due to the high moisture content of the fuel, and units combusting other forms of coal. This
enables developers of subcritical units burning sub-bituminous or bituminous coal to claim
efficiencies and emission rates associated with SC or USC units burning lignite.
6. The Guidelines should benchmark the best performing units in each class.
The Guidelines should identify and benchmark the best performing units in each class. IFC
should contact the operators of these units and acquire (and publish) the design and operating
conditions for these units and the data documenting performance, including the operating and
environmental parameters that impact the results. These data, along with information available in
standard engineering references and information concerning local conditions would then allow
project developers to demonstrate that, given local conditions, the proposed plant is at least as
efficient and clean as the benchmark plants.
This approach follows the recommendation of coal industry executives published by the Coal
Industry Advisory Board to the International Energy Agency (CIAB).15
In a 2010 Report, Power
Generation from Coal: Measuring and Reporting Efficiency Performance and CO2 Emissions,16
the CIAB detailed the differences in reporting methods in different countries, recommended the
creation of an international database and provided a reasonable summary of the factors that can
impact the efficiency of a coal-fired power plant.17
The CIAB Report recommended:
5.4 Performance benchmarking
In order to be useful in its underlying aim of encouraging best practice in coal use
and understanding the potential for further improvement, an agreed view of best-
practice performance would be needed. This should reflect efficiency and specific
CO2 emissions at a number of exemplary coal-fired power plants, covering
different plant designs and operating conditions. These best-practice performance
figures may then be used as benchmarks, providing a basis for participating
countries to consult with industry to determine appropriate future development
strategies that reflect regional constraints and objectives. It should be recognised
that the most efficient plant may not necessarily be the most economic plant to
build, own and operate, or provide the best long-term security of supply. A better
understanding of plant performance allows decision makers to better address the
compromises that must be made.
Tables 3 and 4, below, represent an initial compilation of publicly available performance data for
potential “benchmark” coal and lignite-fired units. The Draft Guidelines should expand on these
15
According the IEA “The IEA Coal Industry Advisory Board (CIAB) is a group of high level executives from coal-
related industrial enterprises, established by the IEA in July 1979 to provide advice to the IEA Executive Director on
a wide range of issues relating to coal. The CIAB currently has 44 members from 19 countries, contributing valuable
experience in the fields of coal production, trading and transportation, electricity generation and other aspects of
coal use. http://www.iea.org/ciab/papers/power_generation_from_coal.pdf 16
Id. 17
Id.
data by contacting the operators of these and similar well-performing units to obtain and publish
relevant design, operating and environmental parameters. Thereafter, project developers can
reference these units and adjust, as appropriate, based on site specific conditions, such as cooling
water temperature.
Table 3. Partial Performance Data for Coal-fired USC Units
Coal Plants Capacity
(MW)
Pressure
(Mbar)
Temperature
(Celsius)
Reheat
cycles
CO2 Emission
Rate (gross/net)
Eff LHV
(gross/net)
Eff HHV
(gross/net)
RDK8 919 28.5 603 1 47.5
(net)18
Nordylland 400 29 582/580/58
0
2 7(n)/699(g) 47 (net)19
Isogo 1 600 25 600/610 1 802(n)/710(g) 45 20
(gross)
Isogo 2 600 600/620 1 802(n)/710(g) 45 21
(gross)
Lunen 750 28 600 4622
Table 4. Partial Performance Data for Lignite-fired USC Units
Lignite
Plants
Capacity
(MW)
Pressure
(Mbar)
Temperature
(Celsius)
Reheat
Cycles
CO2 Emission
Rate
(gross/net)
Efficiency LHV
(gross/net)
Eff HHV
(gross/net)
Neurath 1100 27.2 600 >43(net)23
Niederaussem 1000 >43 (net)24
Boxberg 907 26.6 545 1 48.5(g)/42.7(n)25
Under the World Bank’s Criteria for Screening Coal Projects even projects less than 600 MW
must be designed to use the best, appropriate available technology to allow for high efficiency
18
http://www.gereports.com/supercritical-thinking-this-coal-power-plant-applies-bullet-like-pressures-to-steam-to-
achieve-worlds-best-performance/; http://www.powerengineeringint.com/articles/print/volume-18/issue-
5/Special_Project_Report/rdk-8s-three-little-words-efficient-reliable-and-flexible.html 19
http://cornerstonemag.net/setting-the-benchmark-the-worlds-most-efficient-coal-fired-power-plants/ 20
http://www.nedo.go.jp/content/100580308.pdf; http://www.iea.org/media/workshops/2011/cea/Topper.pdf 21
http://www.nedo.go.jp/content/100580308.pdf; http://www.iea.org/media/workshops/2011/cea/Topper.pdf 22
http://www.powermag.com/europes-most-efficient-coal-plant-comes-online/; http://cornerstonemag.net/setting-
the-benchmark-the-worlds-most-efficient-coal-fired-power-plants/ 23
http://www.rwe.com/web/cms/en/1754836/rwe-generation-se/about-us/lignite/: 24
http://www.rwe.com/web/cms/en/1754836/rwe-generation-se/about-
us/lignite/;https://online.platts.com/PPS/P=m&s=1029337384756.1478827&e=1096495472414.2240023308785804
128/?artnum=x2F004ShER07261656F2X4_1 25
http://www.modernpowersystems.com/features/featureboxberg-achieves-world-record-for-efficiency/;
http://www.power-eng.com/articles/print/volume-106/issue-8/features/new-benchmarks-for-steam-turbine-
efficiency.html
and therefore lower GHG emission intensity,26
and so, application of GIIP to World Bank
lending policies should include a demonstration that SC and USC technologies are not available
and that the subcritical design, including specified fuel, is the most efficient design available for
the project.27
7. The Guidelines should require reporting in a specified form that best addresses World Bank
funding policies.
Table 4 in the 2008 Guidelines provides efficiency data for “typical” (not best performing) units
in terms of “net” and “gross” generation and in terms of “lower heating value” (LHV) and
“higher heating value” (HHV).28
The Draft Guidelines propose to eliminate all data based on the
HHV of the fuel. This approach is incorrect and should not be adopted—the Guidelines should
use net generation to the grid and the HHV of the fuel that is used. Gross generation refers to the
amount of electricity produced by the generator at the plant. However, not all of this electricity
leaves the facility. This is because the unit requires a substantial amount of electricity to
operate—large fans to bring in and exhaust gases, mills to grind the coal to a fine powder, pumps
to cycle water and pollution and operational controls. The amount of electricity “produced” by a
plant and sent offsite for use by the public is ordinarily referred to as “net” generation.29
Efficiency ratings based on gross generation fail to incorporate potential efficiency
improvements associated with reducing auxiliary loads and distort the efficiencies of integrated
gasification combined cycle (ICGG) and carbon capture and sequestration (CCS) technologies
with very high auxiliary loads.
The difference between the HHV and LHV of fuels is related to the assumption made about the
availability of the energy present in the fuel, but unable to do work, because of the moisture
content of the fuel. The HHV measurement includes all the heat released from fuel combustion
and is the true energy content of the fuel. In determining the LHV of the fuel, it is assumed that
the latent heat used to volatilize the moisture in the fuel is not recovered. In the U.S., use of the
“higher heating value” (HHV) is common, while elsewhere, the “lower heating value” (LHV) is
used. The difference is in the treatment of the hydrogen and water content of the fuel, which is
present, but not useful for generating steam.30
A fuel that contains more moisture will generally
have a lower useful heat value and a larger difference between its HHV and LHV than a fuel
with less moisture. In practical applications, increasing moisture content will tend to increase
plant losses and fuel use. If one is merely concerned about the performance of the boiler, use of
the LHV may provide useful information.31
However, World Bank policies include encouraging
26
http://siteresources.worldbank.org/EXTENERGY2/Resources/CGN_20100331.pdf at page 2 27
Supercritical technology initially was developed using small (75 MW) units; the Nordylland unit is only 400 MW
in capacity. 28
HHV is also referred to as the gross calorific value (GCV) while LHV is referenced as the lower calorific value
(LCV) of the fuel. 29
Gross generation is sometimes referred to as “gross output”, while net generation is also referred to as “sent-out”
power or “gross-net” generation. 30
See, https://www.iea.org/ciab/papers/power_generation_from_coal.pdf, for a general discussion of efficiency
measuring and reporting issues. 31
The CIAB report asserts that “[u]sing the NCV basis is questionable: a modern condensing boiler could
potentially achieve a heating efficiency in excess of 100%, in violation of the first law of thermodynamics.” CIAB
Report, supra, at p. 18.
the use of cleaner burning fuels.32
Use of the LHV masks differences in actual plant performance
based on the use of coals with higher useful heat content and, in particular, the adverse impact of
using high moisture lignite fuels. Use of HHV encourages use of more efficient fuels and the use
of waste heat or renewable energy for lignite drying.33
The potential for confusion under the 2008 Guidance is demonstrated by the misuse of net and
gross generation in the December, 2016, Environmental and Social Due Diligence Report for the
Long Phu 1 Thermal Power Plant, purportedly in compliance with IFC policies. In that matter,
the contractor for the lender reviewing the project acknowledged that as designed the proposed
plant would achieve a gross efficiency of (on a HHV basis) of approximately 42.14 percent, but
nonetheless estimated a GHG emission rate that corresponded to a net efficiency of
approximately 44 percent. However, a plant cannot have a higher net efficiency than gross
efficiency34
The Draft Guidelines should be revised to explain these differences and to state that
net generation to the grid and the higher heating value of the fuel should be used for purposes of
evaluating efficiency of proposed thermal projects. We note that the CIAB Report cited herein
recommends this approach as well.35
8. The Guidelines should benchmark best performing units for conventional pollution controls
and apply a “Top Down” test.
The issues discussed above also arise concerning the Draft Guidelines’ treatment of SO2, NOx
and PM emission performance. The Draft Guidelines contain a generic description of the
different pollution controls that are available (see Tables 2 and 3), but include no information
concerning the best performing units or even which technologies must be employed at large coal-
fired units to meet the more broadly worded World Bank Group and IFC policies. For example,
the Draft Guidelines discuss low NOx burners as an applicable NOx controls technology, with no
estimate of the efficacy of this technology and both selective catalytic reduction (SCR), with a
listed control efficiency of 80-95 percent and selective non-catalytic reduction (SNCR), with a
control efficiency ranging between 30-50 percent.36
The Draft Guidelines specify only that
(1) the emission limitations required by the laws of the host country should be met;
(2) that the values of Table 6 should also be met, unless the EA justifies more or less
stringent limits due to ambient environment, environmental, community health, technical
and economic considerations; and
32
See, General EHS Guidelines, at page 5. 33
Lignite drying is not mentioned in the Guidelines. This technology is currently available and should be part of
any analysis of a proposed lignite plant. See, http://rotarydryerchina.com/en/products/hmhgj.html; http://www.iea-
coal.org/site/2010/publications-section/newsletter-information/current-newsletter-3/drying-lignite?;
http://www.rwe.com/web/cms/mediablob/en/606202/data/0/3/Development-status-of-WTA-fluidized-bed-drying-
for-lignite-at-RWE-Power-AG-Article-taken-from-Kraftwerkstechnik-Sichere-und-nachhaltige-Energieversorgung-
Volume-2-.pdf: https://www.usea.org/sites/default/files/082014_Techno-economics%20of%20modern%20pre-
drying%20technologies%20for%20lignite-fired%20power%20plants_ccc241.pdf 34
See, ERM, Environmental and Social Due Diligence – Long Phu 1 Thermal Power Plant, December 9, 2016
(ESDD) at Annex F. 35
Guidelines, supra, at p. 18 and p. 57, fn 21. 36
Guidelines, supra, at Table 2.
(3) that the EA should demonstrate that ambient impacts from emissions are in compliance
with applicable ambient air quality standards the requirements of Section 1.1 of the
General EHS Guidelines.37
The Draft Guidelines propose to reduce the approvable limits in Table 6 modestly. For example,
SO2 emissions from large (>600MW) coal and lignite power plants would decline from a range
of 200-850 mg/nM3to a range of 200-650 mg/nM
3. While directionally correct, even 200
mg/nM3
does not reflect the performance of a well-designed SO2 control system38
and 650
mg/nM3is unconscionably high, especially given the extremely poor air quality in many of the
areas where the World Bank Group operates. These limits are far in excess of what has been
demonstrated to be economically achievable throughout the world. New coal and lignite plants in
the EU are required to meet 75 mg/nM3, in the United States the relevant limit is 60 mg/nM
3 and
in China, most new plants are required to meet a limit of 30 mg/nM3.39
The lower values of the
range of “approvable” emission rates set out in Table 6 are also problematic as they would
suggest that projects that are far cleaner than these ranges – such as those that would meet the
EU, U.S. or Chinese rates set out above - are not approvable. Such an outcome is clearly not
contemplated in the broader World Bank Group and IFC policies. The Draft Guidelines should
set out values for the best performing “benchmark” units in each class of thermal power
producers and require that sponsors of new projects meet those values or provide a clear
technical justification for any short fall.
The third constraint in the Draft Guidelines— compliance with ambient air quality standards— is
insufficiently specific to ensure that public health will not be adversely impacted. As can be seen
in Table 5, below, the World Health Organization (WHO) publishes Ambient Air Quality
Guidelines and “interim targets” that are substantially less protective than the AAQ Guidelines.
The Draft Guidelines are not specific as to whether, for example, the relevant short term SO2
AAQ constraint is 20 or 125µg/m.3 The Guidelines should specify that any airshed which does
not meet the actual WHO guideline should be considered “degraded”.
37
http://www.ifc.org/wps/wcm/connect/554e8d80488658e4b76af76a6515bb18/Final%2B-
%2BGeneral%2BEHS%2BGuidelines.pdf?MOD=AJPERES 38
The Isogo Power station claims that SO2 emissions are less than 6 mg/nM3, NOx emissions less than 20 mg/nM
3
and PM emissions less than 1 mg/nM3. http://www.nedo.go.jp/content/100580308.pdf;
http://www.iea.org/media/workshops/2011/cea/Topper.pdf 39
Large Combustion Plants Directive http://eur-lex.europa.eu/legal-
content/EN/TXT/?qid=1402653842533&uri=CELEX:32001L0080; http://www.gpo.gov/fdsys/pkg/FR-2012-02-
16/pdf/2012-806.pdf, http://www.gpo.gov/fdsys/pkg/FR-2013-04-24/pdf/2013-07859.pdf, http://www.ecfr.gov/cgi-
bin/text-idx?tpl=/ecfrbrowse/Title40/40cfr60_main_02.tpl; 火电厂大气污染物排放标准 (GB 13223-2011). Partial
English translation
http://switchboard.nrdc.org/blogs/bfinamore/NRDC%20Unofficial%20English%20Summary.docx
Table 5. Relevant WHO Ambient Air Quality Guidelines
Table 1.1.1: WHO Ambient Air Quality Guidelines7,8
Averaging
Period
Guideline value in
3
Sulfur dioxide (SO2) 24-hour
10 minute
125 (Interim target-1)
50 (Interim target-2)
20 (guideline)
500 (guideline)
Nitrogen dioxide
(NO2)
1-
year
1-
hour
40 (guideline)
200 (guideline)
Particulate Matter 1-year 70 (Interim target-1)
PM10 50 (Interim target-2)
30 (Interim target-3)
20 (guideline)
24-hour 150 (Interim target-1)
100 (Interim target-2)
75 (Interim target-3)
50 (guideline)
Particulate Matter 1-year 35 (Interim target-1)
PM2.5 25 (Interim target-2)
15 (Interim target-3)
10 (guideline)
24-hour 75 (Interim target-1)
50 (Interim target-2)
37.5 (Interim target-3)
25 (guideline)
Ozone 8-hour daily
maximum
160 (Interim target-1)
100 (guideline)
Since 1970, the U.S. Clean Air Act has required that new major sources in degraded airsheds
meet the lowest achievable emission rate (LAER) and that any emissions from the new source be
offset by reductions at existing sources in the airshed. LAER is the lowest rate that has been
achieved in practice without any consideration of cost. Section 1 of the General EHS Guidelines
follows this approach and requires that any pollution increases from projects in degraded
airsheds “be as small as feasible.”40
40
General Guidelines, supra, at page 5.
Table 6 of the Draft Guidelines would allow a substantial further degradation of already
unhealthy air by interpreting the General EHS Guidelines to allow emission levels that are far
higher than what has been shown to be feasible elsewhere around the world. Thus, for example,
Table 6 allows SO2 emissions of 400 mg/nM3 for coal plants <600 MW and 200 mg/nM
3 for coal
plants >600 MW, even though levels less than 30 mg/nM3
have been shown to be feasible. Table
6 should be revised to identify the best performing units with respect to conventional pollutants.
This is particularly important since host countries may lack the authority to enforce offset
obligations that may last for more than 50 years and (contrary to the mandatory emission offsets
required under U.S. law) the General EHS Guidelines merely note that suitable mitigation
measures may include offset and emission buy down activities within the same airshed. And so,
any emissions allowed above the best practice levels may well cause significant and unnecessary
health and environmental impacts for decades.
Under the U.S. Clean Air Act, new major sources in non-degraded airsheds must meet the “best
achievable control technology” (BACT) which is similar to the European Union’s Best
Achievable Technology. BACT is determined on a case-by-case basis employing what EPA
styles a “Top Down” approach,41
where the most effective technology is employed, unless it is
demonstrated that the most effective technology is infeasible for either technical or cost reasons.
The technologies for controlling conventional pollutant emissions from thermal power plants are
quite mature, having evolved over several decades. Further, thermal power plants generally are
among the very largest emitters and therefore present the most cost-effective opportunity for
controlling pollution. For this reason, as a practical matter, there is no significant difference
between BACT and LAER levels of control in the United States.42
The Draft Guidelines present
no information that demonstrates that the current state of the art of commercially available PM,
NOx and SO2 controls cannot be employed in non-degraded airsheds.
.
The General EHS Guidelines also apply, “as a general rule”, the U.S. EPA’s Prevention of
Significant Deterioration Increments Limits for non-degraded airsheds43
that limit consumption
of the “increment” (the difference between current ambient air quality levels and the relevant
ambient air quality standard) to 25 percent. The Draft Guidelines would eliminate the specific
references to these requirements in the 2008 Guidelines, including the specific statement that the
“EA should demonstrate that emissions do not contribute a significant portion to the attainment
of relevant ambient air quality guidelines or standards, and more stringent limits may be
required.”44
Thus, the Draft Guideline would suggest only that SO2 emission rates as high as
1000 mg/nM3 for units <600 MW and 600 mg/nM
3 for units >600 MW are now approvable. No
explanation for why these references should be deleted is provided. However, a specific and
subsequent reference is often interpreted to override an earlier, general statement, and so there is
a risk that these changes will be viewed as suggesting that the numerical values in Table 6 are
41
https://www.epa.gov/nsr/nsr-workshop-manual-draft-october-1990 42
The major difference is in the offset obligation. 43
United States Environmental Protection Agency, Prevention of Significant Deterioration of Air Quality, 40 CFR
Ch. 1 Part 52.21. The General EHS Guide lines also cite as “other” references for establishing significant emissions
include the European Commission. 2000. “Guidance Document for EPER implementation.”
http://ec.europa.eu/environment/ippc/eper/index.htm ; and Australian Government. 2004. “National Pollutant
Inventory Guide.” http://www.npi.gov.au/handbooks/pubs/npiguide.pdf 44
See, Table 6 of the “Track Changes” version of the Draft Guidelines.
ordinarily controlling. In many countries, limiting increment consumption will require far more
stringent limits than those proposed in Table 6.
Many of the areas where the World Bank Group operates involve communities that rely heavily
on subsistence fishing and are within 150 km of proposed large new plants. In these
circumstances, the risk of mercury (Hg) deposition and uptake into the food chain is particularly
significant. The Draft Guidelines should include a reference to technical and health related
information concerning Hg emissions and should include benchmark performance data for Hg
emissions reduction technologies. Where modern, high-performing SO2, NOx and PM controls
are in place as recommended herein, those controls alone, perhaps augmented by activated
carbon injection (depending on the nature of the fuel) can provide excellent Hg reduction at low
added cost.
The Draft Guidelines should set out “benchmark” units that represent the state of the art for
control of conventional pollutants in each class of units. EU and EPA data are available for this
purpose. 45
Thereafter, as with the climate-related approach suggested above, project developers
should follow U.S. EPA’s Top Down Approach.
9. The Guidelines should be updated to incorporate advances in thermal power generation.
The Guidelines should be updated to incorporate advances in technology that have become
commercially available since the 2008 Guidelines were published. These include the use of
concentrated solar power (CSP) to augment the performance of CCGTs (also known as
Integrated Solar Combined Cycle (ISCC)46
, lignite drying47
and SC and USC circulating
fluidized bed boilers (CFB).48
10. The Guidelines should ensure that fossil fuel-fired thermal generation is only used where
necessary and that the most appropriate form of thermal generation is employed.
The efficiency and CO2 emission rate of a proposed thermal project is also substantially affected
by the anticipated use of the unit. Unit efficiencies and emission rates are often based on full-
45
See, e.g., U.S. EPA’s RACT, BACT, LAER Clearinghouse,
https://www3.epa.gov/ttncatc1/rblc/htm/welcome.html 46
http://www.powermag.com/leveraging-generation-synergies-with-hybrid-plants/;
https://www.energy.siemens.com/us/en/fossil-power-generation/power-plants/csp-power-block/;
http://helioscsp.com/iran-yazd-integrated-solar-combined-cycle-power-station/;
http://projects.worldbank.org/P041396/integrated-solar-combined-cycle-power-project?lang=en;
www.eskom.co.za/AboutElectricity/.../G3CSP_FossilHybridMillerFINAL.pptx 47
http://rotarydryerchina.com/en/products/hmhgj.html; http://www.iea-coal.org/site/2010/publications-
section/newsletter-information/current-newsletter-3/drying-lignite?;
http://www.rwe.com/web/cms/mediablob/en/606202/data/0/3/Development-status-of-WTA-fluidized-bed-drying-
for-lignite-at-RWE-Power-AG-Article-taken-from-Kraftwerkstechnik-Sichere-und-nachhaltige-Energieversorgung-
Volume-2-.pdf: https://www.usea.org/sites/default/files/082014_Techno-economics%20of%20modern%20pre-
drying%20technologies%20for%20lignite-fired%20power%20plants_ccc241.pdf 48
https://www.worldcoal.org/%C5%82agisza-power-plant-world%E2%80%99s-first-supercritical-cfb;
https://www.gepower.com/steam/products/boilers/circulating-fluidised-bed.html;
http://www.iea.org/media/workshops/2011/cea/Topper.pdf
load operation and an annual capacity factor of 80 percent or higher. However, in many
developing countries, off-peak demand for electricity may not be sufficient to require full load
operation of coal-fired units designed for baseload applications. Part load operation, nightly “turn
down” to minimal temperatures and/or frequent unit shut downs will have a significant, adverse
impact on unit efficiency, emission rates and longevity. Since this factor also affects the
economic viability of a proposed project, any evaluation of a thermal power project should
include consideration of the likely load pattern that will be experienced.
This issue is of particular importance where gas turbine generation is under evaluation. As
shown by the “new and clean” efficiency and emissions data published in Gas Turbine World,
large “baseload” CCGTs have a substantially greater efficiency than smaller units designed for
cycling applications. Simple cycle combustion turbines (CTs) have far lower efficiencies and
higher CO2 emission rates and should only be used in “peaking” applications where the capacity
factor is less than 10 percent. The use of “duct burners” for auxiliary power is highly inefficient
and should not be approved without a specific, detailed justification.
Conclusion
The Sierra Club and Bank Information Center urge the World Bank to ensure a full consideration
of low carbon solutions, including renewables, storage and efficiency before approving funding
for new coal or lignite-fired units. Improvements in the transmission and distribution system and
demand-side reductions in low-income countries can often obviate the need for additional
carbon-intensive generation at a lower long term cost and should be the highest priority for
World Bank investments for the foreseeable future. New fossil-fuel generation should be
sponsored only as a last resort, where there truly are no available alternatives.
The Draft Guidelines can and should be revised so that they provide useful information to
engineers and designers of proposed projects and to World Bank staff, other lenders, government
agencies and civil society and fairly implement the broader World Bank policies that require the
best feasible pollution controls and efficiencies for new thermal projects. In these comments we
suggest that the Guidelines either set out or provide reference to “benchmark” units that
represent the best performers in commercial service. Thereafter, project proponents would be
expected to demonstrate that the project is comparable to those benchmark units on an
engineering basis or that meeting those marks is infeasible. We recognize that it may take several
months to acquire the relevant data and resolve issues with stake holders, but suggest that the
effort is critical to ensuring compliance with World Bank policies and will expedite review of
well-designed projects.
We also believe that the process of developing an updated Guidelines would benefit from the
creation of a multi-stakeholder work group and greater transparency in explaining the reasons for
changes from the 2008 Guidelines.
CONSULTATION RESPONSE JUNE 2017
WORLD BANK GROUP DRAFT REVISED THERMAL POWER PLANTS EHS GUIDELINE E3G COMMENTS AND RECOMMENDATIONS CHRIS LITTLECOTT & HELENA WRIGHT
The International Finance Corporation (IFC) of the World Bank group has opened a
‘second consultation period’ on its draft revised EHSi guideline document for thermal
power plants.ii This consultation response focuses on the treatment of coal-fired power
generation and the implications for pollution control and mitigation of climate change.
Key Concerns and Recommendations
IFC Performance Standards and Technical EHS Guidelines are widely used by International Financial Institutions, Export Credit Agencies, and the private sector. It is therefore essential that IFC guidance
provides a clear reference point and high standards of performance for proposed investments.
Prior to being adopted, the draft guideline should be revised to provide an explicit introductory
explanation of how fossil fuel power generation should only be taken forward following prioritisation of cleaner alternatives such as energy efficiency, renewables and electricity
distribution and transmission.
This ‘second consultation period’ has been undertaken almost 4 years since the first consultation period
in October-November 2013.iii The revised draft guideline document significantly fails to incorporate
updated standards set in the interim period by key countries (e.g. China and India), regions (e.g. European Union), and international forums (e.g. OECD) in respect to pollution control performance and power plant efficiencies. The draft guideline proposes weak pollution standards that are typically 10 to 20 times worse than existing best practice. Such levels of pollution would result in significant harm to human health and the environment.
Prior to being adopted, the draft guideline should be revised to incorporate these relevant peer
standards. IFC standards should be identified and should at least match international best practice across all key pollutants, and should include specific requirements for mercury.
The revised draft guideline document fails to provide adequate guidance on the performance levels and measures that would normally be acceptable to IFC, contrary to the stated intent of the EHS guidance framework. In respect to power plant efficiencies and CO2 emissions performance, the
draft guideline presents overlapping categories of plant performance that will confuse rather than clarify any subsequent consideration of investment proposals.
Prior to being adopted, the draft guideline should be revised to provide distinctive categories of
power plant in respect to operating efficiency and CO2 emission rates, together with clear guidance on target levels of performance for any proposed projects.
The revised draft guideline document incorporates text in respect to the potential application of carbon
capture and storage (CCS) technologies and the implications for ‘capture readiness’ at the
permitting stage. This inclusion is welcome but insufficient given repeated international analyses that identify the need to cease investments in unabated coal power generation and accelerate the retrofit of CCS.
Prior to being adopted, the current draft guideline should be revised to require additional actions by project promoters and host country governments in respect to the identification, permitting and practical deployment of CCS. In particular this should require assessment of access to CO2 storage prior to project approvals being granted and finance provided.
Context As part of the World Bank group, in 2006 the IFC introduced a Sustainability Frameworkiv and an accompanying set of Performance Standardsv to shape its approach to Social and Environmental
Sustainability. These Performance Standards have since been widely applied internationally, influencing an aggregate $4.5 trillion of financing over the period 2006-2016.vi
In presenting the Performance Standards, the IFC notes that:
The Performance Standards are directed towards clients, providing guidance on how to identify risks and impacts, and are designed to help avoid, mitigate, and manage risks and impacts as a
way of doing business in a sustainable way, including stakeholder engagement and disclosure
obligations of the client in relation to project-level activities. In the case of its direct investments
(including project and corporate finance provided through financial intermediaries), IFC requires its clients to apply the Performance Standards to manage environmental and social risks and
impacts so that development opportunities are enhanced. [emphasis added] Performance Standard 3 on Resource Efficiency and Pollution Preventionvii recognises that “Industrial
activity and urbanization can increase levels of pollution that may threaten people’s health and the environment.” As a consequence, it sets out three objectives:viii
To avoid or minimize adverse impacts on human health and the environment by avoiding or minimizing
pollution from project activities.
To promote more sustainable use of resources, including energy and water.
To reduce project-related GHG emissions.
Performance Standard 3 further sets out that:
…the client will consider alternatives and implement technically and financially feasible and cost-effective options to reduce project-related GHG emissions during the design and operation of the project. These options may include, but are not limited to, alternative project locations, adoption of renewable or low carbon energy sources… [Paragraph 7, emphasis added]
The client will avoid the release of pollutants or, when avoidance is not feasible, minimize and/or control the intensity and mass flow of their release. This applies to the release of pollutants to air, water, and land due to routine, non-routine, and accidental circumstances with
the potential for local, regional, and transboundary impacts. [Paragraph 10, emphasis added] The EHS Guidelines sit underneath the Performance Standards and serve as essential reference documents to guide implementation:
The EHS Guidelines are technical reference documents with general and industry-specific examples of Good International Industry Practice (GIIP). They contain the performance levels and measures that are normally acceptable to the World Bank Group, and that are generally considered to be achievable in new facilities at reasonable costs by existing
technology.ix[emphasis added]
EHS Guidelines are provided for general cross-cutting issues and specific industry sectors.x Following the 2012 update of the Performance Standards, the IFC has had a rolling programme to update the EHS
Guidelines.xi A two-stage consultation process is undertaken for each thematic area. In some cases, this has been completed within an 18 month period (e.g. offshore oil and gas development in 2013-14), while others have had a considerable time lag between consultation rounds.
This is the case with the current revised draft guideline on thermal power generation, which was first
consulted on in October-November 2013.xii The current second round of consultation seeks to collate further comments before the guideline is finalised, translated and disseminated. This can be a relatively rapid process - the recently published guideline document on Liquified Natural Gas was released three
months following the conclusion of the second consultation round.
Given the importance of the EHS Guidelines for the implementation of the Performance Standards, it is therefore imperative that each guideline document provides accurate information and appropriate
guidance relevant subsequent project assessment and financing decisions. Having reviewed the revised draft guideline for thermal power plants, E3G highlights in this response that significant omissions and
inaccuracies should be rectified before the document is finalised for publication.
E3G comments on the revised draft guideline We focus here on issues of specific relevance to coal-fired power generation, but note that the same principles and need for up-to-date performance comparisons applies across technologies and fuels. To aid comparison we present comments here following the structure of the revised draft guideline on thermal power generation.
Consideration of alternatives Paragraph 6 notes that “Decisions to invest in this sector by one or more members of the World Bank Group are made within the context of the World Bank Group strategy on climate change” and cross references “WBG Climate Change Action Plan 2016-2020”, “Toward a Sustainable Energy Future for All:
Directions for the World Bank Group’s Energy Sector”, and “Criteria for Screening Coal Projects under the Strategic Framework for Development and Climate Change”.
E3G welcomes these references but notes the lack of an explicit opening statement that links the draft
guideline to the IFC Performance Standards. As noted above, Performance Standard 3 sets out clear objectives aimed at minimising negative impacts on human health and the environment and expressly identifies the need for consideration of alternatives prior to project initiation. However, the only
reference to such consideration in this revised draft guideline is in Table B-1 of Annex B: Environmental Assessment Guidance for Thermal Power Projects. All other references to ‘alternatives’ refer to design, technology, or fuel choices subsequent to the initiation of a fossil fuel thermal generation project. A much clearer requirement for prior consideration of alternatives should be provided at the start of the
document, which should explicitly refer to the need for prioritisation of cleaner investment alternatives such as energy efficiency, renewable energy, and electricity distribution and transmission.
Air emissions Paragraph 14 includes a reference to carbon capture and storage. This should be deleted from this location as it relates to greenhouse gas control rather than air pollution. The accompanying reference to Large Scale Integrated CCS Projects as tracked by the Global CCS Institute is undated but obviously out of date. An updated version of this reference should be reincorporated later in the document.
Paragraph 25 refers to mercury in the context of ‘other pollutants’ and potential technological
applications for its removal are discussed. A maximum concentration level for mercury is included in Table 5 regarding effluent. However, there is no limit value included for mercury in Table 6 regarding air emissions, despite Footnote 23 noting that both the USA and EU have now introduced requirements for
mercury controls. (The reference to IED should be removed in light of the agreement on the BREF standards). This should be addressed with Table 6 updated to include mercury emissions levels in line
with existing international practice. If any coal power plants were to follow the draft guideline in not addressing mercury, they would be at risk of contradicting the obligations of host countries under the
Minamata convention, which requires them to put in place best available technology requirements for new sources. It should also be noted that Footnote 23 refers to the Draft EU BREF standards from 2016. These have now been adopted in April 2017,xiii and will shortly be published in their official (translated)
format. We would highlight that the draft guideline needs to be updated throughout to reflect the entry into law of the new BREF standards.
Table 6 (C) presents Emission Guidelines for boiler plant. The proposed emissions levels are unacceptably high when compared with international best practice across a range of countries and
regions. Furthermore, the Table fails to even reference the current standards for the EU, China and India despite claiming to provide details of emissions limits in place as of January 2017. These are both unacceptable weaknesses in the current draft that must be address prior to finalisation and publication.
Table 6 (C) proposes the following emissions levels:
These can be compared with current equivalent standards in EU,xiv China,xv and India:xvi
Pollutant unit IFC revised draft guideline EU China India
SO2 mg/Nm3 200-600 10-75 35 100
NOx mg/Nm3 500 50-85 50 100
PM mg/Nm3 25-40 2-5 10 30
Mercury ug/Nm3 no limit <1-2 30 30
The proposed IFC emissions are therefore significantly higher compared to best practice:
For SO2 = 20 times higher emissions For NOx = 10 times higher emissions For PM = 23 times higher emissions
For Mercury no limit is provided Such weak standards would impose unacceptable pollution burdens on human health and the
environment. These must be addressed as matter of priority before the guideline in finalised and published.
Energy Efficiency and GHG emissions Paragraph 27 introduces this section. We would recommend that it should highlight the importance of considering aggregate lifetime CO2 emissions from power generation projects, not just a consideration of relative plant efficiency. In addition, we recommend that it should include an explicit introductory
reference to the application of carbon capture and storage (which can refer to it being integrated from the outset of a power generation project or as an anticipated retrofit activity). This would be in place of
the current inappropriate reference to CCS in Paragraph 14. This inclusion of CCS should also be
accompanied by up to date reference to operational projects, including the two retrofit post-
combustion projects in operation on coal-fired power plants at Boundary Dam and Petra Nova projects in Canada and the USA respectively.
Paragraph 31 discusses carbon capture and storage readiness (CCR). The inclusion of this framework
reflects this already being a requirement of many lenders. While we welcome the fact that the text states that new coal power plants over 300MW should undertake CCR assessments we would highlight that further guidance should be provided here to require actions by both the project developer and the host country.
Given the present limited availability of accessible CO2 storage and absence of targeted incentives and / or regulatory frameworks for CCS at the national level, the current text could be rapidly dismissed as a
box ticking exercise. Project developers and host countries should therefore be required to consider the timelines for the development of accessible CO2 storage at appropriate scale and the future economic conditions under which CCS retrofit may be undertaken. We can provide further details on this upon request.
If the current text were to remain unrevised, project development and financing would be likely to proceed without having undertaken adequate consideration of the future application of CCS, significantly increasing the likelihood that it would face early closure and / or limited operating hours.
Conversely, scenarios considering the reduction of CO2 emissions in line with efforts to limit climate change to below 2 degrees point to a need for substantial deployment of CCS. In such a scenario, any projects and host countries that were to undertake proactive assessment of CCS application and / or
retrofit would be better positioned to secure longer operating lifetimes at higher load factors. These matters are considered further in the 2017 IEA Energy Technology Perspectives and associated documentation. We note that the second half of Footnote 30 discusses the GCCSI assessment of CO2 Storage Readiness –
this is related to but not the same as capture readiness which is discussed previously in the footnote. Paragraph 28 includes the promotion of biomass as a means of reducing CO2 emissions, stating that it “is considered carbon-neutral if produced in a sustained yield without consideration of energy used for
harvesting, processing and transportation”. We disagree with this approach. Biomass should not be considered carbon-neutral, particularly because there is considerable energy for the harvesting and
transportation for biomass fuel as well as the impact of indirect land use change (ILUC).
Instead, we would suggest that this paragraph should acknowledge that the whole life cycle emissions of the biomass feedstock should be considered to ensure the life cycle emissions are lower than using the original fossil fuel. For example, in the EU: “To be considered sustainable, biofuels must achieve
greenhouse gas savings of at least 35% in comparison to fossil fuels. This savings requirement rises to 50% in 2017.”xvii
Paragraph 29 discusses coal power plant efficiency criteria, including with reference to rehabilitation of existing facilities. As noted above, the key consideration from a climate perspective is in respect to the
overall level of CO2 emissions over the operating lifetime of a power plant, rather than its relative
efficiency alone. We would therefore recommend that all projects (both new and rehabilitation) should be required to quantify their likely lifetime emissions under different operational scenarios, with action taken to minimise lock in to significant CO2 emissions. It should be noted that this is a prudent approach
in response to the growing risk of stranded assets for high carbon investments. This approach should also be mirrored in Annex B: Environmental Assessment Guidance for Thermal Power Projects.
Paragraph 30 states that the “The values in Table 4 are indicative and are not intended to be used as
benchmarks, as regional performance varies (for example due to ambient temperature differences).” This puts the revised draft guideline at odds with the statement highlighted above that EHS guidelines do provide the detailed performance levels and measures expected to meet the EHS Performance Standards. This alone is a significant failing that must be addressed before finalisation and publication.
Furthermore, the plant efficiency and GHG emission level values presented in Table 4 span huge ranges (to the extent that they should not be considered to be in line with Good International Industry Practice)
and overlap substantially. This makes meaningful differentiation impossible between the different categories of plants. Table 4 and Table A-1 both fail to reference the Sector Understanding on Export Credits for Coal-Fired Electricity Generation Projects, agreed in 2015 and in force since 1 January 2017.xviii This sets out clear criteria for differentiating between different categories of power plant based on efficiency and emissions levels (page 123), and therefore which categories of plant are eligible for support via export credits in particular host country income categories.
The present IFC consultation specifically asks for feedback on whether “New facilities should be aimed to be in the top quartile of energy efficiency for the country/region average plant of the same fuel type and capacity” as proposed in Paragraph 29. This could result in some very weak standards in countries
or regions with inefficient plant in operation. We would instead propose that the approach taken by the OECD should be adopted to provide clear restrictions on funding for coal plants in line with the restrictions already in place under the World Bank screening process. We would further recommend that assessments of CCS application and / or retrofit should be incorporated alongside such an approach, as discussed above.
Water Consumption and Aquatic Habitat Alteration The inclusion of new paragraph 34 discussing the impacts of climate change on thermal generation is welcome. However, the current text is a missed opportunity to highlight the opportunities available to
consider alternative electricity generating technologies such as wind and solar that are far better suited to operation in water-stressed environments. The large-scale deployment of renewables in place of existing thermal generation would provide a substantial water dividend for use by local populations and in agriculture. Such an approach would be preferable to the continued promotion of thermal generation
technologies that continue to require water, or which manage to reduce water consumption (eg via air cooling) but continue to contribute to worsening climate impacts through their lifetime CO2 emissions.
Similarly, we welcome the inclusion of new paragraphs 39, 40 and 46 regarding the impact of power plant water discharges on the aquatic environment and the implications for power plant operation in
light of elevated temperatures resulting from climate change. We would highlight that this should be thoroughly considered at the level of strategic environmental assessments at a country or river basin
level, not just in project EAs.
About E3G E3G is an independent climate change think tank operating to accelerate the global transition to a low carbon economy. E3G builds cross-sectoral coalitions to achieve carefully defined outcomes, chosen for their capacity to leverage change. E3G works closely with like-minded partners in government, politics,
business, civil society, science, the media, public interest foundations and elsewhere. In 2016, E3G was ranked the number one environmental think tank in the UK.
More information is available at www.e3g.org
Copyright
This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.0 License.
© E3G 2017
Endnotes i environmental, health and safety ii http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-
standards/ehs-guidelines/thermalpower_phase2_secondconsultation
iii
http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-standards/ehs-guidelines/ehs_guidelines_technical_revision iv
http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-standards/sustainability+framework v http://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/Sustainability-At-IFC/Policies-
Standards/Performance-Standards/ vi
http://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/impact-stories/how-ifc-has-changed-finance vii
http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-standards/performance-standards/ps3 viii
http://www.ifc.org/wps/wcm/connect/25356f8049a78eeeb804faa8c6a8312a/PS3_English_2012.pdf?MOD=AJPERES ix
http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-standards/ehs-guidelines/ehs_guidelines_technical_revision x http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-
standards/ehs-guidelines#IndustryEHS xi http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-
standards/ehs-guidelines/ehs_guidelines_technical_revision xii
http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-standards/ehs-guidelines/thermalpower_phase2_secondconsultation xiii
http://ec.europa.eu/transparency/regcomitology/index.cfm?do=search.documentdetail&Dos_ID=14177&DS_ID=50159&Version=1 xiv
COMMISSION IMPLEMENTING DECISION establishing best available techniques (BAT) conclusions, under Directive 2010/75/EU of the European Parliament and of the Council, for large combustion plants. 28 Apr 2017. http://ec.europa.eu/transparency/regcomitology/index.cfm?do=search.documentdetail&Dos_ID=14177&DS_ID=50159&Version=1 xv
Ministry of Environmental Protection, National Development and Reform Council, and National Energy Administration. 全面
实施燃煤电厂超低排放和节能改造工作方案. [Main Goals of Fully Implementing Ultra-Low Emission and High-Efficiency
Retrofits for Coal-Fired Power Plants]. MEP document no 164, 2015. http://kjs.mep.gov.cn/hjbhbz/bzwb/dqhjbh/dqgdwrywrwpfbz/201109/W020130125407916122018.pdf xvi
Central Pollution Control Board. Environmental Standards - Thermal Power Plants. 2015. http://www.cpcb.nic.in/divisionsofheadoffice/pci2/ThermalpowerPlants.pdf xvii
https://ec.europa.eu/energy/en/topics/renewable-energy/biofuels/sustainability-criteria xviii
http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?doclanguage=en&cote=tad/pg(2017)1
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