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STRATEGIES FOR PROMOTION OF ENERGY EFFICIENT AND CLEANER TECHNOLOGIES IN THE POWER SECTOR. Synthesis Report. Issue 1: Implications of Carbon & Energy Taxes as Instruments for GHG Reduction in the Power Sector - PowerPoint PPT Presentation
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STRATEGIES FOR PROMOTION OF ENERGY STRATEGIES FOR PROMOTION OF ENERGY EFFICIENT AND CLEANER TECHNOLOGIES IN EFFICIENT AND CLEANER TECHNOLOGIES IN
THE POWER SECTOR THE POWER SECTOR
Synthesis ReportSynthesis Report
Issue 1:Issue 1: Implications of Carbon & Energy Taxes as Implications of Carbon & Energy Taxes as Instruments for GHG Reduction in the Power SectorInstruments for GHG Reduction in the Power Sector
Issue 2:Issue 2: Identification of Barriers and Policy and Identification of Barriers and Policy and Measures (PAMs) for the Adoption of Clean and Measures (PAMs) for the Adoption of Clean and Energy Efficient Technologies (CEETs)Energy Efficient Technologies (CEETs)
The Case of VietnamThe Case of Vietnam
Institute of EnergyJuly 2005
Issue 1
Issue 1:Issue 1:
Implications of Carbon & Energy Taxes Implications of Carbon & Energy Taxes as Instruments for GHG Reduction in the Power Sectoras Instruments for GHG Reduction in the Power Sector
Overview of the Power Sector of Vietnam Overview of the Power Sector of Vietnam
Capacity and Generation Mixes
Total Installed power
generation capacity (MW)
(2003)
Total Electricity generation (GWh)
(2003)
Weighted Av. efficiency of
thermal generation (%)
(2000)
Average annual growth rate (%)
Total electricity generation
(1986-2002)
Thermal electricity generation
(1986-2002)
9,146 40,924 36.0 12.34 9.50
Table 1a: Overview of the power sector in Vietnam.
The power sectors in Vietnam demonstrated diverse characteristicsin terms of electricity generation technologies, fuel use, total electricitygeneration capacity, load growth & load characteristics of power system.
Table 2a: Generation and capacity mix of selected countries in 2003, (%). Installed Capacity Generation
Hydro Coal Oil Gas Other Hydro Coal Oil Gas Other
45 12 8 34 0 46 14 7 27 6
Source: Institute of Energy (2004)
Issue 1
Overview of the Power Sector of Vietnam Overview of the Power Sector of Vietnam
Environmental Emissions & Status of Renewable EnergyTechnologies for electricity generation in Power Sector
Table 3a: Overview of environmental emission in Vietnam.
+ Coal based electricity generation accounts for the highest shareof CO2 emission from the power sector in Vietnam.+ Vietnam has power generation potential from all RE sources. Successfulin promotion of small hydropower generation.
Source: Institute of Energy (2004)
Country Total CO2 emission (Million tons) Share of power sector (%)
1990 2002 1990 2002 % increase during 1990-2000
Vietnam 17 57 27.5* 26.8* 10.3
Renewable options Potential (MW)Installed Capacity (MW)
grid Off-grid
BiomassWindSolar (kWh/m2/day)Small hydroGeothermalTotal
4,7509,000
51,400-1,800
400
5000
1300
3942
00.2
000
57
Table 4a: Status of Renewable Energy Technology in electricity generation in Vietnam.
Issue 1
Implications of Carbon & Energy TaxesImplications of Carbon & Energy Taxes
Candidate Supply Side Options
Source: Institute of Energy (2004)
+ Candidate supply side options:+ Candidate supply side options:1. Hydro plants1. Hydro plants 2. Coal & Oil fired power plants2. Coal & Oil fired power plants3. High efficient technologies: 3. High efficient technologies: - Gas turbine combined cycle plants- Gas turbine combined cycle plants- Pressurized fluidized-bed combustion plants (PFBC)- Pressurized fluidized-bed combustion plants (PFBC)- Integrated gasification combined cycle plants (IGCC)- Integrated gasification combined cycle plants (IGCC)- Supercritical plants - Supercritical plants 4. Renewable technologies:4. Renewable technologies:
- Geothermal, Small and mini hydro,- Geothermal, Small and mini hydro,- Wind & Solar- Wind & Solar- Biomass (wood residue, rice husk, bagasse)- Biomass (wood residue, rice husk, bagasse)
Issue 1
+ No DSM + No DSM + Carbon tax rates: (5$tC,10$tC, 25$tC,50$tC,100$tC and 200$tC)+ Carbon tax rates: (5$tC,10$tC, 25$tC,50$tC,100$tC and 200$tC)+ Energy tax rates: (0.5$Mbtu, 1$Mbtu,2$Mbtu,5$Mbtu and 10$Mbtu)+ Energy tax rates: (0.5$Mbtu, 1$Mbtu,2$Mbtu,5$Mbtu and 10$Mbtu)+ Planning horizon: 2006-2025+ Planning horizon: 2006-2025+ All prices in the study are based on price of 2000.+ All prices in the study are based on price of 2000.+ Price Elasticity of demand estimated with - 0.3+ Price Elasticity of demand estimated with - 0.3
Key Findings Utility & Environmental ImplicationsUtility & Environmental Implications
Power Generation Capacity Mix at year 2025 (MW)
Carbon tax rate ($/tC) 0 5 10 25 50 100 200
Hydro 17640 17770 18020 18432 18432 18432 18432
Coal 21400 19300 18700 13600 11500 9200 7600
FO+DO 725 725 725 3560 4285 3125 3995
Gas 9490 11230 11230 12670 12670 12670 12670
Import 3000 3000 3000 3000 3000 3000 3000
RETs 20 151 373 611 1976 9800 10800
Total capacity 53000 52901 52773 52598 52588 56952 57222
Shares in Power Generation Capacity at year 2025 (%)
Carbon tax rate ($/tC) 0 5 10 25 50 100 200
Hydro 33.28 33.59 34.15 35.04 35.05 32.36 32.21
Coal 40.38 36.48 35.43 25.86 21.87 16.15 13.28
FO+DO 1.37 1.37 1.37 6.77 8.15 5.49 6.98
Gas 17.91 21.23 21.28 24.09 24.09 22.25 22.14
Import 5.66 5.67 5.68 5.70 5.70 5.27 5.24
RETs 0.04 0.29 0.71 1.16 3.76 17.21 18.87
Table 5a: Generation capacity mix at selected carbon tax rates in year 2025
Issue 1 Carbon TaxCarbon Tax
Key Findings Utility & Environmental ImplicationsUtility & Environmental Implications
Table 6a: Electricity generation mix at selected carbon tax rates during 2006-2025
Issue 1 Carbon TaxCarbon Tax
Electricity Generation (GWh)
Carbon tax rate 0 5 10 25 50 100 200
Hydro 1218881 1230726 1235176 1254692 1263158 1293814 1296382
Coal 1052220 923436 850862 702984 605781 259464 173251
FO+DO 26941 26941 26941 32635 33472 31540 49285
Gas 748413 852041 908236 1018695 1065026 1216614 1219042
Import 333450 333450 333450 333450 333450 333450 333450
RETs 1872 7377 11875 16322 48584 181917 228516
Total generation 3410219 3403940 3394346 3392968 3377903 3344384 3327511
Shares in Electricity Generation (%)
Carbon tax rate 0 5 10 25 50 100 200
Hydro 35.74 36.16 36.39 36.98 37.39 38.69 38.96
Coal 30.85 27.13 25.07 20.72 17.93 7.76 5.21
FO+DO 0.79 0.79 0.79 0.96 0.99 0.94 1.48
Gas 21.95 25.03 26.76 30.02 31.53 36.38 36.64
Import 9.78 9.80 9.82 9.83 9.87 9.97 10.02
RETs 0.05 0.22 0.35 0.48 1.44 5.44 6.87
Key Findings
Utility & Environmental ImplicationsUtility & Environmental Implications
0
5000
10000
15000
20000
25000
0 5 10 25 50 100 200
Cap
acity
(MW
)
Hydro
Coal
Gas
Import
FO & DO
RETs
Fig1a: Installed generation capacity by fuel types at selected carbon tax rates in 2025
0
200000
400000
600000
800000
1000000
1200000
1400000
0 5 10 25 50 100 200
Elec
trici
ty g
ener
atio
n (G
Wh)
Hydro
Coal
Gas
Import
FO & DO
RETs
Fig2a:Electricity generation by fuel types during 2006- 2025 at selected carbon tax rates
Issue 1 Carbon TaxCarbon Tax
Key Findings
Fig3a: Total electricity generation by hydro during 2006- 2025 at selected carbon tax rates
Fig4a:Electricity generation by coal during 2006- 2025 at selected carbon tax rates
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Elec
tric
ity g
ener
atio
n (G
Wh)
Base case
0.5$/Mbtu case
1$/Mbtucase
2$/Mbtu case
5$/Mbtu case
10$/Mbtu case
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Ele
ctric
ity g
ener
atio
n (G
Wh)
Base case
5$/tC case
10$/tC case
25$/tC case
50$/tC case
100$/tC case
200$/tC case
Issue 1 Carbon TaxCarbon Tax
Key Findings
Fig5a: Total electricity generation by gas during 2006- 2025 at selected carbon tax rates
Fig6a: Change in consumption by fossil fuels during 2006- 2025 at selected carbon tax rates
0
20000
40000
60000
80000
100000
120000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Elec
trici
ty g
ener
atio
n (G
Wh)
Base case
5$/tC case
10$/tC case
25$/tC case
50$/tC case
100$/tC case
200$/tC case
-82.66
63.5577.09
0 -11.70 -18.53-33.36
-42.75
-74.59
62.76
42.1935.84
20.98
0
13.59 15.4823.1519.89
0 0.00 0.00
-100
-80
-60
-40
-20
0
20
40
60
80
100
0 5 10 25 50 100 200
Fuel
con
sum
ptio
n (%
)
Coal
Gas
FO & DO
Issue 1 Carbon TaxCarbon Tax
Key Findings
Fig7a: Effects of carbon tax on power generation technology mix during 2006-2025
Fig8a: Generation mix during the planning period at different carbon tax rates
Technology Mix: Vietnam
0
4000
8000
12000
16000
20000
0 5 10 25 50 100 200 Tax ($/tc)
capa
city
add
ed (M
W)
Conv. Coal GT Steam oil Import Hydro
NGCC Super critical Mini hydro Geothermal Wind
Generation Mix Vietnam
0
5
10
15
20
25
30
35
40
45
Base 5 10 25 50 100 200Tax ($/tc)
Gen
erat
ion
Mix
(%)
Coal Nat_gas Oil Hydro Import Renewable
Issue 1 Carbon TaxCarbon Tax
Key FindingsReduction in Total Capacity Addition due to Carbon Tax (%)
-10
10
20
30
0 5 10 25 50 100 200
Tax ($/tc)
Reductions in Total Generation due to Carbon tax (%)
10
20
30
0 5 10 25 50 100 200
Fig9a: Reduction in total capacity addition due to Carbon tax
Fig10a: Reduction in total generation due to Carbon tax
Issue 1 Carbon TaxCarbon Tax
Key FindingsTable 7a: Weighted average thermal generation efficiency during the planning horizonat selected carbon tax rates, %
Carbon tax rate(US$/tC)
Weighted average thermal generation efficiency (%)
0 37.23
5 38.36
10 38.05
25 40.27
50 41.05
100 44.32
200 44.88
Energy tax rate(US$/Mbtu)
Weighted averageLOLP (%)
EENS
GWh %#
0 0.00327 2588.7 0.07591
0.5 0.0032 2517.5 0.07545
1 0.00242 1947.6 0.06007
2 0.00183 1397.6 0.04459
5 0.000001 0.2 0.00001
10 1E-07 0.09 0.00000
Table 8a: Weighted average loss of load probability and cumulative expected energy not served during 2006-2025 at various energy tax rates
Issue 1 Carbon TaxCarbon Tax
Key FindingsTable 9a: CO2 and local emissions mitigation potential at different carbon tax rates during the whole planning period
Carbon tax rates (US$/tC) 0 5 10 25 50 100 200
Total CO2 emitted (thousand tons) 1308344.1 1241880.4 1200266.1 1107042.8 1042070.4 784433.8 714997.1
Total CO2 reduction (thousand tons) 66463.7 108078 201301.3 266273.7 523910.3 593347
% reduction 5.08 8.26 15.39 20.35 40.04 45.35
Total SO2 emitted (tons) 2606680.5 2513494.5 2436769.3 2177869.7 2089010.9 1160019.4 982602.6
Total SO2 reduction (tons) 93186 169911.2 428810.8 517669.6 1446661.1 1624077.9
% reduction 3.57 6.52 16.45 19.86 55.50 62.30
Total NOx emitted (tons) 2998296.6 2964040.6 2920676.8 2641429.3 2523744.9 2314792.6 2256457.5
Total NOx reduction (tons) 34256 77619.8 356867.3 474551.7 683504 741839.1
% reduction 1.14 2.62 12.22 17.97 27.08 32.05
Fig10a: Cumulative CO2 emission reduction (%) during the planning horizon at
different selected carbon tax rates
40.04
45.35
20.3515.39
5.088.26
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
5 10 25 50 100 200
Cum
ulat
ive
CO
2 em
issi
on re
duct
ion
(%)
Issue 1 Carbon TaxCarbon Tax
Key Findings
Fig11a: Cumulative SO2 emission emitted during the planning horizon at different selected carbon tax rates
0
50000
100000
150000
200000
250000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Tota
l SO
2 em
issi
on (t
on)
Base case
5$/tC case
10$/tC case
25$/tC case
50$/tC case
100$/tC case
200$/tC case
Fig12a: Cumulative NOx emission emitted during the planning horizon at different selected carbon tax rates
0
50000
100000
150000
200000
250000
300000
350000
400000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Tota
l NO
x em
issi
on (t
on)
Base case
5$/tC case
10$/tC case
25$/tC case
50$/tC case
100$/tC case
200$/tC case
Issue 1 Carbon TaxCarbon Tax
Key Findings
Fig13a: CO2 emission intensity in term of per unit of electricity generation at different selected carbon tax rates
214.874234.553
308.496326.276
353.607364.836383.654
0.000
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
450.000
0 5 10 25 50 100 200
ton
CO
2/G
Wh
62.30
55.50
19.86
16.45
6.52
3.571.14
2.59
11.90
15.8322.80 24.74
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
5 10 25 50 100 200
Cum
ulat
ive
emis
sion
redu
ctio
n (%
)
SO2
NOx
CO2
Fig14a: Cumulative CO2 emission reduction (%) during the planning horizon tax at various selected carbon tax rates
Issue 1 Carbon TaxCarbon Tax
Key Findings
Table 11a: The share of supply side effect and demand side effect to the total CO2 mitigation during the planning horizon at selected carbon tax rates, %
Carbon tax (US$/tC) Vietnam
SSE DSE
5 91.47 8.53
10 91.70 8.30
25 94.02 5.98
50 96.37 3.63
100 96.86 3.14
200 95.93 4.07
Note: SSE = CO2 mitigation due to supply side effect DSE = CO2 mitigation due to demand side effect
Carbon tax range (US$/tC) Carbon elasticity (%)
0 - 5 -0.026
5 - 10 -0.051
10 - 25 -0.094
25 – 50 -0.091
50 - 100 -0.423
100 - 200 -0.139
Table 10a: Carbon tax elasticity of CO2 emission at selected carbon tax rates, %
Issue 1 Carbon TaxCarbon Tax
Key FindingsCost ImplicationCost Implication
Table 12a: Average incremental cost (AIC) during 2006-2025 at carbon tax rates (US¢/kWh)
Issue 1 Carbon TaxCarbon Tax
Carbon tax(US$/tC)
Vietnam
0 2.70
5 2.73
10 2.78
25 2.89
50 3.05
100 3.22
200 3.62
120.02
11.57
22.58
42.20
74.20
-4.27-4.44 -3.14
23.0714.54
-2.88
-1.78
-3.16-4.59 -3.14
2.287.10
6.43 11.67
24.98
44.08
67.67
4.532.31
-20.00
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
5 10 25 50 100 200
Per
cent
age
of c
hang
es in
cos
t com
pone
nts
(%)
Capital costFixed O&M costFuel & Variable costTotal cost
Fig15a: Change in discounted expansion cost components for electricity generation expansion during 2006- 2025 at different selected carbon tax rates, (%)