Domestic actions contributing to the mitigation of GHG emissions from power generation in Brazil

Domestic actions contributing to the mitigation of GHG emissions from power generation in Brazil

Climate Policy 2 (2002) 247–254 Short communication Domestic actions contributing to the mitigation of GHG emissions from power generation in Brazil...

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Climate Policy 2 (2002) 247–254

Short communication

Domestic actions contributing to the mitigation of GHG emissions from power generation in Brazil Emilio Lèbre La Rovere∗ , Branca Bastos Americano Programa de Planejamento Energético, Instituto de Pesquisa e Pós-Graduação de Engenharia, Universidade Federal do Rio de Janeiro, PPE/COPPE/UFRJ, Rio de Janeiro, Brazil

Abstract Continued growth and the privatisation of Brazil’s electricity system, which is largely based upon hydropower, is projected to lead to big expansion mainly of natural gas but also coal power stations with a resulting huge growth in greenhouse gases (GHG) emissions unless steps are taken to avoid this. The Brazilian National Program of Power Conservation and Efficient Use of Electrical Energy in terms of avoided GHG emissions (PROCEL), originally created in 1985, is a multi-stakeholder program coordinated by Eletrobrás aimed to reduce the waste of electrical power on both supply and demand side. Initially crippled by lack of funds, a new finance structure introduced in 1994 has greatly increased PROCEL’s impact. Here we develop scenarios that suggest that continued expansion of PROCEL’s programme, including resources that might be drawn through clean development mechanism (CDM) projects, to meet projected PROCEL targets over the next two decades could avoid approximately one-third of the GHG emissions from the Brazilian power sector. This contribution demonstrates the significant global environmental benefits of PROCEL in addition to national benefits of this innovative programme. © 2002 Published by Elsevier Science Ltd. Keywords: Greenhouse effect; Emissions; Energy efficiency; Power sector; Brazil

1. Introduction This paper assesses the global environmental benefits of The Brazilian National Program of Power Conservation and Efficient Use of Electrical Energy in terms of avoided greenhouse gases (GHG) emissions (PROCEL). It is the main result of 2-year research by the authors for Eletrobrás. We take as a starting point the power conservation results achieved in the 1990s. Future power generation expansion is projected according to the new ELETROBRÁS Decennial Plan and the scenario II of its long-term 2015 plan extended up to the year 2020. We present the methodology adopted for sharing the total amount of ∗

Corresponding author. E-mail address: [email protected] (E.L. La Rovere). 1469-3062/02/$ – see front matter © 2002 Published by Elsevier Science Ltd. PII: S 1 4 6 9 - 3 0 6 2 ( 0 2 ) 0 0 0 4 8 - 7

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energy conservation among the different power sources, and calculate the corresponding avoided emissions of carbon dioxide (CO2 ), carbon monoxide (CO), methane (CH4 ), nitrous oxide (N2 O) and nitrogen oxides (NOx ) together with the overall global warming potential (GWP). The methodology developed for estimating the future GHG emissions avoided by PROCEL assumes that the kWh saved will come from the marginal generation units scheduled for each year in the Decennial Plan (1998–2007) and the supply expansion scenario 2008–2020. The analysis considers separately the amount of energy conservation during peak and base load periods with different partitions for each of the two scenarios. We also estimate the methane emissions from the hydropower reservoirs, allowing for a more comprehensive estimate of the contribution from PROCEL to avoid future GHG emissions. However, further field research efforts are still needed to improve the accuracy of such estimates. The methodological approach presented in this report can be easily adapted to use at the project level. This would allow to determine the GHG emissions avoided by the implementation of specific electrical energy conservation projects in different regions of the country, which might become eligible under Kyoto’s Clean Development Mechanism (CDM). One of the key criteria to be met by CDM project proposals is to ensure GHG emission reductions. PROCEL/ELETROBRÁS can apply this methodology to assess the potential global environmental benefits of new energy conservation project proposals and also use it in the follow-up of their implementation, allowing for the certification of emission reductions ex post. The CDM may become increasingly important as a large potential source of additional financial resources to foster energy conservation efforts in Brazil. Due to the current trends of expansion of thermopower generation in the country, the corresponding GHG emissions would increase from the current level of 14 million tonnes (Mt) of CO2 equivalent (eq.) to 67 Mt CO2 eq. in 2010 and 183 Mt CO2 eq. in 2020. Overall GHG emissions from the Brazilian power sector would be even higher including GHG emissions from hydropower reservoirs. Our study estimates that meeting PROCEL targets (corresponding to energy savings of 10% in 2010 and 18% in 2020) would reduce GHG emission from thermopower plants by 31 Mt CO2 eq. in 2010 and 98 Mt CO2 eq. in 2020, or more if avoided GHG emissions from hydropower reservoirs are accounted for. CDM projects in the field of energy conservation in Brazil are already raising interest among foreign investors thanks to the cost effectiveness of these options compared to non-conventional renewable energy sources.

2. Power generation Until the early 1990s, hydropower dominated the Brazilian electricity picture, accounting for over 90% of domestic power needs. Given the larger initial investment and long payback period required by large hydropower schemes, the private sector tends to privilege thermopower, due to its higher risk aversion coupled with the financial constraints imposed by capital scarcity in developing countries. Thus, more recently, hydropower development in Brazil have slowed down in favour of thermopower plants. The atmospheric pollution due to thermopower plants fired by coal, oil products and natural gas is bound to increase. In particular, GHG emissions from the power sector are slowly but consistently increasing in the last years. If emissions from hydropower reservoirs are included in the analysis, the role of the electric power sector in terms of GHG emissions can grow significantly. In this scenario, the role of power conservation is increasing as an instrument of limiting GHG emissions. To estimate the potential energy conservation contribution, we develop a scenario of the power generation profile in the mid- and long-term and estimate the avoided emissions due to PROCEL’s actions. We caution

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Table 1 Power generation per energy source, 1998–2007 Year

1998 1999 2000 2001 2003 2005 2007

Total power generation (TWh per year) 308 345 375 392 440 468 494

Structure (%) Hydro

Natural gas

Coal

Diesel

Fuel oil

Nuclear

Transmission

93.4 86.8 81.7 81.1 80.0 80.4 79.4

0.4 2.3 6.8 7.7 7.8 7.4 7.0

1.8 1.8 1.9 2.0 2.4 2.9 3.3

1.5 1.6 1.5 1.4 1.2 1.2 1.1

1.4 1.3 1.2 1.1 1.0 0.9 0.9

1.3 2.5 3.1 3.0 2.7 2.7 4.0

0.3 3.7 3.8 3.6 4.9 4.6 4.3

Source: La Rovere and Americano (1999).

that for the estimate of avoided emissions in the future, large uncertainties prevail in the reference scenario itself. The structural reform of the Brazilian power sector has changed the nature of power generation expansion programs, which have now to be seen as tools of indicative planning only. The estimates presented here are affected by this added uncertainty. The methodological approach used in this study considers three different periods for calculating the amount of power generation from each primary energy source: • 1990–1997: data available (presented in La Rovere and Americano, 1999); • 1998–2007: power generation expansion according to the Decennial Plan; • 2008–2020: power generation scenarios built according to assumptions made in this study. The amount of power generation in the period 1990–1997 comes from the National Energy Balance (BEN). To calculate the capacity added between 1998 and 2007, information from the Decennial Plan was used, specifying on a monthly basis the entering into operation of new units (turbines) of each plant added to the system. It was assumed that the amount of energy generated by the already operating plants would remain constant (at the 1997 levels) during all the period. The resulting power generation structure until 2007 is shown in Table 1. The last column refers to the addition of firm energy to the generation capacity made available by the interconnection of the two previously separated grid systems (south/southeast/centre-west and north/northeast) scheduled to take place within this period. The overall increase of Brazilian power market in the period 2008–2020 was estimated according to scenario II of the Eletrobrás Plan 2015 (usually considered as the scenario with higher probability). Annual growth rates assumed were 4.8% until 2010 and 4.2% from 2011 to 2020, and plan assumptions were as follows: • Power generated from nuclear plants and from the interconnection of the grid through new transmission lines is frozen at 2007 levels, because no new nuclear power plant is planned to be built after 2007, and the interconnection of previously split sub-systems of the grid will be by that time already achieved and thus new transmission lines will not add to the total amount of firm energy deliverable. • Hydropower adds an amount of energy per year that corresponds to the mean value in the period of the Decennial Plan (1997–2007), that is 11,310 GWh per year. This assumption was based in the still

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Table 2 Power generation per energy source, 2008–2020 Year

2008 2010 2015 2020

Total power generation (TWh per year) 517 565 694 853

Structure (%) Hydro

Natural gas

Coal

Diesel

Fuel oil

Nuclear

Transmission

78.0 75.4 69.5 63.2

8.2 10.5 15.6 20.8

3.8 4.9 7.3 9.7

1.1 1.1 0.9 0.8

0.9 0.9 0.8 0.7

3.8 3.5 2.8 2.3

4.1 3.8 3.1 2.5

Source: La Rovere and Americano (1999).

largely available Brazilian hydropower potential, taking into account that thermopower will play a more important role in the future, due to the privatisation of the electric sector. • A linear trend was fitted to the diesel-based generation growth and also assumed for fuel oil. Diesel oil has only a local importance, limited to the isolated systems of the northern region. Fuel oil plays a marginal role in the Brazilian energy system, serving mainly to meet peak load requirements. • The relationship between the market shares of the remaining power sources, gas and coal, are kept the same as in the year 2007. So, the growth rates of these fuels are the same for every year in the period 2008–2020. Consequently, growing power demand is met mainly by natural gas and coal, according to the recent trend of privatisation of the Brazilian power sector. The resulting power generation structure from 2008 to 2020 is shown in Table 2; it represents a growth rate of more than 4% per year in total power generation, mostly from rapid growth in natural gas and coal plants (Fig. 1). 3. Energy conservation: PROCEL’s actions PROCEL was created in December 1985 aiming to reduce the waste of electrical power both at the demand and supply sides. ELETROBRÁS plays the role of executive secretariat of PROCEL, in charge of coordinating the efforts from governmental bodies, utilities, consumers, manufacturers, research institutes and other stakeholders in the electrical power system. In an early stage, PROCEL suffered from insufficient budget resource allocations. After 1994, its financial means were substantially increased thanks to the use of Reserva Global de Reversão (RGR, an important fund managed by the power sector in Brazil). From then on, significant results have been achieved by PROCEL, including the creation of its technical staff and a critical mass in the field of energy conservation in the country, as shown in Table 3. PROCEL’s actions include both demand side and supply side oriented energy conservation measures. Demand side projects are related to the use of power by final consumers, and have focused on improving the energy efficiency of electricity consuming equipment. PROCEL’s programmes and pilot projects have included: • labelling programs to inform consumers about the average power consumption of appliances; • granting of energy efficiency labels to appliances to influence the choice of consumers; • funding the substitution of equipment with energy efficiency labels for less energy efficient equipment;

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Fig. 1. Power generation per energy source, 1990–2020.

Table 3 Annual results achieved by PROCEL, 1986–1997

Approved investments (R$ million)a Actual investments (R$ million)a Energy saved and additional generation due to actions taken in the year (GWh per year) Equivalent power generation plant (MW)c Peak power reduction (MW) Avoided investments (R$ million)

1986–1994

1995

1996

1997

33.5 31.5 1274

30b 15.8 572

50b 19.6 1970

122b 40.6 1758

430 293 860

415 976 830

300 219 600

135 103 270

Source: La Rovere and Americano (1999). a ´ Salaries of ELETROBRAS/PROCEL staff not included. b RGR resources included: R$ 20 million in 1995, R$ 40 million in 1996 and R$ 90 million in 1997. c Obtained from energy saved and additional generation, considering a typical load factor of 56% for hydropower plants and including 15% of average losses in transmission and distribution for the energy saved.

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• energy efficient design of commercial buildings; • substitution of compact fluorescent bulbs for incandescent bulbs in the residential sector (low income households); • funding of efficient lighting; • energy efficiency programs in public buildings; • adoption of the yellow tariff, allowing for differentiated tariffs according to the period of consumption; • installation of demand limiters in electrical showers to foster their use in off-peak periods; • retrofitting public lighting; • marketing campaigns to modify consumption inhabits. Supply side projects concentrate on reducing power losses along the generation, transmission and distribution power chain. Among them, can be highlighted: • the installation of meters to reduce commercial losses due to widespread illegal consumption; • additional generation projects, making more energy available to the grid through the improvement of generation plants, such as: ◦ better cooling of the generation units to improve their performance (Balbina, Samuel and Emborcação hydropower plants and Jorge Lacerda thermopower plant), ◦ minor equipment changes in the Itaipu hydropower plant, reducing the need for scheduled stops. Besides these direct measures at the supply and demand sides, PROCEL has invested in general infrastructure works, in research and development of new technologies, and in educational programs including training and events. Moreover, PROCEL’s action has also been important in the reform of the Brazilian legislation affecting the power sector, through the elaboration of a law instituting a National Energy Conservation Policy. In the restructuring of Brazilian power sector, PROCEL provides technical support to the newly created National Agency of Electrical Power (ANEEL). In our analysis, energy savings at the demand side were converted to supply savings as follows. Overall losses in transmission and distribution of power were estimated to be 15% in 1996. According to the targets for reducing these losses, it was assumed that this average figure would be linearly decreased from 1999 to 2005, to reach the level of 10%, then kept constant until 2020. The amounts of energy savings and additional generation capacity made available by all energy conservation projects were kept constant after 2001 until 2020. This corresponds to the optimistic assumption that even after the end of PROCEL projects, the implementation of all their measures to increase energy efficiency will be continued by the final consumers on their own (see La Rovere and Americano, 1999). PROCEL annual budget estimates are about R$ 70 million in 1997, R$ 90 million in 1998 and R$ 130 million from 1999 on. Funding from GEF and IRDB projects were added to these figures, as well as the resources from RGR allocated to PROCEL. The amount of energy conservation was calculated using an average estimate of US$ 10/MWh.

4. Emissions from thermopower generation Applying the average GHG emission factors for Brazilian thermopower plants to the power generation from each source of energy. Table 4 shows the results obtained for GHG emissions from thermopower

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Table 4 Annual GHG emissions from the Brazilian thermopower sector Year

Emissions (kt CO2 eq.) Total

1990 1997 1998 1999 2000 2005 2010 2015 2020 Totala

CO2

Emissions structure (%) CH4

N2 O

CO2

CH4

N2 O

9,644 16,590 14,175 18,942 27,608 38,785 66,766 114,952 182,666

9,628 16,560 14,145 18,901 27,547 38,696 66,608 114,675 182,222

2 4 4 11 28 38 65 117 190

14 26 27 30 32 51 93 160 254

99.83 99.82 99.78 99.78 99.78 99.77 99.76 99.76 99.76

0.02 0.02 0.03 0.06 0.10 0.10 0.10 0.10 0.10

0.15 0.16 0.19 0.16 0.12 0.13 0.14 0.14 0.14

1,737,019

1,732,886

1742

2394

99.76

0.10

0.14

Source: La Rovere and Americano (1999). a Total corresponds to accumulated figures from 1998 to 2020.

generation in the period 1990–2020. Applying the GWPs to add up the emissions of CO2 , CH4 and N2 O in terms of kt of CO2 eq., it can be seen that by far the most important GHG in Brazilian thermopower generation system is CO2 with nearly 100% of the emissions (not taking into account the CO and NOx emissions). The accumulated emissions from thermopower generation for the whole period 1998–2020 are presented in Table 5. In terms of CO2 eq., the cumulative GHG emissions from thermopower generation will be 1.8 Gt CO2 eq. during the period 1990–2020, with CO2 emissions corresponding to 99.76%. The importance of non-CO2 GHG emissions can be higher than suggested by the above results, if CH4 emissions from hydropower dams are included in the calculations. So far, these emissions are not taken into account within IPCC Guidelines for GHG Emissions Inventory. However, preliminary estimates made by PPE/COPPE/UFRJ show that under specific circumstances CO2 and CH4 emissions from underwater decomposition of biomass can be relevant in areas flooded by hydropower dams. Field measurements currently undertaken in pilot projects located in the Amazon region can allow for more accurate estimates. 5. GHG emissions avoided by PROCEL Annual amounts of power generation, energy conservation, overall emissions from the power sector and avoided emissions by PROCEL under the assumptions of the study by La Rovere and Americano (1999) are summarised in Table 6. Table 5 Accumulated GHG emissions from thermopower generation, 1998–2020 Accumulated emissions

CO2

CO

CH4

NOX

N2 O

Total

kt kt CO2 eq. kt CO2 eq. (%)

1,732,886 1,732,886 99.76

571 – –

83 1742 0.10

10,200 – –

8 2394 0.14

– 1,737,019 100

Source: La Rovere and Americano (1999).

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Table 6 Summary of PROCEL results and GHG avoided emissions, 1990–2020 α (%)

TWh per year G 1990 1997 1998 1999 2000 2005 2010 2015 2020 Total (1990–2020)

C 223 308 308 346 376 470 567 696 855

12,980

0.16 5.8 8.0 10 13 29 62 130 191 1694

G+C 223 314 316 356 389 499 628 826 1,047 14,675

Mt CO2 eq. (from CO2 , N2 O and CH4 ) E

0.07 1.8 2.5 2.9 3.3 5.9 9.8 16 18 12

9.6 17 14 19 28 39 67 115 183 1739

AE 0.04 1.2 4.1 5.6 5.4 11 31 63 98 830

ε (%)

E + AE 9.6 18 18 25 33 50 98 178 280 2565

0.41 6.6 23 23 16 22 32 35 35 32

Note: columns 2–4 refer to electrical energy in TWh per year. G: power generation; C: total energy conservation by PROCEL = Cb + Cp; G + C = power generation in the absence of PROCEL—hypothetical situation. Column 5, α = C/(G + C), can be understood as the conservation rate and shows the ratio of total energy conservation (C) to the power generation in the absence of PROCEL (G + C). Remaining columns refer to GHG, in million tonnes of CO2 eq. (Mt CO2 eq.); E: emissions from the power sector; AE: avoided emissions by PROCEL =AEb + AEp; E + AE = emissions from the power generation sector in the absence of PROCEL—hypothetical situation. The last column ε = AE/(E + AE) shows the ratio of avoided emissions (AE) to the emissions from the power generation sector in the absence of PROCEL (E + AE), and can be interpreted as the avoided emissions rate.

Under the assumptions of this study, PROCEL contributes significantly to cut GHG annual emissions from the power sector. This contribution varies according to the specific year. The emissions avoided by PROCEL reach 98 Mt of CO2 eq. in 2020, which correspond to seven times the estimated GHG emissions from the Brazilian power sector in 1998. In terms of the accumulated values along the whole period from 1990 to 2020, meeting PROCEL targets will allow for a reduction equivalent to 30–33% of what would be the estimated GHG emissions from the power sector without PROCEL. Further reading La Rovere, E.L., Americano, B.B., 1998. Environmental Impacts of Privatizing the Brazilian Power Sector. In: Proceedings of the Annual Meeting of the International Association of Impact Assessment, Christchurch, April. La Rovere, E.L., Legey, L.F., Miguez, J.D.G., 1994. Alternative energy strategies for abatement of carbon emissions in Brazil. Energy Policy 22 (11), 914–924.

References La Rovere, E.L., Americano, B.B., 1999. Assessment of Global Environmental Impacts of PROCEL: GHG Emissions Avoided by PROCEL, 1990–2020. Final Report to Eletrobrás, September.