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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
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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 Issue 2: Identification of Barriers and Policy and Measures (PAMs) for the Adoption of Clean and Energy Efficient Technologies (CEETs) The Case of Vietnam Institute of Energy July 2005
Issue 1 Issue 1: Implications of Carbon & Energy Taxes as Instruments for GHG Reduction in the Power Sector
Issue 1 Overview of the Power Sector of Vietnam Capacity and Generation Mixes The power sectors in Vietnam demonstrated diverse characteristics in terms of electricity generation technologies, fuel use, total electricity generation capacity, load growth & load characteristics of power system. Table 1a: Overview of the power sector in Vietnam. Table 2a: Generation and capacity mix of selected countries in 2003, (%). Source: Institute of Energy (2004)
Issue 1 Overview of the Power Sector of Vietnam Environmental Emissions & Status of Renewable Energy Technologies for electricity generation in Power Sector + Coal based electricity generation accounts for the highest share of CO2 emission from the power sector in Vietnam. + Vietnam has power generation potential from all RE sources. Successful in promotion of small hydropower generation. Table 3a: Overview of environmental emission in Vietnam. Table 4a: Status of Renewable Energy Technology in electricity generation in Vietnam. Source: Institute of Energy (2004)
Issue 1 Implications of Carbon & Energy Taxes Candidate Supply Side Options • + Candidate supply side options: 1. Hydro plants 2. Coal & Oil fired power plants 3. High efficient technologies: • - Gas turbine combined cycle plants • - Pressurized fluidized-bed combustion plants (PFBC) • - Integrated gasification combined cycle plants (IGCC) • - Supercritical plants • 4. Renewable technologies: • - Geothermal, Small and mini hydro, • - Wind & Solar • - Biomass (wood residue, rice husk, bagasse) + No DSM + 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$Mbtu) + Planning horizon: 2006-2025 + All prices in the study are based on price of 2000. + Price Elasticity of demand estimated with - 0.3 Source: Institute of Energy (2004)
Issue 1 Carbon Tax Key Findings Utility & Environmental Implications Table 5a: Generation capacity mix at selected carbon tax rates in year 2025
Issue 1 Carbon Tax Key Findings Utility & Environmental Implications Table 6a: Electricity generation mix at selected carbon tax rates during 2006-2025
Issue 1 Carbon Tax Key Findings Utility & Environmental Implications Fig1a: Installed generation capacity by fuel types at selected carbon tax rates in 2025 Fig2a:Electricity generation by fuel types during 2006- 2025 at selected carbon tax rates
Issue 1 Carbon Tax Key Findings Fig3a: Total electricity generation by hydro during 2006- 2025 at selected carbon tax rates Fig4a:Electricity generation by coal during 2006- 2025 at selected carbon tax rates
Issue 1 Carbon Tax Key Findings Fig5a: Total electricity generation by gas during 2006- 2025 at selected carbon tax rates Fig6a: Change in consumption by fossil fuels during 2006- 2025 at selected carbon tax rates
Issue 1 Carbon Tax Key Findings Fig7a: Effects of carbon tax on power generation technology mix during 2006-2025 Fig8a: Generation mix during the planning period at different carbon tax rates
Reduction in Total Capacity Addition due to Carbon Tax (%) Reductions in Total Generation due to Carbon tax (%) 30 30 20 20 Issue 1 Carbon Tax 10 10 0 5 10 25 50 100 200 0 5 10 25 50 100 200 Tax ($/tc) -10 Key Findings Fig9a: Reduction in total capacity addition due to Carbon tax Fig10a: Reduction in total generation due to Carbon tax
Issue 1 Carbon Tax Key Findings Table 7a: Weighted average thermal generation efficiency during the planning horizon at selected carbon tax rates, % 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 Tax Key Findings Table 9a: CO2 and local emissions mitigation potential at different carbon tax rates during the whole planning period Fig10a: Cumulative CO2 emission reduction (%) during the planning horizon at different selected carbon tax rates
Issue 1 Carbon Tax Key Findings Fig11a: Cumulative SO2 emission emitted during the planning horizon at different selected carbon tax rates Fig12a: Cumulative NOx emission emitted during the planning horizon at different selected carbon tax rates
Issue 1 Carbon Tax Key Findings Fig13a: CO2 emission intensity in term of per unit of electricity generation at different selected carbon tax rates Fig14a: Cumulative CO2 emission reduction (%) during the planning horizon tax at various selected carbon tax rates
Issue 1 Carbon Tax Key Findings Table 10a: Carbon tax elasticity of CO2 emission at selected carbon tax rates, % 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, %
Issue 1 Carbon Tax Key Findings Cost Implication Table 12a: Average incremental cost (AIC) during 2006-2025 at carbon tax rates (US¢/kWh) Fig15a: Change in discounted expansion cost components for electricity generation expansion during 2006- 2025 at different selected carbon tax rates, (%)