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Japanese Gas Industry and Its Efforts in Reducing CO2 Emission

Japanese Gas Industry and Its Efforts in Reducing CO2 Emission. December 10, 2004 Hiroshi Ozaki The Japan Gas Association. Contents. Japanese gas industry and its CO2 Emission Target Benchmark as Performance Assessment Benchmark as Baseline for Evaluation of Projects

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Japanese Gas Industry and Its Efforts in Reducing CO2 Emission

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  1. Japanese Gas Industry and Its Efforts in Reducing CO2 Emission December 10, 2004 Hiroshi Ozaki The Japan Gas Association

  2. Contents • Japanese gas industry and its CO2 Emission Target • Benchmark as Performance Assessment • Benchmark as Baseline for Evaluation of Projects • emission reduction on customers’ site • emission from Use of Grid Power

  3. Japanese Gas Industry and Its CO2 Emission Target

  4. Japanese Gas Industry and Its CO2 Emission Target Japanese gas industry – an overview • No. of utilities: 227 • diverse in size of operation • Scale of operation • Gas sold: 29 billion m3 (top 10: 85% ) • Customers: 27 million • Vertically integrated: from supply to retail • 90% LNG, 10% petroleum-based

  5. Japanese Gas Industry and Its CO2 Emission Target CO2 Emission Target To reduce CO2 emission from our operation • Target 23g-CO2/m3 (2010) 73g-CO2/m3 (1990) • Means • Conversion to natural gas (LNG) • Energy saving at LNG terminals

  6. Benchmarkas Performance Assessment

  7. Benchmark as Performance Assessment Relativity • Emission rate (CO2/product or service) is more useful than absolute emission quantity. • To identify solutions • To find direction

  8. Benchmark as Performance Assessment Benchmark for the Japanese Gas Utilities • Benchmark : CO2 emission/m3 • comparison within class • single benchmark not equitable • Considerations for design • size • type of gas • subject facilities • geographic factors, etc.

  9. Benchmark as Performance Assessment Stringency Level Higher benchmark levels • more effective to start at an easy level and raise the level Initial benchmark levels Achieve Review Verify

  10. Benchmark as Baseline for Evaluation of Projects

  11. Benchmark as Baseline for Evaluation of Projects Our approach • Focus on demand side emissions • Enhancing efficient utilization (energy company’s mission) • Conversion to natural gas from other fuels • Introducing energy-efficient equipment • Ex: CHP (combined heat & power) • ESCO business

  12. Benchmark as Baseline for Evaluation of Projects Requirements • Criteria for Evaluation: comparison with baseline • Benchmark as baseline : • easy to use and objective • reflective of reality

  13. Area X AreaY CO2 emission factor a b c d e new project existing facilities Benchmark as Baseline for Evaluation of Projects Issues to be considered • Broadnessvs.Accuracy • diversity ofbackground affects baseline • applicable conditions are vital for choice of good projects Benchmark？

  14. Benchmark as Baseline for Evaluation of Projects Designing a Benchmark as Baseline • Steps towards benchmark • to analyse & identify the background • to verify applicability of benchmark • to examine stringency level • Database of project baselines may help

  15. Determination of Emission from Use of Grid Power Average Emission Factor (AEF) and Marginal Emission Factor (MEF)

  16. Determination of Emission from Use of Grid Power Grid Power viewed from CO2 Emission CO2 emission Thermal Nuclear Hydro Demand side Supply side • Emission at generation site only • Power supplied from different sources • Power distributed through grid

  17. Determination of Emission from Use of Grid Power CO2 Emission from Power Consumption- attribution 1. Calculate at generation source only: EU-ETS • Costs passed through to users: same as AEF 2. Calculate demand side emission (virtual and indirect) by Average Emission Factor (AEF) • Proportionally distributed to all customers • Formula: CO2=Power consumed X AEF 3. Calculate emission reduction by Marginal Emission Factor (MEF) • Effect of power saving on reduced CO2 emission • Formula: Reduced CO2=Power saved X MEF

  18. Determination of Emission from Use of Grid Power Estimating Emission on Demand Side • AEF used to estimate total emission on demand side • CO2 emission distributed proportionally to all users Customer 1 Thermal Customer 2 Hydro Customer N Nuclear Wind Supply side Demand side

  19. Determination of Emission from Use of Grid Power Evaluating Reduced Emission on Demand Side • MEF used to calculate emission reduction by power saving • MEF: Emission factor of Power source displaced or delayed by power saving reduction Customer 1 Thermal Customer 2 Hydro Customer N Nuclear Wind Supply side Demand side

  20. Determination of Emission from Use of Grid Power Choice of Emission Factor • AEF and MEF not clearly distinguished • Emission volume by AEF • Reduced emission by MEF • AEF used for being conservative ?

  21. Hydro Nuclear Wind Hydro Nuclear Wind Thermal Thermal Hydro Nuclear Wind Hydro Nuclear Wind Thermal Thermal Determination of Emission from Use of Grid Power Proper Evaluation Using MEF • Specify power replaced or reduced power sources through power saving and renewable projects. • MEF MUST BE USED for proper evaluation.

  22. Hydro Nuclear Wind Hydro Nuclear Wind Thermal Thermal Hydro Nuclear Wind Hydro Nuclear Wind Thermal Thermal Determination of Emission from Use of Grid Power Using AEF for Evaluating Reduced Emission- a road to dire consequences? • Emission reduction by power saving on demand side equally translated into all power sources • Erroneous evaluation of power saving effects and renewable projects Discourages Promising CO2 Reduction Projects

  23. AEF and conservatism are irrelevant Appropriate MEF Power increment or decrement × Determination of Emission from Use of Grid Power Emission Factors and Conservatism New Projects conservative Power saving AEF? conservative Power consumption increased ?

  24. Determination of Emission from Use of Grid Power

  25. Thank you.

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