Research Center for Energy &Environment Case study on Quang Tri wind power project and the needs for capability development Dr. Nguyen Duc Minh Dr. Nguyen Tien Nguyen Research Center for Energy & Environment Address: Nguyen Chi Thanh Road Building: Regional Hydrometeorological Centers of Red River Delta Tel: Website:

Research Center for Energy &Environment Sustainability: + COP7: Renewable energy use is sustainable technology + Vietnam government set high priority for renewable energy development. - Additionality: + CO2 additional reduction is certain. + Technology transfer is promising. CDM eligibility

Research Center for Energy &Environment + Country level: BAU projection for energy demand. + Sectoral level: Master Plan V for electricity expansion to 2010 with outlook to Project level: Coal fired plants. - Plan for new coal fired plants and their technological specifications. - Averaged indicator of 20% top-plants. - Be sure that while wind power comes to grid, coal power will be correspondingly reduced. Baseline

Research Center for Energy &Environment + Boundary: Only inside of plants, wind or coal. + Time: , and Direct leakage: - Up-stream of coal cycle is not taken into consideration. - Emission during material production and manufacture is neglected. + Indirect leakage is not discovered. Project boundary and leakage

Research Center for Energy &Environment Methodology-levelized generation cost Construction period N years commissioning Life time: M years

Research Center for Energy &Environment 1. Investment capital($/kW) - Overnight: Po. - Final( total) Investment capital: P P= P1(1+IDC) (N-1) Pn = Po/N*((1+IDC) N -1)/IDC IDC: Annual interest during construction. 2. Generation cost( GC:$/kWh) GC = INC + OM + Fuel: INC:Investment cost. Payback the Investment Capital OM: Fixed O&M cost. M ethodology-levelized generation cost

Research Center for Energy &Environment + INC: Assumption: - Electricity price is unchanged during life time of projects. - Electricity generation is unchanged over the years. - DR: Discount rate = 10% - LF : Load factor % INC = P*(1+DR) M *DR/((1+DR) M - 1)/LF/ OM: Fixed O&M is given in $/kW/year. Then OM = Fixed O&M / LF/8760 INC and OM

Research Center for Energy &Environment Inputs and results for GC

Research Center for Energy &Environment Carbon avoided Based on previous results, one kWh of Wind power abates 276 gC or 1013g CO2. One Wind tower of 1250 kW capacity with load factor of 30%( the supposed to be more probable capacity) can abate tons CO2 annually The Wind field with 20MW capacity has 16 towers (1.25MW each). The amount of carbon avoided depends on towers introduction scheme. The proposal scheme and results of Carbon avoided are shown in the following table:

Research Center for Energy &Environment Carbon avoided

Research Center for Energy &Environment CO2 reduction cost RC($/TCO2)=(GCw-GCc)/Emission factor

Research Center for Energy &Environment Price of CO2 in dependence on electricity price, paid by EVN: CO2 price($/TCO2)=(GCw-Pr)/Emission factor

Research Center for Energy &Environment

RCEE wind speed measurement tower in Cua Tung

Research Center for Energy &Environment Capacity Needs for CDM Project Implementation

Research Center for Energy &Environment Capacity Needs for CDM Project Implementation 1.Institutional Framworks 2.Methodology and Technology Transfer 3.Financial issues 4.The role of NGOs

Research Center for Energy &Environment Capacity Needs for CDM Project Implementation (Cont.) 1. Institutional Issues: + International aspect: It is expected the Procedure for CDM will be completed. + National aspect: After ratification of KP Protocol by the Government, an institutional and legal system for CDM implementation will be set up. Training on the institutional issue is needed

Research Center for Energy &Environment Capacity Needs for CDM Project Implementation (Cont.) 2. Methodology and Technology Transfer + Methodology approach such as Baseline should be defined +Environmental friendly technology for different sectors should be introduced

Research Center for Energy &Environment Capacity Needs for CDM Project Implementation (Cont.) 3. Financial Issues: + Transaction cost + Economic aspect of the project + CO2 price + Investment Capital Financial Approach should be introduced

Research Center for Energy &Environment Capacity Needs for CDM Project Implementation (Cont.) 4. The role of NGOs + In Vietnam, NGOs are more interested in CDM + Advantage of NGOs is the ability of flexibility in action + Disadvantage of NGO is lack of resources. A combination of Government and Non- Government Organizations is the best solution

Research Center for Energy &Environment Thank you for Attention.