UNEP Collaborating Centre on Energy and Environment Use and Conceptualization of Power Sector Baselines: Methodology and Case Study from El Salvador Lasse Ringius Methodologies for Baselines and Monitoring Indian International Center. New Delhi October 22, 2002

UNEP Collaborating Centre on Energy and Environment Overview of Presentation Power Sector in El Salvador; Comparison of available baseline approaches; Sector information availability in El Salvador; Addressing imports in the El Salvador case; and Simplified additionality test.

UNEP Collaborating Centre on Energy and Environment El Salvador

UNEP Collaborating Centre on Energy and Environment El Salvador: Key Electricity Sector Data In 2001, El Salvador had 1,118 MW of installed electricity generation capacity. Total generation, 3,757 GWh; imports 353 GWh. The generation mix: – 396 MW hydroelectric (35%) – 161 MW geothermal (15%) – 561 MW thermal capacity (50%) Power sector is privatized; wholesale market consists of a contracts and a spot market; dispatch based on market clearing prices.

UNEP Collaborating Centre on Energy and Environment Load Curves, Contracts and Spot Market, May 7, 2002.

UNEP Collaborating Centre on Energy and Environment Availability of Dispatch Information in El Saldador (UT)

UNEP Collaborating Centre on Energy and Environment

Load Duration Curve (UT data)

UNEP Collaborating Centre on Energy and Environment Marrakesh Accords on Baseline Methodologies, 2001 (a) “Existing actual or historical emissions, as applicable; or (b) Emissions from a technology that represents an economically attractive course of action, taking into account barriers to investment; or (c) The average emissions of similar project activities undertaken in the previous five years, in similar social, economic, environmental and technological circumstances, and whose performance is among the top 20 per cent of their category." (CP7/Dec.17(48))

UNEP Collaborating Centre on Energy and Environment Marrakesh Accords on Baseline Methodologies, 2001 With respect to project-specific baselines, they should take “into account relevant national and/or sectoral policies and circumstances, such as sectoral reform initiatives, local fuel availability, power sector expansion plans, and the economic situation in the project sector.”

UNEP Collaborating Centre on Energy and Environment SSC Panel, 2002: Three Baseline Methodologies Suggested (a) The average of the operating margin and the build margin, where: (i) The operating margin estimates the effect of the proposed project activity on the operation of existing and/or future power plants(…)A practical method and often equally precise is the weighted average of all resources, excluding hydro, geothermal, wind, low-cost biomass and solar generation(…);

UNEP Collaborating Centre on Energy and Environment SSC Panel, 2002: Combined Margin Approach (ii) The build margin (or "recently built") estimates the effect of the proposed project activity on the building of alternate power plants. The recommended calculation is based on the weighted average emissions of recent capacity additions, defined as the most recent 20% of plants built or the 5 most recent plants, whichever is greater; or

UNEP Collaborating Centre on Energy and Environment SSC Panel, 2002 (b) The operating margin (weighted average of current generation mix); or (c) Dispatch analysis (recent observed data).

UNEP Collaborating Centre on Energy and Environment Comparison of Electricity Baseline Methodologies in the El Salvador Context

UNEP Collaborating Centre on Energy and Environment Comparison of Electricity Baseline Methodologies in the El Salvador Context

UNEP Collaborating Centre on Energy and Environment Comparison of Electricity Baseline Methodologies in the El Salvador Context

UNEP Collaborating Centre on Energy and Environment Information Availability: The Case of El Salvador

UNEP Collaborating Centre on Energy and Environment Why Addressing Imports in the BLS? Growing regional electricity trade in Central America; Increasing grid interconnections (e.g., SIEPAC); and potential regional grid integration and dispatch.

UNEP Collaborating Centre on Energy and Environment Treatment of Imports in BLS – Low-cost hydro will satisfy domestic market in Guatemala; – Exports will be surplus power from thermal plants similar to Salvadorian thermal plants – Thermal plants will be on the “imports margin” where they will be displaced by CDM project(s) in El Salvador. Thus, imports from neighboring countries might exhibit similar characteristics in terms of avoided power plant emissions.

UNEP Collaborating Centre on Energy and Environment Simplifying Additionality Testing 1. The Marraskesh Accords state that a baseline shall be established “in a transparent and conservative manner regarding the choice of approaches, assumptions, methodologies, parameters, data sources, key factors and additionality, and taking into account uncertainty” (CP7/Dec 17 (45)). 2. Recent commendations by SSC Panel on barrier removal.

UNEP Collaborating Centre on Energy and Environment Simplifying Testing of SSC Projects