1. TA Project: “Improving Emissions Control” Session 2 Scenarios for Emissions Management Dr Russell C Frost Project Team Leader

2. Contents Scenarios – an introduction Three scenarios – Without Measures (WoM) – With Measures (WM) – With Additional Measures (WAM) WoM Scenario – General – based on planning assumptions – Indicative potential damage costs – Example – electricity generation WM and WAM Scenarios Cost-benefit analysis and economic appraisal

3. Scenarios - General Alternative visions of the possible future considering – Population change – Economic development – Environmental management Basis for estimating emission projections 2011 to 2025 and for identifying possible emission ceilings: NOx, NMVOCs, SO 2, NH 3 They force planning assumptions to be made – Assumptions need to be assessed and reviewed

4. Three Scenarios ScenarioDefinition Without Measures (WoM) Also known as ‘Business as Usual 1.Adopts baseline data and planning assumptions common to all scenarios 2.Adopts national commitments pre 2011 3.Adopts national energy policy 4.Adopts National Climate Change Action Plan 2011-2023 With Measures (WM) As WoM but assumes the implementation of 1.EU Directives transposed in 2010 and 2011 With Additional Measures (WAM) As WM but assumes the implementation of 1.EU Directives expected to be transposed in 2012 and beyond

5. WoM Scenario - Population Growth Assumption: linear annual growth in population of 1.15% of 2010 population

6. WoM Scenario - Economic Growth (1) Basis: – 7.5% growth in 2011, expected – 2.75% growth forecast in 2012: slowdown in European economy – Rebound to average long-run rate of growth of 4.5 % through 2013-2025

7. WoM Scenario – Economic Growth (2)

8. WoM Scenario – Growth in Emissions and Impacts Economic growth without measures to curb emissions will result in emissions growth – Strength of the relationship between economic growth and emissions growth will vary between sectors Emissions do have negative impacts on human health, agriculture and the environment – The impacts impose damage costs on society – often termed externalities because it is not the polluter who directly pays the costs

9. Estimated Marginal Damage Costs (€/tonne emission) Data from study undertaken for EEA, reported Nov 2011 Marginal damage costs are at year 2005 price levels Damage costs are related to source location and population distribution Damage costs are regional i.e. not confined to the country source of emission – but excludes effects outside the region NH 3 NOxSO 2 NMVOCsPM 2.5 Highest272001880013500193044600 Lowest13306471400-7130 Turkey4 60019183060819100

10. Indicative Additional Damage Costs Associated with WoM Assumption: increase in emissions from 2010 is directly proportional to the forecast increase in GDP

11. WoM – Electricity Generation (1) National Policies National energy and related policies – Security of supply Develop renewable sources to full economic extent – hydro, wind, geothermal, biomass, solar Natural gas (imported) to be limited to 30% of electricity generation/supply by year 2023 Use of domestic lignite to expand - use of imported hard coal to be constrained Nuclear to provide 5% of supply by 2020 – Privatisation of generation and transmission systems – Energy efficiency to reduce growth in generation capacity – National Climate Change Action Plan 2011-2023

12. Per capita electricity consumption and GDP – selected OECD (2009)

13. WoM – Electricity Generation (2) Potential Demand & Generation Basis and assumptions: – Association of per capita electricity consumption with per capita GDP – selected OECD countries – Growth of population and GDP in Turkey as indicated previously – Reduction in own use and electricity transmission losses from over 15 % in 2010 to 11.5 % by 2025

14. Potential electricity generated to meet demand 2011-25

15. WoM – Electricity Generation (3) Energy Mix to Meet Demand Structured approach and quantitative rules: – By 2023, hydro capacity 66% of NCCAP goal; wind at 50% and geothermal at 50% – Nuclear comes on stream in 2020 to meet 5% of national demand – Natural gas: year 2010 capacity maintained – no growth – Year 2010 ratio of lignite to hard coal generation capacity maintained through to 2025 – Closure of oil-fired generation capacity – Key performance parameters: GWh generated per unit of fuel (gas, coal, etc) Effective number of hours/year plant runs at full capacity

16. Performance Parameter – GWh / unit of fuel consumed FuelUnits200920102011-25 Natural gasMillion m34.694.574.60 Lignite – existingKtonne0.620.65 Lignite – newKtonne--0.65 Hard coalktonne2.542.392.47

17. Performance Parameter – Effective plant hours/year Energy Source200920102011-25 Hydro247132722850 Wind188922092050 Geothermal566471067100 Nuclear--7446 Natural gas578354005600 Lignite – existing482044154620 Lignite – new--6500 Hard coal715850116500 Ratio of electrical power generated (GWh) to installed capacity (GW)

18. WoM – Electricity Generation (4) Energy Mix: 2010 vs 2023 GWh generatedPercentage

19. WoM – Electricity Generation (5) Potential Fuel Consumption ktonne/year except natural gas – million m 3 /year

20. WM Scenario: With Measures SectorsMeasures to be Implemented Electricity generationLCP Directive 2001/80/EEC OG 27605 (8/6/2010) Industrial processes using large scale combustion plant LCP Directive 2001/80/EEC OG 27605 (8/6/2010) Waste managementLandfill Directive 99/31/EEC OG 27533 (26/3/2010) Waste Incineration Directive 2000/76/EC OG 27721 (6/9/2010)

21. WAM Scenario: With Additional Measures SectorsMeasures to be Implemented Industrial processesIPPC Directive 08/01/EC and Solvent, Storage and Decopaint VOCs Directives - superseded by Industrial Emissions Directive (IED) 2010/80/EEC TransportEURO 5 and EURO 6 / EURO V and EURO VI AgricultureIPPC – large scale poultry rearing Nitrates Directive Good practice in fertiliser application and livestock rearing/manure management

22. Cost-Benefit Analysis (CBA) CBA of the incremental costs and benefits provided by specific techniques and of scenarios – WM vs WoM – WAM vs WM Costs of techniques for implementing LCPD have been collected – others to follow – Costs comprise investment and operating expenditure Benefits recur for as long as plant are operated Since costs and benefits arise over a period of time, CBA requires economic appraisal using discounted cash flow (DCF) techniques – TA will provide basic introduction to economic appraisal