Topic: coal

ADVISORY: Press Call on China’s New Leadership: Confronting Energy and Environmental Challenges

Michael Oko — Wed, 27 Feb 2013 17:32:38 -0500

As China continues its leadership transition next week at the National People’s Congress, many are wondering how the country will confront its pressing environmental, climate, and energy challenges. On Friday, March 1 at 9 a.m. EST, WRI’s ChinaFAQs network will bring together leading experts for a press teleconference to discuss these issues.

China’s new leaders have declared that making “ecological progress” will be a priority. However, in recent weeks, environmental challenges—including pollution, air quality, water scarcity, and greenhouse gas emissions—have all been in the headlines.

Experts will discuss what to watch for in China’s energy mix and new policies, including a potential carbon tax. They will also discuss implications of the government’s restructuring of energy and environmental authorities, and opportunities for U.S.-China collaboration on clean energy.

The call is being hosted by ChinaFAQs, a network of independent, U.S.-China experts assembled to provide insights and analysis around climate and energy issues in China.

LISTEN TO THE RECORDING:

WHAT:
Press teleconference on China’s leadership transition and energy and sustainability issues

WHO:
Melanie Hart, Policy Analyst, Center for American Progress
Ailun Yang, Senior Associate, World Resources Institute
Julio Friedmann, Chief Energy Technologist, Lawrence Livermore National Laboratory, and Technical Program Manager for the US-China Clean Energy Research Center for Advanced Coal Technology

WHEN:
Friday, March 1, 2013

TIME:
9:00 a.m. EST

CALL-IN:
US (Toll-Free): 866-803-2143
US/Int’l (Toll): +1 (210) 795-1098
CHINA: + 86-400-810-4773

ACCESS CODE: “WRI”

RSVP to lzelin@wri.org

RELEASE: New Report Presents Pathway for U.S. to Reach 17 Percent Emissions Target

Michael Oko — Wed, 06 Feb 2013 00:10:44 -0500

Analysis finds U.S. is currently not on track to reach its 17% target, but has the tools to get there <!–break–>

New analysis by the World Resources Institute finds that the United States is currently not on track to reach its stated goal of reducing greenhouse gas emissions by 17 percent by 2020 (below 2005 levels), but it has the tools to get there. The new report, “Can the U.S. Get There from Here?” explores specific steps the Administration and states can take to reduce U.S. emissions, without Congressional action.

“President Obama has put tackling climate change high on his agenda. Our analysis shows that with strong leadership and ambitious action the Administration can make a significant dent in U.S. emissions,” said Dr. Andrew Steer, President, World Resources Institute. “Meeting the 17 percent target would signal that the U.S. is serious about climate change at home and would enhance U.S. leadership on the international stage.”

The analysis finds that the Administration has the opportunity to move forward in four key areas:

Implementing strong standards for carbon dioxide pollution from existing power plants;
Reducing non-energy sources of emissions, including hydrofluorocarbons (HFCs), which are commonly found in refrigerators and air conditioners;
Limiting methane emissions from natural gas production; and
Increasing energy efficiency from industry and home appliances.

“The Administration has multiple ways to move forward with smart policies to reduce U.S. emissions. The best opportunity is to enact new standards for existing power plants, which represent one-third of all U.S. emissions,” said Nicholas Bianco, Senior Associate, WRI, and the lead author of the report. “The Administration has the ability to put the U.S. on track to meet its commitments, and can do so in a cost-effective and efficient manner.”

The report also finds that states can take meaningful action and can use their authority to supplement federal actions. Twenty-nine U.S. states have renewable energy standards and 20 have energy efficiency standards. Some states are moving forward with ambitious climate policies. For example, California just launched a cap-and-trade program that will cover 85 percent of the state’s emissions. California also has a target to produce 33 percent of its electricity from renewable sources by 2020. On the East Coast, nine states have capped emissions from the power sector through the Regional Greenhouse Gas Initiative (RGGI).

While meeting the 17 percent target is achievable, scientific authorities have found that it will take deeper reductions to avoid the worst consequences of climate change. Reaching the longer-term goals will likely take additional action from Congress. In the meantime, there is much more the Administration can do to reduce U.S. emissions.

“In meeting its goal, the U.S. can join the global community in taking on the climate crisis. Reducing emissions will benefit U.S. citizens and encourage other countries to make greater reductions,” said Dr. Steer. “It’s clear that the longer the U.S. waits, the harder – and more expensive – it will be. The Administration has the tools. We look forward to seeing what steps they take to shift the country to a low-carbon pathway.”

NOTE: The full report can be found here.

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ADVISORY: WRI's Stories to Watch 2013

James Anderson — Thu, 20 Dec 2012 14:03:26 -0500

WRI will host its 10th annual Stories to Watch event on Tuesday, January 15, 2013, at the National Press Club in Washington, D.C. Dr. Andrew Steer, WRI’s President & CEO, will present insights into the big environmental and international development trends and events that will affect people and the planet in 2013.

Topics will likely include: What will the Obama Administration do to address climate and energy? How will China’s new leadership advance its goal of “ecological progress”? What countries will emerge on the forefront of sustainability? And, how will financial constraints impact businesses seeking to shift to a more sustainable pathway?

A continental breakfast will be served.

WHAT
World Resources Institute’s Stories to Watch 2013

WHO
Dr. Andrew Steer, President & CEO, World Resources Institute.

Dr. Steer is a leading expert on economic development and environmental issues. He has three decades of experience working on international development and on the front lines in Asia and Africa, and at a senior level in international policy roles.

WHERE
National Press Club
Holeman Lounge
529 14th Street, NW
Washington, D.C. 20045

CALL-IN INFO
USA (Toll Free): (866) 803-2143
International (Toll): + 1 (210) 795-1098

Access code: “WRI”

WHEN
Tuesday, January 15, 2013
9:00 - 10:30 a.m. ET

Use #STW2013 on Twitter.

RSVP required to press@wri.org

Global Coal Risk Assessment: Data Analysis and Market Research

Sarah Parsons — Mon, 19 Nov 2012 11:42:09 -0500

Key Findings

According to IEA estimates, global coal consumption reached 7,238 million tonnes in 2010. China accounted for 46 percent of consumption, followed by the United States (13 percent), and India (9 percent).
According to WRI’s estimates, 1,199 new coal-fired plants, with a total installed capacity of 1,401,278 megawatts (MW), are being proposed globally. These projects are spread across 59 countries. China and India together account for 76 percent of the proposed new coal power capacities.
New coal-fired plants have been proposed in 10 developing countries: Cambodia, Dominican Republic, Guatemala, Laos, Morocco, Namibia, Oman, Senegal, Sri Lanka, and Uzbekistan. Currently, there is limited or no capacity for domestic coal production in any of these countries.
Our analysis found that 483 power companies have proposed new coal-fired plants. With 66 proposed projects, Huaneng (Chinese) has proposed the most, followed by Guodian (Chinese), and NTPC (Indian).
The “Big Five” Chinese power companies (Datang, Huaneng, Guodian, Huadian, and China Power Investment) are the world’s biggest coal-fired power producers, and are among the top developers of proposed new coal-fired plants.
State-owned power companies play a dominant role in proposing new coal-fired plant projects in China, Turkey, Indonesia, Vietnam, South Africa, Czech Republic and many other countries.
Chinese, German, and Indian power companies are notably increasingly active in transnational coal-fired project development.
According to IEA estimates, the global coal trade rose by 13.4 percent in 2010, reaching 1,083 million tonnes.
The demands of the global coal trade have shifted from the Atlantic market (driven by Germany, the United Kingdom, France and the United States) to the Pacific market (driven by Japan, China, South Korea, India and Taiwan). In response to this trend, many new infrastructure development projects have been proposed.
Motivated by the growing Pacific market, Australia is proposing to increase new mine and new port capacity up to 900 million tonnes per annum (Mtpa) — three times its current coal export capacity.

ADVISORY: Teleconference on China's Leadership Transition and Implications for Energy and Climate

Michael Oko — Wed, 10 Oct 2012 18:03:10 -0400

The full audio of the press call is available below.

As China’s government prepares for a leadership change in November, many people are wondering what this will mean for key issues, including energy and climate.

The World Resources Institute has gathered leading experts from think tanks and academia to discuss the implications of China’s upcoming transition for U.S.-China relations, clean energy, coal, climate change, and more. They will also put these issues in context for U.S. policymakers.

The speakers are part of ChinaFAQs (www.ChinaFAQs.org), a WRI-led network of independent China experts assembled to provide insight and analysis for U.S. policymakers around climate and energy issues.

The press teleconference is timed with a briefing the same day on Capitol Hill called, “Why China Is Acting on Clean Energy” (Russell Senate Office Building, Room 385; 11:00 a.m. – 12:30 p.m.).

The full audio of the press call is attached. Speakers start at 5:05.

WHAT
Press teleconference on energy and climate issues related to China’s leadership transition

WHO
Joanna Lewis, assistant professor of Science, Technology and International Affairs (STIA), Georgetown University’s Edmund A. Walsh School of Foreign Service

Kenneth Lieberthal, senior fellow, Foreign Policy and Global Economy and Development at Brookings

Deborah Seligsohn, senior advisor, Climate and Energy Program, World Resources Institute

Ailun Yang, senior associate, Climate and Energy Program, World Resources Institute

WHEN
Friday, October 12, 2012

9:30 a.m. EST (DC time)

CALL-IN
U.S. Toll Free: (866) 803-2143
U.S. International Toll: +1 (210) 795-1098
China Toll Free A: 10800-712-1320
China Toll Free B: 10800-120-1320

Access Code: WRI

For more information, contact Michael Oko, Tel. (202) 729-7684; Cel. (202) 246-9269; moko@wri.org

Fact Sheet: U.S. Electricity Markets Increasingly Favor Alternatives to Coal

Kevin Lustig — Mon, 23 Apr 2012 15:20:35 -0400

The U.S. electric power system is gradually shifting toward cleaner forms of generation. One sign of this transition is the declining use of coal for electric power production.

In 2011, use of coal for U.S. power generation dropped to its lowest level in more than a decade, according to the federal government’s independent U.S. Energy Information Administration (EIA). In fact, the EIA reported1 earlier in 2012 that coal’s share of total U.S. electric power generation dropped below 40% for the last two months of 2011, the lowest level since 1978.

To understand the cause of this decline, it is important to examine contributing market forces. Doing so provides important context for recent coal plant retirement announcements, particularly given that some companies have attributed retirements to EPA rules that are still years away from going into force. For example, FirstEnergy Corp. announced in late January 20122 that it would retire several of its smaller coal-fired power plants, explaining that the decision was “based on the U.S. Environmental Protection Agency Mercury and Air Toxics Standards (MATS), which were recently finalized, and other environmental regulations.” FirstEnergy, however, had previously cited a range of reasons3 for its decision to reduce operations at many of its smaller coal plants.

Furthermore, available evidence does not support the notion that regulations are the primary driver behind recent coal plant retirement announcements. These business decisions4 are heavily influenced by such market forces as lower natural gas prices, declining growth in electricity demand, rising coal prices, and increased cost-competitiveness of renewables.

Download the fact sheet to keep reading and see full citations.

ADVISORY: Press Teleconference: Launch of Online Almanac of U.S. Midwest Energy

James Anderson — Mon, 23 Apr 2012 10:08:02 -0400

National and regional energy experts will team up to launch the Power Almanac of the American Midwest, a dynamic online platform to support decision-makers and analysts in the region. Drawing on more than 50 sources, the Power Almanac will be the most comprehensive online resource for energy data in the Midwest.

The Power Almanac of the American Midwest can now be found online: www.wri.org/midwest-almanac

On the call, experts will discuss the energy challenges in the region and explain how the Power Almanac can assist in responding to a range of regional and state-level energy initiatives.

The Midwest is home to a diverse mix of energy resources, including significant generation from coal, natural gas, and nuclear power, as well as a growing renewable energy sector. However, this mix is subject to change with shifting relative costs, aging power plants, and new state and federal standards.

States included in the Power Almanac are Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.

WHAT

Press call to launch the online Power Almanac of the American Midwest

WHO

Nicholas Bianco, Senior Associate, World Resources Institute

Bill Grant, Deputy Commissioner, Minnesota Department of Commerce

Rolf Nordstrom, Executive Director, Great Plains Institute

Doug Scott, Chairman, Illinois Commerce Commission

The presentations will be followed by a Q&A session.

WHEN

Thursday, April 26, 2012

11:00 a.m. EDT//10:00 a.m. CDT

CALL-IN

(888) 455-0064 (Toll Free); or

(212) 519-0819 (U.S. and International)

Access Code: WRI

For more information, contact: Michael Oko; email: moko@wri.org; tel. (202) 729-7684; or Mike Niles; email: nmiles@gpisd.net; tel. (612) 278-7159

Power Almanac of the American Midwest

Kevin Lustig — Wed, 21 Mar 2012 14:07:40 -0400

STATEMENT: EPA Issues Standards to Control Mercury and Other Air Toxins

Michael Oko — Wed, 21 Dec 2011 12:21:59 -0500

The U.S. Environmental Protection Agency issued today the first national standards to control mercury and other toxic air pollutants from coal-fired power plants. These standards follow from the bi-partisan 1990 Clean Air Act Amendments that mandated that EPA require control of toxic air pollutants including mercury.

Following is statement by Kevin Kennedy, U.S. Climate Director, World Resources Institute:

“Just in time for the holidays, the EPA has taken a big step toward protecting people and the environment with the release of new mercury standards for power plants. This announcement demonstrates a balanced and responsible approach by the EPA, which has developed these standards through a lengthy, deliberate process involving many stakeholders.

“In fact, these standards have been in development for over 20 years. Many plants are already meeting the standards, and 11 of the 15 largest coal utilities have already informed their shareholders that they are well positioned to comply with them.

“Furthermore, these standards are achievable using current technology and provide sufficient flexibility to protect electric system reliability. While some older coal plants may be pushed toward retirement, this will help expedite a shift to newer and more efficient plants, or other alternate energy sources.

“EPA has taken a significant step toward cleaner air, and we hope to see more progress to protect public health from air pollutants, including greenhouse gases, in the coming year.”

- END -

Read WRI’s analysis of the new mercury rules, here and here.

Low-Carbon Energy Technology

Kevin Lustig — Mon, 13 Jun 2011 15:37:59 -0400

The engine of economic growth around the globe has traditionally run on fossil fuels. However, a wide variety of technologies now provide opportunities for tremendous growth while reducing the risk to our climate. WRI informs efforts to employ an effective mix of policy, economic mechanisms, and international cooperation to spur the global energy transformation yielding low-cost, safe, and reliable low carbon energy solutions.

Use these links to explore WRI’s work on low-carbon energy technology:

WRI Statement on Energy Production and Human Health

Michael Oko — Tue, 10 May 2011 15:47:57 -0400

The following statement was released today by the World Resources Institute (WRI) in response to a press statement by Peabody Energy:

“In a press statement today, Peabody Energy falsely attributes a conclusion to the World Resources Institute. The incorrect reference is likely drawn from information found on a blog post by the “World Climate Report,” which is not affiliated with WRI.

“The press statement asserts that “the World Resources Institute found that for every 10-fold increase in per-capita energy use, individuals live 10 years longer.” First, WRI has never made such an assertion and has never done analysis to that effect. Second, this conclusion ignores critical factors related to energy production and human health.

“WRI’s long standing support for a global transition to cleaner, low-carbon energy is well-documented. WRI does not support Peabody’s press statement or the related conclusions drawn from this data.”

UPDATE: As of May 12, 2011, Peabody Energy removed the press statement in question from their website.

Who Pays for Carbon Dioxide Capture and Storage (CCS) Demonstrations in Developing Countries?

Francisco Almendra — Thu, 21 Apr 2011 12:57:35 -0400

On April 7th, a group of 24 Energy Ministers met in Abu Dhabi for the 2nd Clean Energy Ministerial (CEM). The group represented the governments of countries collectively responsible for over 80% of global energy consumption, and together they agreed to increase efforts to deploy carbon dioxide capture and storage (CCS) on a commercial scale worldwide.

In addition to this general agreement, the governments of Australia, Canada, France, Germany, Japan, Mexico, Norway, Republic of Korea, South Africa, the United Arab Emirates, the United States and the United Kingdom agreed to initiate one or more concrete actions on CCS before the next Clean Energy Ministerial, which will be hosted next year in London. This announcement may provide a major boost to CCS technology, if countries can find a way to finance such projects.

The agreement came in the wake of recommendations set forth by the Carbon Capture Use and Storage (CCUS) Action Group—led by the United Kingdom and Australia and composed of 13 governments and 14 international institutions, including WRI—which included the need to identify and advance appropriate funding mechanisms to support the demonstration of large-scale CCS projects in developing economies.

Cost Barriers in Developing Countries

In its 2009 CCS Roadmap, the International Energy Agency estimated that that 3,400 CCS projects will be needed by 2050 to meet the global climate change mitigation challenge and two-thirds of them will need to be implemented in developing countries. However, CCS development in a non-OECD context has been slow to start, especially when it comes to large-scale (greater than1 million tons of CO2 per year) demonstration projects.

One of the main barriers to CCS demonstrations in developing countries is their significant cost— developing countries often do not have enough resources at their disposal to fund a robust CCS demonstration program by themselves. WRI sees the need to develop effective financing strategies to enable the implementation of CCS demonstration projects worldwide. CCS demonstration projects are one of the key ways to assess if the technology works and its potential to be part of the solutions portfolio against global climate change going forward.

Financing Options

The decision in the Clean Energy Ministerial is a step in the right direction, although more significant action needs to occur. The lack of funding for CCS development in developing countries is part of a broader challenge to finance CCS demonstrations and provide incentives for early deployments worldwide. The challenge is to deliver on this commitment made at the Ministerial, and structure one or more financing mechanisms that will be able to support CCS demonstration projects by providing seed capital and leveraging co-financing from other public and private sources.

WRI work on CCS is not designed to endorse the technology, but rather to explore whether and how society might safely move forward with CCS projects as part of a broad climate mitigation strategy. While WRI does not advocate or oppose the development of CCS, it does proactively engage with governments, international institutions, and businesses on this emerging technology. In this spirit, WRI joined the CCUS Action Group to ensure health, safety, and environmental integrity principles were upheld in the Group’s recommendations to the Clean Energy Ministerial.

In October 2010, WRI led a workshop with CCUS Action Group members to discuss financing options for CCS in developing countries. Representatives from the governments of Australia, Canada, Norway, Scotland, the United Kingdom, and the United States, as well as participants from the Asian Development Bank, the Clinton Foundation, the Global CCS Institute, and the World Bank attended. Drawing from these discussions, WRI just released a working paper highlighting priorities for funding CCS demonstration projects in developing countries. The paper supports and details the rationale behind the CCUS Action Group’s recommendation to provide additional support from developed countries to implement CCS demonstrations in developing countries.

The CCUS Action Group recommendations included the following specific actions relevant to financing CCS:

Funding mechanism: Request an international CCS body such as the Carbon Sequestration Leadership Forum (CSLF) or Global CCS Institute to recommend a preferred funding mechanism for projects in developing countries. Work to establish a preferred funding mechanism and a process for project solicitation and support in developing countries.
Carbon credits and finance: Support and encourage the UNFCCC work program in 2011 on CCS in the Clean Development Mechanism (CDM) to seek agreement on its inclusion in the December 2011 COP-17 talks in Durban. Support and encourage CCS in other UNFCCC processes, including but not limited to the Global Climate Fund.
Support from multilateral development banks: Urge multilateral development banks to support CCS as an effective low emission technology in developing countries and to introduce mechanisms to address institutional and financial barriers.

Progress on all three fronts will be needed for effective implementation of CCS projects in developing countries in order to move forward on answering the key questions in CCS development and deployment. It is unlikely that any of these three channels will on their own have the necessary scale and delivery conditions to fund CCS demonstrations; however, by complementing each other, there is a good chance that enough momentum can be generated to get CCS demonstrations up and running globally. In turn, the learning generated from these demonstrations will enable non-OECD countries to better gauge the potential of the technology for their local context.

WRI Summary of S. 699: Department of Energy Carbon Capture and Sequestration Program Amendments Act of 2011

Sarah Forbes — Mon, 18 Apr 2011 15:30:36 -0400

S.699 authorizes the Department of Energy to conduct a program to demonstrate commercial application of integrated geologic storage projects, and provides a framework for selection criteria for these demonstrations. Importantly, the bill addresses the long term-stewardship challenges associated with demonstration, including site closure requirements and liability protection.

Overview of Bill

Authorizes the Department of Energy to conduct up to 10 commercial scale demonstrations of geological storage. The bill states that such demonstrations should inject over 1 million tons of carbon dioxide each year from an industrial source for a period of 10 years. These demonstrations would be selected competitively and awarded as cooperative agreements by DOE.
Requires sufficient geologic information to prove that the storage will be safe and permanent. The bill specifies that project selection be based on geological site information, including characteristics of the storage reservoir, identification of potential leakage pathways and a plan for measurement, monitoring and verification during and after injection. The bill also requires that, prior to selection, project operators demonstrate their ability to obtain necessary environmental permits.
Provides liability protection and Federal indemnity for these demonstration projects. The bill authorizes the Secretary of Energy to indemnify projects for personal, property and environmental damages that might be above what is covered by insurance or other financial assurance measures; with the exception of liability that is caused by gross negligence or intentional misconduct. The bill also authorizes the Secretary of Energy to collect fees from operators receiving indemnification and limits the amount of indemnification to $10 billion collectively for all applicable projects. Upon receiving the closure certificate, the site may be turned over to the Federal government for long-term site management and ownership.
Addresses need for proving legal property rights. The bill requires proof of possessing land or land interests for injection, storage, monitoring and closure prior to project selection.
Requires compliance with existing relevant laws for environmental protection. The bill requires compliance with applicable existing regulations for well construction and operation.
Ensures that operators maintain financial assurances. The bill requires that project operators maintain financial assurances after injection until the Secretary of Energy issues a certificate of closure.
Requires the operator to remediate any leaks. The bill requires remediation of any carbon dioxide leaks that might pose danger to human health or natural resources.
Outlines criteria for site closure certification. The bill provides details on requirements for long-term monitoring, including monitoring for at least 10 years after operations cease and the injected carbon dioxide stabilizes. Proof of certification includes demonstration of five criteria:

location and extent of the project footprint (injected and displaced fluid)
pressure in the injection zone is not increasing
no leakage of injected or displaced fluid that would endanger public health, drinking water or natural resources
the injected or displaced fluids are not expected to migrate in the future in a manner that would encounter a leakage pathway
the injection wells at the site are plugged and abandoned in accordance with applicable laws

Includes provisions for siting the demonstrations on public land. The bill authorizes the siting of a demonstration on public land, with the potential transfer of property rights, jurisdiction, and responsibility for long-term monitoring to another Federal Agency (such as the Department of Energy).
Establishes a training program for state regulators. The bill establishes and authorizes funding appropriations for a training program for state agencies involved in permitting, and oversight of carbon capture and storage demonstrations.

For additional information please contact Sarah Forbes, Senior Associate, WRI Climate and Energy Program, at sforbes@wri.org or at (202) 729-7714

CCS Demonstration in Developing Countries: Priorities for a Financing Mechanism for Carbon Dioxide Capture and Storage

Maggie Barron — Mon, 04 Apr 2011 10:54:35 -0400

Executive Summary

Climate Change and CCS

In facing the challenge of mitigating global climate change, world leaders have acknowledged that no single solution exists, and therefore, a portfolio of carbon dioxide (CO2) reduction technologies and methods will be needed to successfully confront rising emissions. Due to their dependency on fossil fuels, the energy supply and industrial sectors are the greatest contributors to CO2 emissions, accounting for 25.9 percent and 19.4 percent of the total respectively.

In addition to efficiency improvements and enhancing clean energy use, one key option for limiting future CO2 emissions from fossil fuel energy use is carbon dioxide capture and storage (CCS). CCS is a suite of technologies integrated to capture and transport CO2 from major point sources to a storage site where the CO2 is injected down wells and then permanently trapped in porous geological formations deep below the surface. Candidates for CCS technology include fossil fuel power plants; steel, cement, and fertilizer factories; and other industrial facilities.

CCS in Developing Countries

Despite often-aggressive programs to promote energy efficiency and deploy nuclear, renewable, and other low-carbon energy sources, many developing countries will still rely heavily on fossil fuel energy to power their development for decades to come. There is therefore a need for developing countries to create strategies that address fossil fuel emissions in a way that minimizes the costs of doing so, and consequently minimizes impacts to their national development goals.

CCS is currently the only near-commercial technology proven to directly disassociate CO2 emissions from fossil fuel use at scale. Its deployment could potentially allow developing countries to gradually shift away from fossil fuels for energy and industrial needs with relatively little disruption to their long-term development strategies. If deployed as an interim measure, it could allow time for other alternative low-carbon technologies to be developed and deployed, permitting fossil fuels to be gradually phased out. This strategy could assist developing countries to transition to a low-carbon economy in the next 15–50 years.

While CCS is potentially attractive to some developing countries, there has been limited development of demonstration projects in Africa, Asia, or Latin America due mainly to their high cost in the absence of expected profits or significant carbon financing. The International Energy Agency (IEA) estimates the total cost for a new average-sized coal-fired power plant that captures up to 90 percent of its CO2 emissions to be US$1 billion over 10 years.

Existing financing for CCS is grossly insufficient to enable demonstration projects in developing countries. The few available funds are either spread over the full array of low-carbon technologies, or fall short of the magnitude or the mandate needed to propel commercial-scale CCS demonstrations forward. Current carbon offset mechanisms are not sufficient to spur CCS deployment in developing countries in today’s context either. Overall, existing CCS financing mechanisms help grow capacity, but their support is insufficient to leverage enough funding from capital markets to implement projects in a non-OECD context.

The IEA CCS Roadmap proposes 50 CCS projects in developing countries in the next 10 to 20 years. As well as reducing the developing world’s greenhouse gas emissions, accelerating CCS demonstration efforts in non-OECD countries can likely also improve technologies, increase efficiency, reduce uncertainty and risk, and initiate learning-by-doing at a lower cost than would be possible in OECD countries. The captured benefits from doing so will be more significant the sooner acceleration in CCS development in developing countries begins.

About this Paper: Topics of Discussion for Financing CCS in Developing Countries

This paper seeks to promote the effective deployment of CCS demonstration projects in developing countries. Aimed at international policymakers and agencies engaged in CCS funding and deployment negotiations and discussions, the paper explores some of the key issues emerging around this critically important topic, and it presents a series of options and recommendations to international policymakers. WRI’s aim is to assist the initial design of an effective approach for financing CCS demonstration projects in developing countries over the next 10 years. Below is a summary of the key topics and options explored in the paper.

Topic 1: Aims of Financing CCS Demonstrations in Developing Countries

The main goal for developed countries to provide financing for early-stage CCS demonstrations in developing countries should be to support non-OECD countries in fulfilling their share in global climate change mitigation efforts.
A financing mechanism for CCS in developing countries should aim to foster tangible CO2 emission reductions through a clear focus on storage goals. The level of ambition for CO2 storage should support current CCS deployment requirements in developing countries. While it is impossible to objectively ascertain what proportion of this total a dedicated OECD country–funded CCS financing mechanism should support, it is evident that developing countries will need support for a significant share of these projects.
Implementing CCS demonstrations that lead to the storage of 45–60 million tons carbon dioxide (MtCO2) over 10 years could significantly spur the research and deployment rates needed for CCS development to take off in developing countries.

Topic 2: Eligible Costs for Financing

Most CCS demonstration projects will operate in conjunction with new or existing power plants or industrial facilities that may also function without the technology. Funding for CCS demonstrations can therefore be structured around whole projects—including the non-CCS components of the facility under consideration—or just the specific CCS components that would enable the facility to effectively capture and store its carbon dioxide emissions.
Funding should only be eligible to finance incremental costs incurred as a result of CO2 capture, transport, and storage efforts—not the full cost of the project.

Topic 3: Project Eligibility Criteria

Project objectives: Finance should be primarily directed toward projects that either actively store CO2 or directly provide the basis for near-future CO2 storage locally, avoiding duplication with other existing funding mechanisms.
Project scales and types: To maximize both near-term and future storage, eligible project types should cover geological site characterization and integrated CCS projects, both at the pilot and commercial demonstration scales.
Project sectors: CCS projects in fossil fuel power plants are likely to be the largest recipients of funding. However, some industrial CO2 sources may present advantages that could facilitate timely and cost-effective development of CCS projects in developing countries. “Low-hanging fruit” projects in industrial facilities with high-purity CO2 streams can advance infrastructure and technologic know-how in developing countries at a fraction of the cost of implementing CCS at a power plant. Funding criteria should therefore not discriminate against industrial sources of CO2.
EOR and other CCUS projects: Enhanced oil recovery (EOR) and other carbon capture, usage and storage (CCUS) projects have multiple advantages for early CCS development and can result in the net storage of CO2, warranting their inclusion in financing opportunities. However, awarding of CCS financing to CCUS projects should occur only where projects are managed and monitored with the aim of permanent CO2 storage.
Additional project requirements: Funding criteria should stipulate that awarded projects employ sound procedures for CCS site selection, operation, and stewardship. Site selection must be based on specific geologic characteristics. Awarded projects must also have monitoring plans in place for both the operational and the post-closure stewardship phase and ideally demonstrate local government support and local community buy-in.

Topic 4: Project Selection Process

In order to make the selection process as equitable and objective as possible while maximizing CCS deployment goals, projects that meet funding demonstration objectives should be awarded on a competitive basis under a points-based system to judge applications. Such system should reward, among other factors, storage efficiency, geographic diversity, and contribution to wider CCS advancement in developing countries.
The selection system should also favor improving knowledge of storage opportunities through projects implemented in deep saline formations, since they represent the largest knowledge gap and the largest storage potential in the future.

Topic 5: Financing Mechanism Characteristics

Significant attention has been focused on creating an international public fund solely dedicated to CCS, or a CCS window within a larger fund that may also finance other pre-commercial, low-carbon technologies in developing countries. Additional research is needed to ascertain the pros and cons of different structures in a developing country environment. However, there are several advantages of adopting a CCS-only mechanism for the early demonstration phase, instead of having CCS in direct competition with other technologies for the same pool of funds.
In order to meet the IEA-recommended storage goal of 45–60 million tons of CO2 in 10 years, a CCS fund needs to be able to invest or leverage total investments of US$5– 8 billion and have the capacity to disburse its resources effectively over the same period.
A CCS fund should employ strong early-mover and CO2 storage incentive provisions to leverage its goals. A 10-year storage incentive on a rising scale could be applied to ensure project operators act to permanently reduce emissions.

Q&A: Energy, Water, and China's Economy

Zou Ji — Fri, 04 Feb 2011 11:10:00 -0500

This interview originally appeared on the Asia Water Project: China website and is reposted with permission.

Energy and water constraints have emerged as critical sustainability issues for China’s economy – particularly if the country is to continue to see significant GDP growth and provide the estimated 10 million jobs needed annually. Asia Water Project recently posed questions about the water-energy nexus to Professor Zou Ji, WRI’s China Country Director, and Lijin Zhong and Hua Wen of WRI’s China Water Team. Their responses are below:

Asia Water Project: What do you see as the essential connections between water and energy?

Lijin Zhong and Hua Wen: Energy and water are interlinked. Many power generation technologies (i) consume freshwater (e.g., nuclear and coal power stations evaporate water during the cooling process), (ii) change freshwater temperature or flows (e.g., hydropower dams adjust the timing and amount of water flows), and (iii) produce large quantities of wastewater.

Many measures for addressing freshwater scarcity such as water pumping, long-distance piping, and desalinization rely upon energy for their operation. Depending on the fuel used, this energy consumption can contribute to climate change - which in turn can exacerbate freshwater scarcity - and put additional pressure on the country’s energy security.

National energy policies often do not fully consider or reflect their implications on freshwater consumption. Likewise, policies for improving freshwater availability often do not consider their implications on energy use (and the associated greenhouse gas emissions). Failure to incorporate both the water and climate implications of energy and water policy can lead to approaches that work at cross purposes or that lead to unsustainable outcomes (e.g., energy investments that exacerbate freshwater scarcity in selected watersheds).

Zou Ji: Another context is urban water or water treatment and supply. There are strong energy implications in terms of transporting and treating water for consumption, especially in the context of rapid urbanization. Increasing population in cities means increasing demand for water supply and for wastewater treatment. This means increasing energy demand. The two are closely linked.

AWP: The government will soon announce its 12th 5-year plan. What are the water targets contained therein?

LZ&HW: The Chinese government will announce its 12th Five Year Plan in March 2011. To date the CPC Central Committee has issued a proposal on formulating the plan, which contains guidance, but no specific targets. Those will most likely not be announced until March. However, we have indications on the policy direction.

China sets water targets every five years in the same way that it sets energy intensity targets. The 11th Five Year Plan (2006-2010) set binding targets to reduce water consumption per unit of industrial added value by 30 percent and to reduce water pollutant discharge measured as “COD” (Chemical Oxygen Demand) by 10 percent. In addition, China set an indicative target to increase irrigation efficiency. For the coming 12th Five Year Plan, a new indicator, a load limit for ammonia nitrogen, will be added as a mandatory water quality target.

Under the framework of the national Five Year Plan, each ministry will develop a sectoral plan with detailed goals and supporting actions. Regarding water resources, the Ministry of Water Resources (MWR), together with the National Development and Reform Commission (NDRC) and the Ministry of Housing and Urban-Rural Development (mohurd), are currently working on the 12th Five Year Plan for Building a Water Saving Society. Major water-dependent industries, including thermoelectric, petrochemical, and iron and steel, will be required to achieve higher water efficiency levels. We do not know yet what the targets will be, but in the previous plan, the power sector was required to improve water efficiency by 10 percent.

AWP: What are the implications for energy consumption of these targets?

ZJ: There are two different implications – one to save energy, the other to use energy. With the target to control discharge of pollution we need energy to build and operate waste treatment – these are both energy consuming. So to reach water targets, we need to consume energy and this increases energy demand.

On the other hand, if we can use recycled water, this can imply saving energy. If you bring water from far sources this requires energy, but using recycled water from nearby sources clearly is a better solution in terms of energy use. For now, we do not know the net implications. Assumptions are, though, that for cleaner water we will use more energy.

LZ&HW: So to meet the water quality targets, treatment rates for both industrial wastewater and municipal sewage will increase, which could increase energy consumption in this sector.

Water use efficiency targets, on the other hand, could be achieved through improved water management and water conservation technologies. Management measures do not necessarily increase energy consumption. However, some of the low-water technologies, such as dry-cooling and hybrid cooling used in the power sector, have a relatively high “energy penalty,” increasing overall energy demand.

AWP: What do you see as the trade-offs between water usage and the need for energy?

LZ&HW: The power sector is among the most water-intensive industries. Some power-generating technologies such as hydroelectric, geothermal, and concentrating solar power (CSP) have low greenhouse gas emissions but high levels of water consumption, while conventional coal-fired technologies have modest water usage but very high greenhouse gas impacts. For example CSP consumes 3-3.5 m3/MWh of water while a subcritical coal plant with a closed-loop cooling system only consumes around 1.6m3/MWh. Some alternatives, such as solar PV and wind power, can reduce onsite GHG emissions and water consumption to zero but are less economically competitive in the near term.

However, “negawatt” measures, those that reduce the need for electricity generation in the first place (such as energy-efficient buildings and appliances) not only save money and reduce GHG emissions, but also eliminate the corresponding water use.

ZJ: There is a trade off but recent technology progress also shows how to break the link between the two. In Northern China, many power plants have started employing air cooling technology that substitutes water for cooling. The other possibility is to use more efficient power generators, grids and pumps for water transport in cities. In the short term, the linkage between water and energy will remain but in the longer term it depends on technological change. This will involve looking at what we can do to fund better technology, introduce incentives and encourage new policies.

AWP: While aware of the need to diversify its energy sources and reduce greenhouse gas emissions, it seems China is starting to realize that alternatives to coal are running up against water limits as well. What are some of the issues here?

China has an ambitious target to expand total energy use, and this needs complimentary water supply regardless of the energy source.

ZJ: There are several issues here related to the water-energy nexus. Let’s start from Concentrating Solar Power (CSP), which also needs water to produce, to store and, transform the energy into vapor. So for some specific solar technologies you need a lot of water. Nuclear power needs a lot of water for cooling. China has an ambitious target to expand total energy use and this needs complimentary water supply regardless of the energy source. So it doesn’t necessarily mean that when you diversify energy sources that you eliminate the water problem.

The partial answer to this is to introduce incentives – for example, correct water pricing or allocation of water quotas, which are measures we have already been using for a long time. The other is to develop water-saving technology. But this is all complicated. There are many factors to consider. If the price can reflect the real cost of energy generation that is fine but for some end users, the real cost of electricity generation and transmission is a problem. So the direction is right, these are all important to consider, but it is a matter of degree.

LZ&HW: China has the fastest growing renewable capacity of any country in the world. Wind power and solar photovoltaic (SPV) are two bright spots of the new energy economy. Water is not a bottleneck for them - on-site water use is negligible and life cycle water consumption is only 1/7 to 1/5 of the most efficient coal-based technology. Reliability and grid accessibility, rather, are obstacles for wind and SPV.

Nuclear power, on the other hand, is among the most water-intensive energy generation technologies at 2.7 m3/MWh. Various sources indicate that China will significantly expand its nuclear power capacity in the coming decade, and at least 30 GW is expected to be completed by 2015. Though all existing Chinese nuclear power plants are based in the coastal region and use sea water for cooling, proposals on building inland nuclear units have been on the rise. In fact, three Yangtze provinces, Hubei, Hunan, and Jiangxi, are reportedly competing over the first permit from the central government.

According to the Medium and Long-term Development Plan for Nuclear Power, several provinces facing water shortages (e.g., Henan and Gansu) are also on the list of potential sites. For those areas, a careful evaluation will be needed to ensure sustainable water supply for cooling, without sacrificing agricultural, human, and environmental water needs.

Likewise, some emerging and future energy generation technologies do pose a challenge for water availability. One example is CSP. Combined with thermal storage systems, this technology could be smoothly integrated into the current grid and even enhance its capacity to accommodate a larger share of variable energy sources. But solar thermal’s cooling water need is exceptionally high – considerably higher than that of nuclear (closed-loop) and almost double that of pulverized coal (PC) per unit of energy generation. Since China’s Sun Belt also overlaps with a water scarce region, water withdrawal and consumption will be a consistent challenge.

Another example is carbon dioxide capture and storage (CCS). Based on the findings from our research, current CCS technologies could capture 90 percent of carbon dioxide from a power plant’s emissions, plant-wide water consumption increases by more than 90 percent. When designing new PC plants with CCS, water availability, as well as the presence of geologic formations needed to promote secure storage, will need to be carefully evaluated.

AWP: Estimates are that an additional 350 million people will move to cities by 2030. What will this mean for energy consumption and the country’s water resources?

ZJ: A larger urban population of course means higher consumption of energy and water; new infrastructure, cleaner water and therefore more electricity use. Today’s rural population enjoys limited infrastructure and therefore uses less energy and consumes fewer resources.

Urbanization, though, is a natural course with or without a specific policy because of the income gap between urban and rural communities.

LZ&HW: Urbanization could be interpreted as a catalyst that accelerates the demand for energy and water, as urban residents consume three times as much energy and water as the rural population.

In the coming two decades, China’s total installed power generation capacity is expected to double from the current level, and coal is projected to still be the dominant energy source. Thanks to modern technologies, future coal-fired power plants will be more efficient and environmentally friendly than they are today. For example, supercritical (SC) and ultra-supercritical (USC) units and dry-cooling could reduce water consumption per unit of power generated to different extend, at a commercially feasible price. Integrated gasification combined cycle (IGCC), though more expensive today, could drastically reduce wastewater discharges and cut GHG emissions. Clean coal technology, together with renewables, can help minimize water/carbon footprint of China’s power sector.

AWP: What part does water-pricing play in the discussion of the water-energy nexus?

LZ&HW: Regarding water pricing, China is gradually shifting from government command to a market-based mechanism, which could ultimately reflect the relative scarcity of water and help address water-energy problems in the future. Over the past ten years, a number of Chinese cities have significantly increased their water price through market-based reforms, with special rates designed to help low-income consumers. Meanwhile, block pricing has been implemented to different extents and with varying degrees of success across China. After the amendment of the Chinese Water Law in 2002, all industrial and municipal water users were required to pay a water resources fee. However, the price is generally low and has not been leveraged as an economic incentive for improving water use efficiency. Current water resources fees for cooling water vary from province to province but normally range from 0.001 to 0.008 CNY/kWh for open-loop units and hydropower units (but are even lower for closed-loop units), a price that accounts for just 1-3 percent of electricity generation costs.

ZJ: In theory, water pricing matters but we also see that in Beijing municipality, the city with the highest income levels in China and where the water price has been high, water demand continues to increase.

Again, this is a matter of degree. If the price is very high then generally the end user will want to save water but this also depends on income level and awareness. Pricing is only one measure to change water demand. Command and control is the other, so planning is also important. For some cities with water stress, municipalities should avoid introducing investments that involve high water consumption. This is a matter of spatial planning for economies and cities.

AWP: The extraction, transportation, purification, and distribution of water, as well as the treatment of wastewater, are energy-intensive processes. As water issues grow, desalination will also be more firmly on the Chinese radar. Yet these all use more energy and thus more water. What do you see as the future here?

LZ&HW: It is true that desalination consumes more energy and bears a much higher price tag. However, the unit water cost of desalination is actually cheaper than that of the South-to-North Water Diversion project. Many coastal cities, including Tianjin, Qingdao, and Dalian, have integrated desalination into their middle-to-long term blueprints as an alternative water resource.

Carbon footprint of desalinization depends on the type of energy source used to power the distillation or reverse osmosis process. Lower carbon footprint could be achieved with wind, solar PV, and nuclear power. PJZ: Cities in northern China should consider looking beyond water diversion. Long transportation of water has a lot of risk in terms of water quality, the unknown ecological impact but we would need more analysis to compare the options.

AWP: What do you see as the trend in China around any reforms in water governance and potentially institutional capacity around managing water allocations among various regions and uses?

ZJ: I am not an expert in this area, but the direction should be toward stakeholder participation, with all end users, suppliers, officials, civil society involved in any decisions.

LZ&HW: Our research to date has focused on the water/greenhouse gas implications of power generation technologies. We have not tackled issues relating to water governance. However, given China’s rapid urbanization, our future interests will be centered around water/energy issues in the urban context. In many emerging middle-sized cities, a considerable amount of electricity is used to purify and transport potable water, and to treat wastewater at wastewater treatment plants. Better energy and water management will be crucial to meet this increasing demand.