10 B01 MRI Geothermal IndonesiaFSReportingMeeting

Copyright (C) Mitsubishi Research Institute, Inc. 1

Geothermal projects under the JCM scheme in Indonesia: Methodological aspects

Mitsubishi Research Institute Inc.

February, 2013

2Copyright (C) Mitsubishi Research Institute, Inc.

■Simplification of geothermal methodology

Major issues

Treatment of non-condensable gases (NCGs)

Grid electricity emission factor

Logical flowchart

Simplification of estimation

Eligibility


■Treatment of non-condensable gases (NCGs)CDM: obligation to measure CO2 and CH4 at periodic intervals.

Problems and issues:Geothermal generators do not measure CH4 (though they can measure CO2).Periodical measurement may be cumbersome.Possible simplification of NCG measurement.CO2 is commonly measured, but not all geothermal developers measure CH4Monitoring points may not be what is in line with normal geothermal operations

SolutionAllow use of default CH4 emission fraction.CO2 should be monitoredMonitoring point at between the gas-liquid separator and the power plant (interface).

Willing / mandated to monitor CH4 weight

fraction in steam

Use default CH4 weight fraction in steam

N

Y

Willing / mandated to monitor CH4 weight

fraction periodically

Conduct ex ante measurement or use the most

recent value monitored according to the

provisions of this methodology.

N

Y

There exists a national / in-house

standard in sampling and monitoring CH4

Conduct annual measurement using sampling

method ASTM-E1675

N

Y

Monitor CH4 weight fraction in steam

using the in-house standard

Flowchart for CH4 monitoring method selection


■NCG monitoring (examples of select projects)

0.000001

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d CH

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ste

am

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CH4

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CO2

and

CH4

em

issi

ons

per e

lect

rici

ty

gene

ratio

n [

eq/M

Wh]

CO2

CH4

Mass fraction of CO2 and CH4 in the produced steam: stability of values lends credibility to the argument that monitoring frequency can be reduced / simplified

Darajat (Indonesia) Amatitlan (Guatemala) LaGeo (El Salvador)

CO2 and CH4 emissions per electricity generation

0.000001

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d CH

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CH4

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ctio

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d CH

4 in

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prod

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m

CO2

CH4

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発電

量当

たり

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量　

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2eq/

MW

h

CO2

CH4

Darajat (Indonesia) Amatitlan (Guatemala) LaGeo (El Salvador)

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たり

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量 t

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q/

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h

CO2

CH4


■Monitoring pointsACM0002: requires monitoring at production wells.Could be cumbersome with geothermal plants with a large number of wells (c. 5MW/well).Ideal monitoring point could be after the steam flow from separator joined but before the rock muffler

発電機蒸気タービン

生産井No.1

還元井

セパレータ

生産井No.2

セパレータ

生産井No.3

セパレータ

デミスター

復水器冷却塔

：NCG量計測点

：蒸気流量計測点

ロックマフラー

NCG抽出システム

Rock muffler Demister

Separators

NCG sampling

Steam flow monitoring


■Grid electricity emission factorMajor issues

Coverage of wide range of technologies Credibility and environmental integritySimplicity

Not having to obtain information on individual power plants, which are difficult or confidential, especially for electricity conservation projects.

Conflicting requirementsHigh efficiency coal power plants can claim reduction only in comparison with low efficiency coal power plants.However, the same logic does not apply to renewable energy power plants (these have to be compared with the grid).There has to be a logical consistency, in order to preserve environmental integrity.

Case of IndonesiaAvailability of information in major grids.Heterogeneous grid composition

Electricity generation by fuel in Indonesia

(Source: IEA)


■Grid electricity emission factor: Logical flowchartInitial diversion according to whether the project participant is an IPP or not.

Definition of IPP may be necessary.

Same result for geothermal power plant.

Exceptions for small scale / LDCs

The emission factor is that of the grid. Factors such as off-grid generation and suppressed demand can be taken into account.

・ Can the type of generation envisaged in the project be implemented without external assistance?

Y N In the absence of the BOCM project, the proponent is likely to invest in / develop power plant using the same generation method.

In the absence of the BOCM project, the proponent is likely to invest in / develop power plant using other generation method.

The emission factor is that of the reference technology is the most common technology (among recent power plants) using the same fuel / resource in the host country. Ffactors such as off-grid generation and suppressed demand are not to be taken into account.

Is the project intermittent (e.g. wind or solar)

Y

The emission factor is the operating margin. If obtaining the data is difficult, then grid average shall be used.

N

The emission factor is that of the grid (or its proxies). Due to its reliability, the emission factor can be the build margin. If obtaining the data is difficult, then grid average shall be used.

Is the project participant an IPP?

N The power plant that is displaced by the project is identifiable.

Y The power plant that is displaced by the project is not identifiable.

IPPNon-IPP


■Grid electricity emission factor: Simplification of estimation

CDM methods: use of operating margin (OM) and build margin (BM).

OM: emission factor of electricity in the margin (excl. low-cost must-run power plants)BM: emission factor of recently built power plants.

N

Y

Y

Y Simple OM of “Tool to calculate the emission factor for an electricity system”

Can dispatch data be obtained?

Dispatch analysis of Tool to calculate the emission factor for an electricity system may be used.

Does LCMR constitute less than 50% of the generation in the grid?

Y

Is it possible to obtain data of individual power plants?

Simple adjusted OM of Tool to calculate the emission factor for an electricity system

N Average OM (similar to simple OM, but including all sources) of Tool to calculate the emission factor for an electricity system

Is it possible to obtain electricity generation and fuel consumption data of individual power plants?

Simple OM Option A1 of (obtain individual power plant’s emission factors using the power plant’s data.

Is it possible to obtain electricity generation and fuel type of individual power plants?

Simple OM Option A2 (obtain individual power plant’s emission factors using electricity generation and default efficiency and fuel data)

Is it possible to obtain electricity generation and fuel consumption for the entire grid?

Simple OM Option B adjusted: able to use efficiency default table.

N

Y

N

Y

Flowchart for operating margin estimation


■Grid electricity emission factor: Simplification of estimation

In the CDM methods, Build margin can be more problematic than the operating margin.

BM needs the data of individual power plants, including the date of construction.

Flowchart for build margin estimation

N

N

Is it possible to obtain electricity generation and fuel consumption data of individual power plants?

Calculate build margin according to the provisions of “Tool to calculate the emission factor for an electricity system”

Y

Is a total energy balance of the electricity generation sector of the country available in two different periods of time (t1, t2), separated by at least 5 years and total generation has increased by more than 20% during that time period?

Is an electricity generation plan which includes expected generation by fuel type available? Such plan must forecast generation up to the point that the total generation increases by more than 20%

Calculate build margin according to the electricity generation plan. If fuel consumption is not forecasted, use the default efficiency of annex 1 of “Tool to calculate the emission factor for an electricity system”

Y

Calculate simplified build margin as the weighted average emissions factor of the incremental electricity generation. If fuel consumption is not forecasted, use the default efficiency of annex 1 of “Tool to calculate the emission factor for an electricity system”

Y

Use the average OM

N


■Application to IndonesiaKey assumptions:

Electricity generation of about 1,734,400/yr,

Emission factor of the grid: 0.749t-CO2/MWh (Indonesian government data)

NCG: 0.0361t-CO2/MWh

Fuel consumption: zero

this results in an emission reduction of about 1.24Mt-CO2/yr

If Build margin is used as the grid emission factor, the ER is 910,000t-CO2

NCG emission from geothermal power plants

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

AMA DAR LAG SAJ LIH OLK3 OLK2

CDM Geothermal plants

NC

G-re

late

d em

issi

ons

(t-C

O2e/M

Wh)

CH4

CO2


■EligibilityCDM: eligibility is determined on the project-specific analysis of additionality.

This may enable identification of whether the project differs from the baseline.However, the process can be time – consuming (though the time has been reduced considerably).

JCM: a simple “positive list” is favoured.Existence of methodology=additionality/eligibility of projectsThe issue is what are the criteria to include a project in the “positive list”.Case study Indonesia

Proportion of (geothermal) generation in the grid (low proportion may mean high eligibility)... Currently about 6% (8300/140000GWh)Proportion of (geothermal) generation in relation to its economic potential (low utilization rate may mean high eligibility) Currently about 4% (1000/27,000MW)

Average time from start comment until registration

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ep/0

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ep/0

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ov/0

6Ja

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ep/0

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ep/1

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Day

s

Source: UNEP Risoe CDM Pipeline

0

50,000

100,000

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200,000

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019G

enera

tion（G

Wｈ

）0

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1000

Grid

EF（

kg-C

O2/M

Wh）

Geoth

Hydro

Gas

LNG

LFO

HFO

Coal

Grid EF

Source: Long Term Electricity Development Plan 2010-2019, RUPTL


■Possible expansion of the grid electricity emission factor estimation.

Inclusion of offgrid components.If the grid electricity is not sufficient, the deficiency may be supplemented by off-grid electricity, which may have a high emission factor.

Drawbacks: Difficult to estimate the extent of offgrid.

Impact of offgrid assumed to be generally minor, in view of high fuel prices (c. 30cents/kWh).

Possibly a limited impact, but could be worth considering in case of isolated grid.

Consideration of electricity exporrtsPossibly an issue with hydro-dominated grid (which has a low marginal cost) exporting to oil-dominated grid (with a high marginal cost).

Not likely to be an issue with a island state like Indonesia.

Consideration of suppressed demand


■Role of offgrid: theoryConventional approach do not yield emission reduction when grid emission factor is so low.

Emission of off-grid generation can be high (up to 2.4t-CO2/MWh)

Conventional approach may not represent reality if off-grid generation is widely available and are used.

CO2 reduction

Reference scenario

CO2 emission

Project

Geothermal

Off grid

Grid (mainly hydro)

CO2 reduction

Reference scenario

CO2 emission

Project

Geothermal

Grid (mainly hydro)

Conventional approach Inclusion of offgrid


■Suppressed demandA suppressed demand situation is applicable when a minimum service level to meet basic human needs, was unavailable to the end user of the service prior to the implementation of the project activity.

Suppressed demand: assume that demand existsConventional approach: prove that demand exists, and is likely to be met by other means in the baseline.

Minimum service levelA level to be able to meet basic human needs

Identification of the baseline technology / measure• Identify the various alternative• Identify compliance with local regulations• rank the remaining alternatives remaining in order of

decreasing efficiency• Assess the alternatives and eliminate in that sequence

alternative which face barriers (e.g. LED, CFls and incandescent lamps are all restricted by lack of electricity, so in the absence of electricity, the baseline will be lamps)

Identification of the baseline service level• The service level provided prior to the implementation of

the project.• The service level provided under the project• Globally applicable conservative thresholds asminimum service levels

Determination of the baseline service level• The service level provided prior to the implementation of

the project.• The service level provided under the project• Globally applicable conservative thresholds as minimum

service levels by peer review journal, benchmarks,

Reference Project

Elec. Consumption (kWh/yr)

Historical level

Minimum service level

Subjected to calculating emission reduction

Not subjected to calculating emission reduction

Post-project


■Possible option on suppressed demand: Comparison with LDCs

Use per capita electricity consumption of LDCs.The largest, Zambia, enjoys a large hydro surplus. Other countries are less conspicous.Indonesia at 218kWh is much lower than most other LDCs, and translates to about 1MWh/user/year5 times the amount of minimum service level according to AMS I-L (250kWh/yr/user or 50kWh/yr/capita)Possibly a large regional diversity in Indonesia

Data: IEA

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Zam

bia

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la

Ban

glad

esh

Senega

l

Suda

n

Togo

Cam

bodi

a

Nepa

l

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Mya

nm

ar

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zania

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cap

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lectr

icit

y consu

mpt

ion (

kWh)

10 B01 MRI Geothermal IndonesiaFSReportingMeeting

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