The Combined Margin Approach: Issues and Options. Michael Lazarus, SEI/Tellus World Bank Power Sector Workshop Caesar Park Hotel, Buenos Aires December 8, 2004. Overview of Presentation. The problem The options The combined margin approach
Michael Lazarus, SEI/Tellus
World Bank Power Sector Workshop
Caesar Park Hotel, Buenos Aires
December 8, 2004
The maroon area shown above may represent delayed (i.e. avoided) new generation capacity.
…assuming that a CDM project has a mix of build and operating margin effects?
Calculate a baseline emission factor EFyas the weighted average of the Operating Margin emission factor (EF_OMy ) and the Build Margin emission factor (EF_BMy,):
EFy = (wOM * EF_OMy) + (wBM * EF_BMy)
where the weights wOM and wBM, by default, are 50% (i.e., wOM = wBM = 0.5)
CDM Consolidated methodology (ACM002) currently contains:
…the generation-weighted average emission factor of a sample of power plants m, as follows,
EF_BMy = FUEL USE * EMISSION COEFF/GENERATION
where the sample group m consists of either the 5 most recent or the most recent 20% of power plants built or under construction, whichever group’s average annual generation is greater (in MWh);
Relative simplicity and feasibility: low-cost, manageable data and skill requirements
Incorporation of both OM and BM effects
Consistent and comparable across regions and projects
Relatively transparent and credible: data verifiable
Applicability to larger investments, lower-emission (e.g. natural gas) projects
Justification of OM/BM weights (50/50 or other)
Dependence on lumpy, historical data for build margin
Application of dispatch analysis
Reflection of local market and operational conditionsWhat are its strengths and weaknesses?
For the purpose of determining the Operating Margin (OM) emission factor, as described below, use one of the following options to determine the CO2 emission factor(s) for net electricity imports (COEFi,j,imports) from a connected electricity system within the same host country(ies):
(a) 0 tCO2/MWh, or
(b) the emission factor(s) of the specific power plant(s) from which electricity is imported, if and only if the specific plants are clearly known, or
(c) the average emission rate of the exporting grid, if and only if net imports do not exceed 20% of total generation in the project electricity system, or
(d) the emission factor of the exporting grid, determined as described in steps 1,2 and 3 below, if net imports exceed 20% of the total generation in the project electricity system.
For imports from connected electricity system located in another country, the emission factor is 0 tons CO2 per MWh.
Capacity additions, recent and projected,–United States
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