Cost-Competitive CO 2 Mitigation with Combined Heat and Power in - PowerPoint PPT Presentation

Cost-Competitive CO 2 Mitigation with Combined Heat and Power in Calgary

Motivation: Calgary must reduce GHG emissions… 25000 Calgary’s Future Greenhouse Gas Emissions Projected GHG Emissions, kt CO 2 e 20000 Targeted 15000 10000 5000 0 2005 2010 2015 2020 2025 2030 2035 2040 2 Source: Canadian Urban Institute

… but abatement costs are unclear CHP Abatement Cost Estimates 300 $280 250 200 Abatement Cost [$/tCO2e] 150 100 50 McKinsey Estimate 0 Canadian Urban Institute -50 Estimate -$45 3 -100

Calgary Hyatt Regency 4

Business-as-Usual (BAU) CO 2 Natural Gas Heat CO 2 Heat Calgary Hyatt electricity Coal Power Plant 5

Combined Heat and Power (CHP) CO 2 Heat Natural Gas CHP Plant electricity 6

Research Questions • What are the conditions under which CHP is an attractive option for abating CO 2 emissions? - Existing literature: Maribu and Fleten (2008), Energy Journal; Lemar (2001), Energy Policy; Jaccard (2004) - Key conditions: Greenfield vs. Retrofit Zones; Low vs. High Natural Gas Price; Timing • What is the feasibility of using CHP to achieve Calgary’s GHG emissions targets? 7

CHP Case BAU Case Natural Gas Mostly Coal Natural Gas 10 MW Electricity Boiler 10 MW CHP from AB Grid electricity heat electricity heat Consumer Consumer End Use End Use 8

Site-Specific Costs: Low-Density Zone CHP High Cost Length = Feeder Lines + Tie-In Lines 9

Site-Specific Costs: High-Density Zone CHP Low Cost Length = Feeder Lines + Tie-In Lines 10

Summary of Results Parameter Change Abatement Cost Impact CHP Capacity Negli Impact CHP Location Greenfield Residential Density Grid Emissions Factor Natural Gas Price Cost of Electricity 11 Greenfield Development Commercial Centre

Abatement Cost vs. Location 1600 600 500 1500 1400 400 $1470 Abatement Cost ($/tCO 2 e) 300 200 $280 100 Greenfield Residential 0 -$46 Commercial Existing Centre Residential -100 12 -200

Abatement Cost vs. Location 1600 600 500 1500 Sensitivity = +/- 2 Standard Deviations 1400 in NG Price 400 $ 1470 Abatement Cost ($/tCO 2 e) 300 200 $280 100 Greenfield Residential 0 -$46 Commercial Existing Centre Residential -100 13 -200

Lifetime Scenario: Residential Greenfield 200 "Growth Rates" Scenario Annual Abatement Cost ($/tonne CO 2 e) "Fuel Switch" Scenario 150 100 50 Saves Money – No Incentive Needed 0 2010 2015 2020 2025 2030 2035 2040 Costs Money – -50 Incentive Needed -100 14

Conclusions • CHP can help Calgary achieve GHG reduction targets 25000 Feasible CHP – 1 large CHP system (100 MW) results in 20000 2% GHG reduction 15000 10000 - Discussions with ENMAX 5000 indicate 15% GHG reduction is feasible 0 2000 2010 2020 2030 2040 • Abatement cost most dependent on location • Currently attractive for greenfield locations… 15

Acknowledgments • Dr. Janne Kettunen, University of Calgary, for supervising our project class • Drs. Michal Moore, David Keith, Joule Bergerson, and Robert Page, University of Calgary, for their advice • Gary Czaikowski and David Williams, ENMAX Utility 16

Contact Information • Nicolas Choquette-Levy * nechoque@ucalgary.ca • Geoff Holmes gholmes@ucalgary.ca • Rahul Nakhasi rnakhasi@ucalgary.ca • Marc Beaudin mdbeaudi@ucalgary.ca Phone: Energy & Environmental Systems Group - (403) 220-8872 17