Emission reduction plans for large combustion plants in BiH FAHRUDIN KULIC USAID EIA PROJECT UGLJEVIK, OCTOBER 20, 2015
Combustion Plant Emissions • Air pollutants : • Sulphur dioxide (SO2) • Nitrogen oxides (NOx) • Dust (particulate matter – PM) • CO2 is not a pollutant. It is a GHG and increased concentrations cause global warming. Source: EPA 2
Why Reduce Emissions • Harmful effects on human health • Respiratory and cardiovascular illnesses (caused by direct emissions of fine particles and particles formed by SO2 and NOx emissions in the atmosphere) • Respiratory illnesses (NOx emissions react in the atmosphere to form ground-level ozone – a major component of smog) • Harmful effects on the environment • SO2 and NOx emissions react in the atmosphere to form acidic compounds that harm lakes and streams ( Acidification ) • Acid deposition harms forests and trees, buildings • An oversupply of nitrogen in the soil or in the water - Eutrophication 3 (fish, seagrass beds)
External costs • Harmful effects on human health and the environment caused by some activity, expressed in monetary value, are called “external costs “ of that activity • External costs of electricity generation are caused by pollutant emissions that adversely affect the environment and human health • External costs of electricity generation cost much more than emission reduction measures 4
Combustion Plants and Pollution in the EU SO2 emissions – sector share Source: EEA 5
Combustion Plants and Pollution in the EU Source: EEA 6
Combustion Plants and Pollution in the EU 7 Source: EEA
Large Combustion Plants and EU Directives • Large Combustion Plants (LCPs) are those plants with thermal input (fuel) equal to or greater than 50 MW • Air pollutants: sulphur dioxide (SO2), nitrogen oxides (NOx) and dust • LCP Directive (2001/80/EC) sets Emission Limit Values (ELVs) for LCPs • This Directive applies only to combustion plants designed for production of energy with the exception of those which make direct use of the products of combustion in manufacturing processes 8
Large Combustion Plants and EU Directives SO2 emissions in EU 9 Source: EEA
Large Combustion Plants and EU Directives • Industrial Emission (IE) Directive (2010/75/EU) encompasses all installations engaged in industrial activities including LCPs (Chapter III) • The IE Directive sets even lower ELVs for LCPs compared to the LCP Directive 10
Energy Community • The Energy Community Treaty signed in May 2005 in Athens, Greece and entered into force in July 2006. • Treaty signed by the European Community and eight Contracting Parties • The key aim of the organization is to extend the EU internal energy market to South East Europe and beyond on the basis of a legally binding framework. 11
Energy Community Article 2 of Energy Community Treaty: • The task of the Energy Community shall be to organize the relations between the Parties and create a legal and economic framework in relation to “Network Energy “ • “Network Energy” includes electricity, gas and oil sectors • The “ acquis communautaire on environment ” of the Treaty includes the LCP Directive 2001/80/EC 12
Energy Community and Large Combustion Plants • On October 24, 2013 Energy Community (EnC) Ministerial Council passed two decisions: • Decision D/2013/05/MC-EnC on the implementation of the LCP Directive (2001/80 EC), which included application of ELVs from the Directive on Industrial Emissions (2010/75/EU) for 2026 and 2026 • D/2013/06/MC-EnC on the implementation of the Directive on Industrial Emissions (2010/75/EU) for NEW plants, which receive a permit after 1 January 2018 • Policy Guidelines on the Preparation of the National Emission Reduction Plans (NERPs) (PG 03/2014), EC Secretariat, December 19, 2014 13
LCP Directive for Energy Community • Network energy- only LCPs that deliver all or a part of produced electricity to the grid • Other LCPs excluded (generating electricity for plant needs) • Existing plant: license issued before 1 July 1992 • New plant: license issued after 1 July 1992 • Stricter (lower) ELVs for new plants • All thermal power plants in BiH are existing plants 14
LCP Directive for Energy Community Options for LCP emission reduction: • Option 1: Compliance with the Emission Limit Values (ELVs) by 1 Jan 2018 • Option 2 : Implementation of NERP (1 Jan 2018 – 31 Dec 2027) • Option 3: Limited service life (20,000 operational hours between 1 Jan 2018 to 31 Dec 2023). From 1Jan 2024 shut-down or satisfy stricter ELVs under the IE Directive. 15
Legislation regarding LCP emissions in BiH • FBiH Rulebook on Emission Limit Values for Large Combustion Plants (FBiH Official Gazette, No. 3/2013) • Rulebook on Prevention and Reduction of Air Pollution in the RS (RS Official Gazette, No. 3/2015 and amendments in 51/2015) • Both rulebooks are harmonized with the LCP Directive, but not with the IE Directive • Both rulebooks give the LCP operators the same three options (ELVs from the LCP Directive) 16
Development of Emission Reduction Plans • MOFTER asked for tech. assist. from the USAID (EIA Project) • Working Groups (WG) formed in Feb 2015 (EIA, SEEC, EPs) • Methodology of work: 1. First draft of report created by SEEC and EIA 2. Presented to WGs 3. WG member review, comment, correct, suggest changes. 4. SEEC and EIA revise reports 5. Process repeated until final draft is agreed upon by WG 6. Draft reports submitted to competent authorities 17
Development of Emission Reduction Plans • Working Groups developed draft reports: • Report on the Inventory of Combustion Plants • Report Current BiH legal and Regulatory Framework • Report of Best International Practices Costs Applicable to LCPs in BiH • Report on Different Scenarios for LCP Emission Reduction Plans • Report on Potential Environmental and Health benefits from National Emission Reduction Plan (NERP) Implementation 18
Large Combustion Plants in BiH • 12 LCPs are obligated to reduce emissions according to the Energy Community Treaty obligations (Network energy-only LCPs that deliver electricity to the grid are covered by the LCP Directive) • Elektroprivreda FBiH – 9 LCPs • Elektroprivreda RS – 2 LCPs • Natron-Hayat – 3 LCPs • All LCPs are obligated to reduce emissions according to the current entity rulebooks 19
Emission Reduction Plans in BiH • Option 1: Compliance with the Emission Limit Values (ELVs) by 1 Jan 2018 • Not a realistic option for thermal power plants (TPP) • LCPs at Natron-Hayat already comply with the LCP ELVs • Option 2: NERP – deadline Dec 31, 2015 • Option 3: Limited service life (20,000 operational hours between 1 Jan 2018 to 31 Dec 2023). As of 1Jan 2024 shut-down, or satisfy stricter ELVs from the IE Directive • Operators chose Option 2 and/or 3 20
Guidelines for Preparation of NERP • Emission ceilings are calculated • For each LCP • For SO2, Nox and PM • For each year from 2018 to 2027 • Emission ceilings are calculated based on ELVs which are gradually reduced from LCP ELVs in 2018 to IED ELVs in 2026: • Plant ’s ceiling (t/y) = Flue gasses flow (Nm3/annually) × GVE (mg/Nm3) × 10-9 21
Guidelines for Preparation of NERP • Alternative to ELV is the MDR - minimum rate of desulphurization • MDR option: Plant ’s ceiling (t/y) = Amount of sulphur in fuel (t/y) × (1 – (MDR*/100) × 2 • Agregation rule: Units capacities are added if connected to the same smokestack (lower ELV) • Entity/National Ceiling equals the sum of individual LCP ceilings 22
Guidelines for preparation of the NERP • The NERP allows flexibility in implementation: • If a financing agreement is signed and a timetable for implementation is submitted, the expected emission reductions will be considered to be achieved • Emissions reductions from one plant can be „ transferred “ to another plant as long as overall emissions are below the ceiling • 1 Jan 2019: start of annual reporting on NERP implementation 23
Annual Emissions of LCPs in 2014 Operator SO2 NOx Dust emissions emissions emissions (tons) (tons) (tons) EP BiH 141.218 14.197 2.175 EP RS 131.027 5.997 4.363 Natron-Hayat 1.332 317 77 Total 273.577 20.511 2.252 24
Large Combustion Plants in BiH • The Working Groups identified two issues open to interpretation, discussion and negotiation: 1. Non-application of aggregation rule during the LCP Directive period 2018-23 for TPP Kakanj 2. Application of Minimum Desulphurization Rate • The Secretariat approved the above requests for revised ceiling calculation methods 25
Large Combustion Plants in BiH cont’d • The Secretariat-approved calculation methods were rolled into the proposed ERPs, which have recently been circulated to the competent authorities for approval • The approved calculations benefit BiH by: 1. Resulting in 55 million KM savings in investment costs for EPRS (TPP Gacko) Increasing EPBiH’s annual income by about 15 million KM 2. from additional electricity sales during 2018-27, based on the current market value 26
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