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1 Cogeneration and Emissions Trading Tom Markowitz www.Enerhope.com Cogeneration Seminar Calgary, Alberta September 1 st, 2011 1:30 p.m.

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Presentation on theme: "1 Cogeneration and Emissions Trading Tom Markowitz www.Enerhope.com Cogeneration Seminar Calgary, Alberta September 1 st, 2011 1:30 p.m."— Presentation transcript:

1 1 Cogeneration and Emissions Trading Tom Markowitz Cogeneration Seminar Calgary, Alberta September 1 st, :30 p.m.

2 2

3 3 “Alberta has both a responsibility and an opportunity to take decisive action to reduce greenhouse gas emissions.” Alberta’s Climate Change Strategy (2008) Alberta and Climate Change: Meeting the Challenge – Regulatory Framework Update (June 22, 2009) _Regulation/Workshop_-_Reg_Framework_Update_-_June_22_09.pdf

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5 5 Alberta’s Targets

6 6 “Specified Gas Emitters” (“SGEs”) of Greenhouse Gases: ~90 Large, Direct Emitters in Alberta Coal-Fired Electricity, Petroleum Refineries, Oil Sands, Upgraders, Petrochemicals…… Each Specified Emitter: > 100 kt CO 2 e/y ~50% of Alberta’s Greenhouse Gas Emissions Emissions growing

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8 8 How to Persuade Specified Emitters to Reduce Emissions: “Command and Control”“Market Forces” e.g. Emissions Trading

9 9 ALBERTA REGULATION 139/2007 Climate Change and Emissions Management Act SPECIFIED GAS EMITTERS REGULATION splay=html

10 10 Bitumen Heater Delayed Coking Unit Coke “The Upgrader” Synthetic Crude Oil “SCO” CO 2 in Exhaust

11 11 Bitumen Heater Delayed Coking Unit Coke Averages, Production (“P”): million Bbl/y Synthetic Crude Oil “SCO” 250,000 tonnes/y CO 2 Total Annual Greenhouse Gas Emissions (“TAE”)

12 12 TECHNICAL GUIDANCE DOCUMENT FOR BASELINE EMISSIONS INTENSITY APPLICATIONS JULY 18, 2007 ALBERTA ENVIRONMENT “BEI” FREQUENTLY ASKED QUESTIONS FOR BASELINE EMISSIONS INTENSITY APPLICATIONS AND COMPLIANCE REPORTING FEBRUARY 2008

13 13 BEI = TAE P Average, Calculate the Baseline Emissions Intensity “BEI” Baseline Emissions Intensity = Total Annual Emissions Production Average,

14 14 Bitumen Heater Delayed Coking Unit Synthetic Crude Oil Coke BEI for The Upgrader 250,000 tonnes/y CO million Bbl/y 250,000 x x 1,000,000 = 80kg CO 2 /Bbl SCO “SCO” BEI = TAE P BEI = TAE P Average,

15 15 Bitumen Heater Delayed Coking Unit Synthetic Crude Oil Coke 2007 and Future: Net Emissions Intensity Limit: 88% of BEI The Upgrader’s Net Emissions Intensity Limit x80= 70.4 kg CO 2 /Bbl SCO “SCO” CO 2

16 16 Bitumen Heater Delayed Coking Unit Synthetic Crude Oil Coke “SCO” 3.3 M Bbl/y In 2008….. The Upgrader produced….. Net Emission Intensity Limit: ______ kg CO 2 e/Bbl SCO :____ kg CO 2 e/Bbl SCO x _____ Bbl SCO = _________t CO 2 /y M232.3 k How many tonnes of CO 2 was the Upgrader allowed to emit? CO 2 Allowed Total Emissions

17 17 During the Year: Measurement and Monitoring of GHG Emissions End of Year: Report Annual Total GHG Emissions to AB Environment “True-Up” of Reported Emissions with Allowed Total Verified!

18 18 Allowed to Emit kt/y In 2008, The Upgrader is allowed to emit kt of CO 2 In 2008, the Upgrader produces 3.3 million Bbl of SCO. Net Emission Intensity Limit: ______ kg CO2e/Bbl SCO 70.4

19 19 Allowed to Emit kt/y 2008: If the Upgrader emits exactly kt of CO 2 ……… The Upgrader is in compliance with Regulation 139/2007 In 2008, the Upgrader produces 3.3 million Bbl of SCO. Net Emission Intensity Limit: _70.4_ kg CO2e/Bbl SCO

20 20 Allowed to Emit kt/y If, in 2008, The Upgrader emits less than kt of CO 2 Alberta Environment gives this many Emission Performance Credits to The Upgrader In 2008, the Upgrader produces 3.3 million Bbl of SCO. Net Emission Intensity Limit: _70.4_ kg CO2e/Bbl SCO “True-Up” at the end of the year

21 21 Allowed to Emit kt/y If, in 2008, The Upgrader emits more than kt of CO 2 In 2008, the Upgrader produces 3.3 million Bbl of SCO. Net Emission Intensity Limit: _70.4_ kg CO2e/Bbl SCO The Upgrader must give to Environment Alberta (Emission Performance Credits + Fund Credits + Offsets) to equal the extra tonnes. “True-Up” at the end of the year

22 22 Emission Performance Credits: Awarded to Specified Gas Emitters (“SGEs”) that have emitted less than their Allowed Total Emissions. Fund Credits: Contributions to the Alberta Climate Change and Emissions Management (“CCEM”) Fund. Used to fund emission reduction projects. One tonne of CO 2 e Credit for each $15 contributed to Fund Offsets: Rewards for verified emission reductions by non-Specified Gas Emitters. e.g. hospitals, transportation, land use, buildings Units: tonnes of CO 2 e All of these “tradeable units” can be bought and sold in Alberta’s emissions trading market.

23 23 Bitumen Heater Delayed Coking Unit Coke Synthetic Crude Oil “SCO” CO 2 in Exhaust What if 2009 Emissions Exceed Allowed Total Emissions! 3.6 million Bbl/y 280 kt/y CO 2 How to reduce the emissions intensity? The Upgrader’s total emissions are 26.6 kt/y higher than the allowed total.

24 24 Heater Delayed Coking Unit Coke Synthetic Crude Oil “SCO” Heat Recovery Boiler ~ Bitumen Pre- Heater Steam Turbo- Generator Cogeneration Retrofit of the Upgrader

25 25 Heater Delayed Coking Unit Coke Synthetic Crude Oil “SCO” Heat Recovery Boiler ~ Bitumen Pre- Heater Steam Turbo- Generator Cogeneration Retrofit of the Upgrader Alberta will award 418 kg of Emission Performance Credits for each MWh of cogenerated electricity. Pre-heating the bitumen with exhaust steam from the turbine increases the efficiency of heating, reduces fuel consumption and air emissions.

26 26 Upgrader: Many opportunities for cogeneration

27 27 SPECIFIED GAS EMITTERS REGULATION : ADDITIONAL GUIDANCE ON COGENERATION FACILITIES OCTOBER 1, 2007

28 28 Offsets Rewards for verified emission reductions by non-Specified Gas Emitters. e.g. hospitals, transportation, land use, buildings Diesel Buses: High-GHG Natural Gas Buses: Low-GHG Typical Offset Project

29 29 Offsets – Information Technical Guidance for Offset Project Developers, January, Carbon Offset Solutions (Climate Change Central) Offsets in Cap-and-Trade (www.Enerhope.com)www.Enerhope.com

30 30 “I will have 100 kt of extra Credits after True-Up at the end of the year.” “I will need 100 kt more Credits at True-Up at the end of the year.” Trading of Credits 100 kt of Credits $

31 31 Sermon (Hide this slide) (Show previous slide while reading out these notes.) (See Notes View of this slide)

32 32 Alberta: 2010 greenhouse gas emission reduction results Results2010Cumulative totals (since July 1, 2007) Facility improvements to target0.68 Mt5.60 Mt Carbon offsets3.86 Mt11.70 Mt Emission performance credits generated1.96 Mt6.48 Mt Emission reductions (from business as usual)6.50 Mt23.78 Mt Climate Change and Emissions Management Fund payments $70.0 million $256.9 million EEE98AC9B2.html Results

33 33 Alberta’s Emissions Trading System: A Success? Yes!.... First Greenhouse Gas Emissions Trading System in North America Demonstrates the Mechanics of Emissions Trading Has Reduced Emissions below Forecasts No Scandals: No speculative investors However…..

34 34 Need for Improvement No declaration of the emission reduction Target for SGEs. Impossible to define Production "P", year-after-year No public record of Credits and their history Baseline formula rewards polluters, punishes efficiency Alberta Environment does not verify offsets CCEM Fund has not reduced emissions significantly Overall sector emissions continue to rise In a recession, emissions intensity goes up, is penalized. 2014: SGE Regulation ends.

35 35 Cogeneration in Alberta Life Cycle Assessment Comparison of North American and Imported Crudes Jacobs – Life Cycle Associates Report to AERI (July, 2009) ycle%20analysis%20jacobs%20final%20report.pdf Cogeneration in the North Replacing Coal-Fired Generation in the South Massive GHG Reductions Emissions trading?

36 36 Emissions Trading Baseline and CreditCap and Trade (Alberta) Specifies allowed total emissions from each “SGE” regulated facility. Each SGE must monitor and report its emissions. Government awards Credits to under-emitters. Demands Credits from over- emitters. SGEs can trade Credits with each other.

37 37 Emissions Trading Baseline and CreditCap and Trade (e.g. European Union) Specifies the Cap, the group total tonnes of pollution allowed for all regulated (“capped”) facilities together. Creates Allowances (Permits), one Allowance for each tonne in the Cap. Distributes the Allowances to capped facilities according to some fair scheme. Each capped facility must monitor and report its emissions. Each capped facility must return to government one Allowance for each tonne it emitted. Capped facilities may trade allowances with each other.

38 38 Some Cap and Trade Systems Active: European Union, New Zealand Regional Greenhouse Gas Incentive (NE US States) NOx and SO 2 Cap and Trade Systems Future: (?) Western Climate Initiative (10 States and Provinces) Japan, China, India, Korea, Australia, California

39 39 Further Information EMISSIONS TRADING PRIMER: Pollution Probe, Toronto, 2003, ISBN : e.htm e.htm TOOLS OF THE TRADE,USEPA, 2003: EU emissions trading: an open system promoting global innovation: European Communities, 2007, ISBN : CLIMATE CHANGE 101- Cap and Trade: Pew Center on Global Climate Change, Arlington, VA, 2009: Jan09.pdf Jan09.pdf

40 40 Emissions Trading Course: Video and.pdf Monthly Emissions Trading News Update Monthly In-Depth Articles and Commentary e.g. “Cogeneration and Emissions Trading”(January, 2011) _Cogeneration_and_Emissions_Trading Consulting Services: Energy, Environment, Engineering and Emissions Trading


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