JOURNAL OF SCIENCE & TECHNOLOGY * No 95 2013 ECONOMIC AND ENVIRONMENTAL BENEFITS OF INTERNATIONAL EMISSION TRADING MARKET FOR POWER SYSTEM WITH BIOMASS IN VIETNAM LOI iCH KINH TE VA M 6 I TRUCJNG C C[.]
Trang 1ECONOMIC AND ENVIRONMENTAL BENEFITS OF INTERNATIONAL EMISSION TRADING MARKET FOR POWER SYSTEM WITH BIOMASS IN VIETNAM
LOI iCH KINH TE VA M 6 I TRUCJNG C C A THJ TRU'DNG MUA BAN KHI T H A I Q U 6 C TE
CHO HE THONG DIEN C 6 S\J' THAM GIA CUA SINH KHOI TAI VI$T NAM
Vo Viet Cuong
University of Technical Education Ho Chi Minh City
Received October 01, 2012; accepted March 01,2013
ABSTRACT
Biomass power generation has been proved to be a competitive power generation source in Vietnam The objective of this study is to evaluate cost effects of intemational emissbn trading market
on power generation system with biomass in Vietnam by 2020
The results show that by introducing biomass power generation into power system, Vietnam does not need nuclear power generation in 2020, yet CO2 reduction cost varies from 9.7 S/t-COi to 13
$A-C02 The highest net profit of selling certificate of emission reductions (CERs) in the intemational emission trading market is 168.1 US$million/y
Keywords, Intemational emrssion trading market, Power generation, Biomass, Vietnam
T6M TAT
PhAt di$n sinh khdi d§ dut?c chirng minh IA ngudn ph^t di$n c^nh tranh tai Vi$t Nam Wye tiSu
Ciia nghiSn cCru nAy IA dAnh glA tAc ddng cda thj truing khi thAi toAn ciu din gii thAnh phAt di$n sinh
khdi tai Vi$t Nam tlnh din nSm 2020
NhO'ng kit quA chl ra r^ng, bing viSc dua phAt di$n sinh khdi vAo h§ thing di$n, Vi$t Nam khdng cin t&i phAt dien nguy§n tO vAo nAm 2020 Chi phi giAm phAt thAi C02 IA tCr 9.7 C02 t(ri 13 $A-C02 Loi nhuAn cao nhit cua viSc bAn chirng chl giAm khi thAi tr§n thf truing mua bAn khi thAi qu6c ti
IA 168,1 US$tri$u/nAm
I INTRODUCTION are electricity contribution of biomass power
Vietnam is a developing country and not g^n^radon, percentage of C02 reduction of the
a party to Kyoto Protocol 1997 That means P"^^"" 'y'^"^' P."'=.^ ^ ^««'"g ^^^ '" * ^ u™ ;„ «« !,ui „„.;.,„ ,*• ™^ ^:„., „*• nr^i international emission trading market, and there is no obligation 01 reduction ot C02 , ^ , ^ ', emission for Viemam However, Vietnam can '^^^'^^ °' " ° ' " " J ^ " P ° " " 8 = " f « ' » " '^
join Kyoto Protocol 1997 through Clean operated m 2020^ LINDO Linear, Meractive, Development Mechanism (CDM) in which and Discrete Opt,mizer)[ 11], software for 11- r>cD • 1, • • I _• • finding the Optimum solution, IS used,
selhng CERs in the international emission " *^ '
trading market 2 CALCULATION
The objective of the study is to evaluate 2.L Objective function and constraints
cost effects of intemational emission trading „, » c • • • , i
„ , ^ , , -7« * The objective function is the total market on power system with biomass in term , ~„,„ „„.„ ~ ,,
P, ee • • I/- » 1 i n i n generation costs in 2010 and 2020, as fobws:
of least-cost efficiency in Vietnam by 2020
Biomass power generation, in which the ^ - 2 J ^y-^^s.^-^g.q.i.y >niin (2.1)
biomass ftiel is assumed lo be supplied by 6 ^•'•'•-''
yearsshortrotadonforestof Acacia hybrid, has where, g: Power generations (coal, heavy oil, been proved to be a competitive power gas fuel, hydro, import-electricity, biomass, generation source for Vietnam by a previous nuclear); q: Load pattems of daily load curve {1 study[2], [3] The biomass power generation is ^ ig^ see Table 4); t: Time ( l h - ' 2 4 h ) ;
Trang 2y: Year (2010, 2020); CEg,y: Electric generation
cost of power generation g in year y; Xg,q,,.y:
Output of power generation g in pattem q at
time t and in year y; W^: Conversion coefficient
to current price
where, r is the interest rate (average: 8%/y); e is
the inflation rate (average: 5%/y)
The generation cost of power generation
g in year y, CEg, y, is calculated as follows:
CEg, y : K.+A„
^[$/kWh](2.3)
where, Fg,,, is the fuel cost; Ag,j, is the
amortization of investment cost; MOg.y is the
maintenance & operation; Xg j, is the output of
power generation g in year y [kWh]
The above objective function is
constrained by electric load, maximum
generation energy, maximum and minimum
installed capacity, reserve capacity, capacity
factor, and load trace-ability ratio[3]
2.1.1 Electric load
The sum of output of all power
generations equals the load demand:
^'^e.',.uy = Kt.y (2.5)
where, Pq, t, y is the electric load demand in
pattem q at time t in year y
2.1.2 Maximum generation energy
Electi-ic generation energy of generation
g in load pattern q at time t and in year y is
load
Xg,q,,.y 5 Xg.q,,„„q J, (2.6)
where, tmaxq is lime of a maximum load in
load pattem q
Electric generation energy of generation
g m year y is lower than its limit:
where, Qmax, g, y is the limit of electric
generation energy from power generation g in
yeary ^
2.1.3 Maximum installed capacity
Installed capacities of heavy oil, hydro nuclear power generations anj import-electricity are lower than their maximum installed capacities:
^e*.y ^ Cn,B>[.g',y (2.8)
where, g* is the power generation of heavy (I, hydro, nuclear, and import-electricity; Cmai, g*, y is the maximum Installed capacity of power generation g* in year y
2.1.4 Minimum installed capacity
Installed capacity of power generationg
in 2020 is higher than its capacity in year201II minus an abolition capacity from 2010 to 2O20, Cg.2020 S Cg,2010 - C.bo,gj2o 10-2020) (2.9) where, Cg, y is die installed capacity of power generation g in year y; Cabo, g, (y - y ) is the abolition capacity of power generation gyfim yearyltoyj
2.1 5 Reserve capacity
For reliability, die sum of installed capacities of power generations in yeary has to
be larger than the maximum electric load demand including the reserve capaci^ as follows:
5:Cg.y&(l+ay)P^y (2.10) where, Pmax, y is the maximum load demand
in year y, and ay is the reserve margin in year
y-2.1.6 Capacity factor
Constraint of daily electric production energy of power generation g is given by:
2 Xg.,.^£24Lg.,.Cg, (2.11) where, Lg, q is the maximum capacity factor of power generation g in load pattem q
2.1.7 Load trace-ability ratio
The relationship between the load trace-ability ratio and die output of power generation g is given by:
("-Pg)-Xg.<, ,.y< Xg.,.,y< (l+Pg).Xg.,.M.y(2.12) where, pg is the load ti-ace-ability ratio of
Trang 311.8 CO2 reduction
CO2 reduction makes the consfraint:
j/.-'^B.q.t.yEa.y < ( l - e r e d ) - E(o%)y (2.13)
where, Eg^ is emission factor of generation g in
year y, E((rt4)y is total emission without CO2
reduction in year y, and ered is percentage of
tCh reduction [%] (0%, 5%, 10%, 15%, 20%)
i2.2 CO2 reduction cost
CO2 reduction cost is defined as cost that
has to pay for the reduction of C02(see Fig 1)
.c^=-CE,
• ( < » ) -CE, '(•w)
[$/t] (2.14)
where, Cred is CO2 reduction cost, CE(o%) and
CE J are electric generation cost with 0% and
e^i CO2 reduction, B^(t%) is amount of CO2
emission with 0% COi reduction
2.3 Data and Parameters of calculations
Data used in these calculations are
mainly collected from the last updated version
of Mater plan of EVN, Jun 2011[1]
Parameters of calculations are (1) the electric
generation energy of biomass power generation
is assumed to be 0% of the total electric
generation energy in 2010, and 0, 5, 10%, of
diat in 2020; (2) the CO2 reductions are 0, 5, 10,
15, 20%; (3) die selling price of CO2 in the
intemational market varies of 0, 10, 15, 20
$/t-C02; (4) whether or not the nuclear power
generation is at work in 2020
CO2 emission
CO2 emission
Power system
with 0% CO2
Reduction
(a)
Efi^j [t] Power system
with e™/ CO2
Reduction
Electric generation
cost CEfoii, [$]
Electric generation cost C £ ^ ^ [$]
(b)
Fig 1 Generation cost and CO2 emission in
case ofO% (a), and e„d (b) CO2 reduction
3 RESULT
options of stmcture of power system The feasible options give optimal solutions and the infeasible options give no solutions, which simultaneously satisfies all the constraints As C02 reduction increases, electric generation from high emission power generation such as coal and heavy oil power generation have to decrease, while other power generation are at limits of energy supply Consequently, energy supply for the system is insufficiency, then, it leads the option to be infeasible or has no solution
Table 1 Calculation results by the linear programming
Biomass
0%
5"/o
10%
C02 reduction 0%
5%
10%
15%
20%
0%
5%
10%
15%
20%
0%
5%
10%
15%
20%
2010
0
X
X
X
X
2020 Non-nuclear
0
y
X
X
X
Q
X
X
X
X
0
X
X
X
"
Nuclear
0
0
0
X
X
0
0
0
0
0
0
0
0
0
0
O : Optimum solution; x : No solution 3.1 Structure of power system
3.1.1 Installed capacity
Figure 2 shows optimum solutions of installed capacity of power generations in 2010 and 2020 Total installed capacity was 18.5 GW
in 2010 and increases to 45.25 GW in 2020 As electric generation energy of biomass power generation increases from 0% in 2010 and up to 10% in 2020, its installed capacity increases from 0% in 2010 and up to 7.6% in 2020 Installed capacity of hydro power generation increases from 8.25 GW in 2010 and to 15.9
Trang 4capacity of hydro power generation to the total
installed capacity reduces ftom 44.6% in 2010
to 35.1% in 2020 Installed capacity of heavy
oil power generation decreases considerably
Import-electricity is fixed at 1.2 OW (6.5%) in
2010 and 4.8 GW (10.5%) in 2020 Nuclear
contributes 4.0 GW (8.8 %) in 2020 The
solutions for C02 reduction are only available
when nuclear contribution in 2020 is As
C02 reduction Increases from 0% to 20% in
2020, installed capacity of coal power
generation decreases from 5.7 GW to 1.8 GW;
and on the other hand, to meet the demand,
installed capacity of gas fuel power genration
increases from 12.1 GW to 14.4 GW
1 1 1
Non-luclear Nuclear „ Biomass
Coal Gas fuel
l l l l l l l l l l l l l|-Impart
Hydro
• Nuclear
• • • • • • • • • I
% COi reduction
Fig 2 Optimum installed capacity of power
generation
3 1.2 Electric generation energy
Electric energy generation increases from
98.1 TWh in 2010 to 286 TWh in 2020 as
shown in figure 3 Hydro power generation
operates at its maximum production energy; the
production energy increases from 36.6 TWh in
2010 and to 80.2 TWh in 2020 However, the
contribution reduces from 37.3% in 2010 to
28% in 2020 Gas fuel power generation is also
operates at its maximum production energy of
33.25 TWh in 2010 and 98.1 in 2020
As electric generation energy of biomass
power generation increases from 0% to 10%
(28.6 TWh), and CO2 reduction increases from
0% to 20% in 2020 (nuclear), electric energy
from coal decreases from 71.3 TWh to 15 3
TWh
On the contrary, import-electricity isJTj TWh in 2010 and increases from 7.4 TWfto 30.4 TWh Elecfric generation from heavy oil is almost zero
Fig 3 Optimum electric energy generation
3.2 CO2 reduction
3.2.1 Amount ofCOi reduction
According to CO2 emission factors in table 2 and amount of electric generations in 3.1.2, total CO2 emission in 2020 (nuclear) is 99.12 MT-CO2 That means 20% of CO2 reductiwiis 19.82 MT-CO2
3.2.2 CO2 reduction cost
Figure 4 shows CO2 reduction cost of optimum solutions in 2020 (nuclear) Reduction costs vary from 9.7 $/t-C02 in case of 10% biomass and 15% C02 reduction to 13 $/t-COi
in case of 0% biomass and 5% C02 reduction this costs are quite cheap comparing to its in developed countries in which of about 300
$/l-C02 As die parameter of CO; price in the intemational emission market varies from lOS/t-CO: to 20 $/t-C02, the above costs would bring economic profits to the power system 3.3 Electricity generation cost Optimum solutions of electric generation cost, included revenue from selling CO2 in the intemational emission market, are shown in figure 5
Selling price of CO2 varies from 10 S/t-COj to 20 S/t-COj Generally, as the biomass contribution and the selling price w
Trang 5lecreases gradually On the confrary, as the
!;02 reduction increase, the electricity
feneration cost increase gradually
The electricity generation cost is 2.64
JS(f/KWh in 2010 In 2020, in case of
lon-nuctear power generation, it decreases from
3.03 to 2.77 US(i/kWh; in case of nuclear
power generation, it decreases from 2.92 lo 2.80
USfi/kWh Generation cost in 2020 is higher
than that of 2010 because fuel cost increases
and the contribution of hydro power generation
decreases In 2020, generation cost in case of
nuclear operating is lower than that of
non-nuclear
3.4 Profit of selling CO2 reduction in the
international emission market
Figure 6 shows profit of selling CO2
reduction in the intemational emission trading
market of the typical existing solutions As CO2
reduction cost is lower or higher than selling
price of CO2, the profit has a positive or
negative value, respectively The positive value
means the power system would get real profit,
compared with case of 0% CO2 reduction, when
selling CO2 reduction in the intemational
emission market On the contrary, the negative
value shows the power system have to pay
more those amount of money when making the
reduction of CO2
As selling price of CO2 increases, net
profit obviously increases In 2020 (nuclear),
the best case of 5% biomass, 20% CO2
reduction and selling price of COz of 20
$/t-C02 would bring the real profit of 168.1
$million/y to the power system And the worst
case of 15% biomass, 20% CO2 reduction and
selling price of CO2 of 0 $/t-C02 makes the
power system have to pay more 264 $million/y,
4 CONCLUSION
Cost effects of intemational emission
trading market on optimum structure of power
system with biomass in term of least-cost
efficiency in Vietnam in 2010 and 2020 are
calculated The linear optimization
programming consisting of an objective
function and a set of consfraints of variables is
used The objective function is the total electric
generation costs in 2010 and 2020 The biomass
2020(Niicleai)
Fig 4 CO2 reduction cost
Non-nuclea Price of C02[$/t-C0i]
-'^
% C O J
reduction
Fig 5 Electricity generation cost ofthe power system
250
•fl50
o
=n 50
G
-2.10
Fig 6 Profit of selling CO2 reduction in the international emission trading market (2020-Nuckar)
Price of COilS/l-COil
> 0
^
^'^-* — ^'^-* » • — — ^'^-* _ _
-.10 ^^^'"^
tv*^ ' ^
-.15 *—^ ^.^
\ \ \ ^
\ , 2 0 \ ,
5 10
0
5 10 l.'> 20
5
S 10 15 20
10
%COi reduction
%
Biomass
Trang 6power generation is assumed to serve from reduction; (3) Generally, as the biomass
2020 Confribution of biomass varies from 0% contribution and the selling price of CO;
to 10% ofthe total electric generation energy; increase, the electricity generation cosi CO2 reduction varies from 0% to 20% Selling decreases gradually On the contrary, as the price of CO2 in the international emission CO2 reduction increase, the electricit) trading market varies from 0 S/t-CO; to 20 generation cost increase gradually In 2010,
$/t-C02 Nuclear power generation has been generation cost is 2.64 US^/kWh In 2020, jii planned to start in 2020 in Vietnam However, case of non-nuclear power generation, ii
it is still freated as a parameter in this study decreases from 3.03 to 2.77 USf(/kWh; in case
Calculation results are as follows- (U Bv °*' ""^'^^'' P'^"'^'' Seneration, it decreases from
Calculation results are as lollows (1 By USff/kWh; (4) In 2020 (nucleari
introducing of biomass into power system, L L r ^n^ \_- " v^uwcdr;, Vietnam docs not need nuclear power *= ''='' ^^ °L^''' b'<»"ass, 20% CO, generation in 2020 Moreover, coal and gas fuel '^"j^^'"" ^"^ selling pnce of CO, of 21 power generations do not need to be operated at f " ^ ^ "'"'^,^, ' ' " " 8 *= ""^ P™"' "f '«•'
the maximum output, and that brings higher $n,illion/y to the power system,
energy security; (2) The 20% CO2 reduction is In conclusion, by introducing Ibe 19.82 MT-CO2 in 2020 (nuclear), and CO2 biomass power generation and joining the reduction costs vary from 9.7 S/t-COi in case of international emission trading market, tk 10% biomass and 15% C02 reduction to 13 powersystemof Vietnam can get many benefits
$/t-C02 in case of 0% biomass and 5% CO2 both in economical and environmental aspects
REFERENCES
1 "The Master plan on Electric Power Development in Vietnam for the period of 2010-2020 perspective up to 2030", Institute of Energy, Electricity of Vietnam (EVN), Ministry of Industry, Hanoi, Jun 2011
2 Vo Cuong Viet et al Mar 2003, "Cost and CO2 balance analysis of biomass power generation in Vietnam", Japan Solar Energy Society, Vol 33, No 3, pp 37-44
3 Vo Cuong Viet et al, Dec 2005, "Considerable Structures of Power Generation System with Biomass for Sustainable Energy Development in Vietnam", Japan Solar Enerev Society Vol 31,
N o 6, pp 67-74 S7 J, ,
4 "Present Situation of Forest Land Used in Viemam by December 31, 2002", Viemam Forest Ranger, Ministry of Agriculture and Rural Development
5 "Regional Cooperation Strategy on Interconnected Power Networks in Indochina", JBIC Institute, Japan Bank for Intemational Cooperation, Aug 2002
6 ^mm i>iihmn, mmmM:
r7^-7->>-^^/uco2»tn«cj:5««e«»»«-1 2 ^ 3 fl
Tam dich: Hiroki Hondo, Yohji Uchiyama, Yue Moriizumi, "Evaluation of Power Generation Technologies based on L,fe Cycle CO, Emission - Re-estimation using latest data and Effects of
M a r ^ M O o r ° " * ' ° " ' """' Social-economic Research Center, Central Electricity - Japnn,
v I l ^ T l ^ ' M f • "^i!n.T'' '^°' ™ ' ' ' ' ° " f^""" °f P ° ™ generation including biomass iii
F i ^ ^ c ^ * F^h Sv ^?.?- ^ ^ ° * " " Conference on Wind Energy, Renewable Energy,
Fuel cell & Exhibition 7-10 June 2005, Hamamatsu, Japan
"Projected Costs of Generating Electricity", OECD/IEA NEA 1998, Paris
Trang 710 Yoshishige Kemmoku et al, 2003, "A Study of Buying Price of Photovoltaic Electricity under a Carbon Tax Regime", Electrical Engineering in Japan, Vol.143, No 2, pp 38-48
11 "The Economics of Nuclear Power", Uranium Information Center Ltd., Briefing Paper 8, Oct
2004
12 http://www.lindo.com/
Author's address: Vo Viet Cuong - Tel: (+84) 986.523.475, Email: cuongvv@hcmute.edu.vn
Faculty of Electrical & Electronics Engineering
University of Technical Education Ho Chi Minh City
01 Vo Van Ngan Str, Thu Due Dist, Ho Chi Minh City