EFFECTS OF CARBON DIOXIDE EMISSIONS, FOSSIL-FUEL BASED DISTRIBUTED GENERATION AND RENEWABLE ENERGY PLANTS: A COMPARATIVE COST ANALYSIS

Paul E. Labis
Cagayan Electric Power and Light Co. Inc.

Rey G. Visande
Liceo de Cagayan University

Reuel C. Pallugna and Nolan D. Caliao

Mindanao University of Science &Technology

Abstract
The traditional approach in electric power generation is to have centralized plants distributing electricity through an extensive transmission & distribution network. Distributed generation (DG) provides electric power at a site closer to the customer, eliminating the unnecessary transmission and distribution costs. In addition, it can reduce fossil fuel emissions, defer capital cost, reduce maintenance investments and improve the distribution feeder voltage conditions. This study calculates and compares the cost of line losses, cost of transmission and distribution in the case of laying additional transmission line, the cost of carbon dioxide (GHG) emission in the case of fossil-fuel based distributed generation, and the cost of using renewable distributed generation in providing additional supply of power to a small rural electric utility. Results show that optimally located DG which are renewable in nature are economical in the long run when factors of fuel costs and carbon dioxide emissions are taken into account. The PV plant is the most economical because it can be moved to optimal location, followed by the wind and hydro, which are geographically fixed.

Keywords: Centralized plants, Distributed Generation, Renewable energy, Fossil fuel, Carbon emission, 1. Background The situation in most small, island based electric utility is that they are supplied electric power from the mainland through submarine cables. Although submarine cables are very robust and designed to endure beyond their life-span, they are also expensive, are subject to weather and undersea disturbance and may still require difficult and expensive repairs. Furthermore, due to the power crisis in Mindanao the cost of energy and its availability have become a prime concern both of the utility administrators and the consumers as well. The aim of this study is to provide a cost analysis between laying a new submarine cable, or putting up fossil-fuel based DG, or renewable DG, on an island based electric cooperative to meet the need for power in the next thirty years. Although this study mainly compares the economic benefits of each option, its focus however, is on the cost of carbon emission or reduction and its computational algorithm. 2. Methodology In this study, historical data of monthly power demand and energy were gathered from the last eight years and forecasted for the next 20 years. This is done in order to determine what will be the size of cable to replace the old one or what will be the size of the DG units to be installed. Figure 1, and graphs are provided below to give a concrete view. This work then proceeds to provide and compare three options to meet this requirement. The comparison is firstly on the technical loss based on computer simulation of the system, second, on environmental effects of carbon dioxide emissions, and third on the economic benefits. The first option is to lay a submarine cable, the second option is to put up a 1

small coal or diesel (light-fuel-oil or LFO) generation unit, and the third option is to put up renewable energy generation units. Furthermore, three options of renewable energy units are compared: Photovoltaic (PV), Small Hydro, and Wind turbines. All values for generation, transmission and distribution costs are the taken from present prevailing rates and the cost of money are assumed to be 10%. Figure 1 shows the annual peak demand from year 2001 to 2028, which occurs only on December each year. As early as 2009 the peak load already exceeded the 80% (of 5MW) tolerable load limit which is 4KW. This is detrimental to the life-span of the submarine cable which is almost over already. The peak load for year 2028 is 6.460MW According to the Grid Code requirement, submarine cable should be rated 1.43 (it should be loaded up to 70% of its rated capacity) times its load requirement. To bear a load of 6.460MW, a 10MW submarine cable is needed. Economic calculation shows that a 13.2KV rated is beneficial over a 34.5KV rated cable. The Grid Code also specifies that generators (Coal, Bunker or Diesel fueled) should be rated 1.25 times its maximum load. So, the DG unit for coal and coal and diesel should be 1.25x 6.460MW or 8MW. For a more reliable operation, 10MW DG would be more advisable. A 10 MW coal-fired generator system is also considered.

Dem and, MW
7 6 5

W M

4 3 2 1 0

9 4

10

11

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13

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17

18

19

20

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22

23

24

25

26

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30

Series1 3.06 3.18 3.3 3.41 3.53 3.65 3.76 3.88

4.12 4.23 4.35 4.47 4.59 4.7 4.82 4.94 5.05 5.17 5.29 5.41 5.52 5.64 5.76 5.87 5.99 6.11 6.23 6.34 6.46

Figure 1: Annual peak load from 2001 to 2030 in MW/year

MWhr S ales
35000 30000 25000 20000

r H W M

15000 10000 5000 0

10

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22

Series1 13149 12876 13662 14448 15234 16020 16806 17592 18379 19165 19952 20738 20738 21525 22311 23098 24671 25457 26244 27030 30305 31163

Figure: 2: Energy sales in kWh per year

2.1 Comparison of Technical loss: Figure 4 is a graphical presentation of the simulation result on the system to determine its line losses of the different schemes of generation. From Figure 3 it could be seen that PV, Diesel, and Coal have the least technical losses, then they are followed by the Submarine cable. Wind and Hydro have the greater losses. All these are due to their location in the system. PV, diesel and coal could be optimally placed through simulation studies, but the location of wind and hydro generation system are fixed by the availability of the resources. A change in the distribution circuit topology may help to alleviate this situation. Although in this study the focus is on mitigating carbon dioxide emissions by using renewable DG, this section on technical loss is considered because renewable DG are location limited, and this may cause large line losses as in this case. But solutions maybe found if the power generated would be enough to account for the losses.
50 45 40 35 30 25 20 15 10 5 0 SubMar Cable

L elos inMW 2 Y rs in s / 0 ea

Coal/Diesel/ PV

Wind

Hydro

Figure 3: Comparison of technical loss

D T R I A I NO C S O G E NH U EG S E E MN TO F O T F R E O S A E I SO S E U E B R N W BE MSI N R D C D Y E E A L DS RB T D Emissions: [FO C A T ] I house E E E G L WH R 2.2 Comparison of Green T I U Gas N R Y

STA RT

Determ Annual ine E lectricity Sales kW / yr Hr

Input data : Forecasted data

S mu th to l o u p e ta f C rb ne is io s a o ms n p d c db C a ro u e y o l D s l -fire ie e d g n ra gp n e e tin la ts

& .

C lc la th a u te e p rc n g o e c e e ta e f a h ty eo G n ra n p f e e tio m ix

Input data : G eneration M data ix per region [NG CP ]

O ta th a e . G G b in e v H E is io sfro F s il ms n m os -F e ul P w r P n b d id gC o e la ts y iv in O E is io sp r y a b th to l m s n e e r y e ta o F s il F e -b s dE c ity f os u l a e le tric G n ra d . e e te

D te in th e rm e e T ta s le fo o l a s r N n -fo s fu l o s il e b s dp n a e la ts .

D te in th e rm e e T ta s le fo o l a s r F s il fu l os e b s dp n a e la ts .

O ta th G Ge is io s b in e H m s n re u e b th R n w l p n d c d y e e e a la ts b m ltip in th A e y u ly g e v .GG H e is io sfro F s il fu l ms n m os e b s dp n w th to l o a e la ts ith e ta f E c ityg n ra db th le tric e e te y e Rnwb p n e e a le la ts .

O ta th C rb n b in e a o D x ee is io s io id m s n c n u db C a o trib te y o l G n ra gp n e e tin la t tC y O / r

Input data

Ae .Ca v ol C m s n O e is io ra =2.1 7 te 1 lb/ k H Wr

M tip th G G u ly e H e is io re u e b ms n dcd y th R n w b p n e e e a le la ts w th re e t m rk t / e cn a e tra in . d g

E ND

O ta th C rb n b in e a o D x ee is io s io id m s n c n u db o trib te y D s l G n ra g ie e e e tin p n , tC / y la t O r

*w e : h re
A B C* D* E* F = am ount of CO ission per year by HFO em = Fossil fuel [HFO ] consum to generate ed = 40.19 TJ / 1000 Ton , Net Calorific value = 21.1 tC/ TJ , Carbon em ission factor = 99%, fraction of carbon oxidized = 3.667 , ratio of carbon in CO [heavy fuel ], tCO 2/yr electricity , 1kT / yr .

Input data : *A = B * C * D*E*F

*are default values from Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories :W orkbook . These are adopted due to the absence of a more region specific factors .

Figure 4: Algorithm for Determining CO2 Emissions of Fossil Fuel Based Generating Plants

Based on the capacity factor (the generated power divided by the plant capacity at rated output) for each plant, PV is 13%, wind is 33%, hydro is 91%, the CO2 abated was computed. The result is in Figure 5 and Figure 6. The highest abatement is from hydro, having the highest capacity factor, the second comes from wind, and the last comes from PV, the one with the lowest capacity factor. The CO2 abated means the amount of CO2 that would have been emitted into the atmosphere had fossil fuel based plants been used to operate but had been avoided because renewable energy plants would be used. The significance of this abatement, viewed in this study, is two fold. One is environmental and the other is economic. Environmentally, this would contribute to the mitigating of CO2 emissions that causes global warming and climate change. Economically, this would provide the utility revenue through carbon credit trading.
T ONSOFCO A AB TED

F ORE TY AR:2009 2 8 CAS E ~ 01

12,000.00

10,000.00

8,000.00

6,000.00

C F S N O T

CO abated [PV]
4,000.00

CO abated [WIND] CO abated [HYDRO]

2,000.00

20 09

21 00

21 01

21 02

21 03

21 04

21 05

21 06

21 07

FORE AS Y AR C T E

21 08

Figure 5: CO2 Abated

F ORE AS YE 2001 ~ 2 C T AR: 9 20 8

T ONSOFCO A AB TED

16,000.00 14,000.00 12,000.00 10,000.00 8,000.00

C S N O T

6,000.00 4,000.00 2,000.00 21 09 22 00 22 01 22 02 22 03

CO abated [PV] CO abated [WIND] CO abated [HYDRO]

22 04

22 05

22 06

22 07

22 08

F ECAS Y OR T EAR

Figure 6: CO2 Abated

CO2Em issionin T for 20years ons

77876.36905

47662.46326

21945.87961 0 Coal Diesel Subm Cable ar PV 0 Wind 0 Hydro

Figure 7: Comparison of Carbon Dioxide Emissions

NPVCost of C Em O2 issionin Php

7,460,517.95

4,566,040.60

2,102,404.50

Coal Diesel Submar Cable PV

Wind

Hydro

Figure 8. Comparison of the NPV Cost of CO2 Emissions per Plant

2.3. The significance of Mitigating Carbon Dioxide Emissions 2.3.1. Environmental Significance When there is more Carbon Dioxide in the atmosphere the temperature gets warmer thereby producing the Green House effect. Carbon dioxide having never gone above 300 parts per million prior to year 2000, has reached the mark of 500 parts per million in 2006 and will double the figures 50 years from now from a projected concentration. The matter of Climate change and the effects of Global warming has become a Moral issue. Allowing the effects of Global warming and the toleration of unrestricted fossil fuel burning is deeply unethical and leaves the future generations fried in a microwave phenomenon if left unabated. 2.3.1. Economic Significance Power Generating plants contributes 60% of the total Carbon Dioxide emissions into the atmosphere. From the calculated data above, the operation of Renewable plants such as PV, Wind and Hydro offsets a substantial amount of CO concentrations emitted into the atmosphere as compared to operating Fossil-fuel based plants such as Coal and Diesel. In the 20 year study, setting aside geographical viability, it is even much more economical to operate Renewable plants such as PV against Coal. Through time, fossil fuels will be depleted and we may be able to develop new ways in generating energy. But the consequence of mans ever increasing demands for energy sources to sustain life leads us to producing pollutants that kills the atmosphere that protects life. 3. Highlights of Findings and Discussion/ Data Presentation

The load demand forecast shows a 36% increase for the next 20 years or an average annual increase of 1.8%. This indicates a positive growth in the use of electricity in the utility. 7

Although load demand and sales data are directly related, experience show that there are a lot of factors, like none-technical loss, that give rise to its difference. Load demand forecasts are necessary base for design computation while sales forecast are significant for economic evaluations. Technical loss depends upon the physical condition of the system, like its line parameters and circuit topography, and the location of the Distributed Generation system. In this study computer simulations of the distribution system were used to determine the technical loss of the system. Results shows that Wind and Hydro based DG units may incur large losses due to their geographical limitations, while the more flexible ones, like Coal and Diesel, with respect to locations, can minimize losses. The carbon emissions considered in this study is limited only to carbon emissions incurred due to plant operations. This means that carbon dioxide emitted due to the manufacturing of its parts are excluded. A comparison of their Carbon Dioxide emissions shows that Coal and Diesel plants have large CO2 emissions. Not only its effect in the environment is enormous but also the economic cost of cleaning them is also, if considered according to the carbon trading rate are also large. Carbon emissions in the Coal and diesel plants come from its fuel. In the economic comparison, fuel costs are the largest costs that these plants will incur in the long run. Least cost comparison of the different plant options shows that Carbon has the highest cost and diesel is the next. This means that in the long run coal and diesel plants would be more expensive to operate. Renewable energy power plants, like wind farm, hydro and photo-voltaic, have higher initial costs but very low operational and maintenance costs, having no consumable fuel to run its operation. Furthermore, they do not emit CO2 into the atmosphere. This is shown in Table 4. So, instead of paying for carbon emission, Renewable DG units, reduce or abate carbon emission and earns carbon credits.

Table 4: Least cost comparison

EC ONOMICC OMPAR ON (MPhp) IS s C ub able C oal Initial/installed cost 200.00 450.00 NPV of O&M 2.30 1,033.78 NPV of Fuel Cost 0.56 2,791,561.51 NPV of Periodic Maint 3.32 3,320,538.21 NPV of CO2 Em . 0.05 0.17 LEAST COAST: 206.22 6,113,583.67

D el ies 78.00 134.39 168,916.91 112.07 0.10 169,241.47

PV 11,250.00 1,292.22 23.81 12,566.04

Wind 956.25 164.76 23.53 1,144.54

H ydro 472.50 162.82 1,295.01 1,930.33

Leas Cos Com t t paris in Millionsof Php on

Submar Cable Coal Dieses PV Wind Hydro

2,793,048.77

555,939.89 169,241.47
Submar Cable Coal Dieses

12,566.04
PV

1,144.54
Wind

1,930.33
Hydro

Figure 9: Least Cost Comparison of the Different Generation Schemes

4. Conclusion and Recommendation The technical, environmental and economic evaluation shows that, for the particular utility under consideration, Renewable Distributed Generation units could greatly mitigate CO2 emissions and are less costly to operate in the long run than fossil fuel based plants.

5.
[1]

References

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