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[.]
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 I TRUCJNG C C A THJ TRU'DNG MUA BAN KHI T H A I Q U C TE CHO HE THONG DIEN C 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$t Nam Wye tiSu Ciia nghiSn cCru nAy IA dAnh glA tAc ddng cda thj truing thAi toAn ciu din gii thAnh phAt di$n sinh khdi tai Vi$t Nam tlnh din nSm 2020 NhO'ng kit quA chl r^ng, bing viSc dua phAt di$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 $A- C02 t(ri 13 $AC02 Loi nhuAn cao nhit cua viSc bAn chirng chl giAm thAi tr§n thf truing mua bAn thAi qu6c ti IA 168,1 US$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 ; ôô !,ui .;., ,*ã ™^ ^:„., „*• 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 11r>cD • the 1, international • .• I emission _• • finding " the Optimum solution,' IS used, selhng CERs in *^ trading market 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 , ~„,„ „„.„ ~ ,, efficiency ee • • Vietnam I/- » 2020 inin generation costs in 2010 and 2020, as fobws: ofP,least-cost in by Biomass power generation, in which the biomass ftiel is assumed lo be supplied by yearsshortrotadonforestof Acacia hybrid, has been proved to be a competitive power generation source for Vietnam by a previous study[2], [3] The biomass power generation is assumed to serve from 2020 The parameters ^- J ^y-^^s.^-^g.q.i.y >niin (2.1) ^•'•'•-'' where, g: Power generations (coal, heavy oil, gas fuel, hydro, import-electricity, biomass, nuclear); q: Load pattems of daily load curve {1 ^ ig^ see Table 4); t: Time ( l h - ' h ) ; JOURNAL OF SCIENCE & TECHNOLOGY * No 95 - 2013 y: 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 Wy = m (2.2) 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 generations equals the load demand: ^'^e.',.uy = Kt.y power (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 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 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 y2.1.6 Capacity factor Electi-ic generation energy of generation g in load pattern q at time t and in year y is lower dian its output at a time of maximum load Xg,q,,.y Xg.q,,„„q J, 2.1.3 Maximum installed capacity (2.6) where, tmaxq is lime of a maximum load in load pattem q Constraint of daily electric production energy of power generation g is given by: 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 Electric generation energy of generation g m year y is lower than its limit: X^ySQm (2.7) where, Qmax, g, y is the limit of electric generation energy from power generation g in yeary ^ The relationship between the load trace-ability ratio and die output of power generation g is given by: ("-Pg)-Xg. 10 10 \ , %COi 20 S 10 15 20 reduction 10 % Biomass Fig Profit of selling CO2 reduction in the international emission trading market (2020-Nuckar) JOURNAL OF SCIENCE & TECHNOLOGY • IN6.y!S-iUIJ power generation is assumed to serve from 2020 Confribution of biomass varies from 0% to 10% ofthe total electric generation energy; CO2 reduction varies from 0% to 20% Selling price of CO2 in the international emission trading market varies from S/t-CO; to 20 $/t-C02 Nuclear power generation has been planned to start in 2020 in Vietnam However, it is still freated as a parameter in this study Calculation results are as follows- (U Bv Calculation results are as lollows (1 By introducing of biomass into power system, Vietnam docs not need nuclear power generation in 2020 Moreover, coal and gas fuel power generations not need to be operated at the maximum output, and that brings higher energy security; (2) The 20% CO2 reduction is 19.82 MT-CO2 in 2020 (nuclear), and CO2 reduction costs vary from 9.7 S/t-COi in case of 10% biomass and 15% C02 reduction to 13 $/t-C02 in case of 0% biomass and 5% CO2 reduction; (3) Generally, as the biomass contribution and the selling price of CO; increase, the electricity generation cosi decreases gradually On the contrary, as the CO2 reduction increase, the electricit) generation cost increase gradually In 2010, generation cost is 2.64 US^/kWh In 2020, jii case of non-nuclear power generation, ii decreases from 3.03 to 2.77 USf(/kWh; in case °*' ""^'^^'' P'^"'^'' Seneration, it decreases from USff/kWh; (4) In 2020 (nucleari L L r ^n^ \_" v^uwcdr;, *= ''='' ^^ °L^''' b'