GvlNaloolFrom: Energy from Waste <efiu@defra.gsi.gov.uk>Date: Tuesday,5 November 2013 14:15To: Alan Watson <alanwatson@p-i-c.org>, Energy from Waste<eftv@defra.gsi.gov.uk>Cc "Laurie Heykoop (Economics) " <laurie.heykoop@decc.gsi.gov.uk>Subject: RE: Quantiffing GHG Savings from waste Projects - Energy from waste:A guide to the Debate. Defra, February 2OL3

Alan

Thankyou for your enquiry

For specific calculations the DECC guidance is correct,long run marginalemissions factors should be used.

The energy from waste guide was targeted at a broad mostly non-specialistaudience hence it does contain some simplifications. The detailed marginalenergy mix is quite a complex concept to explain and was beyond the scope ofthe document. The current level of long run marginal mix is essentiallyequivalent to CCGT, as this dominates the current calculation. For the purposesof the guide this was therefore adopted to clarif,i the argument. Dominic has alsoraised this issue with us and we are considering whether the foofirote should beexpanded to more clearly take account of this in any further revision

Regards

fames

> From: Alan Watson [mailto :alanwatso n @p- i -c.orgJ> Sent: 04 November 2013 Ll:37> To: Energy from Waste> Cc: Laurie Heykoop (Economics)> subject QuantiSring GHG Savings from waste projects - Energy from waste: Aguide to the Debate. Defra, February 2At3

> Dear Sir,

> [ note t]re February 2013 publication "Energy From waste A Guide to theDebate" [1] published by Defra and co-sponsored by the Welsh Government andDECC, says @ $39: "The energy from waste plant will generate some energy (inaddition to whatever it uses to run itself). This energy substitutes for energy thatwould otherwise need to be generated by a conventional gas-fired power station,thereby saving the fossil carbon dioxide that would have been released by thatpower station." Supporting footnote 29 says: "A gas fired power station(Combined Cycle Gas Turbine - CCGT) is the current standard comparator as thisis the 'marginal' technology if you wanted to build a new power station."

> The more recently published - as well as the earlier zalz edition - DECC

guidance [2] on the displaced electricity, however, indicates that it is appropriateto use the displaced emissions from the long run marginal electricity emissions.The guidance states: " 3.15 For grid electricity there are different types of powerplant generating electricity, each with different emissions factors. This mix variesover time, which means that emissions factors will also vary. Analysts should usethe (long run) marginal grid electricity emissions factors in table 1 of thesupporting tables when estimating the impacts on GHG emissions from changesin grid electricity consumption". [My emphasis]

> The email communication benveen Laurie Heykoop at DECC (Economics team)to Dominic Hogg at Eunomi4 [copied below - 3) appears to confirm thisinterpretation of the DECC guidance.

> I would be grateful if you could advise, therefore, why there are differentapproaches suggested in recent Government Guidance in relation to this keyassumption?

> Could you also please confirm whether it is appropriate to use the emissionsfrom displaced electricity from CCGT or from the long run marginal gridelectricity emissions for the assessment of proposed electricity generation plantwhen calculating carbon dioxide equivalent savings for planning purposes?

> Thankyou foryour assistance with this.

> Best wishes

> AIan

> [1] DEFRA.2OLZ. Energy From Waste A Guide to the Debate February2013.

> [2] $3.1S p11 DECC. 2013. Valuation of Enerry Use and Greenhouse Gas (GHG)Emissions Supplementary Guidance to the HM Treasury Green Book onAppraisal and Evaluation in Central Government.

> [3] Email communication between Laurie Heykoop at DECC (Economics team)to Dominic Hogg at Eunomia, received on 2t March 2013:

> From: Heykoop Laurie (Economics) [mailto:laurie.heykoop@ ]> Sent: 21 March 2013 1"L:51> To: Dominic Hogg> Cc: Fleming Neil (Economics)> Subject RE: Quantiffing GHG Savings from Waste Projecrs> Dominic,> a) As indicated before, I believe your approach is right for the question youwantto answer.

t b) You need to pay attention to the emissions factors as they vary betweenyears when you make your calculations.

> To get the grid average figure which incorporates the three sectors ofDomestic, Commercial/Public Sector, and Industrial, into an average you maywish to apply an 'uplift' to the Generation Based figure to account for losses thatoccur during transmission and distribution.> By way of illustration if you save 100kw in 2013 and 150kw in 2014 youwould calculate GHG savings with:> (100 x 0.3355 x uplift factor) + (150 xO.3277 x uplift factor)> The latest'uplift factor' is7.4Vo, or'LA74'for the calculation above.

> Note that in mathematical calculations you would get a larger - and erroneous- result if you dMded by [1 - A.A7q than if you multiplied by (1.07a]. Likewise ifyou are calculating a7.Aa/a decrease in something you would not divide butmultiplyby (1- A.a7q.> Please also note that I have liaised with relevant people here at DECC regardingthe7.4o/o upliftbecause it is a figure from 2010 and thus would be better to havea more recent one. At DECC we make projections of future transmission losses,but what the Defra tables {and figure of 7 .4o/o) give is actual empirical dataobserved during the years in question. So that you are aware it has beensuggested that Defra may update their tables this year.> I hopethis helps,> Laurie

> From: Dominic Hogg [mailto:Dominic.Hogg@eunomia.co.uk]> Sent: 19 March 20L3 LL:ll> To: Heykoop Laurie (Economics)> Cc: Fleming Neil (Economics)> Subject: RE: Quantiffing GHG Savings from Waste projects> Laurie> Thanks for this. I don't lmow who the user will be. so, I guess we use, for anygiven year, the average (of domestic, commercial public sector and industrial)long run marginal consumption-based value multiplied by LA74 (or should itbedivided by (1 - 0.A74?).> Can you just confirm, for avoidance of doubt,> a) that this is fie right approach for a project, and

> bJ that the benefits from the project should be estimated using the relevantlong run marginal for each year the facility is expected to operate

> Thanks for clarifliing these points.> Best regards> Dominic

> From: Heykoop Laurie (Economics) [mailto:laurie.heykoop@ J> Sent: 18 March 201316:28> To: Dominic Hogg> Cc: Fleming Neil (Economics)> Subject: RE: Quanti$ring GHG Savings from Waste Projects

> Dominiq

> You are approaching this in the rightway. The key sections in theSupplementary Guidance are para 3.13 and rJre example in Box 3.2.> To obtain a grid average estimate of consumption based emissions, adjustedfor transmission and distribution losses, you may want to apply the loss figuresat the end of Table 3c in 2al2 Guidelines to Defra / DECC's GHG ConversionFactors for Company Reporting to uplift the emissions, here. The latest averagenetwork losses reported are in 2010 and across all consumers was T.4a/o.

> Alternatively, you may not need to use the average transmission anddistribution losses if you know where (i.e. which sectorJ the electricityyou aredisplacing is.> I hope this helps.> Kind regards,> Laurie

> From: Dominic Hogg lmailto:Dominic.Hogg@eu ]> Sent: 14 March 2Al3l2:L9> To: Greenhouse Gas Emissions Appraisal> Subjec* Quantiffing GHG Savings from Waste Projects

> Dear Sir / Madam> I wanted to check that my approach to the quantification of GHG savingsrelated to electricity generated by specific waste related projects, such as AD,incineration, etc. was correct and aligned with the document:> Valuation of energy use and greenhouse gas (GHG) emissions, (i.e.the supplementary guidance to the Green Book).> Such projects produce electricity, and thereby reduce the amount of electricityrequired, at the margin, from other sources.> Would I be right in saying, therefore, that in order to calculate the GHGs savedfrom the operation of the facility, I should follow the approach identified in para3.13 of the above mentioned document (and in Box 3.1, and shown as anexample in Box 3.2)? To be clear, supposing, for the sake of argument, that thefacility generates 100kwh for a period from 2015 to 203s, then the 'avoidedemissions' associated with that facility would be calculated as:> 2015 100 x long run marginal consumption-based value for 201s> (from your Table 1)> 2035 100 x long run marginal consumption-based value for 2035> ffrom your Table 1)> With appropriate values for the years in between.> In addition, assuming that the facility's energy could, in principle, be used byany user, would it be appropriate to use a figure for a given year which is theaverage of the figures for domestic, commercial / public sector and industrialconsumers?> I'd be grateful for response on this. Please do not hesitate to contact me if thenature of my question is unclear.> Best regards> Dr Dominic Hogg