Development of framework for Measurement, Reporting and Verification system & models of heating services contracting in Bosnia and Herzegovina Michael ten Donkelaar & Jan Harnych ENVIROS, s.r.o. Biomass – Fuel of the Future 13th of December 2013 UNDP, Sarajevo, Bosnia and Herzegovina
Presentation outline • Biomass installations in Bosnia and Herzegovina • Methodologies for calculating CO2 emissions and energy savings • Proposed MRV methodology • Business models for heating services contracting • Discussion
Measurement, reporting and verification (MRV) • MRV has become a highly important issue following COP15 in Copenhagen. • MRV is necessary for: – 1) confirmation of the state of emissions reductions and
– 2) the identifying/specifying potential needs for support, with effective use of emissions inventories and national communications as key.
• Increased credibility of the reported energy savings further interest in developing biomass energy systems in the public sector throughout BiH.
• The use of an improved MRV system for reporting energy usage and GHG reductions will allow the country to formulate Nationally Appropriate Mitigation Actions (NAMAs), and would serve as a model for other carbon reduction projects in BiH.
Biomass installations in Bosnia and Herzegovina • Biomass Project – installation of biomass boilers in public buildings/elementary schools in Srebrenica, Bratunac and Milići municipalities (Republika Srpska) • Two biomass boilers installed in elementary schools (Bratunac and Srebrenica) – Replacement of oil boilers by biomass boilers using briquettes – Biomass boilers from domestic manufacturer – Investment costs 100% financed by UNDP – Approx. 112 tonnes CO2 saved annually (both schools) – baseline 2010
• Briquettes available from suppliers in the area (more supplier options possible) • Schools were underheated before replacement (but exact temperature not known) • No or little other (energy-related) renovations in the school buildings • ADD PICTURES
Old and new boilers
• Old heating oil boiler
New biomass boilers
Measurement reporting verification (MRV) system A proposed measurement reporting verification (MRV) system should take into account: • Baseline - Situation before installing the biomass boiler, type of fuel used and its emission factor, amount of fuel (and its costs)
• New situation after installing biomass boiler, type of wood used (calorific value), amount of fuel and cost, additional emissions of CO2 (e.g. processing / transport of biomass) • Any adjustments, e.g. indoor temperature before and after the boiler replacement, any other measures implemented that would influence the amount of fuel used. (but no baseline data) • Other reasons for MRV: – Measurement of other pollutants (SO2, NOx, PM10) – Measurement of energy and financial savings
1. UNFCCC general guidelines for small-scale CDM projects • Two categories: • Biogas/biomass thermal applications for households / small users (Units > 150 kW) • Thermal energy production with or without electricity (equal to or less than 45 MW thermal)
• Relatively simple calculation for heat only projects • More complex calculations for CHP projects • Baseline – Simplified baseline is the fuel consumption of the technologies that would have been used in the absence of the project activity, times and emission factor for the fossil fuel displaced. – baseline calculations shall be based on historical data on energy use
• Definition of renewable biomass
2. International Performance Measurement and Verification Protocol
(IPMVP) • Developed by EVO (Efficiency Valuation Organisation) - current best practice techniques for verifying results of energy efficiency, water efficiency, and renewable energy projects The major IPMVP principles are based on:
• Setting a baseline and measuring energy use before and after an energy conservation measure has been carried out • Energy (cost) savings = (Baseline energy – Reporting Period Energy) ± Adjustments
• Measurement boundary, 1) whole facility method or 2) retrofit isolation method 1. when replacement of the boiler is part of full reconstruction of a building whole facility method is suitable assessment of total energy use and CO2 emissions. 2. When we are only replacing the boiler then we are talking about the retrofit isolation method assessment of one retrofit (here the boiler replacement)
Setting the systems boundary Heating
Source: EVO
IPMVP – how to determine energy savings
Energy Use
Adjusted Baseline Energy
Baseline Energy
Inreased Production
Savings, or AvoidEd Energy Use
Reporting Period Measured Energy
ECM Installation Baseline Period
Reporting Period
Time
Source: EVO
Proposed methodology • Biomass heating boiler displaces fossil fuel boiler, • Simplified baseline: fuel consumption of the technologies used in absence of the project activity (heating oil or coal) x emission factor for the fossil fuel displaced. • Biomass is considered to be a zero emission fuel, their preparing, handling and transportation are not. Need to take into account • Adjustments for other influences to take into account, for schools mainly: – Change in indoor temperature (before / after replacement) – Change in classroom occupancy
Business models for heating services contracting
Local biomass sources Briquettes used in elementary schools in Bratunac and Srebrenica • Calorific value 17 MJ/kg, price 230 – 250 KM/t (without VAT) Briquette factory near Bratunac • Calorific value 18.5 MJ/kg, price 255 KM/t (but estimated increase of price up to 35 % in next 3 years)
• Possibility of discount for schools (10 – 15 %) Recommendation for fuel purchase • Quality specification of delivered fuel – preferably certificate, which shall contain calorific value • Contract for longer term for reason of security of fuel supply • Storage facilities for whole season
Possible energy contracting models • Energy Supply Contract (ESC) • Energy Performance Contract (EPC) • Combination of ESC & EPC
We consider Energy Supply Contract (ESC) as the most suitable for Bosnia and Herzegovina
Energy supply contract Advantages • Customer (school) is not burdened by any capital costs, „only“ pays for heat
• An energy service company (ESCO) will take responsibility for heat supply, • Price guarantee (for x no. of years)
Remaining questions • Public procurement regulations • Public Private Partnership law • Ownership of heat-boiler during and after contract period
Example of EPC project – project financing from energy savings
Issues for discussion - MRV • How to determine the baseline? • Data from baseline period difficult to get (other data than that of fuel consumption) • How to take adjustments into account • Do we limit ourselves to biomass boiler replacement? • From energy point of view, heating system replacement and insulation more optimal with larger projects different measurement boundary • If CHP would be considered, baseline takes into account heating and electricity production (national mix)
• MRV as a tool to measure energy and financial savings, emission reduction of other pollutants
Issues for discussion – Business models • Public procurement regulations in Federation of Bosnia and Herzegovina (and single cantons) and in Republika Srpska • When going beyond boiler replacement (e.g. replacement of heating system), EPC becomes an attractive option. Is this option feasible in BiH?
Contact Michael ten Donkelaar ENVIROS, s.r.o. Na Rovnosti 1 130 00 Praha 3 tel.: +420 284 007 491 fax: +420 284 861 245 e-mail: michael.tendonkelaar@enviros.cz web: http://www.enviros.cz