URU, Alm.del - 2018-19 (1. samling) - Endeligt svar på spørgsmål 103: MFU spm., om ministeren vil oversende rapporterne med beregninger af klimaeffekten for de to kraftværker i Mali og Benin, som IFU gik ind i i 2016, til ministeren for udviklingssamarbejde

Udenrigsudvalget 2018-19 (1. samling)
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HFO power plant in Mali, Africa

SUMMARY

Trucost, part of S&P Global was commissioned to conduct analysis of the potential CO

e savings

relating to a heavy fuel oil (HFO) power plant installation in Mali (Africa).

This African HFO project can feasibly provide GHG savings based on detailed analysis and

materiality of carbon savings. These are considered

low

with an associated net benefit of 15

tCO

e/DKK million invested. With social cost of carbon incorporated, this is equivalent to 0.012

DKK/DKK invested.

DATA AVAILABLE



The maximum working capacity of the new HFO power plant in Kayes, Mali is 81

MWe (IFU, 2016b)

The actual working capacity is 81% of maximum capacity for the HFO power

plant in Mali (IFU, 2016b)

The guaranteed output for Mali power plant is 578,160 MWh/annum (IFU,

2016b) and based on this it was calculated that the plant operates for 24

hours/day

Kayes, Mali HFO plant is a greenfield project, thus construction emissions are

included

The project life considered for the analysis is 20 years

Ecoinvent factors were used for calculating the lifetime emissions of both

alternative and baseline scenario (EcoInvent, 2016)



RATIONALE OF FUNDING

In Mali as well as generally in Africa, there is an increasing demand for electricity, which needs to

be met. The annual demand for energy is increasing at the rate of 10% per annum in Mali (African

Development Bank, 2015). IFU is considering an investment developing a HFO power plant to help

meet this need.

The optimal opportunity for carbon reductions relates to renewable energy rather than continued

development of fossil fuel based power generation. However, given that the energy demand is

increasing at a high rate and it is easier and reliable to expand the energy generation from thermal

URU, Alm.del - 2018-19 (1. samling) - Endeligt svar på spørgsmål 103: MFU spm., om ministeren vil oversende rapporterne med beregninger af klimaeffekten for de to kraftværker i Mali og Benin, som IFU gik ind i i 2016, til ministeren for udviklingssamarbejde

power plant, HFO electricity generation is investigated as an alternative to current private

generator and carbon intensive grid generation.

INTRODUCTION

Mali Investment:

The developer of the Mali HFO plant is Albatros Energy Mali SA. It made a concession agreement

with the Government of Mali back in 2011 that has later been amended and now covers the

construction and operation of an 81.5 MWe HFO thermal power plant with a guaranteed output

corresponding to 66 MW.

Burmeister & Wain Scandinavian Contractor (BWSC) has been selected as Engineering,

Procurement and Construction (EPC) supplier as well as Operations & Maintenance (O&M)

contractor with a 13-year full O&M contract.

Table 1: Details of Investment made in Mali HFO power plant

Units

City

Location

Power Type

Maximum Capacity

Actual working capacity

Guaranteed output

Working Hours/day

Working Hours/annum

Total MWH

MWh/annum

hours

MWh/annum

Investment

City of Kayes

Western Mali

HFO thermal power plant

81%

578,160

8,760

578,160

METHODOLOGY

The focus of the proposed HFO power plant is to increase the current capacity rather than replace

it. Therefore, the impacts from alternative and baseline scenarios were compared with respect to

providing electricity to satisfy a part of unmet demand from the individual national grids. In the

absence of a HFO power plant, it is assumed an equal amount of electricity would have been

provided by thermal power plants (50%) and private generators (50%), based on current energy

mixes.

To capture impacts arising from both supply chain and operations of alternative and baseline

scenarios, carbon impacts were derived from LCA values from EcoInvent (EcoInvent, 2016) to

account for entire upstream activities associated with different electricity producing

technologies. All EcoInvent records used in this study have been mentioned in detail in the

reference section.

Life expectancy of the project is estimated to be 20 years. The results have been consequently

contrasted with the proposed fund participation in an effort to get a more holistic view of the carbon

savings of the project with respect to the investment.

Mali Project GHG emissions profile

The proposed plant in Mali has a capacity of 81 MW and its output is 66 MW which translates to a

working capacity of 81%. The LCA factor identified was scaled appropriately to fit the detail of the

Mali plant.

Mali Baseline GHG emissions profile

Mali gets its electricity on-grid from thermal power plants (47%) and hydro power (53%)

installations as of 2013 (African_Development_Bank, 2015). The unmet demand is fortified with

off-grid energy from private diesel generators and representing

40% of energy from EDM’s grid

electricity supply (Mali_Minstry_Of_Energy_and_Water, 2011). Using Ecoinvent factors, the total

emission from the Mali grid is determined to be 0.582 KgCO

e/KWh (EcoInvent, 2016).

The HFO electricity is unlikely to replace the grid generated electricity due to unmet demand, so it

is assumed energy will be in addition to the grid, replacing in part the private generation of energy

through diesel generators. The baseline scenario is therefore electricity generation through

thermal power plants (50%) and private generators (50%) to produce power equivalent to

alternative scenario (578,160 MWh/year). Hydro power generation is excluded as this is unlikely to

be further expanded and comparison is against unmet demand not current practice.

Table 2: Baseline energy scenario in Mali

Country

Power type

Thermal

Private.

generators

Fuel type

HFO + Diesel

Diesel

Estimated

contribution %

50%

Total

e/KWh)

(Anon., n.d.)

0.9200

0.9475

Kg CO

e component of

total baseline

0.460

0.474

0.934

Mali

(African Development Bank, 2015)

Assumptions:



It is assumed that while there is current unmet demand, should the project not take

place, 50% of additional electricity would be provided by thermal power plants as grid

production and the other 50% would be catered for by private generators assumed to be

operated by diesel combustion.

A size appropriate LCA for the construction of a HFO plant was not identified, and

therefore the GHG emissions associated with the construction phase were scaled down

accordingly. The emission from combustion is considered appropriate.

GHG emissions from combustion of HFO at power plant were used as a proxy for the

thermal plant output within the country’s grid mix.



RESULTS

The total emissions were calculated per typical year and total project life for both alternative and

baseline scenario. Using the client provided investment details (in table1) the GHG savings or

emissions avoided per million Danish Krone (DKK) invested in to HFO plants were found. IFU

investment was provided in Euros (EUR) and converted to DKK

Converted using UKFOREX (Average value for year 2015)

Table 3: GHG savings from investment made in Mali HFO power plant

Typical Year

Project emissions (tCO

Baseline emissions (tCO

527,120

539,837

Total Project Life

10,542,392

10,796,746

GHG savings (tCO

e per Total DKK

mn Investment)

GHG savings (tCO

e per IFU DKK

mn investment)

IFU saving (DKK/DKK invested)

12,718

254,354

N/A

294

N/A

0.012

For every million DKK

IFU is investing in the Mali HFO power plant, 15 tonnes of GHG could

potentially be avoided. When considering the social cost of carbon, this is equivalent to 0.012

DKK/DKK invested, considered low materiality for carbon saving.

Mali relies upon hydro installations for its grid power and the energy output depends on the water

availability. Also expanding its potential would take more investment and time

(African_Development_Bank, 2015), suggesting expansion of this renewable technology would be

challenging. Hence HFO is being proposed as a short term solution rather than using other high

emission alternatives such as diesel generators. For a long term, sustainable solution, increasing

the renewable potential to achieve a less carbon intensive energy scenario would be preferable.

Limitations:



The EcoInvent records used in the study are only a proxy which are very comparable to the

power production technologies of interest. The values are global as country specific data

was not available, however they are adjusted based on regional grid mix.

Literature and online information available on Mali energy is limited, conflicting and in

places, outdated.



Converted using FOREX, at an exchange rate of 7.44DKK per EUR, as per average rate of 2015

REFERENCES

African_Development_Bank, 2015. Renewable Energy in Africa, Mali country profile,

EcoInvent, 2016. Database search. [Online] Available at:

https://v32.ecoquery.ecoinvent.org/Account/LogOn?ReturnUrl=%2fHome%2fIndex

[Accessed

2016].

IFU, 2016b. BWSC HFO power plant, Kayes, Mali, Clearance in Principle. (Provided by IFU)

Mali_Minstry_Of_Energy_and_Water, 2011. SREP MALI - INVESTMENT PLAN Scaling up

Renewable energy

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