Basing energy improvement pojects solely on CO2 savings

Oct 13, 2012 | Energy and Carbon, Environment, News | 0 comments

The steady increase in proportion of green electricity in the electricity pool has set me thinking about the benefit of and reasons for energy savings. I recently tweeted about Denmark having achieved 40% green electricity last year and wondered that if (or probably, when, knowing the Danes) they achieve 100% green electricity, does it really matter what type of light bulls we use. Whilst it is difficult to communicate complex ideas in a tweet, the point simply put is if electricity is 100% green, then the only reason why you would implement electricity energy savings is for financial reasons, not for wider environmental issues.

Industry is being urged to save energy to reduce CO2 emissions and the carrot is on two levels. First, there is the financial saving, but secondly there is a more subtle pressure to reduce green house gas emissions. For example, industries with IPPC or Waste licences issued by the EPA are required from time to time to undertake energy audits. For each saving identified by the audit, the annual CO2 emissions saved and the capital cost per tonne of annual CO2 emissions saved is required to be reported.

On the face of it, ranking energy saving projects by capital cost per tonne of CO2 saved seems rational. If the imperative is to reduce CO2 emissions, then (all other things being equal), the first project to be selected is the one with the lowest capital cost per tonne of annual CO2 emissions saved. The danger with this is that the current CO2 emissions data for each fuel type will be completely different by 2020. If Ireland is on target, electricity will have about 25% less CO2 emissions and transport fuel will have about 10% less CO2 emissions.

This means that if an energy audit today identified two projects, one say for transport and one say for lighting with equal capital cost per tonne of annual CO2 saving, this will be misleading as over the life of the project the CO2 emissions from electricity are going to fall faster than for transport fuels.

Those undertaking energy audit have a responsibility to put their clients’ interest first. This means that, for example, as well as providing the mandatory ranking required by the EPA, consultants need looking further ahead and calculate the capital cost per tonne of CO2 emissions over the life of the project (or failing that, over a sufficiently long time frame) taking into account the national and EU targets for CO2 emissions reductions from energy sources.