Actions (N (NAMAs) for low-carbon end- use sectors in Azerbaijan - - PowerPoint PPT Presentation

Nationally Appropriate Mitigation Actions (N (NAMAs) for low-carbon end- use sectors in Azerbaijan (A Project of f UNDP, , GEF and SOCAR)

Project Targets, Progress and Way Forward 5th December 2018

Project Objectives and Goals

Project Obje jective and Goal

Project Objective To support SOCAR in the implementation of its Climate Change Mitigation Strategy by promoting and upscaling GHG (Greenhouse Gases) mitigation measures Project Goal To reduce greenhouse gas (GHG) emissions as well as energy consumption in SOCAR's buildings, vehicles and oil-fields.

Approach

SOCAR, the national oil company of Azerbaijan, is the main stakeholder and implementing partner because:

• Its core business (oil & gas sector related production, processing and

distribution) is a major source of GHG emissions

• SOCAR is a major energy user and thus GHG emitter
• NAMA approach offers a valuable opportunity to SOCAR to develop and

implement a large scale GHG mitigation program

• The project supports SOCAR’s long-term sustainable development strategy
• The program can be replicated to the national level and thus influence the

country’s overall GHG emission reduction goals.

Methodology

To improve the energy performance in the oil& gas end-use sectors, namely:

• Oil-Fields: Capture associated gas evaporating from existing
• n-shore Siyazzaneft oil-field and direct it to nearby

residential areas

• Buildings: Install retrofits in new and existing residential, service and

public buildings

• Vehicle Fleet: Improve the fuel-efficiency in passenger cars, trucks,

buses, special purpose vehicles

NAMA Program’s Target Outputs

Per Year (tCO2eq) Influence Period of Pilots (Years) Total Reductions (tCO2eq) tCO2 Eq As percent

• f total

Buildings 420 25 10,500 1,291,855 20.7% Transport 159 10 1,593 9,666 0.2% Associated Gas Capture 21,962 25 549,050 4,941,000 79.2% Total 561,143 6,242,521 100.0% Direct Reductions (from Pilot Projects) Indirect Reductions (Post-Project Period - 25 Years) - Sector / Sub- Sector

Basis of f Target Outputs – Project Based Reductions

• 8,000 m2 building space will be retrofitted which will result in 10,500 tCO2eq

reduction over 25 years.

• 10 vehicles will undergo fuel-switch thus resulting in 98 tCO2eq reduction and

efficient driving practices on 340 vehicles will result in 1495 tCO2eq reduction

• ver 10 years.
• 600 households with average size of 80m2 will receive captured gas and

displace kerosene oil use thus resulting in emission reductions of 549,044 tCO2eq over 25 years.

Basis of f Target Outputs – In Indirect Reductions

Gas Capture: ⁻ At pilot scale, 600 households would receive captured gas through pipelines. ⁻ The displacement of kerosene and wood fuels would result in reductions

• f 550,000 tCO2eq.

⁻ Targeting 15 times the number of households (i.e. 9000) would result in reductions of 4.9 million tCO2eq (considering 60% causality factor.) Buildings: ⁻ At pilot scale, 2% of total building space would cause a reduction of 10,500 tCO2eq based on 20% lowering of consumption. ⁻ Retrofitting 15% buildings with 40% lowering of consumption plus new buildings built by SOCAR will lead to 1.3 million tCO2eq reduction. Transport: 9,666 tCO2eq reductions expected in SOCAR fleet of vehicles by eco-driving training of 20% of car and 50% of heavy vehicle users.

Project Progress to Date

Progress to date - I

• OUTCOME-1: Prioritizing most feasible measures with highest GHG

reduction potential and lowest costs using the Marginal Abatement Cost Curve (MACC) Present Status: MACC Curves for buildings and transportation sectors of SOCAR have been finalized.

• OUTCOME-2: Development of NAMA program/action plan in oil & gas and

end-use sectors

Present Status: Based on the recommendations of Outcome-1 and implementation lessons learned from pilot activities, the NAMA program will be completed in 2019-20 time-frame

Progress to date - II II

• OUTCOME-3 Invest in pilot projects implemented for

large-scale replication through NAMA mechanism

Present Status: The efficiency improvement measure were completed in 5 buildings and their results have been documented.

• OUTCOME-4 Develop the MRV (Measurement, Reporting

and Verification) framework for better management of the NAMA program/action plan

Present Status: MRVs of buildings and transport sectors have been done and corporate MRV report is also finalized.

The NAMA Development and Delivery Process

CO2 Reduction Measures - Buildings Sector

Energy class Energy consumption [kWh/m2 a] Descriptive building energy efficiency status A 0-30 Nearly zero building B 31-50 Low energy consumption building C 51-70 Energy efficient building D 71-120 Average energy efficient building E 121-161 Non-satisfactory energy efficient building F 161-210 Energy inefficient building G 211- High energy inefficient building

CO2 Reduction Measures - Transport Sector

 M1 - Eco-driving training measure (behavior, user pattern, e.g. awareness raising for SOCAR’s staff)  M2 - Optimization of driving routes  M3 - Purchase of electric vehicles - passenger cars  M4 - Purchase of hybrid vehicles - passenger cars  Changing old fleet with new EURO 5 norm vehicles - passenger cars  Changing old fleet with new EURO 5 norm vehicles – buses  Changing old fleet with new EURO 5 norm vehicles – trucks  Changing old fleet with new EURO 6 norm vehicles - passenger cars  Changing old fleet with new EURO 6 norm vehicles – buses  Changing old fleet with new EURO 6 norm vehicles - trucks

Next Steps in the Project

Findings to date and the Way Forward - Buildings

• Lack of:

₋ awareness about EE technologies and their benefits; ₋ technical knowledge on sourcing and installation of EE building materials and technologies; ₋ incentives as energy prices are highly subsidized, especially for the lower-income groups; ₋ comprehensive and formal regulations for EE in housing. The way forward ₋ Develop framework for a comprehensive sustainable housing development program; ₋ Structure financing arrangements with active partnership of Azeri banks; ₋ Enact/enforce building energy codes and a legislative framework at the government level; ₋ Develop a local market for environmentally friendly building construction technologies.

Findings to date and the Way Forward - Transport

₋ Suitable sources of other decarbonized fuel types e.g. hydrogen and (m)ethanol are not easily available; ₋ Compressed natural gas vehicles don’t result in sufficient GHG reductions; ₋ Electric vehicles cannot be considered momentarily because Solar-PV based charging stations are not likely in the near future.

The way forward

₋ Awareness and training in Eco-Driving offers highest reductions in GHG emissions; ₋ Hybrid-electric cars, trucks and buses is the most viable option for renewing the vehicle fleet of SOCAR.

Findings to date and the Way Forward – Gas Capture

₋ Siyazanneft oilfield No. 3 has 63 active wells (total wells in Siyazan are 554) which release associated petroleum gas (APG) to the environment measured at 19,000m3 per day; ₋ Only 4 wells are currently delivering gas to the gathering gas centre of “Azeri Gas” while no infrastructure exists to capture/transport from remaining 59 wells; ₋ Collected gas has to pass through separators, heaters, compressors, and the main distributor line; ₋ Capturing and distributing APG to end consumers requires a functioning gas pipeline grid. The way forward ₋ Varying gas flow and pressure requires different pipeline diameters and wall thicknesses (in total, 10 different types of pipelines are recommended to cover 45 km length); ₋ Siyazanneft oilfield is located in a mountainous area and construction works will require road-reconstruction and tree-cutting to avoid bending the pipelines excessively; ₋ Expedite selection of contractor to procure and install gas gathering/distribution equipment; SOCAR arrangements for pipeline network must proceed in parallel; ₋ Construction has to be on fast-track basis to avoid snow season from November to March.

Gas Capture - Procurement in Process

Thank you

Panel Discussions (2 Panels)

Panel No. 1: Approaches to GHG Reductions from SOCAR Buildings using the NAMA Approach Panel No. 2: Approaches to GHG Reductions from Transport Sector in Azerbaijan