Development I f
t Information Center
The World Bank in Vietnam
Th W ld B k i Vi
Vietnam Blended Learning Program
PROJECT APPRAISAL EXERCISE
UQ SMART – The University of Queensland (Australia)
Institute of Energy Science (Vietnam)
Introduction to Project Appraisal & MACCs
P j A
i l MACC
Case Study Case Study: Redland City Council
Carbon Abatement Project Appraisal Exercise
WHAT ARE MARGINAL ABATEMENT COST CURVES
“A MACC is an economic decision making tool, designed to assist managers to identify, rank and prioritise the
implementation of GHG abatement projects. Projects are ranked from lowest (most desirable) to highest cost per
tonne of CO2-e reduced”
A MACC presents three visual indicators:
• The cost per tonne CO2-e abatement for a project
• The volume of abatement that the project can deliver (annually or over project life)
at that cost per tonne CO2-e abatement
• The given point at which it becomes cheaper to purchase carbon offsets or
i.e. where abatement is no longer competitive with offsets.
HOW TO READ A MACC
Projects that present net savings are located
below the horizontal axis, and should be
prioritised for implementation.
B contrast, projects found above the
horizontal axis have a net cost to implement
per tonne of CO2-e reduce.
A MACC may be considered as part of a
pre-feasibility assessment of potential GHG
In the past, MACCs have mainly been
focused at the macroeconomic
I the past, MACC h
MACCs have mainly b
l been f
the macroeconomic level…
…but this is not very valuable to a business,
unless a MACC reflects the organisational
or facility level.
HOW TO BUILD A MACC
The steps are summarised as follows:
Identify potential abatement projects
Conduct high level technical / risk pre feasibility analysis of each project
Gather financial and GHG information on each project
Determine NPV and net emissions savings (NES) for each project
Develop the MACC (you will do this).
CASE STUDY – TARGETS / OBJECTIVES
Corporate emissions reduction targets set:
- based on 1998 levels
- 25% by 2020
- 50% by 2030
-75% by 2050
Model to determine out how does this translate into
annual emissions reduction targets?
CASE STUDY – TARGETS / OBJECTIVES
Used carbon footprint and modelling to figure out what they need
to achieve, now to plan how to do it most cost effectively...
CASE STUDY – APPROACH
2 MACCs created for purposes of legibility
- efficiency measures
- fuel switching measures
• Two years of intensive eco-efficiency program meant they
needed to look hard and outside the box for additional savings
• Data availability issues and typical people barriers.
g g p
• Electronic framework created for ongoing updating.
CASE STUDY – FINDINGS
Large scale solar, on-site wind, natural gas cogeneration, LED lighting and hybrid
vehicles remain cost prohibitive technologies for now...
Economics of solar and LED projects constantly changing…
Projects are hampered by cheap electricity rates and short asset life cycles
A large portion of ‘low hanging fruit has been ‘picked’, likely a consequence of
achieving impressive reductions in recent years
Reductions getting harder to find and cheap ‘no regrets’ projects and their contribution are increasingly small.
CARBON FOOTPRINT EXERCISE
Answer the following Questions
What are your company’s Scope 1 and Scope 2 emissions in t/CO2e
Have any activities been excluded?
What is your company’s ‘carbon intensity’ in tCo2-e/$000?