Implementation Strategies and Plans for Selected Coahuila State Climate Action Plan (SCAP) Policies Addendum to the Coahuila SCAP Final Report
Submitted to: the Secretaria de Medio Ambiente (SEMA) and the Mexico Low Emissions Development Program (funded by the U.S. Agency for International Development (USAID) and represented by the World Wildlife Fund (WWF) By the: Center for Climate Strategies (CCS) March 2016
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Table of Contents Acknowledgements ....................................................................................................................... ii Acronyms and Abbreviations ..................................................................................................... iii Executive Summary .............................................................................................................. ExS-1 Chapter 1: Background ............................................................................................................. 1-1 Chapter 2: Implementation Strategies and Plans for Policy ES-1. Electricity Production through Renewable Energy Technologies (Photovoltaic Panels, Wind Generators) in Central Station Power .............................................................................................................. 2-1 Chapter 3: Implementation Strategies and Plans for Policy ES-5: Encouragement of Efficient Cogeneration of Electricity in Industry ................................................................... 3-1 Chapter 4: Implementation Strategies and Plans for Policy RCII-3: Increasing Energy Efficiency in Existing Construction, Excluding Industrial Sector – Equipment ................. 4-1 Chapter 5: Implementation Strategies and Plans for Policy TLU-2: Promote Sustainable Urban Mobility Systems ............................................................................................................ 5-1 Chapter 6: Next Steps ................................................................................................................ 6-1
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Acknowledgments March 2016
Acknowledgements The development of the Coahuila Implementation Strategies and Plans (Implementation Plans) for selected Coahuila State Climate Action Plan (SCAP) policies was guided by a collaboration of representatives of the Secretaria de Medio Ambiente (SEMA), the Mexico Low Emissions Development (MLED) Program (funded by the U.S. Agency for International Development (USAID) and represented by the World Wildlife Fund (WWF), and the Center for Climate Strategies (CCS), (Coahuila Implementation Plans Partners). The Coahuila Implementation Plans Partners gratefully acknowledge the following individuals and organizations that contributed significantly to the successful completion of the Coahuila Implementation Plans process and the publication of this report. Great appreciation is due to the members of the Panel of Experts, Dr. Alejandro Dávila and Dr. Miriam Valdés Ibarra, who provided valuable technical expertise and time to the effort. The Coahuila Implementation Plan Partners also recognize the participants in the workshop convened by SEMA and held in Saltillo in February 2016 to approve the general framework for analysis template that guided the process (as described in further detail in this report). The Coahuila Implementation Partners thank Thomas D. Peterson and CCS, with its dedicated team of professionals, who contributed extensive amounts of time, energy, and expertise in providing technical analysis, project management and facilitation services for this process. Special appreciation goes to CCS’s Mexico Project Manager Tom Looby and CCS’s Policy Analyst Arianna Ugliano for their work throughout the process, to Cecilia Sutter for administrative and editing support throughout the project, and CCS’s technical team members Juan Maldonado and Hal Nelson. Finally, the Coahuila Implementation Plans Partners would like to thank the donor and partner organizations and their key staff, including Ricardo Troncoso and Cynthia Menendez of the MLED Program
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Acronyms and Abbreviations March, 2016
Acronyms and Abbreviations $/t $/tCO2e % AFOLU BAU BRT Btu CCS CEL cf CFE CI CIC CICG CICI CO CO2 CO2e CONUEE CRE CY DOE DOT EC EE EIA EO EPA EPS ES FIRCO FS FSIC FSICI ft FWIC FWICI FY gal GDP GFA GHG GJ
pesos per metric ton pesos per metric ton of carbon dioxide equivalent percent Agriculture, Forestry & Other Land Use business as usual bus rapid transit British thermal unit Center for Climate Strategies Clean Energy Certificates Law cubic feet Federal Electricity Commission custom industry cogeneration installed capacity cogeneration installed capacity goal cogeneration installed capacity index Coahuila carbon dioxide carbon dioxide equivalent National Commission for Energy Efficiency Federal Comision Reguladora de Energia calendar year [United States] Department of Energy [United States] Department of Transportation Energy Consumption Energy Efficiency Energy Information Administration [US DOE] Executive Order [United States] Environmental Protection Agency environmental portfolio standard Energy Supply Fideicomiso de Riesgo Compartido fuel supply forecasted solar installed capacity forecasted solar installed capacity index foot forecasted wind installed capacity forecasted wind installed capacity index fiscal year gallon Gross Domestic Product general framework for analysis greenhouse gas gigajoule
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GSP GWh IECC INEGI IPCC kg km km/L kV kW kWh LAERFTE lb LCOE LED LFC LNG LPG m2 ME metric ton MJ MLED MM MRVU MW MWh N N2O N/A NAFIN NG NGCC NGCT NGO NOx NPV PACE PE PM POD PPA PS PV RCII
Acronyms and Abbreviations March, 2016
gross state product gigawatt-hour [one million kilowatt-hours] International Energy Conservation Code Mexico National Institute of Statistics and Geography Intergovernmental Panel on Climate Change kilogram kilometer kilometer/ liter kilovolt kilowatt kilowatt-hour Use of Renewable Energy Exploitation and Energy Transition Financing Law pound levelized cost of energy or electricity light-emitting diode compact-fluorescent liquefied natural gas liquefied petroleum gas square meter macro-economic 1,000 kilograms or 22,051 pounds megajoule Mexico Low Emissions Development million Monitoring, Reporting, Verification and Updating megawatt [one thousand kilowatts] megawatt-hour [one thousand kilowatt-hours] nitrogen nitrous oxide not applicable Nacional Financiera natural gas natural gas combined cycle natural gas combustion turbine nongovernmental organization oxides of nitrogen net present value Property Assessment for Clean Energy Panel of Experts particulate matter policy option document Power Purchase Agreements power supply photovoltaic Residential, Commercial, Institutional, and Industrial
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SAGARPA
Mexico Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación SCAP State Climate Action Plan SEMA Secretaria de Medio Ambiente (State Ministry of Environment) SENER Ministry of Energy SIC solar installed capacity SICG solar installed capacity goal SICI solar installed index sq ft square foot/feet t metric ton Tg teragram [million metric tons] TgCO2e teragrams of carbon dioxide equivalent tC metric tons of carbon tCO2 metric tons of carbon dioxide tCO2e metric tons of carbon dioxide equivalent tCO2e/MWh metric tons of carbon dioxide equivalent per megawatt-hour TLU Transportation and Land Use USAID United States Agency for International Development VOC volatile organic compound WIC wind installed capacity WICG wind installed capacity goal WICI wind installed capacity index WM waste management WWF world wildlife fund yr year
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Executive Summary March, 2016
Executive Summary Background In February 2016, the State Climate Action Plan (SCAP) for Coahuila was completed and released. It identifies 17 policy recommendations in key economic sectors as initial candidates for greenhouse gas (GHG) emissions reduction in Coahuila. Details on the SCAP policies design and the direct impacts analysis are provided in Chapters 2 through 9 of the Coahuila SCAP Final Report. The SCAP policies were designed and analyzed quantitatively by the Panel of Experts (PE) in close collaboration with the Center for Climate Strategies (CCS). CCS also provided facilitative assistance, training and capacity building throughout the process. The SCAP policies are projected to result in a reduction of GHG emissions in Coahuila of 4.4 TgCO2e in 2035 (8% of Business as Usual (BAU) forecasted emissions), and are projected to have a net direct societal savings of over $70 billion pesos ($2014) cumulatively during the period of 2016 - 2035. Following the completion of the Coahuila SCAP, Secretaria de Medio Ambiente (SEMA) and the PE selected – and the representatives of the Mexico Low Emissions Development (MLED) Program approved - the following 4 high priority policies from the Coahuila SCAP (High Priority Policies) to have more detailed implementation plans or strategies (Implementation Plans) developed: • • • •
ES-1. Electricity production through renewable energy technologies (photovoltaic panels, wind generators) in Central Station Power Supply ES-5. Encouragement of efficient cogeneration of electricity in industry RCII-3. Increasing energy efficiency in existing construction, excluding the industrial sector - Equipment (Appliances, lighting, solar water heaters, flow water heaters) TLU-2. Sustainable urban mobility
The goal of the Implementation Plans is to lay out an initial plan or strategy that brings each High Priority Policy closer to an implementation ready status by highlighting key implementation actions and timing, responsible entities, key barriers and available financial resources and approaches, as well as additional analysis, assessment and planning requirements to implement each High Priority Policy. The selection of the High Priority Policies was based on the following screening criteria: • • • • • • •
GHG emission reduction potential Cost-effectiveness Potential Co-benefits Access to private funding Access to federal funding Favorable regulatory framework Favorable legal framework
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SEMA’ specific area of expertise
The Implementation Plans for each High Priority Policy were developed by the PE with the support of CCS’ technical experts using a general framework for analysis (GFA) template that was agreed upon by the PE, SEMA, MLED, and CCS, and supported by representatives of key implementing entities/stakeholders during the workshop held in February 2016 in Saltillo and convened by SEMA. The GFA template refers to the Policy Option Document (POD) elements contained in the Coahuila SCAP Appendices as the foundation upon which the Implementation Plans have been developed. The GFA template is comprised of the following elements of initial implementation planning for each High Priority Policy: • • • • • • • • • • • •
Goals & Policy Design Scope and Scale of Projects/ Programs Location/ Geographic Mapping of Projects Implementation Actions Timing & Milestones Responsible Entities Legal/ Regulatory Basis for Policy Implementation Barriers & Risks Net Present Value Costs (as indicated in SCAP) Financing Mechanisms Communications & Outreach Progress Measurement
CCS facilitated the entire process of development of the Implementation Plans that were ultimately reviewed and approved by the SEMA and MLED. SEMA agreed to act as lead agency of the implementation process for each High Priority Policy.
Summary of ES-1 Implementation Plan - Electricity production through renewable energy technologies (photovoltaic panels, wind generators) in Central Station Power The purpose of this policy is to take advantage of low carbon energy resources in Coahuila to contribute to the national GHG reduction target through diversification of the energy sources. The policy goals are: • Additional 790 megawatts (MW) of new installed low carbon capacity for electricity production by 2025 (6% from solar and 94% from wind) • Additional 1140 MW of new installed low carbon capacity by 2035 (13% from solar and 87% from wind) Several large wind projects have already been proposed, including Hipólito, Parras, Acuña 1, Acuña 2, as well as the Matamoros Solar PV project. Achievement of the policy goals will be
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evaluated by installed capacity MW by project location within Coahuila, through the monitoring of key construction permits and certificates for operation for the wind and solar facilities, as well as tracking of wind and solar megawatt hours (MWh) generation through 2035. The table below summarizes the estimated net GHG reduction and cost savings by technology deriving from the implementation of this policy Table ExS-1. Estimation of net GHG reductions and costs or savings derived from the policy
2025 In-State GHG Reductions
2035 In-State GHG Reductions
2016-2035 Cumulative In-State GHG Reductions
2016 – 2035 Cumulative Total Reductions
(Tg CO2e)
(Tg CO2e)
(Tg CO2e)
(Tg CO2e)
Wind
(0.88)
(1.17)
(17.37)
Solar
(0.04)
(0.13)
(1.16)
Technology
Net present value of societal costs, 2016 – 2035 ($2014)
Cost effectiveness ($2014/ t CO2e)
(23.00)
$(1,335)
$(58)
(1.54)
$(844)
$(550)
The following key milestones for the implementation of ES-1 during the time horizon 2016-2025 and then 2025-2035 have been identified: • Identification and promotion of potential areas • Management and obtainment of permits for implementation of the projects • Monitoring of wind and solar farms operations A list of key implementation actions is provided in Chapter 2 of this report. Key legal and regulatory frameworks for the implementation of ES-1 have been identified in the Federal legislation (Ley de Transición Energética (Energy Transition Law) of 2015) and State legislation (Ley de Fomento al Uso Racional de la Energía (Law for the Promotion of Rational Use of Energy) of 2011). Furthermore, the Clean Energy Certificates Law (CEL) - which establishes a 5% mandatory clean power generation requirement by 2018 - will help achieve the target set in this policy. Large consumers and suppliers are obliged to purchase CELs in proportion to their consumption, and could provide a stable source of income for clean energy generators and the Federal Electricity Commission (CFE). However, it is critical that Coahuila works closely with the Federal Comision Reguladora de Energia (CRE) and the CFE at the federal level, and that other powerful stakeholders are included in the implementation process of ES-1. SEMA has been identified as the agency responsible for the development of an implementation and outreach strategy of this policy by the end of 2016, and additionally as the agency responsible to promote, facilitate, assess and guide the companies to access existing programs and funds as financial sources for this policy. In particular, the following have been identified as key financing mechanisms for the implementation of ES-1: •
The government of Mexico through SAGARPA (in collaboration with the World Bank
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and FIRCO) will finance USD 60.5 million to install renewable technologies in rural areas BANOBRAS: Credit guarantees and financial support for projects that meet the National Strategy for Energy Transition and Sustainable Use of Energy Nacional Financiera (NAFIN) that supports energy saving projects, renewable energy projects and promotion of technological innovation projects Additional programs available at: http://www.gob.mx/semarnat/documentos/guia-deprogramas-de-fomento-a-la-generacion-de-energia-con-recursos-renovables
Key potential barriers for the implementation of ES-1 include, delays in the issuance of construction permits and operating certificates. Additionally, significant planning and implementation resources may be required to develop new or upgraded high voltage transmission lines to carry the renewable electricity into urban areas since large central station renewable projects are typically sited in remote locations, and require feeder transmission lines. The capital costs (MX$) for the construction of these transmission resources are often beyond what renewable project developers can raise for the projects.
Summary of ES-5 Implementation Plan - Encouragement of Efficient Cogeneration of Electricity in Industry This policy considers the promotion of efficient cogeneration in the cement industry, steel industry, and mining sector. The policy goals are: • Additional 68 MW of new installed capacity for cogeneration by 2025 • Additional 125 MW of new installed cogeneration capacity by 2035 Nearly half of this capacity is targeted for the steel sector, with the balance in the cement and mining sectors. The key milestones for the implementation of ES-5 over the periods 2016-2025 and then 20252035 include: • Identification of potential industries and firms • Management of permits for the implementation and operation of cogeneration projects • Monitoring of cogeneration operations A list of key implementation actions is provided in Chapter 3 of this report and it includes: • • • • •
Facilitate access for companies to carbon credit markets Establish training and advice schemes to ease paperwork for cogeneration investments Promote research and technological development in cogeneration technologies Contribute to the training and dissemination of the benefits of cogeneration advantages among the workers Promote the development of technical and technological capabilities related to cogeneration technologies
Additionally, it has been estimated that there are only a few large steel and cement producers that would be likely candidates to install the cogeneration equipment. In contrast, there are many
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mining firms with over 50 employees. The implication is that outreach actions can efficiently focus on a few large plants that have the technical capabilities and thermal requirements to install the MW capacity targeted under this policy. There are strong legal and regulatory frameworks to support the implementation of ES-5. The Clean Energy Certificates Law (CEL) establishes a 5% mandatory clean power generation requirement by 2018, and requires large consumers and suppliers to purchase CELs in proportion to their consumption. As for ES-1, this law could provide a stable source of income for clean energy generators and the Federal Electricity Commission (CFE). Furthermore, the Use of Renewable Energy Exploitation and Energy Transition Financing Law (LAERFTE-2008) states that the powers granted to the Federal Comision Reguladora de Energia (CRE) on renewable energies will apply to electricity cogeneration systems even if they are not using renewable energies, as long as those systems meet the efficiency criteria established by the CRE itself (LAERFTE, Article 20). However, IRENA (2015) notes some uncertainty about the continued authority of LAERFTE, so this policy needs to be followed closely by Coahuila policymakers and stakeholders. For the implementation of this policy it is critical that the State of Coahuila works closely with the Federal Comision Reguladora de Energía (CRE), the CFE, and other powerful stakeholders need to be included in the implementation of ES-5. SEMA is the agency responsible for the development of an implementation and outreach strategy of this policy by the end of 2016, and additionally the key stakeholder responsible to promote, facilitate, assess and guide the companies to access existing programs and funds. In particular, key financing mechanisms have been identified in: • Establishing proportional rates according to the size of the project for payment of state permits • Development of a "state trust for energy sustainability" to support cogeneration actions • Dissemination of federal and regional tax incentives for Distributed Generation with Cogeneration Systems While cogeneration systems can offer reduced electricity and natural gas costs, improved electricity reliability, and other benefits, there are significant key barriers to the adoption of cogeneration systems by industrial firms. From an economic perspective, manufacturers often have limited capital available for end-use efficiency projects and frequently require very short payback periods. Additionally, engineers are often risk adverse to new technologies, the interconnection permitting processes can be complex and expensive, as well as there is a lack of trained personnel available for installation, development and operation of projects.
Summary of RCII-3 Implementation Plan - Increasing Energy Efficiency in Existing Constructions, Excluding Industrial Sector – Equipment The purpose of this policy is to improve the performance of existing buildings by replacing inefficient building technologies that consume electricity and gas with more efficient equipment. This policy promotes:
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The installation of solar water heaters and flow (instantaneous) water heaters in households, thus reducing consumption of liquefied petroleum gas (LPG), natural gas (NG) and electricity for water heating Acquisition of energy efficient appliances Replacement of incandescent bulbs with efficient lighting systems: halogen, compactfluorescent (LFC) and light-emitting diode lamps (LEDs) Replacement of standard air-conditioning equipment for more energy efficient thermal conditioning equipment (e.g. mini-split inverters)
The policy goals are: • Reduce building energy intensity (GJ/building) by 30% by 2025 • Reduce building energy intensity (GJ/building) by 50% by 2035 in both cases relatively to 2015. The implementation of the policy will need to be monitored by the implementing agency to provide annual estimates of progress in meeting the GJ/building energy intensity reduction goal. One indicator used to monitor progress will be based on the national Residential, Commercial, Industrial and Institutional Sector energy intensity indicators established in the National Program for Sustainable Use of Energy (Programa Nacional para el Aprovechamiento Sustentable de la Energía) 2014-2018 that measures the amount of energy required to produce a peso of Gross Domestic Product in the state economy. A list of key implementation actions is provided in Chapter 4 of this report, and it includes the needs for SEMA to design, implement and promote a confinement program for equipment ready to be discarded, as well as a specific program that promotes energy efficient technology. There are strong legal and regulatory frameworks at the national level to support the implementation of RCII-3 under the Energy Transition Law (2015), as well as the National Program for Sustainable Use of Energy (PRONASE, Programa Nacional para el Aprovechamiento Sustentable de la Energía). However, there is a need for enforcement of the national appliance standards at the municipal level in Coahuila. At the state level, the General Law on Climate Change, the Regulations of the General Law on Climate Change and the Law for Adaptation and Mitigation to Climate Change Impacts will also support implementation of the policy. For the implementation of this policy it is critical that the State of Coahuila works closely with the Federal Comision Reguladora de Energia (CRE), the CFE, and other powerful stakeholders need to be included in the implementation of RCII-3. SEMA has been identified as the agency responsible for the development of an implementation and outreach strategy for this policy by the end of 2016, and additionally the key entity responsible to promote, facilitate, assess and guide the companies to access existing programs and funds. In particular, key financing mechanisms include: • Green Mortages by Infonavit • Spotlights Replacement Program - Saving a Light – by FIDE. Program focused on communities with fewer than 100,000 inhabitants or users who have not benefited from previous programs Center for Climate Strategies
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Virtual Store of the company of natural gas, which provides efficient equipment (stoves, water heater, air heaters) that can be paid through the gas bill in financing plans up to 24 months BANOBRAS: Credit guarantees and financial support for projects that meet the National Strategy for Energy Transition and Sustainable Use of Energy Proyectos de Eficiencia Energética FIDE (Commercial and Institutional Program) Eco-Crédito Empresarial - FIDE Nacional Financiera (NAFIN) that supports energy saving projects, renewable energy projects, and promotion of technological innovation projects A guide of programs is available at: http://www.gob.mx/semarnat/documentos/guia-deprogramas-de-fomento-a-la-generacion-de-energia-con-recursos-renovables
There are considerable key barriers to the uptake of energy efficient equipment in the RCII sectors that need to be overcome. A full list is provided in Chapter 4 of this report, and it includes: • Access to capital, since mechanisms of investment in energy efficiency are not fully developed • Potential risk of environmental damage if a handling and disposal of equipment plan is not set • The landlord-tenant market failure can make building retrofits more difficult as landlords typically pay for efficient equipment, but renters pay the utility bills • Lack of data regarding energy consumption in buildings •
Summary of TLU-2 Implementation Plan- Implementation Strategies and Plans for Policy TLU-2: Promote Sustainable Urban Mobility Systems The goal of this policy is to increase commuter participation in public transportation by 2025 and then 2035 in the municipalities of La Laguna, Saltillo-Arteaga-Ramos Arizpe and MonclovaFrontera-Castaños. The core strategy is modernization of the mass public transport system, using urban buses; by implementing prepaid services, redesign of routes, fleet renewal and modernization of infrastructure. The correct implementation of this policy would allow significant reductions in greenhouse gases emissions, and would also account considerable efficiency gains as shown in more details in the SCAP report. This topic has been thoroughly explored by recent transportation and mobility studies in Coahuila (i.e. “Plan Integral de Movilidad Urbana Sustentable” or PIMUS) for the three municipalities These studies indicate that a reconfiguration of existing bus routes, whereby a coordinated network of bus routes with a broader service area replaces bus congestion in the city center, will induce: • • •
Greater participation in the public transportation system Reduction in the number of daily trips with personal passenger vehicles Decrease in annual kilometers traveled by the bus fleet as a whole
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The three municipalities represent the three most populated metropolitan areas of the state of Coahuila which combined account for more than two-thirds of Coahuila’s total population. Actually, there are ongoing discussions about implementing a bus-rapid-transit (BRT) system in the metropolitan zone of La Laguna, which could serve as a demonstration project for the broader scope of this policy. Key milestones for the implementation of this policy include the issue of the necessary concession for public transportation as per the Ley de Tránsito y Transporte del Estado de Coahuila de Zaragoza, and access to the financial resources at the federal level under the Programa Federal de Apoyo al Transporte Urbano Masivo (PROTRAM). The entity responsible for the implementation of this policy is the Sub-Secretariat of Transport of the Ministry of Urban, Water and Land Management of the Government of Coahuila. SEMA will coordinate the multi-agency initiatives and promote a communication strategy to emphasize the environmental advantages of this policy. The legal and regulatory framework for implementing the policy already exists. However, the challenge will be to overcome the key barriers for implementation that include resistance of the affected concessionaries, horizontal and vertical coordination issues, as well as divergence of political incentives among the different actors involved in planning, operation and supervision of the public transportation systems. Convincing concessionaries of the benefits of transport modernization projects represents a major challenge, because individual interest may be curtailed in spite of overwhelming net social benefits. Additionally, it will critical to find a political consensus among concessionaries, State-level administration, and municipal administrations of targeted metropolitan zones. Key financing mechanism for TLU-2 is the Program de Apoyo Federal al Transporte Urbano Masivo (Federal Support Program for Urban Mass Transport), a funding instrument of the Fondo National de Infrastructura (National Infrastructure Fund). This program finances up to 49 percent of mass transport modernization projects that meet its guidelines.
Next Steps The Implementation Plans in this report provide an initial identification of key actions needed for implementation of the High Priority Policies. Additional implementation details may be needed in a next phase in order to make the High Priority Policies fully ready for submission to funders and donors. In particular, some key next steps include: 1. Develop work plans, prioritize implementation actions and define roles and responsibilities for each High Priority Policy 2. Develop a communication and outreach plan for relevant stakeholders for each High Priority Policy
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3. Identify disaggregated financial costs (outlays), financial and public impact returns, and risks associated with investments from spending (Financial Cost Analysis) in order to calculate metrics needed for donor submission, such as return on investment, payback period, etc. 4. Develop a Monitoring, Reporting, Verification and Updating (MRVU) system for each High Priority Policy More details on each of these steps are provided in Chapter 1 of the report.
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Chapter 1: Background 1-1. Summary of Coahuila State Climate Action Plan (SCAP) Results and Recommendations The Coahuila SCAP Report completed and released in February 2016 identifies the following 17 policy recommendations in key economic sectors (Energy Supply (ES), Residential, Commercial, Institutional, & Industrial (RCII), Transportation & Land Use (TLU), Agriculture, Forestry & Other Land Use (AFOLU) and Waste Management (WM)) as initial candidates for GHG emissions reduction in Coahuila: • • • • • • • • • • • • • • • • •
ES-1. Electricity production through renewable energy technologies (photovoltaic panels, wind generators) in Central Station Power Supply ES-2. In-situ electricity generation in residential buildings with photovoltaic panels ES-3 In-situ electricity generation in public buildings with photovoltaic panels ES-4. In-situ electricity generation in commercial and industrial buildings with photovoltaic panels ES-5. Encouragement of efficient cogeneration of electricity in industry RCII-1. Increasing energy efficiency in new and existing construction buildingsBuilding codes and standards RCII-2. Increasing energy efficiency in new construction- Equipment (Appliances, solar water heaters, flow water heaters) RCII-3. Increasing energy efficiency in existing construction, excluding the industrial sector - Equipment (Appliances, lighting, solar water heaters, flow water heaters) RCII-4. Stimulating energy efficiency in the industrial sector with energy efficient equipment and industrial process improvements TLU-1. Urban density index TLU-2. Sustainable urban mobility TLU-3. Energy efficient government fleet AFOLU-1. Dairy cattle manure management AFOLU-2. Increase and maintenance of urban vegetation AFOLU-3. Increase and conservation of vegetation in rural areas WM-1. Landfill methane utilization WM-2. Water sanitation and reclamation for industrial processes and irrigation
The SCAP policies were designed and analyzed quantitatively (i.e. net GHG and energy impacts; and net direct societal costs) over the planning period 2016-2035 by the PE and CCS in collaboration with the Coahuila Partners. This effort provided the PE with enhanced state capacity for climate policy planning and analysis through a “learn by doing” approach directed by CCS. If all the SCAP policies are implemented in a timely manner, they are projected to result in a reduction of GHG emissions in Coahuila of 4.4 TgCO2e in 2035 (8% of Business as Usual (BAU) forecasted emissions). Additionally, the SCAP policies are projected to have a net direct Center for Climate Strategies
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societal savings of over $70 billion pesos ($2014) cumulatively during the period of 2016 - 2035. The weighted-average cost-effectiveness of these policies is expected to be -$1,039 ($2014/tCO2e). These results are summarized in the figures below, and more details on the CO GHG emissions baseline, SCAP policies design, and the direct impacts analysis can be found in Chapters 2 through 9 of the Coahuila SCAP Final Report. Figure 1-1. Cumulative GHG Reduction Potential by SCAP Policy GHG Reductions (TgCO2e)
10 8
2 5
1 8
6 4 2 0
Figure 1-2. Cost Effectiveness of each SCAP Policy Cost Effectiveness ($2014/tCO2e)
$3,000 $2,000
$3,004 $1,000 $0 ($1,000) ($2,000) ($3,000)
$(5,428)
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Figure 1-3. Marginal Abatement Cost Curve for the Coahuila SCAP
Significant GHG reductions will be needed from each of Mexico’s states in order for the nation to achieve its intended reduction targets. The Coahuila SCAP sets the stage for future development of additional mitigation policies and potential strengthening of the policies recommended thereunder. In particular, additional opportunities for reductions in the ES and RCII sectors are expected to be key areas to begin bending the GHG emissions curve for Coahuila. A combination of approaches addressing energy efficiency and renewable energy (both electricity and fuels) will be needed, which could build off of this initial SCAP policy set. Other policies should also be considered, including process input substitution in the cement and iron & steel sectors. Additional mitigation opportunities in other sectors could also be explored, especially in TLU sector.
1-2. Scope, objective and process for development of the Implementation Plans for selected high priority SCAP policies Following the completion of the Coahuila SCAP, SEMA and the PE selected and MLED approved the following 4 high priority policies from the Coahuila SCAP (High Priority Policies) to have more detailed implementation plans or strategies (Implementation Plans) developed: • • • •
ES-1. Electricity production through renewable energy technologies (photovoltaic panels, wind generators) in Central Station Power Supply ES-5. Encouragement of efficient cogeneration of electricity in industry RCII-3. Increasing energy efficiency in existing construction, excluding the industrial sector - Equipment (Appliances, lighting, solar water heaters, flow water heaters) TLU-2. Sustainable urban mobility
The goal is to lay out an initial plan or strategy that brings each High Priority Policy closer to an implementation ready status by highlighting key implementation actions and timing, responsible entities, key barriers and available financial resources and approaches, as well as additional analysis, assessment and planning requirements to implement each High Priority Policy. Center for Climate Strategies
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The High Priority Policies were selected by SEMA in close consultation with the PE and the other Coahuila Implementation Partners based on the following screening criteria: • • • • • • • •
GHG emission reduction potential Cost-effectiveness Potential Co-benefits Access to private funding Access to federal funding Favorable regulatory framework Favorable legal framework SEMA’ specific area of expertise
Results of the selection process are shown in the table below:
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Policy Name
Greater mitigation impact) Greater costeffectiveness
CoBenefits
Table 1-1. Selection results of the High Priority Polices Policy ID
ES-1.
ES-2.
ES-3.
ES-4.
ES-5.
RCII-1.
RCII-2.
Electricity production through renewable energy technologies Photovoltaic energy in residential buildings Photovoltaic energy in public buildings Photovoltaic energy in commercial and industrial buildings Cogeneration in the industrial sector Building Codes and Standards Increasing energy efficiency in new constructionsEquipment
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Criteria Access to Private Funding
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Access to federal public funding
Favorable regulatory framework
Favorable legal framework
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Results
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SEMA explicit interest / priority
1
1
Rural Forestry
Urban Forestry
Increasing energy efficiency in existing constructions, excluding industrial sector Equipment ( Energy Efficient Equipment and Processes in the Industrial Sector Urban Density Index Sustainable Urban Mobility Energy Efficient Government Fleet Dairy Cattle Manure Management
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RCII-3.
RCII-4.
TLU-1. TLU-2.
TLU-3.
AFOLU1. AFOLU2. AFOLU3. WM-1.
WM-2.
Landfill Methane Gas Water Sanitation and Reuse for Industrial Processes and Irrigation
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1
3
1
1
2
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The Implementation Plans for each High Priority Policy were developed by the PE with the support of CCS’ technical experts using a general framework for analysis (GFA) template that was agreed upon by the PE, SEMA, MLED and CCS, and supported by representatives of key implementing entities/stakeholders during the workshop held in February 2016 in Saltillo and convened by SEMA. The GFA template is comprised of the following elements of initial implementation planning for each High Priority Policy: • • • • • • • • • • • •
Goals & Policy Design Scope and Scale of Projects/ Programs Location/ Geographic Mapping of Projects Implementation Actions Timing & Milestones Responsible Entities Legal/ Regulatory Basis for Policy Implementation Barriers & Risks Net Present Value Costs (as indicated in SCAP) Financing Mechanisms Communications & Outreach Progress Measurement
The Policy Option Document (POD) elements contained in the Coahuila SCAP are the foundation upon which the Implementation Plans have been developed and should be referred to, as needed, for more detailed information about the High Priority Policies. CCS facilitated the entire process of development of the Implementation Plans that were ultimately reviewed and approved by the Coahuila Implementation Partners. Details on each Implementation Plan are provided in the following Chapters of this report. SEMA agreed to act as leading agency of the implementation process of each High Priority Policy.
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Chapter 2: Implementation Strategies and Plans for Policy ES-1. Electricity Production through Renewable Energy Technologies (Photovoltaic Panels, Wind Generators) in Central Station Power 2-1. Introduction and Highlights The purpose of electricity production through renewable energy technologies (photovoltaic panels, wind generators) in Central Station Power Supply is to take advantage of low carbon energy resources in Coahuila to contribute to the national GHG reduction target (Objective 3 1) through the strategy of diversification of the energy matrix production in the country (3.2.1). This includes reducing dependence on fossil fuels with high carbon content in electricity generation by promoting installation of power plants that use renewable energy sources, specifically wind and solar, thereby helping to reduce GHG emissions per megawatt hour (MWh) generated (SCAP Report page 4-9, Appendix C pages C-2-12). The key targets for this policy are, by 2025, to have an additional 790 MW of new installed capacity for electricity production (representing 27% of the current installed capacity in Coahuila, which is equivalent to 2900 MW) and, by 2035, to have 1140 MW of new installed capacity (representing 39% of the current installed capacity in Coahuila), all with low carbon content. Several large wind projects have already been proposed, including Hipólito, Parras, Acuña 1, Acuña 2, as well as the Matamoros Solar PV project. Achievement of these goals will be evaluated based on the installed capacity (MW) by project location within Coahuila, through monitoring of key construction permits and certificates for operation for the wind and solar facilities, as well as tracking of wind and solar MWh generation through 2035. The regulatory framework for the implementation of ES-1 has been identified in the federal Ley de Transición Energética (Energy Transition Law of 2015) and state Ley de Fomento al Uso Racional de la Energía (Law for the Promotion of Rational Use of Energy of 2011). Furthermore, the Clean Energy Certificates Law (CEL), which establishes a five percent mandatory clean power generation requirement by 2018, will help achieve the target set in this policy. Large consumers and suppliers are obliged to purchase CELs in proportion to their consumption, and could provide a stable source of income for clean energy generators and the Federal Electricity Commission (CFE). However, the state of Coahuila needs to work with the Federal Comision Reguladora de Energia (CRE) and the CFE. Other powerful stakeholders need to be included in the implementation of ES-1. SEMA is the key stakeholder for the development of an implementation and outreach strategy of 1
Special Climate Change Program Promotion Version 2014-2018, 2014-2018 PECC Government of the Republic.
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this policy by the end of 2016, and also the key stakeholder responsible to promote, facilitate, assess and guide the companies to access existing programs and funds that include the following: • The government of Mexico through the Ministry of Agriculture (SAGARPA in Spanish) (in collaboration with the World Bank and the Trust Fund for Shared Risk - FIRCO), will finance a $60.5 million (USD) plan to install renewable technologies in rural areas • BANOBRAS: Credit guarantees and financial support for projects that meet the National Strategy for Energy Transition and Sustainable Use of Energy 2. • Nacional Financiera (NAFIN): Support for energy saving projects; renewable energy projects, and promotion of technological innovation projects • A guide of programs for support Renewable Energies is available from: http://www.gob.mx/semarnat/documentos/guia-de-programas-de-fomento-a-lageneracion-de-energia-con-recursos-renovables Possible implementation barriers include delays in the issuance of construction permits and operating certificates that are a key requirement for this policy. Furthermore, large central station renewable projects are typically sited in remote locations, and require feeder transmission lines to deliver the renewable electricity to the high voltage transmission lines. In many cases, these large renewable projects require new or upgraded high voltage transmission lines to carry the renewable electricity into urban areas. The capital costs (MX$) for the construction of these transmission resources are often beyond what renewable project developers can raise for the projects. Significant planning and implementation resources are typically required to develop the transmission resources and integrate the intermittent renewable electricity into the electricity system. (SCAP Report page 4-10, Appendix C pages C-33-39).
2-2. Implementation Plan Template for ES-1 Goals & Policy Design: The purpose of this policy is to take advantage of low carbon energy resources in Coahuila to contribute to the national GHG reduction target (3) 3 through the strategy of diversification of the energy matrix production in the country (3.2.1) 4. This includes reducing dependence on fossil fuels with high carbon content in electricity generation 5, by promoting installation of power
2
In Spanish: Estrategia Nacional de Transición Energética y Aprovechamiento Sustentable de la Energía, ENTEASE: http://www.gob.mx/sener/documentos/estrategia-nacional-de-transicion-energetica-y-aprovechamientosustentable-de-la-energia. 3 Objective 3: Reduce emissions of greenhouse gases to move to a competitive economy and low emissions development (Special Climate Change Program Promotion Version 2014-2018, 2014-2018 PECC Government of the Republic.) 4 Strategy 3.2.1 Promote the diversification of the energy matrix with public and private investment in generation through clean energy (Special Climate Change Program Promotion Version 2014-2018, 2014-2018 PECC. Government of the Republic). 5 95% of the total electricity generating capacity comes from two coal plants located near the town of Nava: Carbon II with a capacity of 1,400 MW and Rio Escondido (Jose Lopez Portillo) with a generating capacity of 1,200 MW. 5% of the remaining capacity corresponds to a combined cycle plant located in Ramos Arizpe, a hydroelectric plant located in the riverbed of the Rio Grande (within the limits of Coahuila and Texas) and one turbogas plant located in Monclova.
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plants that use renewable energy sources, specifically wind and solar, thereby helping to reduce GHG emissions per Mega Watt (MW) generated. This strategy is consistent with the state’s resources, as Coahuila receives a high level of solar radiation (2.9 to 6.7 kWh/m2) with high potential for energy conversion. The state can support diversification of electricity supply options by providing siting and construction of new facilities and generation operations with primary renewable energy. Based on the potential of the state regarding power generation by solar radiation and wind, it is established a scenario that considers the following goals: •
•
By year 2025, there will be 790 MW of new installed capacity for electricity production using low carbon technologies (wind and solar). Currently, Coahuila has an electricity generation capacity of 2900 MW, of which approximately 66 MW come from plants that use renewable energy (Hydroelectric Plant Amistad). According to National Electricity Sector Prospective 2015-2029 6, taking into account the program of capacity additions, by 2025 Coahuila will have and installed capacity of 4,758 MW. The 2025 goal represents 17% of the total installed capacity. Given the assumed capacity factors of 21% for solar and 30% for wind, this is estimated to be 13.3% of electricity sales in 2025. By year 2035, there will be 1140 MW of new installed capacity for state electricity production using solar and wind technologies. According to National Electricity Sector Prospective 2015-2029, taking into account the program of capacity additions and the program of power plants retirement, by 2035 Coahuila will have and installed capacity of 3,338 MW. The 2035 goal represents 33.6% of the total installed capacity. Given the assumed capacity factors of 21% for solar and 30% for wind, this is estimated to be 14.1% of electricity sales in 2035.
These targets are set by each type of technology, as shown in Table 2-1, where most of the energy production will come from use of wind. Table 2-1. Policy targets by type of renewable technology. End Year Policy Target (units MW) % of ES-1 goal from Solar % of ES-1 goal from Wind
2025 790 6% 94%
2035 1140 13% 87%
Scope and Scale of Projects/ Programs:
6
Ministry of Energy (Secretaría de Energía), 2015. Available from: https://www.gob.mx/cms/uploads/attachment/file/44328/Prospectiva_del_Sector_Electrico.pdf
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The scope of this policy is state-wide. So far, there are four projects confirmed for wind energy and one project for a solar photovoltaic farm. Nevertheless, in the time frame referred to in this policy, there are high possibilities that more projects are implemented. For the implementation of this policy, it is important to take into account the following: • Potential of the area in terms of power generation considering the inter- and intra-annual variability of the wind / solar radiation at a given location • Consider land use and the necessary permits to enable the wind / solar farm construction Location / Geographic Mapping of Projects: Coahuila receives high solar radiation, especially in western and southern areas (See Figure 2-1). Also, the southern area has a high wind power density (Figure 2-2). Nevertheless, there are cases where the most cost-effective and largest supplies of renewable energy lie outside of load centers, so transmission line projects are required to achieve renewable energy penetration. Figure 2-2 shows the actual configuration of electricity transmission lines placed in the southern and eastern areas.
Figure 2-1. Coahuila Potential for solar and wind energy. a.
Annual direct sunlight
b.
2
Average power density to 50 meters high
W
KWh m día
/
2
Source: Prepared using the Digital Map, Inegi.
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Figure 2-2. Coahuila: Electricity Transmission lines
Source: Prepared using Inegi data.
There are four confirmed projects for power generation from renewable sources (See Table 2). Table 2-2. Renewable Energy. Power Generation Projects. Location Hipólito Parras Acuña 1 Acuña 2 Matamo ros Total Total TOTAL
Renewable Technology
Beginning of Operations
Capacity (MW)
Wind
End 2016
190
Wind
Not available
200
Wind
oct-16
150
Wind
abr-17
200
Not available
20
Solar photovoltaic Wind Solar
Data Source Coahuila State Government. 2015. Environment Secretary. Coahuila State Government. 2015. Environment Secretary. CRE (Energy Regulatory Commission). RES/201/2015 Coahuila State Government. 2015. Environment Secretary. CRE (Energy Regulatory Commission). RES/005/2015
740 20 760
Implementation Actions: • Involvement of the Interministerial Commission for Energy Efficiency (Comisión Intersecretarial del Uso Eficiente de Energía) for the promotion and development of power generation projects from renewable sources • Provision of power lines in places where power generation projects are located
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•
• • • •
•
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Establishment of the operation mechanism and regulation under the Clean Energy Certificates (CEL by its acronym in Spanish), which by 2018 establishes a five percent mandatory clean power generation. This instrument will help achieve the target set in this policy. Large consumers and suppliers are obliged to purchase CEL in proportion to their consumption. CEL will be a stable source of income for clean generators, CFE and third parties. Guidelines establishing criteria for granting Clean Energy Certificates are available from: http://www.dof.gob.mx/nota_detalle.php?codigo=5366674&fecha=31/10/2014 The state government should promote economic and tax incentives in state procedures for companies that use, develop, or generate renewable energy; for example, set rates proportional to the size of the project for payment of state permits It is important to develop a regionalized detailed renewable energies inventory in order to promote projects It is important to encourage the participation of research centers/universities in the development of technology for power generation with primary renewable sources The government must promote the creation of new clusters associated with renewable energy technologies by promoting the integration of industries that take advantage of the emerging market for renewable energy sources and promote industrial development for the production of machinery and equipment for alternative energy generators SEMA must design, implement, and promote a confinement program for equipment used in the solar and wind farms and that are ready to be discarded
Timing & Milestones: The progress of this policy is followed and assessed annually. The project will begin in 2016, the first goal is achieved by 2025, and the second one, ten years later (2035). During this time frame, there will be following actions, elaborating on an annual report: • Identification and promotion of potential location areas • Management and permits for implementation of the projects • Monitoring of wind and solar farms operations Responsible Entities: For the implementation of this policy, the responsible entities are: Private Sector: • Independent energy producers • Investors • National Public Sector: • Ministry of Energy (SENER) • Federal Electricity Commission (CFE) • Energy Regulatory Commission (CRE) State Public Sector: • State Ministry of Environment (SEMA)
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State Ministry of Economic Development, Competitiveness and Tourism (SEDEC) Interministerial Commission for Energy Efficiency Panel of Experts
Legal / Regulatory Basis for Policy Implementation: • Include and elaborate regulations regarding siting and operation of the projects considered in this policy in the Regulations of the Agency on Climate Change • Link NMX regulations concerning extraction and electricity generation with the state law • Regulations about construction, operation, and maintenance requirements for photovoltaic modules • Regulations about construction, operation and maintenance requirements for wind parks • Regulate the skills / certifications of personnel involved in the installation, operation, and maintenance of equipment • Include state and federal permits required for land use • Comprehensive plan for management and disposal of hazardous and non-hazardous photovoltaic panels and wind turbines • Consider regulations for the containment of wind turbines and photovoltaic panels at the end of its useful life • Include regulations about dismantling of wind and solar farms All the documents related to regulatory basis for electricity production through renewable energy technologies are available here: http://www.cre.gob.mx/pagina_a.aspx?id=88. The policy adheres to the national and state regulatory framework: National: • Ley de Transición Energética (Energy Transition Law), promulgated in the Official Gazette on December, 2015: http://www.dof.gob.mx/nota_detalle.php?codigo=5421295&fecha=24/12/2015. The Law regulates sustainable use of energy as well as the obligations of clean energy and reduction of pollutant emissions from the electricity industry, while maintaining the competitiveness of the productive sectors State: • Ley de Fomento al Uso Racional de la Energía (Law for the Promotion of Rational Use of Energy), which establishes the general basis for promoting the rational use of energy and promote the use of renewable energy in the state of Coahuila: http://www.sema.gob.mx/descargas/legal/leyes/Ley_Fomento_Uso_Racional_Energia_E stado_Coahuila.doc • Ley para la Prevención y Gestión Integral de Residuos para el estado de Coahuila (Law for prevention and Waste management for the State of Coahuila). It aims to guarantee the right of everyone to an adequate environment and promote sustainable development through regulation, generation, recovery and integrated management of urban solid waste, as well as pollution prevention and remediation of soil contaminated with waste:
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http://www.sema.gob.mx/descargas/legal/leyes/L7 LEY PARA LA PREVENCION Y GESTION INTEGRAL DE RESIDUOS.doc In the legal framework of public policy, the General Law on Climate Change, the Regulations of the General Law on Climate Change and the Law for Adaptation and Mitigation to Climate Change Impacts in the state of Coahuila de Zaragoza will part of the compliance framework for this policy. • Barriers & Risks: In the implementation and development of projects related to this policy, the main barriers and risks that may arise are identified below. However, in this document, possible implementation mechanisms that contribute to the reduction and abatement of the obstacles are also identified: • • • •
• • • • • • • •
There is a potential risk of environmental damage if a handling and disposal of photovoltaic panels and wind turbines plan is not set. Therefore, it is necessary to develop a comprehensive plan of confinement Economic feasibility to transmit the electricity produced from the transformer to a corresponding target distribution substation to supply electricity to end users Economic feasibility due to the interconnection handling costs and balance network operations There is uncertainty regarding the evolution of the tax over sale and imports of fossil fuels according to their carbon content. Currently, tax payers are the manufacturers, producers, and importers from the sale and imports of fossil fuel. The share assessment is based on the type of fuel The costs of energy production do not consider environmental externalities or impacts on the health of the population, so that investments in clean energy lose priority for being more "expensive" The National Electric System Network should be in optimal condition for the massive inclusion of energy generated from renewable sources Limited interest of fossil fuel-based industries due to uncertainty of cost effectiveness of renewable sources of energy Coordination of environmental and energy policies Coordination amongst parties involved is required in order to remove obstacles for financing There is some level of difficulty in obtaining licenses and permits that the renewable source project developers have to do in order to have the required permits Lack of trained personnel available for installation and operation of renewable technologies Lack of robust plans that involve local communities and consider all social, environmental and economic impacts of the projects.
Net Present Value Costs: The estimated GHG and net cost/saving impacts of the implementation of this policy are presented in Table 2-3. Electricity production through renewable energy technologies will reduce emissions of greenhouse gases. The annual in-state reduction in carbon dioxide equivalent
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emissions would achieve 1.31 tons in 2035. The in-state cumulative decrease between 2016 and 2035 would total 18.53 tons. The implementation of this policy with respect to the trend scenario would yield cumulative savings of 2.179 million pesos and savings per each ton reduced in emissions of greenhouse gases would be approximately 89 pesos. Table 2-3. Estimation of Net GHG Reductions and Costs or Savings Derived from the Application of the Policy to Direct Emission Factors 2025 In-State GHG Reductions
2035 In-State GHG Reductions
2016-2035 Cumulative In-State GHG Reductions
(Tg CO2e)
(Tg CO2e)
(Tg CO2e)
2016 – 2035 Net present value of Cost effectiveness Cumulative Total societal costs, ($2014/ t CO2e) Reductions 2016 – 2035 ($Million, 2014) (Tg CO2e)
(0.92)
(1.31)
(18.53)
(24.53)
$(2,179)
$(89)
If the analysis is done by type of energy source, wind power technology allows savings of 58 pesos per each ton reduced in emissions of greenhouse gases, while using solar photovoltaic panel allows savings of 550 pesos per ton reduced (See Table 2-4). Table 2-4. Estimation of Net GHG Reductions and Costs or Savings Derived from the Application of the Policy to Direct Emission Factors Net present value of societal costs, 2016 – 2035 ($2014)
Cost effectiveness ($2014/ t CO2e)
(23.00)
$(1,335)
$(58)
(1.54)
$(844)
$(550)
2025 In-State GHG Reductions
2035 In-State GHG Reductions
2016-2035 Cumulative InState GHG Reductions
2016 – 2035 Cumulative Total Reductions
(Tg CO2e)
(Tg CO2e)
(Tg CO2e)
(Tg CO2e)
Wind
(0.88)
(1.17)
(17.37)
Solar
(0.04)
(0.13)
(1.16)
Technology
Financing Mechanisms: Because one of the barriers to the implementation of this policy is access to capital, it is essential to consider implementing the following actions: • • •
Establish financing schemes, sales contracts, Power Purchase Agreements (PPA), loan guarantees, public funds, and authorization legislation for state purchases Development of a state trust for energy sustainability to support investment in energy generation with low carbon sources SEMA is the key stakeholder responsible to promote, facilitate, assess, and guide the companies to access existing programs and funds that include: • The government of Mexico through SAGARPA (in collaboration with the World Bank and FIRCO), will finance $60.5 million (USD) to install renewable technologies in rural areas • BANOBRAS: Credit guarantees and financial support for projects that meet the National Strategy for Energy Transition and Sustainable Use of Energy
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Nacional Financiera (NAFIN): Support for energy saving projects. renewable energy projects, and promotion of technological innovation projects A guide of programs for support Renewable Energies is available at: http://www.gob.mx/semarnat/documentos/guia-de-programas-de-fomento-a-lageneracion-de-energia-con-recursos-renovables
Communications & Outreach: SEMA is the key stakeholder for the development of an implementation and outreach strategy of this policy by the end of 2016. It is important to emphasize that investors must have information regarding economic and environmental benefits obtained by implementing power generation projects from renewable sources, such as solar and wind. As well, it is also important that people are aware of the environmental benefits to remove roadblocks and allow infrastructure installation in nearby areas. Progress Measurement: There will be an annual Measurement Report & Verification (MRV) process in order to track the different projects since the implementation stage, establish the critical path, and monitor the achievement of the objectives on time. Some of the key elements to be reported are: • Beginning of operations • Wind and solar farms projects in development, operations, installation, and management stages • Location • Installed capacity (Estimated) • Permits • Produced energy • Final users It is recommended to include the following indicators: Indicator Description
Solar: New Installed Capacity Index Measures the percentage of the goal achieved.
𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆2025 = Estimation
Periodicity Responsible Stakeholder Goal:
𝑆𝑆𝑆𝑆𝑆𝑆𝑡𝑡 −𝑆𝑆𝑆𝑆𝑆𝑆2015 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆2025
x100 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆2035 =
𝑆𝑆𝑆𝑆𝑆𝑆𝑡𝑡 −𝑆𝑆𝑆𝑆𝑆𝑆2015 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆2035
x100
SICI = Solar Installed Capacity Index SIC= Solar Installed Capacity SICG = Solar Installed Capacity Goal Annual SEMA 2025: 47.5 MW
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Indicator Description
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Wind: New Installed Capacity Index Measures the percentage of the goal achieved.
𝑊𝑊𝑆𝑆𝑆𝑆𝑆𝑆2025 =
𝑊𝑊𝑆𝑆𝑆𝑆𝑡𝑡 −𝑊𝑊𝑆𝑆𝑆𝑆2015 𝑊𝑊𝑆𝑆𝑆𝑆𝑆𝑆2025
x100
𝑊𝑊𝑆𝑆𝑆𝑆𝑆𝑆2035 =
𝑊𝑊𝑆𝑆𝑆𝑆𝑡𝑡 −𝑊𝑊𝑆𝑆𝑆𝑆2015 𝑊𝑊𝑆𝑆𝑆𝑆𝑆𝑆2035
x100
Estimation
Periodicity Responsible Stakeholder Goal: Indicator Description
WICI = Wind Installed Capacity Index WIC= Wind Installed Capacity WICG = Wind Installed Capacity Goal Annual SEMA 2025: 742.5 MW 2035: 992 MW Increased Coverage of Solar Installed Capacity in Forecasted Projects Measure the increase in forecasted installed capacity in ongoing projects.
𝐹𝐹𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 = Estimation
Periodicity
𝐹𝐹𝑆𝑆𝑆𝑆𝑆𝑆𝑡𝑡 −𝐹𝐹𝑆𝑆𝑆𝑆𝑆𝑆2015 𝐹𝐹𝑆𝑆𝑆𝑆𝑆𝑆2015
x100
FSICI = Forecasted Solar Installed Capacity Index - Ongoing projects FSIC= Forecasted Solar Installed Capacity - Ongoing Projects Annual
Responsible Stakeholder
SEMA
Indicator
Increased Coverage of Wind Installed Capacity in Forecasted Projects
Description
Measure the increase in installed capacity forecasted in ongoing projects.
𝐹𝐹𝑊𝑊𝑆𝑆𝑆𝑆𝑆𝑆 =
𝐹𝐹𝑊𝑊𝑆𝑆𝑆𝑆𝑡𝑡 −𝐹𝐹𝑊𝑊𝑆𝑆𝑆𝑆2015
Estimation
Periodicity Responsible Stakeholder
𝐹𝐹𝑊𝑊𝑆𝑆𝑆𝑆2015
x100
FWICI = Forecasted Wind Installed Capacity Index - Ongoing projects FWIC= Forecasted Wind Installed Capacity - Ongoing Projects Annual SEMA
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Chapter 3: Implementation Strategies and Plans for Policy ES-5: Encouragement of Efficient Cogeneration of Electricity in Industry 3-1: Introduction and Highlights This policy considers the promotion of efficient cogeneration in the cement industry, steel industry, and mining sector. Electricity cogeneration systems in the industrial sector reach much higher conversion efficiencies than conventional systems by leveraging untapped waste heat and reducing unnecessary energy losses, enabling considerable medium and long term cost savings (CONUEE and CRE, 2013), as well as achieving greater efficiency in the use of fossil fuels, and producing less pollution per unit of useful energy. The key targets for this policy are, by 2025, to have an additional 68 MW of new installed capacity for cogeneration and by 2035 to have 125 MW of new installed cogeneration capacity. Nearly half of this capacity is targeted for the steel sector, with the balance in the cement and mining sectors. Assuming an 80% capacity factor for new cogeneration, these systems would generate electricity equivalent to 4.5% of industrial sales in 2025 and 7.0% of industrial sales in 2035. There are strong legal and regulatory precedents to support implementation of ES-5. Clean Energy Certificates Law (CEL), which establishes a 5% mandatory clean power generation requirement by 2018 will help achieve the target set in this policy. Large consumers and suppliers are obliged to purchase CELs in proportion to their consumption, and could provide a stable source of income for clean energy generators and the Federal Electricity Commission (CFE). Furthermore, the Use of Renewable Energy Exploitation and Energy Transition Financing Law (LAERFTE-2008) states that the powers granted to the CRE on renewable energies will apply to electricity cogeneration systems even if they are not using renewable energies, as long as those systems meet the efficiency criteria established by the CRE itself (LAERFTE, Article 20). However, IRENA (2015) notes some uncertainty about the continued authority of LAERFTE, so this policy needs to be followed closely by Coahuila stakeholders 7. The key milestones for ES-5 include the following action that will occur annually beginning in 2016 through the termination of the planning period in 2035: • An annual Measurement Report & Verification (MRV) process in order to track the different projects since the implementation stage, establish the critical path, and monitor the achievement of the objectives on time including identification of potential industries and firms; management of permits for implementation and operation of cogeneration projects (MW); as well as monitoring of cogeneration operations (MWh). One of the indicators to be used is the Cogeneration New installed Capacity Index that measures the percentage of the cogeneration goal achieved
7
http://www.irena.org/DocumentDownloads/Publications/IRENA_RE_Latin_America_Policies_2015_Country_Me xico.pdf p. 3
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The implementation analysis estimates that there are only a few large steel and cement producers that would be likely candidates to install the cogeneration equipment. In contrast, there are many mining firms with over 50 employees. The implication is that communication and outreach strategies can efficiently focus on a few large plants that have the technical capabilities and thermal requirements to install the MW capacity targeted under this policy. While cogeneration systems can offer firms reduced electricity and natural gas costs, improved electricity reliability, and other benefits, there are significant barriers to the adoption of cogeneration systems by industrial firms. The first set of barriers is economic. There is a lack of knowledge about the economic benefits that cogeneration can bring to the commercial and industrial sectors. Manufacturers often have limited capital available for end-use efficiency projects and frequently require very short payback periods. There is an economic barrier due to the upfront costs for the purchase of technologies. There are also technical barriers that include engineers that are often risk-averse to new technologies, complex and expensive interconnection permitting processes, as well as a lack of trained personnel available for installation, development and operation of projects that can hinder deployment. Key implementation actions include: •
• • • • • • •
The state of Coahuila needs to work with Federal Comision Reguladora de Energía (CRE), the CFE, and other powerful stakeholders that need to be included in the implementation of ES-5. SEMA is the key stakeholder for the development of an implementation and outreach strategy of this policy by the end of 2016. SEMA is also the key stakeholder responsible to promote, facilitate, assess and guide the companies to access existing programs and funds: Dissemination of federal and regional tax incentives for Distributed Generation with Cogeneration Systems Facilitate access for companies to carbon credit markets Establish training and advice schemes to ease paperwork for cogeneration investments. Promote research and technological development in cogeneration technologies: encourage participation of research centers and universities regarding design and building of cogeneration technologies Contribute to the training and dissemination of the benefits of cogeneration advantages among the workers Promote the development of technical and technological capabilities related to cogeneration technologies. Successful outreach and implementation programs for ES-5 cogeneration can be leveraged to recruit large, industrial firms to install large-scale solar or wind projects under ES-1.
3-2: Implementation Plan Template for ES-5 Goals & Policy Design:
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Electricity cogeneration systems 8 reach a much higher efficiency than conventional systems by leveraging untapped waste heat and reducing unnecessary energy losses, enabling considerable medium and long term savings (CONUEE and CRE, 2013). In Mexico, regulation has been developed considering energy efficient cogeneration projects. For most companies in the industrial sector, heat and electricity are essential inputs. When these two forms of energy are required together in a production process, it is an opportunity to implement cogeneration systems, which leads, simultaneously, to achieve greater efficiency in the use of fossil fuels and produce less pollutant emissions per unit of useful energy. This policy considers the promotion of efficient cogeneration systems 9 according to the productive structure of the state, where the impulse for cogeneration is concentrated in the following sectors: cement industry, steel industry, and mining sector. Cogeneration mode represents a viable option to contribute to sustainable energy by increasing energy and economic efficiency of the company. Based on the potential of the sectors and Coahuila’s economic structure, it is proposed a scenario where the cogeneration projects will be implemented in steel, cement and mining industries (See Table 3-1), in order to achieve 68 MW of installed capacity of cogeneration projects by 2025 and 125 MW by 2035. Table 3-1. Goals by sector (MW)
Sector Steel Cement Mining Total •
2025 30 25 13 68
2035 55 45 25 125
By year 2025, there will be 68 MW of cogeneration capacity installed in the industries contemplated in this policy. Assuming an 80% capacity factor for new cogeneration, these systems would generate electricity equivalent to 4.5% of industrial sales in 2025.
8
According to the Law of Electric Energy Public Service, Article 36, Section II, Cogeneration is defined as the production of electrical energy produced in conjunction with steam or other high thermal energy or both; when the thermal energy that is not utilized in the process is used for the direct or indirect production of electric power or when fuels produced during processes are used for direct or indirect power generation. 9 Efficient Cogeneration is defined as the generation of electricity under the provisions of Section II of Article 36 of the LSPEE, provided that the process has a higher minimum efficiency established by the CRE: Capacity of the system Minimal efficiency (%) Capacity >0.03-<0.5MW 5 Capacity >=0.05-<30MW 10 Capacity >=30-<100MW 15 Capacity >=100 20 Considering the net electricity generated in a system for a year (E), net useful thermal energy or heat generated in a system and used in a production process for one year (H), the fossil fuel used in a system for one year (F), where the electrical performance RE = E / F and the thermal efficiency RT = H / F. For more information check: 5 CRE (Feb. 22, 2011): http://www.sener.gob.mx/res/Acerca_de/REScalculoEficienciaCogeneracionEficienteCRE_220211.pdf.
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By year 2035, there will be 125 MW of cogeneration capacity installed. Assuming an 80% capacity factor for new cogeneration, these systems would generate electricity equivalent to 7.0% of industrial sales in 2035.
Scope and Scale of Projects/ Programs: The scope of this policy is state-wide. Nevertheless, there is need to identify the potential of the economic structure of the region in terms of cogeneration. The promotion for cogeneration is concentrated in the following sectors: cement industry, steel industry, and mining sector. Location/ Geographic Mapping of Projects: According to the National Statistical Directory of Economic Units (INEGI), there are 379 economic units in the sectors contemplated in this policy (Steel, Cement, and Mining). As shown in Table 3-2 below, 2, 72% of the companies are classified as “micro” (0-10 employees), 18% as “small” (11 – 50 employees), while only 6% are “medium (51 – 250 employees), and 3.7% are “big” (more than 250 employees). Table 3-2. Classification by employment of Economic Units for Cement, Steel and Mining activities. 2014.
Employees per economic unit
Cement Steel Mining
0-5 159 1 90
6 - 10 14 0 10
11 - 30 26 0 28
31 - 50 5 0 9
51 - 100 2 0 16
101 - 250 1 0 4
250 or more 1 2 11
Total 208 3 168
Total
250
24
54
14
18
5
14
379
Source: Prepared using information from DENUE, INEGI, 2014.
Geographically, cement companies are located mainly in the areas south and east, while mining companies are distributed in all regions of Coahuila. There are only three steel companies, two of which are located in the Central Desert region and the remaining company is located in the Southeast region (See Figure 3-1).
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Figure 3-1: Location of Economic Units for Cement, Steel and Mining activities. 2014.
Cement
Steel
Mining
Source: Prepared using information from DENUE, INEGI, 2014.
Implementation Actions The Interministerial Commission for Energy Efficiency (Comisión Intersecretarial del Uso Eficiente de Energía) will be employed for the promotion and development of power generation projects from renewable sources and the following actions: •
• • • •
•
Include the operations mechanism and regulation of Clean Energy Certificates (CEL by its acronym in Spanish), which, by 2018, establishes a five percent mandatory clean power generation. This instrument will help achieve the target set in this policy. Large consumers and suppliers are obligated to purchase CEL in proportion to their consumption; CEL will be a stable source of income for clean generators, CFE, and third parties. Guidelines establishing criteria for granting Clean Energy Certificates are available at :http://www.dof.gob.mx/nota_detalle.php?codigo=5366674&fecha=31/10/2014. Facilitate access for companies to carbon credit markets Promote economic and tax incentives for companies that use, develop, or generate renewable energy; for example, set rates proportional to the size of the project for payment of state permits The Commission for Energy Efficiency (the Commission) has to establish a plan of dissemination of federal and regional tax incentives for Distributed Generation with Cogeneration Systems The Commission for Energy Efficiency has to establish training and advice schemes to ease paperwork for cogeneration investments. At the same time, the National Chamber of the Transformation Industry (CANACINTRA by its Spanish acronym) has to contribute to the training and dissemination of the benefits of cogeneration advantages among the workers It is important that the Commission encourages the participation of research centers/universities in the development of cogeneration technologies and promote the
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development of technical and technological capabilities related to cogeneration technologies Establish a national register of providers of services related to cogeneration equipment: audits, technical assistance, etc. Also, it is essential to identify and promote mechanisms for certification of capabilities of consulting companies and of those companies dedicated to develop cogeneration projects
Timing & Milestones The progress of this policy is followed and assessed annually. This project will begin in 2016, the first goal is achieved by 2025, and the second one, ten years later (2035). During this time frame, there will be the following actions, supported by an annual report: • Identification of potential industries • Management and permits for implementation of cogeneration projects • Monitoring of cogeneration operations Responsible Entities For the implementation of this policy, participation and support of the following agencies and organizations will be necessary: Private Sector: • Cogeneration related establishments/ Generating companies • Cámara Nacional de la Industria de la Transformación (CANACINTRA) National Public Sector: • Ministry of Energy (SENER) • National Commission for Energy Efficiency (CONUEE) • Energy Regulatory Commission (CRE) • Federal Electricity Commission (CFE) State Public Sector: • State Ministry of Environment (SEMA) • State Ministry of Economic Development, Competitiveness and Tourism (SEDEC) • Interministerial Commission for Energy Efficiency • Panel of Experts SEMA is the responsible stakeholder to carry out the implementation actions, as well as the assessment stage. Legal/ Regulatory Basis for Policy Implementation On April 2010, the CRE published the Interconnection Contracts Models for Renewable Energy and Cogeneration Systems in Small and Medium Scale and the Interconnection Contract for Central Power Generation in the Official Journal of the Federation (DOF). Subsequently, on August 21, 2012, the Contract Model for Collective Source of Renewable Energy and Efficient
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Cogeneration System was published. These agreements extended the benefits of "net metering" and "energy bank" to projects of cogeneration and efficient cogeneration respectively. There is a need to include the regulations regarding operation of cogeneration projects in the Regulations of the Agency on Climate Change. All the documents related to regulatory basis for Electricity production through renewable energy technologies are available at: http://www.cre.gob.mx/pagina_a.aspx?id=88 The policy adheres to the national and state regulatory framework. National: • Ley de Transición Energética (Energy Transition Law), promulgated in the Official Gazette on December, 2015: http://www.dof.gob.mx/nota_detalle.php?codigo=5421295&fecha=24/12/2015. The Law regulates sustainable use of energy as well as the obligations of clean energy and reduction of pollutant emissions from the electricity industry, while maintaining the competitiveness of the productive sectors State: • Ley de Fomento al Uso Racional de la Energía (Law for the Promotion of Rational Use of Energy), which establishes the general basis for promoting the rational use of energy and promote the use of renewable energy in the state of Coahuila: http://www.sema.gob.mx/descargas/legal/leyes/Ley_Fomento_Uso_Racional_Energia_E stado_Coahuila.doc • Ley para la Prevención y Gestión Integral de Residuos para el Estado de Coahuila (Law for prevention and Waste management for the State of Coahuila). It aims to guarantee the right of everyone to an adequate environment and promote sustainable development through regulation, generation, recovery and integrated management of urban solid waste, as well as pollution prevention and remediation of soil contaminated with waste: http://www.sema.gob.mx/descargas/legal/leyes/L7 LEY PARA LA PREVENCION Y GESTION INTEGRAL DE RESIDUOS.doc In the legal framework of public policy, the General Law on Climate Change, the Regulations of the General Law on Climate Change, and the Law for Adaptation and Mitigation to Climate Change Impacts in the state of Coahuila de Zaragoza will be part of the compliance framework for the policy. Barriers & Risks: In the implementation and development of projects related to this policy, the main barriers and risks that may arise are identified below. However, in this document, also possible implementation mechanisms that contribute to the reduction and abatement of the obstacles are identified. • Volatile energy prices can create uncertainty in investment returns, leading to delayed decisions on energy efficiency projects • Manufacturers often have limited capital available for end-use efficiency projects and frequently require very short payback periods. There is an economic barrier due to the upfront costs for the purchase of technologies, plus the lack of national low cost equipment Center for Climate Strategies
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Technical engineers are adverse to new technologies If an appropriate promotion of the economic benefits and technical requirements does not take place, there could be a lack of interest of the producers with cogeneration potential because cogeneration is not their main business Uniformity and ease in interconnection permits and costs are required, along with a review of the technical requirements so that they are accessible and aligned to the real needs of the projects Coordination is required among parties involved to ensure that barriers to access funding are removed Lack of knowledge about the economic benefits that cogeneration can bring to the commercial and industrial sectors Lack of trained personnel available for installation, development, and operation of projects can hinder deployment There can be unrecognized energy benefits and non-energy societal benefits associated with improving energy efficiency. If these benefits are omitted from the cost-effectiveness calculations for cogeneration programs, there can be reduced the interest of carrying out the project
Net Present Value Costs: The estimated GHG and net cost/saving impacts of the implementation of this policy are presented in Table 3-3. Encouragement of efficient cogeneration of electricity in industry will reduce energy consumption, and therefore will reduce emissions of greenhouse gases. The average annual in-state reductions in carbon dioxide equivalent emissions would be 0.22 tons between 2015 and 2035. The cumulative decrease in 2035 would total 2.41 tons. The application of this policy with respect to the trend scenario would yield cumulative savings of 1,614 million pesos and savings per ton reduced in emissions of greenhouse gases would be of 670 pesos. Table 3-3. Estimation of Net GHG Reductions and Costs or Savings Derived from the Application of the Policy to Direct Emission Factors 2025 In-State GHG Reductions (Tg CO2e) (0.12)
2035 In-State GHG Reductions
2016 – 2035 Cumulative InState Reductions
(Tg CO2e)
(Tg CO2e)
(0.22)
2016 – 2035 Cumulative Total Reductions (Tg CO2e)
(2.41)
(2.41)
Net Present Value of Societal Costs, 2016 – 2035 ($2014)
Cost Effectiveness ($2014/ t CO2e)
$(1,614)
$(670)
Financing Mechanisms: Because one of the most important barriers to implement this policy is access to capital to acquire, install, and operate cogeneration equipment, it is essential to consider implementing the following actions: • Establish proportional rates according to the size of the project for payment of state permits • Development of a state trust for energy sustainability to support cogeneration actions • SEMA is the key stakeholder responsible to promote, facilitate, assess, and guide the companies to access existing programs and funds that include:
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Linking financing offers by Development Banking and Commercial Banking with energy efficiency projects in all sectors of energy use Financing Cogeneration projects up to 500 kW (Fideicomiso para el Ahorro de Energía, FIDE) Funding projects for equipment installation and cogeneration systems up to 500 kW, with alternative energies (Fideicomiso para el Ahorro de Energía, FIDE) BANOBRAS: Credit guarantees and financial support for projects that meet the National Strategy for Energy Transition and Sustainable Use of Energy Nacional Financiera (NAFIN): Support for energy saving projects. Renewable energy projects. Promotion of technological innovation projects A guide of programs for support Renewable Energies is available at: http://www.gob.mx/semarnat/documentos/guia-de-programas-de-fomento-a-lageneracion-de-energia-con-recursos-renovables
Communications & Outreach: SEMA is the key stakeholder for the development of an implementation and outreach strategy of this policy by the end of 2016. It is important to emphasize that investors must have information regarding economic and environmental benefits obtained by implementing cogeneration projects. It is also important that CANACINTRA develops a plan to promote and outreach the benefits associated with cogeneration projects for workers to remove obstacles, so that workers support the installation of equipment, its operation and maintenance. Progress Measurement: There will be an annual Measurement Report & Verification (MRV) process in order to track the different projects since the implementation stage, establish the critical path, and monitor the achievement of the objectives on time. Some of the key elements to be reported are: • Beginning of operations • Cogeneration projects in development, operations, and management stages • Industry / Company • Installed Capacity – Estimated • Produced Energy It is recommended to include the following indicators: Indicator Description
Cogeneration: New Installed Capacity Index Measures the percentage of the goal achieved.
𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆2025 =
𝑆𝑆𝑆𝑆𝑆𝑆𝑡𝑡 −𝑆𝑆𝑆𝑆𝑆𝑆2015 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆2025
x100
𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆2035 =
𝑆𝑆𝑆𝑆𝑆𝑆𝑡𝑡 −𝑆𝑆𝑆𝑆𝑆𝑆2015 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆2035
x100
Estimation
Periodicity
CICI = Cogeneration Installed Capacity Index CIC= Cogeneration Installed Capacity CICG = Cogeneration Installed Capacity Goal Annual
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2035: 125 MW
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Chapter 4: Implementation Strategies and Plans for Policy RCII-3: Increasing Energy Efficiency in Existing Construction, Excluding Industrial Sector – Equipment 4-1: Introduction and Highlights The goal of RCII-3 is to improve the performance of existing buildings in the Residential, Commercial, and Institutional (RCI) sectors by replacing inefficient building technologies that consume electricity and gas with more efficient equipment. This policy promotes: • The installation of solar water heaters and flow (instantaneous) water heaters in households, thus reducing consumption of liquefied petroleum gas (LPG), natural gas (NG) and electricity for water heating • Acquisition of energy efficient appliances • Replacement of incandescent bulbs for efficient lighting systems: halogen, compactfluorescent (LFC) and light-emitting diode lamps (LEDs) • Replacement of standard air-conditioning equipment for more energy efficient thermal conditioning equipment (e.g. mini-split inverters) The key milestones for this policy are, by 2025, to reduce building energy intensity (GJ/building) by 30%, and by 2035 reduce building energy intensity (GJ/building) by 50%, all relative to 2015. There will be an annual Measurement Report & Verification (MRV) process in order to track and monitor the decrease in energy intensity for each sector (residential, commercial, and institutional). The implementation of the policy will need to be monitored by the implementing agency to provide annual estimates of progress in meeting the GJ/building energy intensity reduction goal. One indicator to be used to monitor progress will be based on the national Residential, Commercial, and Institutional Sector energy intensity indicators established in the National Program for Sustainable Use of Energy (Programa Nacional para el Aprovechamiento Sustentable de la Energía) 2014-2018 that measures the amount of energy required to produce a peso of Gross Domestic Product (GDP) in the state economy. There are strong legal and regulatory precedents at the national level to support implementation of RCII-3 under the Energy Transition Law (2015), as well as the National Program for Sustainable Use of Energy (PRONASE, Programa Nacional para el Aprovechamiento Sustentable de la Energía). However, there is a need for enforcement of the national appliance standards at the municipal level in Coahuila. At the state level, the General Law on Climate Change, the Regulations of the General Law on Climate Change and the Law for Adaptation and Mitigation to Climate Change Impacts in the state of Coahuila de Zaragoza will support implementation of the policy. There are considerable barriers to the uptake of energy efficient equipment in the RCII sectors that need to be overcome in order to achieve the successful implementation of this policy. The first set of barriers is financial, including barriers to access to capital and the high upfront costs of energy efficient technologies. There is an important need to develop financing mechanisms.
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The landlord-tenant market failure can make building retrofits more difficult as landlords typically pay for efficient equipment, but renters pay the utility bills. The second set of barriers are educational and market-related: a lack of knowledge of environmental problems by consumers, lack of knowledge about the economic benefits that efficient equipment can provide in the consumption of energy, resistance to cultural changes by the population in favor of adopting practices that enhance energy efficiency. The state of Coahuila needs to work with Federal Comisión Reguladora de Energia (CRE), the CFE, and other powerful federal stakeholders that need to be included in the implementation of RCII-3. SEMA is the key stakeholder for the development of an implementation and outreach strategy of this policy by the end of 2016. It is essential that SEMA engage the actors who will make the investment decisions, information regarding the direct and indirect economic and environmental benefits obtained by the efficient use of energy. At the same time, it is required to promote and give assistance for accessing existing funding programs, including: • Design and implement a market transformation program. The program consists of coordinate with convenience stores and supermarkets different ways of promoting energy efficient technologies (layout, promotions, etc). The National Chamber of the Transformation Industry (CANACINTRA by its Spanish acronym) can be the market transformation program agency • Promote consumption of “FIDE seal” products. • Green Mortages by Infonavit 10 • Spotlights Replacement Program - Saving a Light – by FIDE 11. Program focused on communities with fewer than 100,000 inhabitants or users who have not benefited from previous programs • Virtual Store of the company of natural gas, which provides efficient equipment (stoves, water heater, air heaters) that can be paid through the gas bill in financing plans up to 24 months • BANOBRAS: Credit guarantees and financial support for projects that meet the National Strategy for Energy Transition and Sustainable Use of Energy • Proyectos de Eficiencia Energética FIDE (Commercial and Institucional Program) 12 • Eco-Crédito Empresarial - FIDE 13 • Nacional Financiera (NAFIN): Support for energy saving projects. Renewable energy projects. Promotion of technological innovation projects • A guide of programs for support Renewable Energies is available at: http://www.gob.mx/semarnat/documentos/guia-de-programas-de-fomento-a-lageneracion-de-energia-con-recursos-renovables
10
More information: http://portal.infonavit.org.mx/wps/wcm/connect/infonavit/trabajadores/saber+para+decidir/cuido_mi_casa/hipoteca+ verde 11 More information: http://www.ahorrateunaluz.org.mx/MicroSitio/ 12 More information: http://www.fide.org.mx/index.php?option=com_content&view=article&id=121:proyectos-deeciencia-energetica-fide&catid=60:programas-de-ahorro&Itemid=219 13 More information: http://www.fide.org.mx/index.php?option=com_content&view=article&id=342&Itemid=224
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4-2: Implementation Plan Template for RCII-3 Goals & Policy Design: In this policy, the GHG mitigation strategy is oriented to satisfy energetic needs of existing buildings in the RCII (Residential, Commercial, Institutional and Industrial) sector by replacing high-energy-demanding technologies (electricity and gas) with more efficient ones. This policy specifically promotes the following measures: • Use of solar energy through installation of solar water heaters in households, thus reducing consumption of liquefied petroleum gas (LPG), natural gas (NG), or electricity for water heating purposes • Use of flow water heaters, with the purpose of reducing the use of LPG and NG • Acquisition of energy efficient appliances. • Replacement of incandescent bulbs for efficient lighting systems: halogen, compactfluorescent (LFC) and light-emitting diode lamps (LED) • Replacement of standard air-conditioning equipment for more energy efficient thermal conditioning equipment (e.g. mini-split inverter) For this policy, the following goals are established: • By year 2025, there will be a reduction in the energy intensity of 30% (electricity, LPG, NG) (GJ/building), in residential, commercial, and institutional buildings in relation to 2015 • By year 2035, there will be an Energy intensity reduction of 50% (electricity, LPG, NG) (GJ/building), in residential, commercial, and institutional buildings in relation to 2015 Scope and Scale of Projects/ Programs: The scope of this policy is state-wide. Since the projects under this policy will involve building owners, it is important ensuring dissemination of the comprehensive benefits associated with the use of energy efficient technologies. Additionally, since one of the main barriers for the implementation of this policy is financing, it is necessary to consider the appropriate mechanisms for the implementation of these technologies. Location/ Geographic Mapping of Projects: The scope of this policy is state-wide, and will have a major impact in the most populated municipalities: Saltillo (725, 123 inhabitants), Torreón (239,629), Monclova (216,206), Piedras Negras (152,806) and Acuña (136,755) (See Figure 4-1).
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Figure 4-1. Coahuila: Categories of Municipalities by population.
Source: Prepared using INEGI data, 2014
Implementation Actions: SEMA must design, implement, and promote a confinement program for equipment ready to be discarded. Also, the Secretariat must design and develop a program that promotes a cultural change where the use of energy efficient technology is preferred. The program will include the following: • Issue “building with sustainable equipment” certificates, when the construction complies with the equipment requirements mentioned in the policy design (lighting, solar power water heating, efficient appliances, etc.) • Issue sustainable building certificates when renovations comply with the design and construction requirements considered in this policy • Establish a promotion policy to encourage the use of low environmental impact technologies, as well as the rational use of those, emphasizing the benefits obtained • Promotion and dissemination of programs that benefit environmental sustainability • Training and dissemination of the culture of energy saving among the population • Design and implement a market transformation program. The program consists of coordinating with convenience stores and supermarkets with different ways of promoting energy efficient technologies (layout, promotions, etc). The National Chamber of the Transformation Industry (CANACINTRA by its Spanish acronym) can be the market transformation program agency
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Promote consumption of “FIDE seal” products. The Trust for Electric Energy Savings (FIDE by its Spanish acronym) gives a seal as a distinctive granted to products that contributes directly or indirectly in saving electricity. Buying products with the seal guarantees that the equipment is energy efficient and contributes to saving electricity 14 Implement exchange and recycling programs linking private sector (industrial and commercial) to create the market for this kind of products so the program is economically self-sustaining Promote research and technological development in energy efficiency: encourage participation of research centers and universities regarding design and building of energy efficiency- oriented technologies. Promote the development of technical and technological capabilities related to sustainable use of energy Establishing a national register of quality-certified service providers related to energy efficiency Identify and promote mechanisms for certification capabilities of consulting companies and of those companies dedicated to develop energy efficiency projects
Timing & Milestones: The progress of this policy is followed and assessed annually. The project will begin in 2016, the first goal will be achieved by 2025, and the second one, ten years later (2035). There will be an annual report in order to monitor lineal yearly reductions, which are assumed in the time frame: annual reduction of three percent through 2025, and 2.5% annually in the 20252035 period. Responsible Entities: Private sector: • Household owners • Banks and financial institutions • Cámara Nacional de la Industria de la Transformación (CANACINTRA) National Public Sector: • Ministry of Energy (SENER) • Energy Regulatory Commission (CRE) • Federal Electricity Commission (CFE) • National Housing Commission (CONAVI) • National Commission for Energy Efficiency (CONUEE) State Public Sector: • State Ministry of Environment (SEMA) • State Ministry of Economic Development, Competitiveness and Tourism (SEDEC) • Interministerial Commission for Energy Efficiency 14
More information: http://www.fide.org.mx/index.php?option=com_content&view=article&id=101&Itemid=231
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Panel of experts
Legal/ Regulatory Basis for Policy Implementation: • This policy complies with the National Program for Sustainable Use of Energy (PRONASE, Programa Nacional para el Aprovechamiento Sustentable de la Energía), so this policy adheres to the regulatory framework of the national program 15 • Nevertheless, there is needed to include the regulations regarding energy efficiency in the Regulations of the Agency on Climate Change in order promote the application of NOM systems by municipal governments • All the Mexican Official Standards (NOMS by its Spanish acronym) for Energy Efficiency - Balance to 2013 for each sector is provided in the document provided in next link: https://www.gob.mx/cms/uploads/attachment/file/55461/normas_1.compressed.pdf • NOMS - Residential Sector: http://www.conuee.gob.mx/wb/Conuee/noms_sector_residencial • NOMS - Industrial and Commercial Sector: http://www.conuee.gob.mx/wb/Conuee/noms_industrial_y_comercial • NOMS - Buildings and Housing: http://www.conuee.gob.mx/wb/Conuee/noms_inmuebles_y_vivienda • The policy adheres to the national and state regulatory framework: National: • Energy Transition Law, promulgated in the Official Gazette on December, 2015: http://www.dof.gob.mx/nota_detalle.php?codigo=5421295&fecha=24/12/2015. The Law regulates sustainable use of energy as well as the obligations of clean energy and reduction of pollutant emissions from the electricity industry, while maintaining the competitiveness of the productive sectors State: • Law for the Promotion of Rational Use of Energy, which establishes the general basis for promoting the rational use of energy and promote the use of renewable energy in the state of Coahuila: http://www.sema.gob.mx/descargas/legal/leyes/Ley_Fomento_Uso_Racional_Energia_Estado_Coahui la.doc
•
o Housing Law Article 53: Sustainable housing; and Article 55: criteria 3: adaptation to climate sustainability criteria and energy efficiency Law for prevention and Waste management for the State of Coahuila. It aims to guarantee the right of everyone to an adequate environment and promote sustainable development through regulation, generation, recovery and integrated management of urban solid waste, as well as pollution prevention and remediation of soil contaminated with waste: http://www.sema.gob.mx/descargas/legal/leyes/L7 LEY PARA LA PREVENCION Y GESTION INTEGRAL DE RESIDUOS.doc
15
The program is available from: http://www.conuee.gob.mx/work/sites/Conuee/resources/LocalContent/182/5/PRONASE20142018FINAL.pdf
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In the legal framework of public policy, the General Law on Climate Change, the Regulations of the General Law on Climate Change and the Law for Adaptation and Mitigation to Climate Change Impacts in the state of Coahuila de Zaragoza will be part of the compliance framework of the policy. Barriers & Risks: In the implementation and development of projects related to this policy, the main barriers and risks that may arise are identified below. However, in this document, possible implementation mechanisms that contribute to the reduction and abatement of the obstacles are also identified. • A major barrier to the implementation of these projects is the access to capital. There is an important need to develop a financing mechanism due to the mechanisms of investment in energy efficiency are not yet fully developed • There is a potential risk of environmental damage if a plan for handling and disposal of equipment is not set. Therefore, it is necessary to develop a comprehensive plan of confinement • The landlord-tenant market failure can make building retrofits more difficult as landlords typically pay for efficient equipment, but renters pay the utility bills • An economic barrier is due to high upfront costs of energy efficient technology. Therefore, it is necessary having coordination amongst parties involved in order to remove obstacles for financing due to difficulty in obtaining credit from the private financial sector for developing energy efficient projects • Getting access to rental properties to retrofit them is problematic because of coordination issues between landlords and tenants • Non-compliance with the energy efficiency rules in buildings if there are no sanctions • Resistance of the population to the sanctions for breach of the standards for energy efficiency in buildings • Part of the population has no knowledge and is unaware of environmental problems and their consequences • The electricity subsidy acts as a barrier in developing the implementation of energy efficiency strategies for consumers who do not have a high consumption • Lack of knowledge about the economic benefits that efficient equipment can provide in the consumption of energy, therefore in costs, especially in the high-consumption sector • Resistance to cultural changes in the population in favor of adopting practices that enhance energy efficiency due to lack of information and bad habits regarding energy waste • Tendency to prefer a conventional commercial approach by the perception of costs, risks, and uncertainties regarding acquisition of efficient equipment and technology • The absence of a globally accepted certification system for energy efficient practices • Lack of data regarding energy consumption in buildings Furthermore, the barriers identified in the PRONASE, based on the International Energy Agency (2012) are the following: Market
Distortions of organizations and market prices prevent consumers realize the true value of energy efficiency (EE).
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Financial Information and Awareness Regulatory and institutional
Technical
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Split incentive problems created when investors cannot capture the benefits of greater energy efficiency Transaction costs (costs of project development are high relative to the value of energy savings) Initial costs and benefits dispersion discourage investors Perception that EE investments are complicated and risky, with high transaction costs. Lack of awareness of the financial benefits by funding institutions. Lack of sufficient information and understanding on the part of consumers to make rational decisions about consumption and investment. Electricity rates discourage investment in EE (as precious block are reduced). Incentive structures encourage energy providers to sell instead of investing in energy efficiency is cost-efficient. Institutional bias towards investments in the supply side. Lack of affordable and EE technologies appropriate to local conditions. Insufficient capacity to identify, develop, implement and maintain EE investments.
Net Present Value Costs: The estimated GHG and cost/saving impacts of the implementation of this policy are presented in Table 4-1. Increasing energy efficiency in existing constructions by installing efficient equipment will reduce energy consumption and hence emissions of greenhouse gases. The instate reduction in carbon dioxide equivalent emissions in 2035 would be 1.20 while the in-state cumulative decrease would achieve 13.80 tons between 2015 and 2035. Considering the upstream out-of-state GHG impacts, the cumulative reductions would be 17.62 tons between 2015 and 2035. The application of this policy with respect to the trend scenario would yield cumulative savings of 21,262 million pesos and savings per ton reduced in emissions of greenhouse gases would be of 1,206 pesos. Table 4-1. Estimation of Net GHG Reductions and Costs or Savings Derived from the Application of the Policy to Direct Emission Factors 2025 In-State GHG Reductions
2035 InState GHG Reductions
2016 - 2035 InState Cumulative Reductions
2016 – 2035 Cumulative Total Reductions
(Tg CO2e)
(Tg CO2e)
(Tg CO2e)
(Tg CO2e)
(0.720)
(1.200)
(13.800)
(17.624)
Net Present Value of Societal Costs, 2016 – 2035 ($2014, Millions)
Cost Effectiveness ($2014/ t CO2e)
($21,262)
($1,206)
In order to have an idea of the cost effectiveness of some of the technologies promoted in this policy, in the following tables are shown the cost-benefit of the electricity saving measures and simple Payback periods for each sector (Residential, Table 4-2; Commercial; Table 4-3). The
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estimations are taken from a study made by MGM Innova 16, which was not used for the RCII-3 analysis, but is indicative of the costs assumptions in the RCII-3 results. The MGM Innova study is available from: http://www.inecc.gob.mx/descargas/cclimatico/2012_estudio_cc_mitgef13.pdf Table 4-2. Residential Sector: Electricity Savings Summary and Simple Payback Periods
Air Conditioned (AC)
Technology type To be replaced Replacing
Economic savings (MX$ / year) $663.00 $995.00 $1,326.00 $1,455.00 $2,183.00 $2,910.00 Economic savings (MX$ / year) $954.00 $603.00 $256.00 $1,084.00 $689.00 $294.00
Period Payback (years) 4.01 2.79 2.14 1.83 1.27 0.97 Period Payback (years) 4.09 6.47 15.25 4.5 7.08 16.59
Lumens
Economic savings (MX$ / year)
Period Payback (years)
475 900 1200 1600
$58.40 $85.80 $104.00 $140.50
0.67 0.54 0.46 0.36
LED
Lumens
Economic savings (MX$ / year)
Period Payback (years)
8 12 14.5 17
470 800 1055 1100
$58.40 $87.60 $110.40 $151.50
2.72 3.54 3.31 2.74
Window Equipment
Minisplit
Minisplit
Minisplit
Lighting
Refrigerators
Fabrication Year To be replaced Replacing 1990 2012 1994 2012 2002 2012 1990 2012 1994 2012 2002 2012 Compact Incandescent Fluorescen (W) t (W) 40 8 60 13 75 8 100 23 Incandescent (W)
40 60 75 100 Source: MGM Innova, 2012
Equipment Capacity (Tons of Refrigeration, TR) 1 1.5 2 1 1.5 2 Cubic feet
less than 16.5
between 16.5 and 19
Table 4-3. Commercial Sector: Electricity Savings Summary and Simple Payback Periods
Ref rig era tor s
AC
Equipment Capacity (TR)
Economic savings (MX$ / year)
Period Payback (years)
5
$16,356
2.36
10
$25,885
3
15
$38,837
3.2
0.5
$2,687.00
2.2
16
The study was conducted under the Project of the Fifth National Communication to the Framework Convention of the United Nations Climate Change (UNFCCC), coordinated by the National Institute of Ecology and Climate Change (INECC) with funds from the Global Environment Facility (GEF) through the United Nations Development Programme (UNDP). Mexico, 2012.
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Pumping
Lighting
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0.75
$4,031.00
2.42
1
$5,374.00
3.14
2
$10,748.00
2.12
3
$16,122.00
1.64
5
$26,870.00
1.23
3x32W
$700.67
0.85
2x32W
$781.51
0.58
1x32W
$458.13
0.85
3x54W
$727.62
2.89
3x32W
$3,443.71
5.9
2x32W
$5,165.57
5.32
1x32W
$6,887.42
4.39
3x54W
$10,331.13
3.72
Financing Mechanisms: Because one of the most important barriers to achieve compliance with this policy is access to capital to acquire energy efficient technologies, which are often more expensive, it is essential to consider implementing the following actions: • Linking financing offers by Development Banking and Commercial Banking with energy efficiency projects in all sectors of energy use • Establish economic and/or tax incentives for replacement of energy efficiency systems in order to facilitate access to high efficiency alternatives. • Design and development of training for institutions that offer financial schemes for the acquisition of energy efficient equipment and systems • SEMA is the key stakeholder responsible to promote, facilitate, assess, and guide the companies to access existing programs and funds that include: • Green Mortages by Infonavit 17 • Spotlights Replacement Program - Saving a Light – by FIDE 18. Program focused on communities with fewer than 100,000 inhabitants or users who have not benefited from previous programs • Virtual Store of the company of natural gas, which provides efficient equipment (stoves, water heater, air heaters) that can be paid through the gas bill in financing plans up to 24 months • BANOBRAS: Credit guarantees and financial support for projects that meet the National Strategy for Energy Transition and Sustainable Use of Energy • Proyectos de Eficiencia Energética FIDE (Commercial and Institucional Program) 19 • Eco-Crédito Empresarial - FIDE 20 17
More information: http://portal.infonavit.org.mx/wps/wcm/connect/infonavit/trabajadores/saber+para+decidir/cuido_mi_casa/hipoteca+ verde 18 More information: http://www.ahorrateunaluz.org.mx/MicroSitio/ 19 More information: http://www.fide.org.mx/index.php?option=com_content&view=article&id=121:proyectos-deeciencia-energetica-fide&catid=60:programas-de-ahorro&Itemid=219 20 More information: http://www.fide.org.mx/index.php?option=com_content&view=article&id=342&Itemid=224
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Nacional Financiera (NAFIN): Support for energy saving projects. Renewable energy projects. Promotion of technological innovation projects • A guide of programs for support Renewable Energies is available at: http://www.gob.mx/semarnat/documentos/guia-de-programas-de-fomento-a-lageneracion-de-energia-con-recursos-renovables
Communications & Outreach: SEMA is the key stakeholder for the development of an implementation and outreach strategy of this policy by the end of 2016. It is essential that SEMA engages the actors who will make the investment decisions, information regarding the direct and indirect economic and environmental benefits obtained by the efficient use of energy. At the same time, it is required to promote and give assistance for accessing existing funding programs Progress Measurement: There will be an annual Measurement Report & Verification (MRV) process in order to track and monitor the decrease in energy intensity for each sector (residential, commercial and institutional). The indicators to report will be based on the national indicators established in the National Program for Sustainable Use of Energy (Programa Nacional para el Aprovechamiento Sustentable de la Energía) 2014-2018. Indicator Description Estimation Periodicity Responsible Stakeholder Indicator Description Estimation Periodicity Responsible Stakeholder
Energy intensity index, Commercial and Institutional Sector It measures the amount of energy required to produce a peso of Gross Domestic Product in the state economy. IE=EC/GDP IE= Energy Intensity EC = Energy Consumption in PJ GDP = Gross Domestic Product of state economy in millions Pesos Annual SEMA Energy intensity index, Residential Sector It measures the amount of energy consumed by user in Residential sector. IE=EC/Users IE= Energy Intensity EC = Energy Consumption in PJ Users = Number of residential users of the grid in the state Annual SEMA
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Indicator Description
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Increased professionals trained in technical skills in the field of sustainable use of energy. Measures the increase in the number of people trained technical and technologically in sustainable energy development. 𝐸𝐸𝑆𝑆𝑡𝑡 −𝐸𝐸𝑆𝑆2015 𝑃𝑃𝑆𝑆𝑃𝑃𝑃𝑃𝑃𝑃𝑆𝑆𝑃𝑃 = 𝐸𝐸𝑆𝑆 x100 2015
Estimation
PCHTASE= Professionals Trained in Technical Skills on Sustainable Use of Energy EC = Energy Consumption
Periodicity Responsible Stakeholder
Annual
Indicator Description
SEMA Increased coverage of training activities measures and benefits of sustainable use of energy. Measure the increase in coverage of people receiving information on measures and benefits of sustainable energy development through information campaigns. 𝑆𝑆𝑃𝑃𝑆𝑆𝑃𝑃𝑆𝑆𝑃𝑃 =
𝐴𝐴𝑆𝑆𝑡𝑡 −𝐴𝐴𝑆𝑆2015 x100 𝐴𝐴𝑆𝑆2015
Estimation
CAIASE = Coverage Index of Training Activities on sustainable use of energy. AI = Informative Activities related to sustainable use
Periodicity Responsible Stakeholder
Annual SEMA
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Chapter 5: Implementation Strategies and Plans for Policy TLU-2: Promote Sustainable Urban Mobility Systems 5-1: Introduction and Highlights Sustainable urban mobility systems seek to stop and reverse the trend of sprawling urban development and over reliance in the use of the personal passenger vehicle as the main form of transportation. A holistic strategy towards sustainable urban mobility encourages the use of public and non-motorized modes of transportation, the development of infrastructure for pedestrians and cyclists, and implementation of beautification projects and expansion of green areas in roads, parks, gardens and other urban spaces. An important goal of a sustainable urban strategy is to increase commuter participation in public transportation. This topic has been thoroughly explored by recent transportation and mobility studies (i.e. “Plan Integral de Movilidad Urbana Sustentable” or PIMUS) for the municipalities of La Laguna; Saltillo-Arteaga-Ramos Arizpe and Monclova-Frontera-Castaños. These studies indicate that a reconfiguration of existing bus routes, whereby a coordinated network of bus routes with a broader service area replaces bus congestion in the city center, induces: 1) Greater participation in the public transportation system, 2) A reduction in the number of daily trips in personal passenger vehicles, and 3) A decrease in annual kilometers traveled by the bus fleet as a whole. TLU-2 leverages the findings of the PIMUS studies and further assesses the positive GHG and energy impacts as well as net cost savings of the proposed bus system improvements relative to the business-as-usual scenario. This policy is designed to be implemented in the three most populated metropolitan areas of the state of Coahuila: La Laguna, Saltillo-Arteaga-Ramos Arizpe and Monclova-Frontera-Castaños, which combined account for more than two-thirds of Coahuila’s total population. Actually, there are ongoing discussions about implementing a busrapid-transit (BRT) system in the metropolitan zone of La Laguna, which could serve as a demonstration project for the broader scope of this policy. The regulatory framework for implementing the policy already exists, the challenge will be to overcome the obstacles of implementation, including resistance of the affected concessionaries, horizontal and vertical coordination issues, as well as divergence of political incentives among the different actors involved in planning, operation and supervision of the public transportation systems. Convincing concessionaries of the benefits of transport modernization projects represents a major challenge, because individual interest may be curtailed for some in spite of overwhelming net social benefits. Another critical element for the realization of this policy is to find a political consensus among concessionaries, State-level administration, and municipal administrations of targeted metropolitan zones. Financing for TLU-2 will come primarily from the Program de Apoyo Federal al Transporte Urbano Masivo (Federal Support Program for Urban Mass Transport- PROTRAM), a funding instrument of the Fondo National de Infraestructura (National Infrastructure Fund). This Center for Climate Strategies
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program finances up to 49 percent of mass transport modernization projects that meet its guidelines.
5-2: Implementation Plan Template for TLU-2 Goals & Policy Design: During the last fifty years, the national population not only tripled, but there has been a continuous migration from rural to urban settlements. By 2010, cities of more than 15,000 inhabitants accounted for 71.6% of the total national population (National Urban Development Program, 2014-2018, p. 3). The accelerated rate of population growth in cities was followed by an expansion of urban areas and a decrease in urban density. At the same time, there has been a drastic growth in the number of vehicles in the state’s vehicle fleet. These trends reveal the disorderly growth of Mexican cities, where urban mobility systems are increasingly dependent on the private vehicle. Despite large investments in road infrastructure, traffic congestion problems have continued to become more acute, while the average distances traveled have increased exponentially. More cars are on roads increasing total vehicle-kilometers traveled, at decreasing average speeds, producing significant externalities in time, travel costs and GHG emissions. Sustainable urban mobility systems seek to stop and reverse these trends, through qualitative and quantitative diversification of mobility options. It seeks to ration car use by encouraging the use of mass transit and non-motorized modes of transportation. A holistic strategy towards sustainable urban mobility requires modernization of mass transit systems, development of infrastructure for pedestrians and cyclists, and implementation of beautification projects and expansion of green areas in roads, parks, gardens and other urban spaces. An important step of a sustainable urban strategy is to increase commuter participation in public transportation. Recent transportation and mobility modeling conducted in the municipalities of La Laguna; Saltillo-Arteaga-Ramos Arizpe and Monclova-Frontera-Castaños indicate that a reconfiguration of existing bus routes, whereby bus congestion in the city center is replaced by a coordinated network of bus routes with a broader service area, leads to 1) greater public transit participation and 2) a decrease in annual kilometers traveled by the bus fleet as a whole. The proposed TLU-2 policy leverages the findings of these recent municipal level transportation studies to assess the GHG, energy and cost impacts of an updated bus route system relative to the business-as-usual scenario. The resulting environmental impacts quantified for this policy are listed below. Results of the energy and GHG emissions analysis for the period 2016-2035 are presented in Table 5-1. • • • •
Assessment of kilometers traveled by the bus systems in a business-as-usual (BAU) scenario and policy scenario Assessment of diesel fuel consumption by the bus systems in the BAU and policy scenario Assessment of kilometers traveled in personal vehicles in the BAU and policy scenario Assessment of gasoline fuel consumption by personal vehicles in the BAU and policy scenario
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Societal cost streams quantified for TLU-2 are listed below. Cost assessment results for the period 2016-2035 are presented in Table 5-2. • • •
Diesel fuel consumptions of the bus fleet systems in the BAU and policy scenario Gasoline fuel consumption of the personal car fleet of in the targeted metropolitan zones (MZs) Bus systems operation and maintenance costs in the BAU and policy scenario
The purpose of this measure is to modify the structure of daily transfers for a lower carbon intensity option, while simultaneously reducing costs and travel times. The design and projected outcomes of TLU-2 align to national strategies that seek to design and implement sustainable mobility policies for cities greater than 500,000 inhabitants (Strategy 3.5.1 PECC), which aims to promote key transportation projects that exhibit transit travel time reduction, socio-economic profitability and improved environmental impact. (Strategy 3.5.7, PECC).
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Coahuila Implementation Plans Report Table 5-1. Energy and GHG Emissions Summary, 2016-2035
Chapter 5
March, 2016
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
Year
2,657
2,643
2,626
2,606
2,588
2,567
2,544
2,519
2,491
2,460
2,445
2,429
2,412
2,394
2,375
2,355
2,335
2,313
TJ
Bus System Diesel Consumption
200,964
201,265
200,338
199,231
197,943
196,472
195,113
193,565
191,826
189,896
187,772
185,453
184,339
183,132
181,831
180,471
179,050
177,567
176,020
174,408
(tCO2e)
Bus System Diesel Combustion Emissions
1,030,125.39
55,635
55,637
55,301
54,916
54,481
53,998
53,547
53,045
52,493
51,889
51,235
50,529
50,152
49,752
49,327
48,887
48,279
47,655
47,014
46,355
(tCO2e)
Upstream Emissions from Bus System Diesel Consumption
309,465.93
17,876
17,965
17,624
17,279
16,931
16,578
16,304
16,023
15,734
15,439
15,135
14,824
14,604
14,379
14,196
14,039
13,878
13,706
13,555
13,396
TJ
Personal Car Gasoline Consumption
22,017,510.98
1,271,839
1,278,125
1,253,892
1,229,380
1,204,585
1,179,507
1,160,001
1,139,988
1,119,457
1,098,403
1,076,815
1,054,686
1,039,063
1,023,023
1,009,986
998,813
987,347
975,109
964,390
953,102
(tCO2e)
Personal Car Gasoline Combustion Emissions
6,417,733.59
375,593
376,957
369,328
361,636
353,880
346,061
339,895
333,595
327,160
320,589
313,878
307,027
302,085
297,034
292,866
289,249
284,649
279,836
275,469
270,947
(tCO2e)
Upstream CO2e Emissions from Gasoline Consumption
41,724.67
2,017
2,020
2,027
2,033
2,039
2,043
2,050
2,055
2,060
2,064
2,067
2,069
2,097
2,121
2,140
2,154
2,164
2,169
2,170
2,166
TJ
Bus System Diesel Consumption
3,145,660.35
152,058
152,285
152,827
153,299
153,703
154,037
154,534
154,963
155,322
155,610
155,829
155,975
158,115
159,894
161,308
162,387
163,127
163,526
163,578
163,282
(tCO2e)
Bus System Diesel Combustion Emissions
857,355.56
42,096
42,098
42,186
42,255
42,305
42,336
42,411
42,467
42,503
42,521
42,519
42,497
43,018
43,439
43,759
43,988
43,986
43,886
43,690
43,398
(tCO2e)
Upstream Emissions from Bus System Diesel Consumption
256,983.02
13,592
13,660
13,544
13,427
13,308
13,188
13,132
13,074
13,013
12,950
12,884
12,816
12,672
12,525
12,415
12,329
12,242
12,146
12,072
11,993
TJ
Personal Car Gasoline Consumption
18,283,519.32
967,061
971,841
963,615
955,278
946,827
938,262
934,299
930,164
925,852
921,361
916,688
911,829
901,607
891,088
883,267
877,183
870,960
864,184
858,895
853,258
(tCO2e)
Personal Car Gasoline Combustion Emissions
5,326,570.90
285,587
286,624
283,828
281,006
278,157
275,281
273,761
272,194
270,579
268,916
267,203
265,441
262,123
258,727
256,122
254,026
251,095
248,003
245,335
242,564
(tCO2e)
Upstream CO2e Emissions from Gasoline Consumption
(5.63)
(0.46)
(0.46)
(0.44)
(0.41)
(0.39)
(0.37)
(0.34)
(0.32)
(0.30)
(0.27)
(0.25)
(0.22)
(0.21)
(0.20)
(0.19)
(0.18)
(0.17)
(0.16)
(0.15)
(0.14)
Total Net Change in GHGs Tg CO2e
Net Change
2032
2,670
3,776,656.07
TLU-2 Policy Scenario Energy & Emissions
2033
2,666
Business-As-Usual Energy & Emissions
2034
50,094.32
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2035
5-4
Sum
Center for Climate Strategies
Coahuila Implementation Plans Report Table 5-2. Societal Costs Summary, 2016-2035
Personal Car Gasoline Fuel Costs
$3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $3,625 $2,142
MM$
Bus Systems Operation & Maintenance Costs
$15,061
$721 $729 $735 $739 $742 $744 $743 $741 $737 $743 $748 $753 $758 $762 $766 $771 $775 $780 $783 $789
MM$
Bus Systems Diesel Fuel Costs
$100,372
$4,367 $4,433 $4,499 $4,572 $4,644 $4,716 $4,798 $4,896 $4,994 $5,063 $5,132 $5,201 $5,269 $5,337 $5,406 $5,501 $5,597 $5,694 $5,792 $4,461
MM$
Personal Car Gasoline Fuel Costs
$39,459
$2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $2,118 $1,336
MM$
Bus Systems Operation & Maintenance Costs
($53,516)
($2,067) ($2,107) ($2,148) ($2,190) ($2,234) ($2,278) ($2,326) ($2,377) ($2,429) ($2,544) ($2,658) ($2,772) ($2,885) ($2,997) ($3,108) ($3,227) ($3,346) ($3,465) ($3,584) ($2,775)
MM$
Total Policy Costs
($30,338)
($1,875) ($1,820) ($1,767) ($1,716) ($1,667) ($1,619) ($1,574) ($1,532) ($1,491) ($1,487) ($1,480) ($1,470) ($1,457) ($1,441) ($1,424) ($1,408) ($1,390) ($1,371) ($1,351) ($996)
MM$2014
Total Discounted Policy Costs
March, 2016
MM$
$71,021
Chapter 5
Bus Systems Diesel Fuel Costs
$4,878 $4,978 $5,076 $5,183 $5,288 $5,393 $5,509 $5,642 $5,776 $5,947 $6,118 $6,288 $6,458 $6,627 $6,795 $6,999 $7,203 $7,409 $7,617 $6,175
Net Costs
MM$
$121,360
TLU-2 Policy Scenario Costs
$771 $784 $798 $811 $825 $838 $851 $864 $877 $895 $913 $930 $947 $962 $977 $993 $1,008 $1,022 $1,035 $1,043
Business-As-Usual Costs
$18,145
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5-5
Sum
Center for Climate Strategies
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Goals: La Laguna: Goals for 2025 and 2035. 1. Restructure the demand for the various modes of transportation, that is, reduce the percentage of private passenger car use and increase the relative participation in the use of mass public transportation, bicycling and walking.
Public Transport* Other motorized Cars By foot
2014 49.0% 11.0% 25.0% 15.0% 100.0%
2024 49.0% 10.0% 24.0% 17.0% 100.0%
2034 49.0% 9.0% 23.0% 19.0% 100.0%
Saltillo-Arteaga-Ramos Arizpe: Goals for 2025 and 2035. 1. Modify the structure of demand of the transport means, reducing the percentage of car commutes and increasing the relative participation in daily commutes in massive public transport, bicycle and by foot. 2014
Alternative Scenario
2024
2034
Public Transport* Other motorized+
687,684 246,538
35.76% 12.82%
1,045,190 381,897
35.09% 12.82%
1,496,928 559,673
34.29% 12.82%
Cars+
657,307
34.18%
978,574
32.85%
1,217,573
27.89%
By foot or Bicycle+
331,538
17.24%
573,143
19.24%
1,091,406
25.00%
1,923,066
100.00%
2,978,804
100.00%
4,365,580
100.00%
2. Decrease energy demand of public transportation and personal car. Monclova-Frontera-Castaños: Goals for 2025 and 2035. 1. Modify the structure of demand of the transport means, reducing the percentage of car commutes and increasing the relative participation in daily commutes in massive public transport, bicycle and by foot.
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Coahuila Implementation Plans Report Alternative Scenario
Chapter 5 March, 2016 2024
2014
2034
Public Transport* Other motorized+
304,591 288,309
31.57% 29.88%
335,528 317,861
31.54% 29.88%
369,604 351,019
31.47% 29.88%
Cars+
258,246 113,648
26.77%
25.00% 13.57%
270,158 183,825
23.00%
11.78%
265,912 144,337
15.65%
964,756
100.00%
1,063,647
100.00%
1,174,601
100.00%
By foot or Bicycle+
2. Decrease energy demand of public transportation and personal passenger car. Scope and Scale of Projects/ Programs: This policy is designed to be implemented in the three most populated metropolitan areas of the state of Coahuila: La Laguna, Saltillo-Arteaga-Ramos Arizpe and Monclova-Frontera-Castaños. Municipalities in these three metropolitan zones located within the geopolitical boundaries of the state concentrate more than two-thirds of Coahuila’s total population (68.7 per cent). The core strategy is modernization of the mass public transport system, using urban buses by implementing prepaid services, redesign of routes, fleet renewal and modernization of infrastructure. The correct implementation of this policy would allow significant reductions in greenhouse gases emissions (third-place policy in this matter among the 17 policies considered in the SCAP) and would also account considerable efficiency gains (policy with the best results in reducing total costs in net present value and reaching greater savings per mitigated ton of CO2e). Instrumentation would be reinforced by adding a set of measures to promote non-motorized transportation options, rationalizing the use of particular vehicles within the urban spaces (see Implementation Mechanisms), and also actions that tend to increase density in those metropolitan zones. Location/ Geographic Mapping of Projects:
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Figure 5-1. Project mapping
The policy focuses on the three most populated metropolitan zones in Coahuila. This concentration allows the benefit of economies of scale in the implementation of main and secondary measures. Implementation Actions: •
Modernize mass transit systems in major metropolitan areas of the state: introducing prepaid systems and restructuring routes to reduce the vehicle fleet, route distances and increasing occupancy levels of the units (passenger / km). These operational improvements will decrease system demand for fossil fuels, bringing down the average operation cost. Additional gains in energy efficiency could be obtained through the renewal of the vehicle fleet, but these plausible incremental impacts were not quantified as part of this assessment The proposals for integrated transport systems in the most populated metropolitan zones of Coahuila, which consider federal rules in the subject, constitute a substantial support for the instrumentation of this policy A successful modernization project of mass transit in a metropolitan zone in Coahuila can function as pilot project for similar initiatives in the other MZs. Given the existing good relations between the municipal authorities in Torreon and the State Government of Coahuila state, modernization of transport in the municipalities of Coahuila of the
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metropolitan zone of La Laguna could be a starting point. Already in this perspective, the Integral Sustainable Urban Mobility Plan of La Laguna (or PIMUS) 21 includes, among other actions, the operation of a bus rapid transit system (BRT) by 2017. Successful implementation of transport modernization in La Laguna could serve as a case study that could be replicated in municipalities of the same MZ but located in the State of Durango. While this policy (TLU-2) focuses on restructuring the conformation of integrated urban public transportation systems in the most populated metropolitan zones in Coahuila, its implementation would be further facilitated and strengthened with the adoption of a series of complementary policies, as follows: • •
Increasing urban density and mixed land use, with the purpose of reducing average distances in daily transfers (See TLU-1. Coahuila Phase 2. State Climate Action Plan -SCAP-. Final Report, Part 3, App. E., pp E-0-E-4); Encourage non-motorized transport options and promote more efficient use of cars in the urban space. The Government of Coahuila and its municipalities, especially those in the cities with the highest population concentration, can move in this direction through the implementation of the measures outlined in the Law of Sustainable Mobility of the State of Coahuila. Among other provisions, this law gives priority to efficient use of road space and assesses the distribution of budget resources according to a hierarchy of mobility with deference to those which emphasize: pedestrians, especially disabled people and people with limited mobility; cyclists and users of public passenger transport (Article 4). Similarly, Articles 12 and 15 instruct the State Government and the municipalities to develop appropriate programs for Sustainable Mobility and to contemplate the budgetary allocations necessary for its implementation. 22
Timing & Milestones: For reason specified in the section Barriers & Risks, the first two years (2016 and 2017) of the implementation of this policy will focus on the MZ of La Laguna. The success of this first phase will be crucial to extend the reach of this policy to the MZs of Saltillo-Ramos Arizpe-Arteaga and Monclova-Frontera-Castaños. Two instruments are key in the implementation of this policy: •
The regulation of concessions for the provision of public transport service provided by the Law on Traffic and Transportation of the State of Coahuila de Zaragoza 23 , and
21
Integral Sustainable Urban Mobility Plan of La Laguna (PIMUS). Retrieved from http://www.torreon.gob.mx/pdf/PIMUS_LAGUNA.pdf 22
Sustainable Mobility Act of the State of Coahuila. Retrieved http://www.congresocoahuila.gob.mx/portal/wp-content/uploads/2015/01/coa219.pdf
from
23 Law on Traffic and Transportation of the State of Coahuila de Zaragoza. Retrieved from http://congresocoahuila.gob.mx/portal/wp-content/uploads/2014/11/coa38.pdf
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Access to federal resources from the Federal Support Program for Urban Mass Transit (See section Financing Mechanisms)
Responsible Entities: The Sub-Secretariat of Transport of the Ministry of Urban, Water and Land Management of the Government of Coahuila. Local Governments of the metropolitan zones of La Laguna, SaltilloArteaga-Ramos Arizpe, and Monclova-Frontera-Castaños. The concessionaries of the mass transit system in the targeted MZ. SEMA will coordinate the multi-agency initiatives and promote a communication strategy to emphasize the environmental advantages of this policy. Legal/ Regulatory Basis for Policy Implementation: The regulatory framework for implementing the policy already exists; the challenge will be to overcome the obstacles of implementation defined in Barriers & Risks. The key elements of law and regulatory framework are: • Ley de Movilidad Sustentable del Estado de Coahuila. http://www.congresocoahuila.gob.mx/portal/wp-content/uploads/2015/01/coa219.pdf • Ley de Tránsito y Transporte del Estado de Coahuila de Zaragoza. http://congresocoahuila.gob.mx/portal/wp-content/uploads/2014/11/coa38.pdf • Programa Federal de Apoyo al Transporte Urbano Masivo. http://www.fonadin.gob.mx/wb/fni/programa_de_transporte_urbano • Lineamientos del Programa de Transporte Urbano. http://www.fonadin.gob.mx/work/sites/fni/resources/LocalContent/518/2/Guia_Presentac ion_EvaluacionPROTRAM.pdf Barriers & Risks: Resistance of the affected concessionaries with the launch of the integrated transport systems, horizontal and vertical coordination issues, as well as divergence of political incentives among the different actors involved in planning, operation, and supervision of the policy. Convincing concessionaries of the benefits of transport modernization projects represents a major challenge. Integrated transport systems offer undeniable advantages for the general interest of both users and dealers, but its implementation may affect individual benefits for some dealers with the existing system. Another critical element for the realization of this policy is to advance towards removing the political aspects of the transport system, because concessionaries have been part of organized support for political parties in the electoral process. Political differences arise between the State administration and some of the municipalities of targeted metropolitan zones. Net Present Value Costs: Table 5-3 presents the cumulative GHG and cost impacts of TLU-2 for the period 2016-2035. Cumulative GHG emission reduction, inclusive of in-state and upstream emissions, is projected to be on the order of 5.63 Tg CO2e. Net cumulative cost savings were estimate to be $30,338 million pesos on a net present value (NPV) basis. NPV were calculated using a 5% per year real discount rate.
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Table 5-3. Estimated Net GHG Reductions and Costs or Savings Derived from the Application of TLU 2 to Direct Emission Factors Total GHG Impacts
In-State GHG Impacts Policy ID
Policy Title
2025 Tg TLU-2.
2035 2035 Cumulative Cumulative
Annual CO2e Impacts
Sustainable Urban Mobility
(0.19)
2035 Tg
TgCO2e
(0.35)
(4.36)
TgCO2e (5.63)
Base Year 2014$ NPV 2015-2035 $Million ($30,338)
Cost Effectivene ss $/tCO2e ($5,390)
Financing Mechanisms: The National Infrastructure Fund from the Federal Support Program for Mass Transport provides unrecoverable supports that can finance up to 49 percent of investment projects related to modernization programs covering mass transit with its guidelines. It also includes recoverable support for the realization of: studies and consultancies, subordinated or convertible credit; performance or political risk guarantees; direct capital contributions or indirect contributions (specialized investment funds for transportation). This program represents an important incentive to implement modernization actions for the mass transport systems in the most important metropolitan zones of the state. The existence of modernization projects is one of the most important requirements to gain access to federal funds. References to relevant sources of funding are listed below: • Programa Federal de Apoyo al Transporte Urbano Masivo (PROTRAM). http://www.fonadin.gob.mx/wb/fni/programa_de_transporte_urbano • Lineamientos del Programa de Transporte Urbano. http://www.fonadin.gob.mx/work/sites/fni/resources/LocalContent/518/2/Lineamientos_ Programa_Transporte.pdf • Guía de presentación y evaluación. http://www.fonadin.gob.mx/work/sites/fni/resources/LocalContent/518/2/Guia_Presentac ion_EvaluacionPROTRAM.pdf In addition to federal funds mentioned in previous paragraphs, concessionaries of the mass transit systems can also participate in financing of this policy in the most important MZ in the state. Similarly, resources from the national financial system can be accessed, facilitated by guarantees that can be obtained through the PROTRAM. Communications & Outreach: SEMA can lead the communication strategy to explain the environmental benefits of the modernization project of mass transit, while the Sub-Secretariat of Transport of the Ministry of Urban, Water and Land Management of the government of Coahuila can lead the process of disclosure of economic and social benefits, as well as coordinating the phases of implementation. Progress Measurement: Center for Climate Strategies
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The government agencies that are best empowered and positioned to develop progress indicators in the implementation of this policy are SEMA, the Sub-Secretariat of Transport of the Ministry of Urban Water and Land Management of the Government of Coahuila, in coordination with the local authorities of municipalities of Coahuila’s MZ involved. The basic indicators to monitor the key aspects of TLU-2 are: • •
The total fuel consumption of the bus fleet providing services of urban public transport in the state’s three most populous MZs The share of this transport system in daily transfers in these populations
These indicators should be viewed against the levels set as goals in the SCAP. To obtain this information, it is required to apply surveys of origin and destination periodically, which register the contribution of different means of transport in meeting the needs of urban mobility in the major MZs in Coahuila. It is also recommended to monitor indicators of complementary policies in those same MZs, particularly: • The evolution of urban density indices (population per hectare) (contrast it against goals) and • Observe the percentages of participation of other modes of transportation in daily transfers and compare them to the goals of TLU-2: Non-motorized transport (cycling and walking), private cars and other motorized (Taxi, transport of personnel and motorcycle)
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Chapter 6: Next Steps As mentioned in Chapter 1, the Implementation Plans set the stage for the implementation phase of the High Priority Policies by highlighting the key elements of an initial implementation strategy for each of them. Consequently, implementation details will need to be further developed in a next phase in order to make the High Priority Policies ready for submission to funders and donors, and ready for implementation. In particular, critical key next steps include: 1. Develop work plans, establish priority implementation actions, as well roles and responsibilities for each High Priority Policy As illustrated in detail in the previous Chapters of this report, key implementation actions and, when possible, related timing have been identified for each High Priority Policy. As critical next step in the implementation processes of each High Priority Policy, SEMA, as leading entity of these processes, should establish a priority order of the series of implementation actions for each High Priority Policy, and lead the development of detailed work plans for their implementation. The work plans should assign to the responsible entities, as initially identified in the Implementation Plans, specific roles and responsibilities to start and conduct the implementation processes. 2. Reach out to relevant stakeholders for each High Priority Policy Based on the implementation actions and responsible entities identified in the Implementation Plans (adjusted as needed), SEMA, as leading entity of the implementation processes, should reach out to relevant stakeholders for each High Priority Policy to secure commitment and engagement as needed for the implementation process. A prior clear understanding of potential roles, responsibilities, implementation actions and timing, as well as the financial resources needed is critical. The outreach process will need to be supported by adequate capacity and a specific communication and outreach plan for each High Priority Policy. 3. Identify disaggregated financial costs (outlays), financial and public impact returns, and risks associated with investments from spending (Financial Cost Analysis) Based on analysis of direct costs and benefits included in NPV analysis of policy options, the annual financial outlays and spending (expenses) required to implement each policy option and its project level implementation should be disaggregated along with revenue or savings (income). These should be further separated by sources and uses of funds if multiple streams are involved. Income and expenses constitute the portion of social impact NPV that is used for discounted cash flow (DCF) analysis. Once financial expenses and income are estimated, the risk (statistical variation) and or uncertainty (lack of knowledge) associated with project outcomes for each period should be calculated. This provides the basis for calculation of expected value (probability or knowledge adjusted) outcomes. Note that risk can be positive (upside) or negative (downside), depending on circumstance. Risk and uncertainty can be calculated on an annual basis (preferable), a full period basis, or an interim period basis, such as biannual. The period chosen should match payback period requirements, which are often short, particularly for consumers. Center for Climate Strategies
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The expected value calculations for costs and benefits should include both financial outcomes (income and expenses) and social impact outcomes (such as emissions reductions and clean energy access). Risks should include controllable (endogenous) project variables (such as project design, management, and customer outreach) and uncontrollable (exogenous) variables, such as fuel and technology costs. The results of the proposed policy option and project plan can then include 1) financial and social impact returns with disclosure and adjustment for risk and uncertainty, 2) the type of financial costs and revenues needed and their associated sources and uses that can be used to structure specific options for financing, 3) methods for managing risk and uncertainty, and 4) estimation of DCF based Profit/Loss, Rate of Return, Payback Period, and other metrics needed to meet financial readiness and submission requirements. This information also can support potentially varied sources and methods of financing and increase its structural efficiency. For instance, some projects might qualify naturally for fixed rates and debt based mechanisms, while others might better qualify as equity or variable rate approaches, or hybrids. Additionally, by combining financial and social impact information, access to impact sensitive pools of funds are possible, including blends of public and private funds. The level of analysis can be adjusted as needed to meet specific funding options if it is clear in advance which are best or possible. 4. Develop a Monitoring, Reporting, Verification and Updating (MRVU) system for each High Priority Policy Once implemented, the performance of each High Priority Policy needs to be monitored and evaluated, as well as the policy design and implementation elements updated as circumstances change. A MRVU system for each High Priority Policy needs to be developed for this purpose as a part of the implementation process, and it will need to include procedures, protocols as well as performance metrics and indicators based on the High Priority Policy goals and objectives, to enable comparison of actual results versus business as usual trends and track incremental effects of each High Priority Policy. Adequate capacity will also be needed to support the operation of the MRVU systems. SEMA, as leading entity of the implementation processes, should identify the responsible entity for the development of the MRVU system.
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