What are the greenhouse gas emissions of a mini-grid project and how are they calculated?

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Short Answer

Energy generation is the largest source of greenhouse gas (GHG) emissions globally, and efforts to reduce GHG emissions often focus on the energy sector. Renewable resources, such as solar, wind and hydropower, offer potential GHG emissions savings compared to fossil fuels such as coal or petroleum. A comparison of the life cycle GHG emissions from diverse electricity- generation technologies, both renewable and nonrenewable, is shown in the following figure.

The graph compares the lifecycle greenhouse gas emissions of different energy sources: biopower, photovoltaics, concentrating solar, geothermal, hydropower, ocean energy, wind, nuclear, natural gas, oil and coal. Lifecycle emissions are significantly lower for the renewable energy resources. Biopower can result in negative net emissions up to about -600 g CO2 equivalent per kWh. The other renewable energy resources have lifecycle emissions of less than 250 g CO2 equivalent per kWh. Natural gas, oil, and coal have increasingly higher lifecycle emissions. Coal power can result in more than 1,600 g CO2 eq / kwh of lifecycle emissions, the highest level of any resource.
Comparison of Published Life Cycle Assessment GHG Emissions for Electricity Generation Technologies.
Source: Intergovernmental Panel on Climate Change (IPCC) (2012). Renewable Energy in the Context of Sustainable Development.

Renewable energy is often assumed to be carbon neutral (i.e., it generates no GHG emissions) because either no GHGs are emitted in the power generation stage (wind power) or because the GHGs emitted in power generation are equivalent to those sequestered in feedstock growth (biomass). In reality, GHG emissions are associated with all sources of energy (although some energy sources can sequester or avoid more emissions than they generate, resulting in net negative GHG emissions) when the inputs, transport, operation and maintenance (O&M) and decommissioning of the system are all taken into account.

GHG emissions from a mini-grid primarily depend on the power source. Analyses show that nonrenewable resources, such as oil and coal, have significantly greater GHG emissions than do renewable sources such as solar or wind. In addition, energy storage technologies can have significant GHG emissions from manufacturing, bioenergy can have significant GHG emissions from biomass production, and hydropower can have significant impacts from reservoirs depending on the particular aspects of the system. Run-of-the-river hydropower uses the movement of flowing water to spin a turbine and therefore has lower environmental impact over all. Large dams, on the other hand, create large bodies of standing water that displace forests, reflect sunlight, change or stop the movement of flowing water and change the local microclimate, all of which impact the storage and release of greenhouse gases.

Chapter nine of the Intergovernmental Panel on Climate Change’s (IPCC’s) Special Report on Renewable Energy Sources and Climate Change Mitigation provides an overview of the role that renewable energy can play in advancing sustainable development.

Determining the Greenhouse Gas Emissions of a Mini-Grid

The Generalized Life Cycle Stages for Electricity Generation consists of Upstream, Operation, and Downstream activities. Upstream activities may include resource extraction, material manufacturing, component manufacturing, and construction. For fossil fuel, nuclear chains, and bioenergy, there is also an upstream fuel cycle, consisting of fuel resource extraction/production, processing/conversion, and delivery to the site. During operation, activities include combustion, maintenance, and operations. Downstream of the operation, there are activities including dismantling, decommissioning, and disposal and recycling.
Generalized Life Cycle Stages for Electricity Generation. Fuel cycle applies to fossil and nuclear chains and bioenergy.
Source: IPCC (2012). Renewable Energy in the Context of Sustainable Development

Determining the GHG emissions of a mini-grid is important when comparing mini-grid alternatives based on their climate impact. If there is an economic value for GHG emissions reductions, calculating these savings is important when comparing alternatives on a cost basis and in accessing carbon markets.

There is no single agreed-upon accounting methodology for calculating the GHG emissions of a mini-grid. Some approaches focus on emissions reductions, whereby the GHGs that would have been emitted in absence of the project are calculated. Other approaches calculate the net emissions from a system per unit of electricity generated. Many approaches rely on a concept called Life Cycle Assessment (LCA). A GHG LCA determines emissions at each life cycle stage, including fuel and technology inputs (extraction, processing and transportation), O&M of the system and decommissioning. The diagram at right depicts generalized life cycle stages for electricity generation.

Several organizations have developed their own methodologies and calculation tools. USAID uses the Clean Energy Emissions Reduction (CLEER) tool, which all clean energy projects must use in reporting GHG emissions reductions.

Further Explanation of Key Points

Life Cycle Assessments

LCAs are used to analyze the inputs and outputs of a product or system in each stage of its life cycle (such as production of raw material through processing, transport, use and disposal). LCAs emerged from the concern that the impacts associated with a single stage of product life (such as consumption of a liquid fuel decoupled from the manufacturing process) are insufficient to provide an accurate understanding of the product’s total environmental and social impacts. In conducting an LCA, mini-grid developers must establish a system boundary to define the stages of the product’s life cycle, identify each stage, and conduct an inventory analysis of all inputs and outputs at each stage within the boundary and interpret the results to determine the total status or impact. There is no universal approach to conducting an LCA, and many different methodologies are used with varying boundaries and assumptions. An LCA can be used to analyze the inputs and outputs of GHG emissions, energy, water or other elements.

Electricity Greenhouse Gas Life Cycle Assessments

Although there is no single agreed-upon methodology for GHG LCAs, analyzing the results of existing LCAs demonstrates the relative GHG emissions of different energy sources. The U.S. Department of Energy’s National Renewable Energy Laboratory’s (NREL) Life Cycle Harmonization Project considered thousands of published LCAs for different electricity sources and found that renewable resources consistently have lower GHG emissions than fossil fuel-based resources (see the Life Cycle Stages diagram). However, there is a wide range of potential emissions, depending on specifications of a system. A closer look at the NREL study’s data for wind, solar photovoltaic (PV), biomass, geothermal, hydropower and coal is provided in the following table.

Comparison of Published LCA GHG Emissions by Electricity Source
Electricity Source Range of GHG Emissions (gCO2eq/kWh) Median GHG Emissions (gCO2eq/kWh) Dominant Life Cycle Stage Contributor
Wind 3-45 10 86% upstream (materials extraction, module and parts manufacture, construction)
Solar PV 39-49 (c-Si)
18-52 (Thin Film)		 40 60%-70% upstream (materials extraction and production, manufacturing, construction)
21%-26% O&M
Biomass 16-74 - -
Geothermal <50 (Flash Steam)
<80 (Enhanced Geothermal Systems)		 - -
Hydro 4-14 - -
Coal - 1,000 98% operational (coal mining, preparation, transport, combustion, power plant O&M)

Source: IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation.

Within each source-specific result, there are a range of configurations and technology types represented. Given the ranges, the values should not be taken as absolute.

GHG emissions from fossil fuel energy systems occur primarily in the operational phase (fuel extraction, processing and combustion). On the other hand, GHG emissions from renewable energy systems come primarily from the upstream side of the life cycle. The process of decommissioning plants generally produces few emissions compared with earlier life cycle stages. The implication for renewable energy mini-grids is that annual GHG emissions decrease with longer lifespans, and system maintenance is thus particularly important in terms of reducing climate impact. This is further explained in NREL’s analysis of Indirect Impacts of Alternative Electricity Penetration and the Growing Impacts of a Lifecycle Perspective, where “indirect impacts” refer to GHGs emitted outside of power generation. The following table shows the results of this study.

Life Cycle GHGs for Power Generation
Power Plant Direct GHG Emissions (gCO2e/kWh) Indirect GHG Emissions (gCO2e/kWh) Life Cycle GHG Emissions (gCO2e/kWh) Direct Share (%) Indirect Share (%)
U.S. Fleet Coal 1,095.4 85.3 1,180.7 93 7
SPC Power Corporation (SPC) 866.1 98.5 964.6 90 10
SCPC w/carbon capture and sequestration (CCS) 137.1 140.1 277.2 49 51
U.S. Fleet Natural Gas 408.8 72.3 481.2 85 15
Natural Gas Combined Cycle (NGCC) 392.9 57.4 450.3 87 13
NGCC w/ CSS 56.5 85.8 142.3 40 60
Gas Turbine 600.6 111.2 711.8 84 16
U.S. Fleet Nuclear 0.0 38.8 38.8 0 100
Advanced Nuclear Power Reactors Generation III+ 0.0 9.4 9.4 0 100
Hydro 0.0 28.2 28.2 0 100
Geothermal 0.0 57.8 57.8 0 100
Solar 0.0 47.3 47.3 0 100
Wind 0.0 21.4 21.4 0 100
Offshore Wind 0.0 28.9 28.9 0 100
Source: U.S. Department of Energy, Indirect Impacts of Alternative Electricity Penetration and the Growing Importance of a Life Cycle Perspective.

Greenhouse Gas Accounting Methodologies and Tools

Several GHG accounting methodologies (including LCAs and methodologies that focus on more limited life cycle stages) and calculation tools are available to determine the GHG emissions of a mini-grid. Depending on the project, different methodologies and tools will be more or less appropriate. Each approach can be used to compare the GHG emissions of energy alternatives, as long as the methodology is consistently applied. Comparing alternatives using different methodologies will not produce meaningful results.

The most appropriate methodology or tool for a project may depend on the requirements of a donor, an offtaker or the opportunity to access a carbon market. For example, clean energy projects funded by USAID must use its CLEER tool. To sell carbon credits under the Clean Development Mechanism (CDM) emissions trading schemes, GHG emissions reductions must be calculated using a CDM-United Nations Framework.

There also have been efforts to harmonize methodologies. Nine international financial institutions organized one such effort in 2012, developing a framework for a harmonized approach.

Putting it Into Practice

Determining the GHG emissions of a mini-grid requires selecting a methodology appropriate for project needs, comparing alternatives based on that methodology, collecting the necessary data and carrying out the calculations. Examples of GHG accounting methodologies and tools are provided in the following tables.

Clean Development Mechanism Methodologies

United Nations Framework Convention on Climate ChangeClean Development Mechanism Methodologies

Developer: United Nations Framework Convention on Climate Change (UNFCCC)

Use: For projects selling certified emissions reductions (CER) in an emissions trading scheme under the CDM or voluntary mechanisms that also accept CDM methodologies.

Summary: The CDM “allows emission-reduction projects in developing countries to earn CER credits, each equivalent to one ton of CO2.” It includes several methodologies to determine the CERs for different activities. Methodologies AMS-I.F. and AMS-I.L. are particularly relevant for mini-grids that generate less than 15 MW.

These methodologies use a boundary of the physical geographical site of the renewable generating units, but require that hydro and biomass meet certain conditions to ensure that GHG emissions outside the project boundary do not offset the project boundary emissions. All renewable energy emissions are considered to be zero under this methodology except those from geothermal power plant operations and the water reservoirs of hydro plants.

 

Clean Energy Emission Reduction Tool

United States Agency for International Development: U.S. Aid from the American PeopleClean Energy Emission Reduction Tool

Developer: ICF International for USAID

Use: Required for all USAID-funded clean energy projects.

Summary: This Microsoft Excel-based tool calculates emissions and emissions reductions from renewable electricity generation (PV, wind, geothermal, hydroelectric, and select biomass; anaerobic digesters for manure management is under development); fuel switching; and energy efficiency. It relies on a methodology that considers the replaced energy source, the type of renewable energy and the amount of energy consumed or saved. This tool focuses on the life cycle stage of electricity generation although for biomass-based electricity, it does consider the source of the biomass and includes sustainable sourcing requirements. It also connects to the USAID performance indicator reporting system.

Global Environment Facility (GEF)

The GEFGlobal Environment Facility (GEF)

Developer: GEF

Use: All GEF climate-change projects must assess GHG savings using this methodology.

Summary: Because of the types of projects that GEF funds (focused on strategic market development through demonstration projects and direct investments, financing mechanisms that leverage local private-sector financing, capacity building and technical assistance and government policies), GEF developed a methodology that differs from the CDM methodology in that it determines three types of GHG reductions:

  1. Direct contribution (similar to CDM methodology)
  2. Direct post-project contribution (due to financial mechanisms put in place by the project which outlast the project)
  3. Indirect contribution (due to capacity building, innovation and catalytic action)

It also differs from the CDM in that rather than using a “business as usual” baseline, it uses the current state of the market as a baseline.

The Hybrid Optimization of Multiple Energy Resources (HOMER)

HOMER EnergyThe Hybrid Optimization of Multiple Energy Resources (HOMER)

Developer: HOMER Energy

Use: When utilizing HOMER to model a micro-grid system, a user can utilize the GHG analysis function to compare results between configuration alternatives.

Summary: HOMER software allows users to model micro-grids and performance characteristics. Users can design and optimize mini-grids within this software, selecting various types of power sources, energy-storage technologies and load profiles. For each configuration, the software allows the user to assess systems’ technical and economic feasibility as well as calculate GHG reductions.

The Tracking Checklist: Environmental, Health and Safety Impact Management can be used to plan for assessing the GHG emissions throughout the life of a project.

Resources

Amponsah, N. et al. (2014). Greenhouse Gas Emissions from Renewable Energy Sources: A Review of Lifecycle Considerations.
This study reviews 79 life cycle analyses of renewable energy, showing the variability of results.

GEF (2008). Manual for Calculating GHG Benefits of GEF Projects: Energy Efficiency and Renewable Energy Projects.
This is GEF’s methodology for calculating GHG emissions reductions from GEF-funded renewable energy projects.

HOMER Energy. HOMER.
This is a website for the HOMER Energy micro-grid modeling software, which allows users to model mini-grids while calculating GHG emissions, among other things.

IPCC (2012). Renewable Energy Sources and Climate Change Mitigation.
This report is a comprehensive review of renewable energy technologies, including GHG analyses.

NREL. Life Cycle Assessment Harmonization Results and Findings.
These are the results of a project that analyzed and harmonized existing GHG life cycle analyses.

UNFCCC. Clean Development Mechanism (CDM). AMS-I.F.: Renewable Electricity Generation for Captive Use and Mini-Grid – Version 2.0.
This is a GHG calculation methodology under the UNFCCC’s CDM for small scale renewable electricity generation for captive use and mini-grids.

UNFCCC. Clean Development Mechanism (CDM). AMS-I.L,: Electrification of Rural Communities Using Renewable Energy – Version 2.0.
This GHG calculation methodology, under the UNFCCC’s CDM, is for rural communities using renewable energy.

UNFCCC. Clean Development Mechanism (CDM). What is the CDM?.
This website provides an overview of the CDM.

USAID. Clean Energy Emission Reduction (CLEER) Protocol Activity.
This factsheet describes USAID’s tool for calculating GHG emissions reductions from clean energy projects and must be used by all USAID-funded clean energy projects.

World Bank (2012). International Financial Institution Framework for a Harmonised Approach to Greenhouse Gas Accounting.
Recognizing the need to harmonize GHG accounting methodologies, several international financial institutions worked together to develop this framework for a harmonized approach to greenhouse gas accounting.