Mitigation Analysis

Analysis of Mitigation Options Results

The results for each mitigation option are summarized in Table III.20. The most effective options correspond to the transportation sector, in terms of both contribution to emissions reduction and costs. For the three transportation options considered the cost were negative, which means that their application would provide benefits for the national energy system.

Regarding the options for the manufacture industry, the boilers conversion from liquid fuels to natural gas also reflects negative costs, but to a considerably lower extent than those for the transportation sector; likewise, the emissions reduction is also considerably lower in comparison with the rest of the options. Efficiency improvement of natural gas boilers that show close to zero cost, is more effective in reducing emissions that boilers conversion.

From the options showing a positive cost, improvement efficiency of natural gas furnaces presets the lowest total cost but is not very effective in reducing emissions; therefore, it has a high unit cost that is very close to that of the option dealing with changes in the iron reduction process, which requires higher investments.

The increase in hydro generation is the alternative with the highest total cost but it is very effective in reducing emissions; compared to direct heat options, unit cost is less that half. Figure III.8 shows the "discrete step" curve where the cost and the extent of the emissions reduction of each of alternative, are presented.

As previously mentioned, these options were analyzed separately but neither the interdependency that may exist between them nor the effects that they may have in the energy system if they were jointly analyzed, have been assessed. However, it should be noted that they are highly independent actions except for those in the transportation sector, which that may require a few adjustments in order to apply them together. In spite of these limitations, and the small number of analyzed options, cost curves were built in order to have some global results for the energy system. Table III.21 shows the estimated series for average, and incremental costs while Figure III.9 shows the corresponding curves.

In the energy sector, low energy prices represent the main barrier to any mitigation program. In spite of the last energy price increase, oil products and natural gas prices are still below the exportation FOB value and the marginal costs, respectively. Thus, energy still maintains a low share of the users cost structure and does not incentivate investments in energy use improvement programs.

Even with the future price increases assumed in the baseline scenario, other types of measures will be needed to promote and encourage these programs since, in general, the users have other priorities and, in many cases, more attractive investments opportunities. Also, in most cases, the users lack the knowledge on how to achieve a rational energy consumption and the associated benefits. The measures should then be oriented at developing education and training programs, energy auditing, adequate financial mechanisms, and equipment standars.

Another important limitation to mitigation strategies implementation is the lack of institutional capacity and legal instruments for developing the mitigation measures. Venezuela lacks adequate institutional arrangements to deal with energy demand management. On the other hand, political decisions to implement mitigation programs and the allocation of financial resources for programs promotion and development are other important factors to be considered since any mitigation initiative, regardless of the associated economic benefits, requires adequate financing and human resources for planning and implementation.

Index    Next
If you have any questions or comments please contact us at VEBHM7SL@IBMMAIL.COM.