Summary and conclusions

En opdateret analyse af Danmarks muligheder for at reducere emissionerne af NOx

This report presents the results of the project "Up-dating of NO_x analysis". The project comprised an update of assumptions and input data regarding an analysis from 2006 which looked at alternative ways of reducing the NO_x emissions. The 2006 analysis was documented in the following reports (only in Danish):

Miljøstyrelsen: Danmarks muligheder for at reducere emissionerne af NOx i 2010, Hovedrapport, Miljøprojekt nr. 1104, 2006.
Miljøstyrelsen: Samfundsøkonomisk analyse af NOx reduktion, Bilagsrapport, Arbejdsrapport nr. 21 fra Miljøstyrelsen, 2006.

Below, the results of the update are presented. The analysis has focused on reviewing the assumptions regarding the potential for NO_x emission reductions for each measure and the direct costs of implementing the measure.

Table 0-1 Overview - Updating of measures

Measure	Result of update
Full and partly boosting of coal fire power stations (using natural gas)	These measures from the 2006 analysis are no longer relevant. All power stations will by 2015 have de-NOx equipment leading to lower emissions than what would have been the result of boosting.
SCR on gas engines at combined heat and power plants (CHP)	The measure has been updated and the result is a slight increase in the NO_x costs compared to the 2006 analysis due to lower estimate of the capacity utilisation factor.
Improved efficiency of gas engines at CHP plans	The assumptions regarding the NO_x reduction potential and costs have been revised. The result is an estimate of the NO_x costs that is slightly lower than in the 2006 analysis.
Reburning and advanced reburning CHP plants using coal or biomass fuels	Similar to the situation for the large power stations, introduction of de-NOx equipment on most large CHP plants mean that reburning is no longer a relevant measure to consider. .
Low NOx burners in the district heating sector	The assumptions on NO_x reduction potential and costs have been revised. The result is almost no change apart from the estimate of the NO_x cost for oil fired boilers. Due to a revised capacity utilisation factor, the estimate of the NO_x cost has slightly increased.
Low NOx burners on industrial boilers	The investment costs estimate has been revised leading to higher costs and combined with other though smaller adjustments the resulting estimate of the NO_x reduction costs is higher than the 2006 analysis.
1 SCR on heavy vehicles 2 Accelerated implementation of EURO 6 for heavy vehicles 3 SCR on farm tractors and harvesters.	These measures have been updated with smaller adjustments and revisions of input data and assumptions.
Oil and Gas offshore	Small adjustments of the reduction potential and cost assumptions leading to slight decrease in the NO_x reduction costs.
Additional measures for power stations	The use or further use of SCR has been assessed. SCR can be applied at most sources and can reduce NO_x by up to 90 %. The large power stations have already introduced SCR. Additional reductions can be achieved by more frequent replacement of the catalytic elements.
Additional measures for district heating plants including CHP	There is a potential from application of SCR though individual plant conditions such as fuel types need to be considered. Also accelerated replacement of old gas engines has been identified as a potential measures.
Additional measures for the brick making industry	The possible reduction potential has been investigated with the conclusion that there is no significant potential.
Additional measures for industrial combustion	There is a potential for application of SCR or SNCR on most installations. Costs and reduction potential can only be assessed by consideration of the site specific conditions.
International experience	The experience from other countries notable other EU Member States have been reviewed. No major additional measures have been identified.

The update of the measures included in the 2006 analysis has given the following key results:

A number of measures such as boosting and reburning on power stations and other large point sources are no longer considered as relevant measures.
Minor revisions and adjustments have been implemented for measures in the industry, district heating sector, for mobile sources and for offshore.
Additional measures have been considered. This includes primarily the use of SNCR and SCR. Most sources of NO_x emissions can be fitted with either of these abatement technologies. There is for example a potential by more frequent replacement of the catalytic elements in the SCR units. Also by increased ammonia dosing the reduction in SNCR units can be increased. These are relevant measures in waste incineration installations. The report includes rough estimates of reduction potentials and costs.

The calculations show the costs and benefits of the relevant measures. These are the measures pointed at in table 0-1, and the application of SNCR and SCR in waste incineration installations. Figure 0-1 shows the shadow price (welfare-economic costs per kg removed NOx) of these measures. The measures are ranked according to their shadow price and the dotted line shows the damage costs of emissions of one kg NOx, being DKK 52 per kg NOx.

Figure 0-1. Measures ranked according to their welfare-economic shadow price

Figure 0-1. Measures ranked according to their welfare-economic shadow price

The measures with a shadow price of less than the damage costs would give a welfare-economic surplus. This implies that the most cost-effective measures are

Better controls for gas engines at combined heat and power plants (CHP)
Optimisation of SNCR in waste incineration installations
Replacement to low-NOx burners at light oil fuel kettles in industry and CHP

The measures in CHP and industry remove 3300 tonnes NOx in 2010. The measures imply a cost of DKK 3 million per year for the business sector and DKK 12 million per year for the government due to a loss in tax revenues. Moreover reductions can be expected from the measures within the waste incineration installations, but the exact potential has not been estimated here.

A number of sensitivity analyses have been carried out where assumptions are changed to show their influence on the results. The analysis show that the measures are robust to changes in interest rates and in the prices of electricity, gas and oil. However, if the investments are carried out at lower costs, four more measures would give a welfare-economic surplus. If the damage costs of emissions are lowered, fewer measures will give a welfare-economic surplus.

Compared to the report from 2006, fewer measures will now give a welfare-economic surplus, due to a lower damage cost of emissions. However better controls for gas engines at combined heat and power plants (CHP) and replacement to low-NOx burners at light oil fuel kettles in industry do still give a welfare-economic surplus. Moreover, replacement to low-NOx burners at light oil fuel kettles in CHP is now also a cost effective measure. Besides, their might be a potential for cost effective NOx reductions by optimising SNCR in waste incineration installations.