Sectoral Approachin the Electric Power Industry

The Federation of Electric Power Companies of Japan4

Sectoral Approach in the Electric Power Industry

Outline of Power Working Group of the Global Superior Energy Performance Partnership

October 2012
The Federation of Electric Power Companies of Japan
Executive Summary The electricity sector has promoted peer review activities relating to the operation andmaintenance of fossil power plants as one of the main action plans under the Asian Pacific Partnership on Clean
Development and Climate (hereinafter referred to as APP). The US government proposed winding up the APP because
it claimed that the mission of the APP had been completed, but the Japanese government and the country’s private
sector recognized the importance of promoting the activities of the APP and tried to carry on the achievements andexperiences of the APP in the newly founded Global Superior Energy Performance (hereinafter referred to as GSEP). In
collaboration with the USA, Japan set up a Power Working Group and took the chair under GSEP. The Power WG
decided to expand outreach and engage the International Electricity Partnership (hereinafter referred to as IEP), a
global private initiative to leverage the private resources of the electricity sector to promote public and private
partnerships.
Achievements of APP Activities
Introduction
It is imperative to deploy developed countries’ energy
saving technologies in developing countries, in order tomitigate the negative effects of global climate change.
The technology of electricity, amongst others, will be
more and more important. APP activity has been bestpractice of a public sector partnership, which provides
policy assistance, and the private sector, which owns
energy saving technologies. APP has been transformed
into the GSEP on the basis of the experience that was
acquired in APP activities. The activities that wereclosed to APP member countries are now expected todevelop and be exploited in the wider field.
In the electricity sector, technology is not only
deployed by siting and constructing power plants; thetransfer of know-how focused on operations andmaintenance is also important. The APP stakeholders
made the O&M peer review the main activity, in
addition to sharing information on energy saving
technologies. The mind-set will not be changed andwill develop even after transformation into the GSEP.
During this transformation, there has been close
coordination between the public and private sectors tomake this happen. At the private sector level,
cooperation with the IEP, which includes European
colleagues, was assured as a step towards internationalalignment. And in Japan, the iron and steel, cement andelectricity sectors shared the value of APP activities,
worked together, cooperated with the government toplan to set up the GSEP. While APP started as a
top-down approach, GSEP started as a bottom-up
approach.
This article introduces some examples of what APP
achieved and examines how the GSEP has evolved,
with the focus on a public private partnership.

The APP begins
The APP was launched by the USA in July 2005 tocontribute towards energy and climate change in the
Asia and Pacific region. The Bush administration tried
to demonstrate how the USA was pushing forward withtechnology deployment for the sake of energy andclimate change and worked hard to coordinate among
member countries and to attract attention. The official
announcement was made at the ASEAN ministerial
meeting in Vientiane Laos, with participating countries
consisting of Australia, China, India, South Korea,
Japan and the USA (Canada joined later). It was
implemented by a ministerial meeting and its’ Policy
Implementation Committee (PIC). It started with eighttask forces; that is,Power Generation andTransmission, Cleaner Fossil Energy, Renewable
Energy and Distributed Generation, Buildings andAppliances, Steel, Cement, Aluminum, Coal Mining.
The vision statement designated the following;First, by building on the foundation of existing bilateraland multilateral initiatives, we will enhancecooperation to meet both our increased energy needs
and associated challenges, including those related to air
pollution, energy security, and greenhouse gas
intensities,
Secondly, areas for collaboration may include, but not
be limited to: energy efficiency, clean coal, integrated
gasification combined cycle, liquefied natural gas,carbon capture and storage, combined heat and power,
methane capture and use, civilian nuclear power,
geothermal, rural/village energy systems, advanced
transportation, building and home construction andoperation, bioenergy, agriculture and forestry,hydropower, wind power, solar power, and otherrenewables.
Thirdly, a non-binding compact in which the elements

5of this shared vision were developed, as well as theways and means to implement it, will be further
defined and lastly, the partnership will be consistent
with and contribute to our efforts under the UNFCCC
and will complement, but not replace, the Kyoto
Protocol.
The Japanese participants regarded the APP as one of
the key components of the “Sectoral Approach”, which
was strongly promoted by Japanese governments, and apeer review of the operation and maintenance of fossil
power plants was given the status of a main action planby the Generation and Transmission task force. The
Sectoral Approach was developed by Japanese
governments to quantify CO2 emissions, with an

Fig. 1

Fig. 2assumption of setting a reduction target. This plans toprovide incentives to invite the main emerging
economies to participate in international targets byacquiring accurate information such as the current andfuture potential of reduction, and of internationallycomparable data, through which the challenges could
be shared and the technology road map would be
developed and implemented. Each sector showedvarious specific measures. Because the Sectoral
Approach was designated to be introduced in theinternational context, the first thing it required wascommon indicators.
In the case of the electricity sector, the portion of
non-fossil fuel generation in the energy mix, operation

Asia Pacific Partnership- Organization

Low carbon fuel mix common
indicators

6
and maintenance improvement, renovation andreplacement potential and the best available
technologies in fossil fuels generation can be common
indicators. Among the above, operation andmaintenance improvement can be implemented throughthe APP peer review4 activities and it was therefore
selected as a flagship project, “Power Generation Best
Practices”.
Apart from the above, the following were included in
the Power Generation and Transmission Task Force;・ Best Practices for Demand Side Management
Activity Plan・ Energy Regulatory & Market Development Forum・ TradeExhibitions/Conferences
and
Trade
Missions
・ Hydroelectric Generation Best Practices
・ Combustion Optimization in Coal Based Power
Plants・ Implementation of Artificial Intelligent Soot
Blowing System for Improving the SteamGenerator Efficiency by IncreasingtheEffectiveness of Soot Blowers
・ SOx Reduction Technologies in Flue Gas
・ Risk Evaluation and Prioritization (REAP) for
Maintenance and Renovation & Modernization(R&M) of Power Plants
・ Life Extension & Remaining Life Assessment ofPower Plants
・ Site Visit of Energy Conservation andEnvironment Protection Technology—Application

Fig. 3of Plasma Ignition Technology in Power
Generation
・ Generator Transformer Programs (Inspection
Procedures, Diagnostic Tools and Maintenance)
Coal Fired Power Generation Peer Review Activity
With regard to the deterioration of generation
efficiency through the ageing of existing coal fired
power plants, this is expected to recover by improving
operations and maintenance.
There is a possibility that this case is similar torefurbishment in developing countries. Peer review
here means that peers mutually evaluate the power
plants, identify common challenges, share best practicethrough discussion and propose specific improvement
plans.
When implementing the Peer Review the Green Hand
Book, which was compiled by Japanese electricity
companies and which encompasses a wide variety ofbest practices, was distributed for free. The Green
Hand Book was prepared for the first Peer Review
activity and later acknowledged to be the office text by
the task force. It can be downloaded from the following
URL5.
The following peer review activities occurred after test
one in the USA in October 2006.
-

April 16 – 19 2007, at J Power’s Takasago
Thermal Power Station in Hyogo Japan, two 250
MW, with the participation of two Australian,Comparison on deviation from designed efficiency

4In January 2006, the Federation of Electric Power Companies

of Japan(FEPC) and the Edison Electric Institute (EEI) joined
the APP ministerial meeting, where Mr. Masumoto of FEPC andMr. Morris of AEP agreed to adopt peer review because they
were knew how important this is.Mr. Morris of AEP agreed toadopt peer review because they were knew how important thisis.

5

See http: www.fepc.or.jp/env/app/7-eight Canadian, eight Indian, 10 Japanese, 13
Korean and six American engineers
February 6 – 12 2008, at the Kota Power Station
Rajasthan, two 110 MW, three 10MW and1.195MW and the NTPC

Fig.4

-

-

-

Green Handbook(National Thermal Power Corporation) Dadri
Power Station in India, with the participation offour 210 MW, with the participation of two
Australian, five Canadian, 37 Indian, 14 Japanese,
10 Korean and seven American engineers
April 28-March 2 2008 at Alliant Energy’s
Edgewater Coal-based Station, 60 MW, 330 MW
and 380 MW in Sheboygan, Wisconsin, and theColumbia coal-basedPower Station, two 533MWs
in Pardeeville, Wisconsin USA, with theparticipation of one Canadian, two Chinese, six
Indian, 22 Japanese, eight Korean and 42
American engineers
June 23 – 27 2008, the Loy Yang Power Station,
two 515 MW and two 560 MW, the YallournPower Station, two 350 MW and two 375 MW andthe Hazelwood Power Station, eight 200 MW in
Australia, with the participation of 20 Australian,
one Chinese, six Indian, 16 Japanese, three Korean
and two American engineers
July 6 – 10 2009 at the South-East Power
Company’s Yonghung coal-fired Power Plant, two
800 MW and two 870 MW in Korea, with theparticipation of 20 Japanese, one American, two
Chinese and 80 Korean engineers

The following are examples of the result of the peer
review activity. Experience in the USA shows that;--

Participants were divided into teams for boilers,
auxiliary machines and turbines.
Opinions were exchanged and experiences wereshared with regard to the optimization of boiler
combustion, increased efficiency of air-preheaters,
improvement of steam turbine efficiency, water
quality improvement of cooling water forcondensers, etc.
A tentative calculation of the improvement effectsof steam turbines was made. It was confirmed thatheat efficiency could be increased by 1% to 1.5%
at each power plant, which is equivalent to apotential of approximately 90,000 ton CO2 per
power plant.
Apart from the above, the National Energy Technology
Laboratory of the Department of Energy under
USAID’s Greenhouse Gas Pollution Prevention Project
established the Centre for Power Efficiency &Environment Protection (CenPEEP) and two regional
CnePEEPs, and provided basic power plant diagnosis.
To date, NTPC avoided a total of 30 million tons of
CO2 of additional reductions. Under APP, theyextended the successes of the NTPC and CenPEEP to
three plants operated by the State Electricity Boards ofWest Bengal and Punjab.
Quantification of CO2 Potential through the
improved operation and maintenance of power
plantsThe APP Power Generation and Task Force quantified
the CO2 Potential through the improved operation andmaintenance of power plants, resulting from theachievements of peer review activities, based on themutual trust of the member countries. The study will bereported here.
After quantification, two scenarios for the introductionof new technology, BAU (Business As Usual) andBAT (Best Available Technology), were developed.
Under the BAT scenario, strategic technology transfer
was expected.
--

The BAU scenario did not envisage theintroduction of improved O&M. Current coal fired
technology (Subcritical combustion) existed until
2010. From 2015 onwards Ultra- Supercritical
Coal-Fired Power Plants (USC) with steam
conditions up to 600 degrees will be diffused
The BAT scenario envisages the introduction of
improved O&M. Ultra-Supercritical Coal-Fired
Power Plants (USC) will be diffused up to 2015.
Integrated Gasification Combined Cycle (IGCC)
Technology will be diffused from 2016 to 2025.
Next Generation IGCC technology will be diffused
after 2030.

With regard to BAT, deterioration in efficiency would
begin 15 years after its start-up, but the potential for
improvement was assumed, based on information
gained from questionnaires sent to member countries.
That of existing plants was based on the Platts database.
Future prospects of power plants were based on theInternational Energy Agency (IEA)’s World Energy
Outlook 2009. As a result of this study, the potential
was 1,185 Mt-CO2/year, 2.29 Mt-CO2/year and a total

8of 1,503Mt-CO2/year. The breakdown showed that the
153 Mt-CO2 reduction was attributed to the improved
O&M of existing plants, the 186 Mt-CO2 reduction
was attributed to the improved O&M of existing andincoming plants and the 1,163 Mt-CO2 reduction was
attributed to incoming new technologies. The study
was conducted under the APP Power Generation andTransmission Task Force and presented to the IEA
with the idea that the diffusion of new coaltechnologies was important and that improved O&M
was also necessary.

Distribution/Demand
Practice Activities

Side

ManagementBest

The Distribution/Demand Side Management Best
Practice Activities were led by the Lawrence Berkeley
National Laboratory (LBML) in cooperation with the
Edison Electric Institute (EEI). This started in 2007 in
Maharashtra in India, based on California’s experience
focusing on structural, regulatory and administrative
challenges. In 2009 they held a Distribution/Demand
Side Management Event in North Carolina andCalifornia with assistance from Progress Energy and
PG&E, with 35 participants from Australia, China,
India, Japan, South Korea and the USA. The program
was focused on technical information exchange and theidentification of Best Practices, which included Smart
Grid and Demand Response planning, presented by theUSA. Improving the reliability of the distribution
system was presented by Japan. There was an active
discussion on the cost of DSM and reduced losses inthe transmission and distribution system in Japan by
the Indian regulators and local utilities. It was agreed tofurther develop the activity as one of the flagshipprojects.

Fig. 5

Renewable Energy Best Practice Activities
The 1st "Hydroelectric Generation Efficiency
Improvement Project" was held from August 13-17,
2007 in support of the Asia Pacific Partnership "Power
Generation and Transmission Task Force" Action
Plans. The program began in Charlotte, North
Carolina USA at the Duke Energy headquarters andconcluded at FirstEnergy’s Yards Creek Pumped
Storage Hydroelectric facility in Blairstown, New
Jersey, USA. More than 40 participants withhydroelectric engineering, operations, maintenance andmanagement expertise from five APP countries
participated in the event. In March 2009, 50
participants form Canada, China, India, Japan, South
Korea and the USA met in San Francisco, California to
exchange initial information from the different
perspectives of the purchaser, operator/developer andintegrated system operator. The event was hosted by
PG&E and NextEra Energy Resources in cooperation
with the Edison Electric Institute.
In September 2010 APP participants held a windenergy event in Montreal.
Engagement in GSEP
APP completed
In the APP activities, the power generation andtransmission task force was chaired by the US from thestart, but because of the change in US politics it
proposed giving up its status as chair of the PIC(Policy Implementation Committee) and the task force
secretariat, and informed Japan in June 2010. The APP
revealed new potential, from the viewpoint that thisestablished the regional cooperation framework onenergy security and environmental protection in the
Asia and Pacific region, and that the collaborative
public and private sector partnership progressed this.
Politicians and negotiators attended the ministerial

Comparison of CO2 reduction effect (2030 BAT Scenario)

9meetings and PIC meetings, and were likely to reflect
negotiations at the UNFCCC, but in the task forces,
because there was less influence from the negotiations,and there was a greater private sector presence, there
was a constructive discussion. Particularly in the
sectors of cement, steel and electricity, a common
measurement method for GHG emissions, peer reviews
and plant diagnosis was developed. The Japanese
private sector made APP activities the centre ofinternational cooperation on climate change and took
as many opportunities as possible to be heard, making
an active international contribution. In due course there
was growing attention from third parties, including theEU.
The APP showed how successfully the public andprivate partnership worked in terms of technology
transfer and the perception was fostered that the private
sector has to be given an important role in climatechange policy making, while the partnership with the
public sector needs to be accelerated. The Japanesepublic and private sectors shared the idea that it isimperative to replace the APP task forces, but on theother hand they believed that meaningful participationby the USA was not expected if it continues as the APP,
and that it was task forces that should be promoted
further and not the PIC meeting, because the latter was
subject to political influence. They reached a judgmentthat the decision of the US had to be accepted and thattask force activities had to be transferred to some otherinitiative.
In response to the above development, the power
generation and transmission task force had an inner
meeting in Tokyo in June 2010 with its task force chair
Mr. Jarad Daniels of the US Department of Energy. The
two day meeting concluded with several
recommendations for future task force activity,
assuming that the APP would end, which were intended
to promote the expected results and to make up for
deficiencies. Here are the main points of therecommendations;---

To maintain key stakeholders, government
representatives must show strong support for
public-private efforts and move quickly tomaintain momentum in the private sector.
To broaden engagement, additional public andprivate sector involvement should include service
providers and technology providers, and also
representatives from funding organizations for the
implementation of capital-intensive projects.
Specific near-term outreach plans for the Task
Force should include, but not be limited to,organizations and countries such as the E.U.’s
Eurelectric organization and the International
Electricity Partnership (see below for further
details), with participation from other countries
which rely greatly on fossil fuel use--

The Task Force’s Best Practice Peer Review
project for coal-fired power plants should continue,as this has proved to be very effective and very
important for significantly reducing GHG
emissions.
A technology transfer mechanism should be
developed for best practices in Transmission andDistribution (T&D)
The current Demand-Side Management activities
should be expanded andbest practices and regulations for Renewable
Energy should be shared

The APP held the closing PIC meeting in Bangkok in
April 2011 to conclude this activity. It was decided totransfer the cement, steel and electricity task forces to
GSEP. It was expected that the valuable network thathas developed through APP activities would continue
on the next platform, and that new initiatives would belaunched. The APP website 6 will be maintained toshare the legacy of the information gathered, as well as
best practices and other information that has beendeveloped.

Fig

6

APP Closing
Committee

PolicyImplementation

GSEP launched
Before the APP’s closing PIC meeting at the first Clean
Energy Ministerial Meeting in Washington, D.C. in
June 2010, U.S and Japanese ministers proposed a new
public and private partnership initiative, GSEP. Thisaims to diffuse technologies to accelerate energy
efficiency improvements in commercial buildings andindustrial facilities, which together account for almost
60 per cent of global energy use, and to reducegreenhouse gas emissions and pollution. Participating
governments include Australia, Canada, Denmark,Finland, France, India, Japan, Korea, Mexico, Russia,
South Africa, Sweden and the United States, together
with the European Commission.
6See
http://www.asiapacificpartnership.org/english/default.aspx

10
The GSEP was initially composed of the Certification
Working Group (later renamed the Energy
Management Working Group) and the Sectoral
Working Group.
The central focus of the Energy Management WG is toadopt an energy management system, to achieve
designated minimum rates of energy performance
improvements and to receive third-party validation forthese improvements. (This is led by the US). It was
assumed that the Sectoral Working Group would
include energy intensive industries who are engaged
with energy efficiency improvements, to be driven by
public and private partnerships. This plans to develop a
database of best available technologies and bestpractices with regard to successful energy saving and
GHG emission reduction, and to standardize themeasurement and monitoring methodology of energy
consumption and GHG emissions. It is expected to
implement facilities diagnosis and peer review. It wasalso placed under the IPEEC. (This is led by Japan)
Japan proposed that the Working Group should consistof the cement, steel and electricity sectors, which wereamong the most active under the APP, emphasizing that
there had to be a successor to the APP task forces
because these were a good demonstration of public andprivate partnerships. The electricity sector insisted that
activities relating to improvements in operation andmaintenance that were focused on coal-fired generation
plants needed to continue in the new framework,
knowing that the circumstances concerning coal-fired
power generation differ from country to county.
With regard to the electricity industry, because APP

Fig. 7stakeholders met at the Tokyo Inner meeting held
before the Clean Energy Ministerial Meeting to discuss
the transfer to GSEP, the APP’s Power Generation andTransmission Task Force was quickly transferred to the
GSEP Power WG. The APP’s Steel and Cement Task
Forces also decided to transfer to the GSEP WGs by
the end of 2010. The US added the Cool Roofs andPavements WG and Finland launched the Combined
Heat and Power WG after the Clean Energy Ministerial
Meeting. Now there are six WGs.
The GSEP WGs were also adopted by the IPEEC
Executive Committee.
In Japan this was followed by a period of consultationby the Ministry of Economy, Trade and Industry(METI) and relevant organizations, and resulted in aworkshop in Washington, D.C in September 2011. At
the meeting, the six WGs discussed how they would
proceed with their activities. The Power WG was
attended by METI and FEPC from Japan, the USDoE
and the EEI from the US, Eurelectric from the EU, theCanadian Electricity Association and the World
Resources Institute from China, with the objective oflearning lessons from the APP and exchanging viewson the development of the activity plans.
The main conclusions of the Power WG were as
follows;-

It was confirmed that the APP Power Task Force
activities and the peer review of coal-fired
generation plants were particularly significant
The WG’s activity plan should be developed on theTransfer of APP to GSEP

11

-

-

basis of recommendations (peer review, T&D,
DSM etc) provided by the Tokyo Inner meeting
held in June 2010
Outreach to developing countries is important
It was agreed that the Power WG Chair would be
Mr. Asahi, Director-General of METI and that the
Co-Chair would be Dr. Kyte, coordinator of theInternational Electricity Partnership
The activity plan would be reported to the third
Clean Energy Ministerial Meeting which would beheld in London in April 2012

IEP and the Asia Development Bank. The WG adopted
the WG’s work plan and operational guidelines andapproved the implementation of activities to facilitate
the development, deployment and diffusion of
cost-effective, cleaner and more efficient technologies
based on work done by the APP Power Generation andTransmission Task Force, among others by highlighting-

International Electricity Partnership (IEP)
In October 2008 the Canadian Electricity Association,essa (Australia), the Edison Electric Institute (US),
Eureletric(EU) and FEPC(Japan) agreed to establish
the International Electricity Partnership at the WorldElectricity Summit Meeting in Atlanta, US. The
Comisión de Integración Energética Regional (Latin
America) joined later.
The objective of the IEP is (a) to exchange views on
the agenda at international climate change negotiations,(b) to confirm common perspectives of theinternational electricity sector and to deliver its own
views and (c) to seek what contribution the electricity
sector can make to viewpoints on climate change
impact.
The activities it has previously implemented are;-April 2009, announcement of CCS roadmap at theAd hoc UNFCCC WG in Bonn-

December 2009, announcement of “Roadmap for a
Low-Carbon Power Sector by 2050 at the side
event of COP 15 in Copenhagen-

April 2010, panel discussion on the above roadmap
in Tokyo-

December 2010, MRV report of the electricity
sector and performance of the IEP at the COP 16
side event in Cancun-

December 2011 Outreach to South Africa aboutcommon challenges facing the electricity industry,in Durban

GSEP 1st Sectoral Working Group
Following the workshop in Washington, D.C., theGSEP 1st Sectoral Working Group was held in Tokyo in
March 2012, consisting of the Power WG and the SteelWG. The Power WG was attended by 30 members
from Japan’s METI, FEPC, CRIEPI, Tokyo ElectricPower Co., Kansai Electric Power Co., the US DoE,
Indonesia’s Ministry of Mineral Resources and Energy,
PLN, China’s Renmin University, CLP of China, theBest Practices in Power Plant Efficiency andOperation
Best Practices in Transmission and Distribution(T&D)
Best Practices in Demand Side Management(DSM).

Moving ahead
Throughout the course of moving to the GSEP from
APP, some challenges were highlighted. The mosttypical example was pointed out by the Centre forEuropean Policy Studies (CEPS) report 7 entitled
Sector-specific Activities as the Driving Force towards
a Low-Carbon Economy. From the Asia-PacificPartnership to a Global Partnership (Noriko Fujiwara2012). This gives an assessment of the APP bydescribing “The APP’s two features – bottom-up
approaches and a public–private partnership – wereconsidered factors behind its success” but at the sametime it pointed out “Among the major barriers, the lackof funding puts constraints on progress in thedemonstration of new technologies.” and suggested“Facilitating access by the private sector tointernational and regional financial institutions (e.g. theWorld Bank, the Asian Development Bank and theEuropean Investment Bank (EIB)) would be a possible
solution to the funding problem.”This may be correct but the focus should be on how
resources can be secured to allow financing to be
reimbursed. Under the APP/GSEP, it is assumed that
resources are derived from increased efficiency, but
electricity rates are normally low in developing
countries. Therefore different ideas, including
lengthening the reimbursement period and reducing theinitial cost, have to be taken into account.
The above essay pointed out another barrier, “a lack of
capacity for data collection and management”. This isalso true of the electricity sector. However all thechallenges pointed out already can be solved. These
will be addressed as the GSEP moves ahead.

7See
http://www.ceps.eu/book/sector-specific-activities-driving-forcetowards-low-carbon-economy-asia-pacific-partnership-gl