Socio-Economic Assessment of Fusion Energy Research, Development, Demonstration and Deployment Programme

Providing safe, clean and affordable energy supply is essential for meeting the basic needs of human society and for supporting economic growth. From the historical perspective, the constantly growing energy use was one of the main factors, which drove the industrialised countries to the current level of prosperity. Meanwhile, in recent decades, the issue of global energy security became a topic of increasing concern in the international policy agenda. On the one hand, the world is facing the problem of exhaustion of most convenient and cheep fuel reserves. The situation is becoming worse, because of the constantly growing demand in developing countries, and the oligopolistic behaviour of major energy exporting countries. On the other hand, the society is becoming more and more sensitive to the environmental pollution problems, caused by the excessive consumption of fossil fuels. In the face of energy security challenge, national governments ought to implement adequate strategies aimed at liberalisation of energy markets, diversification of energy supply mix, enhancement of energy efficiency, encouragement of investments in energy infrastructures, and promotion of innovation in energy sector. In a longer term perspective, the latter point becomes increasingly important, because the world is relying currently on the consumption of non-renewable fossil fuels, and the development of new safe, clean and resource unconstraint energy technologies is vitally needed. In line with this strategy, the major world economies pursue the joint R&D programme on thermonuclear Fusion technology, which represents numerous advantages due to its inherent safety, avoidance of CO2 emissions, relatively small environmental impact, abundance and world-wide uniform distribution of fuel resources. Considering the importance of the projected environmental and economic benefits of Fusion, the questions are raised whether the current level of financial support is sufficient, and what could be the optimal strategy to proceed with the demonstration of Fusion technology, given the time span and potential risks of Fusion RDDD programme. To put these questions into the context, one has to consider the current trends in energy R&D funding, which has seen a drastic decline ( ~50%) over the last three decades. The liberalisation of energy sector poses additional problem due to the fact that free markets partially failure to provide public goods, such as basic science and R&D, because of the so-called spillover effects meaning that the firms are not able to appropriate the integral results of their R&D investments. Regarding the thermonuclear Fusion technology, the decision makers responsible for national energy policies and allocation of public R&D funds may face the following specific questions: What is the expected net socio-economic payoff (social rate of return) of Fusion R&D programme, including both internal and external costs and benefits? What are the reasonable economic arguments that could justify the increase in public funding of the ongoing and future Fusion R&D activities and would stimulate greater involvement of the private sector? What additional value can be obtained through undertaking a more ambitious Fusion R&D programme (accelerated development path), which requires bigger number of experimental facilities, increased funding, and more intense overall efforts of international scientific and industrial community? In order to provide sound arguments for policymakers seeking to optimise public R&D funding, a robust socio-economic evaluation of the whole Fusion research, development, demonstration and deployment (RDDD) programme is needed. At the present stage, prospective analyses of Fusion technology have been emphasised mainly on the investigation of technological issues, estimation of the direct costs of Fusion power and analysis of its potential role in future energy systems. Meanwhile, methodological tools and practical studies aiming at a more comprehensive socio-economic assessment of global long-term energy R&D programmes, such as Fusion, are still incomplete. The primary difficulty concerns the evaluation of positive externalities that may reveal through different types of spillover effects, including but not limited to knowledge, network and market spillovers. While the presence of these effects has been identified in the economic theory and confirmed by empirical studies, their quantitative analysis in the specific case of large scale energy R&D programmes represents some methodological lacuna and deserves further investigation. Another problem relates to the methodology of cost-benefit analysis, which oftentimes ignores the hidden value of R&D projects arising due to the possible flexibility in managerial decisions. In fact, throughout the course of any R&D project, its prospective cash-flows can be significantly improved by pro-active management of different implementation stages, e.g. expanding the production, if market conditions are favourable, or abandoning, if R&D process appears to be unproductive. As a result, the strategic value of any R&D project normally exceeds its net present value (NPV) calculated with the traditional discounted cash flow (DCF) method. Although this strategic approach to capital budgeting, known as Real Options, has been propagated recently in several publications dealing with appraisal of lumpy irreversible investments, its practical application in the context of Fusion RDDD programme has not been mastered yet to the required extent. A particular challenge consists in the need for adequate treatment of different types of uncertainty in the model structure, parameters and input data. Accordingly, the main objective of this thesis consists in complementing the existing studies with an in-depth analysis of the positive externalities (spillover benefits) of Fusion RDDD programme and calculation of its strategic real options value subject to different managerial strategies throughout demonstration and deployment stages. Net social present value of Fusion RDDD programme and potential impact of Fusion R&D activities on the economic performance of the involved private companies are estimated using an integrated modelling framework, which includes the following components: (1) assessment of technological potential for deployment of Fusion power plants based on the simulation of multi-regional long term electricity supply scenarios with PLANELEC model; (2) economic evaluation of Fusion RDDD programme and analysis of different implementation strategies using Real Options model; (3) estimation of the economic value of spillover benefits from participation in Fusion R&D projects at the microeconomic level with the help of financial evaluation model; (4) strategic evaluation of Fusion RDDD programme, taking into account both spillover benefits and real options value, and policy recommendations.

Vers un assainissement urbain durable en Afrique subsaharienne

Halidou Koanda

Justification In Sub-Saharan Africa, excreta and wastewater disposal is characterised primarily by on-site sanitation systems. This sanitation option is more likely to increase as governments, municipalities, communities, private operators and donor agencies strive to reach the Millennium Development Goals aimed at reducing by half the proportion of people without access to basic sanitation facilities. Due to increased urban population growth in Sub-Saharan Africa, the faecal sludge volumes will increase to alarming quantities in the coming decades. An evaluation of faecal sludge management practices reveals that the main shortcomings relate to the widespread lack of involvement and foresight by the municipalities, the paucity of effective legal provisions and organization, and the absence of stakeholder coordination. Stakeholder involvement for planning and implementing faecal sludge management is virtually inexistent or excluded from urban sanitation planning processes. In the majority of situations, faecal sludge management is financially not viable. This is a major cause of the indiscriminate dumping of faecal sludge in urban areas or its untreated use in urban agriculture. These practices not only pose permanent and serious health risks but also contaminate both scarce ground and surface water. Objective and general approach On the basis of these facts, which present a real challenge to sector specialists, the overall objective of our research is to develop an innovative strategic planning approach for sustainable faecal sludge management in urban areas which allows minimising public health and environmental risks. Focus is placed on developing a reproducible methodology for stakeholder involvement, on enhancing population awareness for improved faecal sludge disposal and attributing a leading role to the dynamic private faecal sludge emptying and transport operators. These aspects form the three pillars of our search for a comprehensive methodological approach. The municipality of Ouahigouya in Burkina Faso with a population of about 65'000 inhabitants was used as pilot site to launch, implement and scientifically validate the approach. Analysis and stakeholder involvement The stakeholder-based planning approach developed in Ouahigouya relies on a combination of stakeholder identification and analysis, and participatory planning techniques (focus groups, workshops, informal meetings, all-stakeholder workshops). A quantitative survey among households allowed collecting stakeholders' proposals and evaluating suggestions for improvement of faecal sludge management and neighbourhood hygiene proposed by the population. The main steps in the stakeholder involvement approach include: Jointly clarifying the objectives of the planning process together with the stakeholders; Identifying stakeholders and their interests; Classifying stakeholders according to their importance and influence based on defined criteria and confirmed by the stakeholders themselves; Identifying the interactions between the stakeholders; Verifying the results of the stakeholder analysis by the stakeholders themselves; Choosing stakeholder involvement techniques; Implementing the chosen method of stakeholder involvement: development of faecal sludge management scenarios, acceptance of the scenarios by the stakeholders in focus groups, choice and acceptance of a basic scenario for development of the future strategy in an all-stakeholder workshop; Evaluating the chosen involvement process by the stakeholders. The experience gained with the planning methods developed and implemented in Ouahigouya reveals that the "Stakeholder analysis" method is efficient and provides answers to questions such as: Who are the important and influential stakeholders? Who should participate in the planning process and in which manner? This experience also revealed the need for capacity building of certain stakeholder categories (emptying operators, women's associations, etc.) to increase their degree of involvement in the planning process. Improvement in stakeholder involvement was achieved thanks to a combination of workshops, focus groups and other informal meetings allowing less influential stakeholders (associations of local women, horticulturists, emptiers) to share information and to freely express their opinions and concern and to defend their interests. Thus, providing an excellent example of local democracy appreciated by all stakeholders of Ouahigouya. The approach developed provides tools for policy-makers and planners to ensure an effective stakeholder involvement in the process of developing a common vision and implementation of improved urban sanitation measures. The conditions for replicating the approach developed and tested in Ouahigouya are due to participatory democracy, great commitment of the local authorities and the high motivation of the stakeholders involved. Levers for the willingness-to-improve faecal sludge management and neighbourhood hygiene The evaluation method of the willingness to improve faecal sludge management by the population was based on a combination of the planned behavior model of Ajzen and the contingent valuation method, financial analysis of the pit emptying and faecal sludge enterprise, and on focus groups of stakeholders. By focusing on local practices, perceptions and individual behavior, this method revealed that financial viability – often reduced to willingness-to-pay – is not the only factor to consider when planning improvement of sanitation practices. Willingness-to-improve is highly dependant on psycho-sociological factors such as attitude towards and beliefs in an improved neighbourhood environment, social pressure on the households by the neighbourhood as well as the subjective costs and benefits expected from improved faecal sludge management. These factors therefore present levers allowing planners and decision-makers to encourage, increase and develop the demand for improved latrine emptying services, e.g. though social marketing. Promoting private entrepreneurs According to market analysis of emptying services and stakeholders involved, small private and mainly informal enterprises play a leading role in faecal sludge management in most cities of Sub-Saharan Africa. These operators, dynamic but fragile, require an appropriate institutional, jurisdictional and economic environment based on a balanced partnership between the municipality (public) and the private sector. Our study reveals that for a company truck to be profitable, about 1'000 trips per year (at 6'000 FCFA per trip) are required or the equivalent of a city of 56'000 inhabitants. In the case of Ouahigouya, profitability is increased if the emptying operators apply the latest management and professional tools and techniques, and manage to provide emptying services in neighbouring towns. Decision support tools The research led to developing decision support tools for professionals and policy-makers. These tools facilitate the development of a tariff-oriented policy to avoid uncontrolled faecal sludge discharge into the environment, to render investments by private operators profitable, and still make emptying services accessible to low-income households. This involves: Analysis of the cost structure of 3 pit emptying companies has revealed that fuel, maintenance/repair and personnel costs make up 45%, 20% and 30%, respectively, of an enterprise's operating expenses. An Excel programme was developed to allow municipalities and private operators to determine the operating costs of emptying services. This allowed to establish a sustainable money flux between the different stakeholders involved and to define the tariffs. To prevent faecal sludge discharges in the immediate residential environment or on unauthorised sites, it might under specific circumstances prove necessary and feasible to reimburse rather than charge entrepreneurs for delivering faecal sludge to the treatment sites, hence, create a strong incentive for good emptying and haulage practice. Evaluation methods of the sludge quantities to be disposed of have been developed to allow faecal sludge planning by the municipal authorities, assessment of the potential market and return on investment by the private operators. Advantages of the approach for the population of Ouahigouya Based on the results of our study, it was possible to formulate practical recommendations for the organisation of the urban sanitation sector for the municipality of Ouahigouya – now in possession of a sustainable faecal sludge management strategy. Our study has also contributed to promoting local consultation and raising the awareness of the role and contribution of each stakeholder group, in particular the previously neglected manual emptiers in their daily efforts to improve the living conditions of the urban inhabitants. The "Strategic Excreta and Wastewater Sanitation Plan", that was developed and supported by the "Office National de l'Eau et de l'Assainissement - National Water and Sanitation Agency", provides an excellent framework for the implementation of the elaborated faecal sludge management model (as part of the this strategic plan).

EPFL2006

Environmental impacts and benefits of information and communication technology infrastructure and services, using process and input-output life cycle assessment

Yves Jon Césare Loerincik

Sustainable development and the Information Society are two concepts that are not commonly associated. However, both could have a major impact on the other. Information and communication technologies (ICT) may have important negative impacts on the environment. At the same time, ICT can also bring improvements. To provide guidance on how ICT devices and applications can be oriented towards positive effects, new methodology and tools are needed to understand and assess these various effects. In that respect, Life Cycle Assessment (LCA) is a pertinent approach, potentially enabling a holistic and in-depth analysis. This thesis proposes to develop appropriate Life Cycle tools and methodology and to apply them to measure the sustainability of ICT devices and of their applications. Specific objectives are: to explore the possibilities of combining Process LCA (PLCA) and Input-Output LCA (IOLCA), and to develop an operational method for ICT applications; to apply the developed method to assess the direct impacts of a computer network, including software and maintenance and developing strategies, to account for the high renewal rate in ICT technologies; to extend the method to consider not only negative impacts, but also benefits of ICT; to develop a method to address effects on lifestyles and rebound effects, and apply it to assess the impacts and benefits of innovative ICT services; Chapter 1 is a short introduction describing the environmental impacts of ICT and how this work addresses them. Chapter 2 presents the main methodological developments: It looks in detail at how PLCA and IOLCA can be compared and used in a complementary way. A method is developed to compare the two approaches in detail and to evaluate the cut-offs processes – the processes that are not traditionally considered in a PLCA – of two specific ecoinvent processes. The conclusions are that a full integration of PLCA and IOLCA remains difficult with our present level of knowledge. IOLCA could be use to complement PLCA when no other evaluation is available, but IOLCA should also be used as a quality check for PLCA and to determine priorities. Chapter 3 assesses comprehensively the environmental impacts of the computer network of the Ecole Polytechnique Fédérale de Lausanne. The LCA shows that the computers have the highest environmental impact, but also that short-term technology changes can reduce significantly their impact. The use phase dominates the impacts, but the production phase is also significant. Finally, using the Input-Output (IO) approach leads us to the conclusion that the service-linked contribution included in the total cost of ownership - that is, all of the costs associated with the computer network - has a significant impact on the environment. Chapter 4 evaluates the impacts and benefits of the ICT application to help the management of urban networks. The CREM, in Switzerland, uses a telemonitoring system to assess the water, electricity, district heating, and natural gas networks to increase the efficiency of their management. We want to know how the environmental and economical costs of the infrastructure and its maintenance compare with the savings. An LCA has been performed using a tiered hybrid approach. It shows that the savings overcome largely the cost and environmental impacts of the infrastructure. Chapter 5 analyses an innovative service developed by France Telecom. The visiophonic station enables the substitution of physical interviews by virtual interviews. A PLCA of the service shows that the saved km due to the shift from physical to virtual interviews dominates the effects on the environment and that the potential savings are therefore important. However, depending on what is consumed when using the time and financial resources made available by the service, the related impacts counterbalance the savings. Rebound effects must therefore be considered, studied, and addressed in the development as well as the implementation of new ICT services. Chapter 6 concludes with recommendations towards environmental beneficial uses of ICT and identifies what is needed for the necessary further LCA developments.

EPFL2006

Méthodologie de la synthèse des systèmes énergétiques industriels

Raffaele Bolliger

This work presents a synthesis method that leads to the preliminary design of industrial energy systems. Such systems are composed of several technologies that transform, through a set of physical unit operations, raw materials and energy into products and energy services. The purpose of the preliminary synthesis is to define which technologies form the system, to calculate their technical characteristics, their operating conditions and their interactions, based on performance indicators such as for example the cost of the system or its environmental impact. This area is studied since a long time and many synthesis approaches are available. However, these methods have significant limitations, particularly in their ability to face the study of more and more complex systems. The main goal of the method presented in this work is to enable the study of large systems and promote the use of the experience gained from previous studies in the form of models and methodological approaches. The synthesis method of industrial energy systems is based on the overall system optimization using a model that is obtained by assembling several modules, representing each a set of physical unit operations and whose equations are formulated with the black box technique, and an integration model that can represent the possible interactions within the system. Optimization is performed using a multi-objective evolutionary algorithm, whose objective functions are defined on the basis of calculation of several performance indicators based on the model of the system. To simplify the resolution of this complex system, the optimization problem is decomposed into a master problem, responsible for calculating the characteristics of the units and their operating conditions, and an optimization slave subproblem, which selects the units being part of the system and their interconnections. To ensure its robustness, the slave subproblem is formulated as a mixed-integer linear optimization problem. The slave subproblem is formulated by using process integration techniques, which are extended in this work to allow the synthesis of multiple heat and mass transfer networks. The synthesis problem can thus be defined using an explicit superstructure or by one generated automatically, either implicit or explicit. This work also introduces a technique that greatly reduces the number of degrees of freedom of the integration model. Instead of separately optimizing each ΔTmin/2 associated with heat streams, a formula is applied to calculate their value from a reference case. The ΔTmin/2 optimization is thus reduced to the optimization of a single decision variable related to the reference case, regardless of the size of the problem. The proposed method uses a set of heterogeneous elements, including flowsheeting software for modeling physical unit operations, mathematical programming tools for the formulation of the integration problem, methods for calculating performance indicators and calculation tools such as the optimization algorithm. This work introduces new tools developed to systematically apply the proposed methodology and to automate recurring operations of data transfer and the call of the various used software. In particular, a syntax description is defined as an abstraction layer to describe and to structure the exchanged information. A computing platform has been created to support the application of the method and to ensure the data transfer between its components. Two case studies are presented to illustrate the various aspects of the synthesis method. A first case, involving the synthesis of two combined cycles, has been chosen to illustrate the different application stages of the method and to show the potential reuse of certain modules. Through the integration techniques, it has been possible to identify potential heat recovery that can increase the performance of one of the cycles beyond what had been expected by experts using conventional simulation techniques. The second case study is about the treatment of waste generated by an industrial site active in the field of fine chemicals. Waste treatment can recover different materials and energy services useful for process units, thereby reducing the quantities purchased in the market. The model of multi-network integration can easily solve the complexity of the problem of waste management in developing strategies for allocating waste to the various treatments available for different objective functions related to operating costs and environmental impact.

EPFL2010

Méthodologie de la synthèse des systèmes énergétiques industriels

Raffaele Bolliger

EPFL2010

Environmental impacts and benefits of information and communication technology infrastructure and services, using process and input-output life cycle assessment

Yves Jon Césare Loerincik

EPFL2006

Vers un assainissement urbain durable en Afrique subsaharienne

Halidou Koanda

EPFL2006