Climate Risk And Adaptation In The Electric Power Sector

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Climate Risk and Adaptation in the Electric Power SectorThis report aims to highlight and raise awareness on the exposure and vulnerability of theenergy sector to climate change. It also identifies adaptation options available to each sourceof energy generation as well as for the distribution and end use of electrical energy.About the Asian Development BankADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developingmember countries reduce poverty and improve the quality of life of their people. Despitethe region’s many successes, it remains home to two-thirds of the world’s poor: 1.8 billionpeople who live on less than 2 a day, with 903 million struggling on less than 1.25 a day.ADB is committed to reducing poverty through inclusive economic growth, environmentallysustainable growth, and regional integration.Based in Manila, ADB is owned by 67 members, including 48 from the region. Its maininstruments for helping its developing member countries are policy dialogue, loans, equityinvestments, guarantees, grants, and technical assistance.ISBN 978-92-9092-730-3Asian Development Bank6 ADB Avenue, Mandaluyong City1550 Metro Manila, Philippineswww.adb.orgPrinted on recycled paper.Printed in the PhilippinesClimate Risk and Adaptation in theElectric Power Sector

Climate Risk and Adaptation in theElectric Power Sector

2012 Asian Development BankAll rights reserved. Published 2012.Printed in the Philippines.ISBN 978-92-9092-730-3 (Print), 978-92-9092-731-0 (PDF)Publication Stock No. RPT124764Cataloging-in-Publication DataAsian Development Bank.Climate risk and adaptation in the electric power sector.Mandaluyong City, Philippines: Asian Development Bank, 2012.1. Climate change adaption.   2. Energy.   I. Asian Development Bank.The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of theAsian Development Bank (ADB) or its Board of Governors or the governments they represent.ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequenceof their use.By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in thisdocument, ADB does not intend to make any judgments as to the legal or other status of any territory or area.ADB encourages printing or copying information exclusively for personal and noncommercial use with proper acknowledgmentof ADB. Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without theexpress, written consent of ADB.Notes:In this publication, “ ” refers to US dollars.Asian Development Bank6 ADB Avenue, Mandaluyong City1550 Metro Manila, PhilippinesTel 63 2 632 4444Fax 63 2 636 2444www.adb.orgFor orders, please contact:Department of External RelationsFax 63 2 636 2648adbpub@adb.orgPrinted on recycled paper.ii

ContentsList of Tables, Figures, and Boxes ivForeword viAcknowledgments viiiAbbreviations ixGlossary xExecutive Summary I.Introduction xiii1II. Climate Change and the Electric Power Sector A. The Case for Action B. Vulnerability of the Electric Power Sector to Climate Change and Options for Adaptation 1. Fossil Fuel Production and Transport 2. Power Generation 2.1 Thermal Power (Coal, Oil and Gas) 2.2 Nuclear Power 2.3 Renewable Energy—General 2.4 Hydropower 2.5 Wind Power 2.6 Solar Photovoltaics 2.7 Concentrating Solar Power and Solar Tracking Systems 2.8 Bioenergy: Biomass Energy and Biofuels 2.9 Geothermal Power 2.10 Ocean Power 3. Transmission and Distribution 4. Electricity End Use 5. Summary of Findings and the Way Forward 335899131820252728313134353943III. Building Adaptation Strategies into Electricity Power Sector Policy and Planning A. Implications for Policies and Planning B. National and Sector Policies and Processes C. Electricity Sector Policies and Plans 47474748IV. Conclusions 53References 55iii

List of Tables, Figures and BoxesTablesE1123456789101112131415Indicative Impacts of Climate Change on Electricity Generation, Transmission, and End Use Key Climate Change Impacts and Adaptation—Fossil Fuel Extraction and Transport Key Climate Change Impacts and Adaptation—Thermal Power Temperature Effect on Nuclear Power Efficiency Key Climate Change Impacts and Adaptation—Nuclear Power Key Climate Change Impacts and Adaptation—Hydropower Key Climate Change Impacts and Adaptation—Wind Power Key Climate Change Impacts and Adaptation—Solar Photovoltaic Power Key Climate Change Impacts and Adaptation—Concentrating and Tracking Solar Power Key Climate Change Impacts and Adaptation—Biomass Energy and Biofuels Key Climate Change Impacts and Adaptation—Geothermal Power Key Climate Change Impacts and Adaptation—Ocean Power Impacts of Climate Change on Electricity Transmission and Distribution Networks Key Climate Change Impacts and Adaptation—Electricity Transmission and Distribution Key Climate Change Impacts and Adaptation—Electricity End Use Indicative Impacts of Climate Change on Electricity Generation, Transmission, and End Use xiv101415182427293033333637404345Figures1Natural Catastophes and Financial Losses, 1980–2010 2 Typical Range of Water Withdrawals and Consumption for Thermal and Nuclear Powerin the United States 3 Typical Range of Water Withdrawals and Consumption for Power from Renewable Sourcesin the United States iv61219

List of Tables and FiguresBoxes1Vulnerability of the Electric Power Sector in Ho Chi Minh City 2Adaptation Options for the Electric Power Sector in Ho Chi Minh City 3Effects of Heavy Rain on Coal Production 4Climate Change Threats to the O Mon IV Thermal Power Plant in Viet Nam 5Adaptation to Expected Climate Change Threats to the O Mon IV Thermal Power Plant 6Possible Corrective Actions to Improve Nuclear Power Plant Safety: Lessons from Fukushima 7Climate Change Impact of Hydropower on the Mekong River 8Glacier Melting, Glacial Lake Outburst Floods, and Hydropower in Nepal 9 Improving Efficiency of Existing Hydropower Generation through Climate Modeling in Fijiand Papua New Guinea 10 Absorbing Wind Power into the Grid and Maintaining Grid Stability 11 Waterless Commercial-Scale Concentrating Solar Power Plant 12 Measures to Improve Climate Resilience of Bioenergy Systems 13 Effects of Temperature Increase on Electricity Demand 14 Applying a Climate Lens 15 Asia–Pacific Energy Policy Makers and Regulators’ Statement on Clean Energyand Climate Change 16 Risks of Multiple Hazards on Electric Power Sector Infrastructure 47811131621212326303241485152v

ForewordBetween 2005 and 2030, primary energy demand in Asia and the Pacific is expected to grow at an annual rate of2.4%, and demand for electricity at 3.4%. Developing member countries (DMCs) of the Asian Development Bank(ADB) will account for the bulk of these increases.By 2030, fossil fuels (coal, gas, and oil) are expected to continue to generate more than 70% of electricity in theDMCs. The power sector alone will continue to contribute approximately half of the region’s total carbon dioxide(CO2) emissions by 2030, with a corresponding contribution to the increase in atmospheric concentration ofgreenhouse gases. In response to this challenge, ADB has adopted a number of initiatives (including the EnergyEfficiency Initiative and the Asia Solar Energy Initiative) and programs (such as the Clean Energy Program) tosupport low-carbon investments in the energy sector. ADB’s total clean energy investments reached 2.1 billionin 2011. Renewable energy and energy efficiency account for the bulk of these investments.To date, far less attention has been devoted to the exposure and vulnerability of the power sector to theprojected changes in climate within the region. The power sector is vulnerable to projected changes in manydimensions of climate, including likely increases in the frequency and intensity of extreme weather events, higherair and water temperatures, changes in rainfall and river discharge patterns, and sea level rise. Climate changeis expected to affect the entire electric power sector: fuel mining and production, fuel transportation to powerplants, electricity generation, transmission through high voltage grids, and low voltage distribution to consumers.Patterns of energy load growth and end-use demand by consumers will also be altered by climate change. Giventhe rapidly increasing growth in energy use in the region and the large investments required in coming decades,attention must be given to ensuring a full accounting—and management—of risks to these investments relatedto climate change.This report aims to highlight and raise awareness on the exposure and vulnerability of the energy sector inAsia and the Pacific to climate change. It also identifies adaptation options available to each source of energygeneration as well as for the distribution and end use of electrical energy. The report does not aim to proposetechniques and methodologies to assess and respond to exposure and vulnerability in specific settings.However, it is hoped that an increased awareness will be conducive to the development of such techniques andmethodologies. A companion report, Guidelines for Climate Proofing Investments in the Electric Power Sector,provides a step-by-step approach to climate proofing investment projects in the sector. An explicit accountingof the impacts of climate change on existing energy infrastructure, energy project investments, and developmentplanning in the energy sector are key to increasing the region’s resilience to climate change and ensuring itscontinued economic development.vi

ForewordThis report has been jointly produced by ADB’s Regional and Sustainable Development Department andSoutheast Asia Department, and is part of ADB’s overall effort to provide technical resources to assist both itsoperational staff and its DMC partners in managing climate risks confronting their investment projects. Theseresources encompass guidance materials, technical notes, and case studies on integrating climate changeadaptation actions and climate proofing vulnerable investments in critical development sectors.Nessim J. AhmadDirector, Environment and Safeguards (RSES)Regional and Sustainable Development DepartmentConcurrently Practice Leader (Environment)Chairperson, ADB Climate Change Adaptation and Land Use Working GroupAnthony JudeDirectorEnergy DivisionSoutheast Asia DepartmentCo-Chair, Energy Community of Practicevii

AcknowledgmentsThis report was co-authored by Peter Campbell Johnston, Jose Frazier Gomez, and Benoit Laplante(consultants) under TA 7377 (VIE): Climate Change Impact and Adaptation Study in the Mekong Delta (financedby the Government of Australia and the Climate Change Fund of the Asian Development Bank) and RETA 6420:Promoting Climate Change Adaptation in Asia and the Pacific (financed by the Japan Special Fund and theGovernment of the United Kingdom).Pradeep Tharakan (climate specialist, Energy Division, Southeast Asia Department) initiated and providedguidance and technical advice for this report. Charles Rodgers (senior environment specialist [climate changeadaptation], Regional and Sustainable Development Department) provided guidance and comments. Thereport also benefited from valuable comments and suggestions from Thomas Jensen (environment and energyspecialist, UNDP Pacific Center, Fiji) and from peer reviews by Mr. Brian Dawson (senior climate change adviser,Secretariat of the Pacific Community, New Caledonia); Dr. Alberto Troccoli (head of the Weather and EnergyResearch Unit and leader of the Regional Weather, Climate & Energy Stream of the Commonwealth and IndustrialResearch Organisation’s Marine and Atmospheric Research, Canberra, Australia); and the UK Met Office, HadleyCentre, UK. Throughout this effort, valuable support was provided by Lorie Rufo (environment officer [climateadaptation], Regional and Sustainable Development Department).viii

OTECT&DAsian Development Bankcarbon dioxideconcentrating (or concentrated) solar powerdeveloping member country of the Asian Development BankFood and Agricultural OrganizationInternational Atomic Energy Agencyinformation and communication technologyInternational Energy AgencyIntergovernmental Panel on Climate ChangeInternational Organization for Standardizationmegawattmegawatt-hourocean thermal energy conversiontransmission and distributionix

GlossaryUnless explicitly indicated otherwise, this glossary is a subset of the definitions presented in the glossaries of theIntergovernmental Panel on Climate Change (2007) and the contributions of its various working groups, as well asfrom the United Nations Framework Convention on Climate Change.Adaptation. Adjustment in natural or human systems in response to actual or expected climatic stimuli or theireffects, which moderates harm or exploits beneficial opportunities. There may be various types of adaptation:Anticipatory adaptation. Adaptation that takes place before impacts of climate change are observed;occasionally referred as proactive adaptation.Autonomous adaptation. Adaptation that does not constitute a conscious response to climatic stimulibut is triggered by ecological changes in natural systems and by market or welfare changes in humansystems.Planned adaptation. Adaptation that is the result of a deliberate policy decision, based on anawareness that conditions have changed or are about to change and that action is required to returnto, maintain, or achieve a desired state.Climate. Climate in a narrow sense is usually defined as the average weather, or more rigorously, as thestatistical description in terms of the mean and variability of relevant quantities over a period of time rangingfrom months to thousands or millions of years. The classical period for averaging these variables is 30 years, asdefined by the World Meteorological Organization. The relevant quantities are most often surface variables suchas temperature, precipitation, and wind. Climate in a wider sense is the state, including a statistical description,of the climate system.Climate change. Climate change refers to a change in climate over time, whether due to natural variability or asa result of human activity. The United Nations Framework Convention on Climate Change, in its Article 1, definesclimate change as “a change of climate which is attributed directly or indirectly to human activity that altersthe composition of the global atmosphere and which is in addition to natural climate variability observed overcomparable time periods.”Climate change impacts. The effects of climate change on natural and human systems. Depending on the stateof adaptation, one can distinguish between potential impacts and residual impacts:x

GlossaryPotential impacts. All impacts that may occur given a projected change in climate, without consideringadaptation.Residual impacts. The impacts of climate change that would occur after adaptation has taken place.Climate prediction. A climate prediction (or climate forecast) is the result of an attempt to estimate the actualevolution of the climate in the future (e.g., at seasonal, inter-annual, or long-term timescales).Climate projection. The calculated response of the climate system to emissions or concentration scenariosof greenhouse gases, often based on simulations by climate models. Climate projections critically depend onthe emissions scenarios used and therefore on highly uncertain assumptions of future socioeconomic andtechnological development.Climate variability. Climate variability refers to variations in the mean state and other statistics (such as standarddeviations, the occurrence of extremes, etc.) of the climate on all spatial and temporal scales beyond that ofindividual weather events. Variability may be due to natural internal processes within the climate system (internalvariability) or to variations in natural or anthropogenic external forcing (external variability).Downscaling. Downscaling is a method that derives local- to regional-scale (10 to 100 kilometers) informationfrom larger-scale models or data analyses. There are two main methods: dynamical downscaling and empirical/statistical downscaling. The dynamical method uses the output of regional climate models, global models withvariable spatial resolution, or high-resolution global models. The empirical/statistical methods develop statisticalrelationships that link large-scale atmospheric variables with local and regional climate variables. In all cases, thequality of the downscaled product depends on the quality of the driving model.Extreme weather event. Event that is rare at a particular place and time of year. Definitions of “rare” vary, butan extreme weather event would normally be as rare or rarer than the 10th or 90th percentile of the observedprobability density function.General circulation models. General circulation models, or GCMs, representing physical processes in theatmosphere, ocean, cryosphere, and land surface, are the most advanced tools currently available for simulatingthe response of the global climate system to increasing greenhouse gas concentrations. GCMs depict theclimate using a three-dimensional grid over the globe, typically having a horizontal resolution of between250 and 600 km, 10 to 20 vertical layers in the atmosphere, and sometimes as many as 30 layers in the oceans.Only GCMs, possibly in conjunction with nested regional models, have the potential to provide geographicallyand physically consistent estimates of regional climate change which are required in impact analysis.1Impact assessment. The practice of identifying and evaluating, in monetary and/or nonmonetary terms, theeffects of climate change on natural and human systems. Climate projections are used to first identify howthe climate is changing, and then the impact of those changes on systems such as river basin dynamics areassessed, through hydrologic modeling, for example. From: www.ipcc-data.org/ddc gcm guide.html. Updated 11 November 2011, slightly edited.1xi

Climate Risk and Adaptation in the Electric Power SectorSensitivity. Sensitivity is the degree to which a system is affected, either adversely or beneficially, by climatevariability or climate change. The effect may be direct (e.g., a change in crop yield in response to a change in themean, range, or variability of temperature) or indirect (e.g., damages caused by an increase in the frequency ofcoastal flooding due to sea level rise).Special Report on Emissions Scenarios. The Special Report on Emissions Scenarios was a report prepared bythe Intergovernmental Panel on Climate Change for the Third Assessment Report in 2001 on future emissionsscenarios to be used for driving global circulation models to develop climate change scenarios. There exist fourbroad families of emissions scenarios (A1, A2, B1, and B2) that depend on different assumptions pertaining toeconomic growth, population growth, the adoption of new technologies, and the degree of integration amongnations of the world.Storm surge. The temporary increase, at a particular locality, of the height of the sea due to extrememeteorological conditions. The storm surge is defined as being the excess above the level expected from thetidal variation alone at that time and place.Threshold. The level of magnitude of a system process at which sudden or rapid change occurs. The climatesystem tends to respond to changes in a gradual way until it crosses some threshold: thereafter any change thatis defined as abrupt is one where the change in the response is much larger than the change in the forcing. Thechanges at the threshold are therefore abrupt relative to the changes that occur before or after the threshold andcan lead to a transition to a new state.Uncertainty. An expression of the degree to which the exact value of a parameter is unknown. Uncertainty canresult from lack of information or from disagreement about what is known or even knowable. Uncertainty canbe represented by quantitative measures (for example, a range of values calculated by various models) or byqualitative statements (for example, reflecting the judgment of a team of experts).Vulnerability. Refers to the degree to which a system is susceptible to, and unable to cope with, adverseeffects of climate change, including climate variability and extremes. Vulnerability is a function of the character,magnitude, and rate of climate change and variation to which a system is exposed; its sensitivity; and itsadaptive capacity.Vulnerability assessment. A vulnerability assessment attempts to identify the root causes for a system’svulnerability to climate changes.xii

Executive SummaryWhile the electric power sector is generally a focus ofattention in the context of discussions on greenhousegas mitigation, the sector is itself vulnerable toprojected changes in climate.This publication, Climate Risk and Adaptation inthe Electric Power Sector, focuses primarily onelectric power generation, its transmission, and itsdistribution. The report aims to highlight and raiseawareness of the exposure and vulnerability of thesector to climate change. It also discusses adaptationoptions available for each source of power supplyas well as for the distribution of electric power. Asecond publication, Guidelines for Climate ProofingInvestments in the Electric Power Sector, providesa step-by-step approach at a project level to assessclimate risk and to climate proof investments in thesector.The power sector is vulnerable to projected climatechanges, including the following: Climate change impacts and theenergy sectorThere is unequivocal scientific evidence that theclimate is warming and recent observed changesin the climate are very likely due to an increase ingreenhouse gases produced by human activity. Arecent assessment of the vulnerability of 193 countriesto climate change rated 30 of these countries atextreme risk, of which 9 are ADB developing membercountries (DMCs). The assessment excluded anumber of ADB Pacific DMCs, many of which arealso considered to be at extreme risk. A similar studyranked 14 DMCs as being at extreme risk from naturaldisasters and climate change. Increases in water temperature are likely to reducegeneration efficiency, especially where wateravailability is also affected.Increases in air temperature will reduce generationefficiency and output as well as increasecustomers’ cooling demands, stressing thecapacity of generation and grid networks.Changes in precipitation patterns and surfacewater discharges, as well as an increasingfrequency and/or intensity of droughts, mayadversely impact hydropower generation andreduce water availability for cooling purposes tothermal and nuclear power plants.Extreme weather events, such as stronger and/or more frequent storms, can reduce the supplyand potentially the quality of fuel (coal, oil, gas),reduce the input of energy (e.g., water, wind,sun, biomass), damage generation and gridinfrastructure, reduce output, and affect securityof supply.Rapid changes in cloud cover or wind speed(which may occur even in the absence of climatechange) can affect the stability of those grids witha sizeable input of renewable energy, and longerterm changes in these and precipitation patternscan affect the viability of a range of renewableenergy systems.Sea level rise can affect energy infrastructure ingeneral and limit areas appropriate for the locationof power plants and grids.Electric power in Asia and the Pacific is thus avulnerable sector in a vulnerable region.xiii

Executive SummaryTable E1 provides a qualitative and indicativesummary of expected impacts of climate changeon various electricity production technologies,transmission and distribution (T&D) grids, and enduse demand. Extreme events such as cyclonescan, of course, have serious impacts on powerinfrastructure and supply in general, beyond theimpacts summarized in the table. While some ofthese impacts can cover a broad geographic area(e.g., changes in air temperature), others may behighly site-specific (e.g., changes in wind speed orwater availability). Some columns of the table indicatetypically “no significant impact,” but as discussedin the main body of the report, on occasion impactscould be considerable. While Table E1 is only broadlyindicative, it provides an initial approximation of theexpected impacts of climate change and climatevariability on the electric power sector. Particularareas of note include the following: Flooding is generally likely to have thebiggest impact for a wide range of generationtechnologies.Higher water temperatures (where water is usedfor cooling purpose) generally have a more severeimpact than higher air temperatures.Reduced availability of water can have limited tosevere impacts, the more serious threats oftenrelated to insufficient cooling water.Hydropower output (though not necessarilyinfrastructure) can be severely affected bychanges in precipitation.Geothermal power has relatively minor climatechange sensitivities, mainly related to flooding.Although solar photovoltaic technologies haverelatively minor climate change sensitivities,output varies with changes in cloud regimes, andconcentrating and tracking solar technologies areTable E1  Indicative Impacts of Climate Change on Electricity Generation, Transmissionand End Use AirTemp WaterTemp WaterAvailability WindSpeed Natural --1--Ocean-1--1N/A-3T&D grids3--13a1-212-3End use2-----3-TechnologyStormsCSP concentrating solar power, change in, T&D transmission and distributiona Higher severity in coastal or low-lying areas.Notes: 3 severe impact, 2 medium impact, 1 limited impact – no significant impact, N/A not applicableSource: Modified and expanded from European Commission. 2010. Investment needs for future adaptation measures in EU nuclear powerplants and other electricity generation technologies due to effects of climate change. Final report. European Commission DirectorateGeneral for Energy Report EUR 24769.xiv

Executive Summary vulnerable to damage from high-gusting windsand hail.Biomass generation shares climate changesensitivities with thermal generation technologies.In addition, biomass production is highlysusceptible to climate change and the energydensity of biomass can vary due to variations inphotosynthetic/plant physiological interactions,often driven by CO2 concentration changes.Ocean power technologies, currently notcommercialized but with some promise fortropical coastal and island locations during thenext 20–30 years, have varying sensitivities, withsome technologies sensitive to changes in watertemperature or sea level.T&D grids can be highly sensitive to high ambienttemperature (increased electrical resistance) andstorm damage.Electricity end-use demand is sensitive totemperature changes in general but particularly toheat waves.Engineering adaptation measures include thefollowing: Adaptation to climate changeElectric power investment decisions have long leadtimes and long-lasting effects, as power plants andgrids often last for 40 years or more. This explainsthe need to assess the possible impacts of climatechange on such infrastructure, to identify the natureand effects of possible adaptation options, and toassess the technical and economic viability of theseoptions.Adaptation measures can generally be dividedinto engineering and non-engineering options. In anumber of circumstances, it may be best to promoteno or low-risk adaptation strategies that deliverdevelopment benefits regardless of the nature andextent of changes in climate. This is a useful andpractical approach wherever uncertainty is highregarding climate change, and where large climateproofing capital investments cannot be easily justified.In other circumstances, such climate-proofinginvestments may be justified. On the other hand, a“do nothing” response may occasionally be moreappropriate and cost-effective. In general, more robust design specificationscould allow structures to withstand moreextreme conditions (such as higher wind orwater velocity) and provide them with the abilityto cope safely with higher air and/or watertemperatures. In some circumstances, it may alsobe necessary to consider relocating or refittingextremely vulnerable existing infrastructure.Furthermore, decentralized generation systemsmay reduce the need for large facilities in highrisk areas and minimize climate risk. Finally, thereliability of control systems and information andcommunications technology (ICT) componentsmay improve from redundancy in their designand from being certified as resilient to highertemperatures and humidity.For thermal power, enlarged or retrofitted coolingsystems (including air cooling) where wateris expected to be increasingly scarce may beconsidered; where increased flooding is expected,designing facilities to be waterproofed may be anoption.For nuclear power, redundant cooling systemsmay be considered, and it may be possible toassure robust protection from floods, tsunamis, orother extreme events that can otherwise damagebackup generation and essential cooling systems.For hydropower, where water flows are expectedto change over the life of the system, it maybe possible to consider diverting upstreamtributaries, building new storage reservoirs,modifying spillways, and installing turbines bettersuited to expected conditions. Greater waterflows (whether from glacial melting or increasedprecipitation) may require higher and more robustdams and/or small upstream dams.Where wind speeds are likely to increase, it maybe possible to design turbines and structuresbetter able to handle higher wind spee

1 Key Climate Change Impacts and Adaptation—Fossil Fuel Extraction and Transport 10 2 Key Climate Change Impacts and Adaptation—Thermal Power 14 3 Temperature Effect on Nuclear Power Efficiency 15 4 Key Climate Change Impacts and Adaptation—Nuclear Power 18 5 Key Climate Change Impacts and Adaptation—Hydropower 24 .

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