CDM and the Pacific Island

Transcription

1 CDM and the Pacific Island Countries Opportunities and challenges Atul Raturi USP Presented at JICA-CDM TV seminar, Suva, October 2008

2 The Electrified Earth Electricity Access 100 % Ho ouseholds Cook Islands Fiji FSM Marshall Is Solomon island Samoa PNG The PICs Scene There are 1.6 billion people worldwide without access to electricity

3 PIC Electricity generation Cook Islands FSM Kiribati Marshall Islands Niue Palau Tuvalu Tokelau Tonga Vanuatu All Diesel All Diesel All Diesel All Diesel All Diesel All Diesel All Diesel All Diesel All Diesel 93% Diesel Source : PIREP report PNG 35% Hydro,39% oil,25% Natural gas

4 FEA Electricity generation Hydro Diesel/other 1990: 94.5 % from hydropower 2003: 67.3 % from hydropower Currently almost 80% is produced using diesel

5 Climate Change effects in PICs Carteret Islands, PNG By 2015: All 6 (7 now!!) Islands will be submerged people displaced The sea has dissected the Huen Island into two. Similar stories in Kiribati, Tuvalu and others Photo: Times

6 Climate Change effects in PICs Mount Jaya, New Guinea Island Photo: Temperature increase on the Island ~ 0.3 Degrees every decade ; Among the fastest in the world Glaciers have receded more then 300 meters in the last 30 years Flora and fauna: waiting to be discovered ( if survive!!) Malaria cases reported at an altitude of 2,100 m.

7 Renewable Energy projects can help alleviate the two problems Energy poverty GHG emission CDM can play a major role in this effort by providing much- needed revenue.

8 Small Scale CDM Projects A Small-Scale Scale CDM project is defined as: Type 1: Renewable energy systems with < 15MW capacity Type 2: Energy Efficiency projects with a saving of < 60 GWh per year Type 3 : Any other project emitting < 60 Kilo tonnes CO 2 per year.

9 Project Categories Type 1: I.A. Electric generation by the user I.B. Mechanical energy for the user I.C. Thermal energy for the user I.D. Renewable electricity generation for a grid. Type 2: II.A. Supply side energy efficiency improvements transmission and distribution II.B. Supply side energy efficiency improvements generation II.C. Demand-side energy efficiency programs for specific technologies II.D. Energy efficiency and fuel switching measures for industrial facilities II.E. Energy efficiency and fuel switching measures for buildings Type 3: III.A Agriculture III.B Switching fossil fuels III.C Emission reductions by low-greenhouse gas emitting vehicles III.D Methane recovery and avoidance

10 CDM Project Cycle UNEP RISO E Center

11 Small-scale CDM Projects Reduced transaction costs Simplified PDD Simplified baseline and monitoring i strategies Same DOE can validate, verify and certify emissions reductions

12 CDM Projects:Costs involved* Project Item Full Scale (USD) Small Scale(USD) PIN development 20,000 15,000 PDD Preparation 45,000 25,000 Consultation and DNA approval 10,000 5,000 Validation by DOE 30,000 12,500 Registration Fee 30,000 5,000 Transaction negotiation 20,000 15,000 Project monitoring Variable Variable Verifications & Certification 25,000 12,500 TOTAL (approximate) >180,000 >90,000 *Green Markets International

13 Carbon Revenue Estimates* Technology System Capacity (Example) System cost CO 2 reduced CER income (Example) (t CO 2 )/year % of system cost Wind Power 10MW $12,500,000 21,000 21% Hydro Power 1.5 MW $2,000,000, 6,000 38% Assumptions: $12.50/CER^, 0.8 tco 2 /MWh emission factor, Wind Capacity factor: 30%,Hydro capacity factor 55% ^Current rates: $20-25 per CER. *Green Markets International

14 Bundling Several small-scale GHG reduction projects can be combined to form a Bundled d CDM project Bundling entity CER Investor Bundling can be done across countries and regions

15 Additionality for SS CDM It is imperative to show that a proposed project is additional : sometimes a difficult condition. SS CDM projects can be shown to be additional by highlighting the barriers: Investment barrier Technological barrier Prevailing practices barrier Any other barrier that t would have contributed t to higher emissions.

16 Programmatic CDM A programme of activities for GHG reduction. For example: Demand Side Management(DSM) Implementation of Appliances Standards and Labelling programme (S&L) Minimum Energy Performance Standards (MEPS) Energy efficient lights

17 Projected Energy Savings in PICs With Energy labelling and MEPS Energy savings ( Refrigerators + AC) % Fiji SI Palau Samoa Tonga Kiribati Tuvalu PNG Source: SRCI,1995 Example- Thailand: CO 2 reductions= 0.9 Million MT annually through S & L

18 Unilateral CDM Projects No declared investor- only host country Nearly half the registered projects are unilateral Reduced transaction costs Increased price of CERs Good for small-scale projects In-country capacity building required Less technology transfer

19 Potential Projects Kadavu: Solar Lighting PNG, Solomon Islands: Kerosene lamps replacement Rotuma: Coconut Oil Energy efficiency ( CFL ) Wastewater to biogas (methane ) Landfill methane

20 Example: Kadavu Solar Lighting Electricity generation using PV in place of diesel generators : 75 kwh/day/village will result in a saving of ~ 375 t CO2 annually Replacing kerosene lamps with LED lights: 2000 households x 1 liter kerosene/day x 2.8 kg CO2/L x 365 days = a saving of ~ 2,044 t CO2 annually

21 Rotuma Electricity : Fuel Switch Current situation: Total demand ( including water pumping): kwh/day Diesel used: 360 liters/day= 132,000 L per annum GHG generated = MT per annum CDM Project: Replace diesel by Coconut Oil CER income: 8,000 USD SOPAC

22 Wastewater Methane Example Wastewater (estimated) : 28,000,000 L per day Biogas recovery (estimated): 3.15 MT Methane recovery/day : 2.20 MT/day Methane recovery/annum: 803 MT/year GWP for Methane: 21 MT CO 2 equivalent CO 2 generated while flaring/ tonne of methane : 3 MT Net GWP for methane: 18 MT CO 2 e CERs generated /year : 14,454 Possible CDM income: $361,350

23 Kerosene based lighting About 90% of the people in PNG use kerosene for lighting ~ 35 Million Liters/ year ~ 98 M kg of CO 2 equivalent A kerosene wick lantern produces~ 1 lux (lumen/m 2 ) at 1 m distance Used 4 hours/day a kerosene lamp emits 100kg of CO 2 annually. Annual light output of a kerosene lamp = light produced by a 100 W incandescent lamp in 10 hours : Highly inefficient

24 White Light Emitting Diode (WLED) based lighting WLED (5W) Efficiency~ 100 lumens/watt (0.1lumen/watt for kerosene) Solid state lighting Indestructible, lifetime-100,000 hours,30-40 years Very low power requirement: 1 watt wled requires 80% less power than a CFL Connected to a rechargeable battery can be used anywhere Recharging: solar, manual (pedal power) etc. CDM project: Replace kerosene lamps by WLED lights

25 Afforestation & Reforestation Based CDM Projects Small Scale A & R project activities Threshold limit of net anthropogenic GHG removals by sinks of 16 kt CO 2 per year Implemented by low income communities Small scale projects-unable to meet the minimum demand from buyers, Reduced competitiveness Reducing Emissions from deforestation in Reducing Emissions from deforestation in Developing Countries ( REDD): Post 2012

26 Fuel Switching: CNO as diesel replacement in transport

27 Barriers Small size: 24 members of Pacific Power Association (PPA) provide for a Total demand of 905 MW. CDM awareness lacking RE resource assessment is not adequate Lack of trained manpower High transaction costs small projects are not very attractive to potential investors

28 Fiji:CDM Project Small Scale and bundled d projects 2 run-of-river hydro projects. Vaturu (3 MW) and Wainikasou (6.5 MW)-displace diesel generation Developed by Pacific Hydro and FEA Combine output: 35 GWh/year CDM registration : October ,928 tonnes of CO 2 reduction per year Fully Bank Implemented( ABN -AMRO)

29 PNG CDM Project Lihir Gold Mines: Geothermal plant replacing diesel generation 55 MW l plant. 411 GWh per year First and only CDM project in PNG Will reduce 2,789,037 tonnes of CO 2 No annex-1 country partner reduction over 10 years

30 ADB s Asia Pacific Carbon Fund Summary of APCF features* Pay up front for carbon credits Technical support for CDM project development Transaction costs for CDM development PDD costs Capacity building for monitoring the emission reductions Validation / registration costs small scale projects Focus on Pacific Bundling and programmatic CDM Future carbon fund for post 2012 Cooperate with other ADB resources (ex Clean Energy Fund) Additional funding Support for DNA establishment *ADB

31 RETScreen- A Tool For RE and EE Pre- Feasilbility Studies PV3

32 The Way Forward Establish DNA in all PICs Capacity building Making CDM as part of other government policies Awareness among private and public sector about the CDM possibilities Develop many small scale projects country/region wide

33 Finally CDM provides the Developing Countries an opportunity to expand their Renewable Energy Projects and enhance Energy Efficiency Measures. All stakeholders should come together to take advantage of this mechanism and make Energy Access and CDM a win-win combination.

34 References Small scale CDM projects: Yuzi Mizuno, 2004 Enabling PICs to participate i t more effectively in CDM activities: iti Ilona Millar, FIELD,2007 The International Carbon reduction Market: Green Markets International, 2006 Small Island States, t the CDM and Carbon Finance, Tom Roper,2005 Renewable Energy and the CDM, Federal Ministry for the environment, Germany, 2007 International CDM market :Dr. Manuel Fuentes, 2006 PDD Lihir Gold and Pacific Hydro projects Cosbey et al: Making development work in CDM, 2006 Forests and the CDM and Developments in the dialogue on reducing emissions from deforestation: Hooda,N.,, 2007 Methods and guidelines for assessing afforestation and reforestation projects under cdm: Murthy, I.