Climate Change and the Carbon Market

Transcription

1 Click to edit Master title style Forest Industry: Opportunities and Incentives Climate Change and the Carbon Market Focus on Forest Engineering November 2010 TAPPSA 2010 Conference Durban, South Africa Ciska Terblanche

2 1 Content International status of Climate Change Four Incentive mechanisms to boost the biomass use in SA 1

3 2 Climate Change Status EU Commit to a 20% or 30% reduction in GHG emissions below 1990 levels Phase III of the EU Trading system runs from 2013 to 2020 China January 2010 announced they will reduce their economy s carbon intensity by 40-45% South Africa Biomass Market is created Copenhagen Dec 2009 DEAT indicates a reduction in GHG emissions target of 34% by 2020 Commitment made on condition that appropriate funding is provided to South Africa DME commitment 2003: GWh will be generated by renewable energy sources by the year Approximately 4% (1667 MW) of the country's energy supply Climate Change White Paper to be communicated to stakeholders by end

4 3 Incentive Schemes to increase the use of biomass as fuel Feed-in tariff Tradable Green Certificates Fiscal and Financial Incentives Cap and Trade REFIT (Renewable Energy Feed-in Tariff TREC in South Africa - under development Tax incentives VAT, import taxes EU Emission Trading System, CDM (Clean Development Mechanism) 3

5 4 Tradable Renewable Energy Certificates (TREC) TREC = Tradable Renewable Energy Certificate Certificate issued to a power producer for each kwh electricity generated from renewable energy Power producer sells kwh generated from a renewable energy source (sell electricity) Host: Department of Energy Model: REC system implemented in EU Initially a Voluntary system, but legislation provides the framework to switch to a mandatory system, i.e. industry will have a RE electricity use target Under development 4

6 5 Tradable Renewable Energy Certificates (TREC) RE Electricity consumption Target Eg 15% of consumption Renewable Energy Power producer Consumer Electricity export to grid Consumer kwh Consumer $ 5

7 6 REFIT REFIT = Renewable Energy Feed-in Tariff Under REFIT the power producer is paid a fixed feed-in tariff for each kwh produced from a Renewable Energy Source Biomass: R1.18 per kwh Department launches refit programme for renewable energy September 30, 2010 Hosted by the Department of Energy, input from NERSA, Eskom 6

8 7 REFIT for Biomass in principle R1180 per MWh Electricity Export to the Grid MWh 7

9 8 CDM Background CDM = Clean Development Mechanism One of three cap and trade mechanisms under Kyoto Applies to only developing countries Emission reductions are traded (carbon credit): 1 ton CO 2 = 1 credit Company A -8% CO 2 Target 50% purchased Company B 8

10 9 Generating a credit Real, measurable and long term CO2 Emissions CO2 Reductions Now 10 Years

11 10 CDM Statistics Registered Projects > 2,400 registered projects in 51 countries with another 1,900 in the pipeline > 900 projects in China > 500 projects in India > 170 projects in Brazil Registered projects expected to generate > 374 million CERS p.a. and > 1.8 billion CERs by end

12 11 CDM Trades 2009: Over US$20 billion traded under CDM 200 million tons of CO 2 e traded Average price of US$

13 12 CDM Trades Who are the buyers? Forward sales Spot market 12

14 13 CDM Supply and Demand 13

15 14 Summary Financial Mechanisms available in South Africa to boost biomass use REFIT: Sell electricity from renewable energy to Eskom R1.18 per kwh TREC: Sell electricity from renewable energy to a electricity consumer CDM: Sell CO 2 reductions to developed countries 12 per ton CO 2 14

16 15 Potential income for Fuel Switch from coal to biomass Fuel switch from coal to biomass in principle: 1t Coal = 2.5t CO 2 1t Coal = 3-3.5t Biomass wet 1t CO 2 = 12 = R108 income REFIT in principle: 1 MWh produced = R1180 1MWh = 1.8t wet Biomass (conventional fluidized bed boiler, condensing turbine) 1t Coal = 3t Biomass = 2.5t CO 2 = 30 = R270 income Fuel switch from coal to biomass to produce electricity (condensing turbine): 1 ton Biomass (wet) = 0.56 MWh = R80 (CDM) + R660 (REFIT) 1 ton Biomass wet = R740 15

17 Thank You for your attention Ciska Terblanche +27(0)