Small Scale CDM Projects

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1 Frederik Staun, UNEP Risoe Centre, Carbon finance Belize City August,

2 If energy producing less than 15 MW If only emission reductions less than 60,000 CO2 equivalent a year. Easier UN approval process than large scale projects TYPE I Renewable energy projects TYPE II Energy efficiency improvement projects TYPE III Other project activities 2

3 TYPE I RENEWABLE ENERGY PROJECTS 3

4 I.A. Electricity generation by the user Renewable energy generation units that supply individual households or users or groups of households or users with electricity. The applicability is limited to households and users that do not have a grid connection. These units include technologies such as solar power, hydropower, wind power, and other technologies that produce electricity all of which is used on site by the user, such as solar home systems, and wind battery chargers. The renewable generating units may be new or replace existing fossil fuel fired generation. The capacity of these renewable energy generators shall not exceed 15 MW. 4

5 I.B. Mechanical energy for the user o Renewable energy generation units that supply individual households or users with a small amount of mechanical energy o Includes technologies such as hydropower, wind power, and other technologies that provide mechanical energy, all of which is used onsite by the household or user, such as wind powered pumps, solar water pumps, water mills and wind mills o Generation capacity shall be less than 15MW 5

6 I.C. Thermal energy for the user with or without electricity Renewable energy technologies that supply individual households or users with thermal energy that displaces fossil fuels. Examples include solar thermal water heaters and dryers, solar cookers, energy derived from renewable biomass for water heating, space heating, or drying, and other technologies that provide thermal energy that displaces fossil fuel. Biomass based co generating systems that produce heat and electricity are included in this category. Where thermal generation capacity is specified by the manufacturer, it shall be less than 45 MW. For co fired systems the aggregate installed capacity (specified for fossil fuel use) of all systems affected by the project activity shall not exceed 45 MWth. 6

7 I.D. Grid connected renewable electricity generation Renewable energy generation units, such as photovoltaics, hydro, tidal/wave, wind, geothermal and renewable biomass, that supply electricity to and/or displace electricity from an electricity distribution system that is or would have been supplied by at least one fossil fuel fired generating unit. Project activities that seek to retrofit or modify an existing facility for renewable energy generation are included in this category. To qualify as a small scale project, the total output of the modified or retrofitted unit shall not exceed the limit of 15 MW. 7

8 I.E. Switch from Non Renewable Biomass for Thermal Applications by the User Small thermal appliances that displace the use of non renewable biomass by introducing new renewable energy en user technologies. Examples of these end user technologies include biogas stoves and solar cookers. If any similar registered small scale CDM project activities exist in the same region as the proposed project activity then it must be ensured that the proposed project activity is not saving the nonrenewable biomass accounted for by the other registered project activities. Project participants are able to show that non renewable biomass has been used since 31 December 1989, using survey methods. 8

9 TYPE II ENERGY EFFICIENCY IMPROVEMENT PROJECTS 9

10 II.A. Supply side energy efficiency improvements transmission and distribution o Technologies or measures to improve the energy efficiency of an electricity or district heating transmission and distribution system o Include upgrading the voltage on a transmission line, replacing a transformer, and increased insulation of the pipes in a heating system o Maximum allowed improvement 60 GWh per year 10

11 II. B. Supply side energy efficiency improvements generation Technologies or measures to improve the efficiency of fossil fuel generating units that supply an electricity or thermal system by reducing energy or fuel consumption by up to the equivalent of 60 GWhe per year. Examples include efficiency improvements at power stations and district heating plants and co generation. The technologies or measures may be applied to existing stations or be part of a new facility. A total saving of 60 GWhe is equivalent to maximal saving of 180 GWhth in the fuel input to the generation unit. 11

12 II.C. Demand side energy efficiency activities for specific technologies Activities that encourage the adoption of energy efficient equipment, o lamps, refrigerators, motors, fans, air conditioners, appliances, etc. at many sites. o These technologies may replace existing equipment or be installed at new sites. o The aggregate energy savings by a single project may not exceed the equivalent of 60 GWh per year. 12

13 II.D. Energy efficiency and fuel switching measures for industrial facilities o Any efficiency and fuel switching measure implemented at a single industrial or mining and mineral production facility. o Examples include energy efficiency measures (such as efficient motors), fuel switching measures (such as switching from steam or compressed air to electricity) and efficiency measures for specific industrial or mining and mineral production processes (such as steel furnaces, paper drying, tobacco curing, etc.). o The measures may replace, modify or retrofit existing facilities or be installed in a new facility. o The aggregate energy savings of a single project may not exceed the equivalent of 60 GWhe per year. o A total saving of 60 GWhe per year is equivalent to a maximal saving of 180 GWhth per year in fuel input. 13

14 o Energy efficiency and fuel switching measure implemented at a single building, such as a commercial, institutional or residential building, or group of similar buildings, such as a school, district or university o Include technical energy efficiency measures (such as efficient appliances, better insulation and optimal arrangement of equipment) and fuel switching measures (such as switching from oil to gas). o Aggregate energy savings of a single project may not exceed the equivalent of 60 GWh per year. 14

15 o Any energy efficiency and/or fuel switching measure implemented in agricultural activities of facilities or processes. o Measures for specific agricultural processes such as less irrigation, reduced requirement of farm power per unit area of land, reflected in less and smaller tractors, longer lifetime of tractors and less farm equipment, reduction of irrigation, use of lighter machinery, etc. o The aggregate energy savings of a single project may not exceed the equivalent of 60 GWh per year. 15

16 Technologies and measures to improve the efficiency of electricity or thermal energy generation from recovered waste energy from a single source at an industrial, mining or mineral production facility. No auxiliary fuel is used and/or co firing for energy generation in the project activity does not take place. covers both new and existing facilities; in the case of capacity expansion, added capacity shall be treated as a new facility. 16

17 OTHER PROJECT ACTIVITIES 17

18 III. C. Emission reductions by low greenhouse gas emitting vehicles o Considers projects like low greenhouse gas emitting vehicles o Allowed emission reductions of less than or equal to 60 kt CO2 equivalent annually. 18

19 III.D. Methane recovery in animal manure management systems This methodology covers project activities involving the replacement or modification of existing anaerobic manure management systems in livestock farms to achieve methane recovery and destruction by flaring/combustion or gainful use of the recovered methane. 19

20 III.E. Avoidance of methane production from decay of biomass through controlled combustion, gasification, or mechanical/thermal treatment o o measures that avoid the production of methane from biomass or other organic matter that: (a) Would have otherwise been left to decay under clearly anaerobic conditions throughout the crediting period in a solid waste disposal site without methane recovery, or (b) Is already deposited in a waste disposal site without methane recovery. Decay of the wastes of type referred to above is prevented through one of the following measures: (a) Controlled combustion. (b) Gasification to produce syngas/producer gas. (c) Mechanical/thermal treatment to produce refuse derived fuel (RDF) or stabilized biomass. An example of a mechanical/thermal treatment process is the pelletization of wood particles 20

21 II.F. Avoidance of methane production from biomass decay through composting o Comprises measures to avoid the production of methane from biomass or other organic matter that would have otherwise been left to decay anaerobically in a solid waste disposal site without methane recovery. Decay is prevented through aerobic treatment by composting and proper soil application of the compost. o Co composting wastewater and solid biomass waste, where wastewater would otherwise have been treated in an anaerobic wastewater treatment system without methane recovery. For example, composting of empty fruit bunches from palm oil production, with the addition of palm oil mill effluent o Emission reductions of less than or equal to 60 kt CO2 equivalent annually. 21

22 III.G. Landfill Methane Recovery Measures to capture and combust methane from landfills (i.e., solid waste disposal sites) used for disposal of residues from human activities including municipal, industrial, and other solid wastes containing biodegradable organic matter. The recovered methane from the above measures may also be utilized for the following applications instead of flaring or combustion: (a) Thermal or electrical energy generation directly; or (b) Thermal or electrical energy generation after bottling of upgraded biogas; or (c) Thermal or electrical energy generation after upgrading and distribution using injection of biogas into a natural gas distribution grid with no significant transmission constraints; or Upgrading and transportation of biogas via a dedicated piped network to group of end users; or Hydrogen production. 22

23 III. H. Methane Recovery in Wastewater Treatment o Measures that recover methane from biogenic organic matter in wastewaters o Substitution of aerobic wastewater or sludge treatment systems with o anaerobic systems with methane recovery and combustion Adding anaerobic sludge treatment system with methane recovery and combustion to an existing wastewater treatment plant without sludge treatment o Introduction of methane recovery and combustion to an existing sludge treatment system o Introduction of methane recovery and combustion to an existing anaerobic wastewater treatment system such as anaerobic reactor, lagoon, septic tank or an on site industrial plant o Emission reductions of less than or equal to 60 kt CO2equivalent annually 23

24 III.I. Avoidance of methane production in wastewater treatment through replacement of anaerobic lagoons by aerobic systems Measures that avoid the production of methane from biogenic organic matter in wastewaters being treated in anaerobic lagoons Measures are limited to those that result in emission reductions of less than or equal to 60 kt CO2 equivalent annually 24

25 III.J. Avoidance of fossil fuel combustion for carbon dioxide production to be used as raw material for industrial processes o Avoidance of fossil fuel combustion for carbon dioxide production to be used as raw material in industrial processes, provided that the used CO2 is emitted to the atmosphere at some point in time. o All carbon in the CO2 produced under the project activity shall come from the renewable biomass source o This methodology is applicable to situations where the generation of CO2 from fossil or mineral sources in the baseline is only for the purpose of CO2 production to be used for the production of inorganic compounds. There is no energy by product of CO2 production from fossil source and its consumption in the baseline. o Measures are limited to those that result in emission reductions of less than or equal to 60 kt CO2 equivalent annually. 25

26 III.K. Avoidance of methane release from charcoal production by shifting from pit method to mechanized charcoaling process Activities that avoid release of methane from traditional open ended charcoal production methods by producing charcoal in new facility(ies) equipped with recovery and flaring/combustion of methane generated in the production process. Local regulations do not require controlling methane emissions in charcoal production or there is a widespread non compliance of the local regulation Project activity shall not result in changes in the type and source of biomass raw material used for production of charcoal 26

27 III.Q. Waste Energy Recovery (gas/heat/pressure) Projects Project activities that utilize waste gas and/or waste heat at existing facilities as an energy source for: o Cogeneration; or o Generation of electricity; or o Direct use as process heat; or o For generation of heat in elemental process1 (e.g. steam, hot water, hot oil, hot air). o For generation of mechanical energy 27

28 III.R. Methane recovery in agricultural activities at household/small farm level Project category comprises recovery and destruction of methane from manure and wastes from agricultural activities that would be decaying anaerobically emitting methane to the atmosphere in the absence of the project activity. Methane emissions are prevented by: o Installing methane recovery and combustion system to an existing source of methane emissions, or o Changing the management practice of a biogenic waste or raw material in order to achieve the controlled anaerobic digestion equipped with methane recovery and combustion system. 28

29 III.S. Introduction of low emission vehicles to commercial vehicle fleets Project activities introducing low greenhouse gas emitting vehicles for commercial passenger and freight transport, operating on a number of identified fixed routes. Types of low emission vehicles to be introduced include but not limited to: Compressed natural gas (CNG) vehicles; Electric vehicles; Liquid petroleum gas (LPG) vehicles; Hybrid vehicles with electrical and internal combustion motive systems. Types of vehicles covered by the methodology include: Busses (public transport); Trucks (freight transport) 29

30 III.T. Plant oil production and use for transport applications Project activities involving the cultivation of oilseeds, the production of plant oil and the use of plant oil for transportation. Plant oil in contrast to bio diesel is not trans esterified but only pressed and filtered from oilseeds. This methodology is only applicable to plant oil that is used in blends of up to 10% by volume of plant oil or used as pure. In case pure plant oil is used it shall be used as a fuel only in converted vehicles. 30

31 III.U. Cable Cars for Mass Rapid Transit System (MRTS) This category comprises cable cars substituting traditional road based transport trips. Measures are limited to those that result in emission reductions of less than or equal to 60 kt CO2e annually. 31

32 III.W. Methane capture and destruction in non hydrocarbon mining activities Activities that capture and destroy methane released directly from holes bored to geological formations specifically for mineral exploration and prospecting. Measures are limited to those that result in emission reductions of less than or equal to 60 kt CO2 equivalent annually. 32

33 III.X Energy Efficiency and HFC 134a Recovery in Residential Refrigerators Demand side activities for replacement of existing, functional domestic refrigerators with more efficient units utilizing refrigerants and foam blowing agents having no ozone depleting potential (ODP) and low global warming potential (GWP). Refrigerator demanufacturing, including recycling of refrigerator materials and recovery2 of baseline refrigerant (e.g. HFC 134a) and foam blowing agent is an integral part of the project activity. Measures are limited to those that result in emission reductions of less than or equal to 60 kt CO2 equivalent annually. 33

34 III.Y. Methane avoidance through separation of solids from wastewater or manure treatment systems Measures are limited to those that result in emission reductions of less than or equal to 60 Kt CO2 equivalent annually. 34

35 Bundled CDM projects 35

36 What is bundling? A group of things fastened together for convenient handling. 36

37 Bundling principles Same type, same category, same technology/measure Same baseline may be used under some conditions One DOE can validate. Common monitoring plan for the bundle, one monitoring report o Conditions for sampling Same length and starting date of crediting period One verification report. One issuance same time, for same period, 1 serial number for all projects (the bundle). Must use SSC methodologies. 37

38 Advantages Can save costs, depending on case. 1 DOE for validation and verification Sampling allowed in monitoring plan. 1 PDD collects all small project activities. Single entity can act on everyone s behalf. Good way for small, rural, scattered projects to access carbon finance. 38

39 Thank you! 39