Carbon Market after Cancun

Transcription

1 Carbon Market after Cancun Implications & Opportunities Post-2012 Carbon Market and New Opportunities Boonrod Yaowapruek 31 January 2011 Senior CDM officer Main Events 2008

2 Outline Implications from Cancun Background : Kyoto Protocol & EU ETS Cancun s summary Opportunities for Thai s project owners Current market Opportunities Strategy FAQ 2

3 GDF SUEZ: Key Figures Electricity No. 1 Independent Power Producer in the world 72.7 GW of installed power-production capacity No.5 producer in Europe Natural gas and LNG No. 1 purchaser of natural gas in Europe No. 1 transmission and distribution network in Europe No. 1 importer of LNG in the United States A supply portfolio of more than 100 billion m 3 A fleet of 17 LNG vessels including one under construction Energy Services No. 1 supplier to cities and businesses across Europe More than 8000 cities and clients Environment No. 2 supplier of environmental services in the world 200,650 employees throughout the world 79.9 billion revenues in ,200 researchers and experts at 9 R&D centers p. 3

4 A history of services in public utilities Société Générale des Pays-Bas Société Industrielle des Transports Automobiles (SITA) GDF SUEZ Société Lyonnaise des Eaux et de l Eclairage Suez Lyonnaise des Eaux Compagnie Universelle du Canal Maritime de Suez Gaz de France Compagnie Mutuelle de Tramways SUEZ p. 4

5 A presence across the energy value chain Exploration and production Electricity generation Supply and infrastructures Trading and portfolio management Distribution Sales and energy services p. 5

6 GDF SUEZ Breakdown of power generation in 2009 Breakdown by fuel* Breakdown by region* 53% Natural gas North America Benelux & Germany France 30.2% 11.6% 17.9% Rest of Europe 11% Coal 296 TWh 8.7% 16.5% 16% Nuclear 2% 1% Other Wind power 16% Hydro power 1% Biomass and biogas 15% South America Middle East & Pacific * Including 100% of the capacity of GDF SUEZ assets regardless of the actual holding rate. p. 6

7 GDF SUEZ s Awards last year 2010 Gigaton awards at the CoP 16 in Cancun: for our demonstrated leadership by emitting among the lowest CO2 per kilowatt-hour produced in Europe. Overall Sponsor of the Year 2009 Power Deal of the Year 2009 in the Americas for the Astoria II project a 575 MW gas fired plant in New York 719 million of limited recourse debt Power Deal of the Year 2009 in Asia Pacific for Senoko 3300 MW power assets in Singapore 1063 million of limited recourse debt Public Private Partnership Deal of the Year 2009 in Asia Pacific for the Victoria desalination project a 150 million m³/year of seawater desalination plant 2238 million of limited recourse debt Gulf power deal of the year 2009 for Shuweihat 2 a 1,510 MW power and 18,942m³/hour of water in the United Arab Emirates : 1350 million of limited recourse debt. p. 7

8 GDF SUEZ has an extensive knowledge as Developer & CER buyer s perspective Electrabel SA/NV is the entity within GDF SUEZ in charge of the portfolio management of the energy activities in Europe. GDF SUEZ Energy International manages energy activities outside Europe and Tractebel Engineering SA/NV is responsible for engineering consultancy (power, infrastructure and CDM). These entities work together for the origination and implementation of CERs/ERUs projects in Latin America, Asia, Middle East, Africa and Europe. Development of CDM/JI Projects (Equity investment) CDM/JI Origination (Purchase of CERs/ERUs) Development Cell Origination Cell CERs 1) Europe ERUs 2) Middle East, Asia, Africa 3) Latin America EMISSION COMPLIANCE PORTFOLIO - Compliant Buyer - (Purchaser of primary and secondary CERs/ERUs) p. 8

9 GDF SUEZ represents a strategic partner for carbon credits projects We are a prime and compliance buyer of CERs. Our credit profile is robust and we are recognized as one of the most accountable companies worldwide. We are the largest Independent Power Producer (IPP) worldwide and have a very strong presence on the energy field in Thailand. (through our subsidiaries Glow Energy and PTT-NGD) We have the ability to bring you support on the CDM part of the project (including training for project registration, monitoring & verification processes). Our subsidiaries, Tractebel Engineering (a well-known international energy and infrastructure consultancy) and Econergy (a leading carbon markets consultancy) can also bring their support for a successful development of the project. p. 9

10 Implications from Cancun p. 10

11 Kyoto Protocol today 189 parties have ratified the KP Annex I (38 industrialized and transition countries) With defined reduction targets Non-Annex I (151 developing and emerging countries), w/o reduction targets but possibility to benefit from the CDM activity EU-ETS: Part of the obligation to reduce reduction obligations were passed to the industry Annex I ETS demand Non-Annex I Not ratified supply p. 11

12 Emission Trading In 1992, most countries joined an international treaty the United Nations Framework Convention on Climate Change (UNFCCC) and defined a non binding target for industrialized countries to reduce emissions of 6 gases. The Kyoto protocol defined binding emission reduction targets for the period Each country has a capital of emission (AAU) 1. To meet its target, a country can either reduce its national emissions or buy emissions rights from foreign reduction projects 2. EU-ETS is one of the policy instruments implemented by the EU to meet its Kyoto requirment 3. International Emissions Trading - Possible trade between industrialised (Annex B) countries - Traded unit: Assigned Amount Units (AAU) UNFCCC 1 Kyoto Protocol Country level Cap-and-trade EU-ETS Company level cap-and-trade Project based abatement: Joint Implementation (JI) - Emission reduction projects in Annex B countries - Traded unit: Emission Reduction Unit (ERU) Project based abatement: Clean Development Mechanism (CDM) - Emission reduction projects in developing countries - Traded unit: Certified Emission Reduction (CER) EU-ETS : European emission Trading 3 - Cap-and-trade for specific industrial sectors. - Traded unit: EUA 2

13 Cancun s summary Topics Mitigation targets & MRV What was agreed Formal recognition of Copenhagen pledges Confirmation of 2 C limit and option to move to 1.5 C Provision on measurement, reporting, and verification (MRV) Climate Finance Formal recognition of financing goals of the CA ($100bn annually by 2020) Establishment of a new Green Climate Fund CDM REDD+ Continuation of the CDM post-2012 Standardised baseline under the CDM Inclusion of Carbon Capture and Storage (CCS) projects Formal endorsement of foundations for REDD mechanism Phased-in approach Request for developing REDD modalities by COP 17 Accounting framework and explicit recognition of sub-national approaches REDD+ = Reducing Emissions from Deforestation and Forest Degradation + The role of conservation, sustainable management of forests and enhancement of forest carbon stocks 13

14 Cancun s summary Positive -Trust in the UNFCCC process has been restored; -Targets submitted to the CA were finally adopted; - Cancun brings some certainties on the supply (CDM continuity, REDD+, CCS, Green Climate Fund); -Global agreement seems more likely to happen in the future. Reality -Targets submitted are not legally binding; -The EU is still the only party to have passed 2020 target into law; -USA, Japan, and Australia still do not have a legal mandate for action; -Progress is still too slow a gap between the end of Kyoto and a post-kyoto regime looks very likely. Source: Bloomberg New Energy Finance 14

15 Carbon prices during Cancun Developments in Cancun did not strongly effect the carbon prices Energy fundamentals drove EUA&CER prices The broadly positive outcome was bullish for CERs prices, which held ground despite weak energy complex Source: Bloomberg New Energy Finance p. 15

16 On the agenda for this year Location Global Market Expected development CDM EB to receive first submission for standardized baseline for CDM projects. Further evidence anticipated on wholesale market of CER price fragmentation along host country and technology lines. EU ETS To decide whether to tighten the emission target from 20% by 2020 ( levels). To agree rules for phase III of the EU EUS. To pass Regulation on CER eligibility from Australia To decide how to introduce a carbon price New Zealand To determine whether agriculture will join the ETS in 2013 North America China Japan South Korea Source: Bloomberg New Energy Finance California, New Mexico, British Columbia, Ontario and Quebec to continue plans to implement regional cap-and-trade. Further action expected on EPA implementation of GHG regulations To release 12 th Five year Plan for energy and strategic emerging industries, which is expected to include a plan to introduce a national carbon trading scheme To work on passing the Climate Bill and other policy measures (eg.a new Env Tax) To put the cap-and-trade proposal to the National Assembly, with a good chance of passing p. 16

17 Opportunities for Thai project Owners p. 17

18 More Frequency More Frequency CDM in Thailand CDM status No. of projects % Issuing 2 1.4% Registered % Rejected 2 1.4% Request for registration Validation terminated/ negative At validation 5 3.6% % % Summary % Source: UNEP Risoe, 1 Jan 2011 Timing is very important! Time delay: Public comt -to Req. for Registration Days Time Delay: Req. for Registration to Registration Source: GDF SUEZ, UNEP Risoe Days 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 18

19 Opportunities in Thailand Type Technical Potentials (MW) IRR without CERs * IRR with CERs* Biomass 4, % 15% Solar Power >5, % Wind Power 1, % 12.1% Hydro Power 700 Biogas % 20% MSW 400 Energy Efficiency? 9.6% 12.5% CCS: Carbon Capture and Storage Source: GDF SUEZ, DEDE, IGES * average data from Thai CDM projects? 19

20 Thailand Renewable Energy Development ( ) Source: DEDE p. 20

21 Biomass Energy Source: DEDE p. 21

22 Solar Energy Source: DEDE p. 22

23 Wind Energy Source: DEDE p. 23

24 Biogas Energy Source: DEDE p. 24

25 Waste-to-Energy Source: DEDE p. 25

26 FAQ 1. Will there be the new international agreement (2 nd Kyoto Protocol)? 2. What would happen to CER price without the second Kyoto Protocol? 3. If we start the CDM process now, how can we make sure that there will be a Buyer after 2012? 4. What would be the CER prices for post-2012? 5. Will the CER prices from Projects to Countries be different? 6. Should I sell CERs forward now? 7. What is your recommendation for mitigating the CDM risks? 26

27 THANK YOU Boonrod Yaowapruek

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