Experiences with the first approved projects from a DOE perspective

Transcription

1 TÜV SÜD Carbon Management Service Experiences with the first approved projects from a DOE perspective Presentation overview 1. Activities of TÜV SÜD Group in CDM 2. The T CDM Project Cycle Beijing October 21, 2005 Michael Rumberg TÜV V Industrie Service GmbH TÜV V SÜD S D Group 3. Experiences with CDM hurdles to be overcome 4. Outlook TÜV SÜD Carbon Management Service 1. Activities of TÜV SÜD Group in CDM Background TÜV SÜD Holding AG: > employees active world wide in the field of inspection and auditing Carbon Management Service: Interdisciplinary team (economists, natural sciences, engineers) and a pool of experts Basic idea: know-how in plant engineering and energy management, experiences in industry and competencies in strategy consulting and risk management offering to the market as a qualified certification organisation Services Validation, verification and certification of GHG projects (national/ji/cdm) Verification and certification of emission inventories (EU-Directive) Certification of energy from renewable sources Knowledge management ( Reference List (CDM/JI) Klimaschutz Verifiziertes CDM - Projekt TÜV Standard CMS 022 Project types: - renewable energy - energy efficiency -fuel switch - landfill gas - afforestation Locations: - Albania -Argentina - Brazil - Bulgaria - Chile - China - Columbia - Czech Republic - Ecuador - Egypt - Estonia - Fiji - Hungary - India - Indonesia - Latvia - Marocco - Mexico - Moldawia - Nicaragua - Panama - Paraquay - Peru -Poland -Romania - Russia - Slovakia - South Africa - Tansania - Trinidad - Uganda - Ukraine 2. The CDM Project Cycle

2 Project cycle 3. Experiences with CDM hurdles to be overcome from a certifiers perspective Hurdels and obstacles The most important ones: project identification development of PDD validation Letter of Approval registration project implementation verification Further hurdles: financing contracts trading / transaction Project identification - project size is too small resulting in to small amounts of CERs - no approved methodology available not knowing what this means regarding time and work (at least 9 month delay) - no knowledge about the baseline and additionality concept - minimum size of projects ( CERs/year) - early pre-check to assure that the project qualifies for CDM avoidance of unnecessary costs - support with experienced team/consultant development of PDD - project developer has not the necessary know how (economic, technical and methodlogical skills) - stressing not the major issues first (Example: doing the stakeholder process before assuring that the project is additional) - too ambitious timtable non perfect PDDs to be submitted - Project team should be selected with care - Compare with other projects already in the process Validation - Limited knowledge about the process and the requirements on the project developers side - Result: large number of revised PDD versions - Timing: more than expected (3-9 month, although in the ideal case only 8 weeks) - More transparency and information in advance has to be provided by DOEs - higher requirements for acceptance of draft PDDs - more information can be obtained in the Validation and Verification Manual (VVM)

3 Deficits in the project description In brown-field projects the description of the current delivery system is often too limited. The description of the technical equipment to be applied in the project is often not detailed enough or missing. The management structure of the project and the corresponding responsibilities are often not clearly described or missing. Risk management tools in case of unintended developments affecting the projects success but also the generation of carbon credits could be defined more precisely. Deficits in Baseline and Additionality A storyline which is applicable to the baseline scenario as well as to the additionality discussion should exist. The baseline discussion and the additionality discussion should not contradict each other. The baseline should not reflect the reality but literally follow the methodology in a complete manner. The additionality discussion should focus on the requirements set for example in the add-tool. Comprehensive elaborations should be avoided. Reasons for the assumptions made should be given. One issue remains: Validation has to assess a risk dilemma : Project developers try to show that the project has low risk. At the same time barriers and/or unfavourable economic conditions should be shown. Deficits in the Local Stakeholder Process Observations: Global Stakeholder Process The project should be presented not only to local authorities but the actual local stakeholders (neighbours). Stakeholders and Parties contribute rarely to the global stakeholder process. Appropriate media to do so should be used. The chance to comment on projects is mainly only taken by accredited observer organisations as environmental NGOs. Otherwise the local stakeholder process is not very elaborated and limited to support from local and regional authorities. Most comments given are negative. The number of comments for JI projects is lower than for CDM projects. In order to take potential comments into account the stakeholder process should take place early in advance. TÜV SÜD welcomes all comments and takes them in its conclusion into account. Letter of Approval Registration: Necessary documents - respective department in the host country is not installed, or has not the necessary competence / knowledge to issue a LoA - no English version of the LoA is available - different approach in major host countries: India, China, Brazil, Russia, Ukraine - limited influence of DOEs - early contact in most cases advisable List of main documents: PDD (in the stakeholder process) PDD (final version) Validation Report including Validation Protocol Letter of Approval/Authorization from host country / investing country Letter of Modalities for Communication regarding CER issuance Registration format (done by DOE) Later on: Proof of payment

4 Registration - small number of projects registered so far - reasons: non perfect PDDs require a lot of additional documents /evidences to result in a positive validation opinion - risk, that the EB puts in a request for review due to criticism with respect to the PDD and/or the validation report Example - higher quality of PDDs and validation reports - clear and in time guidance through the EB in critical issues in order to avoid the sitation where the DOEs accepts an approach (in the absence of guidance) and the EB rejects the same later on in the registration phase Huitengxile Project, P.R. China Huitengxile Project, China Inner Mongolia 12 x 900kW + 10 x 1500kW = 25.8 MW Connected to the Northern Grid Wind parks in operation since 1998 at that site, project start 2004 Buyer: Dutch government (CERUPT-Tender) Receipt of PDD: May 2004 On- site audit: July 2004 Receipt of revised PDD: November 2004 Stakeholder Process: November December 2004 Draft report: December 2004 Receipt of LoA: March 2005 Final report: April 2005 Submission for registration: April 2005 Project registered : June 2005 Implementation and verification Outlook: - Will implementation be as planned? JI experiences indicate: No! 4. Outlook - What will happen if not? To what extent the project can change? - What happens if it becomes obvious that the additionality discussion is no longer valid? - Example: LFG project starts feeding electricity to the grid. - First results: Lower production in CERs than in prognosis figures

5 Next steps - Registry and transfers feasible and business oriented - Ability of the CDM EB to stabilize process and make it more efficient - Quality standard applied in verification process, requirements by DOEs and CDM EB TÜV V Industrie Service GmbH TÜV V SÜD D Group Carbon Management Service Michael Rumberg Tel Michael.Rumberg@tuev tuev-sued.de