Programme of Activities (PoA) for Sustainable Renewable Energy Power Generation in Papua New Guinea (PNG) Journey So Far

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1 Programme of Activities (PoA) for Sustainable Renewable Energy Power Generation in Papua New Guinea (PNG) Journey So Far Darshak Mehta Technical Support Facility Carbon Market Program Asian Development Bank adb.org 18 July 2012

2 The project ADB was processing Project 41504: Town Electrification Investment Program It included TA 7113 PNG: Preparing the Town Electrification Project Loan 2714/2713 PNG: Town Electrification Investment Program, Tranche 1 Early identification of CDM opportunity before loan was approved ADB Loan Project Elements The investment program will improve power supply in provincial urban centres through replacement of diesel power generation with sustainable renewable energy power generation. The investment program will include: (i) construction of about six run of river hydropower plants to supply provincial centres, (ii) construction of transmission systems to connect provincial centres, and (iii) capacity building within the power utility and communities. Project preparatory technical assistance (TA) was used in project preparation.

3 Papua New Guinea Population 7.06 million Urban population 12.5% Area 462,840 km2 GDP / Capita USD 1300 Proportion of land area covered by forest 58.1% Population living on less than US$1.25 per day 35.8% CDM Related Number of registered CDM projects 5 (as on 09 July 2012) PoA under validation 4 (as on 09 July 2012) CDM projects under validation 12 (as on 09 July 2012) Electricity Scenario in PNG Grid connected power is largely restricted to the main urban areas Less than 10% of the population has access to electricity Relatively low percentage of urban residents are connected Distributed power is rarely available outside the provincial urban centres The supply of power to business and industry in the provincial urban centres is unreliable Many large businesses in the provinces self generate using diesel generators, at high cost Lack of access to affordable, reliable power is limiting economic growth

4 The Thought Process Need for electrification Low carbon growth possible due to existence of natural resources like Solar, hydro, geothermal, wind, wave / tidal, biomass projects New projects may include user generated, grid connected and mini grid projects Developers may be government, private companies or individuals Similar situations are likely to exist in many more countries in the pacific / world The Thought Process (contd.) PoA is ideal for a long term multiple projects scenario Number of individual methodologies need to be used to suite each plausible scenario (no electricity (AMS I A) / mini grid (AMS I F) / Grid connected (AMS I D)) Type I methodologies are good for the hydro projects, and are applicable for other RE technologies as well AMS I F or AMS I D are not suitable for greenfield RE generation situation where baseline has no power There is a need to have approval from CDM EB on multiple methodology application in PoA

5 UNFCCC Submissions SSC_537* Permission for use of multiple methodologies in a single PoA AMS I F and AMS I D together By end of crediting period grid may expand further and join to a national grid Projects like biogas where combination of type I and type III methodologies was not permitted at that time Request to SSC WG submitted and it acknowledged this limitation and considered further work on this aspect while making standard for multiple methodologies SSC WG reminded that there has to be consistency of circumstances throughout the crediting period further flexibility in rules was necessary * UNFCCC Submission SSC_547* AMS I F and AMS I D are not suitable for renewable electrification in non electrified areas which was case in most of PNG (90 per cent not electrified) AMS I A was found to be necessary to be included in PoA in addition to AMS I F and AMS I D There was a clause in AMS I F which made it necessary to discard the fossil fuel based original electricity generation devise to be destroyed Under SSC_547 ADB requested removal of this clause on account of Inconsistency within the methodology for PoA and Non PoA projects Usefulness of the equipment in other non electrified areas Back up generation device to renewable energy *

6 UNFCCC Submission SSC_547 (Cont.) SSC WG accepted use of AMS I F, AMS I D and AMS I A in same PoA SSC WG removed clause of discarding replaced fossil fuel generating equipment from type I methodologies AMS I A, AMS I B, AMS I C, AMS I D and AMS I F in PoAs Additionality Approach This is in addition to automatic additionality for projects of less than 15 MW projects Offshore wind Solar Photovoltaic, solar thermal Tidal / Wave energy Check Agenda of EB 68 for proposed amendment to this list

7 A small beginning.. To reach. and their combinations

8 Combination of RE technologies / Situations covered under PNG PoA EB 65..Annex 3* 23. If the boundary of the PoA is amended postregistration to expand the geographic coverage or to include one or more additional host Parties, the CME shall update the eligibility criteria to reflect the consequent changes. * STANDARD FOR DEMONSTRATION OF ADDITIONALITY, DEVELOPMENT OF ELIGIBILITY CRITERIA AND APPLICATION OF MULTIPLE METHODOLOGIES FOR PROGRAMME OF ACTIVITIES

9 Extension to Pacific Extension to Asia

10 Extension to LDC of the World PoAs Building Partnerships Air Methane Oxidation Biogas Biomass Heat Biomass Electricity Building EE CFL Coal Mine Methane Composting Energy Efficient Chillier Green Brick High Voltage Distribution System Hydrauluic Ram ICS Improved water mills Small Hydro Solar PV Solar Water Heating Street Lighting Landfill gas LED Vapour Absorption Referigeration Banglades China India Mongolia Nepal Pakistan PhilippinesSrilanka Thailand Viet Nam

11 Newer Developments in CDM New methodologies AMS I.L.: Electrification of rural communities using renewable energy AMS III.AW.: Electrification of rural communities by grid extension AMS III.BB: Electrification of communities through grid extension or construction of new mini grids Concept of suppressed demand Suppressed Demand Suppressed demand concept has considered in new methodologies and emission factors are 6.8 tco2e / MWh for first MWh 1.3 tco2e / MWh for to MWh 1.0 tco2e / MWh for to MWh For all values above project having greater than 0.5 MWh, a default value of 1.00 will be used. Thus, project design and presentation can help in optimizing the CDM benefits

12 Way Forward and Lesson Learnt Asia alone has 675 million people without electricity. Highest electrification requirement is in Myanmar, East Timor, Bangladesh, India, Cambodia, Lao PDR, Solomon Islands Expansion project boundaries in case of advanced PoAs LED, water purification, biogas and other RE technologies Newer methodologies may give better emission reduction Blending of existing rules can help in simplification of the CDM process Appropriate logical explanations of difficulties in CDM projects may be resolved by CDM EB by presentations Support and guidance provided by.. Jiwan Acharya, Anthony Maxwell, Vinay Deodhar, Susan Supa, Damien Sonny, Birgit Haberl, Kate Hughes, Alma Canarejo, Anna Cinco.. Srikanth Subbarao

13 And the journey begins From Divune.