Outline. Hydro potential in CDM Issues in new hydro projects Case studies Next step? Short brief on EcoSecurities

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1 The Clean Development Mechanism: Emission down, profit up Paul Butarbutar Senior Project Manager EcoSecurities Indonesia EcoSecurities Group plc

2 Outline Hydro potential in CDM Issues in new hydro projects Case studies Next step? Short brief on EcoSecurities 2006 EcoSecurities Group plc Carbon credits - origination to commercialisation

3 Hydro potential in CDM Opportunities to generate carbon finance from a number of different types of hydro projects: New build run of river hydro projects Hydro projects that utilize existing dams and reservoirs Small scale hydro projects <15MW Hydropower project will displace the power generation using thermal energy source Approved methodologies that can be used for these types of project: AMS ID for small scale project ACM002 for large scale 2006 EcoSecurities Group plc Carbon credits - origination to commercialisation

4 Issues in new hydro projects So far, no methodologies to account for methane emission for new building of dams and reservoirs, especially for power plant with capacity >20 MW Compliance with WCD criteria Gaining public acceptance Comparative options assessment Addressing existing dams Sustaining rivers & livelihoods Recognizing entitlements & sharing benefits Ensuring compliance Sharing rivers for peace, development & security

5 Assessment of the compliance with WCD criteria Stage 1 Needs assessment 2 Selecting alternatives 2a Selecting alternatives 3 Project preparation 4 Project implementation 5 Project operation Gaining public acceptance Comparative options assessment Addressing existing dams Sustaining rivers & livelihoods Recognising entitlements & sharing benefits Ensuring compliance Sharing rivers for peace, development & security 2006 EcoSecurities Group plc Carbon credits - origination to commercialisation

6 Stages 1 Needs assessment: Validating the needs for water & energy services 2 Selecting alternatives: Identifying preferred development plan from among full range of options 2a Selecting alternatives: Identifying preferred development plan from among full range of options 3 Project preparation: Verifying agreements are in place before tender of the construction contract 4 Project implementation: Confirming compliance before commissioning 5 Project operation: Adapting to changing contexts

7 Case study 1 China Xiaogushan Hydropower Project The project will generat 102 MW or 394 GWh per year supplied to grid GHG reduction of 3,128,919 tons CO2e by avoiding operation of existing thermal power plant and future capacity expansion of fossil fuel-based generation One of China s first proposed CDM activities The first-ever renewable energy power loan provided for the Northwest region of China from ADB The specific sustainable development benefits of the project include: Supply of reliable, zero-emitting renewable energy to the provincial grid Increased energy and decreased load-shedding for several nearby poor villages that will allow expansion of villagers household, educational, health, and public facilities Promotion of private power development managed by local entrepreneurs Local income, new skills and job generation (3,000 jobs

8 Case study 2 La Esperanza Hydro Project in Honduras EcoSecurities worked with the project developer to secure carbon revenues for the La Esperanza Hydro Project in Honduras. EcoSecurities was the carbon advisor to Consorciode Inversiones, S.A. (CISA), handling the quantification, registration and transaction process The proposed activity will displace existing and future generation facilities in the Honduran national electricity grid that use diesel fuel La Esperanza is a small scale run-of-river hydroelectric project of MW that is expected to reduce about 37,000 tco2 per year Benefit of the project: improving the quality of electricity service in the town of La Esperanza, characterized by voltage fluctuations and brown/black outs prior to project implementation, rural electrification of local communities provide local employment to local people both during construction and operation in an area where permanent and reliable sources of employment are scarce. improvement to the basin where the water sources are located by means of reforestation and educational programs. Reforestation of deforested and degraded land in the project area includes 37,000 seedlings already planted, another 24,000 planted in spring 2004, and a continued expansion program thereafter

9 Case study 3 Tarabintang Hydropower Project The project will generate 2 x 10 MW supplied to Northern Sumatera grid Estimated emission reduction of around 85,000 tons CO2e per year by avoiding operation of existing thermal power plant and future capacity expansion of fossil fuel-based generation The feasibility study of the project is available Looking for underlying investment EcoSecurities will develop the CDM project and enter agreement with project owner to buy CER once it is produced The specific sustainable development benefits of the project include: Supply of reliable, zero-emitting renewable energy to the Northern Sumatera grid Improve electricity supply, reduce blackout Promotion of private power development managed by local entrepreneurs Local income, new skills and job generation

10 Next steps? Filling in questionnaire Carbon feasibility assessment Signing of Emission Reduction Purchase Agreement (ERPA), continued with: Development of PDD Stakeholder consultation, application for Letter of Approval from DNA, and validation Submission for registration EcoSecurities will help you in development of CDM part at no cost; EcoSecurities will buy your carbon asset on fixed price 2006 EcoSecurities Group plc Carbon credits - origination to commercialisation

11 Who is EcoSecurities EcoSecurities Group Ltd is the world s leading originator, developer and trader of carbon credit projects Since it was founded in 1997, EcoSecurities FOCUSED on emissions reductions projects and currently has around 200 projects in development around the world 1 of 3 first registered projects that has received CERs developed by EcoSecurities Go Public since December 2005 on the London Stock Exchange 15 offices with around 200 staff More than 130 millions of CER in the portfolio Voted as the best carbon advisory company five years in a row since by the readers of Environmental Financing Magazine Voted as the best carbon trading company by PointCarbon, EcoSecurities Group plc Carbon credits - origination to commercialisation

12 Portfolio & Track record Wind farms Landfills Small scale hydropower Pig Waste biodigestors Biomass and waste mgt Industrial efficiency 2006 EcoSecurities Group plc Carbon credits - origination to commercialisation

13 Thank you!!! Start something Start from You Start NOW!!! Paul Butarbutar EcoSecurities Indonesia Graha Niaga 17th Floor Jalan Jenderal Sudirman Kav. 58 Jakarta Tel: (62-21) Fax: (62-21) EcoSecurities Group plc Carbon credits - origination to commercialisation