The role and responsibility of the Coordinating and Managing Entity (CME)

Transcription

1 The role and responsibility of the Coordinating and Managing Entity (CME) Presented by Patrick Horka, Head of PoAs, South Pole Carbon 21 March 2012

2 Content PPs/CMEs expectations in PoAs CMEs roles and responsibilities Possible CME operational models Practical solutions to cover carbon aspects South Pole s contribution to a successful PoA 2

3 Thanks to PoA the minimum CDM size limit can be lowered 3

4 Goal of PoAs Making carbon revenues bankable Cash inflow Debt Cash inflow Carbon finance Debt Equity??? CER revenues??? Operating revenues Equity CER revenues Operating revenues Cash outflow Investment & construction expenditure Debt servicing Operating expenditure Investment & construction expenditure Debt servicing Operating expenditure Year Year Cash outflow Reduced non-registration risk of CPAs Inclusion of new CPA within 2-5 months (if well designed PoA), possible before financial closure If sound monitoring and effective verfication is ensured, very low non-delivery risk of CERs. Risks similar to obtaining power revenues Carbon revenues become bankable! 4

5 What can be expected from PoAs? Geographical and sectoral redistribution (towards LDCs and EE (low density)) Economy of scale/lowered transaction costs Lowered registration and issuance risks Scalable carbon finance mechanism Lower time to market These evolutions shall result in : Translating carbon revenues into carbon finance Linking policies and ER 5

6 Content PPs/CMEs expectations in PoAs CMEs roles and responsibilities Possible CME operational models Practical solutions to cover carbon aspects South Pole s contribution to a successful PoA 6

7 Typical PoA structure Technology provider Finacial institutions PoA Coordinating Entity Contracts Administration PoA design Promotion Financial management Monitoring UNFCCC DOE DNA CPA developers CER buyer

8 CMEs layers of roles and responsibilities 1. Carbon aspects 2. Finance 3. Technology 4. Project management/product commercialization Excellent coverage of all Carbon aspects required for all type of PoAs and, basis for an overall success! 8

9 1. Carbon aspects Carbon specific due diligence of potential CPAs Liaise with DOEs and include CPAs Introduce an efficient and reliable monitoring system Monitoring data management PoA verification Commercialize CERs Ability to manage all CER flows: Cede carbon rights Introduction of solid incentive schemes Track generation of emission reduction Manage ERPAs 1. Carbon aspects 2. Finance 3. Technology 4. Project management/product commercialization 9

10 2/3/4. Finance/Technology/Project mgt./product commercialization Finance: Provide carbon prepayments Support equity investment Technology: Knowledge of sector and user habits Technology with USP over PoA crediting period Project mgt./product commercialization: Logistics Distribution network down to the end-user Marketing Manage financial flows back to the CME 1. Carbon aspects 2. Finance 3. Technology 4. Project management/ product commercialization 10

11 Content PPs/CMEs expectations in PoAs CMEs roles and responsibilities Possible CME operational models Practical solutions to cover carbon aspects South Pole s contribution to a successful PoA 11

12 Possible operational models for implementing a PoA 12

13 Some Coordinating Entity model : the government based PoA Government owned and operated PoA : Set-up and manage PoA PoA supports its policies Advantage/Disadvantage : PoA gets a monopolistic position PoA cannot be transboundary Challenge : Government needs to be familiar and efficient with UNFCCC procedures 13

14 Some Coordinating Entity model : the government concession Government concession: PoA supports its policies Operation of the PoA is sub-contracted Advantage/Disadvantage : PoA gets a monopolistic position PoA cannot be transboundary Operator can be a carbon professional 14

15 Some Coordinating Entity model : the private PoA Private PoA: PoA supports a measure or a technology Coordinating entity provides at minimum CDM and monitoring services Coordinating entity can provide eventually technical and investment solutions. Advantage/Disadvantage : PoA does not get a monopolistic position PoA can be transboundary Act as an open PoA 15

16 Content PPs/CMEs expectations in PoAs CMEs roles and responsibilities Possible CME operational models Practical solutions to cover carbon aspects South Pole s contribution to a successful PoA 16

17 Practical solutions to cover all carbon aspects! 1. A project management tool (PMT): Track CPAs and keep PoA overview Define responsibilities Allow communication flow between team members Overview CPA milestone targets QC/QA system Manage CERs, allocate to buyers, transfer to CPA implementer Portfolio management 2. Automated Monitoring and Verification Systems (MOVERs) Automatic collection and tamper proof transmission of data. Interface for DOEs, credit buyers and POs to access the data in real time to conduct consistency checks Data aggregation and archival across a potentially large number of CPAs 17

18 South Pole s PMT : PoA overview High level PoA management for CME management! 18

19 South Pole s PMT : PoA vintages overview 19

20 South Pole s PMT : CPA milestones overview 20

21 South Pole s PMT : CPA QC/QA 21

22 Sout Pole s PMT: Monitoring mgt. example Collects data from the project site Prepares monthly reports for the CME Collects monthly reports and relevant information Stores data into PMT and develops PoA Monitoring Report QA/QC of the PoA Monitoring Report Provides / recieves CDM- related feedbak to the CPA Implementer as needed CPA Implementer Technical staff Operational staff Management R R A C C I CME CPA Manager R R PoA Manager (CPA Supervisor) A R I Project Manager R R South Pole Supervisor Quality Manager A C I Local Responsible for Data Management I I 22

23 South Pole s MOVERs : Example China micro hydro MOVERs developed in China: GSM based technology using common industrial standard (RS485) Hardware set-up is very simple cheap (ca. 100 EUR per meter) 23

24 South Pole s MOVERs : Example China micro hydro (continued) Electricity meter at Suzhou also configured to send data to PMT 24

25 South Pole s MOVERs : PMT interface MOVERs PMT interface developed for first pilot project (CYY) 25

26 South Pole s MOVERs : Application opportunities Fixed installed meters (e.g micro hydro): Direct transfer of data via GSM Real time data control Direct actions on CPAs with data out of bound No meters, manual data collection (e.g. water purification): Technical local staff to collect data on hard copy (e.g. water device user information) Local responsible for data mgt. to archive hard copy and electronically submit data on regular basis Almost real time data control Centralized data verification and intervention option Tracking of distribution and/or monitoring progress To do: Direct data feeding via text messaging and transmission via mobile phones 26

27 Take away message Each CMEs faces their very specific challenges BUT all CMEs need a deep carbon management expertise, internally or via a partner, to achieve the continuous issuance of CERs! 1. Carbon aspects 2. Finance 3. Technology 4. Project management/product commercialization 27

28 Content PPs/CMEs expectations in PoAs CMEs roles and responsibilities Possible CME operational models Practical solutions for to cover carbon aspects South Pole s contribution to a successful PoA 28

29 South Pole provides the whole range of carbon asset management solutions PoA relevant today PoA relevant today PoA relevant tomorrow PoA relevant today 29 29

30 South Pole is proactively shaping the PoA market and conciously takes the risk of an early mover Own development PPPs Own development of 8 private sector PoAs, 1 registered, 7 in final validation stage First successfully validate VCU grouped project South Pole is developing first fully integrated, web based management system to manage PoAs Two PoAs under implementation as a Public Private Partnership (together with GTZ) Consulting More than 20 finalized and ongoing consulting mandates in the space of PoAs First mandate to take over carbon mgt. tasks on behalf of al CME 30

31 World wide presence, allowing best support for own but also external PoAs California Mexico City Medellin as of January 2012 Head office Satellite office Local presence Zurich Beijing Taipei New Delhi Hanoi Kampala Bangkok Jakarta Johannesburg 2006: Incorporation in Zurich / Switzerland 2011: ten offices worldwide 2011: Best Project Developer* Swiss Social Entrepreneur of the Year 2011** Over 80 carbon pros from 22 countries Projects in over twenty countries Specialized in highquality Gold Standard * Environmental Finance: Voluntary Carbon Market Survey 2011; ** Schwab Foundation/WEF