Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out

How the Kyoto Protocol Promotes Renewable Energy

VIEWS: 62 PAGES: 18

  • pg 1
									How the Kyoto Protocol Promotes Renewable Energy: a Perspective from the Private Sector

Jürgen Wahl
February 19, 2004 Global Forum on Sustainable Energy – Fourth Meeting
A Verbund company

Kyoto Protocol
 1997: Industrialized nations agree to limit greenhouse gas emissions  Total target is -5.2% (relative to 1990 levels)  Greenhouse gases: CO2, CH4, N2O, HFCs, PFCs, SF6  Kyoto Protocol enters into force and becomes legally binding after:  Ratification by more than 55 countries  Ratification by the countries which account for at least 55% of the total CO2 emissions Will Russia or USA ratify the Protocol?
February 19, 2004 2

Kyoto Emission Reduction Targets
GOALS MEASURES NECESSARY

 Industrialized Nations
 EU  Austria  Sectors (up to)  Individual Businesses (up to)

-5.2%
-8% -13% -20% -25%

February 19, 2004

3

Ways of Reaching the Kyoto Emission Reduction Targets
Reaching Emission Targets

National Reduction Measures

Flexible Mechanisms

Minimum 50 %

JI: Joint Implementation CDM: Clean Development Mechanism

IET: International Emissions Trading
4

February 19, 2004

Kyoto Protocol and the Flexible Mechanisms
1. Joint Implementation (JI): emission reducing projects between two Annex I countries resulting in the generation of emission certificates (2008 – 2012 + options out of the “EU Linking Directive)
2. Clean Development Mechanism (CDM): emission reducing projects between an Annex I country and a developing country resulting in the generation of emission certificates (from 2000 – 2012) 3. International Emissions Trading (IET): Annex I countries can trade emission certificates with each other (from 2005 (EU only !) – 2012)
February 19, 2004 5

Share of Total CO2 Emissions – Energy and Manufacturing Industries in the EU15

February 19, 2004

6

CO2-Demand in Europe supports Business Opportunities:

Europe JI Projects
February 19, 2004 7

CDM Projects

Estimates of International CO2 Potentials:
EU 15 New Member States and Applicant Countries
Baltic Countries

China

Poland
Czech Republic

CHINA*
Slovakia Hungary Romania

EU
Slovenia

*CO2 Reduction • 40% Steel • 40 % Energy 3.000 mt CO2* no demand
8

Bulgaria

Supply Demand

50 mt CO2 1255 mt CO2
February 19, 2004

1836 mt CO2 7 mt CO2

Source: Wuppertal Institute, Policy Brief for the EP Environment Committee EP/IV/A/2003/09/01

WIN-WIN-WIN Situation for all Parties Involved CYCLE OF SUSTAINABLE DEVELOPMENT
Monetary funds made available for technology investments

Host Country
Sale of emission certificates help reach Kyoto targets Benefits: Social and environmental standards Institutional strengthening Establishment of international project pipelines

Donor Country

Verbundplan

Benefits: Increased added value and profitability

Project
Benefits: Sustainable technology transfer Capacity building Increased profitability (IRR, NPV)

February 19, 2004

9

Benefits of JI & CDM for Verbundplan and its partners:
 “First Mover” in using the chances of the Kyoto Protocol in Austria, but also taking the risks;  International Marketing/Image factor “Austrian Sustainable Solutions”;  Strengthening the Core Business of every Team Member;

 Strengthening the international Marketing and Sales activities for our Products and Services;
 New Innovations made for financing projects;  Improved profitability of projects because “avoided environmental costs” have been considered;
February 19, 2004 10

Hydropower Plant Vacha Cascade/Tsankov Kamak, Bulgaria:
Total project value: 200 m EUR (Planning, Engineering, Construction, E&M) including a road construction (30 m EUR)
80 MW

Installed capacity:

Construction period: 2004 - 2007
Long-term Sustainability:  Refurbishment of existing plants in the cascade  200.000 t C02 per year from 2008 – 2012 => => 1 Million tons of CO2  Additional environmental benefits  500 new jobs during construction, 50 new jobs for Operation and Maintenance February 19, 2004

11

Success Factors for project development (1):
 We convinced our customer at the very beginning of the benefits of Joint Implementation (additional cash flows at least for 5 years)
 Early involvement of the official responsible institutions (treated them as “partners”) in Austria and abroad to finalize an MoU, which lowers political and economic risks  Clear Cost-Benefit Analysis of the project necessary (developing and transaction costs of certificates => clear additionality !

 Definition as a pilot project in 2001 => „Learning by Doing“
 High Flexibility for Project Development and Know how of the Kyoto Protocol and its related rules and regulations was necessary (Austria, EU, International) but changed during the process
February 19, 2004 12

Success Factors for project development (2):
 Integrated 3-Pillars Approach: Parallel development of technical planning, JI-procedure, development of financing structure  Despite missing legal framework we convinced the financial institutions of our ideas and the recent developments of the Kyoto Protocol  The setup of the financing scheme has at least been as important as the technical feasibility !!  Professional Project Management: Strategy, Tasks, Time Schedule, Next steps, etc.  Forward Contract opens benefits (risks) for both sides
February 19, 2004 13

Hydropower Project in Bhutan:
 Renewable energy: two hydropower plants in Basochhu, Bhutan

 Upper Stage: 22 MW  Lower Stage: 42 MW  Project implemented by an Austrian consortium and a local engineering partner  Bhutanese involved during all project phases  Total cost of project: € 31,250,000
 Co-financing through emission certificates could cover approx.10-15% of project costs
February 19, 2004 14

JI Project for an International Paper Company in CEE (1):
Current Situation:
 Paper production process is energy intensive (Electricity, Steam)  Paper companies in industrialized countries are required to reduce their GHG emissions (EU-ET-Directive !)

 Emission reduction by increasing energy efficiency
 Emission reduction generated in Eastern European subsidiaries through JI helps to meet the emission targets !
February 19, 2004

Total Energy Demand Electrical: 500 GWh/a Total Energy Demand Thermal: 5300 TJ/a Self-supply Electrical: Self supply Thermal: 30% 85%

CO2 Emissions:

380.000 t/a
15

JI Project for an International Paper Company in CEE (2):
JI Project: Fuel switch from oil to biomass and waste at a subsidiary paper production site in Hungary
Benefits for the Paper Company
 Transfer of Emission Certificates to one of the other 6 production sites in EU countries  Less energy costs  Modernization of energy production and supply

Benefits for the Environment
 Reduction of GHG emissions
 Better utilization of resources through increased efficiency  Reduction of other emissions (NOx)  Reduction of landfill waste
16

February 19, 2004

Conclusions from Private Sector´s point of view:
The Kyoto Protocol supports the development of sustainable energy

solutions in developing countries:
 Creates new financing options (“green certificates”)  Guarantees certain social and environmental standards and thus encourages sustainability  Supports innovation and technological development  Creates new business opportunities and project pipelines

=> Promotes the “Cycle of Sustainable Development”
February 19, 2004 17

Thank you for your attention!
Jürgen Wahl email: juergen.wahl@verbundplan.at Tel:++43-1-53605-54813 Fax:++431-53605-154813 www.verbundplan.com


								
To top