Minvrom 06 Mul
- 1. Carboncredits.nl Baseline Methodologies Dispatch Analysis Gerhard Mulder Project Officer
- 2. Senter Internationaal Agency of the Dutch Ministry of Economic Affairs Programme implementation, for example: CO2-reductionplan (domestic) Emerging markets Export Finance Staff of approximately 760 Annual budget: EUR 1.000 million
- 3. Senter Internationaal: Carboncredits.nl Carboncredits.nl is the team within Senter that executes the JI/CDM mechanism for the Dutch government 6 project officers, one programme manager Supported by a group of technical and financial experts 3 ERUPT tenders: (total 70 projects - JI) 1 CERUPT tender: (total of 80 projects - CDM) Look at www.carboncredits.nl
- 4. Senter Internationaal: Procurement rules Carboncredits.nl implements the programme conform EU procurement rules. Public tender with two phases: selection phase: focus on the supplier contract awarding phase: focus on the proposal There is no negotiation, and there is no preference for companies Procurement rules are published in the Terms of Reference (ToR) Advantage: one rules are published, they stand firm Disadvantage: limited flexibility, bureaucratic
- 5. Introduction: History of JI/CDM Dutch Government started with first AIJ projects in 1997 First ERU-Procurement Tender (ERUPT) for Joint Implementation in 2000 Describe baseline methodology in ToR Input from national and international experts Today: ERUPT- 2 and 3, plus CERUPT-1 have resulted in over 150 PINs, and approximately 50 Baseline studies
- 6. Introduction: Goals Baseline study What is the goal of a baseline study? Article 44: the baseline for a CDM project activity is the scenario that reasonably represents the anthropogenic emissions by sources of GHG that would occur in the absence of the proposed project activity Baseline emissions -/- project emissions +/- leakage = emissions reductions
- 7. Introduction: Elements of the Baseline Principle of Control Project boundary Account for Leakage Fixed period For 7-year renewable or 10-year non-renewable Provides confidence to investors Marrakech Accords criteria: Conservative, Transparent, Reasonable Not one-size-fits-all Reality is very complex Scenario Analysis
- 8. The Dutch Baseline Methodology Strong emphasis on using conservative assumptions The ToR allows for more than one baseline methodology: Scenario Analysis Investment Analysis Simplified Baselines for Small Scale CDM
- 9. Scenario Analysis Definition: “A future emissions scenario (baseline) is constructed by identifying barriers and risks in a key-factor analysis, using currently delivery system as a starting point” Which MA approach is umbrella for scenario analysis methodology (art. 48)? A. Existing or historical emissions B. Barriers-to-investment approach C. Build Margin/Benchmarking
- 10. Scenario Analysis: Steps Step 1: Describe current delivery system to develop baseline emissions E.g. how many MWs of what type is installed, fuel use, etc Step 2: Establish which emissions can be controlled or influenced by the project participants One step upstream, one step downstream Step3: Develop Key Factor Analysis Sectoral reform initiatives, local fuel availability, power sector expansion plans, and the economic situation in the project sector Step 4: Determine CEF Various techniques to calculate displacement
- 11. Scenario Analysis: Take your pick While Scenario Analysis is guiding principle, it can be implemented in more than one way Depending on the sector/project Depending on the preference of the project participant Of the approximately 25 PDDs we received for CERUPT, we identified several different ways to implement our baseline guidelines: Dispatch Analysis Alternative Investment Analysis Ex-ante calculation of CEF of existing plants All methodologies are conform MA: reasonable, conservative, and transparent
- 12. Dispatch Analysis: An Overview Dispatch Analysis simulates the electricity sector for a period of time It calculates generating costs per plant in each hour, and then optimises the dispatch for the system The model calculates the electricity generated for each power plant for the whole crediting period Knowing the carbon content of the fuels, you can calculate the emissions generated You run the model with and without the proposed CDM project, and you can calculate how much electricity and emissions your project has displaced
- 13. Dispatch Analysis: Advantages Approximates reality closest Uses reality as starting point Combines short term and long term effects Works best if National Expansion Plans exist But has element of Alternative Investment Analysis Data input can be evaluated easily and objectively DOE must evaluate input Focus is on displacing electricity rather than capacity CEF is based on how much electricity the proposed CDM project is expected to generate
- 14. Dispatch Analysis: Disadvantages Dispatch Model may not always be available Models are often used by National Grid Operator Data may not always be available Some data may be proprietary
- 15. Pe ñ as Blancas Case Study Operational details of the PB hydroelectric facility in Costa Rica: 35.4 MW 169 GWh/year Construction starting date: August 2000 Costa Rica is committed to developing renewable resources: 75 percent of installed capacity is hydro ICE is the vertically integrated state-owned utility Official national expansion plan foresees in development of more hydro, as well as fossil fired units
- 16. Pe ñ as Blancas Case Study Average CEF 0.46 tCO2/MWh)
- 17. Pe ñ as Blancas Case Study How was Costa Rica conservative in establishing the baseline? Assumes no imports Did not include scenario of regional integration Average fuel prices Heat rates of existing fossil plants Demand projections Used National Expansion Plan Furthermore, all assumptions meet the criteria that the baseline must be ‘transparent and reasonable’
- 18. Next Steps Meth Panel rejected 14 of 15 New Methodologies Could not reach consensus on Dispatch Analysis Investment additionality appears to be back as the most important criteria for project eligibility Executive Board must provide guidance on how to move the CDM ahead