Post on 01-Jul-2015
description
Approved CDM Methodologies, CDM Project Design Document (PDD)
Lucas BelenkyACX Executive Climate Change and Carbon Trading Course
November 12th 2012
• Contribute to Sustainable Development
• Local Stakeholder Consultation and EIA
• Approval from the Host Country
• Result in emission reductions that are additional
• Prior Consideration of the CDM
Requirements for Projects under the CDM
1. Project Type
a) Type 1: Energy Generation
b) Type 2: Efficiency Measures
c) Type 3: All other types
2. Project Size
a) Large
b) Small
c) Micro
Categories of CDM Projects
Electrical Energy Other Energy Off-Grid Power Bio Fuels
• Grid-connected renewable energy
• Renewable energy for mini-grid or captive use
• Electricity from biomass combustion
• Mechanicalenergy for the user
• Thermal energy production
• Solar water heaters
• Electricitygeneration by the user
• Biogas/biomass for thermal applications
• Biodiesel production
• Plant oil production and use for energy generation
Type 1 CDM Projects – Energy Generation
Supply-Side Demand-Side Fuel-Switching
• Generation
• Transmission and distribution
• Installation of co-generation or tri-generation systems
• Efficiency activities for lighting technologies
• Efficiency activities in new buildings
• Efficiency activities in hot water devices
•Efficiency application in the use of non-renewable biomass
• Switches in buildings
• Switches in agricultural facilities
• Switches in industrial facilities
Type 2 CDM Projects – Energy Measures
Gas Avoidance & Destruction
TransportationSpecific
TechnologiesChange in Practice
• Methane avoidance
• HFC Destruction
• Sulfur Hexafluoride destruction
• Mass public transit systems
• Hybrid vehicles
• Fuel monitoring in commercial freight
• Water purificationsystems
• Solar LED lighting
• Renewable energy technologies in new residential buildings
• Shift from high-to low-carbon fuel/energy
• Recovery and recycling of materials
• Recovery of waste gas in industrial facilities
Type 3 CDM Projects – Gas Destruction and Other
Type Large Small Micro
Energy Generation > 15 MW 5 – 15 MW < 5 MW
Efficiency Measures> 60 MWh
Saved60 – 20 MWh
Saved< 20 MWh Saved
Other Projects > 60,000 Credits60,000 – 20,000
Credits< 20,000 Credits
CDM Projects by Size
• Methodologies cover different project types and size. The describe how to determine the Baseline.
• Baseline:
• Describes what is happening in absence of the project
• Sets level of carbon emissions occurring now
• Commonly called the “business-as-usual” scenario
Determining Project Baselines
• Baseline established through surveys, historical data, or government data and published reports
• Emissions during the project activity monitoring throughout the project
• Emission reductions are calculated as the difference between the baseline and the project activity
Calculating Emission Reductions
0
50
100
150
200
250
300
350
400
450
0 1 2 3 4 5 6 7Car
bo
n D
ioxi
de
Emis
sio
ns
(to
nn
es)
Project Year
Baseline Emissions Project activty Emission Reductions
Example Emission Reductions from a Project
Definition: An activity is deemed additional if it results in real and measurable emission reductions that would not have occurred without carbon finance.
Each activity under the CDM must prove it is additional:
Examples
1. Renewable Energy
2. Diesel Generator
3. Landfill Gas Flaring
Additionality is relative to the baseline
Additionality of CDM Activities
Prove the proposed project activity is not:
a) The most economically or financially attractive; or
b) Economically or financially feasible, without the revenue from the sale of Certified Emission Reductions (CERs).
Simple Cost Analysis
Investment Analysis
Benchmark Analysis
Proving Additionality – Investment Analysis
Prove the proposed project activity faces barriers that:
a) Prevent the implementation of this type of proposed activity; and
b) Do not prevent the implementation of at least one of the alternatives.
“The identified barriers are only sufficient grounds for demonstration of additionality if they would prevent potential project proponents from carrying out the proposed project activity undertaken without being registered as a CDM project activity.”
Barrier due to Prevailing Practice
Investment Barriers
Technological Barriers
Project is a “First-of-its-kind”
Proving Additionality – Barrier Analysis
Micro-scale projects are automatically additional if:
• The technology is approved by the Host Country
• The activity serves households or SMEs
• The activity is in a Least Developed Country
Prior Consideration: Each proposed activity, regardless of size or type, must show that the pursuit of CERs was intended since inception of the project concept.
1. Letter of Prior Consideration
2. Restricted Project Start Date
Proving Additionality – Microscale Projects and Prior Consideration
Step 1. Identify Alternatives
Step 2. Investment Analysis
and/or
Step 3. Barrier Analysis
Step 4. Common Practice Analysis
If all are steps are satisfied, activity is additional.
The Process of Demonstrating Additionality
Feasibility Documentation Validation Registration
DOEProject Proponent UNFCCC
2 Weeks 8 Weeks12 Weeks8 Weeks
Complete Project Development: 30 Weeks
CDM Project Cycle: Project Development
Operation
Monitoring
Verification
Issuance
Repeat for 10 Years. Repeat for 21 Years. Renew the Baseline
every 7 Years.
Fixed Renewable
Project Proponent
DOE
UNFCCC
Project Proponent
CDM Project Cycle: Project Life
• Data Collection on the project activity
• Select appropriate (or best) baseline and monitoring methodology
• Determine if the activity can be shown to be additional
• Estimate achievable emission reductions and future carbon credit revenue
1st Step: Project Feasibility Study
• Establish project baseline
• Write PoA-DD, CPA-DD, and CPA Template
• Prove Additionality
• Conduct LSC
• Perform EIA
2nd Step: Develop Project Documentation
• Appoint DOE to perform project validation
• Address and correct CLs and CARs from the DOE
• Apply for LoA from Host Country
3rd Step: Validation of Project Documentation
• Submit project for registration
• Address and correct remaining CLs and CARs from the DOE
• Register the activity under the CDM
• Begin Crediting Period
4th Step: Registration of the Activity
• Operate project for 1 (or 2) year(s)
• Collect monitoring data (continuous or sampling)
• Prepare monitoring report with achieved emission reductions
Monitoring Emission Reductions of the Project
Appoint DOE to verify Monitoring Report
DOE reviews report and recommends volume of CERs for issuance to the activity
Verification and Issuance
Requested CERs are issued to the project proponent
Project Proponent pays issuance fee
Process repeats every year throughout the crediting period of the activity