Egypt’s National Strategy Study (NSS) on the Clean Development Mechanism (CDM) Presented by: Dr....

Egypt’s National Strategy Study (NSS)on the

Clean Development Mechanism (CDM)

Presented by:Dr. Attia Saad El-Din

Dr. Yosry BarakatTIMS

CDM in Egypt Cairo, January 12-13, 2004

TIMS/EEAA CD4CDM- Second National Workshop (Phase II) UNEP RISO / APEX

Project Execution

Energy & Environment Research Center (E2RC)/

Tabbin Institute for Metallurgical Studies (TIMS)

Under Umbrella of

Climate Change Unit / Egyptian Environmental Affairs Agency (EEAA)

In Cooperation With

The World Bank (WB) & Ernst + Partners Ltd. (EBP)Government of Switzerland



• Introduction• Conventional & CDM Project Inputs & Outputs• CDM Strategy Objectives• CDM Benefits in Egypt• CDM Barriers in Egypt• Institutional Setup • Eligibility Criteria• Ranking Criteria• CDM Projects Portfolio• CDM Projects Pipeline

Content



Introduction• One of the mechanisms for international GHG

abatement is the Clean Development Mechanism (CDM), as described in Article 12 of the Kyoto Protocol:

– In short, an Annex I country (or firm) pays for GHG mitigation in a developing country through CDM projects and purchases the resulting measurable reduction of GHG emission in the host country.

– A CDM project has to comply with the criteria set by the Kyoto Protocol and has to be approved by the host and investor countries.

– The investing paying country obtains certified emission reductions, which it can use to comply with its Kyoto commitment.



ConventionalProject

Equity Investment

Financial Returns

Conventional Project Inputs and OutputsConventional Project Inputs and Outputs



CDMProject

Equity Investment

Financial Returns

CDM Project Inputs and OutputsCDM Project Inputs and Outputs

Carbon Investment

Carbon Credits

Other Development Benefits



CDM Strategy Objectives

• Establishing a national mechanism for the selection, coordination, facilitation and implementation of CDM projects.

• Identifying the roles of the different Egyptian institutions within the CDM project cycle.

• Preparing a pipeline of CDM projects.• Assessing GHG reduction potential in Egypt

and the competitiveness in the international GHG market.

• Identifying national capacity building needs.



CDM Benefits in Egypt

• Financial Flow

• Improvement of Local Environment

• Technology Transfer

• Creation of Jobs



Potential Barriers

Examples

TechnologicalRisks for provision of the technical service for equipment Technical risks - technology performanceTechnology has never been demonstrated in the host country

Organizational / Legal

Substantial obstacles to receiving direct investment Policies the subsidize fuel

FinancialLack of long-term risk capitalHigh cost of capitalExchange rate risksDemonstration of new business model (e.g. energy service company)

MarketRaw material supply risks Unpredictable price trends

Barriers that could be addressed by CDM investment



Existing National Governmental Institutions Participating in the CDM

Ministry of State for Environ-mental Affairs

(MSEA)

Ministryof

Petroleum(MOP)

Ministryof

Electricity& Energy

(MEE)

Ministry of Industry &

Technological Development

(MITD)

Ministryof

Transport(MOT)

Ministry ofAgriculture and Land

Reclamation(MOALR)

The Central Department for Afforestation & Environment

Tabbin Institute for Metallurgical Studies (TIMS)

Egyptian Accreditation Council (EGAC)

New & Renewable Energy Authority (NREA)

Organization of Energy Planning (OEP)

The Egyptian General Petroleum Corporation (EGPC)

Egyptian Natural Gas Holding Company (EGAS)

Egyptian Environmental Affairs Agency (EEAA), Climate Change Unit

Environmental Protection Fund (EPF)





Existing Private Sector Institutions and NGOs with CDM Potential

Environmental NGOs

Federation of Egyptian

Industries (FEI)

Private Audit/

Consulting Firms

World Energy Council (WEC)

Energy Efficiency

Council (EEC)

The Egyptian Energy Service Business

Association (EESBA)

Criteria for CDM Projects

• The CDM operates basically on a project level• The projects meeting essential (Mandatory)

criteria (ELIGIBILITY CRITERIA):– Real and measurable reduction of GHG

emission compared with baseline scenario– Simple payback period ought to be more than

two years– The proposed CDM project must be in areas

where no national development plans have been formulated



Criteria Indicators for Ranking and Criteria Indicators for Ranking and Prioritising CDM ProjectsPrioritising CDM Projects

• Point system based on allocated weight and score for each of the following indicators:– Economic benefits– Environmental benefits– Social Benefits



Economic Benefit Parameters

• Value added • Infrastructure• Export potential• Import substitution• Employment

• Salaries and taxes• Foreign investment • Payback period • State of technology • Energy savings



Environmental Parameters

• Overall environmental performance

• Environmental management systems

• Implementation of eco-efficiency and cleaner production techniques

• Self-monitoring and auditing



Social ParametersSocial Parameters• Percentage of employees covered by social

insurance• Percentage of female employees to total• Presence of programmes for vocational

training• Awards bonuses and other incentives

programmes • Presence of programmes for summer

internship & training• Social & fringe benefits



CDM Pilot Projects Pipeline

CDM Pilot Projects Pipeline



ProjectCode

ProjectInvestment

(M$)ASC(Ton)

CSC($/tC)

Pbp(years)

I. Electricity Generation

I.1 Electricity Generation by Wind Farms

I.1.1 60 MW Wind farm 54 40138 30 No Pbp

I.2 Electricity Generation by Integrated Solar Thermal System

I.2.1

Integrated Solar Thermal

Combined Cycle System

300 MW

240 49664 107.5 No Pbp

Overview of the Project Portfolio



ProjectCode

ProjectInvestment

(M$)ASC(Ton)

CSC ($/tC)Pbp

(years)II. Other Renewable Energy Applications

II.1 Other Solar Energy Applications

II.1.1Toshka PV Water

Pumping0.6 39.4 2141 No Pbp

II.1.2 Solar Food Dehydration 2 1691 156.8 No Pbp




ProjectCode

ProjectInvestment

(M$)ASC(Ton)

CSC ($/tC)Pbp

(years)III. Transportation ProjectsIII.1 Railways Electrification Projects

III.1.1Cairo–Alex. Railwayelectrification

355 21073 1604. 5 No Pbp

III.2 UndergroundIII.2.1 Alex. Underground 687 11579 3169.9 No PbpIII.3 Waterway Transportation

III.3.1Development of CargoRiver Nile

174 31855 97 No Pbp

III.4 Switching to N.G in Transportation

III.4.1Install dedicated CNGengines to replace lowefficiency diesel engines

12.3 2580 -300.6 3.8




ProjectCode

ProjectInvestment

(M$)ASC(Ton)

CSC($/tC)

Pbp(years)

IV. Energy EfficiencyIV.1 Control Systems and Energy Saving Equipment

IV.1.1Control Systems and EnergySaving Equipment at Zenotex

1.1 1932 -76.2 6.2

IV-2 Waste Heat Recovery

IV.2.1Using N.G. & RegenerativeBurners in Ezz Steel Co.

4.0 3956 -21.3 9.5

IV.3 CogenerationIV.3.1 Beni Soeif Cement Cogen 8.3 6336 -125 8.5

IV.3.2Industrial Investments Co.(Chemical Industry)

0.3 185 -174 7.8

IV.3.3 Misr Elmonifia Cogen (Textile) 1.6 911 -237 6.3IV.3.4 Mohm cogen (metal works) 0.3 369 -133 5.5IV.3.5 Egypt Air Hospital (Building) 0.3 59 -488 8.5




ProjectCode

ProjectInvestment

(M$)ASC(Ton)

CSC($/tC)

Pbp(years)

V. Waste ManagementV.1 Solid Waste Management

V.1.1Feed Stock from OrganicWaste

1 377336 -3.9 6.1

V.1.2Organic Solid WasteDigestion

40 127000 163 No Pbp

Overview of the Project Overview of the Project PortfolioPortfolio

Overview of the Project Overview of the Project PortfolioPortfolio



CDM Projects PipelineCDM Projects PipelineProject #1 Cogeneration Project of 3.5 MW Capacity at Misr

Elmonifia Company (Textile)

Project #2 Control System and Energy Saving Equipment at Zenotex

Project #3 Installing Dedicated CNG Engines to Replace Low Efficiency Diesel Engines

Project #4 Establishment of Forest Plantations and Shelterbelts Around 10th of Ramadan City

Project #5 Afforestation of a Part of Cairo-Aswan Highway

Project #6 CDM 60 MW Wind Farm in Comparison with BAU 45 MW Steam Turbine (Mixed Fuel)

Project #7 Organic Solid Waste Digestion



Conclusions from the National Strategy Study on CDM in Egypt

• There is a significant potential for CDM in Egypt:

– Projects– People and institutions

• CDM opens business opportunities and benefits to Egyptian stakeholders

• Steps needed to make use of this potential:– Capacity building– Institutional setting– Pilot projects



Egypt’s National Strategy Study (NSS) on the Clean Development Mechanism (CDM) Presented by: Dr....

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