Transcript CDM Considerations and Opportunities in Cambodia

National Workshop on Capacity Development for the
Clean Development Mechanism
26-27 March 2003
CDM Considerations and
Opportunities in Cambodia:
Energy Efficiency, Transport &
Renewable Energy
Andrew Williamson
Advisor to Department of Energy Technique
(Ministry of Industry, Mines and Energy
Structure of Presentation
Energy Efficiency
Transport
1. CDM considerations
2. International Case Study
3. Opportunities in Cambodia
Renewable Energy
Key questions…
1. How can CDM help projects in Cambodia?
2. How do CDM projects ‘work’?
3. What opportunities exist in Cambodia?
CDM Project Requirements
A CDM project must be…
• REAL (it will actually reduce emissions)
• Measurable (the emission savings can be
quantified)
• Additional (the savings would not have
happened without the project)
• Sustainable (defined by host country to include
environmental + community benefits, technology
transfer etc)
Energy Efficiency – CDM Considerations (1)
The main types of EE projects are:
Demand Side
Example: Retrofit new efficient lighting, reduce energy losses in
process, introduce new efficient appliances
Supply Side
Example: Improve efficiency of generator, upgrade transmission line
and transformers to reduce losses, upgrade steam boiler for greater
efficiency
Fuel Switching
Example: Replace coal boilers with gas-fired units, use biofuels
instead of diesel. (* NOT nuclear!)
Energy Efficiency – CDM Considerations (2)
•
Energy Efficiency (EE) projects usually reduce the energy demand per unit
of output and thus offer other benefits of cost saving and production
efficiency
•
EE projects for CDM can involve either upgraded or new equipment
•
CDM Transaction costs are high so often need to group many projects
under one CDM project to make viable
•
EE projects are difficult to baseline, monitor + verify, and special guidelines
have been produced to assist calculation
•
Must first establish Emissions Baseline – the greenhouse emissions which
would have occurred in ‘business as usual’, ie: if the CDM project was not
done.
•
Small projects (up to 15MW generation capacity or 15GWh/yr of equivalent
energy savings) have special simplified rules and calculations
Energy Efficiency – CDM Considerations (3)
•Monitoring and Verification – need to prove that savings are real
throughout the project
•This can be difficult and costly, especially when many emission sources
are involved (easier on single large projects where performance can be
measured directly)
•THUS vital for effective training and management of operators (includes
ensuring that operation manuals for new equipment are provided in
Khmer language)
•Emissions Leakage – refers to situation where old replaced equipment
is sold to someone who uses it elsewhere resulting increased emissions
elsewhere (so it reduces the overall effectiveness of project).
Energy Efficiency - International Case Study
Bangladeshi Brick Kilns
Project
• 20 new Brick Kilns
• Higher efficiency than standard
kilns (new “Hoffman” design)
• Uses natural gas rather than coal
•
•
Baseline assumes most likely
scenario for brick production over
next 10 yrs in Bangladesh
Monitoring will involve metering
of actual gas consumption +
calculation of brick production
Project Partners
$
CERs
Kiln Owners
20 various
companies
CDM Operator
(organise CDM
financing + deliver
CERs to Investor)
…Could be:
•Owners’ Association
•NGO
•Private Business
$
CDM Investor
CERs
(in Developed Country)
Energy Efficiency - International Case Study
Brick Kilns in Bangladesh
Baseline Case
Project Size
CDM Project
170 million bricks per year
170 million bricks per year
Capital Investment
US$4.89 mil
US$13.69 mil
Fuel Costs
US$2.25 mil
US$1.91 mil
20% of project cost per year
36.4% of proj cost per year
US$0.04483
US$0.05517
Operations + Maintenance
Sale price per brick
Financing Interest Rate
Total emissions of CO2
Emissions Reduction
15%
86,496 tonnes per year
41,438 tonnes per year
45,059 tonnes per year
Financial Internal Rates of Return IRR (assuming CER value of US$10 per tonne of CO2)
Without CDM Financing
With up-front CDM Financing
With Sale of CERs
IRR on Equity 18.9%
IRR on Total Costs 17.3%
IRR on Equity 27.4%
IRR on Total Costs 20.6%
IRR on Equity 24.8%
IRR on Total Costs 20.2%
Energy Efficiency - Cambodian Opportunities (1)
Industrial Sector – types of operators
Breweries and Bottling
Animal Feed Factory
Distillery (cassava?)
Plywood Manufacturing
Water Purification
Cement Works (?)
Laundries
Paper Mill
Brick Kiln
Sewerage Pumping
Garment Factories
Cigarette Factories
Rice Mills
Plastics manufacturer
Sugar Refinery
Galvanized Iron Roofing
Food Processing
Paint Factory
Energy Efficiency - Cambodian Opportunities (2)
Opportunities – Industrial Sector
•Lighting – improve design (new fittings + reflectors), new technology (tri-phosphor
fluorescents, high pressure sodium), control (timers, sensors), skylights + light
wells/shelves
•Boilers – improved design, insulate ducting, steam traps, heat recovery to pre-heat
feed water
•Refrigeration – new refrigerants + lubricants, optimise settings, controls (timers,
sensors), duct layout + zoning, new technology
•Compressed Air – leak stop program (must be ongoing), efficient nozzles, unit
sizing, optimise control (staging, timers, variable speeds etc), position intake for
cool air
•Electric Motors – replace with high efficiency motors, variable speed drives,
optimise control (timers, sensors, idle shut-off)
Energy Efficiency - Cambodian Opportunities (3)
Commercial Buildings
Hospitals
Hotels
Banks
Office Buildings
Government
Offices
Warehouses
Restaurants
Markets and
Shops
Schools
Opportunities
•Building Design – orientation + exterior awnings + facades
+ landscaping to reduce solar gain, insulation, natural
lighting, natural ventilation, building materials to reduce aircon load, interior colours to reduce lighting load, doubleglazed windows, air-locks + air curtains + revolving doors to
minimise air leaks
•Lighting – improve design, new technology (fittings +
reflectors, low-energy ballasts, dimmable fluorescents),
automate control (timers, sensors), zoning
•Water Heating – centralised units, solar and gas rather than
electric, heat pumps, insulate ducting, heat recovery from
air-con, reduce water use (efficient nozzles, taps, showers),
optimise settings (reduce temp)
•Air Conditioning – new refrigerants + lubricants, optimise
settings, controls (timers, sensors), duct layout + zoning,
new technology, avoid individual control-setting, ceiling fans
where possible
Energy Efficiency - Cambodian Opportunities (4)
Cogeneration (or “Combined Heat and Power”(CHP)
•Anywhere with both electrical and heating or cooling needs
•Especially: industrial plants and commercial buildings
•Service can be offered by existing IPP (delivers electricity AND steam /
cool air!)
Scenario 1: Garment Factory
•Electricity generated by on-site diesel generators
•Modified so hot water recovered directly from ‘’water jacket” or heat
exchangers to pre-heat the factory boilers
•Big saving in energy costs and emissions from coal-fired boilers
Scenario 2: Commercial Building
•Electricity generated by on-site diesel generator
•Air conditioning compressors driven directly by second shaft on diesel
engine
•OR: absorption chillers use the recovered heat from engines (as above)
to generate cool air
Energy Efficiency - Cambodian Opportunities (5)
Residential
Houses
Apartment
Blocks
Rural cottages
Opportunities
•Building Design – orientation + exterior awnings + facades +
landscaping to reduce solar gain, natural lighting, natural
ventilation (flow-through, heat exhausts), building materials to
reduce cooling load
•Cooking – gas cooking if possible, efficient wood + coal stove
designs, area with good ventilation + separate from living areas
(to avoid heating them)
•Lighting – use compact fluorescents, interior colours to reduce
lighting load, task lighting rather than whole space (eg: over
cooking bench, kitchen table etc)
•Space Cooling – ceiling fans, sealable bedrooms for aircon
•Appliances – awareness programs: energy efficiency labeling +
stand-by loads, refrigerator settings + maintenance
•Street Lighting – design + placement, high efficiency bulbs +
fittings, optimise timers or sensors
Transport - CDM Considerations
•Transport Efficiency Projects can be difficult to measure + verify as emission
sources are generally privately owned + mobile! CDM validity should be checked.
Vehicle Efficiency
•Improve existing vehicles (better maintenance, testing, regulations)
•New technology (introduce + encourage its use through incentives + regulation)
Fuel Substitution
•Biofuels (biodiesel, ethanol etc) to reduce use of diesel and petrol
•Encourage natural gas + CNG use
•Electric + hybrid vehicles (…and soon: fuel cells)
Transport System Efficiency
•Public transport systems (which are effective)
•Trains for bulk cargo to/from sea/air ports
•Encourage and simplify non-motorised transport
•Plan towns, buildings and events to improve traffic flow + reduce need for
motorised transport
Transport - International Case Study
Urban Busses in Yogyakarta, Indonesia
Project
• Improve the energy efficiency of public bus system
• Replace engines on 200 of the fleet of 500 busses
• Switch from diesel to either clean diesel, natural gas or other (still in design)
Emissions Reductions
Project Crediting Period
Project Participants
•2,106 tonnes CO2 per year
•25% reduction per bus
•10-15% reduction for fleet
10 years
•Yogyokarta Urban Bus Co-op
•Gadja Mada University
•Road, Traffic + Transport Office
Transport Opportunities for Cambodia (1)
Biofuels
•
Sustainable, renewable fuel source (for transport + generator sets)
•
Biodiesel, Ethanol, raw vegetable oils (eg: palm oil in Marine diesel
engines)
•
Local production from energy crops
•
Increase energy independence
Project Options
•Establish local manufacturing plants plus energy crops (technology transfer +
training)
•Demonstration project with free/cheap samples to promote + gain credibility
•Public transport trial running on biofuels
•Incentives (subsidies, tax concessions) to transport companies to use (eg:
trucks, taxis, ferries, trains)
•Promote + raise awareness of benefits for environment + Cambodia
Transport Opportunities for Cambodia (2)
Private Vehicles
• Establish emissions regulations + registration requirements
• Periodic vehicle inspections + phase-in fines OR free tune-ups?
• Tune-up program: establish training program for service centres, and mobile
testing stations
• Efficiency labeling on vehicles sold
Public Transport
• Efficient bus system around the major towns with services devoted to schools,
universities + factories
• As major highways are improved, establish cheap, reliable and safe bus system
between major towns + tourist destinations
• Upgrade train services (passenger + cargo) from sea port to Phnom Penh (plus
Pursat, Battambang + Siam Reap?)
Renewable Energy - CDM Considerations
•
Must be sustainable
•
Measuring + Verification usually just involves measuring actual
generation output, then calculating baseline fossil fuel emissions as
savings
•
Need to be close to suitable transmission lines or consumers
•
Need someone to buy energy
•
Need licences from EAC as generator
•
Need to secure long-term supply of fuel if biomass (+possibly hydro)
International Case Study - Renewable Energy
Waste Palm Oil Electricity Generation, Indonesia (1)
Project
• 10.3MW capacity from special high-pressure boiler with steam-turbo
generator
• Combustion of 220kT/yr of empty fruit bunches from processing plant
• Palm Oil mill is 1.5km from 20kV substation + close to river
Host Country Partner
• Joint venture of 3 Indonesian companies (Catra Nusantara Bersama,
Bronzeoak Limited, and PT Indonesian Power)
• 2 of the companies will also purchase the power from the JV
CDM Investor Partner
• now looking - from an Annex 1 country
• probably use a local Indonesian company to co-ordinate CDM
investment
International Case Study - Renewable Energy (2)
Waste Palm Oil Electricity Generation, Indonesia
Project Details
Project Cost
US$16.5 mil
Operating Cost
US$1.6 mil
Financing
Debt 60%, Equity 40%
Interest Rate on Term Loan
12% pa
Plant Load Factor
Annual Electricity Generation
82%
10.285 million kWh per year
CERs generated per year
56,500 tonnes CO2
Calorific Value of Fuel
1052 kcal / kg
Fuel Cost
US$0.027 / kg
Power Sale Price
US$0.0625 / kWh
Project IRR without CDM funds
19.5%
IRR at CER price of US$3.50
21.3%
IRR at CER price of US$5.00
22.1%
IRR at CER price of US$7.50
23.6%
Renewable Energy Opportunities for Cambodia (1)
Hydropower
• Excellent potential, proven ability in-country
• Pico/micro suitable in many small villages on rivers
• Mini – projects identified and investigated in Meritech study
• CDM: gather small projects into one proposal
Wind
• Large utility scale (>500kw): 8 areas identified by modelling as good potential, now
need monitoring and investigation
• Small domestic scale (<500kW): demonstration projects by NEDO in Takeo, but one
turbine damaged and monitoring unsuitable
• Further investigation needed
Solar PV
• Excellent potential
• Extensive demonstrations by NEDO and others
• Opportunities for Grid-Interactive inverters in towns and small grids
Renewable Energy Opportunities for Cambodia (2)
Biomass
• Various fuels available (rice husks, straw, bagasse, palm oil, forestry residue,
plantation timber/crops (eg: rubber))
• Many technologies now mature and in use elsewhere
• Need thorough resource assessment + feasibility studies
• current fuel uses must be investigated
Biofuels
• Biodiesel, ethanol and direct vegetable oils
• (Discussed in Transport section)
• Requires resource and feasibility assessments
Landfill and Urban Waste
• Many technologies mature and available
• Cheap and widely used elsewhere
• Can be retrofitted, but better if designed at start of landfill life
Geothermal
• Small, low-quality resource in Kompong Spue
• Worth basic investigation
• 50MW plant planned for central Vietnam
Next Steps
Raise Stakeholder Awareness of Benefits
• Government, Project Developers, Private Industry, Investors,
International Developers and CDM Investors
Project Identification + Pipeline
• Resource assessments + industry studies/surveys + energy audits
• Project Design
• Feasibility Studies
• Consultation with communities, authorities
Project Promotion + Financing
• Seek partners for finance + investment + co-ordination
• “Will CDM help this project?”
Yes: Start CDM Cycle
No: Find alternative funding
CDM Projects in Cambodia
- information and assistance CDM Operation, Cambodia Status etc
• Climate Change Unit MoE: Mr Tin Ponlok or Mr Sum Thy
Renewable Energy and Energy Efficiency
• Department of Energy Technique: Dr Sat Samy, Director
• Hydropower Department: Dr Bun Narith, Director
Fossil Fuel Generation, Transmission and Distribution
• Energy du Cambodge: Dr Praing Chulasa, Deputy Director,
Corporate Planning and Projects
• Electricity Authority of Cambodia: Dr Ty Norin, Chairman
• Department of Energy Development (MIME): Mr Tun Lean, Director
References
•
•
•
“A User’s guide to the CDM”, Pembina Institute, June 2002
[email protected]
www.pembina.org
“CDM Opportunities in Asia”, TERI New Delhi et. al., October 2002
“Cambodia’s Initial Communication under the UNFCCC”, Ministry of Environment
Cambodia, August 2002
• “Introduction to the CDM”, UNEP Collaborating Centre on Energy and Environment,
RISO National Lab, (not dated)
• “Simplified modalities and procedures for CDM small-scale project activities”,
UNFCCC (www.unfccc.int/cdm/ssc.htm)
• “DRAFT Renewable Energy Action Plan”, World Bank and MIME (DET), November
2002
Useful Websites
• International Energy Agency (baseline calculations)
www.iea.org/books/studies/2000/em.base.pdf
• Monitoring and Verification guidelines
www.ipmvp.org/info/info.html
• Asian CDM Opportunities
www.pembina.org/publications
www.teriin.org/climate/cdm.asia
• Renewable Energy Feasibility Software + Examples (FREE download)
www.retscreen.ca
• Prototype Carbon Fund – World Bank
• www.prototypecarbonfund.org or www.carbonfinance.org