CDM Type Micro-Hydro Projects: A Case Study

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CDM Type Micro-hydro Projects:

A Case Study

National Workshop on Capacity Development for the


Clean Development Mechanism (CDM)
Eugenio Lopez Conference Center
December 9, 2002

Grace S. Yeneza
Preferred Energy Inc.
Clean Development
Mechanism
 Will be driven by the availability of
developing country projects operating
below the “baselines”
 Will be a “competitive” process
 Offers an excellent opportunity for
Philippines to fund projects for
sustainable development
Technical Requirements for CDM

 Baseline Study  Company to commission and


pay for a baseline study, in
accordance with Kyoto Protocol
requirements

 Company to prepare Project


 Mitigation Concept Note showing “with
Analysis Project scenario” and estimated
emissions reduction benefits
 Review of proposals by an
investment banker for the
buyers (fee range-10 to 15% of
CER value).
Technical Requirements for CDM

 Validation/verification  Preparation of Monitoring


Plan by qualified
consultants,
 Operational Entity ("OE") to
validate the Emission
Reduction component of the
Project
 Buyer commissions an
appraisal and due diligence
at a level determined by the
CDM.
Technical Requirements for CDM
 Certification  Prepare and submit a
Project Design
Document ("PDD")
(with "Letter of
Approval" from GOP
 Project Company
requests the GOP to
submit to the CDM
Executive Board a
request for registration
of the Project
Micro-hydro Projects
 Basically Small (up to 100kW)
 Villa Escudero – 98 kW
 Tulgao, Kalinga - 30 kW
 Balbalasang MHP – 25 kW
 Lon-Oy MHP – 20 kW
 Caguyen, Licuan Baay, Abra - 7kW
 Buneg, Nabuanagan, Apayao- 5 kW
A 100-kW micro-hydro = 800-900 tCO2 e/yr
 Most are community-owned and operated, for
community use
 Dispersed & implemented in remote areas
Examples of CDM Projects
Undergoing Evaluation
 Caribbean wind farm project:
-20 MW electricity output
-50,000 t CO2 emission reductions per year (for 10 years)
-Project costs: US$20m (+)
-Carbon value
-@$3 US/tonne CO2e = $1.72m US
-@$5 US/tonne CO2e = $2.87m US
 SE Asia waste to energy project:
-2 MW electricity output
-50,000 t CO2e (+) emissions reductions per year(for 10 years)
-Project costs: US$3.5m
-Carbon value
-@$3 US/tonne CO2e = $1.72m US
-@$5 US/tonne CO2e = $2.87m US
It will take about 50-60 units 100-kW microhydros
to attain significant CER to attract CDM
Challenges/Hurdles to
Overcome
 GOP approval process
 Current Technical Requirements
 Capacity building
 What CDM is all about
 How to do baselines
 How to capture value of benefits
 How to prepare required documentation
 Financing
 Project Aggregation; identify organizations to do
aggregation
Recommendations
 Pro-active government that is project
development-oriented
 Systems and approval procedures must be
clear & easy to comply with
 Lobby for “ Fast-track” mechanism for
approval/certification of small scale projects
 Small scale projects must be viewed from the
developmental perspective and not only from
its carbon mitigation potential
Recommendations

 Establish an entity to develop top down


baselines for small scale projects
 Even now, start a quasi-CDM program within
DENR
 Provide access to financing by small projects
 Focus capacity building and support on
developing real project developers

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