Calibration regarding project assessment requirements - RIT Perspectives

Vinay Deodhar, RIT

Module 2.1 7th JCWBonn, 12-13 March 2011

New Workflow

• Just one opportunity to the PP/DOE and they have to get it right, else face rejection

• Of course more time given for preparing the appropriate response

• More balanced and fare process, with two “teams” conducting the review

• EB role graduated to a higher level of judging in case of differing reviews

• Reasoning of decision to reject has to be given• Problems with bordering cases, i.e. where the project can be

registered or issuance can be agreed with minor revisions – even such cases decision has to be rejection!

Major issues continue to be same..

• Investment analysis– Input values not explained and properly validated.

Critical ones being tariff, PLF, investments– WACC determination

• Prior consideration of CDM in the investment decision

• Barrier analysis• Applicability of the baseline methodology• Project implementation as per the design in

registered PDD

Investment analysis

• Main issue is validation of the input values of main parameters.VVM mandates independent validation of critical parameters like – Plant load factor (EB guidance regarding this not

referred to)– Tariff (EB decision for highest tariff in provinces in

China also needs to be considered)– Costs of the capital equipment – Coefficient of effective electricity

Barrier analysis

• Barriers not validated appropriately• EB guidance on objective validation of

presence of barriers• Latest EB decisions regarding policy changes

not applied correctly

Project implementation

• Many times verification of project implementation as per PDD is not adequate

• Not clear whether DOE verified whether the values of critical parameters at the time of PDD preparation remain valid

• Guidance on type of changes not clearly adhered

Suggestions

• RIT is a resource of international experts from all over the world available to the EB on tap and should be utilized effectively, judiciously but extensively

• Specialization among RIT members regarding project types and countries

• Inputs from RIT in small group for rule changes alongside public commenting process

• Meetings of RIT members should be convened at least once in six months in conjunction with the EB meetings

Thank you on behalf of your RIT!