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Barriers to Energy Efficiency under CDM, 22 November 2007, Vienna, Binu K Parthan and Udo Bachhiesl, REEEP and IEE, TU Graz
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GFSE 2007, 22.11.2007, Vienna
Barriers to Energy Efficiency under CDM
22 November 2007, Vienna
Binu K Parthan and Udo BachhieslREEEP and IEE, TU Graz
GFSE 2007, 22.11.2007, Vienna
REEEP• Multi-stakeholder
partnership launched at WSSD by UK;
• 245 partners with 38+24 governments;
• 84 projects covering 50 countries with € 6.3 mio with over € 23 million leverage;
• In Vienna with eight regional secretariats
GFSE 2007, 22.11.2007, Vienna
IEE, TU Graz
• Institute for Electricity Economics and Energy Innovation, Established in 2000, Faculty of Electrical Engineering and Information Technology, TU Graz;
• Prof. Stigler, dean and head;
• numerous academic activities and research projects in RE, EE, energy innovation and economics
GFSE 2007, 22.11.2007, Vienna
Climate Change and Energy Efficiency
• IPCC Fourth Assessment Report –“warming of climate system is unequivocal”
• McKinsey –Environmental issues including climate change – #1 issue;
• IPCC – Role of Energy Efficiency – supply, buildings, agriculture, transport.
GFSE 2007, 22.11.2007, Vienna
CDM Projects
• 844 projects registered over 91 mio CERs issued – over 1 billion CERs expected;
• Only 97 energy efficiency projects registered – 5% CERs till 2012.
Fuel
Switch
1%
Industrial
Gas
70%
Energy
Efficiency
8%
Methane
and
Cement
6%
Renewables
15%
(Source: UNFCCC, UNEP)
GFSE 2007, 22.11.2007, Vienna
CDM Market
• 2006 market volume -$5.25 billion;
• 2007 October CER prices:– Registered projects 13-15
€/tCO2e
– Unregistered projects 8-11.5€/tCO2e
– Secondary 17€/tCO2e
• Post 2012 credits – 2$ to 7$;
Asia
80%
Africa
3%
LAC
10%
Other &
Unspecifie
d
7%
(Source: World Bank)
GFSE 2007, 22.11.2007, Vienna
Methodologies
• 115 methodologies approved by EB –Several withdrawn/ consolidated;
• 21 Energy Efficiency Methodologies available;
• 11 methodologies never used!
EE
24%
Ind gas
12%
Fuel
Switch
7%
CH4+Cem
29%
RE
16%
AR
12%
(Source: UNFCCC, UNEP)
GFSE 2007, 22.11.2007, Vienna
Barriers to Energy Efficiency
• Households and Buildings – Behavioral issues, information and regulation;
• Industry and Agriculture – information, management priority, competition;
GFSE 2007, 22.11.2007, Vienna
Barriers to EE under CDM• Demonstration of
additionality –Investment Barrier (86%) – payback-period and classical investment analysis –Constraints energy efficiency;
• CDM M&P –single site, large scale and co-terminus emission reductions – Energy Efficiency (other than Industry) Smaller scale, dispersed and longer/different time periods
GFSE 2007, 22.11.2007, Vienna
Barriers• Methodological issues
– 10% of methodologies useful for EE
– 30% success rate for EE methodologies compared to 50% average;
– Monitoring methodologies for EE;
– Equipment lifetime issues for retrofit or replacement;
– Consideration of upstream emissions.
• Need for methodological framework vs project specific methodologies
GFSE 2007, 22.11.2007, Vienna
Barrier Removal Initiatives
• CDM Executive Board– Measures to improve the share
of EE in CDM;
– PoA which will allow EE CPAs;
• Expert Group on EE and Carbon Finance – WB, IEA, GEF, UN –methodologies, technical guidance and capacity building;
• EEC – policy makers, industry and development agencies –advocacy, global assessments and best practice – Global Status Report on EE.
GFSE 2007, 22.11.2007, Vienna
Barrier Removal Initiatives
• CDM Gold Standard, sponsored by REEEP – 5-25% premium prices-Financial attractiveness of EE;
• LOGOC – Beijing London Olympic Games CDM Project;
• Econoler International –Indian street lighting scale-up project – CGI;
• IMT-Efficiency Power Plant -DSM, Jiangsu 2 mio tCO2e/y
GFSE 2007, 22.11.2007, Vienna
Summary
• Energy Efficiency offers one of the most cost effective options to mitigate Climate Change;
• Energy Efficiency - several major barriers in general and specific to CDM;
• Initiatives by CDM-EB and Networks and initiatives address some of the key barriers for Energy efficiency under CDM;
• REEEP role is a facilitator – Industry, NGOs, FIs, Governments to use the partnership and its resources to support EE under CDM.
GFSE 2007, 22.11.2007, Vienna
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