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E7 Flexibility Mechanisms
E7 Flexibility Mechanisms
E7 Flexibility Mechanisms
E7 Flexibility Mechanisms
E7 Flexibility Mechanisms
E7 Flexibility Mechanisms
E7 Flexibility Mechanisms
E7 Flexibility Mechanisms
E7 Flexibility Mechanisms
E7 Flexibility Mechanisms
E7 Flexibility Mechanisms
E7 Flexibility Mechanisms
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E7 Flexibility Mechanisms

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  • 1. E7 Recommendations for the Design of Flexibility Mechanisms to Manage Greenhouse Emissions
  • 2. INTRODUCTION Joint Implementation (JI), a Clean Development Mechanism (CDM) and emissions trading (ET) are three Flexibility Mechanisms adopted in the Kyoto Protocol to assist Parties to the Protocol to meet their greenhouse gas (GHG) emissions commitments. The rules for the operation and use of these mechanisms are to be further defined at future Conferences of the Parties to the UN Framework Convention on Climate Change (UNFCCC). The Flexibility Mechanisms are of great interest to electricity companies because,if properly designed,they may increase the number of cost-effective and efficient options available for the mitigation of greenhouse gas emissions. The electricity sector can play an important role in managing these emissions in both developed and developing countries.This paper offers recommendations for the development of the Flexibility Mechanisms from the perspective of the E7,an international organization of eight of the world’s leading electricity companies. BACKGROUND Energy has provided the basis for increased economic productivity and improvements in the quality of life throughout the twentieth century. Globally, electricity’s share of energy use will continue to grow as developing countries industrialize. The efficient and greater use of electricity can be an effective means for controlling greenhouse gas emissions. Government and industry must ensure that all sectors of society contribute to greenhouse gas emission reductions and that the burden does not fall disproportionately to any industry,sector or country.In addition,all actions that produce real and verifiable reductions in greenhouse gas emissions should receive appropriate recognition. The Flexibility Mechanisms promote cooperation between developed and developing countries and entities therein to undertake actions to achieve sustainable energy development and manage greenhouse gas emissions. The E7 is committed to sustainable development and is working to reduce global greenhouse gas emissions in response to the threat of global warming. Through its experience in efficient electricity generation in both developed and developing countries, three Activities Implemented Jointly and an emissions trading initiative, the E7 is able to offer a unique insight into the development of the Flexibility Mechanisms. In 1998, E7 published “The E7 Proposal for International Guidelines” to promote international electricity sector investments that contribute to economic and social development and the environmental quality of projects. The Guidelines also encourage the use of the Flexibility Mechanisms contained in the Kyoto Protocol. On the basis of E7’s experience and environmental commitment, this paper offers recommendations for the resolution of key issues facing the development of the Flexibility Mechanisms. The paper begins with a review of E7 experience in managing GHG emissions, both at home and abroad. E7 COMPANY ACTIVITIES TO MANAGE GREENHOUSE GAS EMISSIONS The E7 Greenhouse Gas Management Strategy (1996) formalizes the E7 commitment to sustainable development and actions to reduce global greenhouse gas emissions. The average carbon intensity of the electricity generated by E7 members is about fifty percent lower than the global average,due to a very high proportion of hydroelectricity and other renewable energies, and nuclear generation in the generation mix, and the efficiency of E7 operated fossil-fuelled generating stations. E7 company actions to reduce GHG emissions are summarized in Tables 1A-C.Each member’s approach to managing GHG emissions reflects differences in available natural energy resources,national energy policies,security of supply,the existing energy mix and the structure of the electricity market. Despite the differences, the strategies are based on common principles and have many common elements, ranging from improving supply side and end use energy efficiency to international activities. The E7 has initiated three Activities Implemented Jointly (AIJ), located in Indonesia, Jordan and Zimbabwe. The projects are described in Appendix A. In 1997, Ontario Hydro and Southern California Edison (SCE) undertook a trade of CO2 emission reduction credits (ERCs). Ontario Hydro agreed to purchase from Southern California Edison 10,000 tons of CO2 credits generated by the Mohave Power Plant Heat Rate Improvement Program.The ERCs were surplus to Southern California Edison’s needs.The lessons learned about developing AIJ projects and from the SCE-OH trade are summarized in Appendix B.
  • 3. FLEXIBILITY MECHANISMS IN THE KYOTO PROTOCOL The Flexibility Mechanisms introduced in the Kyoto Protocol, Joint Implementation, a Clean Development Mechanism and emissions trading, offer flexibility and choice to Annex 1 Parties for cost effective and efficient mitigation of GHG emissions. E7 companies plan to use instruments such as the Flexibility Mechanisms, to supplement domestic actions to reduce GHG emissions. On the basis of our E7 projects,AIJ and emissions trading experience, we offer our perspective on key issues facing the development of operating guidelines for the Flexibility Mechanisms. The use of the Flexibility Mechanisms by electricity companies to contribute to global greenhouse gas emissions management is premised on three assumptions: ❑ the environmental benefits of reducing greenhouse gas emissions are the same for any source or location, ❑ for an investing party, greenhouse gas emissions might be reduced more cost-effectively abroad than at home, and ❑ offshore greenhouse gas emissions reductions can be credited against national GHG emissions inventories. E7 RECOMMENDATIONS FOR THE DEVELOPMENT OF FLEXIBILITY MECHANISMS To ensure the greatest environmental benefit and the highest participation, the rules for the operation of the Flexibility Mechanisms must be well defined, based on market principles, transparent, consistent globally, and have longevity. The participation of the private sector in the Flexibility Mechanisms should be on a voluntary basis. In the development of the guidelines for the implementation of these mechanisms, there are many common issues to be resolved,such as additionality, baselines, certification or registration and quotas. This section presents the E7 view of these issues. Links The ultimate success of the Flexibility Mechanisms in managing GHG emissions is tied to the success of all three individual mechanisms, CDM, JI and ET. The use of the three mechanisms should be promoted. In addition to emissions reduction credits created through voluntary domestic actions, CDM and JI projects can generate emission reduction credits for trading in the marketplace. A viable greenhouse gas emissions credits trading market will further promote cost effective and efficient actions to mitigate GHG emissions. The Kyoto Protocol places different financial burdens on the three Flexibility Mechanisms.Article 12.8 states that a share of the proceeds from certified CDM projects shall be used to cover administrative expenses and assist developing country partners meet the costs of adaptation. The Protocol does not set such a requirement for JI and ET. To encourage maximum participation in CDM and all other mechanisms, transaction costs and bureaucracy should be minimized. Eligible Projects The definition of eligible projects for CDM and JI should consider the following recommendations: ❑ All mechanisms should be applicable to any project that produces real and measurable GHG savings and other environmental,economic and social benefits, as long as the objectives of the Kyoto Protocol and operating guidelines are met. ❑ The mechanisms should promote innovation in energy efficiency and the use of non-GHG emitting technologies such as hydroelectricity and other renewable energies,or nuclear generation,depending upon local conditions and priorities. ❑ The rules and modalities should allow for a broad range of partnerships. Any entity should be able to undertake projects and generate credits, e.g., developing countries,private entities,intermediaries, etc. ❑ Projects should be selected based on priorities set by the investor and the project host, such as cost and type of project, e.g., technology, sequestration, etc.The buyer and seller,not governments or other agencies, should set the price of the credits. ❑ Activities Implemented Jointly which comply with CDM guidelines should be given CDM status. ❑ CDM investments would be facilitated if developing countries announce project eligibility criteria and create the institutional mechanisms necessary for project coordination and approval.
  • 4. Additionality Clear and uniform international guidelines for additionality must be established, because the lack of consistent criteria creates problems for industry in identifying potential projects. All types of projects, including those that are commercially profitable,should qualify under the CDM or JI if they reduce GHG emissions relative to a business as usual scenario based on local conditions. CERTIFICATION A simple and common global certification process will lower transaction costs.The intent of the recommendations presented in this section is to avoid situations in which the trading of emission reduction credits on a secondary market is restricted because of different certification requirements under different regimes. The certification issue has two aspects, certification of projects and certification of credits.Emission reductions credits are only certifiable once the reductions have been achieved. However, to facilitate project planning and financing, a process of project review and certification, in accordance with CDM/JI guidelines, prior to project initiation should be available. As part of this process, the emission reduction potential of the project would be estimated. The project and credits certification processes should include the following steps: Certification of Projects: 1. International entity establishes guidelines and accredits certifiers. 2. National entity establishes guidelines or qualification criteria consistent with the international guidelines. 3. Projects are developed based on the guidelines, as appropriate. 4. Projects are submitted to the national governments for forwarding to the international certification body. Certification of Credits: 5. Actual emissions reductions achieved by the project should be auditable and verifiable. Private and independent third party auditors exist to undertake financial and environmental audits. The use of such auditors would enhance credibility and might eliminate the need for creation of a government or public body to carry out this task. 6. The audited report of achieved emissions reductions, i.e., credits, is reported to the national authority. 7. The national authority submits these audited savings to the international entity for certification or registration as certified emission reduction units. 8. The certified emission reduction units remain the property of the project legal entities, i.e., project partners,for use in either meeting national commitments or sale to other parties. 9. Only certified emission reductions units are applied to country GHG emissions reduction commitments. Credits Certified emission reduction units or credits should meet the following criteria: ❑ Credits should be based on achieved emissions reductions. ❑ Credits should belong to the participants that have undertaken and implemented the projects. ❑ The origin of the credits should be well defined. ❑ The credits created from the different mechanisms should be fungible,that is tradable as one commodity on a secondary market. Baselines The baseline is important to the credibility of the calculation of the emissions reductions. Some considerations for the definition of the baseline are listed below: ❑ Baselines should include economic growth so that society is not deprived of the benefits of electrification. ❑ Baselines should be based on local conditions and standards, e.g., marginal unit of capacity, grid connected project versus off-grid systems. ❑ Baselines should remain constant for the duration of the project.
  • 5. ❑ Both the host country and the project investor must agree with the methodology to calculate the baselines and the ensuing reductions and credits. Quotas The domestic efforts of E7 companies to reduce GHG emissions, which are based mainly on voluntary actions, underline E7 company commitment to sustainable development and their responsibility,as leading electricity companies, to contribute to the mitigation of global warming. Projects and credits generated under ET, JI and CDM should not replace domestic efforts to manage GHG emissions in total. Quotas for total emission reductions to be achieved domestically may however limit the use of Flexibility Mechanisms, and this could have implications for the economic feasibility of their use. To allow maximum flexibility,any requirement for domestic GHG emissions reductions should not constrain the use of the Flexibility Mechanisms. Gas The Flexibility Mechanisms should include all six greenhouse gases mentioned in the Kyoto Protocol, and the associated sources and sinks. Governing Mechanisms The guidelines for all three mechanisms should be consistent and ensure that the credits generated by the different mechanisms can be traded. The operation of the mechanisms should be guided by market principles,without any constraints or restrictions, which could impede transactions, trades or projects. The administrative functions of the governing entities should be self-sustaining financially, transparent, lean, accessible and shared between developed and developing countries. Governments or national authorities should be responsible for the registration of GHG reductions. Guidelines should be established as early as possible, especially for the Clean Development Mechanism, so that credit registration can begin in 2000. Banking Banking of credits obtained through the use of all three mechanisms,for use in subsequent commitment periods, should be allowed. Direct Participation by Business Sector Annex I countries should authorize the direct participation of the business sector in the use of Flexibility Mechanisms. This authorization should not however create market distortion among members of the same business sector in different countries. Guidelines should provide for the registration and reporting of projects by more than one Annex I country when projects are undertaken by a group of Annex I investors. Transaction costs Transaction costs should be minimized. Risk It is recognized that the Flexibility Mechanisms, as with any other business transaction, imply risks. It is the responsibility of each partner in a project or trade to mitigate these risks as part of the commercial contract,or any other legal or commercial mechanism. Project Evaluation and Implementation To be effective and attract the interest of Parties, CDM and JI must provide incentives to private sector entities to participate. With the implementation of CDM and JI,projects which in the past may not have been considered economic, could become more attractive to investors because of the potential marginal value of emission reduction credits. All project proponents should be encouraged to evaluate projects based on the inclusion of anticipated financial returns from emission reduction credits.This will increase the competitiveness of projects,which otherwise,may be either non-competitive, or only marginally competitive. This in turn could lead to innovative and additional investment opportunities,which contribute to sustainable development, the objectives of the Kyoto Protocol and an enhanced rate of return on investment. Long term contracts between private entities related to projects that produce a stream of emission reduction credits should not be restricted. Such contracts will
  • 6. enhance flexibility and the ability to effectively manage GHG emissions over the long term. Credibility All mechanisms must be transparent. Emissions Trading As is the case with trading emission reduction credits produced through Joint Implementation or the Clean Development Mechanism, credits created by private sector domestic actions which reduce emissions below a baseline should be tradable under the Emissions Trading mechanism. The E7 encourages voluntary actions by parties and countries to initiate the trading market. CONCLUSIONS This document has provided the E7 electricity company perspective on key issues facing the development of the Flexibility Mechanisms adopted in the Kyoto Protocol. The E7 supports the use of the Flexibility Mechanisms and believes that they can contribute to reductions in global greenhouse gas emissions, if properly designed and implemented. The Flexibility Mechanisms provide an opportunity to bridge the gap between developing and developed countries and to foster sustainable energy development. The E7 is ready to contribute to the ongoing efforts of the UNFCCC Secretariat and other international bodies as well as the national bodies in its member countries to operationalize the Flexibility Mechanisms. The E7 will also continue to offer lessons from the current AIJ projects and individual company emissions trading initiatives as input towards the design of the Flexibility Mechanisms. Electricity companies, and the business community as a whole, can play an important role in the success of JI, CDM and ET and the E7 will work towards achieving this goal. FUTURE ACTIONS Foreign investment in the electricity sector in developing countries must occur in a manner consistent with sustainable development. The E7 Chairmen recently published the E7 Proposal for International Guidelines to promote economic and social development and environmental quality in projects undertaken in the global electricity industry. The use of Flexibility Mechanisms is included within the E7 Proposal for International Guidelines. The E7 has also issued an open letter calling for support to further define a code of good practices that would be acceptable and applicable to all players in the international electricity business. The E7 will consider undertaking CDM and JI projects to contribute to the testing and refinement of the guidelines for their operationalization. In this regard, the E7 has recently launched the E7 Fund for Sustainable Energy Development, an instrument to initiate sustainable energy projects. Ontario Hydro and Southern California Edison have undertaken an emissions reduction credits trade.The E7 encourages its members to build upon this experience and undertake new trades.
  • 7. APPENDIX A1: E7 Indonesia AIJ Renewable Energy System The E7 Indonesia AIJ - Renewable Energy Supply System project will supply a limited, but reliable amount of electricity through renewable energy to households and community facilities in rural Indonesia.By harnessing solar, wind and hydro energies, current levels of greenhouse gas emissions should be reduced and living conditions improved without producing additional emissions. This Renewable Energy Systems AIJ project will include installation of up to 1000 solar home systems,rehabilitation of a micro-hydro plant for operation as a grid-connected independent power producer, construction of three stand alone micro-hydro plants, and construction of a photovoltaic/wind hybrid system.The potential social and economic benefits of the project have been assessed based on statistical household income surveys.E7 will provide project management, training, education and financing. Several financing options will be offered to potential users to meet individual needs and to gain experience with different financing models. By pre-financing the initial investments,E7 will cover all related financial risks. Payments made by the users for the electricity consumed will flow to a community-managed fund. In December 1996, the Government of Indonesia, represented by the State Ministry of Environment and the Director General of Electricity and Energy Development, and the E7 signed a Letter of Intent and a Memorandum of Understanding. The baseline estimates and data used for the CO2 offset calculations are in accordance with methodologies used by the World Bank for renewable energy projects in Sri Lanka and Indonesia.The baseline consists of households using kerosene for lighting and diesel-based battery charging for other uses, and three village co-operatives operating off-grid diesel generators to provide electricity to health stations,schools and small,isolated village grids. This baseline will be compared to the situation created by the project, households converted to electric lighting and photovoltaic-based battery charging as electricity is provided by a 50 Wp solar home system per household, and village co-operatives operating three micro-hydro power plants (15 - 60 kW each) and one PV/wind hybrid system (15/20 kW). CO2 savings from this project over a period of 15 years are projected to be approximately 13,000 tonnes. Starting with the solar home systems in October 1998, construction of all plants will be completed by the end of 1999. Plant operation, maintenance etc. as well as economic performance will be monitored for an additional one to two years. APPENDIX A2: E7 Jordan AIJ Power Plant Energy Efficiency The National Electric Power Company (NEPCO) is a major source of GHG emissions in Jordan. This project provides technical assistance and equipment to the National Electric Power Company (NEPCO) to improve power plant energy efficiency. Three oil-fired, conventional steam cycle units, 10 to 15 years old, at two plants are being studied. The heat rate and efficiency of the units have decreased in recent years. The project consists of five tasks,all of which can improve unit performance and reduce CO2 emissions: boiler and turbine heat rate and efficiency tests, boiler combustion optimization, boiler water chemistry management,energy efficiency training, and creation of an energy efficiency audit program. Following characterization of current levels of unit performance, the E7 and NEPCO will jointly determine the actions that the E7 will undertake to further improve plant energy efficiency. The Minister of Planning has recognized the project as an Activity Implemented Jointly. Two Agreements, between the Ministry of Planning and the E7, and between NEPCO and the E7 were signed in September 1997. APPENDIX A3 : E7 Zimbabwe AIJ Rural Electrification The E7 Zimbabwe AIJ - Rural Electrification project was announced during the 1996 World Solar Summit in Harare. The project consists of installing a mini-hydro plant at an existing irrigation dam and developing the distribution infrastructure necessary to electrify a remote zone of Zimbabwe and to support local economic and social development. Partners are the E7, the Zimbabwe Electricity Supply Authority (ZESA) and the Zimbabwean Government.E7 and ZESA are financing the project,with ZESA financing 40% of the distribution network. Two 350 kW turbines will provide an installed capacity of 700 kW and generate three million kWh per year. The plant will be linked to ZESA’s national grid. CO2
  • 8. savings relative to marginal coal supply will be 1400 t/y. This project will provide the villages in the region with access to electricity earlier than planned and also enable small-scale developments which will contribute to local economic development. The project has been designed to be self-sustaining, with particular attention to the development of a self- supporting revenue stream,capacity building,maintenance and monitoring aspects.An estimated 70,000 inhabitants could benefit from this project. ZESA will purchase power from the facility at 80% of the going retail sales price.Some 120 kilometres of distribution network will be added to link the facility to the grid and provide access to local communities. Electricity customers will pay ZESA’s retail rate.Revenue from sales to ZESA will cover operation and maintenance costs of the power plant and grid to reconstitute the initial capital and ensure durability. The difference between revenue from sales to ZESA and all costs (including depreciation) will be placed in a fund to be used for local development initiatives. A Trust structure comprising all key players and local community representatives will administer the fund.
  • 9. APPENDIX B : E7 GHG Emissions Reduction Activities and the SCE-OH Emission Credits Trade Baselines ❑ Stable political and economic outlooks in the host country will facilitate project planning and the development of a reliable baseline. ❑ The restructuring of host country participants may affect baselines. ❑ All parties must agree with the methodology to calculate the baselines and ensuing GHG reductions and credits. Agreements ❑ Visible understanding and support of the flexible instruments by all project partners, as shown by positions and activities at the Conferences of Parties (COPs) to the UNFCCC, will facilitate the development of the required agreements. ❑ Commitment from all partners to all aspects of the project, including technical, financial and environmental, will facilitate the development of the required agreements. ❑ Close contacts between the investing party country and host country will facilitate projects. Eligible Projects ❑ Projects should be adapted to local conditions,that is, project parameters, technology, etc., must be consistent with the skills, knowledge and resource base as they exist in the host country. ❑ Local development needs must be considered and assisted. Guidelines ❑ Guidelines should provide for the registration and reporting of projects undertaken by a group of international investors through more than one Annex I country. Additionality ❑ Clear and uniform international guidelines for additionality must be established. The lack of a consistent definition for this criterion creates problems for industry in identifying potential projects. Credits ❑ The source of emission reduction credits (ERCs) must be acceptable to both the buyer and seller. Constraints about the source of the ERCs may relate to the type of reductions producing the credits, e.g., energy efficiency initiatives, demand side management, sequestration, etc., or the year of credit creation. ❑ The ownership of the ERCs must be clear. ❑ Currently,because of the small number of trades,the market price for ERCs is based on literature reviews and perceptions of a fair price. ERC price will reflect the risk associated with the trading process, the credibility of the reductions, the availability of documentation, etc. Certification ❑ Certification of the ERCs is a key aspect to any trade and the certification requirements of both the buyer and seller should be defined in advance of any trade. ❑ A simple and universal certification process will lower transaction costs and promote trades. ❑ The cost for certification must be factored into the price of the ERCs. Small trades will have relatively higher transaction costs. Contracts ❑ Standardized contracts allow all parties to understand the terms of the sale in advance of the trade and can reduce transaction costs. ❑ Companies interested in participating in the ERC marketplace should have internal procedures to support the sale, purchase and certification of ERCs.
  • 10. E7 Member EDF ENEL Hydro-Québec Kansai Ontario Hydro RWE Edison International TEPCO Agreements Électricité de France Strategy ENEL Strategy and negotiation of a long term voluntary agreement with Environment and Industry Ministries is underway Hydro-Québec strategy Environmental Action Plan by Japanese Electric Power Industry (voluntary action) New ERA Strategy Corporate Strategy to Manage Greenhouse Gas Emissions approved 1995. An annual progress report is submitted to Canada’s Climate Change Voluntary Challenge and Registry Inc. RWE GHG Strategy developed as part of the voluntary agreement between the Federation of German industries and the Federal Republic of Germany. Edison International Global Climate Change Policy Edison’s Climate Challenge Accord with DOE (voluntary agreement) TEPCO Environmental Action Plan by Japanese Electric Power Industry (voluntary action) Targets ENEL Group target for reduction of CO2 emissions from thermal power: 20% of 1990 level by 2003 Hydroelectricity accounts for 96% of Hydro-Québec’s generation.Hydro-Québec does not have a GHG target. Industry’s goal: Reduce unit CO2 emissions per kWh by 20% in 2010 compared to 1990 levels. Reduce the amount of greenhouse gases emitted per unit of energy Ontario Hydro supplies to its customers, i.e., carbon intensity, by 5% by the year 2000 compared to the rate in 1990, that is 0.26 Tg CO2/TWh. Stabilize Corporate net greenhouse gas emissions at the 1990 baseline level by the year 2000 and further reduce emissions by 10% by 2005. Overall national goal of the Federation of German Industries to reduce specific CO2 emissions by 20% up to 2005 on the basis of 1990. Two million ton reduction below 1990 levels 2000. Industry’s goal: Reduce unit CO2 emissions per kWh by 20% in 2010 compared to 1990 levels. APPENDIX C1: E7 Member CO2 Reduction Strategie – Voluntary Agreements and Targets
  • 11. APPENDIX C2: E7 Member CO2 Reduction Strategie – Supply Side E7 Member EDF ENEL Hydro-Québec Kansai Ontario Hydro RWE Edison International TEPCO Thermal Generation Improve plant energy efficiency. Clean coal combustion projects and new plants, e.g., circulating fluidized bed boiler, gasified coal, combined cycle operation, etc., planned. Develop co-generation in partnership with major industries. Complete program to improve efficiency of existing oil-gas plants. Complete repowering program. Plans for combined cycle gas turbine, using steam turbines of existing plants underway. Plan increase in use of natural gas,but retain some coal/orimulsion/tar and oil-gas plants to preserve security of supply. Not applicable Construct combined cycle gas turbine Increase use of LNG Continuous improvement in efficiency of electricity generation and transmission, year 2000 target: 1.1 Mtonne CO2/y savings already exceeded. Two oil-fired units converted to dual fuelling with natural gas. Construct 965 MW lignite power station with optimized plant technologies;target 43% efficiency versus 30% efficiency of older plants. Replace existing lignite fired power station with best available generation technology. ncrease use of cogeneration in lignite plants. Use power station for district heating. CO2 emission reduction target for lignite power plant in Rhine land: -27% by 2030. Improve energy efficiency of existing thermal power plants. Edison Mission Energy development and operation of environmentally- sound power generation technologies Construct combined cycle power generation facilities. Increase use of LNG. Energy security enhanced with oil and coal fired generation facilities. Renewable Energy Supply Improve energy efficiency of hydroelectric plants. Increase wind generation from 8 MW in 1997 to 500 MW in 2005. 25% target for Caribbean Island renewable energy supply by 2000. 10,000 solar water heaters installed in Caribbean and Reunion Islands, 600 new isolated customers provided with solar cells.Install geothermal generation facilities where possible. Plan to develop 940 MW by 2003 (hydro,geothermal,wind,photovoltaic). Renewable energy subsidiary company created.Urban waste subsidiary company created.Increase power purchases from other companies and participate in bidding for construction and operation of new plants. National target for renewable energy generation: Increase from 52 TWh (hydro, wind, geothermal) in 1997 to at least 73 TWh by 2010. Pursue hydroelectric development, e.g., Lower Churchill Falls. Export power to US and other Canadian provinces to replace fossil fuel generation. Build or purchase 100MW of wind power Hydropower resource development Renewable Energy Technologies Program target: 1 TWh by 2005 of wind, microhydro, PV. Increase promotion of renewable energies program. Green tariff. Purchase power from renewables (wind, biomass and geothermal). Develop new renewable capacity through Edison Technology Solutions. Promote the use of renewable energy. Nuclear Generation Improve energy efficiency and capacity factor. New nuclear power plants. Improve capacity factor of nuclear power station Develop generation mix based on nuclear power.
  • 12. APPENDIX C3: E7 Member CO2 Reduction Strategies – End Use, Research and Other Initiatives E7 Member EDF ENEL Hydro-Québec Kansai Ontario Hydro RWE Edison International TEPCO End Use Price set to be consistent with the best use of electricity. Established partnerships to increase efficiency in electric heating,promote customer energy efficiency, promote electric vehicles and transportation, and promote energy efficiency lighting. Promote electrotechonologies in industry. Provide financial incentives to increase end use energy efficiency. Promote rational use of electricity. Promote market for Heat pumps (domestic and services) Promote market and R&D for industrial electrotechnologies replacing combustion technologies (+25 TWh by 2010, -12 Mtonne CO2) Energy services (beyond meter) and Public Light management subsidiary companies created. Electrical car battery reload grid design Pursue research on batteries for electric cars and on engines for hybrid cars. 100,000 people’s Eco-family campaign (energy conservation in households.) Promote and disseminate: - Ice-storage air conditioning systems (Eco-Ice). - Electric vehicles Promote efficient use of energy through various organizations Year2000netemissionreductiontarget:4.6MtonneCO2by2000,alreadyexceeded. - Low-cost leasing program - Funding for feasibility studies and demonstrations - Water treatment services Promote programs for energy saving measures Promote research and development programs to improve end-use energy efficiency. Customer energy efficiency program (turn-key solutions; audit) Promote program to develop a self-sustainable market for electric vehicle Support customers’ efforts to conserve energy. Expand use of thermal storage air-conditioning systems Other Initiatives * Purchase of electrical equipment to lower SF6 emissions Development of flue gas CO2 recovery technology. GHG Offset Mechanisms,strive to develop offsets equivalent to 4.8 Mtonnes CO2 by 2000.Purchase of GHG emission reduction credits from SCE. *Note: All companies have programs to promote international technology transfer, and reduce transmission and distribution grid losses. Climate Change Research Research and Development program Monitoring high-altitude station for GHG Study GHG emissions from decaying biomass in hydro reservoirs. Participate in international research related to sequestration: - technology for large scale afforestation on tropical forests – coastal ecosystems Participate in various Climate Change Research Programs:IEA and MIT,Boston,on technologies for mitigating climate change and modelling and political assessment of ecological,economical and social aspects of global warming.

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