E7Recommendations forthe Design of FlexibilityMechanisms to ManageGreenhouse Emissions
INTRODUCTION of the Flexibility Mechanisms. In 1998, E7 published “The E7 Proposal for International Guidelines” toJoint Implementation (JI), a Clean Development promote international electricity sector investments thatMechanism (CDM) and emissions trading (ET) are contribute to economic and social development andthree Flexibility Mechanisms adopted in the Kyoto the environmental quality of projects. The GuidelinesProtocol to assist Parties to the Protocol to meet their also encourage the use of the Flexibility Mechanismsgreenhouse gas (GHG) emissions commitments. The contained in the Kyoto Protocol.rules for the operation and use of these mechanismsare to be further deﬁned at future Conferences of the On the basis of E7’s experience and environmentalParties to the UN Framework Convention on Climate commitment, this paper offers recommendations forChange (UNFCCC). the resolution of key issues facing the development of the Flexibility Mechanisms. The paper begins with aThe Flexibility Mechanisms are of great interest to review of E7 experience in managing GHG emissions,electricity companies because, if properly designed, they both at home and abroad.may increase the number of cost-effective and efﬁcientoptions available for the mitigation of greenhouse gasemissions. The electricity sector can play an important E7 COMPANY ACTIVITIES TO MANAGErole in managing these emissions in both developed and GREENHOUSE GAS EMISSIONSdeveloping countries. This paper offers recommendations The E7 Greenhouse Gas Management Strategy (1996)for the development of the Flexibility Mechanisms from formalizes the E7 commitment to sustainable developmentthe perspective of the E7, an international organization of and actions to reduce global greenhouse gas emissions.eight of the world’s leading electricity companies. The average carbon intensity of the electricity generated by E7 members is about ﬁfty percent lower than the globalBACKGROUND average, due to a very high proportion of hydroelectricity and other renewable energies, and nuclear generationEnergy has provided the basis for increased economic in the generation mix, and the efﬁciency of E7 operatedproductivity and improvements in the quality of life fossil-fuelled generating stations.throughout the twentieth century. Globally, electricity’sshare of energy use will continue to grow as developing E7 company actions to reduce GHG emissions arecountries industrialize. The efﬁcient and greater use summarized in Tables 1A-C. Each member’s approach toof electricity can be an effective means for controlling managing GHG emissions reﬂects differences in availablegreenhouse gas emissions. natural energy resources, national energy policies, security of supply, the existing energy mix and the structure of theGovernment and industry must ensure that all sectors of electricity market. Despite the differences, the strategiessociety contribute to greenhouse gas emission reductions are based on common principles and have many commonand that the burden does not fall disproportionately to elements, ranging from improving supply side and endany industry, sector or country. In addition, all actions that use energy efﬁciency to international activities.produce real and veriﬁable reductions in greenhouse gasemissions should receive appropriate recognition. The E7 has initiated three Activities Implemented Jointly (AIJ), located in Indonesia, Jordan and Zimbabwe. TheThe Flexibility Mechanisms promote cooperation between projects are described in Appendix A. In 1997, Ontariodeveloped and developing countries and entities therein Hydro and Southern California Edison (SCE) undertookto undertake actions to achieve sustainable energy a trade of CO2 emission reduction credits (ERCs).development and manage greenhouse gas emissions. Ontario Hydro agreed to purchase from SouthernThe E7 is committed to sustainable development and California Edison 10,000 tons of CO2 credits generatedis working to reduce global greenhouse gas emissions by the Mohave Power Plant Heat Rate Improvementin response to the threat of global warming. Through Program. The ERCs were surplus to Southern Californiaits experience in efﬁcient electricity generation in both Edison’s needs. The lessons learned about developing AIJdeveloped and developing countries, three Activities projects and from the SCE-OH trade are summarizedImplemented Jointly and an emissions trading initiative, in Appendix B.the E7 is able to offer a unique insight into the development
FLEXIBILITY MECHANISMS IN THE KYOTO use of the three mechanisms should be promoted. InPROTOCOL addition to emissions reduction credits created through voluntary domestic actions, CDM and JI projects canThe Flexibility Mechanisms introduced in the Kyoto generate emission reduction credits for trading in theProtocol, Joint Implementation, a Clean Development marketplace. A viable greenhouse gas emissions creditsMechanism and emissions trading, offer ﬂexibility and trading market will further promote cost effective andchoice to Annex 1 Parties for cost effective and efﬁcient efﬁcient actions to mitigate GHG emissions. The Kyotomitigation of GHG emissions. E7 companies plan to Protocol places different ﬁnancial burdens on the threeuse instruments such as the Flexibility Mechanisms, to Flexibility Mechanisms. Article 12.8 states that a share ofsupplement domestic actions to reduce GHG emissions. the proceeds from certiﬁed CDM projects shall be usedOn the basis of our E7 projects, AIJ and emissions trading to cover administrative expenses and assist developingexperience, we offer our perspective on key issues facing country partners meet the costs of adaptation. Thethe development of operating guidelines for the Flexibility Protocol does not set such a requirement for JI and ET.Mechanisms. To encourage maximum participation in CDM and allThe use of the Flexibility Mechanisms by electricity other mechanisms, transaction costs and bureaucracycompanies to contribute to global greenhouse should be minimized.gas emissions management is premised on threeassumptions: Eligible Projects ❑ the environmental beneﬁts of reducing greenhouse The deﬁnition of eligible projects for CDM and JI should gas emissions are the same for any source or consider the following recommendations: location, ❑ All mechanisms should be applicable to any project ❑ for an investing party, greenhouse gas emissions that produces real and measurable GHG savings and might be reduced more cost-effectively abroad other environmental, economic and social beneﬁts, than at home, and as long as the objectives of the Kyoto Protocol and operating guidelines are met. ❑ offshore greenhouse gas emissions reductions can be credited against national GHG emissions ❑ The mechanisms should promote innovation in inventories. energy efﬁciency and the use of non-GHG emitting technologies such as hydroelectricity and other renewable energies, or nuclear generation, dependingE7 RECOMMENDATIONS FOR THE DEVELOPMENT upon local conditions and priorities.OF FLEXIBILITY MECHANISMS ❑ The rules and modalities should allow for a broadTo ensure the greatest environmental beneﬁt and the range of partnerships. Any entity should be ablehighest participation, the rules for the operation of the to undertake projects and generate credits, e.g.,Flexibility Mechanisms must be well deﬁned, based developing countries, private entities, intermediaries,on market principles, transparent, consistent globally, etc.and have longevity. The participation of the privatesector in the Flexibility Mechanisms should be on a ❑ Projects should be selected based on priorities setvoluntary basis. In the development of the guidelines by the investor and the project host, such as costfor the implementation of these mechanisms, there are and type of project, e.g., technology, sequestration,many common issues to be resolved, such as additionality, etc. The buyer and seller, not governments or otherbaselines, certiﬁcation or registration and quotas. This agencies, should set the price of the credits.section presents the E7 view of these issues. ❑ Activities Implemented Jointly which comply with CDM guidelines should be given CDM status.Links ❑ CDM investments would be facilitated if developingThe ultimate success of the Flexibility Mechanisms in countries announce project eligibility criteria andmanaging GHG emissions is tied to the success of all create the institutional mechanisms necessary forthree individual mechanisms, CDM, JI and ET. The project coordination and approval.
Additionality ﬁnancial and environmental audits. The use of such auditors would enhance credibility and mightClear and uniform international guidelines for eliminate the need for creation of a government oradditionality must be established, because the lack of public body to carry out this task.consistent criteria creates problems for industry inidentifying potential projects. All types of projects, 6. The audited report of achieved emissions reductions,including those that are commercially proﬁtable, should i.e., credits, is reported to the national authority.qualify under the CDM or JI if they reduce GHG emissions 7. The national authority submits these auditedrelative to a business as usual scenario based on local savings to the international entity for certiﬁcationconditions. or registration as certiﬁed emission reduction units.CERTIFICATION 8. The certiﬁed emission reduction units remainA simple and common global certiﬁcation process will the property of the project legal entities, i.e.,lower transaction costs. The intent of the recommendations project partners, for use in either meeting nationalpresented in this section is to avoid situations in which commitments or sale to other parties.the trading of emission reduction credits on a secondary 9. Only certiﬁed emission reductions units aremarket is restricted because of different certiﬁcation applied to country GHG emissions reductionrequirements under different regimes. commitments.The certiﬁcation issue has two aspects, certiﬁcation ofprojects and certiﬁcation of credits. Emission reductions Creditscredits are only certiﬁable once the reductions have been Certiﬁed emission reduction units or credits shouldachieved. However, to facilitate project planning and meet the following criteria:ﬁnancing, a process of project review and certiﬁcation,in accordance with CDM/JI guidelines, prior to project ❑ Credits should be based on achieved emissionsinitiation should be available. As part of this process, reductions.the emission reduction potential of the project would ❑ Credits should belong to the participants that havebe estimated. undertaken and implemented the projects.The project and credits certiﬁcation processes should ❑ The origin of the credits should be well deﬁned.include the following steps: ❑ The credits created from the different mechanismsCertification of Projects: should be fungible, that is tradable as one commodity on a secondary market. 1. International entity establishes guidelines and accredits certiﬁers. Baselines 2. National entity establishes guidelines or qualiﬁcation The baseline is important to the credibility of criteria consistent with the international the calculation of the emissions reductions. Some guidelines. considerations for the deﬁnition of the baseline are 3. Projects are developed based on the guidelines, listed below: as appropriate. ❑ Baselines should include economic growth so 4. Projects are submitted to the national governments that society is not deprived of the benefits of for forwarding to the international certiﬁcation electriﬁcation. body. ❑ Baselines should be based on local conditions and standards, e.g., marginal unit of capacity, gridCertification of Credits: connected project versus off-grid systems. 5. Actual emissions reductions achieved by the project ❑ Baselines should remain constant for the duration should be auditable and veriﬁable. Private and of the project. independent third party auditors exist to undertake
❑ Both the host country and the project investor Banking must agree with the methodology to calculate the Banking of credits obtained through the use of all three baselines and the ensuing reductions and credits. mechanisms, for use in subsequent commitment periods, should be allowed.QuotasThe domestic efforts of E7 companies to reduce GHG Direct Participation by Business Sectoremissions, which are based mainly on voluntary actions, Annex I countries should authorize the direct participationunderline E7 company commitment to sustainable of the business sector in the use of Flexibility Mechanisms.development and their responsibility, as leading electricity This authorization should not however create marketcompanies, to contribute to the mitigation of global distortion among members of the same business sectorwarming. in different countries.Projects and credits generated under ET, JI and CDM Guidelines should provide for the registration andshould not replace domestic efforts to manage GHG reporting of projects by more than one Annex I countryemissions in total. Quotas for total emission reductions when projects are undertaken by a group of Annex Ito be achieved domestically may however limit the investors.use of Flexibility Mechanisms, and this could haveimplications for the economic feasibility of their use. To Transaction costsallow maximum ﬂexibility, any requirement for domesticGHG emissions reductions should not constrain the use Transaction costs should be minimized.of the Flexibility Mechanisms. RiskGas It is recognized that the Flexibility Mechanisms, as withThe Flexibility Mechanisms should include all six any other business transaction, imply risks. It is thegreenhouse gases mentioned in the Kyoto Protocol, and responsibility of each partner in a project or trade tothe associated sources and sinks. mitigate these risks as part of the commercial contract, or any other legal or commercial mechanism.Governing Mechanisms Project Evaluation and ImplementationThe guidelines for all three mechanisms should beconsistent and ensure that the credits generated by the To be effective and attract the interest of Parties, CDMdifferent mechanisms can be traded. and JI must provide incentives to private sector entities to participate.The operation of the mechanisms should be guided bymarket principles, without any constraints or restrictions, With the implementation of CDM and JI, projects whichwhich could impede transactions, trades or projects. in the past may not have been considered economic,The administrative functions of the governing entities could become more attractive to investors because of theshould be self-sustaining ﬁnancially, transparent, lean, potential marginal value of emission reduction credits.accessible and shared between developed and developing All project proponents should be encouraged to evaluatecountries. projects based on the inclusion of anticipated ﬁnancial returns from emission reduction credits. This will increaseGovernments or national authorities should be responsible the competitiveness of projects, which otherwise, may befor the registration of GHG reductions. either non-competitive, or only marginally competitive.Guidelines should be established as early as possible, This in turn could lead to innovative and additionalespecially for the Clean Development Mechanism, so investment opportunities, which contribute to sustainablethat credit registration can begin in 2000. 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
enhance ﬂexibility and the ability to effectively manage electricity industry. The use of Flexibility MechanismsGHG emissions over the long term. is included within the E7 Proposal for International Guidelines. The E7 has also issued an open letter callingCredibility for support to further deﬁne a code of good practicesAll mechanisms must be transparent. that would be acceptable and applicable to all players in the international electricity business.Emissions Trading The E7 will consider undertaking CDM and JI projects toAs is the case with trading emission reduction credits contribute to the testing and reﬁnement of the guidelinesproduced through Joint Implementation or the Clean for their operationalization. In this regard, the E7 hasDevelopment Mechanism, credits created by private recently launched the E7 Fund for Sustainable Energysector domestic actions which reduce emissions below a Development, an instrument to initiate sustainablebaseline should be tradable under the Emissions Trading energy projects.mechanism. The E7 encourages voluntary actions by Ontario Hydro and Southern California Edison haveparties and countries to initiate the trading market. undertaken an emissions reduction credits trade. The E7 encourages its members to build upon this experienceCONCLUSIONS and undertake new trades.This document has provided the E7 electricity companyperspective on key issues facing the development of theFlexibility Mechanisms adopted in the Kyoto Protocol.The E7 supports the use of the Flexibility Mechanismsand believes that they can contribute to reductions inglobal greenhouse gas emissions, if properly designedand implemented. The Flexibility Mechanisms providean opportunity to bridge the gap between developingand developed countries and to foster sustainable energydevelopment.The E7 is ready to contribute to the ongoing efforts ofthe UNFCCC Secretariat and other international bodiesas well as the national bodies in its member countriesto operationalize the Flexibility Mechanisms. The E7will also continue to offer lessons from the current AIJprojects and individual company emissions tradinginitiatives as input towards the design of the FlexibilityMechanisms.Electricity companies, and the business community asa whole, can play an important role in the success of JI,CDM and ET and the E7 will work towards achievingthis goal.FUTURE ACTIONSForeign investment in the electricity sector in developingcountries must occur in a manner consistent withsustainable development. The E7 Chairmen recentlypublished the E7 Proposal for International Guidelinesto promote economic and social development andenvironmental quality in projects undertaken in the global
APPENDIX A1: E7 Indonesia AIJ Renewable Energy Starting with the solar home systems in October 1998,System construction of all plants will be completed by the end of 1999. Plant operation, maintenance etc. as wellThe E7 Indonesia AIJ - Renewable Energy Supply System as economic performance will be monitored for anproject will supply a limited, but reliable amount of additional one to two years.electricity through renewable energy to households andcommunity facilities in rural Indonesia. By harnessing solar, APPENDIX A2: E7 Jordan AIJ Power Plant Energywind and hydro energies, current levels of greenhouse Efficiencygas emissions should be reduced and living conditionsimproved without producing additional emissions. The National Electric Power Company (NEPCO) is a major source of GHG emissions in Jordan. This projectThis Renewable Energy Systems AIJ project will include provides technical assistance and equipment to theinstallation of up to 1000 solar home systems, rehabilitation National Electric Power Company (NEPCO) to improveof a micro-hydro plant for operation as a grid-connected power plant energy efﬁciency.independent power producer, construction of threestand alone micro-hydro plants, and construction of a Three oil-ﬁred, conventional steam cycle units, 10 to 15photovoltaic/wind hybrid system. The potential social and years old, at two plants are being studied. The heat rateeconomic beneﬁts of the project have been assessed based and efﬁciency of the units have decreased in recent years.on statistical household income surveys. E7 will provide The project consists of ﬁve tasks, all of which can improveproject management, training, education and ﬁnancing. unit performance and reduce CO2 emissions:Several ﬁnancing options will be offered to potential boiler and turbine heat rate and efﬁciency tests, boilerusers to meet individual needs and to gain experience combustion optimization, boiler water chemistrywith different ﬁnancing models. By pre-ﬁnancing the management, energy efﬁciency training, and creation ofinitial investments, E7 will cover all related ﬁnancial risks. an energy efﬁciency audit program.Payments made by the users for the electricity consumedwill ﬂow to a community-managed fund. Following characterization of current levels of unit performance, the E7 and NEPCO will jointly determineIn December 1996, the Government of Indonesia, the actions that the E7 will undertake to further improverepresented by the State Ministry of Environment and the plant energy efﬁciency. The Minister of Planning hasDirector General of Electricity and Energy Development, recognized the project as an Activity Implemented Jointly.and the E7 signed a Letter of Intent and a Memorandum Two Agreements, between the Ministry of Planning andof Understanding. the E7, and between NEPCO and the E7 were signedThe baseline estimates and data used for the CO2 offset in September 1997.calculations are in accordance with methodologies usedby the World Bank for renewable energy projects in Sri APPENDIX A3 : E7 Zimbabwe AIJ RuralLanka and Indonesia. The baseline consists of households Electrificationusing kerosene for lighting and diesel-based battery The E7 Zimbabwe AIJ - Rural Electriﬁcation projectcharging for other uses, and three village co-operatives was announced during the 1996 World Solar Summit inoperating off-grid diesel generators to provide electricity Harare. The project consists of installing a mini-hydroto health stations, schools and small, isolated village grids. plant at an existing irrigation dam and developing theThis baseline will be compared to the situation created distribution infrastructure necessary to electrify a remoteby the project, households converted to electric lighting zone of Zimbabwe and to support local economic andand photovoltaic-based battery charging as electricity is social development. Partners are the E7, the Zimbabweprovided by a 50 Wp solar home system per household, Electricity Supply Authority (ZESA) and the Zimbabweanand village co-operatives operating three micro-hydro Government. E7 and ZESA are ﬁnancing the project, withpower plants (15 - 60 kW each) and one PV/wind hybrid ZESA ﬁnancing 40% of the distribution network.system (15/20 kW). Two 350 kW turbines will provide an installed capacityCO2 savings from this project over a period of 15 years are of 700 kW and generate three million kWh per year.projected to be approximately 13,000 tonnes. The plant will be linked to ZESA’s national grid. CO2
savings relative to marginal coal supply will be 1400 t/y.This project will provide the villages in the region withaccess to electricity earlier than planned and also enablesmall-scale developments which will contribute to localeconomic development.The project has been designed to be self-sustaining,with particular attention to the development of a self-supporting revenue stream, capacity building, maintenanceand monitoring aspects. An estimated 70,000 inhabitantscould beneﬁt from this project.ZESA will purchase power from the facility at 80% of thegoing retail sales price. Some 120 kilometres of distributionnetwork will be added to link the facility to the grid andprovide access to local communities.Electricity customers will pay ZESA’s retail rate. Revenuefrom sales to ZESA will cover operation and maintenancecosts of the power plant and grid to reconstitute the initialcapital and ensure durability. The difference betweenrevenue from sales to ZESA and all costs (includingdepreciation) will be placed in a fund to be used for localdevelopment initiatives. A Trust structure comprisingall key players and local community representatives willadminister the fund.
APPENDIX B : E7 GHG Emissions Reduction CreditsActivities and the SCE-OH Emission Credits Trade ❑ The source of emission reduction credits (ERCs)Baselines must be acceptable to both the buyer and seller. ❑ Stable political and economic outlooks in the host Constraints about the source of the ERCs may country will facilitate project planning and the relate to the type of reductions producing the development of a reliable baseline. credits, e.g., energy efﬁciency initiatives, demand side management, sequestration, etc., or the year ❑ The restructuring of host country participants may of credit creation. affect baselines. ❑ The ownership of the ERCs must be clear. ❑ All parties must agree with the methodology to calculate the baselines and ensuing GHG reductions ❑ Currently, because of the small number of trades, the and credits. market price for ERCs is based on literature reviews and perceptions of a fair price. ERC price willAgreements reﬂect the risk associated with the trading process, ❑ Visible understanding and support of the ﬂexible the credibility of the reductions, the availability of instruments by all project partners, as shown documentation, etc. by positions and activities at the Conferences of Certification Parties (COPs) to the UNFCCC, will facilitate the development of the required agreements. ❑ Certiﬁcation of the ERCs is a key aspect to any trade and the certiﬁcation requirements of both ❑ Commitment from all partners to all aspects of the buyer and seller should be deﬁned in advance the project, including technical, ﬁnancial and of any trade. environmental, will facilitate the development of the required agreements. ❑ A simple and universal certiﬁcation process will lower transaction costs and promote trades. ❑ Close contacts between the investing party country and host country will facilitate projects. ❑ The cost for certiﬁcation must be factored into the price of the ERCs. Small trades will have relativelyEligible Projects higher transaction costs. ❑ Projects should be adapted to local conditions, that Contracts is, project parameters, technology, etc., must be consistent with the skills, knowledge and resource ❑ Standardized contracts allow all parties to understand base as they exist in the host country. the terms of the sale in advance of the trade and can reduce transaction costs. ❑ Local development needs must be considered and assisted. ❑ Companies interested in participating in the ERC marketplace should have internal procedures toGuidelines support the sale, purchase and certiﬁcation of ❑ Guidelines should provide for the registration and ERCs. 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.
APPENDIX C1: E7 Member CO2 Reduction Strategie – Voluntary Agreements and Targets E7 Member Agreements Targets EDF Électricité de France Strategy ENEL ENEL Strategy and negotiation of a long term voluntary agreement with ENEL Group target for reduction of CO2 emissions from thermal power: 20% Environment and Industry Ministries is underway of 1990 level by 2003 Hydro-Québec Hydro-Québec strategy Hydroelectricity accounts for 96% of Hydro-Québec’s generation. Hydro-Québec does not have a GHG target. Kansai Environmental Action Plan by Japanese Electric Power Industry (voluntary Industry’s goal: Reduce unit CO2 emissions per kWh by 20% in 2010 compared action) New ERA Strategy to 1990 levels. Ontario Hydro Corporate Strategy to Manage Greenhouse Gas Emissions approved 1995. An Reduce the amount of greenhouse gases emitted per unit of energy Ontario annual progress report is submitted to Canada’s Climate Change Voluntary Hydro supplies to its customers, i.e., carbon intensity, by 5% by the year 2000 Challenge and Registry Inc. 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. RWE RWE GHG Strategy developed as part of the voluntary agreement between the Overall national goal of the Federation of German Industries to reduce speciﬁc Federation of German industries and the Federal Republic of Germany. CO2 emissions by 20% up to 2005 on the basis of 1990. Edison International Edison International Global Climate Change Policy Edison’s Climate Challenge Two million ton reduction below 1990 levels 2000. Accord with DOE (voluntary agreement) TEPCO TEPCO Environmental Action Plan by Japanese Electric Power Industry Industry’s goal: Reduce unit CO2 emissions per kWh by 20% in 2010 compared (voluntary action) to 1990 levels.
APPENDIX C2: E7 Member CO2 Reduction Strategie – Supply Side E7 Member Thermal Generation Nuclear Generation Renewable Energy Supply EDF Improve plant energy efﬁciency. Improve energy efﬁciency Improve energy efﬁciency of hydroelectric plants. Clean coal combustion projects and new plants, e.g., circulating and capacity factor. Increase wind generation from 8 MW in 1997 to 500 MW in 2005. ﬂuidized bed boiler, gasiﬁed coal, combined cycle operation, 25% target for Caribbean Island renewable energy supply by 2000. etc., planned. 10,000 solar water heaters installed in Caribbean and Reunion Islands, Develop co-generation in partnership with major industries. 600 new isolated customers provided with solar cells. Install geothermal generation facilities where possible. ENEL Complete program to improve efﬁciency of existing oil-gas plants. Plan to develop 940 MW by 2003 (hydro, geothermal, wind, photovoltaic). Complete repowering program. Renewable energy subsidiary company created. Urban waste subsidiary Plans for combined cycle gas turbine, using steam turbines of company created. Increase power purchases from other companies and existing plants underway. participate in bidding for construction and operation of new plants. Plan increase in use of natural gas, but retain some coal/orimulsion/tar National target for renewable energy generation: Increase from and oil-gas plants to preserve security of supply. 52 TWh (hydro, wind, geothermal) in 1997 to at least 73 TWh by 2010. Hydro-Québec Not applicable 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 Kansai Construct combined cycle gas turbine Increase use of LNG New nuclear power plants. Hydropower resource development Improve capacity factor of nuclear power station Ontario Hydro Continuous improvement in efﬁciency of electricity generation Renewable Energy Technologies Program target: and transmission, year 2000 target: 1.1 Mtonne CO2/y savings 1 TWh by 2005 of wind, microhydro, PV. already exceeded. Two oil-ﬁred units converted to dual fuelling with natural gas. RWE Construct 965 MW lignite power station with optimized plant Increase promotion of renewable energies program. technologies; target 43% efﬁciency versus 30% efﬁciency of older plants. Green tariff. 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. Edison International Improve energy efﬁciency of existing thermal power plants. Purchase power from renewables (wind, biomass and geothermal). Edison Mission Energy development and operation of environmentally- Develop new renewable capacity through Edison Technology sound power generation technologies Solutions. TEPCO Construct combined cycle power generation facilities. Increase Develop generation mix Promote the use of renewable energy. use of LNG. Energy security enhanced with oil and coal ﬁred based on nuclear power. generation facilities.
APPENDIX C3: E7 Member CO2 Reduction Strategies – End Use, Research and Other Initiatives E7 Member End Use Climate Change Research Other Initiatives * EDF Price set to be consistent with the best use of electricity. Research and Development program 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. ENEL Promote rational use of electricity. Monitoring high-altitude station for GHG Purchase of electrical equipment to lower Promote market for Heat pumps (domestic and services) SF6 emissions 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 Hydro-Québec Pursue research on batteries for electric cars and on engines for hybrid cars. Study GHG emissions from decaying biomass in hydro reservoirs. Kansai 100,000 people’s Eco-family campaign (energy conservation in households.) Participate in international research related Development of ﬂue gas CO2 recovery Promote and disseminate: to sequestration: - technology for large scale technology. - Ice-storage air conditioning systems (Eco-Ice). afforestation on tropical forests – coastal - Electric vehicles ecosystems Ontario Hydro Promote efﬁcient use of energy through various organizations GHG Offset Mechanisms, strive to develop Year 2000 net emission reduction target: 4.6 Mtonne CO2 by 2000, already exceeded. offsets equivalent to 4.8 Mtonnes CO2 by - Low-cost leasing program 2000. Purchase of GHG emission reduction - Funding for feasibility studies and demonstrations credits from SCE. - Water treatment services RWE Promote programs for energy saving measures 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. Edison International 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 TEPCO Support customers’ efforts to conserve energy. Expand use of thermal storage air-conditioning systems *Note: All companies have programs to promote international technology transfer, and reduce transmission and distribution grid losses.