Dicky presentation for ebtke econex


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Dicky presentation for ebtke econex

  1. 1. Carbon Market Role in Indonesia Renewable Energy Development: Geothermal Case Study Dicky Edwin Hindarto Coordinator of Carbon Trade Mechanism Division National Council on Climate Change of IndonesiaNational Council on Climate Change of Indonesia
  2. 2. Presentation Structure 1. Why do we choose carbon market? 2. How is the current condition of Indonesia geothermal projects in carbon market? 3. Is the market only CDM? 4. What are Indonesia strategies on the next carbon markets? 2 National Council on Climate Change of Indonesia
  3. 3. How to finance green development in Indonesia?Renewable Energy is a part of our green development plan in IndonesiaThe financing needs are huge and in great variety; consequently requirea mix of market and non-market approaches Market Non-market Compliance market National budget (CDM) Private investment Voluntary market (VCM) Foreign public funding Policies (e.g fiscal, banking incentives and disincentives) Future carbon markets Philanthropic contribution (companies, NGOs) 3 National Council on Climate Change of Indonesia
  4. 4. Indonesia carbon market status Solar, 1 Afforestation, 1 181 CDM projects received DNA Agriculture, 1 Cement, 1 approval (as of May 31st, 2012) , PFCs and SF6, 3 Reforestation, 1 EE households, N2O, 3 including 5 PoAs. 76 of CDM 1 Biomass EE Industry, 7 projects are registered and 19 energy, 35 EE supply side, 7 projects have issued their CERs. 24 of voluntary carbon market Methane avoidance, 98 EE own generation, 7 projects had been developed. Fossil fuel switch, 10 Fugitive, 5PFCs and SF6, 1 Solar, 1 Geothermal, 15 Coal bed/mineN2O, 1 Cement, 1 methane, 2 Hydro, 27 Landfill gas, 12 EE Industry, 2 CDM projects in Indonesia Biomass energy, 12 EE supply side, 2  New carbon market projects are being Methane Fossil fuel developed avoidance, 35 switch, 3  77 of REDD+ demonstration activities have Fugitive, 1 developed. Geothermal, 4  Japan government have done 32 FS under the Hydro, 6 Landfill gas, 7 Bilateral Offset Mechanism Proposal (3 CDM registered projects projects are geothermal) 4 National Council on Climate Change of Indonesia
  5. 5. Geothermal projects in Indonesia carbon market (> 1500 MW) Solar Biomass 0% 15 geothermal projects are in our energy EE supply Cement 2% side 0% 3% Methane CDM pipeline. Fugitive avoidance 7% 29% 1 project is developed under voluntary carbon market scheme. Geothermal 4 projects have already produced 59% CERs and VERs. Indonesia issued CER Gunung Salak ‘94 Wayang Windu ‘99 Darajat ‘94 Kamojang ‘83 Reserve: 600 MW Reserve: 385 MW Reserve: 432 MW Reserve: 333 MW Production: 375 MW Production: 227 MW Production: 255 MW Production: 200 MW VER: 130.500 tCO2 CER: 709.535 tCO2 CER: 2.219.297 tCO2 CER: 92.691 tCO2 5 National Council on Climate Change of Indonesia
  6. 6. Our experiences in geothermal development on carbon market  The geothermals are green and clean projects.  Most of the additionality criterias are fit to the geothermal projects, but new geothermal electricity ceiling price could affected some difficulties on additionality test if it is developed under CDM.  The emission reductions are relatively huge.  Some of the new markets mechanisms initiatives that currently still being developed are targeted to the renewable energy development, including geothermal. Geothermal development under new market mechanism 6 National Council on Climate Change of Indonesia
  7. 7. Geothermal development impacts on emission reduction Java-Madura-Bali electricity grid emission factors Emission factor (ton CO2eq. / MWh) Year Ex-post Ex-ante 2007 0,851 - 2008 0,804 - Kalimantan and Sulawesi electricity 2009 0,713 0,725 grid emission factor 2010 Emission factor (ton CO2eq. / Electricity grid MWh) Ex-post Ex-ante East Kalimantan 0.715 0.742 West Kalimantan 0.786 0.775 Central and South Kalimantan 1.280 1.273Geothermal North and Central Sulawesi and Gorontalo 0.121 0.161impacts South, South East, and West Sulawesi 0.267 0.269 7 National Council on Climate Change of Indonesia
  8. 8. Future carbon market roles on RE projects  Other revenue flow from carbon market for operational and maintenance  Reduce financial and technical risks  To attract “green investment” +  To be used for banking and financial institution purposes 8 National Council on Climate Change of Indonesia
  9. 9. Indonesia new carbon markets development strategy • Currently still being negotiated • Robust, and maybe still Multilateral complicated carbon market • Environmantal integrity and sustainable development criteria issues • Directly between Indonesia and Bilateral and some developed countries • International carbon offset regional carbon • Japan and Australia have market already expressed their interestsRenewable • Could be mandatory or Energy voluntary based Domestic carbon • National boundary market • Simple and robust • Could be used for NAMAs 9 National Council on Climate Change of Indonesia
  10. 10. Indonesia future carbon market frame work International Carbon Markets Direct link with other International Linking via offset domestic market Crediting mechanism mechanism Mechanism DOMESTIC MARKET MECHANISMS that based on voluntary market system REGIONAL AND (e.g. Emissions trading scheme or sectoral trading) BILATERAL MARKET Indonesia will prepare standard, policies, and that based on regional and market instrument. bilateral agreement and domestic CARBON CREDIT SUPPLIER emission reduction policies Indonesia will produce carbon credit for (e.g. NAMA or sectoral crediting) mandatory and voluntary based market system for international market. 10 National Council on Climate Change of Indonesia
  11. 11. Where do we put RE and geothermal in future carbon markets? New CDM Other Creditable New NAMAs Markets Renewable Energy BOCM VCM  Traditionally, RE, particularly geothermal, still can be developed under CDM. There are some countries that still want to continue CDM post 2012.  Renewable Energy could be one of the main target in Creditable NAMAs.  VCM can be used for “non additionality” RE projects, particularly geothermal.  Some countries are eager to invest the RE projects using BOCM scenario (3 geothermal FS have been done).  One or two other new markets mechanism still being developed and, geothermal is one of the main target. 11 National Council on Climate Change of Indonesia
  12. 12. Terima kasihThank you National Council on Climate Change of Indonesia