Carbon Markets Update 17.10.2010

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Presentation in the Mekong regional Forum in Lao PDR.

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Carbon Markets Update 17.10.2010

  1. 1. Carbon Markets Market outlook for renewable energy and energy ffi i j tefficiency projects 26th October 2010 Mr Juha RuokonenMr. Juha Ruokonen firstname.lastname@greenstream.net T l 358 40 840 8005Tel. +358 40 840 8005
  2. 2. GreenStream Services Core competence Services offered • Fund management within carbon and renewable energy; current investment vehicles include Asset Management Services energy; current investment vehicles include - Multilateral Carbon Credit Fund (EBRD and EIB) - Fine Carbon Fund - Blåfall - Nordic Carbon Fund - Fine Post-2012 Carbon Fund - Climate Opportunity Fund • Brokerage of carbon credits and green certificates • Portfolio management servicesGreen Certificates, Broker of the Year Intermediary Services 2004, 2005, 2006, 2007, 2008, 2009 • CDM, JI and GIS project cycle management • Investment opportunities and financing solutions for blAd i S i renewable energy • Market analysis, policy design, carbon and renewable energy business strategies Advisory Services 2(c) GreenStream Network Plc26.10.2010 JR
  3. 3. Kyoto Protocol and other trading schemes CANADA • “Turning the Corner" plan • Start after 2010 CHINA MGGRA • 6 States and 1 Province (CAN) • Cap-and-trade • -60-80% in the “long- EU ETS • Cap-and-tradeUSA JAPAN • Semi- voluntary scheme JVETS 2010 • -20% by 2020 (2006) CHINA • Pilot scheme for 8 cities and 5 provinces • Target to reduce greenhouse gas i t it • -60-80% in the long- run” Cap and trade • 2005-> • -21% by the year 2020 RGGI • 10 States • Cap-and-trade scheme proposal in Congress • -17% by 2020 from 2005 level JVETS started 2005 • Climate bill incl. ETS in Parliament in intensity 10 States • Cap-and-trade • -10% of the year 2009 level by the year 2018 2005 level autumn 2010 WCI • 7 States and 4 Canadian provinces • Cap-and-trade TOKYO • Cap-and-trade • Started in 2010 25% f 20002018 CPRS, AUSTRALIA • Cap-and-trade • Proposal rejected CCX • Voluntary system • -4% from the • Cap-and-trade • -15% from 205 level by 2010 • Start in 2012 • -25% from 2000 by 2020 Ratified Signed, not ratified NZ ETS • Cap-and-trade • 2010- (2008) p j by Parliament. New proposal expected. year 1998-2001 level by the year 2010 VOLUNTARY CARBON KYOTO PROTOCOL • Start 2008 • Mandatory for 37 developed countries 26.10.2010 JR 3(c) GreenStream Network Plc No position 2010 (2008)CARBON MARKET • Strong growth Mandatory for 37 developed countries • -5% 2008-2012 • International Emission Trading, CDM/JI
  4. 4. The rise of the global carbon and renewable energy marketsenergy markets Global Carbon Market Value *EUR Billion Global New Investment in Sustainable energy EUR 103 120 140 118 130 122 50 60 120 140 EUR Billion 42 7 86 60 80 100 57 87 98 89 35 54 82 30 40 60 80 100 Govern Third party investments 0.4 8.7 24 42.7 0 20 40 0.4 8.7 25 42.7 33 32 14 31 5735 0 10 20 0 20 40 Govern. R&D, Corporate R&DD, Small di ib d Source: State and Trends of the Carbon Market 2006, 2007 2008 2009 d 2010 Th W ld B k 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 Source: Global Trends in Sustainable Energy Investments 2010 UNEP SEFI distributed capacity 2007, 2008, 2009 and 2010, The World Bank 2010, UNEP SEFI 26.10.2010 JR 4(c) GreenStream Network Plc
  5. 5. Global CDM pipelinep p 2 500 3 000 CO2e) Forestry HFC & N2O reduction 1 000 1 500 2 000 alvolume(MtC Fuel switch Energy efficiency Methane reduction & cement Renewables 0 500 CumulativetotaC Number of CDM projects (Total 5529) (As of Oct 2010) Supply-side EE CER volume by 2012 (Total 2827 MtCO2e) (As of Oct 2010) Methane 19 % Supply-side EE 10 % Fuel switch 2 % Methane 20 % EE 10 % Fuel switch 6 % Demand- side EE 1 % HFCs, PFCs Renewables 61 % Demand- side EE 4 % Forestry 1 % Transport HFCs, PFCs & N2O 26 % Renewables 35 % 1 % Forestry 1 % Transport 0 % Source: CDMpipeline.org 26.10.2010 JR 5(c) GreenStream Network Plc HFCs, PFCs & N2O 2 % p 1 %
  6. 6. Renewables and Energy Efficiency projectsgy y p j EE Energy Efficiency Energy Project types, total 778, (As of Oct 2010) S l Renewable Energy Project types, total 3351, (As of Oct 2010) EE Service 3 % EE Households 8 % Biomass Geothermal 0 % Solar 2 % Tidal 0 % EE own generation 58 % EE Industry 18 % Supply  side Hydro 45 % energy 21 % 58 % EE Supply side 11 % Energy distrib. 2 % Wind 32 % 988 MtCO2 by 2012 322 MtCO2 b 2012 Theoretical CER potential of the current pipeline: Source: CDMpipeline.org 988 MtCO2 by 2012 (35%from the total CDM pipeline) 322 MtCO2 by 2012 (11% from the total CDM pipeline) 26.10.2010 JR 6(c) GreenStream Network Plc p p ) CDM pipeline)
  7. 7. Regionsg 60 12 Cumulative total volume of expected CERs by 2012 by host country Vietnam 3000 12 Cumulative total volume of expected CERs by 2012 by host country China 40 50 dCERsby201 Vietnam Thailand Lao PDR2000 2500 dCERsby201 India Brazil South 10 20 30 onsofexpecte Cambodia 500 1000 1500 onsofexpecte South Korea Mexico Malaysia 0 10 Millio 0 500 Millio Projects in Validation kCERs by 2012 Cambodia 7 1250 Source: CDMpipeline.org Lao PDR 3 651 Thailand 123 26112 Vietnam 127 26892 26.10.2010 JR 7(c) GreenStream Network Plc Vietnam 127 26892
  8. 8. CER price developmentp p 26.10.2010 JR 8(c) GreenStream Network Plc
  9. 9. CDM Challengesg • Development of the CDM projects takes time and resources:resources: • Project lead times are long: it takes at least two years to develop project idea to a registered CDM projectdevelop project idea to a registered CDM project • There is risk that project will not get registered as a CDM projectp j -> Impact of CDM financing to the construction decision is small but there are also exceptions in some project types • In general, there is capital gap in early stage project development and investment financing • Traditional financing is available for advance stage project (c) GreenStream Network Plc26.10.2010 JR 9
  10. 10. Market outlook • Climate policy negotiations continue at international level Demand&Supply of CDM/JI credits Demand Supply • Cancun, Mexico, 2010: No major breakthrough expected • Johannesburg, South Africa, 2011: New Total 1222 Total 1225 EU 890 CDM 1030 Japan 300 JI 195 agreement for 2013- period? • Flexible Mechanisms will be part of the new agreement Japan 300 JI 195 Other 32 Source: States and Trends of the Carbon Market 2010, The World Bank • CDM reform i.e. changes in the rules • New mechanisms: REDD (Forestry), sectoral approach and NAMA creditingcrediting • Carbon market will continue!! • CDM projects eligible in the EU ETS also i 2013 2020in 2013-2020 • New cap-and-trade schemes are likely to include CDM and similar mechanisms 26.10.2010 JR 10(c) GreenStream Network Plc
  11. 11. 26.10.2010 JR 11(c) GreenStream Network Plc
  12. 12. GreenStream in Brief • GreenStream is a leading Northern European company focusing on: • Asset Management and investments in carbon and bl k trenewable energy markets • Climate Services covering tailored advisory and intermediary services • GreenStream is licensed by the Finnish FSA• GreenStream is licensed by the Finnish FSA • GreenStream's clients are energy and industrial companies, financial institutions and governments • Some 40 professionals working in Helsinki, Oslo, Berlin, Stockholm, Vilnius, Kiev, Moscow, Beijing • China is a key market in which GreenStream is engaged in a considerable number ofy g g projects, JV established with Juno Capital for cooperation on CDM projects and climate investments in China • CarbonStream Africa – JV with CEF to develop CDM projects in Southern Africap p j • Chosen as the Best Broker in green certificate markets in EU (excl. UK) six years in a row by the readers of Environmental Finance as well as runner-up in the category EU Emissions Trading Scheme – Best Advisory in 2006g y 26.10.2010 JR 12(c) GreenStream Network Plc

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