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Day 2 PoA to Enhance EE in MENA Region


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Regional Workshop: National Energy Efficiency Action Plans Kempinski Hotel, Amman, Jordan 5 - 6 December, 2010

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Day 2 PoA to Enhance EE in MENA Region

  1. 1. Regional Workshop:National Energy Efficiency Action Plans Amman, 5-6 December, 2010 PoA to enhance EE in MENA region Amel BIDA RCREEE
  2. 2. ContentProtocol of KyotoPrinciples of CDMStatus of CDM projectsPoA approach - coordinating entities - Crediting period - flexibility of rulesPoA and EEPoA and international financingConclusion
  3. 3. Kyoto Protocol- adopted at the 3rd session of the (COP3) to the UNFCCC heldin Kyoto, Japan, in December 1997.- entered into force in February 2005The Protocol defines quantified greenhouse gas (GHG) emissionsreduction targets for Annex I Parties. [KP Art.3 para1] Annex I :Developed countries having different GHG emission ceilings “assigned amounts”for the 5-years period of 2008-2012 (1st commitment period).
  4. 4. The Kyoto Protocol introduces 3 marketmechanisms, namely the Kyoto Mechanisms.International Emissions Trading <Article 17 of the Protocol>Joint Implementation (JI) <Article 6 of the Protocol>Clean Development Mechanism (CDM) <Article 12 of the Protocol> The purpose of the CDM shall be to : - assist non-Annex I Parties in achieving sustainable development and in contributing to the ultimate objective of the Convention, and - assist Annex I Parties in achieving compliance with their commitments. [KP Art.12 para2]
  5. 5. The Clean Development Mechanism (CDM) Annex I Parties which have ceiling for GHG emissions - assist non-Annex I Parties which don’t have commitment, to implement project activities to reduce GHG emissions and - credits will be issued based on emission reductions achieved by the project activities =(CER) Annex I Parties can use CERs to contribute to compliance of their quantified GHG emissions reduction targets of the Kyoto Protocol. [KP Art.12 para3(b)]Source: IGES 2010
  6. 6. Additionality of CDM projectsAdditionality: A CDM project activity is additional if GHG emissions arereduced below those that would have occurred in the absence of theregistered CDM project activity; [CMP/2005/8/Ad1, p16 para43] The DOE shall review the PDD (Determining a baseline and monitoring methodology) to confirm that the project activity is expected to result in a reduction in GHG emissions that are additional Source: IGESBaseline methodologies present a description of all reasonable baseline scenariosin accordance with approved methodologies (AMs) or new methodologies (NMs)
  7. 7. Crediting periodCERs shall only be issued for a crediting period starting after thedate of registration of a CDM project activity. [CP/2001/13/Ad2, p23 para12 • A maximum of 10 years with no option of renewal • A maximum of 7 years which may be renewed at most 2 times.
  8. 8. CDM project cycle(1) Planning a CDM project activity PO (2) Making the (PDD) PO Cost (3) Getting approval Host country DNA (4) Validation DOE Cost (5) Registration CDM /EB Cost (6) Monitoring PO (7) Verification and certification DOE Cost (8) Issuance of CERs CDM /EB
  9. 9. CDM worldwide status 23 projects in Arab States - Egypt : 6 - Morocco : 5 436 - UAE : 4 - Jordan : 248 - Syria : 2 86 - Tunisia : 2 124 1038 - Qatar : 1 179 - Mauritania : 1 5% of others 561 1% of total
  10. 10. Source: UNFCCC
  11. 11. Options of CDM projectsSingle Project CDM Programme Bundle of ProjectsLarge-Scale (LSC) of activities (PoA)Small-Scale (SSC) -A number of activities - A number of activities submitted- 1 project only submitted as 1 project over the duration of a program- Single location - Many locations- Single project owner - Many project owners - Many locations across countries- Single crediting -Single crediting period - Many project owners Period for all activities - Each project has own crediting- Project owner is -All project owners are period known known - At least one project owner is known • 15 MWe for renewable energya small-scale (SSC) projects • 60 GWh/a for energy-efficiency improvement • 60 ktCO2e/a for other activities
  12. 12. PoA is a policy instrumentA CDM Programme of Activities (PoA) is a voluntary coordinated action; by a privateor public entity which coordinates and implements any policy/measure or statedgoal (i.e incentives schemes and voluntary programs), which leads to GHG emissionreductions or increases net GHG removals by sinks that are additional to any thatwould occur in the absence of the PoA; via an unlimited number of CDM programactivities (CPAs) Annex 38, EB32 PoA CPA CPA CPA CPA CPA CPA CPA No limit on the aggregated capacity of PoA
  13. 13. CDM PoA set up PoA DDGeneric CPA CPA1 (1) Planning a CDMPoA idea (objectives/ potential) Coordinating Entity (2) Business model Coordinating Entity Cost (3) Making the (PoA-DD/ CPA-DD) Coordinating Entity (4) Getting approval Host country DNA (5) Validation DOE Cost (6) Registration CDM /EB Cost
  14. 14. To include CPA under PoA -Methodology -Technology In accordance with - Eligibility criteria The PoA Design - Baseline - Additionality - Monitoring Plan Letter of Approval CDM Validation CDM registration PoA CPA2 CPA3 CPA4 CPA5 CPA6 The emission reductions are attained at the level of the CPAs Program
  15. 15. CPAn implementation (1) Eligibility Verification DOE Cost (2) CPA inclusion CDM /EB (3) Implementing CPA (4) Monitoring of CPA Coordinating Entity (5) Verification of emission reduction DOE Cost (6) Issuance of CERs CDM /EB (7) Distribution of CERs Coordinating Entity
  16. 16. The coordinating entity Authorized by all participating - define the program concept, with has to be (including DNA) clear on : • the Target group(s), CPA developpers • the service or activity to implement Private • the organizational issues Key role • the idea on how to organize the monitoring Public - submit the PoA to the EB - communicates with the EB on all matters,The CE has the responsibility to make the PoA a success - Attract project developers - Provide training - Manage financial mechanism - Cooperate with financial institutions - Trading CERs - Signing ERPA - Allocate revenues
  17. 17. The coordinating Entity can be :- Bank : designing attractive financial products with using the revenues to subsidize the interest rates shorten the loan repayment period- Public Agency will benefit from  introducing the PoA process  promoting policy implementation and generating revenues to pay the operating costs- Energy Supply company : who are often main driver of demand-side EE measures  reduce peaks in energy demand  Contribute to optimizing the power generation over time PoA can support utilities in achieving energy savings PoA could be considered as interesting instrument
  18. 18. Crediting Period - Duration of the PoA, is defined at the time of request for registration by the entity, but can not exceed 28 years - At any time during the duration of the PoA , the coordinating entity can add any CPA with informing the EB trough the DOE CPA 2 10 years CPA 5 CPA 7 7 years 7 years CPA 3 7 years CPA 6 CPA 4 10 years CPA 1 7 years PoA 7 years 28 years - Exact number and time of CPAs implementation not known at time of submission ( neither overall emission reductions of PoA not estimate )
  19. 19. Other advantages • Fees registration - For each CPA included in the program, no fees is to be paid - Only the registration fees for a PoA is paid. It’s based on the total expected annual emission reductions of the CPA(s) that will be submitted together with the request for registration of the PoA. The concept of PoA to aggregating small and dispersed projects activities subtends the idea to bear the high transaction costs related with the CDM • Additionality and baseline methodology - Additionality of each CPA has to be demonstrated through the eligibility criteria for inclusion of CPAs and not on the CPA level itself - Baseline for the whole program is determined at the beginning in the PoA design document (PoA-DD) for the Program of Activities. - PoA may apply a combination of baseline and monitoring methodologies which must be applied to all CPAs, in a consistent manner - PoA can apply a small-scale (SSC) methodology without any limit on the overall size of the PoA
  20. 20. • Boundary project • Single measure, single location  Thermal insulation in building • Several measures, single location  EE in industries • Single measure, many locations  SWH, CFL, labeling • Several measures, many locations  combination of RE technologies PoA boundary may extend beyond a single host country the project can be local, national or regional including various countries- The PoA is an option to reach wider groups of stakeholders and types ofactivities that are too small to be developped at stand –alone CDM project- The PoA opens up opportunities for the implementation of small scale ERActivities in household and in area where the traditional CDM didn’t gain ground- PoA is suitable for the field of small to medium sized projects which aregeographically and temporarly dispersed and have large number of project owners- PoA ensure certainty regarding conditions and procedures and flexible to anyPP to join a PoA at any time
  21. 21. PoA and Energy Efficiencythe PoA is introduced as a variation of CDM to giving primarily small scale emissionreduction projects the possibility to become aggregated under clear frame work Categories of projects to apply PoA• Energy efficiency improvement (EE appliances, EE building, EE in industries…)• Fuel Switching• Fugitive emission• Industrial processes• Renewable• Waste• others Source: Pointcarbon database/ perspectives CC
  22. 22. PoA and international assistance and financingThe PoA approach considered as an option to achieve economies of scaleis attractive for some international funds :Carbon Partnership Facility : who targets the carbon market of post 2012 which focus on the PoA in Urban cities including the EE in the transport and in the waste sectorKFW centre created in October 2008 aiming to support the Public and private entities in developing countries to identify the PoA potential and implement low carbon projectsUNEP Initiative to strengthen the technical assistance to the DNA and Coordinating Entities to develop the SSC projects with PoA approach.CDM-JI Initiative launched by the BMU (German Ministry of Evironment to enhance the regional cooperation in MENA region in the CDM field, particularly the PoA approachCTF (World bank &ADB and other Banks) accords concessional loans (duration 40-years including10 years grace) for the low carbon projects Copenhagen accord : the commitment of industrialized countries to allow 30 US$ billion per year to finance mitigation and adaptation projects in developing countries (these funds will be raised to 100 US$ billions by 2020)
  23. 23. Conclusion As the PoA apporach  introduces the new concept of Coordinating Entity to manage the program  provides organizational, financial, and methodological framework  reduces the transaction costs (verification made for a sample of activities) As the International institutions  support through technical assistance to develop the PoA approach,  offer opportunities to finance low carbon projects  accord concessional loans (duration 40-years including10 years grace)As the NEEAPS will cover an important number of dispersed projects in EE in the building, EE for the appliances, in the manufactories, in the utilities to reduce losses, in the REtechnologies (SWH, PV) … The potential of PoA could be very important in the Arab States And RCREEE is there to - assist all Arab countries to implement their NEEAPs - help them to benefit from the international financing
  24. 24. Thank you for your attentionRegional Centre for Renewable Energy and Energy EfficiencyHydro Power Plants Execution Authority Ministry of Electricity and Energy (7th floor)Block 11 - Piece 15, Melsa District - Ardh El Golf Nasr City - Cairo, EgyptT +2-02-24154691F +2-02-24154661Email : amel.bida@rcreee.orgwebsite :