CDM Criteria & Roadmap for CDM Project Development
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Transcript of CDM Criteria & Roadmap for CDM Project Development
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CDM Criteria & Roadmap for CDM Project Development
For Workshop
on
January 28th – 29th, 2005
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MITIGATION OPTIONS IN THE ENERGY SECTOR IDENTIFIED ARE :
Improvements in energy efficiency through upgrading currently employed technologies
Introduction of advanced technologies that are more efficient
Use of renewable energy sources wherever feasible to bring down the carbon content of the grid, to provide sustainable energy, and as a decentralised energy source at remote areas
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MITIGATION POTENTIAL
Greenhouse Gas
Mitigation Options MitigationPotential 2002-2012 (million
tons)
Long-term Marginal Cost ($/ton of carbon
equivalent)
Carbon Demand-side energy efficiency 45 0-15
Supply-side energy efficiency 32 0-12
Electricity transmission and distribution
12 5-30
Renewable electricity technologies
23 3-15
Fuel switching (gas for coal) 8 5-20
Forestry 18 5-10
Methane Enhanced cattle feed 0.66 5-30
Anaerobic manure digesters 0.38 3-10
Low methane rice varieties marginal 5-20
Cultivation practices marginal 0-20
Nitrous Oxide Improved fertilizer application marginal 0-20
Nitrification inhibitors marginal 20-40
Source: Based on modeling exercises reported in Rana, A. and Shukla, P.R. (2001), Ghosh et al.
(2001); Garg A. Shukla, P.R. (2002), and ALGAS (1998)
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What is CDM
Developed CountryT
otal
GH
G E
mis
sion
s } Emissions to be reduced
Developing Country
Tot
al G
HG
Em
issi
ons
No emission reduction
commitments
Investments
Carbon Credits
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CDM PROJECT ELIGIBILITY
Such activities should be Approved by the Govts. of the participating Parties be host country driven May involve private / or public entity Environmental integrity is a must Economic efficiency for cost effectiveness Equity
Implementation of such projects should result in social, environmental, economic and technological well-being - the four pillars
of sustainable development
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Types of CDM Projects
Energy
Renewables: Wind, solar, hydro, biomass, geothermal
Power Generation: Combined Cycle turbines, clean coal technology
Fuel Switching: Natural Gas, methane, biomass & biogas
Co-generation: Sugarcane, chemical processes
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Types of CDM Projects
Industry
Efficiency: Boilers. Motors, lighting
Cogeneration-chemical, metellurgy, paper
Retrofits
Production Process
Waste Fuel Recovery – including landfills
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PROJECT CONCEPTUALIZATION
IDENTIFICATION AND ORGANIZATIONTARGET BENEFICIARIES AND NETWORKING
PARTICIPATORY PROJECT DEVELOPMENT-identify stakeholder, position, interest
expected argument-choose appropriate technologies
PROJECT FUND SOURCING / FINANCING
PROJECT PLANNING-integrating sustainable development goals
of the region / site specific
PROJECT IMPLEMENTATION -an agreed time frame
-an agreed monitoring and verification arrangement;
the organization to monitor-establish emission baseline
PERIODIC MONITORING AND
EVALUATION-emission reduction
PR
OJE
CT
CY
CL
E
CDM PROJECT CYCLE
Project Idea Note (PIN) / Project Concept Note (PCN)
Host / Investor approval
PDD
Validation
Registration
Monitoring
Financing & Implementation
Verification Certification
DNA; Investor
PD/CCC
OE
EB
PD
PD
OE EB
Participation EIA
Baseline & ERM&V Plan
On-site Inspection Review MonitoringGHG Reductions Verification Report
PD/CCC
Implementing Agencies
Baseline & Additionality M&V Plan
EIA St. Consul Contracts
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CDM PROJECTSSome Important Aspects
Participation is voluntary, approved by each party involved
Additional to any that would occur in the absence of certified project activity
Project fulfills the criteria of financial additionality
Reduction of emissions should be real, measurable and should have long time benefits
Project should contribute to the sustainable development of the host country
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CDM PROJECT CYCLE
Project Idea Note (PIN) / Project Concept Note (PCN)
Host / Investor approvalDNA;
Investor
PD/CCC
Implementing Agencies
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PIN/PCN
Name of the project
Ownership details of project sponsors
Project Description
Status of Project Clearances
Financing details of the projects
Total CDM contribution sought
IRR and DSCR with & without CDM revenue
Estimate of GHG abetment
Sustainable development criteria
Project Risks
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CDM PROJECT CYCLE
Project Idea Note (PIN) / Project Concept Note (PCN)
Host / Investor approval
PDD
DNA; Investor
PD/CCC
PD/CCC
Implementing Agencies
Baseline & Additionality M&V Plan
EIA St. Consul Contracts
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PROJECT DESIGN DOCUMENT
Project Description
Promoter Details
Baseline
Additionality
Sustainable Development Criteria
Monitoring Plan
Financial Status
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CDM PROJECT CYCLE
Project Idea Note (PIN) / Project Concept Note (PCN)
Host / Investor approval
PDD
Validation
Registration
DNA; Investor
PD/CCC
OE
EB
Participation EIA
Baseline & ERM&V Plan
PD/CCC
Implementing Agencies
Baseline & Additionality M&V Plan
EIA St. Consul Contracts
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Validation of CDM Projects Validation is a process of independent evaluation
of a project activity by a designated Operational Entity (OE) against the requirements of the CDM on the basis of the PDD.
Registration Registration is the formal acceptance of a
validated project as a CDM project by the Executive Board. Registration is the prerequisite for verification,
certification and issuance of the CERs
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CDM PROJECT CYCLE
Project Idea Note (PIN) / Project Concept Note (PCN)
Host / Investor approval
PDD
Validation
Registration
Monitoring
Financing & Implementation
DNA; Investor
PD/CCC
OE
EB
PD
PD
Participation EIA
Baseline & ERM&V Plan
PD/CCC
Implementing Agencies
Baseline & Additionality M&V Plan
EIA St. Consul Contracts
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MONITORING
Project Participants, as part of the PDD provide a monitoring plan:
Based on previously approved methodology/new methodology
Determined by DoE as appropriate to circumstances of the project activity
Reflects good monitoring practice
A monitoring report in accordance with monitoring plan is to be submitted to the DoE for verification
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CDM PROJECT CYCLE
Project Idea Note (PIN) / Project Concept Note (PCN)
Host / Investor approval
PDD
Validation
Registration
Monitoring
Financing & Implementation
Verification Certification
DNA; Investor
PD/CCC
OE
EB
PD
PD
OE EB
Participation EIA
Baseline & ERM&V Plan
On-site Inspection Review MonitoringGHG Reductions Verification Report
PD/CCC
Implementing Agencies
Baseline & Additionality M&V Plan
EIA St. Consul Contracts
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Verification Verification is the periodic independent review
and determination by DoE of the monitored reductions by sources of greenhouse gases that have occurred as a result of the CDM project activity
Certification Certification is the written assurance by the DoE
that the project activity achieved the reductions in anthropogenic emissions by sources of GHGs as verified
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ISSUANCE OF CERTIFIED EMISSION REDUCTIONS
Certification Report constitutes request to EB for issuance of CERs equal to verified amount of reductions of GHGs
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MINIMUM TRANSACTION COST ASSOCIATED WITH CDM PROJECT CYCLE
CDM project cycle stages where costs are incurred
Cost Estimates (Rupees)
Pre-operational phase design
PIN/PDD Preparation 6 lakhs
Validation (to be paid to DOE) 4-10 lakhs*
Registration (to be paid to CDM EB)
2.25 – 7.5 lakhs*
Operational phase Monitoring & Verification (to be paid to DOE)
10 lakhs *
Certification (to be paid to CDM EB)
2% of the CER value
Risk mitigation 1% - 3% of CER value
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Bundling
Effective way to reduce transaction costs
Several projects bundled together to share transaction costs and CER benefits
Projects should have:
Similar technology
Be in the same geographical area
Preferably have the same project owner, but not necessary
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