Case Study: Jepirachi Wind Power ProjectNortheastern Atlantic Coast
Colombia
Charles Cormier , PCF Team
Tel: +1.202.473.5423
Project Characteristics
• Description: Aeolic facility owned and operated by Empresas Publicas de Medellin (EPM), with 19.5 MW, supplied by a total of 15 generators (capacity of 1.3 MW each)
• Location: Wayuu Indian Territory in the Northeastern region of the Atlantic Coast of Colombia
• Financing: EPM’s balance sheet; USD $21 million
Benefits for Project Sponsor
• Carbon finance provides an additional source of revenue– Revenues from sales of electricity: 90%– Revenues from carbon emission credits: 10%
• With carbon finance, IRR increases by +1.0• Plant will be first in country (renewable, new technology)• Wind potential in area is significant (5 GW/y ) and could
represent important contribution to power system for the country (contrary trend to period of rains)
• Linked to social development program
Sources of Energy in the Colombian Grid 1990-2010
0
10
20
30
40
50
60
70
80
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
% C
om
posi
tion
Inst
all
ed C
apaci
ty
Range Hydro 2010: 61-63%
Range Thermal 2010: 37-39%
Wind, Solar, Biomass: 0%
The project is additional ...
Demand is expected to increase between 3.7 to 5.8% in the next five years.Due to economic situation: • Withdrawal of public sector investors • Reluctance of private sector to invest in hydroelectric power
Most likely course of action without CDM as determined through least cost analysis:
The most probable expansion plan consists of future investments in thermal energy
This is confirmed by comparing generation costs of Jepirachi wind power project (USD 38.35 / MWh) with other alternatives in the baseline study • Coal USD /MWh 35.30 • CCGT USD/ MWh 31.50 – 32.82 • OCGT USD/ MWh 36.50
What type of energy will be displaced ?
•Will displace the most expensive energy that is dispatched at the margin
•From 2003 to 2009 will displace a mixture of gas and coal
•From 2010 to 2024 will displace energy from gas
•The Monitoring Plan will confirm these assumptions and measure actual emission reductions
Issues during Validation
• Whether local indigenous community were supportive of project
• Extent of public consultation
• Environmental Impact Assessment (migratory birds, etc.)
• Sustainable development indicators/ economic development indicators
Characteristics of the Wayuu Nation
• Semi-nomadic people; territory spans Northern east corner of Colombia and adjacent Venezuela
• Matriarchal society without centralized structure
• 30,000 individuals, 300 in the project area.
A formal agreement between the Project Sponsor and the Wayuu Community was signed following extensive negotiations, to outline a community driven compensation and development plan
Social Development
Education:
• Provision of school facilities and teachers
Health
• Strengthening of health center (electricity, instruments, medical personnel)
Water Supply:
• Provision of water desalinization plant
Conclusions
• PIN submitted in march 2001 • Initial validation opinion (favorable) was issued in June 2002 • Agreement reached on terms of emission reduction purchase
agreement in June 2002 • Project will generate: 1.168 mtCO2 over 21
years• PCF will buy first 800,000 tons at $3.5/tCO2e,
with additional premium of $0.50 t/CO2e for social benefits
• Finalisation of Emission Reduction Purchase Agreement expected in December 2002
• Completion of construction expected in October 2003
Top Related