Small Scale Bundling & Programmatic CDM

Kuala Lumpur, 24th June 2009

EVI - Profile
Among the largest Climate Change Mitigation advisory firms in India & PAN Asia, working across all CDM sectors such as renewable energy, energy efficiency, waste management, etc More than 135 CDM projects under way across a breadth of industry and project types, with over 27 registered. Managing a portfolio of 90+ million CERs and 50+ million VERs

One of the first Indian firms to offer services of Carbon Footprinting and Carbon Neutrality. Various projects completed on the same.
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Bring together an innovative combination of technology, financing and supplier network. Extensive expertise in the Climate Change Mitigation sector

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EVI - Credentials

First Climate Change Mitigation firm to offer Carbon Neutrality services in India to organizations and events. Various Projects completed for Pharma, IT, Steel etc. Facilitated most of the carbon neutral events organized by Indian organizations till date Facilitated the first Municipal Solid Waste (MSW-RDF) project CDM registration in India Facilitated the first Wind & Largest Hydro project CDM registration in India

We are currently working on a few of the most complex areas such as Bus Rapid Transportation System, Reforestation, Programmatic CDM, Carbon Disclosure Project (CDP) etc
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Contents

Defining Small Scale Projects Bundling of small scale activities De-bundling issues Programmatic CDM Concept

Highlights What if Fee implications

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Defining Small Scale Projects

Three benchmarks

Type I (Renewable Energy)

Power Generation Capacity up to 15 MW Thermal Energy Generation up to 45 MWh thermal

Type II (Energy Efficiency)

Energy Efficiency - 60 MW e or 180 MW thermal saving

Type III (Others)

Other projects with emission reductions up to 60 kt CO2e

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Bundling

Many small scale activities can be bundled within a single project within the limit of small scale as defined for the three categories Benefits

Easy CER selling and better prices Reduced the transaction cost of CDM cycle (advisory, validation, verification)

Points to consider

Coordination is difficult among the Project Participants Issues of delayed execution Invoicing/ payments difficulties Different timelines of activities
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De-bundling

De-bundling is defined as the fragmentation of a large-scale project activity into smaller parts.

Need to check

A proposed small-scale project activity shall be deemed to be a de-bundled component of a large-scale project activity if there is a registered small-scale CDM project activity or a request for registration by another small-scale project activity:

By the same project participants;

In the same project category and technology/measure; and

Registered within the previous 2 years; and Whose project boundary is within 1 km of the project boundary of the proposed small-scale activity at the closest point.

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Programmatic CDM (pCDM)

Local/regional/national policy or standard cannot be considered as a clean development mechanism project activity, but that project activities under a programe of activities can be registered as a single clean development mechanism project activity Key terms PoA Programme of Activities CPA CDM Programme Activity

PoA
CPA

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Programmatic CDM (pCDM)

Highlights

Program life for 28 years (60 years for Aforestation program) Each CPA crediting period either 10 or 21 years but limited to remaining life of PoA CPA is not part of any other applied/ approved CDM/ VER project CER registered/ issued in the name of managing entity and distributed among the participants according to contract Is not necessarily limited to a single country, can be transboundary in nature among non-annex 1 countries Methodology/ technology measure type used is same for all CPAs
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Programmatic CDM (pCDM)

Highlights

Change in methodology applies to new CPAs only

Key Steps in doing a PoA

Identify managing entity Define boundary Describe program of activities Define eligibility criteria Define additionality criteria Monitoring By sampling or accessing data of each CPA EIA PoA /CPA level

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Programmatic CDM (pCDM)

Highlights

Key Documents

CDM-PoA DD (Design Document) CDM-CPA-DD (generic) CDM-CPA-DD (specific)

Inclusion of new CPA

CPA submitted to DOE Validated by DOE and uploaded every month Uploaded CPA is part of PoA now Informed to DOE, DNA and managing entity
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Programmatic CDM (pCDM)

What if

CPA is rejected by EB

CPA can not be part of any CDM project in any form DOE shall deposit a CER amount with EB equivalent to issued CERs in the name of PoA associated with rejected CPA within 30 days Review by another DOE in case of CPA rejection

Methodology is under revision/ withdrawn

No CPA shall be included

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Programmatic CDM (pCDM)

FEE implications

Registration fee

Based on expected annual CERs at the time of PoA registration Paid by Managing entity New CPA inclusions dont attract registration fee

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Issues

When can EB reject a CPA? No clear definition of stage EB can reject at Verification, or any time after CPA is included What would be the effect on the entire cycle?

DOE Buyer Managing Entity

Monitoring How to ensure accuracy and sanctity of Sample vis--vis entire participant base? DOEs would be hesitant to take up PoAs High liabilities, no crosscheck mechanism with EB for any CPA Being extra cautious, time taken and cost for each CPA would increase Entire purpose of PoA would be defeated

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Opportunities

Programmatic CDM is ideal for distributed activities

Solar lanterns Small MSW projects Compact Fluorescent Lamp Biogas projects (community based)

These projects are usually bypassed for CDM due to high relative cost/benefit These can be implemented via PoAs and CDM benefits can be obtained for much more remote sections of society

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For more details, contact: Ethaya Rajan Mokanatas Principal Consultant - CFTS
+6012 204 2355