Barriers to Energy Efficiency under CDM, 22 November 2007, Vienna, Binu K Parthan and Udo Bachhiesl, REEEP and IEE, TU Graz

1. Barriers to Energy Efficiency under CDM
22 November 2007, Vienna
Binu K Parthan and Udo Bachhiesl
REEEP and IEE, TU Graz
GFSE 2007, 22.11.2007, Vienna

2. REEEP
• Multi-stakeholder
partnership launched at
WSSD by UK;
• 245 partners with
38+24 governments;
• 84 projects covering 50
countries with € 6.3 mio
with over € 23 million
leverage;
• In Vienna with eight
regional secretariats
GFSE 2007, 22.11.2007, Vienna

3. IEE, TU Graz
• Institute for Electricity
Economics and Energy
Innovation, Established in
2000, Faculty of Electrical
Engineering and Information
Technology, TU Graz;
• Prof. Stigler, dean and head;
• numerous academic activities
and research projects in RE,
EE, energy innovation and
economics
GFSE 2007, 22.11.2007, Vienna

4. Climate Change and Energy
Efficiency
• IPCC Fourth
Assessment Report –
“warming of climate
system is unequivocal”
• McKinsey –
Environmental issues
including climate
change – #1 issue;
• IPCC – Role of Energy
Efficiency – supply,
buildings, agriculture,
transport.
GFSE 2007, 22.11.2007, Vienna

5. CDM Projects
• 844 projects registered Energy
over 91 mio CERs Fuel
Efficiency
Switch
8%
issued – over 1 billion 1%
CERs expected; Renewables
15%
• Only 97 energy Methane
and
efficiency projects Cement
6%
registered – 5% CERs Industrial
Gas
till 2012. 70%
(Source: UNFCCC, UNEP)
GFSE 2007, 22.11.2007, Vienna

6. CDM Market
• 2006 market volume - Other &
LAC Unspecifie
$5.25 billion; 10% d
7%
• 2007 October CER
prices: Africa
3%
– Registered projects 13-15
€/tCO2e
– Unregistered projects 8-
Asia
11.5€/tCO2e 80%
– Secondary 17€/tCO2e
• Post 2012 credits – 2$ (Source: World Bank)
to 7$;
GFSE 2007, 22.11.2007, Vienna

7. Methodologies
• 115 methodologies
AR
approved by EB – 12% RE
Several withdrawn/ 16%
Fuel
consolidated; Switch
7%
• 21 Energy Efficiency Ind gas
EE
12%
Methodologies 24%
available;
CH4+Cem
• 11 methodologies never 29%
used!
(Source: UNFCCC, UNEP)
GFSE 2007, 22.11.2007, Vienna

8. Barriers to Energy Efficiency
• Households and
Buildings – Behavioral
issues, information and
regulation;
• Industry and Agriculture
– information,
management priority,
competition;
GFSE 2007, 22.11.2007, Vienna

9. Barriers to EE under CDM
• Demonstration of
additionality –Investment
Barrier (86%) – payback-
period and classical
investment analysis –
Constraints energy
efficiency;
• CDM M&P –single site, large
scale and co-terminus
emission reductions – Energy
Efficiency (other than
Industry) Smaller scale,
dispersed and
longer/different time periods
GFSE 2007, 22.11.2007, Vienna

10. Barriers
• Methodological issues
– 10% of methodologies
useful for EE
– 30% success rate for EE
methodologies compared to
50% average;
– Monitoring methodologies
for EE;
– Equipment lifetime issues
for retrofit or replacement;
– Consideration of upstream
emissions.
• Need for methodological
framework vs project specific
methodologies
GFSE 2007, 22.11.2007, Vienna

11. Barrier Removal Initiatives
• CDM Executive Board
– Measures to improve the share
of EE in CDM;
– PoA which will allow EE CPAs;
• Expert Group on EE and Carbon
Finance – WB, IEA, GEF, UN –
methodologies, technical
guidance and capacity building;
• EEC – policy makers, industry
and development agencies –
advocacy, global assessments
and best practice – Global
Status Report on EE.
GFSE 2007, 22.11.2007, Vienna

12. Barrier Removal Initiatives
• CDM Gold Standard,
sponsored by REEEP – 5-
25% premium prices-
Financial attractiveness of
EE;
• LOGOC – Beijing London
Olympic Games CDM Project;
• Econoler International –
Indian street lighting scale-
up project – CGI;
• IMT-Efficiency Power Plant -
DSM, Jiangsu 2 mio tCO2e/y
GFSE 2007, 22.11.2007, Vienna

13. Summary
• Energy Efficiency offers one of the most cost
effective options to mitigate Climate Change;
• Energy Efficiency - several major barriers in general
and specific to CDM;
• Initiatives by CDM-EB and Networks and initiatives
address some of the key barriers for Energy
efficiency under CDM;
• REEEP role is a facilitator – Industry, NGOs, FIs,
Governments to use the partnership and its resources
to support EE under CDM.
GFSE 2007, 22.11.2007, Vienna

14. Thank You
www.reeep.org - NewsREEEP
www.reegle.info
info@reeep.org
or
bachhiesl@TUGraz.at
All pictures from REEEP supported projects
GFSE 2007, 22.11.2007, Vienna