Wednesday, January 30, 2008

Electricity crises and the CDM

South Africa's power crises might stimulate CDM in South Africa, according to a piece on Point Carbon. This is a possibility, but do not count on the CDM to come to the immediate rescue.

According to South Africa's Designated National Authority latest project portfolio (dated 10 Dec 2007), there were 63 CDM projects submitted of which 10 have been approved at the CDM executive board so far. Almost half (46%) of the projects are in energy efficiency (EE), renewable energy (RE) and fuel switching. Of the approved project design documents (PDDs) energy efficiency, renewable energy and fuel switching projects are only responsible for 31% of the potential annual emission reductions. When projects approved and in those in the pipeline are added 77% of all potential emissions reductions are in fuel switching, with a further 9% in RE and EE.

Based on existing developments therefore, investments in especially fuel switching projects may stimulate CDM, if these are approved by the CDM Executive board. These large fuel switching projects are still in the Project Idea Note (PIN) phase and it will take time before developed into a PDD and approved by the CDM Executive Board.

The CDM infrastructure is also geared towards other regions. According to the UNFCCC, Africa still accounts for only 2.64% of all CDM projects worldwide. Measured on the amount of certified emissions credits issued, China dominates, followed by India and South Korea.

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