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Low-carbon Energy Projects for Development in Sub-Saharan Africa Unveiling the Potential, Addressing the Barriers . Financed by the Norwegian Trust Fund, Supported by CF-Assist Presentation to the Reference Group of the NTF, November 13, 2008. Presented by : Ashok Sarkar The World Bank.

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Financed by the norwegian trust fund supported by cf assist

Low-carbon Energy Projects for Development in Sub-Saharan AfricaUnveiling the Potential, Addressing the Barriers

Financed by the Norwegian Trust Fund, Supported by CF-Assist

Presentation to the Reference Group of the NTF, November 13, 2008

Presented by : Ashok SarkarThe World Bank


Summary of the presentation

Summary of the Presentation

  • Strong development of the CDM Except in Sub Saharan Africa

  • Unveil the Potential of CDM Energy Projects in SSA

  • Addressing the Barriers Recommendations


Financed by the norwegian trust fund supported by cf assist

y = 0.0435x - 1647.4

2

R

= 0.9791

60

50

40

30

20

10

0

May-03

Aug-03

Nov-03

Feb-04

May-04

Aug-04

Nov-04

Feb-05

May-05

Aug-05

Nov-05

Feb-06

May-06

Aug-06

Nov-06

Feb-07

Ch. de Gouvello - WB / AFTEG - May 2006

Member of the MethPanel of the CDM

Source: UNFCCC data

The number of CDM eligible activities has expanded quickly

Pace of releasing new approved Methodologies by Regulatory Bodies (EB+MethPanel)

More than 120 CDM Methodologies Approved(August 2008)


Financed by the norwegian trust fund supported by cf assist

Cumulative Number of CDM Projects per Methodology

(projects that officially began validation process)

Ch. de Gouvello - WB / AFTEG - May 2006

Member of the MethPanel of the CDM

Source: UNFCCC data

Nb Proj under ACM0001

50

Nb Proj under ACM0002

The Y axis has been

Nb Proj under ACM0003

truncated at 50

Nb Proj under ACM0004

Nb Proj under ACM0005

Nb Proj under ACM0006

40

Nb Proj under ACM0007

Nb Proj under ACM0008

Nb Proj under AM0001

Nb Proj under AM0002

Nb Proj under AM0003

30

Nb Proj under AM0004

Nb Proj under AM0005

Nb Proj under AM0006

Nb Proj under AM0008

Nb Proj under AM0009

20

Nb Proj under AM0011

Nb Proj under AM0013

Nb Proj under AM0014

Nb Proj under AM0015

Nb Proj under AM0016

10

Nb Proj under AM0018

Nb Proj under AM0021

Nb Proj under AMS-I.C

Nb Proj under AMS-I.D

Nb Proj under AMS-II.B

-

Nb Proj under AMS-II.C

Nb Proj under AMS-II.D

2/1/04

4/1/04

2/1/05

4/1/05

6/1/05

8/1/05

4/1/06

6/1/04

8/1/04

2/1/06

12/1/03

10/1/04

12/1/04

10/1/05

12/1/05

Nb Proj under AMS-III.B

Nb Proj under AMS-III.D

Nb Proj under AMS-III.E

Each new approved methodology unleashes a new segment of the CDM projects potential


Financed by the norwegian trust fund supported by cf assist

2,800

2,600

2,400

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

-

-

90

180

270

360

450

540

630

720

810

900

990

1,080

1,170

1,260

1,350

Dec. 2004

Dec. 2005

Dec. 2006

Dec. 2007

Dec. 1rst, 2003

August 1, 2008

N= 3,900

Number of CDM projects that have already applied for validation

Nb of Projects

The number of CDM projects that have begun or completed the validation process increases as the following exponential /polynomial function of time

y = 1E-06x3 + 4E-05x2 - 0.04x

R2 = 0.99

Number of projects submitted for validation is now doubling every 8 months

Ch. de Gouvello WB / LCSEG

Source: UNFCCC data

Nb of calendar days since Dec 1rst, 2003


Annual value of cdm ji emission reductions transactions billion usd up to 2012 vintages

Annual value of CDM/JIEmission Reductions Transactions (billion USD) (up to 2012 vintages)

Already more than 5 billion dollars of North-South Net Transfer before end of 2012

  • However still some uncertainties for post 2012 (second commitment period)

Source: State and Trends of the Carbon Market 2008. Karan Kapoor and Philippe Ambrosi, World Bank, May 2008


Financed by the norwegian trust fund supported by cf assist

Very few CDM projects so far in Sub-Saharan Africa

Location of approved CDM projects (source: UNFCCC)

The number of CDM projects should be greater


Financed by the norwegian trust fund supported by cf assist

Same facilities hosting CDM projects in other regions also exist in Sub Saharan Africa


Financed by the norwegian trust fund supported by cf assist

  • Check the Potential :

    How many potential CDM projects in SSA similar to projects developed in other countries with approved methodologies ?

     22 types of projects

     44 countries

  • Investigate the reasons why not implemented :

     Recommendations


Financed by the norwegian trust fund supported by cf assist

Power Sector

CO2

Power

Generation

Transport /

Distribution

Consumption/ Use

CDM Projects

CDM Projects

CDM Projects

Generation from Fossil Fuels

- Addition of2nd cycle

- CHP in industry

  • - Switch to compact fluorescent lamps

  • Energy-saving household appliances

  • Non-lighting electricity for industry

Grid loss reductions

Renewable Energy

- CHP in sugar mills

- Agricultural residue

- Forest / wood-process residues

- Typha australis

- Jatropha biofuel

- Hydroelectricity

- Photovoltaics rural areas

- Landfill gas

Nb Proj = 204

CERs = 36 MtCO2/y

Power = 5.9 GW

Inv. Cost = $ 7.1 billion

Nb Proj = 204

CERs = 36 MtCO2/y

Power = 5.9 GW

Inv. Cost = $ 7.1 billion

Nb Proj = 3

CERs = 0.9 MtCO2/y

Power = 0.01 GW

Inv. Cost = $ billion

Nb Proj = 373

CERs = 73 MtCO2/y

Power = 17.8 GW

Inv. Cost = $ 17.8 billion

Nb Proj = 67

CERs = 2.4 MtCO2/y

Power = 0.7 GW

Inv. Cost = $ 1 billion

Nb Proj = 553

CERs = 141 MtCO2/y

Power = 27.5 GW

Inv. Cost = $ 38.5 billion

Nb Proj = 406

CERs = 20 MtCO2/y

Power = 4 GW

Inv. Cost = $ 5.7 billion

Nb Proj = 40

CERs = 3 MtCO2/y

Power = 0.6 GW

Inv. Cost = $ 0.8 billion

Nb Proj = 555

CERs = 177 MtCO2/y

Power = 28 GW

Inv. Cost = $ 54 billion

Nb Proj = 26

CERs = 25 MtCO2/y

Power = 6.4 GW

Inv. Cost = $ 9.4 billion


Financed by the norwegian trust fund supported by cf assist

Fuel for Industry (Coal, Fuel Oil, Gas)

CH4CO2

CO2

CH4CO2

Thermal Use/

Consumption

Fuel production

Transport

CDM activities

CDM activities

CDM activities

Production

- Flared gas recovery

- Coal mine methane

- Waste gases in crude oil refinery

Thermal Use and Consumption

- Improved steam system

- Reduced clinker use in cement manufacturing

Nb Proj = 211

CERs = 37 MtCO2/y

Power = GW

Inv. Cost = $ billion

Nb Proj = 46

CERs = 2.8 MtCO2/y

Power = GW

Inv. Cost = $ 0.1 billion

Nb Proj = 55

CERs = 92 MtCO2/y

Power = 45 GW

Inv. Cost = $ billion

Nb Proj = 18

CERs = 2.5 MtCO2/y

Power = 0.1 GW

Inv. Cost = $ 0.1 billion

Nb Proj = 26

CERs = 4.3 MtCO2/y

Power = 0.7 GW

Inv. Cost = $ 0.9 billion

X

X


Financed by the norwegian trust fund supported by cf assist

CO2

CO2

CO2

Transport /

Distribution

Use/

Consumption

Fuel production

CDM activities

CDM activities

CDM activities

Fuel for vehicles

  • Production

  • Biodiesel from Jatropha

  • Consumption and Use

  • Shift to Bus Rapid Transit (BRT)

Nb Proj = 63

CERs = 12 MtCO2/y

Inv. Cost = $ billion

Nb Proj = 60

CERs = 3.2 MtCO2/y

Inv. Cost = $ billion


Financed by the norwegian trust fund supported by cf assist

CO2

CO2

CO2

Transport /

Distribution

Production of woodfuel

Consumption

CDM activities

CDM activities

CDM activities

Woodfuel for households

  • Production

  • Improved Charcoal Production

Nb Proj = 68 (PoA)

CERs = 22 MtCO2/y

Inv. Cost = $ 0.2 billion


Financed by the norwegian trust fund supported by cf assist

Number of Potential Projects

2,866

3,227

Number PoAs

361

Potential GHG reductions

740 MtCO2 /year

Percent of the country emissions

109 %

Value of the GHG reductions over crediting period(10 or 21 years, base 10 US$/tCO2)

$ 97.8 billion

Potential of additional electricity generation

1,244 TWh/year

Percent of actual generation

380 %

Potential of additional power generation capacity

155 GW

Percent of installed capacity

225 %

Investment cost (only for projects for which cost data is available)

$ 157,6 billion

Technical Potential of Low Carbon Energy Projects in SSA(available for each of the 44 countries considered – see attached CD)

Many technologies could not yet be included at this stage: wind, geothermal, efficiency in building, solar water heaters, efficient cooking stoves, etc.


Financed by the norwegian trust fund supported by cf assist

1/2


Financed by the norwegian trust fund supported by cf assist

2/2


Financed by the norwegian trust fund supported by cf assist

Annual Emissions Reductions in tCO2 and in proportion of countries emissions

Potential for future emissions reductions in proportion of current emissions (CO2) (100% = 1)(Note: extremely high values observed for certain countries are due to the fact that flaring emissions where not reflected in official country emissions data)


Financed by the norwegian trust fund supported by cf assist

USDpertC02

Million tons of CO2 avoided

USDperMW

Additional Power in MW

Investment Curves: - tCO2 Reductions Potential - Additional Power Generation Capacity

During projects lifetime (10 or 21 years)


Iii barriers and recommendations

III. Barriers and Recommendations


1 appropriate regulatory framework is missing

1. Appropriate Regulatory Framework is missing

Example : Cogeneration

  • Many cogeneration projects in UNFCCC validation/registration pipeline: Brazil, India, etc.

  • Very few in Sub-Saharan Africa. But there are sugar factories, agro-industry, refineries, chemical industry,…

  • Key bottleneck in Africa: No Feed-in Tariff

     no possibility to sale electricity

     no possibility to get credits

     no CDM project

Missing: Regulatory Framework for Auto-producers

Biofuels: Regulatory Framework also missing


1 appropriate regulatory framework is missing1

1. Appropriate Regulatory Framework is missing

Carbon Finance cannot provide TA to fix it

However, support can be provided by Technical Units of International Development Agencies for developing missing regulations


1 complementary regulatory framework needs to be developed

Recommendations to overcome Barriers

1. Complementary Regulatory Framework needs to be developed

2.Market access requires appropriate infrastructure planning and policies to overcome logistics bottlenecks

3. Technical information on mature, clean energy technologies must be appropriately disseminated

4. The local skills required to run mature, clean technologies must be developed

5.Technical Assistance and R&D are required to achieve full efficiency andsustainability of clean energy technologies

6. Develop local expertise and institutional procedures to facilitate project developers’access to an increasing range of financial resources earmarked for climate change

7.Post-Kyoto Carbon Funds are required

8. However, Carbon Finance alone will not solve the investment financing gap.Earmarked Climate Investment Funds (CIFs) are essential

Technical Units of Development Agencies are used to channel TA and Financing at Project Level – Integration is key


Financed by the norwegian trust fund supported by cf assist

Thank You - Merci

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