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Regulating off-grid renewable energy tariffs in Mozambique

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Small hydropower

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Small Hydro in Indonesia

Small hydropower here refers to hydroelectric power plants below 10MW installed capacity. Hydroelectric power plants are power plants that produce electrical energy by driving turbines and generators thanks to the gravitational force of falling or flowing water. Through the natural water cycle mainly evaporation, wind and rain, the water is then brought back to its original height. It is thus a renewable form of energy.

Clean Development Mechanism market status: 

 [This information is kindly provided by the UNEP Risoe Centre Carbon Markets Group]

Project developers of hydro projects (excluding run of river projects) in the CDM pipeline mainly apply the following CDM methdologies: ACM2 “Consolidated baseline methodology for grid-connected electricity generation from renewable sources” for large-scale projects and AMS-I.D. “Grid connected renewable electricity generation” for small-scale projects

CDM projects based on hydro represent 27.4% of all CDM projects in the pipeline and, as such, are the most common project type in the pipeline. The geographical distribution of hydro projects is concentrated around Asia and in particular China [media:image:6] Excluding run of the river projects, the CDM pipeline contains 522 hydropower projects as of March 2011. Out of these 261 projects are registered and for a 101 projects CERs have been issued. 

Example CDM project:

Title: “Santa Cruz I Hydro Power Plant” (CDM Ref. No. 2405)
The CDM project is a run-of-the-river hydropower plant, located north east of Peru’s capital city of Lima at 1,985 metres above sea level, in the basin of the Blanco River (Santa Cruz) in the district of Colcas. The plant will have an installed capacity of 5.9 megawatts and a projected yearly average generation of 35,827 megawatt hours. The objective of the Santa Cruz I Hydroelectric Power Plant is renewable electricity generation to be supplied to the Peruvian National Inter-connected Electric Grid.
Project investment: USD 7,500,000
Project CO2 reduction over a crediting period of 7 years: 118,490 tCO2e
Expected CER revenue (CER/USD 10): USD 1,184,900
Hydropower plants represent 27% of all CDM projects requesting validation (UNEP Risoe). In absolute numbers this would mean 1351 projects and an installed capacity of 44995MW (UNEP Risoe). Currently 553 projects are registered.

Biofuels from algae

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An open pond for growing algae in Israel. (source: Seambiotic)

Producing biofuels from algae is still in a pre-commercial state of technology development. But algae-based biofuels are considered to be a promising upcoming alternative to fossil fuels as they could reduce GHG emissions when compared to fossil fuels, and because algal biofuels may have additional advantages over traditional biofuels such as higher per acre yields and less competition for arable land. The main obstacle to a wide spread use of algae-based biofuels are the high production costs.

Solar PV

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Solar cells (source: http://www.flickr.com/photos/33264427@N06/3166865015/)

Solar photovoltaic, or simply photovoltaic (SPV or PV), refers to the technology of using solar cells to convert solar radiation directly into electricity. A solar cell works based on the photovoltaic effect. R&D and practical experience with photovoltaics have led to the development of three generations of solar cells: Crystalline silicon based solar cells, thin film solar cells and third generation PV. Solar PV is very likely to play a significant role in climate change mitigation in the future.

Clean Development Mechanism market status: 

[this information is kindly provided by the UNEP Risoe Centre Carbon Markets Group]

Project developers of solar PV projects under the CDM mainly apply the following CDM methdologies:

ACM 2: "Consolidated baseline methodology for grid-connected electricity generation from renewable sources” for large scale projects and AMS-I.D.: Grid connected renewable electricity generation and AMS-I.A.: Electricity generation by the user for small-scale projects.

As of March 2011, there are 65 solar PV projects in the CDM pipeline, out of which 26 are registered and for 2 CERs have been issued.

Concentrating Solar Power

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A solar collector assembly

Concentrating solar power (CSP) systems concentrate the energy from the sun for electricity production. This is done by heating a fluid which is then used to raise steam for a conventional turbine for on and off-grid electricity provision. These systems can also provide heat, either at high temperatures directly for chemical reactions, e.g., chemical processing, or as a by-product for desalination plants or cooling systems, depending on requirements.

Biomass combustion and co-firing for electricty and heat

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Alholmens Kraft, Finland, the world's largest biomass-fired power plant

Combustion is the most common way of converting solid biomass fuels to energy. Worldwide, it already provides over 90% of the energy generated from biomass, a significant part of which in the form of traditional uses for cooking and heating. Biomass of different forms can also be used to produce power (and heat) in small-scale distributed generation facilities used for rural electrification, in industrial scale applications, as well as in larger scale electricity generation and district heating plants.

Clean Development Mechanism market status: 

[This information is kindly provided by the UNEP Risoe Centre Carbon Markets Group]

Project developers of biomass projects in the CDM pipeline apply a variety of different CDM methodologies due to a variety of different feedstock and sectors where biomass projects are applied. Methodologies include ACM6 “Consolidated methodology for electricity generation from biomass residues”, ACM3 “Emissions reduction through partial substitution of fossil fuels with alternative fuels or less carbon intensive fuels in cement manufacture”, AMS-I.A.: Electricity generation by the user and AM36 “Fuel switch from fossil fuels to biomass residues in heat generation equipment”.

CDM projects based on biomass represent 13.6% of all CDM projects in the pipeline. Biomass projects have been the main driving force of CDM project development in many developing countries where agriculture is the main industry and agricultural wastes are abundant. Of the 277 registered projects, 168 are small-scale projects. [media:image:4] Example CDM project:

Title: “35 MW Bagasse Based Cogeneration Project” by Mumias Sugar Company Limited (MSCL) (CDM Ref. No. 1404)
Mumias Sugar is the leading sugar manufacturer in Kenya. It sells sugar through appointed distributors nationwide. The company has diversified into power production. The technology to be employed for the Mumias Cogeneration Project will be based on the conventional steam power cycle involving direct combustion of biomass (bagasse) in a boiler to raise steam, which is then expanded through a condensing extraction turbine to generate electricity. Some of the steam generated will be used in the sugar plant processes and equipment.
Project investment: USD 20'000'000
Project CO2 reduction over a crediting period of 10 years: 1'295'914 tCO2e
Expected CER revenue (USD 10/CER): USD 12'959'140

Wind energy: on-shore, large scale

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Wind turbines in IT (source:http://www.flickr.com/photos/gorillaradio/2401771926

Besides conventional hydropower, onshore large-scale wind energy is presently the cheapest form of renewable energy. At locations with a good level of wind resource, it can be cost competitive with some forms of traditional/thermal power production. Global wind energy capacity has been growing very rapidly over the past decade. In 2009, newly installed capacity was more than 34GW (GWEC, 2010) representing more than 25% of total new generation capacity globally.

Clean Development Mechanism market status: 

[this information is kindly provided by the UNEP Risoe Centre Carbon Markets Group]

Project developers of large-scale wind projects in the CDM pipeline mainly apply the following CDM methdology:

ACM 2: "Consolidated baseline methodology for grid-connected electricity generation from renewable sources”

CDM projects based on wind represent 17.3% of all CDM projects in the pipeline. Recent years have shown a tendency towards a more widening geographical dispersal of CDM wind projects, indicating that countries other than India and China observe the CDM as a tool to support wind projects. [media:image:6] Example CDM project

Title: “KL Rathi Steels 1.5 MW Wind Power Project at Kutch District” (CDM Ref. No. 2706)
M/s KL Rathi Steels is a closely held Public Limited company, engaged in making TOR steel bars and steel wires. The work of the company takes place in the village of Chapraula, on the outskirts of Ghaziabad, near Delhi. M/s KL Rathi Steels have installed one 1.5 MW wind turbine generator (WTG) of Suzlon make, in Abdasa, Kutch District, Gujarat.
Project investment: USD 2,200,000
Project CO2 reduction over a crediting period of 7 years: 27,100 tCO2e
Expected CER revenue (USD 10/CER): USD 271,000

Wind energy: small-scale

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Small wind turbines on the isle of Eigg, Scotland

Smaller-scale wind turbines can be found in a wide range of applications including off-grid power; either directly by charging a storage battery or in combination with another form of generation to cover intermittent periods when there is little to no wind. In such instances small wind may be cost effective depending on the costs of alternate off-grid technologies and fuel prices; however the overall contribution of small wind to climate change mitigation will probably be limited due to the long payback periods required to offset the carbon used in their manufacture.

Clean Development Mechanism market status: 

[this information is kindly provided by the UNEP Risoe Centre Carbon Markets Group]

Project developers of small-scale wind projects under the CDM mainly apply the following CDM methdologies:

AMS-I.D.: Grid connected renewable electricity generation

AMS-I.A.: Electricity generation by the user

CDM projects based on wind represent 17.3% of all CDM projects in the pipeline. Recent years have shown a tendency towards a more widening geographical dispersal of CDM wind projects, indicating that countries other than India and China observe the CDM as a tool to support wind projects. [media:image:3] 

To develop an off-grid RE tariff-setting tool for FUNAE that is suited to small-hydro, solar, wind and biomass (the most appropriate RE technologies for Mozambique), which is based on a detailed and accurate analysis of all the financial, economical, social and environmental aspects.

Location

Mozambique
25° 57' 55.08" S, 32° 35' 21.12" E
Main activity and output: 
  • Develop a balanced, accurate and easy to use tariff setting tool which takes in consideration the Mozambican rural reality, to be used in the provision of energy services in remote locations, far way from the national grid, where there is clear demand for energy services
  • Systematically consider other sources of revenue from new RE generation projects, such as CDM revenue
  • Train FUNAE staff in conducting surveys in rural locations to determine end-user willingness and capacity to pay for electricity from renewable sources
  • Build institutional capacity so that the tariff setting tool to be used by FUNAE efficiently and independently
Expected impact: 
  • Sustainability of FUNAE's operations by charging adequate tariffs for off-grid electricity generated from renewable sources
  • Increase in rural electrification rates and a scaling up of off-grid rural electrification projects in Mozambique thanks to FUNAE's improved regulatory capacity in tariff-setting
  • Use of the new tariff setting tool by other stakeholders in the electricity sector in Mozambique (such as the EDM the national utility, the Ministry of Energy or the national regulator CNELEC)
Link: 
http://www.reeep.org/showProject/2518.107010507/regulating-off-grid-renewable-en...

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