carbon markets update 17.10.2010
DESCRIPTION
Presentation in the Mekong regional Forum in Lao PDR.TRANSCRIPT
Carbon MarketsMarket outlook for renewable energy and energy
ffi i j tefficiency projects
26th October 2010Mr Juha RuokonenMr. Juha [email protected] l 358 40 840 8005Tel. +358 40 840 8005
GreenStream ServicesCore competence Services offered
• Fund management within carbon and renewable energy; current investment vehicles include
Asset Management Services
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Kyoto Protocol and other trading schemesCANADA• “Turning the
Corner" plan • Start after
2010 CHINA
MGGRA• 6 States and 1
Province (CAN)• Cap-and-trade• -60-80% in the “long-
EU ETS• Cap-and-tradeUSA
JAPAN• Semi-
voluntary scheme JVETS
2010• -20% by 2020
(2006)
CHINA• Pilot scheme for 8
cities and 5 provinces• Target to reduce
greenhouse gas i t it
• -60-80% in the long-run”
Cap and trade• 2005->• -21% by the
year 2020RGGI• 10 States
• Cap-and-trade scheme proposal in Congress
• -17% by 2020 from 2005 level
JVETS started 2005
• Climate bill incl. ETS in Parliament in
intensity
10 States• Cap-and-trade• -10% of the
year 2009 level by the year 2018
2005 level autumn 2010WCI• 7 States and 4
Canadian provinces• Cap-and-trade
TOKYO• Cap-and-trade• Started in 2010
25% f 20002018
CPRS, AUSTRALIA• Cap-and-trade• Proposal rejected
CCX• Voluntary
system• -4% from the
• Cap-and-trade• -15% from 205 level
by 2010• Start in 2012
• -25% from 2000 by 2020
Ratified
Signed, not ratified
NZ ETS• Cap-and-trade• 2010- (2008)
p jby Parliament. New proposal expected.
year 1998-2001 level by the year 2010
VOLUNTARY CARBON
KYOTO PROTOCOL• Start 2008• Mandatory for 37 developed countries
26.10.2010 JR 3(c) GreenStream Network Plc
No position
2010 (2008)CARBON MARKET• Strong
growth
Mandatory for 37 developed countries• -5% 2008-2012• International Emission Trading, CDM/JI
The rise of the global carbon and renewable energy marketsenergy markets
Global Carbon Market Value *EUR Billion
Global New Investment in Sustainable energyEUR
103120
140 118130
122
50
60
120
140
EUR Billion
42 7
86
60
80
100
57
8798 89
35
54
82
30
40
60
80
100
Govern
Third party investments
0.48.7
24
42.7
0
20
40
0.4 8.7 25 42.7 33 3214
31
5735
0
10
20
0
20
40Govern. R&D, Corporate R&DD, Small di ib d
Source: State and Trends of the Carbon Market 2006, 2007 2008 2009 d 2010 Th W ld B k
2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009
Source: Global Trends in Sustainable Energy Investments 2010 UNEP SEFI
distributed capacity
2007, 2008, 2009 and 2010, The World Bank 2010, UNEP SEFI
26.10.2010 JR 4(c) GreenStream Network Plc
Global CDM pipelinep p2 500
3 000
CO
2e) Forestry
HFC & N2O reduction
1 000
1 500
2 000
al v
olum
e (M
t C Fuel switchEnergy efficiency Methane reduction & cementRenewables
0
500
Cum
ulat
ive
tota
C
Number of CDM projects (Total 5529) (As of Oct 2010) Supply-side
EE
CER volume by 2012 (Total 2827 MtCO2e)(As of Oct 2010)
Methane19 %
Supply-side EE
10 %
Fuel switch2 %
Methane20 %
EE10 %
Fuel switch6 %
Demand-side EE
1 %
HFCs, PFCs
Renewables61 %
Demand-side EE
4 %Forestry
1 %Transport
HFCs, PFCs & N2O26 %
Renewables35 %
1 %Forestry
1 %
Transport0 %
Source: CDMpipeline.org
26.10.2010 JR 5(c) GreenStream Network Plc
HFCs, PFCs & N2O
2 %
p1 %
Renewables and Energy Efficiency projects gy y p j
EE
Energy Efficiency Energy Project types, total 778, (As of Oct 2010)
S l
Renewable Energy Project types, total 3351,(As of Oct 2010)
EE Service3 %
EE Households
8 %
Biomass
Geothermal0 %
Solar2 %
Tidal0 %
EE own generation
58 %
EE Industry18 %
Supply side
Hydro45 %
energy21 %
58 %
EE Supply side11 %
Energy distrib.2 %
Wind32 %
988 MtCO2 by 2012 322 MtCO2 b 2012
Theoretical CER potential of the current pipeline:
Source: CDMpipeline.org
988 MtCO2 by 2012 (35%from the total CDM pipeline)
322 MtCO2 by 2012 (11% from the total CDM pipeline)
26.10.2010 JR 6(c) GreenStream Network Plc
p p ) CDM pipeline)
Regionsg
6012
Cumulative total volume of expected CERs by 2012 by host country
Vietnam300012
Cumulative total volume of expected CERs by 2012 by host country
China
40
50
d C
ERs
by 2
01 Vietnam
Thailand
Lao PDR2000
2500
d C
ERs
by 2
01
India
Brazil
South
10
20
30
ons
of e
xpec
te Cambodia
500
1000
1500
ons
of e
xpec
te South KoreaMexico
Malaysia
0
10
Mill
io
0
500
Mill
io
Projects in Validation kCERs by 2012
Cambodia 7 1250
Source: CDMpipeline.org
Lao PDR 3 651
Thailand 123 26112
Vietnam 127 26892
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Vietnam 127 26892
CER price developmentp p
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CDM Challengesg• Development of the CDM projects takes time and
resources:resources: • Project lead times are long: it takes at least two years to
develop project idea to a registered CDM projectdevelop project idea to a registered CDM project• There is risk that project will not get registered as a
CDM projectp j-> Impact of CDM financing to the construction decision is small
but there are also exceptions in some project types
• In general, there is capital gap in early stage project development and investment financing• Traditional financing is available for advance stage project
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Market outlook• Climate policy negotiations continue
at international levelDemand&Supply of CDM/JI credits
Demand Supply
• Cancun, Mexico, 2010: No major breakthrough expected
• Johannesburg, South Africa, 2011: New
Total 1222 Total 1225
EU 890 CDM 1030
Japan 300 JI 195agreement for 2013- period?
• Flexible Mechanisms will be part of the new agreement
Japan 300 JI 195
Other 32
Source: States and Trends of the Carbon Market 2010, The World Bank
• CDM reform i.e. changes in the rules• New mechanisms: REDD (Forestry),
sectoral approach and NAMA creditingcrediting
• Carbon market will continue!!• CDM projects eligible in the EU ETS also
i 2013 2020in 2013-2020• New cap-and-trade schemes are likely to
include CDM and similar mechanisms
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• China is a key market in which GreenStream is engaged in a considerable number of y g gprojects, JV established with Juno Capital for cooperation on CDM projects and climate investments in China
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