renewable energy markets: interaction with carbon...

1

Renewable Energy Markets: Interaction with

Carbon Offsets Molly Peters-Stanley, Ecosystem Marketplace Carbon Program

Renewable Energy Markets 2010

Portland, Oregon

October 21, 2010

2

Original reporting, reposting market news, bi-weekly newslettersCompliance scheme price trackingState of the Markets reports: voluntary + forest carbon, watershed payments, biodiversity

Ecosystem Marketplace: Making the Priceless Valuable

4

• Market-wide, comprehensive survey of the voluntary carbon markets

• Survey itself purely focused on the over-the-counter (OTC) market

• Market-wide survey that covered offset suppliers across the value-chain: developers, aggregators/wholesalers, and retailers.

• Other than the direct respondents, further data was obtained from brokers, registries, and exchanges.

This year, a record 205 respondents from 34

countries responded to our survey

5

• The Lion Sleeps?: Year went in “like a lion and out like a lamb”

• Building Bridges: A key theme was linkages – between infrastructure providers and third party standards – and expansion to new locations and emerging markets for supply and demand

• Recession / regulation: while CSR and PR were reported as main buyer motivations, pre-compliance activity scaled up as major market influence

• Carbon+: Consumers increasingly seeking specific options given more freely available project information

Looking back at 2009

44

11 6 9 1016

4457 50

2 1

10

23

69

41 0.1

0.2

2

0

20

40

60

80

100

120

140

pre-2002 2002 2003 2004 2005 2006 2007 2008 2009

Exchanges (other) CCX OTC

127Mt

67Mt

27Mt12Mt12Mt

6Mt

44Mt

11Mt

94Mt

6

Voluntary Markets VolumeMtCO2e

Transaction volumes declined 26% in 2009

Source: “State of the Voluntary Carbon Markets 2010”, Ecosystem Marketplace and Bloomberg New Energy Finance

7

Voluntary Markets Value$Millions

178

43 26 38 43 67

270

420326

3 3 38

72

307

50 1

2

12

0

100

200

300

400

500

600

700

800

pre-2002 2002 2003 2004 2005 2006 2007 2008 2009

Other exchanges CCX OTC

$728

$343

$105

$45$41$26

$178

$387

$43

Average OTC prices declined to $6.5/t to produce

a $326m market, constituting 87% of the total


8

Transaction Volume by Project Type

Behind landfill methane, A/R and wind, volume

fairly evenly disbursed among project types

31%

10%

8%7%

7%

4%

4%

4%

3%

3%

3%

3%

2%1%

1%1% 7%

Landfill

Affor/Refor

Wind

Run-of-river

Avoid. Def.

Livestock

EE & Fuelswitch

Coal mine

Geo-seq

Forest Mgmt

Allowance

Ag Soil

RE - all others

Wastewater

Agro-forestry

Remaining - all others

Not specified


8.6

4.1

7.7

16.4

0.7 1.3 0.7

2.6

0.0 0.3 0.5

2.1 1.70.3

1.1

13.7

4.33.4 3.2 2.8

1.8 1.7 1.4 1.4 1.4 1.2 1.1 0.8 0.6 0.6 0.4 0.4 0.3 0.1

2.9

0

2

4

6

8

10

12

14

16

18

Lan

dfi

ll

Aff

/Ref

Win

d

Hyd

ro

Avo

id D

ef.

Live

sto

ck

Co

al m

ine

Geo

-seq

Fore

st M

gmt

Allo

wan

ce

Ag

soil

Fuel

-sw

itch

ing

Met

han

e (a

ll o

ther

s)

Agr

o-f

ore

stry

Ener

gy e

ffic

ien

cy

Bio

mas

s

RE

-al

l oth

ers

Ind

. Gas

es

Oth

er la

nd

-bas

ed

No

t sp

ecif

ied

2008 20099

Methane was the major winner capturing 41% of

volume, followed by forestry with 24%Transaction Volume by Project TypeMtCO2e


10

Volume Renewable Credits by Project Type, 2008 v. 2009


Run-of-river sustains hydro + other renewable

project types decline

7.7

16.4

0.52.1 1.7

3.4 3.2

1.1 0.6 0.40.02.04.06.08.0

10.012.014.016.018.0

Wind Hydro Fuel Switching

Energy Efficiency

Biomass

2008

2009

MtCO2e

11

Top three regions dominate 84% of supply

Transaction Volume by Location and Project Type

US: 56%

Latin

America:

16%

Asia: 12%


LDC’s:

2% volume

3% value

12

Percent of Transaction Volume Renewables Credits by Location


Asian and Turkish supply dominated by

renewables while LA opts for forestry

75%

98%

18%

0%

36%

2% 2%

90%

79%

15%6% 5% 1% 0%

0%

20%

40%

60%

80%

100%

120%

Asia Turkey Oceania Africa Latin America

US Canada

2008

2009

13

US leads in offset purchases, largely attributed to

pre-compliance motives

Customer Location

49%

41%

4%

2% 1% 1% 2%

US

EU (incl. Russia)

AU/NZ

Asia

Canada

Latin America

Remaining


14

Recession, pickiness cut off EU buyers

from Asian market


15

Price premium for most renewable technologies

Average Prices and Price Ranges by Project TypeUS$/t

33.8

12.39.6 9.2 8.7

7.3 6.8 6.7 6.6 5.8 5.7 5.5 5.2 4.6 3.6 2.9 2.4 1.7 1.2 0.8 0.2

6.7 8.6

111 max

-

5

10

15

20

25

30

35

40

Sola

r (4

)

Bio

mas

s (1

5)

Met

han

e -

oth

er (

4)

Ener

gy e

ffic

ien

cy (

20

)

Win

d (

46

)

Fore

st m

gmt

(8)

Lan

dfi

ll (6

6)

RE

-o

ther

(1

4)

Fuel

sw

itch

(1

6)

Ru

n-o

f-ri

ver

(26

)

Live

sto

ck (

28

)

Co

al m

ine

(12

)

Agr

o-f

ore

stry

(5)

Aff

/Ref

(51

)

Was

tew

ater

(9)

Avo

id. d

ef. (

10

)

Geo

-seq

& In

d. g

as (

4)

Larg

e h

ydro

(5

)

Ag

soil

(25

)

Oth

er la

nd

-bas

ed (

18

)

Allo

wan

ce (

15

)

Oth

er (

3)

No

t sp

ecif

ied

(7

)


16

Two standards account for two thirds of the market

Transaction volume by standard utilised

35%

31%

12%

7%

4%

4%3%

2%2%1% 3% VCS

CAR

CCX

GS

Internal

ACR

None

CCB

ISO-14064

Social Carbon

Remaining

Carbon Fix

0.6%

Green-e Climate

0.5%

CDM/JI 0.4%

VER+ 0.2%

Plan Vivo 0.2%

GHG Friendly 0.5%


17

Most popular standards close to average prices

Average Prices and Price Ranges by StandardUS$/t

15.2

12.111.1 10.9

10.3 8.98.1 7.6 7.0

6.2 5.84.7

3.4

1.2 0.8

7.59.2

111 max

-

5

10

15

20

25

30

35

40

(7) (3) (34) (3) (3) (17) (15) (11) (39) (5) (11) (109) (9) (11) (112) (10) (18)

CDM/JI GHG Friendly

GS CarbonFix VER+ Plan Vivo ISO-14064

Soc. Carb CAR Green-e CCB VCS ACR Internal CCX None Other

Volume-weighted average price Maximum transaction price Minimum transaction price


18

CCX and CAR dominant in pre-compliance space,

VCS and GS for pure voluntary buyers

Customer Motive by Standard

70%

49%

1%11% 5%

7%

6%

5%

64%

52%

23%

44%

94%

25%

43%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Chicago Climate

Exchange

Climate Action

Reserve

American Carbon Registry

Voluntary Carbon

Standard

Gold Standard

Resale (pure or pre-compliance)

"Pure" voluntary (retirement)

Pre-compliance (end-use)


19

CAR pays it forward

Registry Issuance Versus Transactions


10.1

7.9

2.9 2.9

2.01.9

0.2

2.0

5.6

1.92.5 2.0

4.4

0.020

2

4

6

8

10

12

Markit (multiple)

APX (VCS) American Carbon Registry

Caisse des Depots (VCS)

Gold Standard CAR Blue Registry

Issued Transacted

88

58

46 4537

20 18 1611 10 9 6 6 4 4 4

93

0102030405060708090

100

Vo

lun

tary

Car

bo

n S

tan

dar

d

Go

ld S

tan

dar

d

CA

R

CD

M/

JI

CC

B

AC

R

CC

X

ISO

-14

06

4

Soci

al C

arb

on

Nat

ion

al C

arb

on

Off

set

Stan

dar

d (A

ust

ralia

)

VER

+

Car

bo

n F

ix

Pla

n V

ivo

Gre

en

ho

use

Fri

en

dly

Reg

ion

al G

ree

nh

ou

se G

as

Init

iati

ve

Gre

en

-e

Oth

er

No

t A

pp

licab

le

20

VCS the clear leader, while suppliers also plan to

use GS, CAR, CDM and CCB in future

Future Standard Usage, According to Participants


21

Suppliers bullish on future of voluntary markets,

respondents indicate 1,300 MtCO2e by 2020

Projected Market Growth for the Voluntary Carbon Markets, according to ParticipantsMtCO2e

0

200

400

600

800

1,000

1,200

1,400

2003

2004

2005

2006

2007

2008

2009

2010

20

11

2012

2013

2014

2015

2016

2017

2018

2019

2020

Historic Growth Projected Growth (by 2008 participants)

Projected Growth (by 2007 participants) Projected Growth (by 2009 participants)


22

Molly Peters-Stanley

Associate, Ecosystem Marketplace

+1-202-298-3005

[email protected]

A Great Thanks to Suppliers!!!

mailto:[email protected]



renewable energy markets: interaction with carbon...

Documents