Workshop on CDM Methodologies and Technical Issues Associated with Power Generation and Power Saving Project Activities Review of approved and proposed energy efficiency projects and methodologies and identification of gaps World Bank, Carbon Fund Pedro Maldonado Programa de Estudios e Investigaciones en Energía Universidad de Chile Montreal, December 3rd, 2005

Approval process status of CDM EE projects

Energy Efficiency: a valid option for CDM projects? Insufficient EE methodologies submitted Not approved EE methodologies exceed their relative importance in connection with the methodologies submitted Are PP submitting EE Meth less rigorously than those submitting energy renewable projects? Exists any bias against the EE projects affecting the methodologies reviews? Is it more complex to develop Baseline and Monitoring methodologies in the case of EE CDM projects? The CDM philosophy from the very beginning was to make easy the technological transference through joint venture. EE is one of the best ways of accelerate the technological transfer.

Not approved CDM EE projects Type of projects DSM in the Commerce Sector EE improvements in the Industrial Process EE improvements in the Electric Power System EE retrofitting of District Heating EE programs (electric motors) Power factor improvement in a water utility

Justification for not approval of EE CDM projects’ methodologies Reasons for non-approval of proposed methodologies applicable to any type of CDM projects Reasons for non-approval of proposed methodologies in the case of EE CDM projects Insufficiently developed BL methodologies Insufficiently developed monitoring methodologies

General reasons for non-approval The information used to assess project additionality should be in the public domain Monitoring Methodology is inconsistent with the proposed Baseline Methodology It is not clear that the baseline scenario is a conservative one. In the process of BL determination it should be shown how the subsidized fuel prices are addressed Scope of the Meth is too broad, involving the DOE in methodological tasks Barriers are not adequately identified or the way in which CDM projects will trigger the overcoming of barriers

Specific reasons for non-approval of EE CDM project Methodologies Baseline Methodology On the one hand, PP usually proposes only one BL scenario, which is normally the keeping of facility operation, which also shows deteriorating performance. On the other hand, if several BL scenarios are identified, the Meth doesn’t specify how the BL scenario has been chosen A service increase is not adequately considered in the BL scenario. Similarly, the project might increase production or displace production in other facilities Projects related to generation or energy transport could be affected by autonomous DSM measures, but usually DSM is ignored in scenarios development In some cases it is needed measurements and estimation of dozens of mass and heat flow variables, which is extremely complex

Specific reason for non-approval of EE CDM project Methodologies Baseline Methodology Uncertainties are not always adequately considered, which is particularly central when EE improvements are reduced In cases like the electric motors program, the methodology doesn’t address properly the variable load. It should be considered different sub groups assuming different operating hours, loads, remaining life and baseline efficiency. Sample definitions Usually no free riders are considered When the product mix change, specific energy consumption need to be adjusted, normally the Meth ignores this adjustment

Specific reason for non-approval of EE CDM project Methodologies Baseline Methodology In the case of District Heating CDM project activities, it should be noted that: a) individual heating devices impact is insufficiently considered neither in the BL nor in the project scenario, b) the same goes for insulation standards affecting new buildings, c) BL should consider the demand increase due to the replacement of individual heating devices by DH. Default efficiency values are not a conservative approach, measurements is suggested specially in the case of boilers Additionality assessment is not sufficiently covered. Investment barriers and not-common-practices are insufficiently justified

Specific reason for non-approval of EE CDM project Methodologies Monitoring Methodology It is not always clear how key parameters should be collected and monitored, even, some key data is missing in the Meth QA/QC procedures need to be strengthened Leakage is ignored. This is unacceptable if the low efficiency equipment is transferred to another activity The data items to be monitored should be adequately linked with their use in the calculation of the ER

CDM EE project activities options Improved efficiency of Electrical Power System Improved District Heating System Demand-Side energy efficiency programs for specific technologies (lamps, ballasts, motors, refrigerators) Demand-Side energy efficiency in the industrial and mining sectors Energy Efficiency Standards for new state- subsidized dwellings

Energy Efficient Motors : a key program- based CDM project activities

The energy-efficient motors: an interesting option for a CDM program New projects or expansion of existing installations Replacement of existing motors about out of order

Energy Savings estimation at year 2010 (GWh/year)

Some examples of Demand-Side energy efficiency in the industrial and mining sectors Energy intensity reduction in the Chilean copper industry Use of frequency converters in underground mining ventilation EE improvement through operation control at the concentration area EE improvement in flotation cells Replacement of motors with inefficient performance and subject to a high probability of flaw

Evolution of energy intensity in the Chilean copper industry

Operation control at the concentration area

Power consumption versus air flow

Multi pole motors for flotation cells

Chagres Chuquicamata Caletones Potrerillos Ventanas Paipote

Conclusions The CDM philosophy, from the very beginning, was to make easy the technology transfer through joint venture. EE projects fill up properly with this requirement in a wider scope of activities There is a lot of EE opportunities to be developed as CDM project activities, conducting to GHG emissions reduction and technology transfer In order to implement those opportunities it is possible to ask ourself if: The PDD and Methodology forms could be more friendly designed? Is there any bias against EE projects suspicious of having financially attractive options? Could the PP develop more proper Baseline and Monitoring Methodologies?

Conclusions (2) EE CDM projects should be based mostly on homogeneous and simple to monitor technologies So, there is an urgent need for a comprehensive summary of information available and for centralized recommendations aiming to minimize the rejection of CDM EE projects.