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Johannes Henkel Berlin University of Technology Department of Energy Systems www.ensys.tu-berlin.de CDM Programme of Activities vs. Conventional CDM –

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Presentation on theme: "Johannes Henkel Berlin University of Technology Department of Energy Systems www.ensys.tu-berlin.de CDM Programme of Activities vs. Conventional CDM –"— Presentation transcript:

1 Johannes Henkel Berlin University of Technology Department of Energy Systems www.ensys.tu-berlin.de CDM Programme of Activities vs. Conventional CDM – a case study on the Economics of Rural Electrification in Kenya Institutions, Efficiency and Evolving Energy Technologies 34 st IAEE International Conference Stockholm Concurrent Session: Electrification of Developing Countries 22.06.2011 Johannes Henkel Roland Monjau

2 Johannes Henkel - 2 - Outline Motivation CDM Programme of Activities Case study: Rural electrification in Kenya by using small Hydro Results: Economics of the case study Conclusions

3 Johannes Henkel - 3 - Source: Michalowa et al., 2003 Motivation

4 Johannes Henkel - 4 - Size of existing CDM projects Source: UNFCCC, registered projects and projects under validation, 29th April 2011

5 Johannes Henkel - 5 - Size of existing CDM projects (Detail) Source: UNFCCC, registered projects and projects under validation, 29th April 2011

6 Johannes Henkel - 6 - What is CDM Programme of Activities (PoA)? One CDM PoA Project Design Document: –General description of activities –Application of baseline and monitoring methodology to a typical CDM Project Activity (CPA) –Environmental analysis can be done at PoA level –Additional CPAs must be approved by the national authority only (Cost of a CPA are ~10% of normal CDM cost) –Longer running period But: –Higher project development cost (higher complexity) –Higher fix costs (by ~50%)

7 Johannes Henkel - 7 - Example: Ordinary CDM vs. PoA Ordinary CDMProgrammatic CDM Cost in DescriptionCost in Description CDM Project development costs 90,000Negotiations, PDD, Stakeholder consultation, Validation, LoA, Registration CDM PoA fixed development costs 125,000Same as CDM, but higher validation and PDD costs CDM project annual M&V costs 30,000Monitoring and Verification CDM PoA fixed annual M&V costs 45,000Same as CDM, but higher DOE costs CDM CPA marginal development costs 4,000Contract, Inclusion to PoA, short DD CDM CPA marginal O&M costs 200Automatic reporting Source: Heuberger 2008

8 Johannes Henkel - 8 - Case study: Rural electrification in Kenya Use of Hydro energy for rural electrification Site identification approach: 1.Potential for MHP 2.Population density 3.Electricity demand from companies (non-household) Rough estimation results in 50-70 sites in Kenya having at least the demand of a 100 kW MHP Selection of 12 specific sites in Central Kenya Financing project by ROSCAS (=rotating savings and credit association) – by this form community-based finance is possible whilst transforming subscribers into customers and owners Households are connected to the mini grid consecutively

9 Johannes Henkel - 9 - 14 km Ø micro- grid (Phase I) consisting of: 100 kW Kaplan turbine/800 households (HH) Generator set and 11kV transformer station 11KV/400V transformer station per 180 HH Load limiter 110W for every HH Interconnection Plant (Phase II) 1.8 MW Kaplan turbine Generator set and 11kV transformer station 11 kV transmission line Schematic depiction of the Rural Energy Access Model REAM

10 Johannes Henkel - 10 - Project setting

11 Johannes Henkel - 11 - Map of sites

12 Johannes Henkel - 12 - Overview of the involved sites Site # Site nameGeneration capacity (kW) Maximum connections Start of project (given in semester from mid- 2009 onwards) households in grid area 1Rianjuwe20080081000 2Kiangurwe20080013000 3Riakaruira50080025000 4Inanjugu30080033000 5Interconnection site 18000100 6Gitii30080043000 7Kii805009 8Muchungwa50080055000 9Muketura605009 10Muromu20080062000 11Urumandi20080072000 12Riagecheru20080082000 Overall4540820027000

13 Johannes Henkel - 13 - Monte-Carlo-Analysis of the Project Economics Variable short descriptionValue according to the REAM model Assigned PDF Investment data Generator 93,174triangular Connection cost per household 309.5triangular Interconnection plant per kW 780triangular Operating cost per semester REAM holding operating cost 35,000triangular Generator set per 100kW 3,364normal Primary distribution grid 5.24normal REAM model data Cost for connection without shareholder status 150uniform Deficit in payment rate0.00%uniform cost of electricity flat rate 5.42/monthfixed value Price per kWh for productive consumption 0.10Uniform Number of stakeholder per site800 Technical data Number of connections established at each site and semester 200Truncated normal distribution Electricity consumption limit provided to households 59.4fixed value Multiplier for consumption after interconnection grid access 2.50fixed value

14 Johannes Henkel - 14 - Cumulated cashflow analysis Financing gap

15 Johannes Henkel - 15 - Results: Elasticities Input variableElasticity ε # of connected households1.022 Grid cost per connection-0.850 Interconnection scheme cost-0.520 Initial Generator cost-0.225 O&M grid-0.175 O&M generator-0.159 Operating cost Holding company-0.146 Additional generator cost-0.036 Deficit in repayment-0.018 1.Regression analysis 2.Calculation of elasticities according to Pindyk and Rubinfeld 1991:

16 Johannes Henkel - 16 - Results – CER Transaction costs Small Scale CDM methodology Type I.A Electricity generation by the user

17 Johannes Henkel - 17 - Conclusions Transaction costs of conventional (bundled) CDM average 3-4 lower Reason: Programmatic approach has no effect, as the project activities follow each other directly If the Rural Electrification Access Models is reproduced, PoA is financially beneficial If all involved sites are known ex-ante, bundled CDM is the better option Cost structure gives implicit incentive for defining a PoA as broadly as possible: Claims are constituted

18 Johannes Henkel - 18 - Thank you for your attention! Johannes Henkel Berlin University of Technology Department of Energy Systems Einsteinufer 25 (TA 8) D-10587 Berlin Germany johannes.henkel@tu-berlin.de www.ensys.tu-berlin.de Tel: +49 30 314-21710 Fax:+49 30 314-26908


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