Press
Indian PoA to generate 36 million CERs
Carbon Finance
The third – and possibly largest – programme of activities (PoA) under the Clean Development Mechanism (CDM) was approved last week, as the pipeline of PoAs awaiting validation has reached more than 40.
The Bachat Lamp Yojana programme will distribute compact fluorescent light bulbs to households across India, replacing traditional incandescent bulbs and so saving energy and carbon emissions.
The PoA is an umbrella under which small-scale CDM projects – referred to as CDM Programme Activities (CPAs) – are undertaken. The first CPA within the PoA will distribute fluorescent bulbs to some 220,000 households in the Ranga Reddy district of Andhra Pradesh, eastern India. Over the eight-year crediting period, the CPA is expected to generate about 270,000 certified emission reductions (CERs).
C-Quest Capital, a Washington, DC-based carbon finance business, is implementing the first CPA and will receive CERs in return. Jin Lee, an associate at the firm, said C-Quest expects to implement a total of eight-to-12 CPAs within this PoA over the next few years. “It depends on how willing households are to accept the bulbs,” she said.
Lee noted that each CPA is unlikely to exceed 270,000 CERs, as the CDM rules limit how much energy a small-scale project can save.
The Bachat Lamp Yojana PoA has potential to include 400 such CPAs, said Manu Maudgal, a technical expert for GTZ, a German state-owned sustainable development organisation, who is based at the Indian Bureau of Energy Efficiency in New Delhi, which is managing the project.
And, even with a conservative estimate that 200 CPAs are implemented, each creating 30,000 CERs a year for a six-year period, the PoA could generate 36 million CERs, he said. The PoA lasts for 28 years from November 2007.
Maudgal said 25-30 CPAs will be implemented in the next three months – two additional CPAs are already planned for the Andhra Pradesh region, and a further 10 are due each in Kerala, southern India, and Punjab in the north. “We expect in one year to achieve 200 CPAs,” he added.
Most of the investors who have applied for permission to implement CPAs under this umbrella programme are based overseas, Maudgal said. Among the Bureau’s list of investors are AES, EDF Trading and Evolution Markets. Fluorescent bulb manufacturers, such as Osram and Philips, are also potential investors.
Meanwhile, the number of PoAs in the pipeline has reached 44, according to the latest update from analysts at UNEP Risø Center, up from 18 in November.
“A large number [21] of PoAs were submitted in December 2009, since the CDM Executive Board had decided that if you submitted the PoA before the end of 2009, you could include CPAs that you had started a couple of years before when the Board made the first rules,” said Joergen Fenhann, a senior scientist based in Roskilde, Denmark.
The PoAs cover a variety of project types, but bulb replacement, capturing methane from waste, solar water heating and improved cooking stoves appear the most popular.
India and China remain popular locations for hosting projects, but investors are also targeting least-developed countries that have previously received little investment via the CDM, including Senegal, Bangladesh, Yemen, Nepal and Nicaragua.