ICC Side Event Technology Development and Deployment to address Climate Change

1. ICC Side EventTechnology Development and Deploymentto address Climate Change Technologies DeploymentAppropriate Frameworksand Conditions Bonn, June 8, 2009 Dr. J.Y. CANEILLEDF / DDD

2. Basics

3. Electricity represents 40% of greenhouse gases emissions Two thirds of the world electricity are generated from fossil fuels Over the next 30 years: Huge demand Developing countries (China, India...) Renewal of fleet in most developed countries Ready answer: coal Accessible and affordable But would double volumes of greenhouse gas emissions Necessity to: Improve energy efficiency Improve demand side management Deploy low carbon and carbon-free technologies Accelerate R&D on promising technologies, including carbon sequestration (demonstrators) Electricity generation 37% Deforestation 18% Energy 65% Nuclear Transport 22% Industry 22% Coal Agriculture 14% 17% Buildings 12% Wastes 3% Others related to energy 8% 35% Source Stern review 2000 : 42 GT equivalent CO2 Gas Oil 19% 10% 19% Renewables (up to 92% Hydro) Some facts about electricity sector

4. How countries perform (CO2/kwh) ? Why ? Source : A. Vieillefosse, MEDD

5. Due to a large diversity of energy mix :a consequence of National Energy Policies Source : A. Vieillefosse, MEDD

6. Questions for the electricity sector ? • Is the notion of benchmark appropriate for the electricity sector ? One technology ? Best Available Technologies for each technology ?A decreasing value of CO2 per kwh generated ? • Coming back to the reality of the electricity sector driven mostly by national energy policies, in developed countries and developing countries, one has to be careful by setting up common benchmarks. Why ? - There is no fundamental reason to converge towards the same value everywhere (for instance average value of CO2/Kwh)on the short and mid term : similar issue to « national circumstances »- Also the decreasing dynamics of such a benchmark cannot be the same everywhere- Paying attention to the fact that different technologies can come on board and that interactions exist that can modify the bencmark indicator • Relate a sectoral approach for the electricity sector with national energy policies and measures (including technology changes capacity building and institutional changes)

7. The electricity sector A matter ofInvestment and PolicyDesigns

8. Technologies : the crucial matrix Market Structure vs. Maturity

9. From Electricity Project – WBCSD 2007 Policies vs. technological maturity Stage of maturity, extent of deployment and local capacity are important considerations when designing policy and this can vary geographically

10. How to make sure that existing technologies, future technologies and R&D come on board ? • Create successful deployment conditions of already existing technologies • Address barriers to investment in mature but emerging technologies • Address particular policies oriented to appliances • Organise and support R&D processNuclear generation 4 Renewables (photovoltaic, biofuels,…) CCS Networks Appliances • Address the time frames appropriately • Building progressively the right international architecture taking what is right in what has emerged already : CDM programmes with extension in scopeCollaborative research between developed and developing countries

11. Some possible directions • A trans-national sectoral agreement will be difficult to achieve • - large spectrum of technologies, no easy « focal » benchmarks • - Company activities and the energy mix of countries are shaped by national energy policies. • - The power sector is more fragmented than other sectors. • A specific sectoral approach could be explored(sectoral or programmatic CDM’s / NAMA’s) • - knowledge sharing on technologies and on energy policies and sharing on best practices • - Developing of economic instruments (sectoral CDMs), and of policy measures that promote the deployment of the best available technologies • - for future technologies, promote international collaborative research with developing countries.

12. A way forward for mature technologies : an Energy Policy Related Transfer Mechanism ? • 70% of the necessary GHG reductions could be done with mature technologies. To-day more than 80% technologies transfers are effectively done by the private sector • - Existing technologies used in Annex I countries might be not yet or unsufficiently deployed in non Annex I countries- Reasons : institutional frameworks, capacity building requirements, long term stability for investment, higher costs- if those conditions can be overcome, more investment could be undertaken by the private sector • A specific sectoral approach attached to energy policies • - Necessary money is loaned upfront on the basis there is a clear program to change an energy policy, and used to improve the institutional framework and/or organise capacity building to realise that program (technology oriented)- Can improve descending the leanring curve of the concerned technology in the country- Money is sent back afterwards to the loaner country in the shape of carbon credits (those necessary at least to cover the expenses, paying attention to the environmental integrity of the scheme)- The new conditions allow the private sector to act