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Swiss AIJ Cogeneration Projects. Framework of Swiss AIJ Program practical experience cooperation with host countries development of guidelines, baseline setting,.... Projects under AIJ phase in realization: Romania, Slovakia under consideration: Poland, Lithuania, Russia, Costa Rica
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Swiss AIJ Cogeneration Projects • Framework of Swiss AIJ Program • practical experience • cooperation with host countries • development of guidelines, baseline setting,.... • Projects under AIJ phase • in realization: Romania, Slovakia • under consideration: Poland, Lithuania, Russia, Costa Rica • Pilot projects as starting point for private actors • Multiplication, replication
The Swiss - Romanian AIJ Project (STEP) • Swiss - Romanian financial assistance • 230 Romanian cities • Lack of maintenance and rehabilitation • EBRD project for 5 cities • Request for cofinancing by Switzerland • Large replication potential (not only in Romania)
Technical Solution (STEP) • New boiler houses • low NOx burner boiler systems • cogeneration units, gas engines • automatisation • Two pipe and preinsulated heat distribution system (financed locally) • Substation in each building (heat and sanitary water) • Pipework in the building (system security) • Option: demand side measures, energy related building rehabilitation
Emissions without the STEP Project • Will increase due to further deterioration of the system • Will increase due to increasing water losses • Will increase due to increasing standard of living (higher room temperatures 15°C 20°C)
What would happen if STEP would not be implemented? • Baseline scenarios assessed: • no investment for the next 4 years and temperature level in the apartments of 15°C maintained • later minimal investment to keep the system operative, 15°C • later minimal investment with a corresponding increase to 20°C • alternative (different) investment using an EBRD credit after year 8
Yearly CO Emissions of STEP and Baseline 2 30'000 (t/a) 25'000 Baseline emissions 20'000 Emissions 15'000 2 CO 10'000 Emissions of JI Project Yearly 5'000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 (2014) (2000) Year of Operation
GHG Offsets by STEP Components 30'000 (t/a) 25'000 Energy efficiency 20'000 Emissions 15'000 Cogeneration 2 CO 10'000 Yearly 5'000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 (2014) (2000) Year of Operation
Impact of baseline electricity on STEP CO2 offsets 350'000 Average EF Country: 1'020 300'000 Proposed EF: 950 250'000 200'000 Average EF UCPTE: 493 CO2 offset over 15 years (t) 150'000 100'000 Range of EF in local coal-fueled plants 50'000 0 -50'000 0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 Baseline electricity emission factor (t CO2/GWh)
Key Values of STEP Project • Results in • 140’000 tons of CO2 emission reduction over project lifetime • 3.9 Mio $ Swiss investment • 2.6 Mio $ local investment • 8$/per ton CO2 abatement cost, discounted at 8% • 3.9 Mio $ net benefit for the Romanian partner
Memorandum of Understanding • reference to the CoP and the UNFCCC • Romanian and Swiss focal points • JI between Annex I • one or more projects defined in a project agreement • fulfilling the criteria of UNFCCC • monitoring plan is mentioned and third party verification ex - post • reporting jointly to UNFCCC • ERU transfer when allowed under UNFCCC
Project Implementation Agreement • Joint Implementation aspects • baseline definition • monitoring and verification / notification and reporting • credit sharing • participants responsibilities • guarantee of local financing • contracting Swiss and local deliverer and constructing firm
State of the STEP Project • MoU and all agreements signed • Delivery contracts to be signed • Building and montage work first half of 2000 • Operation autumn / winter 2000 • Private Swiss investors start to consider replication
The Swiss - Slovak AIJ Project • Energy efficiency project in private wood processing plant Bucina Zvolen • producing chip boards and semi products • energy intensive drying process • Feasibility study completed • Delivery conditions agreed • JI Agreement Slovakia - Switzerland under negotiation • Implementation scheduled summer 2000
Old /New Process Gas-burner Chips production Chips drying Particleboard production Gas-turbine Electricity production Particleboard production Chips production Chips drying
Baseline onlyTurbines Turbines & Control System GHG Emissions of Project and Baseline 80000 70000 60000 50000 Yearly CO2 Emission (t) 40000 30000 20000 10000 0 1 2 3 4 5 6 7 8 Year of operation
Baseline Consideration • An EBRD loan to Bucina has already been spent • until the loan is paid back, no additional loans are allowed • Bucina would not be able to invest in the next 8 years
Conclusions • Decentralized Cogeneration offers a chance to increase energy efficiency • Financially viable if electricity prices are fair (undistorted markets) • Emission Reduction Units are an additional market product of cogeneration units • JI/CDM is an additional source to finance cogeneration • Technology is available let’s multiply the pilot-projects