CDM Considerations and Opportunities in Cambodia: Energy Efficiency, Transport & Renewable Energy

1. National Workshop on Capacity Development for the Clean Development Mechanism 26-27 March 2003 CDM Considerations and Opportunities in Cambodia: Energy Efficiency, Transport & Renewable Energy Andrew Williamson Advisor to Department of Energy Technique (Ministry of Industry, Mines and Energy

2. Structure of Presentation Key questions… • How can CDM help projects in Cambodia? • How do CDM projects ‘work’? • What opportunities exist in Cambodia? Energy Efficiency • CDM considerations • International Case Study • Opportunities in Cambodia Transport Renewable Energy

3. CDM Project Requirements A CDM project must be… • REAL (it will actually reduce emissions) • Measurable (the emission savings can be quantified) • Additional (the savings would not have happened without the project) • Sustainable (defined by host country to include environmental + community benefits, technology transfer etc)

4. Energy Efficiency – CDM Considerations (1) The main types of EE projects are: Demand Side Example: Retrofit new efficient lighting, reduce energy losses in process, introduce new efficient appliances Supply Side Example: Improve efficiency of generator, upgrade transmission line and transformers to reduce losses, upgrade steam boiler for greater efficiency Fuel Switching Example: Replace coal boilers with gas-fired units, use biofuels instead of diesel. (* NOT nuclear!)

5. Energy Efficiency – CDM Considerations (2) • Energy Efficiency (EE) projects usually reduce the energy demand per unit of output and thus offer other benefits of cost saving and production efficiency • EE projects for CDM can involve either upgraded or new equipment • CDM Transaction costs are high so often need to group many projects under one CDM project to make viable • EE projects are difficult to baseline, monitor + verify, and special guidelines have been produced to assist calculation • Must first establish Emissions Baseline – the greenhouse emissions which would have occurred in ‘business as usual’, ie: if the CDM project was not done. • Small projects (up to 15MW generation capacity or 15GWh/yr of equivalent energy savings) have special simplified rules and calculations

6. Energy Efficiency – CDM Considerations (3) • Monitoring and Verification – need to prove that savings are real throughout the project • This can be difficult and costly, especially when many emission sources are involved (easier on single large projects where performance can be measured directly) • THUS vital for effective training and management of operators (includes ensuring that operation manuals for new equipment are provided in Khmer language) • Emissions Leakage – refers to situation where old replaced equipment is sold to someone who uses it elsewhere resulting increased emissions elsewhere (so it reduces the overall effectiveness of project).

7. EnergyEfficiency- International Case StudyBangladeshi Brick Kilns Project • 20 new Brick Kilns • Higher efficiency than standard kilns (new “Hoffman” design) • Uses natural gas rather than coal • Baseline assumes most likely scenario for brick production over next 10 yrs in Bangladesh • Monitoring will involve metering of actual gas consumption + calculation of brick production Project Partners $ CDM Operator (organise CDM financing + deliver CERs to Investor) $ CDM Investor CERs CERs • …Could be: • Owners’ Association • NGO • Private Business Kiln Owners 20 various companies (in Developed Country)

8. Energy Efficiency - International Case StudyBrick Kilns in Bangladesh

9. Energy Efficiency - Cambodian Opportunities (1) Industrial Sector – types of operators Breweries and Bottling Distillery (cassava?) Water Purification Laundries Brick Kiln Garment Factories Rice Mills Sugar Refinery Food Processing Animal Feed Factory Plywood Manufacturing Cement Works (?) Paper Mill Sewerage Pumping Cigarette Factories Plastics manufacturer Galvanized Iron Roofing Paint Factory

10. Energy Efficiency - Cambodian Opportunities (2) • Opportunities – Industrial Sector • Lighting – improve design (new fittings + reflectors), new technology (tri-phosphor fluorescents, high pressure sodium), control (timers, sensors), skylights + light wells/shelves • Boilers – improved design, insulate ducting, steam traps, heat recovery to pre-heat feed water • Refrigeration – new refrigerants + lubricants, optimise settings, controls (timers, sensors), duct layout + zoning, new technology • Compressed Air – leak stop program (must be ongoing), efficient nozzles, unit sizing, optimise control (staging, timers, variable speeds etc), position intake for cool air • Electric Motors – replace with high efficiency motors, variable speed drives, optimise control (timers, sensors, idle shut-off)

11. Energy Efficiency - Cambodian Opportunities (3) • Opportunities • Building Design – orientation + exterior awnings + facades + landscaping to reduce solar gain, insulation, natural lighting, natural ventilation, building materials to reduce air-con load, interior colours to reduce lighting load, double-glazed windows, air-locks + air curtains + revolving doors to minimise air leaks • Lighting – improve design, new technology (fittings + reflectors, low-energy ballasts, dimmable fluorescents), automate control (timers, sensors), zoning • Water Heating – centralised units, solar and gas rather than electric, heat pumps, insulate ducting, heat recovery from air-con, reduce water use (efficient nozzles, taps, showers), optimise settings (reduce temp) • Air Conditioning – new refrigerants + lubricants, optimise settings, controls (timers, sensors), duct layout + zoning, new technology, avoid individual control-setting, ceiling fans where possible Commercial Buildings Hospitals Hotels Banks Office Buildings Government Offices Warehouses Restaurants Markets and Shops Schools

12. Energy Efficiency - Cambodian Opportunities (4) Cogeneration (or “Combined Heat and Power”(CHP) • Anywhere with both electrical and heating or cooling needs • Especially: industrial plants and commercial buildings • Service can be offered by existing IPP (delivers electricity AND steam / cool air!) • Scenario 1: Garment Factory • Electricity generated by on-site diesel generators • Modified so hot water recovered directly from ‘’water jacket” or heat exchangers to pre-heat the factory boilers • Big saving in energy costs and emissions from coal-fired boilers • Scenario 2: Commercial Building • Electricity generated by on-site diesel generator • Air conditioning compressors driven directly by second shaft on diesel engine • OR: absorption chillers use the recovered heat from engines (as above) to generate cool air

13. Energy Efficiency - Cambodian Opportunities (5) • Opportunities • Building Design – orientation + exterior awnings + facades + landscaping to reduce solar gain, natural lighting, natural ventilation (flow-through, heat exhausts), building materials to reduce cooling load • Cooking – gas cooking if possible, efficient wood + coal stove designs, area with good ventilation + separate from living areas (to avoid heating them) • Lighting – use compact fluorescents, interior colours to reduce lighting load, task lighting rather than whole space (eg: over cooking bench, kitchen table etc) • Space Cooling – ceiling fans, sealable bedrooms for aircon • Appliances – awareness programs: energy efficiency labeling + stand-by loads, refrigerator settings + maintenance • Street Lighting – design + placement, high efficiency bulbs + fittings, optimise timers or sensors Residential Houses Apartment Blocks Rural cottages

14. Transport - CDM Considerations • Vehicle Efficiency • Improve existing vehicles (better maintenance, testing, regulations) • New technology (introduce + encourage its use through incentives + regulation) • Fuel Substitution • Biofuels (biodiesel, ethanol etc) to reduce use of diesel and petrol • Encourage natural gas + CNG use • Electric + hybrid vehicles (…and soon: fuel cells) Transport Efficiency Projects can be difficult to measure + verify as emission sources are generally privately owned + mobile! CDM validity should be checked. • Transport System Efficiency • Public transport systems (which are effective) • Trains for bulk cargo to/from sea/air ports • Encourage and simplify non-motorised transport • Plan towns, buildings and events to improve traffic flow + reduce need for motorised transport

15. Transport - International Case StudyUrban Busses in Yogyakarta, Indonesia Project • Improve the energy efficiency of public bus system • Replace engines on 200 of the fleet of 500 busses • Switch from diesel to either clean diesel, natural gas or other (still in design)

16. Transport Opportunities for Cambodia (1) Biofuels • Sustainable, renewable fuel source (for transport + generator sets) • Biodiesel, Ethanol, raw vegetable oils (eg: palm oil in Marine diesel engines) • Local production from energy crops • Increase energy independence • Project Options • Establish local manufacturing plants plus energy crops (technology transfer + training) • Demonstration project with free/cheap samples to promote + gain credibility • Public transport trial running on biofuels • Incentives (subsidies, tax concessions) to transport companies to use (eg: trucks, taxis, ferries, trains) • Promote + raise awareness of benefits for environment + Cambodia

17. Transport Opportunities for Cambodia (2) Private Vehicles • Establish emissions regulations + registration requirements • Periodic vehicle inspections + phase-in fines OR free tune-ups? • Tune-up program: establish training program for service centres, and mobile testing stations • Efficiency labeling on vehicles sold Public Transport • Efficient bus system around the major towns with services devoted to schools, universities + factories • As major highways are improved, establish cheap, reliable and safe bus system between major towns + tourist destinations • Upgrade train services (passenger + cargo) from sea port to Phnom Penh (plus Pursat, Battambang + Siam Reap?)

18. Renewable Energy - CDM Considerations • Must be sustainable • Measuring + Verification usually just involves measuring actual generation output, then calculating baseline fossil fuel emissions as savings • Need to be close to suitable transmission lines or consumers • Need someone to buy energy • Need licences from EAC as generator • Need to secure long-term supply of fuel if biomass (+possibly hydro)

19. International Case Study - Renewable Energy Waste Palm Oil Electricity Generation, Indonesia (1) Project • 10.3MW capacity from special high-pressure boiler with steam-turbo generator • Combustion of 220kT/yr of empty fruit bunches from processing plant • Palm Oil mill is 1.5km from 20kV substation + close to river Host Country Partner • Joint venture of 3 Indonesian companies (Catra Nusantara Bersama, Bronzeoak Limited, and PT Indonesian Power) • 2 of the companies will also purchase the power from the JV CDM Investor Partner • now looking - from an Annex 1 country • probably use a local Indonesian company to co-ordinate CDM investment

20. International Case Study - Renewable Energy (2) Waste Palm Oil Electricity Generation, Indonesia

21. Renewable Energy Opportunities for Cambodia (1) Hydropower • Excellent potential, proven ability in-country • Pico/micro suitable in many small villages on rivers • Mini – projects identified and investigated in Meritech study • CDM: gather small projects into one proposal Wind • Large utility scale (>500kw): 8 areas identified by modelling as good potential, now need monitoring and investigation • Small domestic scale (<500kW): demonstration projects by NEDO in Takeo, but one turbine damaged and monitoring unsuitable • Further investigation needed Solar PV • Excellent potential • Extensive demonstrations by NEDO and others • Opportunities for Grid-Interactive inverters in towns and small grids

22. Renewable Energy Opportunities for Cambodia (2) • Biomass • Various fuels available (rice husks, straw, bagasse, palm oil, forestry residue, plantation timber/crops (eg: rubber)) • Many technologies now mature and in use elsewhere • Need thorough resource assessment + feasibility studies • current fuel uses must be investigated • Biofuels • Biodiesel, ethanol and direct vegetable oils • (Discussed in Transport section) • Requires resource and feasibility assessments • Landfill and Urban Waste • Many technologies mature and available • Cheap and widely used elsewhere • Can be retrofitted, but better if designed at start of landfill life • Geothermal • Small, low-quality resource in Kompong Spue • Worth basic investigation • 50MW plant planned for central Vietnam

23. Next Steps Raise Stakeholder Awareness of Benefits • Government, Project Developers, Private Industry, Investors, International Developers and CDM Investors Project Identification + Pipeline • Resource assessments + industry studies/surveys + energy audits • Project Design • Feasibility Studies • Consultation with communities, authorities Project Promotion + Financing • Seek partners for finance + investment + co-ordination • “Will CDM help this project?” Yes: Start CDM Cycle No: Find alternative funding

24. CDM Projects in Cambodia - information and assistance - CDM Operation, Cambodia Status etc • Climate Change Unit MoE: Mr Tin Ponlok or Mr Sum Thy Renewable Energy and Energy Efficiency • Department of Energy Technique: Dr Sat Samy, Director • Hydropower Department: Dr Bun Narith, Director Fossil Fuel Generation, Transmission and Distribution • Energy du Cambodge: Dr Praing Chulasa, Deputy Director, Corporate Planning and Projects • Electricity Authority of Cambodia: Dr Ty Norin, Chairman • Department of Energy Development (MIME): Mr Tun Lean, Director

25. References • “A User’s guide to the CDM”, Pembina Institute, June 2002info@pembina.orgwww.pembina.org • “CDM Opportunities in Asia”, TERI New Delhi et. al., October 2002 • “Cambodia’s Initial Communication under the UNFCCC”, Ministry of Environment Cambodia, August 2002 • “Introduction to the CDM”, UNEP Collaborating Centre on Energy and Environment, RISO National Lab, (not dated) • “Simplified modalities and procedures for CDM small-scale project activities”, UNFCCC (www.unfccc.int/cdm/ssc.htm) • “DRAFT Renewable Energy Action Plan”, World Bank and MIME (DET), November 2002 Useful Websites • International Energy Agency (baseline calculations)www.iea.org/books/studies/2000/em.base.pdf • Monitoring and Verification guidelineswww.ipmvp.org/info/info.html • Asian CDM Opportunitieswww.pembina.org/publicationswww.teriin.org/climate/cdm.asia • Renewable Energy Feasibility Software + Examples (FREE download)www.retscreen.ca • Prototype Carbon Fund – World Bank • www.prototypecarbonfund.org or www.carbonfinance.org