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This programme of activities highlights challenges, advantages, and achievements of PoAs in CDM host countries. It provides insights and perspectives on implementation, transaction costs, stakeholder interactions, and more.
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Programme of ActivitiesLessons learnt &PoAs as a chance for CDM Host Countries • UNFCCC Joint Coordination Workshop • 12-13 March 2011, Bonn • Perspectives GmbH, Hamburg • Marc André Marr
PoA specific challenges Implementation of PoAs • Suitability of CE and interdependencies DNA related challenges • Very limited or no experience with PoAs Methodology related challenges • PoA specific requirements and limited suitability (e.g. combination) Reducing transaction costs? • PoA initially involves higher CDM transaction costs DOE liability • Result: Contrary to initial idea of the PoA concept “Reduce transaction costs” Stakeholder interaction and interrelations
PoA Case Study Mini hydro-power Africa PoA idea • Two PoAs for newly built mini-hydro power plants for rural electrification (replacing diesel generation) Current status • Support for Coordinating Entity • Business model finalized • Project developers identified • PoA Idea Notes finished • Incentive scheme developed • Terms of references • Support in promotion material
PoA Case Study Mini hydro-power Africa Business Model of the PoA • Rural Electrification Agency will be Coordinating Entity • Supports CPA developers • Administers the PoA • Responsible for monitoring • CPA developers • Construct and operate the projects • Conduct on-site monitoring (metering) • Financial institutions • Providing soft loans
PoA Case Study Mini hydro-power Africa Key advantages of the PoAs • Enable projects that would otherwise never be realized • No access to finance • Insufficient capabilities & capacities • Support rural electrification in a sustainable way • Lowering the risks for investors and carbon buyers due to established framework
PoA Case Study Mini hydro-power Africa Main challenges of the PoAs • Institutional framework with interrelations and dependencies • Setting up a business model which enables a high participation and being operable • High level of standardization required
What PoAs can achieve • PoAs enable project activities that otherwise would not be realized • PoAs can significantly • Reduce transaction costs • Save time from initial idea to CER issuance • Lower the risks for investors and CER buyers • PoAs are able to set the basis for NAMA development • PoAs can be an attractive additional CDM option
What is required for enable a greater use of PoAs? • Increased stakeholder interaction => PoA Working Group • Solution oriented approach • Identify and develop methodological simplifications • Standardization; default factors • Combination of methodologies (pick and choose) • PoA specific methodologies • Clear guidance on Liability (currently playground for DOEs) • Opportunities for up-front financing • Support from UNFCCC (e.g. clear statement, guidelines, case studies)
Thank you! Perspectives GmbH Marc André Marr Head of Carbon Project Services marr@perspectives.cc