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Carbon Bazaar – 2010 Experience in Selling Carbon Credits

Carbon Bazaar – 2010 Experience in Selling Carbon Credits. Rishi Seth Emergent Ventures India Pvt. Ltd. About EVI: An Emerging and Integrated Climate Change Company . About Emergent Ventures (EVI) Emerging and Integrated climate change company rapidly increasing its geographical reach .

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Carbon Bazaar – 2010 Experience in Selling Carbon Credits

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  1. Carbon Bazaar – 2010Experience in Selling Carbon Credits

    Rishi Seth Emergent Ventures India Pvt. Ltd.
  2. About EVI: An Emerging and Integrated Climate Change Company
  3. About Emergent Ventures (EVI)Emerging and Integrated climate change company rapidly increasing its geographical reach ABOUT EVI Started Carbon Advisory business in 2004, EVI is a fast growing renewable energy focused firm offering carbon markets, strategic advisory and undertaking renewable energy project development for corporate entities, government organizations and funds across the globe Backed by IDFC Private Equity, India’s largest private equity firm managing a corpus of over $1.3 Bn The Company has an established management team lead by Mr. Vinod Kala who has in the past incubated and conceptualized some of the pioneering companies in the clean energy efficiency space EVI has over 100 employees with footprint across India, Indonesia, Malaysia, Singapore, Thailand, Australia and USA EVI’s vision is to create sustainable solutions for the environment by mobilizing finance and low carbon technology
  4. Key Milestones in EVI’s growth EVI has been on a steady growth path since inception Contract for development of 100 MW Solar Thermal and 50 MW Solar PV Developing 500+ MW self identified clean energy generation assets across biomass, wind, waste-to-energy and solar 35 CDM registered projects, 200+ in pipeline Over 140mn carbon credits under management Investment by IDFC PE Started two new business segments Climate Value Advisory and Carbon Finance and Technology International operation started with formation of Singapore subsidiary WindForce incubated. Wind farm development subsidiary formed Study on CDM opportunity in urban transport for MoUD Won first CDM registration contract (Wind) Multiple registration contracts in the pipeline Won first CDM registration contract (Wind) 2008 2009 2010 2004 2005 2006 2007 Started climate change business in 2004 First client engagement – Municipal Solid Waste (MSW) Subsidiary in Malaysia & US formed Comprehensive GHG mapping for HDFC Bank Carbon neutrality advisory for Australian Trade Commission Employee base grown to over 100 10 CDM registrations Transacted 9mn VERs – largest in the world CDM registration of world’s largest Hydro project (192 MW)
  5. EVI Service OfferingsLeveraging on its deep climate change advisory expertise, EVI is now expanding into clean energy generation space Carbon Advisory (CA) Climate Value / Strategic Advisory (CVA) Carbon Finance & Technology Solutions (CFTS) Clean Energy Generation (Asset Ownership) CDM / VER project origination Project conceptualization and carbon credit due diligence CDM execution & CER generation Carbon asset management (Compliance & Voluntary Markets) Carbon trading and brokerage Policy research and advisory Climate change risk assessment Climate change strategy formulation for corporate; green branding etc. Carbon foot-printing; GHG management Carbon neutrality services Sustainability reporting & assurance Renewable energy advisory Surveys & business rankings Prefeasibility analysis & survey; Techno-economic viability study Financial closure / Syndication Engineering, procurement & construction services (EPC) Overall development & management of projects (Owners’ engineer) Carbon asset management for in-house projects Operation & management of project (Management lease) Has identified attractive generation projects under development; includes biomass, waste to energy, wind farms and solar Key Projects / Highlights Has registered 35 projects under CDM with UNFCCC Projects registered include HFC23 destruction, N20 capture & destruction, wind farms, hydro power, waste heat recovery, biomass, methane recovery etc. Very wide variety of expertise covering 4 GHG gases, all types of renewable energy projects, plantations/afforestations etc. Presence in South East Asia and Africa, new emerging markets with a pipeline of 200+ projects across Asia and Africa. Helping various govt. institutions on climate change policy aspects (Ministry of New & Renewable Energy, National Bamboo Mission, Ministry of Urban Development, Govt. of Sikkim etc.) Ongoing projects include sustainable city planning etc. Corporate Clients include HDFC, GMR, Jain Irrigation, Jubilant, Jindal Steel 5 Technology areas developed (biomass combustion, biomass gasification, anaerobic digestion, wind farm development, solar, plantations) and won engagements ~ 300 MW+ Engaged in conceptualization and development of large scale solar projects for the government as well as clients. 60MW biomass fired (Bihar) 30MW biomass fired (Bihar-II) 5.6MW waste to energy (Haryana) 12MW waste to energy (AP) 75MW wind farm (TN) 225MW wind farm (TN-II) 100MW solar (AP) 8MW biomass gasification (Sri Lanka) 7MW biomass gasification (TN & West Bengal)
  6. Carbon Markets
  7. Carbon Markets RGGI $2.5 billion EU ETS $104 billion CER $25 billion AAU $2.6 billion JI $0.5 billion 7
  8. ComplianceMarkets… Sale Options - Contracts Spot sale to capture high spikes in the market prices; Major advantage of spot sale is that CERs always get the market price, however downsides are Huge downside risk in case of a price crash (moderate probability of price decline) Uncertainty regarding timing of sale, this might create uncertainty in annual cash-flow as well ERPA based – contract based sale, long gestation period considering spot sale! 8
  9. Compliance Markets… Forward sale for increasing certainty about CERs revenue with various pricing structures . Typically Buyers enter forward contracts to reduce cost of compliance and to have greater certainty of compliance. 9
  10. Compliance Markets… Sale Options … 10
  11. Compliance Markets … Price Drivers 11
  12. Compliance Markets …Types of Pricing Structures 12
  13. Compliance Markets…Some Key Concerns 13
  14. Voluntary MarketsMarketSize ... 2009 market size expected to shrink; the contraction could have been much more severe but for the CCAR market in the USA, in particular Forestry credits under the protocol. 14
  15. Voluntary Markets2009 – A Tough Year Economic recession Fall in corporate voluntary spending Excess supply of VERs Led to a BUYER’s market More compliance uncertainty (USA/Aus) CCX market collapse Addition cost with registries Overall lower prices for pre-CDM and VCS credits BUYER MOTIVATIONS 15
  16. Trading Experience – Carbon Asset ManagementEVI has developed an in-depth understanding of the carbon markets both compliance and voluntary – enabling clients to monetize their carbon assets COMPLIANCE EVI has transacted over 7 million CERs on behalf of its clients Spot ‘Short-Term Forward’ Forward – multiple price discovery mechanisms Forward with upfront payments VOLUNTARY EVI has transacted over 12 million VERs on behalf of its clients Spot & Forward transaction World’s largest VER deal for 400 MW run of the river hydro project.
  17. Carbon Markets
  18. Thank You
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