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South African PACE Centre
CDM for Small-Scale Renewable Energy & Energy Efficiency
KEY ISSUES FOR PACE
Dean Cooper, Managing Director, Parallax
Parallax
Sustainable Development Solutions
PACE Centre
Key Issues for the PACE Centre
Cost
Potential
barriers to
small-scale
CDM
Parallax
Sustainable Development Solutions
PACE Centre
South African PACE Centre
CDM for Small-Scale Renewable Energy & Energy Efficiency
Cost
“CDMs have not really developed anything.
So far they have been all costs and no benefits.”
(Brian Dawson, UNDP, 11 Dec 2004)
Parallax
Sustainable Development Solutions
PACE Centre
South African PACE Centre
CDM for Small-Scale Renewable Energy & Energy Efficiency
Transaction Costs
• Project baselines
• Validating procedures
• Monitoring plan
• Contract negotiation
• Registration
• Up front payment
Parallax
Sustainable Development Solutions
PACE Centre
Key Issues for the PACE Centre
Cost
Awareness
Potential
barriers to
small-scale
CDM
Parallax
Sustainable Development Solutions
PACE Centre
South African PACE Centre
CDM for Small-Scale Renewable Energy & Energy Efficiency
Awareness of Small-Scale CDM Prospects
• Lack of information
• Bias towards “low-hanging fruit”
• Short term outlook
• Uncertainties – investment & returns
Parallax
Sustainable Development Solutions
PACE Centre
Key Issues for the PACE Centre
Cost
Awareness
Potential
barriers to
small-scale
CDM
Scale
Parallax
Sustainable Development Solutions
PACE Centre
South African PACE Centre
CDM for Small-Scale Renewable Energy & Energy Efficiency
Scale to Attract Investors
• Individual projects insufficient
• Project bundling
• Common baselines (international experience)
• Low and delayed revenue streams
• High project & business risks
Parallax
Sustainable Development Solutions
PACE Centre
Key Issues for the PACE Centre
Cost
Awareness
Potential
barriers to
small-scale
CDM
Scale
Project Cycle
Parallax
Sustainable Development Solutions
PACE Centre
South African PACE Centre
CDM for Small-Scale Renewable Energy & Energy Efficiency
Project Cycle
• Understanding
• Eligibility (DNA relations)
• Timing (approval & validation)
• Monitoring
Parallax
Sustainable Development Solutions
PACE Centre
Key Issues for the PACE Centre
Cost
Awareness
Potential
barriers to
small-scale
CDM
Scale
Capacity
Project Cycle
Parallax
Sustainable Development Solutions
PACE Centre
South African PACE Centre
CDM for Small-Scale Renewable Energy & Energy Efficiency
Limited Capacity
• Technology knowledge base
• Access to financial & technical resources
• Institutional capacity (including bureaucracy)
• Clarity of policy
• Investment capacity
Parallax
Sustainable Development Solutions
PACE Centre
Key Issues for the PACE Centre
Cost
Time
Awareness
Potential
barriers to
small-scale
CDM
Scale
Capacity
Project Cycle
Parallax
Sustainable Development Solutions
PACE Centre
South African PACE Centre
CDM for Small-Scale Renewable Energy & Energy Efficiency
Time Demands
• Understanding processes
• Completing PINs / PDDs
• Finding project partners (public/private)
• Establishing links to scale-up
• Investor agreements
Parallax
Sustainable Development Solutions
PACE Centre
Key Issues for the PACE Centre
Cost
Awareness
Time
Potential
barriers to
small-scale
CDM
Scale
Capacity
Project Cycle
Parallax
Sustainable Development Solutions
PACE Centre
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