renewable energy in carbon market
TRANSCRIPT
National Council on Climate Change of Indonesia
Renewable Energy in Indonesia Carbon Market
Dicky Edwin Hindarto
National Council on Climate Change of Indonesia The Indonesia DNA
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Outlines
1. NCCC roles in carbon market 2. Indonesia carbon market
current condition 3. Indonesia future carbon
market scenario 4. RE in Indonesia future
carbon market scenario 5. Nusantara Carbon Scheme.
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NCCC of Indonesia roles on carbon market NCCC has 5 tasks, one of the most important thing is to develop carbon
trading within Indonesia area (Presidential Decree number 46, 2008)
NCCC is the Indonesia UNFCCC focal point and also the focal point for another carbon market related international forum and negotiation e.g. bilateral initiative with the Japan and Australia
The Executive Chairman of the NCCC is also the head of the Designated National Authority for Clean Development Mechanism (CDM) in Indonesia, called “Komite Nasional Mekanisme Pembangunan Bersih” (Komnas MPB)
The Carbon Trading Mechanism Division also act as the secretariat of DNA-CDM in Indonesia.
The CDM Projects development in Indonesia
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Biomass energy, 11
Cement, 1
EE households, 0
EE Industry, 2
EE supply side, 2
EE own generation, 0
Fossil fuel switch, 3
Fugitive, 1
Geothermal, 4
Hydro, 6
Landfill gas, 7Coal bed/mine methane, 0
Methane avoidance, 35
N2O, 1
PFCs and SF6, 1
Agriculture, 0
Solar, 1 Afforestation, 0
Reforestation, 0
The Indonesia CDM and voluntary projects
Total CER expected until 2012 : 50,132,380 CER; mostly from methane avoidance Total CER expected until 2012from the registered projects : 27,513,180 CERs; mostly from
geothermal There are more than 20 voluntary carbon markets that being developed in Indonesia Some of the so called “REDD+” projects goes to the voluntary carbon market About 2,5 millions VER are already issuanced for voluntary carbon market projects.
Biomass energy, 33
Cement, 1
EE households, 1
EE Industry, 7
EE supply side, 7
EE own generation, 6
Fossil fuel switch, 10
Fugitive, 4
Geothermal, 12
Hydro, 27Landfill gas, 12
Coal bed/mine methane, 2
Methane avoidance, 95
N2O, 2
PFCs and SF6, 3
Agriculture, 1
Solar, 1 Afforestation, 1
Reforestation, 1
The CDM projects in UNFCCC pipeline The registered CDM projects in UNFCCC
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The Indonesia issuanced CDM projects No. Title Province / State Type Sub-type CERs
Expected
CERs
Issuance
success
1 CDM SOLAR COOKER PROJECT Aceh 1 Aceh Solar Solar cooking 1,077 6,060 18%
2 Methane Capture and Combustion from
Swine Manure Treatment Project at PT
Indotirta Suaka Bulan Farm in Indonesia
Riau Methane
avoidance
Manure 42,716 221,485 19%
3 Indocement Alternative Fuels Project West Java & South
Kalimantan
Biomass energy Agricultural
residues: other
kinds
80,967 258,308 31%
4 Indocement Blended Cement Project West Java & South
Kalimantan
Cement Clinker replacement 333,076 1,211,054 28%
5 Darajat Unit III Geothermal Project West Java Geothermal Geothermal
electricity
1,329,960 1,390,111 96%
6 Tambun LPG Associated Gas Recovery and
Utilization Project
West Java Fugitive Oil field flaring
reduction
1,483,279 1,040,953 142%
7 MEN-Tangerang 13.6MW Natural Gas Co-
generation Project
Banten EE supply side Cogeneration 17,154 21,836 79%
8 Emission reductions through partial
substitution of fossil fuel with alternative fuels
in the 2 cement plants of PT Holcim
Indonesia Tbk
West Java &
Central Java
Biomass energy Agricultural
residues: other
kinds
12,335 106,284 12%
9 4MW Biomass Power Plants Using Waste
Wood Chips & Sawdust in Central Java
Province, Indonesia
Central Java Biomass energy Forest residues:
sawmill waste
10,982 14,322 77%
10 Gianyar Waste Recovery Project Bali Methane
avoidance
Composting 2,110 6,713 31%
11 Methane Recovery in Wastewater
Treatment, Project AIN07-W-01, Sumatera
Utara (North Sumatera), Indonesia
South Sumatra Methane
avoidance
Waste water 14,472 41,349 35%
12 Methane Recovery in Wastewater
Treatment, Project AIN07-W-05, Sumatera
Utara, Indonesia
North Sumatra Methane
avoidance
Waste water 30,235 42,206 72%
13 AIN08-W-03, Methane Recovery in
Wastewater Treatment, Sumatera Utara,
Indonesia
North Sumatra Methane
avoidance
Waste water 15,537 38,319 41%
14 BAJ Gunung Agung Factory tapioca starch
wastewater biogas extraction and utilization
project, Lampung Province, Republic of
Lampung Methane
avoidance
Waste water 6,858 30,779 22%
15 Kamojang Geothermal West Java Geothermal Geothermal
electricity
92,691 81,660 114%
16 Wayang Windu Phase 2 Geothermal Power
Project
West Java Geothermal Geothermal
electricity
379,773 372,373 102%
Total 3,853,222 4,883,812 79%
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New carbon market scenarios for Indonesia
CDM Voluntary
Carbon Market
Readiness of the government and privates to prepare legal, organizational, and technical structures of market.
• New CDM • REDD+ • Crediting NAMAs • Regional market • Domestic market • Bilateral offset
credit mechanism
• Others
• Reformed CDM post-2012
• Programmatic CDM (we have issued 5 LoAs)
• REDD+
• Creditable NAMAs
• Bilateral offset credit mechanism, 32 FS have been done)
• Voluntary market and domestic market
• Regional market (with Australia and New Zealand)
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Indonesia future carbon market frame work
International Carbon Markets
Linking via offset mechanism
Direct link with other domestic market
mechanism
International Crediting
Mechanism
DOMESTIC MARKET MECHANISMS that based on voluntary market system
(e.g. Emissions trading scheme or sectoral trading) Indonesia will prepare standard, policies, and
market instrument.
CARBON CREDIT SUPPLIER Indonesia will produce carbon credit for
mandatory and voluntary based market system for international market.
REGIONAL AND BILATERAL MARKET
that based on regional and bilateral agreement and domestic
emission reduction policies (e.g. NAMA or sectoral crediting)
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Where do we put the RE in future carbon markets?
Renewable Energy
CDM and PoA
Creditable NAMAs
VCM BOCM
Other New
Markets
Traditionally, RE can be developed in future CDM and PoA.
Large RE is one of the main target in Creditable NAMAs.
VCM can be used for the small to the large capacity of RE.
Some countries are eager to invest the RE projects using BOCM scenario (geothermal, hydro, biomass).
One or two other new markets mechanism still will be developed and use RE as one of the main target.
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Designing new market mechanism
Voluntary Offset Cap and Trade New Market Mechanism?
• Politically easier to adopt • Relatively harder to
operate due to its ‘project-based’ nature
• Governance is simple • Does not require lengthy
preparation eg. Preparing sectoral baseline, etc.
• Can be customized by design to accommodate specific need eg. Micro project, co-benefit value, etc.
• Need strong political will to adopt
• Easier to implement due its nature of ‘inventory-based’
• Friendlier to large-scale ‘green’ investment
• Need rigorous preparation to establish baseline
• Governance is complex cap setting and mechanism design
• Leakage issues
• Easy to adopt • Simple governance • Does not require lengthy
preparation • Customize-able • Easy to implement
(inventory-based?) • Support large-scale
‘green’ investment
New market mechanism should seek to feature only the merits of existing mechanisms with regard of UNFCCC negotiation results.
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Indonesia initiative on domestic carbon market
Skema Karbon Nusantara, or Nusantara Carbon Scheme (NCS), is an Indonesian-based voluntary carbon market scheme.
By entering NCS, Indonesians can reduce greenhouse gas emissions by developing low carbon project or buying NCS credits.
NCS features:
A simple yet robust procedures;
Technical assistance from National Council on Climate Change; and
Assurance that the project had delivered real and measurable emissions reduction and contributes directly to Indonesia low carbon and sustainable development.
SkemaKarbonNusantara
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Renewable energy is one of our main target
Specifically, SKN will be targetted:
• Projects that ‘traditionally’ not feasible for carbon market, e.g. micro projects (<5MW energy generation, <10 GWh/yr. of energy saving, <20.000 tCO2/yr. of emissions reduction) and community-based forestry/agriculture projects as Seller; and
• Indonesian entities interested in offsetting GHG emission and contributes to sustainable development as Buyer
Along with other countries initiative and VCM standards!
J-VER
K-CER
SkemaKarbonNusantara
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SKN’s flow of operation
• SKN flow of operation is comparable with CDM.
• Validation/verification in SKN will prioritize local entities (private companies/NGOs/research institutes) with reference to ISO 14064 series and ISO 14065
Project Design Document Validation
AssessmentMonitoring and
Verification
Monitoring Report
Credit IssuanceRegistry and
Distribution of Credits
Validation Report
No Yes
YesNo
By Validator/Verificator By SKN CommitteeBy Project Developer
National Council on Climate Change of Indonesia
Terima kasih Thank you
SkemaKarbonNusantara