Energy Management Workshop, Africa Carbon Exchange. Sizing Renewable Energy Systems for Different Facilities and Translation to Carbon Credits
Jul 13, 2015
Energy Management
Workshop,
Africa Carbon Exchange.
Sizing Renewable Energy Systems
for Different Facilities and
Translation to Carbon Credits
Presentation
1. Introduction to Viability Africa2. Overview of Existing EE Regulatory
Framework in Kenya3. Scalability of RE systems for Carbon
Credit financing4. Industrial EE and RE and Climate
Financing Opportunities5. Domestic EE and RE and climate
financing Opportunities 6. Case Studies
Viability Africa, LLC’s overriding objective is to operate as the
leading development and financial advisory firm for clean
technology projects and ventures across East Africa. Viability Africa
will support investments that exhibit economic, technical,
environmental, and social viability and sustainability. The growth of
our team will focus on the recruitment and development of East
Africans seeking to become the future business and political leaders
of their country and region. Our Founders have committed to
reinvesting a significant portion of the company’s earnings to ensure
the company will have long-term sustainability and impact, and to
solidify Viability Africa as a resource available to the market for
years to come as the clean technology sector grows in relevance
and impact across East Africa.
Our Vision
Viability Africa, LLC
Carbon Energy Environment
• Asset Development• Transaction Management• Asset Monitoring
• Feasibility Studies• Project Financing• Financial Advisory• Project Management
• Environmental and Social Impact Assessments
• Environment Audits
Founded in 2009, Viability Africa has headquarters in Nairobi, Kenya with near term expansion plans to establish offices in Dar esSalaam, Tanzania. Our current portfolio crosses a number of countries in sub-Saharan Africa and includes a diverse range of innovative technologies and solutions.
Presentation
1. Introduction to Viability Africa
2. Overview of Existing EE Regulatory Framework in Kenya
3. Project Components for Success
4. Venture Components for Success
5. Accessing Finance through Voluntary Carbon Markets
6. Case Studies
Overview of Existing EE Regulatory Framework in Kenya
1. Existing Statutory Provisions
2. Ministerial Directives, Policies and Regulations
3. Implementation Record
4. Comparison to other Jurisdictions
5. Need for a more powerful RE/EE Lobby?
Existing Statutory Provisions
• The Energy Act 2006– Calls for the Minister (Cabinet Secretary) to promote RE
by formulating national strategy for research, providing a working RE framework, promotion of RE specific technologies, promotion of local RE manufacturing,
– Calls for the Minister (Cabinet Secretary) to develop a national EE programme which includes standardization using KBS, awareness creation, strengthening consultation, financial assistance including financial incentives for EE
– Factories and Buildings – Specific provisions allowing the ERC in Consultation with the Minister (Cabinet Secretary) to direct EE measures with sanctions for non compliance
Ministerial Directives, Policies and Regulations
Sector Specific Requirements and Programmes
• 2004 – Sessional Paper No.4 on Energy
• Energy (Solar Water heating) Regulations 2010
• National Energy Policy – Third Draft – May 11 2012
• Establishment of the Centre for Energy Efficiency and Conservation (CEEC)
The three instruments have varying implications either generally or specifically as is the case for the solar Hot Water heating regulations.
Implementation Record
The various initiatives have realized the following results:
• KAM-GEF programme resulted in energy Savings of 1,800 GWh
• Estimated GHG savings of 5.2 million tonnes of CO2e.
• Increased uptake of Solar Hot Water Heaters since regulation passed even before it fully comes into force with an estimated demand of 65,000 units per year and Kenya’s status as a world leader in units sold per head.
• Increasing awareness amongst industry players on the need for increased EE measures
Comparison to Other Jurisdictions
1. Germany - 3 pillar approach1. Reduced energy Demand on Buildings and minimum 20% RE in
Energy Mix
2. Financial Incentives for buildings at Federal , Regional and Municipal levels
3. EE awareness including pilot programmes, and issuance of Energy Performance Certificates (EPCs)
Results: – 2006 - 2009, One million buildings refurbished
– 400,000 highly efficient buildings constructed
– 240,000 per year in the sector created per year
– 27 billion euros distributed in loans and subsidies between 2004 and 2009, for a total investment in building efficiency of nearly 54 billion euros
Need for a more powerful RE/EE Lobby?
What is needed:
1. Increased standardization for EE and RE technologies coming into Kenya
2. Support for local manufacture and assembly
3. Strengthen legislation around implementation of the existing legislations
4. Encourage tax rebates/ alternative incentives around EE for industrial and
commercial premises
5. Train local experts and local skills
Scalability of RE systems for Carbon Credit financing
1. Carbon Markets
2. Case Studies of Existing Projects
3. Costs and economic realities
Carbon Markets
• CDM - Market opportunities post 2012
• Gold Standard VCS and other trading schemes – Price consideration against sustainability
• Project development considerations– Additionality
– Sustainability
– Consultant costs vis-à-vis profitability
– The opportunity in consolidating efforts under PoAs
Case Studies
• Kenya has 14 registered CDM – Standalone projects –90% are RE based
• Project activities which qualify for carbon crediting:– CFL Lighting
– Energy Efficiency at Industrial Facilities
– Electricity distribution and transmissions
– EE measures on commercial buildings
– and commercial plants
Case Studies
1. Domestic Energy Efficiency
1. The Paradigm Project
2. Aqua Clara Foundation
3. Triple Quest
Costs and Economic Realities
• Consultancy
• DOE/ Validation
• Miscellaneous expenses – LSC etc
• Registration fees
Voluntary Carbon Case Study: Safe Water Team Kenya
• GS 1124• Implementation of 2,000 water filters in rural households in Siaya and
Bondo (Nyanza, Kenya). One year rollout implementation timeline, goal to establish the area as a distribution hub for future projects.
• Project Registered• Prepayment Model
o First payment at Registrationo Project Milestones o Carbon and Implementation Costs
• Scalable Modelo Three Micro-Scale PoA (Central America, East Africa, West Africa)
• Took Time to Developo 10 Months Registrationo 6 Months Transaction
Voluntary Carbon Case Study: AquaClara
• GS 1068
o Entrepreneur based model with tens of thousands of biosand filters set to be installed. AquaClara manages the supply chain to ensure the entrepreneurs have access to a sustainable source of input requirements as well as marketing and education resources. Focus is in Rift Valley area but targeting numerous communities in Kenya.
• Large Scale Project
• In Validation
• Transaction Closed (Forward Agreement)
o Fixed Pricing, Upside Potential
o Forward Sale Structure
Voluntary Carbon Case Studies: Lessons Learned• Transparent Relationship
o Developer – Buyero Consultant – Developero Consultant – Buyer
• Realistic Expectationso Timelines always seem to be overaggressiveo Costs are difficult to anticipateo Maintain Conservative Approach
o Tonnageo Costs
• Communication
Questions?
Nathan PM Gachugi
Project Manager
Viability Africa, LLC
www.ViabilityAfrica.com