Carbon credits to capitalize Chilean small power plantsPublished: May 12, 2009
Sales of credits could facilitate the implementation of small and medium hydropower plants in southern Chile. Association of Small Hydroelectric Plants coordinates CDM operation.
With the implementation of a Clean Development Mechanism Program led by the Association of Small and Medium Hydropower Plants (APEMEC), Chile will facilitate the construction of this type of power plants. Carbon credits will be sold to generate additional income and finance these projects.
This initiative from the Chilean Economic Development Agency (CORFO) seeks to reduce greenhouse gases and promotes the development of non-conventional renewable energy (NCRE) in Chile. Javier García, CORFO's deputy head of Investment and Promotion Division, explained that the institution "aims to support national companies in order for them to achieve the highest profit in the markets in which they participate; in this case, the carbon market. This tool is available to project developers in order to enhance energy generation from clean NCRE sources."
The Clean Development Mechanism (CDM) of the Kyoto Protocol seeks to reduce GHG emissions. This allows the most polluting countries to establish emission reductions through projects in developing countries, as if they were generated in their own territory. Programmatic CDM projects gather sector or regional partners related to a particular technology, and are presented as a single project.
CORFO released a Program of Activities Design Document (PoADD) for a proposed Clean Development Mechanism. The following validation and registration stages will be led by APEMEC. The Association's goals are to identify potential project participants, determining the volume of carbon credits, ensuring proper implementation of the program, and consensual and transparent transfer of economic benefits generated by this program to the project owners.
Pedro Matthei, president of APEMEC, remarked that "as a first step, we are surveying all projects that qualify, in order to measure the volume of CERs. Subsequently, we will start sales efforts and convey the benefits to the projects."
Great potentialThe Association of Small and Medium Hydropower Plants has identified about 20 such projects in their start-up stage only in the Puyehue and Ranco lakes, with a total investment of approximately US$ 550 million. Similarly, important hydropower projects can be found on the Longaví, Maule, Bío Bío, Laja, Toltén, San Pedro and Pilmaiquén rivers.
Data from APEMEC and other sources -such as the Federico Santa María University- indicate that generation potential in Chile, based on small and medium hydropower plants, is over 1,700 MW. "The small and medium hydropower plants sector is the primary source of NCRE in Chile, and its associated environmental impacts are comparatively low," highlighted Matthei in an interview to Electricidad Interamericana Magazine.
Matthei remarked that APEMEC will work to become an organism "that facilitates and promotes the development of these projects in Chile". The APEMEC president also emphasized that the Association "will work closely with government authorities and various industry players."
Sources:CORFORevista EI (Electricidad Interamericana)