POLAND AS JOINT IMPLEMENTATION HOST COUNTRY GREAT POTENTIAL CONTRA POOR MANAGEMENT

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POLAND AS JOINT IMPLEMENTATION HOST COUNTRY
GREAT POTENTIAL CONTRA POOR MANAGEMENT?

• Anna Paslawska, EPA SP. Z O.O.
• European Wind Energy Conference Exhibition
• Athens 2006
• Climate Change Policy

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EPA SP. z o.o.

• Head office Szczecin, north-west of Poland.
• Core Business - WIND POWER
• Turnkey Project Development,
• Wind Measurements, Micrositing, Productivity
  Analyses,
• Consultancy Services Verification of project
  documentation provided by the Customer,
  Feasibility studies of planned investments,
  Tender and procurement documentation, Fund
  acquisition, ect.,
• Joint Implementation.
• Member of Polish Wind Energy Association and
  EWEA.

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Aim and plan of presentation

• JI as one of Kyoto mechanisms.
• Poland as a party of UNFCCC and a Host of JI
  projects.
• Polish JI Potential.
• Approval of the project as a JI project.
• Bottlenecks and facilitations of the process in
  Poland.
• Is it worth to develop JI projects in Poland?

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JI as a mechanism

• JI 1 out of 3 mechanisms established to achieve
  cuts in emissions and help tackle climate change.
  
• Joint implementation allows industrialized
  countries to implement projects that reduce
  emissions or increase removals using sinks, in
  other industrialized countries.
• JI projects are most likely to take place in
  Central and Eastern European transition
  economies, where there is more scope for cutting
  emissions at lower costs than in the west.

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JI as a mechanism

• Reduction or avoidance of GHG emission - eligible
  projects
• Construction of combined heat and power
  installations,
• Fuel-switch from energy sources with high carbon
  content to energy sources with lower carbon
  content,
• RES projects,
• Energy efficiency projects, ect.
• Product ERU Emission Reduction Unit
• 1ERU 1 CO2teq saved in the system (not
  emitted, reduced),
• other GHG are re-calculated into CO2 equivalent.
• ERUs can be generated and transferred between
  2008-2012 and used to fulfill obligations under
  Kyoto Protocol.

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What wind has to do with JI?

• RES projects qualify as JI projects (avoidance of
  CO2 emissions)
• gt Wind is evaluated as clean technology with no
  leakage.
• JI as a tool to finance RES projects
• gt Increase of project IRR by 1-2 ,
• gt Early payments up to 30 of total ERU value.
• Exchange of ERU into EUA based on Linking
  Directive
• gt Starting from 2008 1ERU1EUA,
• gt Current price difference 1EUA
  23-27(/tCO2),
• 1ERU 4-8 (/tCO2).

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Poland as a party of UNFCCC and JI Host Country

• 28 July 1994 ratification of United Nations
  Framework Convention on Climate Change
• gt Stabilization of GHG emissions on 1988 level,
  
• gt Poland as the economy in transition.
• 26 July 2002 ratification of Kyoto Protocol
• gt Obligation to reduce GHG emissions by 6 in
  comparison to 1988 level.
• 16 February 2005 Kyoto Protocol entered into
  force,
• gt Delayed publication of Document in Journal of
  Law
• (17 October 2005).

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Poland as a JI Host Country

• Annex A country with the surplus of emissions.
• Track II from the Marrakesh Accords
• gt CDM-like approach to JI projects with
  international validation, approval and
  performance verification.
• Poland is still not eligible for Track I
• gt There is no national registry to record the
  acquisition and transfer of AAUs, ERUs,
• gt Some experts predict change of the country
  status.

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Country Rating JI (of 13.12.2005, Point Carbon)

Source Point Carbon
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Officially approved projects (till 10.11.2005)

• Polish-Dutch Biomass Project in Jelenia Góra
  (2000),
• Polish-Canadian Project - Small Hydropower Plant
  on the Bóbr river near Leszno Górne (2001),
• Polish-Danish Project Zagorze Wind Power
  Project (2002), 
• Polish-Dutch Project - Landfill Gas Recovery in
  Konin (2005),
• Polish-Danish Project - Zakopane Methane
  Utilisation Project - undergoing implementation,
• Prototype Carbon Fund - Geothermal Base-load
  Heating Plant in Stargard Szczecinski (2005). 

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JI Procedure

• Expression of Interest
• Project Idea Note,
• Letter of Endorsement.
• 2. Offer
• Business Plan and Environmental Assessment Study
  additional documents if required by ERU-buyer,
• Opinions from Projects Stakeholders,
• Project Design Document (Monitoring Plan and
  Baseline Scenario),
• Validation of the Project Determination Report,
• Letter of Approval.
• 3. Emission Reduction Purchase Agreement.

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Countrys JI potential

• 2010 indicative target 7.5 of gross energy
  consumption coming from RES (2,3 from wind)
  obligation to purchase electricity and heat
  generated by RES.
• Obsolete power generation system
• gt 94 of electricity produced in professional
  power and heat and power plants based on coal,
• gt Power blocks technically and economically
  worn,
• gt Many installations do not meet EU emission
  standards defined in Directives 2001/80/EC and
  2001/81/EC and Polish obligations under Goeteborg
  Protocols,
• gt Modernizations made in the 90. aimed at
  decreasing exhaust gasses pollution contributed
  to fulfillment of Kyoto obligation surplus of
  GHG emissions.

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Facilitations

• Established Focal Point - Department of
  Environmental Protection Instruments, Ministry of
  Economy.
• Basic guidelines on governmental web site
  http//www.mos.gov.pl.
• Some experiences 6 approved projects around 20
  undergoing approval process.
• Most validation companies are present in Poland
  at least 3 have experiences.
• Positive JI investment climate.

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Bottlenecks

• No standardization of approval procedures
• gt Different emission factors in different
  projects,
• gt Different credit sharing between host and
  donor country.
• No help by defining the Baseline, proving
  additionality, calculating emission factor.
• gt Difficulties with obtaining the data about
  the power sector (especially concerning the
  emission and production level of power plants).
• MoU only with some countries and programmes.
• Time the whole procedure takes around 12
  months.
• No transposition of Linking Directive so far
  still not possible to dedicate credits from JI to
  private companies under EU ETS.

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Is it worth to develop JI projects in Poland?

• Great potential investments in different
  sectors!
• Poland as EU member state needs to follow and
  implement EU policies and law reduction of
  political risk.
• Attractive geographical location for companies
  active in Europe.
• Experiences with JI, stable place in JI country
  ratings.
• Most of bottlenecks can be overcome with the help
  of local technical advisors.
• Possibility to exchange ERU to EAU starting from
  2008.

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Thank you for your attention!

• Anna Paslawska
• Project Manager
• a.paslawska_at_epa.com.pl
• EPA SP. Z O.O.
• Wojska Polskiego 154
• 71-324 Szczecin, Poland
• www.epa.com.pl