Seeking Continental Sustainability

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• Seeking Continental Sustainability
• Julie Smith-Galvin
• Enel North America, Inc.
• Forum on Hydropower 2005
• Gatineau, Quebec, Canada
• October 27, 2005

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Enel Worlds Largest Renewable Portfolio
USA390 MWhydro, wind
Italy 15,100 MW hydro, geo, wind, pv
Canada 40 MWhydro, biomass
Guatemala 60 MW - hydro
El Salvador100 MW - geothermal partner
Costa Rica60 MW - hydro, wind
Chile90 MW - hydro
Spain1240 MW1 hydro, wind, biomass
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Enel North America 100 Renewable Energy
CHI Canada, Inc. 2 Provinces 50 MW Hydro,
Biomass
US Operations 17 States 350 MW Hydro, Wind
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What does sustainability mean?
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There are over 300 definitions!
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Often quoted
Sustainable development meets the needs of of
the present without compromising the ability of
future generations to meet their own needs.
1997- Minister Gro Harlem Bruntland (Norway)
Applied to hydropower

• Water not consumed nor polluted
• Important water management role
• High energy payback ratio
• Emissions benefits
• Etc.

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Focus on Global Warming
The dominant cause of climate disruption is the
emission of carbon dioxide from fossil-fuel
combustion 80 of civilizations energy comes
from fossil fuel combustion
Green Strategies, Inc.
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Emissions from Electricity Generation
Canadas Third National Report on Climate Change,
2001
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The Headlines scream . . .
Climate change increasingly seen as a risk
factor More Canadian firms are analyzing
effects on their businesses from carbon
emissions Globe and Mail, Oct 11, 2005
Global warming causing record Arctic ice
melt CTV.ca News Staff
A New Worry for Insurers Firms Looking at
Whether Climate Change Could Affect Their Bottom
Lines Washington Post, Oct 5, 2005
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The pictures tell a story . . .
NASA image NRDC overlay
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Summertime in Mt. Hood
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Hydropower likely to suffer as impacts felt . . .

• Some models show that 75 of the US states would
  experience decrease water supply resulting in
  hydropower losses of USD 4 13 billion by 2060
  (EPA 1992)

But, hydropower can be part of the solution . . .

• Few to no greenhouse gas emissions
• Offsets greenhouse gas emitting generation

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Opportunities Maximize Value in Emerging Markets
No One Single Market (Mosaic or Puzzle?)
EU Emissions Trading Scheme 23.35/t CO2e EUA
(Oct 12 close) 25 EU member states participate
(12,700 installations 40 of emissions) 2005
2007 phase 2008 2012 Kyoto commitment period
Six sectors covered Clean Development
Mechanism 2.00 8.00/t CO2e CER Developing
countries project based 360 million tonnes/year
transacting 57 from energy sector Joint
Implementation (ERU) Annex I countries project
based
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Opportunities Maximize Value in Emerging Markets
Direct Participation by Hydropower?
EU Emissions Trading Scheme 23.35/t CO2e EUA
(Oct 12 close) 25 EU member states participate
(12,700 installations 40 of emissions) 2005
2007 phase 2008 2012 Kyoto commitment period
Six sectors covered Clean Development
Mechanism 2.00 8.00/t CO2e CER Developing
countries project based 360 million tonnes/year
transacting 57 from energy sector Joint
Implementation (ERU) Annex I countries project
based
No
YES
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Opportunities Maximize Value in Emerging Markets

• In Canada

• Offsets System for Greenhouse Gases
• Rules recently proposed
• All projects resulting in emission reductions
  online on or after 2000
• Standardized protocols to calculate reduction
• Energy Sector National Intensity Factor
  Proposed
• Price to be set by market
• Two main buyers Government Large Final
  Emitters
• Government has CDN15/t CO2e cap for LFEs

YES
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Opportunities Maximize Value in Emerging Markets

• In US (not Kyoto related)

• Regional Greenhouse Gas Initiative
• 9 Northeast states 2 Observer states
• Stabilization until 2015 10 reduction by 2020
• Price caps/exit mechanisms
• Goal to be national model

• Hydro Included?
• Still possibility of output allocations (state
  discretion)
• 20 set-aside with strong language supporting
  RE/EE
• 5 set-aside Strategic Carbon Fund (to address
  leakage)
• Offsets does not currently include many
  renewables

TBD
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Opportunities Maximize Value in Emerging Markets

• Many Issues still to be worked out
• - Overlap between programs Lots of
  Speculation!
• Will RGGI include CDM and/or Canadian offsets?
• Will EU ETS allow RGGI allowances?
• - Overlap between Renewable Energy Certificates
  Emission Markets
• Largely a US issue
• - US/Canadian border issues
• Canadian offsets program allows for cross
  border trucking offsets but not energy
• - Prices, Liquidity, Terms

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Parting Message

• Global Warming is a problem of such magnitude
  that all available tools must be used to combat
  it . . .

Hydropower must be recognized as one of the tools
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Questions Answers