Aiming Zhou Energy Specialist Asian Development Bank

6th Asia Clean Energy Forum 20-24 June 2011 Manila

Outline
o Understanding Renewable Energy Certificates o How do they fit into ADB's Clean Energy Program? o What is ADB's RECs initiative? o Other Clean Energy Program initiatives

Understanding RECs
o One megawatt hour of electricity

generated and delivered to the grid from a qualified renewable energy source
o Sold separately from commodity electricity o Also known as tradable renewable

certificates (TRCs), green tickets, green certificates, green tags, renewable energy credits

RECs Conceptual Framework

Biomass Wind Solar Geothermal Hydro

Environmental benefits Electricity Generation Physical electricity

RECs Market

Power Market

Renewable Energy Policy Framework

Tender Scheme Feed-in-Tariff

Renewable Energy Portfolio RECs

Installed Wind Power Capacity by Region

180,000 160,000 140,000 120,000 100,000 MW 80,000 60,000 40,000 20,000 1997
1997 Asia Pacific Africa Middle East Europe & Eurasia S. & Cent. America North America 1,119 6 18 4,812 42 1,639

1998
1998 1,261 10 18 6,572 66 2,226

1999
1999 1,426 64 18 9,756 95 2,573

2000
2000 1,798 137 18 13,650 96 2,752

2001
2001 2,349 137 18 17,833 131 4,462

2002
2002 2,916 148 33 23,854 140 4,947

2003
2003 3,790 211 72 29,325 190 6,715

2004
2004 5,438 234 101

2005
2005

2006

2007

2008

2009
2009 42,037 1,014 101 76,581 1,418 38,933

2006 11,591 386 101 48,651 397 13,180

2007 17,193 469 101 56,851 581 18,810

2008 26,446 696 101 65,998 977 27,940

7,889 278 101 41,068 195 9,867

34,749 194 7,197

Installed Solar PV Power Capacity by Region

25,000

20,000 MW 15,000 10,000 5,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

1997

1998 164 369 116 117

1999 247 487 143 136

2000 383 682 200 160

2001 523 724 301 192

2002 730 787 421 238

2003 972 851 624 304

2004 1,267 886 1,283 408

2005 1,582 924 2,246 514

2006 1,930 963 3,218 664

2007 2,240 1,043 5,012 877

2008 2,850 1,097 10,429 1,223

2009 3,763 1,329 16,066 1,771

Asia Pacific
Rest of World Europe North America

115 292 95 103

Installed Geothermal Power by Region

12,000
10,000 8,000 6,000 MW 4,000 2,000 1990 1995 2000 2003

2004

2005

2006

2007

2008 2007 2,131 3,490 1,453 2,850

2009 2008 2,176 3,673 1,554 2,911 2009 2,180 3,810 1,634 3,087

1990 Rest of World Asia Pacific Europe North America 1,193 1,347 629 2,775

1995 1,532 1,774 722 2,817

2000 1,932 2,980 1,021 2,228

2003 2,051 3,171 1,107 2,020

2004 2,047 3,169 1,123 2,534

2005 2,049 3,255 1,123 2,653

2006 2,095 3,443 1,260 2,687

Uneven Deployment of RE Technology

New Zealand 1% Japan 5% Other Asia Pacific 2%

Australia 4%

South Korea 14%

Australia Malaysia 5% 0%

People's Republic of China 8%

India 3%

India 26%

People's Republic of China 62%

People's Republic China 1%

Japan 70%

Solar

Wind
Indonesia 32%
Philippines 51%

Japan 14% Papua New Guinea 2%

Geothermal

RECs Around the World

Why RECs
o Flexibility
Domestic and international tradable . No transmission constrains within physical electricity transfer Mandatory Compliance and Voluntary Commitment Support small/distributed projects

o Complementary to other RE incentives

FITs Investment tax credit

Drivers of REC Market Prices

o Mandatory Markets
o
Supply and demand (RPS target, availability of costeffective resources, ability to site new projects, etc.) RPS Rules (geographic eligibility, banking, penalties)

o Voluntary Markets
o
o o o
Supply and demand (competition from RPS markets, consumer demand for local resources) Type and location of resource New vs. existing Volume purchased

RECs in the Context of ADBs Energy Experience

o ADBs First Energy Policy (1981): response to
the oil crisis o Second Energy Policy (1995): infrastructure investment and developing financially robust and efficient sector operations o Energy Policy Review (2000): reducing poverty, increasing private sector involvement, addressing environment impacts, promoting regional cooperation

o Energy Policy 2009: Three Pillars (EE/RE; EfA,

Reform/Capacity Bldg/Governance)

ADB Clean Energy Financing (Target = $2 Billion by 2013)

2,000 1,800 1,750 1,313 1,400 1,756
1,600 1,400

$ 2 Billion
1,800

1,600

($ millions)

1,200 1,000 800 600 400 226 200 2003 2004 2005 2006 2007 2008 306 757 657 668

1,200

$ 1 Billion

2009

2010

2011

2012

2013

ADBs Composition of CE Financing (Cumulative 2008-2010, in US$ million)

Clean Energy Funds: 192 Cleaner Fuel: 318

Hydro
Energy Efficiency: 1,234

Wind
638 20.8%

Solar
206 6.7%

Others
556 18.1%

1,674
Renewable Energy : 3,074

54.4%

Total Energy-related Investment (2008-2010): $ 9.1 Billion ; Total Clean Energy Investment (2008-2010): $ 4.8 Billion.
Note: Others in the breakdown of RE projects pertains to biomass/biogas, waste to energy

Green Certificates Initiative in Asian Pacific

o Uneven distribution, development and investment by RE
sources, countries

o In order to increase the flexibility to meet renewable

energy development targets in selected DMCs
o Market assessment o Legal and regulatory framework o National and regional trading platform

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Pilot Study for a RECs Program in Sri Lanka

o Evaluate policy and technology options is REC scheme compatible with financial/fiscal incentive measures already in place?

o Analyze institutional framework o Design conceptual framework

o Propose legal & regulatory framework

Thank You !
Contact Aiming Zhou, email: azhou@adb.org More information: www.adb.org/clean-energy