A large gap in the electricity supply and demand is causing rolling load shedding all over Pakistan since many years. Installing run of the river and medium size hydro electric projects in Northern Pakistan can help reduce rolling electric load shedding. However, high capital investment required for building hydro electric projects and a long period of payback is a barrier for such investments. The Carbon Offset credits generated from hydro electric project can reduce the investment financial burden.
Carbon offsets are generated when electricity produced from hydro electric generation displaces grid electricity that is mostly generated using fossil fuel. For example, a 30 MW run of the river project with 90 capacity factor can generate approximately 236,520 megawatt hours (MWh) per year which will displace equivalent amount of fossil fuel fired WAPDA grid electricity. At the average WAPDA combined grid factor of 0.594 tonnes of carbon dioxide (tCO2e) per MWh hydro electric project will generate 140,492 tCO2e offset credits per year. At a prevalent carbon offset price of US $10 per CER (certified emission reduction), this will add additional revenue of $1,404,493 per year thus increasing rate of return on the hydro electric project that you plan to install or are in the process of installing or have already installed.
How does this process work?
After gathering your hydro electric project design and plant operation information:
- Polar Design Studio will complete the Clean Development Mechanisms (CDM) project design document (PDD). (takes 1 – 3 months)
- Once the PDD is finalized, a CER purchase agreement (ERPA) will be negotiated for a 10 year period with a potential buyer from the developed world.
- A DOE (PDD validation) firm will be hired to perform the project PDD validation and registration with the CDM Board. (takes 3 – 6 months)
- As part of step 3, the PDD approval letter will be obtained from the Pakistan CDM, (Designated National Authority) and Environmental Impact assessment (EIA) approval will be taken from the Ministry of Environment.
- On successful registration of the project (PDD) with the CDM Board, project monitoring according to the PDD will be started and all required WHR monitoring data will be collected each year.
- DOE will verify monitoring report for the year and register it with the CDM Board to release CER generated from the project for the year.
- The CER released each year will be transferred to the buyer who will in return pay CER purchased amount as per ERPA agreement.
- The process of project monitoring and verification will be done each year for the project life-cycle of 10 years.
What will be our role?
- Polar Design Studio in partnership with the project owner will complete: project CDM
- PDD development, validation, registration, monitoring and CER transfer during the CDM project life cycle.
- Polar Design Studio will ensure all CER monitoring is carried out every year and CER generated are transferred to buyer and funds are released from buyer are transferred to the project owner each year.
- Next Step!
- Call us to discuss and provide the preliminary information about your hydro electric project for CDM potential analysis.
- We will let you know your existing or potential project CDM CER revenue potential.
- Once you sign agreement, working with you we will proceed with your CDM project development.