Renewable Energy and the Flexible Mechanisms of the Kyoto Protocol: A Case Study from the Czech Republic

Ian Murphy
Less Carbon (Canada) Inc, Calgary, AB

The flexible mechanisms arising from the Kyoto Protocol that incentivize clean energy technologies can have a material economic effect on renewable energy projects. The ability to add an additional revenue stream to a clean energy technology project through the sale of emission credits can positively impact its investment return when compared against traditional fossil fuel powered energy sources.

The subject of my presentation shall be a review of the developmental and financing stages of a wind farm in Eastern Europe, which will be partially financed through the sale of carbon emissions credits. I shall focus on the steps necessary to take advantage of the new market in carbon credits, as well as looking at the wider implications for potential renewable energy projects in the developing world.

The project's aim is to design and implement the first major wind farm in the Czech Republic, which is one of the most energy and greenhouse gas emissions intensive economies in the world. As a result of this and several other factors, this project is to be structured as a JI (Joint Implementation) project. When completed, this project shall generate 2.7million tons of emissions credits. To give an indication of the value, an approximation of the value of these credits at the lower end of today's prices equates to C$20million between 2005 and 2012. In summary, despite considerable barriers to entry, the introduction of carbon finance can materially assist the adoption of renewable energy technologies in the developing world.

AAPG Search and Discovery Article #90039©2005 AAPG Calgary, Alberta, June 16-19, 2005