The Kyoto Protocol, with its targets and project development mechanisms, is beginning to have a positive effect on the development of decentralized energy around the world. Now, six countries have established the Asia-Pacific Partnership with some overlapping goals. Griffin M. Thompson and Joe O. Neuhoff discuss the Partnership and its likely impact on distributed generation.

The Asia-Pacific Partnership on Clean Development and Climate (APP), a voluntary collaboration among six nations – Australia, China, India, Japan, the Republic of Korea, and the United States – is an innovative effort to pursue the integrated goals of advancing energy security, fostering economic growth, mitigating greenhouse gas emissions, and reducing air pollution that is delivering real results. These six nations, which together account for about half of the world’s economic output, population, energy use, and greenhouse gas emissions (see Table 1), seek to achieve these goals through the development, deployment, and commercialization of clean energy technologies. The Partnership and its initiatives also seek to assist in alleviating poverty and improving human health.

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The APP has eight task forces, each of which includes both public and private sector experts:

  • Cleaner Fossil Energy
  • Renewable Energy and Distributed Generation
  • Power Generation and Transmission
  • Aluminium
  • Buildings and Appliances
  • Cement
  • Coal Mining
  • Steel.

Among these, distributed generation has a critical role to play. Given the focus of the Partnership upon removing policy and regulatory barriers to clean technology deployment, promoting a favourable environment for distributed generation technologies is a key aspect to implementation.

Involving emerging economies

The involvement of China and India in the Partnership is especially important. Developing countries’ emissions are forecast to surpass emissions of developed countries by the end of this decade. Working with these countries through partnerships such as the APP allows the United States and emerging economies to engage each other in the way most likely to produce results. So while the Partnership initially is limited, it nonetheless can have a significant impact.

Growing economies serve to improve the lives of people through jobs and new opportunities and a better environment. With opportunity comes sustained growth, the promise of a better future and an enhanced capacity to protect the environment. This Partnership will improve millions of lives, foster prosperity and a cleaner environment, and help protect the planet.

The Partnership is centered on the power of the marketplace and transformational technologies to foster economic growth and spur environmental progress. An innovative and particularly important aspect of the Asia-Pacific Partnership is that it is a public-private partnership, bringing together not just the government and private sector within each country but also bringing together governments and private sectors across national borders. This cross-cutting approach advances the Partnership’s goals through co-operative design and implementation of tangible, effective projects. And partnering with both government and the private sector in other countries is instrumental in addressing what the US President has called ‘the serious challenge of global climate change;’ a global problem requires a truly international cross-cutting effort.

Accordingly, this strategy cuts across two planes: first, it secures the benefits of co-operation between government and the private sector; and second, it fosters multinational collaboration.

Private sector involvement

In order to address this challenge, APP is taking an innovative ‘bottom up’ approach. Through engaging private industry as well as government officials, the APP is using public-private partnerships to build local capacity, improve efficiency and reduce greenhouse gas and air pollution emissions from industrial facilities, power plants, mines and buildings. Private sector involvement is the key to selecting practical and innovative projects that promote near-term results. Government involvement is also necessary to engage the right public sector officials and remove barriers to transitioning technology.

In tandem with the private sector, a shared vision strengthens each Partner’s ability to meet their respective goals. Ultimately it is the private sector that will deploy clean technologies and this input and participation are essential. The APP focuses upon undertaking measures to create new investment and business opportunities, including the removal of barriers to the introduction of clean, more efficient technologies; helping each Partner country meet nationally designed strategies for improving energy security and addressing the challenge of climate change; and promoting the development and deployment of existing and emerging cleaner technologies and practices that will achieve practical results.

Renewable Energy and Distributed Generation Task Force

The six APP partners consumed nearly 6.8 trillion kilowatt-hours of electricity in 2004 – almost 44% of the world’s total, according to the Energy Information Administration (EIA) – and electricity consumption growth rates are expected to continue to increase. Given increasing concerns about energy security, renewable energy and distributed generation technologies will play a larger part in the future energy production strategy of the APP partners. Increasing fossil fuel prices along with the need for reliable access to energy, increased environmental concerns, and a strong interest in poverty alleviation are already raising the profile of these technologies.

There are several reasons why distributed generation (DG) is part of the APP agenda. DG enables power grids to potentially reduce air pollution and greenhouse gas emissions and attain greater cost and network efficiencies. DG can also overcome intermittency problems by functioning in combination with a diverse variety of renewable energy sources. DG systems located near end-users, especially those that are in remote grid areas, can provide lower cost, more reliable, and more efficient power generation to these communities. Renewable energy (RE) combined with DG can improve local air quality and thus environmental and public health by reducing emissions from electricity generation transmission.

DG installations can also be used to engage and educate local communities about energy conservation leading to further increases in efficiency through behavioral changes. By improving public health and ensuring access to reliable energy services in remote grid areas, DG systems directly address the APP-wide goal of poverty alleviation.

The Renewable Energy and Distributed Generation (RE&DG) Task Force promotes investment in these technologies and works to address market and technical impediments that may inhibit their adoption.

When the RE&DG Task Force was formed, members agreed to work together to ensure RE and DG technologies were accessible, affordable and reliable to deploy commercially across all six Partnership countries. Increasing the use of these technologies is a key step in achieving sustainable economic, social and environmental development. Members agreed to focus on accelerating deployment of these technologies, bringing the cost of RE and conventional generation into parity, and identifying and overcoming market and policy barriers to deployment.

The Task Force agreed to a work plan with the primary objectives of:

  • deploying RE and DG technologies in APP countries
  • ensuring support for widespread deployment to meet country development needs
  • relating financial and engineering benefits of distributed energy systems to the APP’s economic development and climate goals
  • promoting collaboration among APP members on research, development and implementation of RE technologies
  • supporting economic development and poverty alleviation through deployment in remote areas
  • identifying potential projects that allow Partners to assess the applicability of RE and DG technologies to their needs.

The Task Force also established an action plan that included a first set of 24 projects as listed in Table 2.

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This is only a first step as clearly many additional projects could fall within the wide confines of the Task Force goals and objectives. A project review team considers new project submissions on a continuous basis for addition to the action plan. As long as two countries support a new project, it can become an APP project. Progress on implementation of current projects is monitored and evaluated by Task Force members.

The APP Task Force provides the private sector with opportunities for funding on a case-by-case basis as well as public policy support in specific issues. Examples of other benefits to the private sector include:

  • provide opportunities to develop and/or expand business relationships with customers and clients in APP countries
  • support to firms from government agencies
  • facilitate communication to government officials in APP countries
  • assistance with business communications on APP achievements.

Of the 24 initial projects, six are considered deployment projects, 15 are market-enabling projects, and three are research, development and demonstration (RD&D) projects. Deployment projects are commercial projects undertaken by industry that focus on accelerating the uptake of existing, commercial RE&DG systems and services into Partner country markets. Market-enabling projects focus on addressing policy, regulatory, attitudinal, financial, educational and other challenges to the uptake of RE&DG technologies. RD&D projects focus on applied research, development and/or demonstration of new technologies to reduce their technical and commercial risk and increase stakeholder confidence.

Implementation of all 24 projects can potentially achieve deployment of 1.8 GW of RE and DG capacity within five years which would translate into significant carbon reductions.

The barriers to the uptake of RE&DG include the lack of mature markets and adverse policy, regulatory, and legal frameworks that discourage the development of and investment in renewable energy. Some of these barriers can obstruct technology transfer and make it difficult to finance RE&DG deployment. The RE&DG Task Force is tackling these issues through a project that will identify and assess ways to remove unintended barriers that exist in the laws of the target countries. Other potential barriers to RE&DG stem from its high costs on a small scale, a lack of awareness of its technology options, a fear of the intermittency problems that may occur, and the need for electricity storage when using certain RE&DG technologies.

In the longer term, new clean technologies offer opportunities to make Partners’ energy economies more secure while achieving dramatic reductions in air pollution and greenhouse gas emissions. The medium- and longer-term focus of this Partnership will be on developing and commercializing transformational energy technologies such as RE&DG technologies. Revolutionizing energy production will help achieve substantial cuts in greenhouse gas emissions. Indeed, new energy technologies hold the key and distributed generation is a critical part of this strategy.

The APP is one of a number of approaches we pursue to address climate change and sustained economic growth and reach our common goal of reducing greenhouse gas emissions worldwide. The private sector’s contribution to distributed generation technology plays a key role in increasing the uptake of clean energy globally.

We look forward to working with all of you toward that end.

Griffin M. Thompson is the Program Manager of Asia-Pacific Partnership on Climate Development and Climate (APP), and Senior Energy Advisor of Bureau of Oceans, Environment and Science, US Department of State. Joe O. Neuhoff is a Member on the RE&DG Task Force, and Director of the Office of Energy and Environmental Industries, US Department of Commerce, Washington DC. US. e-mail: thompsongm@state.gov, joe.neuhoff@mail.doc.gov

Developing a relationship with private companies interested in DG is a critical part of the APP and we are actively soliciting companies with project ideas to get involved. Please find out more information at our website www.asiapacificpartnership.org. You can also e-mail the US team at APP_US@state.gov or the international Administrative Support Group at APP_ASG@state.gov.

Kyoto versus APP

At their heart the Kyoto Protocol of the United Nations Framework Convention on Climate Change and the Asia-Pacific Partnership on Clean Development and Climate are both diplomatic efforts to engage other nations at an international level on the issue of climate change.

Both are based on the premise that climate change is a real problem caused in part by humans and that people must take some responsibility for that problem. Both the APP and Kyoto have a focus on reducing pollution, but doing so in a way which does not unfairly burden the poor.

In the case of the APP, it aims to ‘identify policies and deploy technologies that reduce greenhouse gas emissions, promote healthier air quality, advance sustained economic growth, and reduce poverty’. In the case of Kyoto, the first round of negotiations made the distinction between ‘Annex I’ and ‘Annex II’ countries. Annex I countries are already industrialized countries and therefore must take the lead in reducing emissions because their economies have so far benefited the most from those emissions. Annex II countries on the other hand, although they have not yet agreed to binding emission reduction targets, are still party to the agreement and have agreed to cooperate with the wider international community to begin monitoring and reducing their GHG emissions.

All of the six APP nations are involved to a lesser or greater degree in the Kyoto Treaty. All are signatories of the UNFCCC, and all but Australia and the US have ratified the convention’s Kyoto Protocol.

The main difference between the APP and Kyoto is that Kyoto has binding targets for emission reductions and leaves it up to individual countries to prioritize opportunities, whereas the APP leaves it up to the countries how much emissions should be reduced, but focuses efforts on eight key sectors. The APP also has a strong technology transfer focus.

Both approaches have their strengths and there is no reason why we have to choose between the two approaches. The approaches are perfectly compatible. In the press release announcing its launch, the APP stated: ‘the partnership will be consistent with and contribute to our efforts under the UNFCCC and will complement, but not replace, the Kyoto Protocol.’ Indeed the climate change problem is sufficiently important that we will require further efforts in addition to the work that is being carried out in the context of Kyoto or the APP.

To those interested in cogeneration and on-site power, both treaties have strategic importance and both will ultimately help promote the suite of clean technologies encompassed in COSPP. The fact the APP singles out ‘Distributed Generation’ as one its eight priority sectors is significant however. If the DE market becomes engaged in the APP process it could end up being an effective vehicle for opening up new markets and creating awareness for the power of DE in reducing pollution including GHG emissions. Also significant is the overlap between many of the other seven sectors identified as priorities and DE. For example, significant opportunities for on-site power production exist in the cement sector, the aluminium sector, as well as the building sector so considerable synergy exists between the goals of the DG Task Force and the other Task Forces.

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by Jeff Bell, World Alliance for Decentralized Energy

Initial projects involving cogeneration

 

Project 2. Commercial Demonstration of a PEM Fuel Cell for Power Generation

The chlor-alkali industry is one of the largest chemical industries in India and is expected to grow along with the growing Indian economy. The proton-exchange membrane (PEM) fuel cell product captures hydrogen produced in the chlor-alkali industry to create on-site electricity, thereby creating electricity savings. Also, it will displace the use of coal-fired power plant generation, leading to significant CO2 emission reductions. India and the US will both participate in this industry changing project.

Project 5. Deploy Combined Heat and Power (CHP) in China that Utilize Coke Oven Gas for Fuel Feedstock

CHP systems offer significant energy efficiency opportunities in Partner countries. Solar Turbines, Inc., a division of Caterpillar, has committed to providing the key turbine component as part of a complete generator set to Shangdong Jemin Coal Gasification Chemical Company, along with training in these systems. Solar Turbines estimates a saving of 1.2 million tonnes of CO2 per year once all systems are operable.

Project 7. Facilitate Deployment of Highly Efficient Combined Heat and Power (CHP) Applications, Including Fossil and Biomass-Fueled Industrial, Institutional and District Energy CHP Projects in Partner Countries

Despite the availability of CHP technologies and proven benefits and performance of these systems, projects often are not implemented even when investment is compelling. EPA will build on its CHP Partnership Program to identify and clear barriers to efficient design of on-site energy systems. The project will promote collaborative education and outreach to energy users, utilities, policy-makers, and the design and construction communities, if possible. It will also promote and streamline the immediate and ongoing deployment of large and district-energy-scale new CHP projects in Partner countries with the aim of implementing 500 MW of new CHP within participating countries within three years.

Project 22. Flexible Biomass Gasification Technology for Distributed Power Generation

The ultimate aim of this research and development project is to demonstrate the key technological aspects of the proposed biomass gasification technology for distributed power generation, to speed up the commercial update of biomass as a reliable and cheap renewable energy source across the Partnership countries. Australia will be managing this project with participation of Japan, the Republic of Korea, China and India. This technology will greatly reduce the transportation costs associated with biomass gasification while being particularly suitable for distributed power generation in rural areas where biomass fuels are grown.