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Emissions
and Climate Change
Climate
change, and the global response to it, is set to have a major impact on
the energy and water sectors worldwide. Under the 1997 Kyoto Protocol
and subsequent instruments, emissions trading has been established as
a key response mechanism for achieving emissions control at least cost.
Policy
Development and Regulation
IPA Energy + Water Economics has been closely involved with the UK implementation
of the EU Emissions Trading Scheme, which will establish the world's largest
emissions market in 2005. We can assist with setting up the necessary
institutional, legislative and regulatory frameworks to achieve compliance
with either the EU ETS or Kyoto Protocol, and to facilitate emissions
abatement.
Trading
Scheme Design and Implementation
IPA has particular expertise in the design of trading schemes and other
market-based instruments for achieving regulatory objectives. We have
advised clients on the practical implications of schemes for trading of
emissions of carbon dioxide, SOx, NOx and mercury.
Price
Forecasting and Modelling
IPA's proprietary macro-economic model (ECLIPSE) includes an in-house
carbon model and can be used to evaluate dynamic interactions between
policy measures, as well as their impact on individual plant profitability.
We are particularly well qualified to evaluate the flow-on impact of carbon
prices on power and fuel prices.
Emissions
Reduction Projects
We have considerable knowledge of the Kyoto Protocol's Joint Implementation
scheme and the Clean Development Mechanism, and can advise Clients on
how to invest in projects that can generate credits under these schemes.
We also carry out due diligence on such projects.
Corporate
Emissions Strategy
Carbon pricing is now a reality in the EU, and is of increasing relevance
worldwide. Corporations may be directly exposed through emission limits,
or indirectly through their power or other energy-intensive raw material
purchases. IPA provides clear, structured advice on the issues, the mitigation
options available, and the implications for corporations.
Training
IPA provides training courses on emissions trading, providing both larger
scale workshops for multiple clients and smaller in-house strategy sessions
for managers interested in the strategic implications of this issue.
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Current
and Recent Experience in Emissions and Climate Change
UK
- Design of Emissions Trading Scheme
IPA is advising the Federation of British Cremation Authorities on the
establishment of a trading mechanism to meet Government targets for the
reduction of emissions of mercury from crematoria.
EU
- Abatement of Emissions from Large Combustion Plants
For DG XI IPA analysed the impacts of the opening of EU generation markets
to the Accession States, and the cost advantages which accrued to certain
countries from derogations from EU environmental standards and emission
constraints.
UK
- Price Forecasting
IPA used ECLIPSE to produce wholesale gas, electricity and carbon price
forecasts, incorporating three scenarios for the price of carbon and other
emissions constraints, to 2024 for a major global energy company. IPA
also advised on the impact of these scenarios on the profitability of
the company's existing plant.
UK
- Policy Development
IPA analysed the responses to the three major consultations on implementation
of the EU Emissions Trading Scheme and the development of the UK's National
Allocation Plan for the UK Department for the Environment, Food and Rural
Affairs (Defra). IPA's reports are available on the Defra EU ETS website.
UK
- Impact of National Allocation Plan
IPA carried out an analysis of the impact of the UK draft National Allocation
Plan and other emissions constraints on the operation and profitability
of a gas-fired power station.
UK
-District Heating and CHP
IPA carried out a Strategic Review of the UK Government's £50 million
Community Energy Programme (CEP) for the Energy Saving Trust and Carbon
Trust. The CEP provides grants to support district heating investments
(mainly CHP). The results were presented to an EST Stakeholder Workshop
and used as the basis for a bid for extension of funding for the programme.
Mauritius
- Biomass and CDM
IPA in partnership with DCDM prepared the bid for a 20-year Power Purchase
Agreement for a 30 MW CHP plant based on sugarcane waste (bagasse) in
Mauritius. As part of the bid IPA advised on the potential revenue stream
that could be obtained from the sale of Certified Emission Reductions
under the Clean Development Mechanism, and the process of obtaining accreditation
under the scheme.
Montenegro
- Energy Efficiency
IPA in partnership with Carl Bro, IDOM and Planet Ernst and Young created
an Energy Efficiency Unit to disperse funds for energy efficiency projects
from a revolving fund provided by an international donor. IPA established
a process by which a pipeline of energy efficiency projects could be assessed,
financed and implemented.
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