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CDM wind-energy projects: exploring small capacity thresholds and low performances

Author:
  • Luis Mundaca
  • Håkan Rodhe
Publishing year: 2005
Language: English
Pages: 399-418
Publication/Series: Climate Policy
Volume: 4
Issue: 4
Document type: Journal article
Publisher: James & James

Abstract english

This article analyses existing small-scale wind farms located in India as hypothetical projects implemented under the Clean Development Mechanism (CDM). It addresses them from three different viewpoints (sustainable development, financial feasibility and institutional conditions), focusing mostly on identifying the smallest capacities and lowest performances at which these cases may become attractive for CDM investors. Although the case studies exhibit the potential to achieve the dual objective of the CDM; based on our estimates of related transaction costs we find that small-scale CDM wind farms that generate a minimum of 3,500-5,000 certified emission reductions (CERs) per year may start to attract the attention of CDM investors, as long as a minimum of just US$5 per CER is obtained and supportive strategies such as project bundling and unilateral implementation model are in place. Lessons from the Indian wind-energy experience indicate that non-Annex I countries interested in attracting the attention of CDM investors for wind-energy projects should undertake domestic efforts to build institutional and human competences capable of supporting both their domestic wind-energy markets and the development of CDM wind-energy projects in general. Some policy recommendations are drawn.

Keywords

  • Social Sciences Interdisciplinary
  • CDM
  • small-scale projects
  • wind energy
  • transaction costs

Other

Published
  • ISSN: 1469-3062
Luis Mundaca
E-mail: luis.mundaca [at] iiiee.lu.se

Senior lecturer

The International Institute for Industrial Environmental Economics

+46 46 222 02 57

344-A

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International Institute for Industrial Environmental Economics (IIIEE)

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