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Climate Change Initiative Newsletter

January 2002

Climate Change Initiative

Table of Contents

1. Post Cop7 Activities in Ukraine
2. Carbon Sequestration Training – What Ukraine Truly Needed

Upcoming Events

February 4-5, 2002 – Kyiv, CCI office
Carbon Sequestration in Agriculture and Forestry Workshop for policy makers to develop Ukraine’s strategic position on carbon sequestration
Organizers: Ministry of Ecology and Natural Resources, State Committee for Forestry, CCI

Ukraine Climate Change News

3. Ukrainian NGO Meet to Discuss Climate Activities

U.s. Climate Change Activity

4. White House Chooses Effective Fuel, GHG Plans
5. North America Farmers to Play а Role in Climate Change Mitigation
6. Energy, Farmers and NGO Ally to Curb Global Warming

International Climate Change News

7. EU Environmental Ministers Still to Find Common Ground on Carbon Regulation
8. Waste Management as Carbon Removal
9. Dutch National CO₂ Trading Believed to Be Costly
10. Wind Energy Boost in Germany
11. Norway, Romania Conclude JI Deal
12. Spanish EU Presidency Urged to Address Environment
13. UK Government Encourages Business to Reduce GHG through Trading
14. Low Carbon Vehicles а Priority for UK
15. UK Bioenergy Will Take Off when Government Supports
16. Sanyo and Samsung Make First Step to Bring Fuel Cells to Common Use
17. Canada Utility Calls for GHG Project Proposals

Climate Change Initiative

1. Post Cop7 Activities in Ukraine

On January 23, 2002, а public discussion of the 7^th session of the UNFCCC Conference of Parties supported by CCI took place. The discussion was lead by the representatives from the Ministry of Ecology and Natural Resources of Ukraine (MENR), other members of the Ukrainian delegation to the Cop7. Mr. Lipinskiy, of MENR, proposed an extensive overview of the course of negotiations and major Cop7 achievements. Mr. Lipinskiy valued the Marrakech session was the most successful COP since Kyoto, resulting in а constructive set of documents reached by а compromise. The Ukrainian delegation sees these compromises as the only way forward, giving а chance to the Convention and the Protocol on the threshold of the Johannesburg summit. The Cop7, they say, gave а move forward to the Kyoto Protocol enforcement, though did not make the life easier to а number of countries, and reaffirmed the results of the IPCC report proving that the climate change problem has not faded in any way.

MENR representative also spoke on the outcomes of the January 10 meeting of the Inter-ministerial Commission on climate change. The decisions included the order from the Chair to the relevant authorities to submit their proposals on the Kyoto Protocol ratification advisability until а strict deadline. It was also decided that immediate actions have to be made to address the yet unfulfilled commitments, such as National GHG Emissions Inventory, regular National Communication. The Commission Chair also ordered the National Academy of Science to develop а plan for scientific back up of climate change activity in Ukraine. In order to make those decisions а reality, three working groups were found. They correspondingly will deal with three topics: UNFCCC implementation strategy; legal procedures; and climate change sectoral activities (full list of the Commission and working groups is available from CCI website).

The NGO climate change working group representatives where not too numerous at the discussion, though promised to submit the Government their common position document evaluating the Cop7 events and recommending steps to be taken.

Also at the discussion were present representatives of the Ministry of Fuel and Energy, State Forestry Committee, who expressed their preparedness to work on а more profound climate change strategy.

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2. Carbon Sequestration Training – What Ukraine Truly Needed

During the last week of January the CCI together with State Committee for Forestry held its new training course on “Carbon sequestration in agriculture and forestry” at the facility of Training Center of Energy Managers. This module is а result of а half-year work by the CCI experts together with Ukrainian and international experts. Ihor Buksha, а member of the NGO Working Group on climate change from Research and Development institute of forestry and agro-forest-melioration took the most active part in the course development from the Ukrainian side. The course was opened by the Deputy Chair of the State Committee for Forestry Mykola Vedmid, who recommended the local forestry officials from all over Ukraine to be open to the new knowledge and learn how to sequester carbon to the benefit of Ukraine. He also told the audience about the Committee activities in developing the Ukraine’s climate policy and encouraged forestry specialists to contribute to the climate change mitigation decision making. The training program included several basic presentations of carbon sequestration projects, including planning, preparation, implementation, monitoring and verification. The trainees said this information was new and utile but underlined that most use they got from practical sessions. The Ukrainian forestry specialists were offered to prepare carbon sequestration projects themselves and present those to the lectors and colleagues. The groups, which were formed by geographical regions of Ukraine, suggested successful and varied in approaches and techniques projects. The comparison showed all projects realistic and scientifically grounded, though needing yet to be finalized on the economic part. On the whole, the training course turned out to be one of the most successful CCI seminars and at the same time was claimed by forestry people to be nearly а unique one in their field. CCI plans to conduct another carbon sequestration course outside of Kyiv later on this year, modified according to the experience gained during January 28-31.

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Ukraine Climate Change News

3. Ukrainian NGO Meet to Discuss Climate Activities

On January 25-25 the Working Group of Ukrainian NGO on climate change held а meeting supported by Greenpeace International, Alliance to Save Energy, Rec-kyiv, World Bank, and the Institute for Technical Thermal Physics. The major topic in focus was the Kyoto Protocol enforcement. The Workgroup members agreed that the ratification itself by the Ukrainian Parliament would not become efficient enough without а series of other in-line legal acts. The Ngos believe that Joint Implementation projects have the most promising potential in Ukraine and suggest а national JI office be established in the shortest term.

On the first meeting day the representatives of the Ukrainian government, donor organizations and international climate change programs implemented in Ukraine participated. This day was dedicated to how NGO community could help promote the Kyoto Protocol ratification in Ukraine. It was suggested that donor groups envisage public participation in the process of climate change programs planning and finance allocation.

The same day the NGO WG members presented their view on GOU and donor community progress and shortcomings in climate change mitigation activity and offered their help and support. In the first place this related to the National Action Plan recommended by the Convention and the Kyoto Protocol. The NGO proposal to conduct the national climate conference was supported by the GOU, while the USAID spokesman informed that CCI was planning to organize such а conference later in 2002 and encouraged the NGO community to cooperate.

On January 26 the Ngos outlined their activity plan for the year 2002. Among the principal events planned there are: the information tour all over Ukraine, actions against agricultural waste burning, training seminars and publications.

The meeting also selected the WG Board, including Serhiy Fedorinchyk and Olexiy Pasiuk.

(with the help of NGO Climate Change Working Group)

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U.s. Climate Change Activity

4. White House Chooses Effective Fuel, GHG Plans

The Bush administration is studying with "Serious interest" а proposal to reduce petrol use by establishing а system of tradable credits for fuel economy improvements.

John Graham, who, as regulatory "czar", scrutinizes all government rule-making in the Office of Management and the Budget, said in an interview that he favored such market-based programs, when applicable, in place of traditional regulation. He is also considering an expanded program of pollution trading which might include the swap of emissions permits for the release of nitrogen oxides, sulfur dioxide, mercury and carbon dioxide.

Eileen Claussen, head of the Pew Center on Global Climate Change, which has campaigned hard for greenhouse gas reduction, said her group had yet to study the proposal. "In general we think trading of credits is а cost effective way of getting where you want to go", she said. The administration has been under increased pressure to propose а permits trading system to reduce the emissions of greenhouse gases in North America. President George W. Bush has promised to deliver an alternative scheme to tackle global climate change, following the administrationъs rejection of the Kyoto Protocol.

Mr Graham said his office would pursue "An agenda of smarter regulation" which would use market-based initiatives when possible. He denied "а grandiose plot to roll back safeguards" or attempt an across-the-board elimination of regulations. He is pushing agencies to voluntarily subject their proposals to independent peer review, and has been praised for opening the regulatory review process to public scrutiny on the internet. Gary Bass of OMB Watch, а nongovernmental organization that opposed Mr Grahamъs appointment, said he had "put а lot of energy into making regulatory actions more transparent". But, Mr. Bass added: "He is а nice guy, but we feel his policies are still unknown." Ngos are most fearful of his risk-analysis approach to regulation - а practice they say, which could go badly wrong if the assumptions made are miscalculated. Mr Graham has promised "а smarter process", which adopts new rules when market and local choices fail, modifies existing rules to make them more effective or less costly and rescinds outmoded rules.
(Financial Times, December 19)

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5. North America Farmers to Play а Role in Climate Change Mitigation

Paying farmers to tie up carbon in their soil - а process known as carbon sequestration - is being proposed as а way to help curb global warming. By using no-till and other soil conservation practices that preserve crop residue and plant materials, farmers can play а role.

During the past couple of years some firms have tried buying carbon credits from farmers in Iowa and other states. However, the companies are only willing to pay $1 or so per acre per year, which farmers say isnъt enough. Farmers look upon this as the companies wanting to steal the carbon credits. One reason the companies say they canъt pay any more than that is because there is no retribution by the buyers of the credits if farmers who sell the credits donъt continue their no-till or other carbon sequestration practices.

Methods to increase the amount of carbon in soils have gained new prominence as concerns about global warming have increased. Crops take carbon out of the air and put it into the soil through their root system. Tillage allows carbon to escape. No- till and other eligible conservation practices on the other hand, help keep it in the soil.

A new revenue source for farmers A "Carbon credit" market has been proposed, and companies that cause GHG emissions may be the source for paying farmers for carbon credits. With greenhouse gas emission reduction markets scheduled to begin operation in 2002, an Iowa-based company announced in early December 2001 what it calls а unique opportunity for the Midwestъs industrial and agricultural bases. Essential Science, Inc., of Coralville, Iowa, has created а greenhouse gas emission registry for industrial and agricultural operations, an important tool for North American farmers and businesses who foresee participation in the emerging domestic and overseas greenhouse gas markets, says Richard Ney, president of Essential Science.

The registry service will prepare clients for participation in innovative emission trading programs for management of greenhouse gas emissions. "Emission trading is viewed as the best tool to achieve lowest-cost reductions in emissions, providing financial rewards for activities that benefit the environment", says Ney. "The potential market value of greenhouse gas emission reductions is significant", he adds. "The registry is designed to aid businesses in making а smooth entry into this new marketplace."
(Farm Progress, December 14)

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6. Farmers and NGO Ally to Curb Global Warming

Spokane, Washington: Entergy Corporation, one of the nation’s leading utility companies, and the Pacific Northwest Direct Seed Association have combined efforts to help reduce global warming through environmentally beneficial farming practices. The Letter of Intent signed middle January calls for participating farmers of the PNDSA to implement new direct seed agricultural techniques in the Pacific Northwest.

Entergy would receive credit for carbon dioxide and emissions reductions achieved through direct seed agriculture which would ultimately help offset CO₂ emissions from the company’s power plants in the United States. With Entergy’s support, the direct seed project would reduce over 30,000 tons of CO₂ emissions over а 10-year period.

PNDSA and Environmental Defense, а national nonprofit environmental organization, also have а cooperative agreement to investigate and encourage the adoption of environmentally beneficial farming practices. In May 2001, Entergy became the first U. S. utility company to publicly announce а commitment that the company would voluntarily take actions to stabilize its domestic greenhouse gas emissions and work with Environmental Defense to develop а long-term target to achieve additional reductions.

"Entergy is undertaking а number of internal and external projects to reduce emissions and achieve its greenhouse gas target", said Dr. Marty Smith, Entergyъs climate program coordinator. "In addition to helping reduce emissions, this project affords Entergy the opportunity to make а contribution to the advancement of а new and more environmentally sound method of agriculture."

Traditional agricultural practices, in which top layers of soil are turned over and exposed, allow carbon sequestered in the soil to be oxidized and released into the atmosphere. The new direct seed technique involves cultivation and fertilization using "no-till" direct injection methods that leave the soil undisturbed and avoid the associated CO₂ emissions. Additional emissions of CO₂ also are permanently eliminated by reducing the amount of fossil fuel burned in farm equipment during the period of the agreement.

"This project will allow farmers to make conservation investments that will pay off for them, as well as for the planetъs future", said Karl Kupers, vice president of the PNDSA and lead for negotiations on behalf of PNDSA. "We are proud to be involved in this unprecedented partnership between farmers, major industry and an environmental group. Such cooperation is critical to retooling agriculture, which must happen to ensure survival of the family farm business, the fabric of rural America and ultimately а higher quality of life for everyone."
(Entergy Corporation, January 15)

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7. International Climate Change NEWS

EU Environmental Ministers Still to Find Common Ground on Carbon Regulation

EU ministers are divided over whether to make an industrial carbon dioxide emissions trading scheme mandatory or voluntary for businesses during а preliminary three-year lead-in phase from 2005, it emerged from environment council meeting in Brussels.

Environment ministers were debating for the first time а key European Commission proposal to help the EU comply with its greenhouse gas reduction targets under the Kyoto protocol. A formal agreement is not expected until the end of the year.

"If you look at the votes, thereъs а blocking minority" against the European Commissionъs plan for the scheme to be mandatory from the start, Belgian environment minister Magda Aelvoet said after the debate. But she said а "Certain majority" still preferred this option.

Leading the opposition is the UK, where the issue has crucial significance since its own domestic scheme is planned to be voluntary until 2007. The countryъs environment minister, Michael Meacher, claimed the debate was "About evenly balanced" between the opposing camps. Setting prescriptive rules at the outset would be "Tricky and not advisable", he said. "We should be moving to а mandatory scheme, but in а pragmatic way." Also ranged against the Commission is Germany, where industry fears the trading scheme could override existing energy efficiency agreements. But Commission officials said Germanyъs position was not as negative as they had expected.

Other elements of the debate were less divisive and showed broad support for the Commissionъs approach to trading, according to Ms Aelvoet. These were that permits should initially be allocated free of charge to businesses, that trading should focus first on just carbon dioxide emissions, and that emissions from electricity generation should be addressed through obligations on generators rather than downstream consumers.
(Environment Daily, December 13)

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8. Waste Management as Carbon Removal

EU waste management should become а significant net absorber of carbon by 2020, according to а consultancy report released by the European Commission.

The report analyses the climate implications of waste management operations. It includes not only direct emissions, such as of methane from landfill sites, but also emissions avoided through recycling or by displacement of emissions through waste incineration, and even through long-term sequestration of carbon in landfills.

In 2000, it calculates, average European waste management practices resulted in net emissions of 50kg of carbon dioxide equivalent per tonne (CO₂eq/t) of municipal waste arising, with much higher net emissions where waste is landfilled in а raw state. The 1999 landfill directive, and especially its targets for cutting biodegradable waste dumping, will drive this down, says the report. Assuming Eu-wide compliance with the directiveъs targets by 2016, waste management operations would actually be absorbing 200kg CO₂eq/t by 2020. Even if the targets are only met in 2020, net absorption would still be 140kg CO₂eq/t.

Furthermore, says the studies, the rate of net absorption could be more than doubled through policies explicitly aimed at reducing or avoiding greenhouse gas emissions. If anti-emission policies were maximised, it would minus 490kg CO₂eq/t by 2020, while an alternative that excluded incineration would still achieve minus 440kg CO₂eq/t.

The reportъs conclusions are based on an examination of how far individual waste management operations contribute to or avoid greenhouse gas emissions. Overall, source segregation of municipal waste followed by high levels of recycling plus composting or anaerobic digestion for the biodegradable fraction is reported to offer the biggest net carbon absorption. However, other waste management techniques are also seen as having а role to play. Both mechanical-biological treatment (MBT) and waste incineration are reported as having significant potential to reduce net emissions.

The report stresses, however, that the climate implications of MBT and incineration depend crucially on detailed assumptions. MBT is calculated to produce а negative flux of 340kg CO₂eq/t if landfilling of stabilized compost and rejects is assumed to sequester carbon beyond 100 years. Without this assumption, MBT actually produces а positive greenhouse gas flux.

Similarly for incineration, if coal-fired generating plant is replaced by waste incineration, and if energy is recovered through combined heat and power, then the climate benefits are practically the same as with recycling and composting of source-segregated materials. But without these assumptions, mass-burn incineration is virtually neutral in greenhouse gas terms.

Waste transport operations are calculated to contribute negligibly to the waste management sectorъs overall carbon balance. The report also warns that recycling of waste electrical and electronic equipment (WEEE) can result in significant positive emissions through the release of fluorocarbons with high global warming potential.
(Environment Daily, December 14)

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9. Dutch national CO₂ Trading Believed to Be Costly

An influential Dutch economic policy consultancy warned against launching а national carbon dioxide emission trading scheme, arguing that it would be too expensive. The government is considering following in the footsteps of countries that have taken this step, like the UK and Denmark, but has yet to make а decision.

The Netherlands bureau for economic policy (CPB) was commissioned to look at the cost implications of different CO₂ quota trading systems as well as existing regulatory and tax policies aimed at curbing emissions.

It concludes that the best option would be for the Netherlands to participate in the international trading scheme based on absolute CO₂ ceilings. A trading system is due to operate under the UN Kyoto protocol from 2008, but CPB acknowledges that considerable uncertainty continues to hang over the project.

The second best option could be to participate in an Eu-wide system due to be launched in 2005 under proposals issued last year by the European Commission, the Cpbъs Machiel Mulder told Environment Daily.

Least cost-effective would be for the Netherlands to launch its own scheme because of predicted high transaction costs, the body advises. It suggests that "Improving the design" of the Netherlands' existing energy tax system could be an "Attractive alternative" to national trading.
(Environment Daily, January 15)

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10. Wind Energy Boost in Germany

COPENHAGEN - The number of installed wind turbines in Germany, the worldъs largest wind power market, surged 59 percent in 2001 and activity is seen unchanged in the coming years, the German wind energy association said.

In total Germany installed wind turbines generating 2,659 megawatt last year, up from 1,668 megawatt in 2000, Bundesverband Windenergie (BWE) said. Accumulated wind energy capacity in Germany totaled around 8,750 megawatt by end-2001 and accounted for almost 3.5 percent of Germanyъs electricity need.

"The boom in wind energy will continue in the coming years", BWE said in а statement. "Further installation of onshore turbines generating 5,000 megawatt seems realistic by the end of 2004", it said.

Germany is by far the largest wind power market in the world ahead of Spain and the United States. Wind energy is а fast growing market worldwide as countries try to bring down green house gas emissions.

Installed wind turbines in the U.s. generated 1,694 megawatt last year, up from 732 megawatt the year before, the American Wind Energy Association (AWEA) said. German private-owned wind turbine maker Enercon held 28.5 percent of the market of installed megawatt last year, up from 27.4 percent in 2000.

The worldъs leading turbine maker Danish Vestas Wind Systems gained terrain in Germany where its market share rose to 19.5 percent from 13.2 the previous year. German-danish Nordex' share increased to 10.4 percent from 8.8 percent, while Enron Wind, а unit of troubled U.s. energy group Enron, lost market share to 10.9 percent from 14.9 percent the year before.
(REUTERS, January 17)

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11. Norway, Romania Conclude а JI Deal

Norway and Romania signed а bilateral Climate Change Agreement on project co-operation for reduction of greenhouse gases. This is the first bilateral Joint Implementation project under the Kyoto Protocol that Norway takes part in, allowing for transfer of credits.

The Emission Reduction Units (Erus) that Norway will receive as payment for the investment can be used to fulfill the Norwegian Kyoto commitment. In Romania the project will contribute to reduce local air pollution and improvements in the heating systems in city of Fagaras, in addition to reduction in greenhouse gases.

Most of all the project co-operation with Romania is an example on the large potential that exists for international co-operation to reduce greenhouse gas emissions. This is just а beginning of Norway co-operation with other countries that is likely to grow strongly in the years to come. The Norwegian Government wants to see business and industries more engaged in such projects. It is also important that projects also provide additional effects in the host country, as in this case modernisation of the energy system and reduction in local air pollution, says the Norwegian Minister of Environment, Mr. Borge Brende.

It is estimated that the project will reduce the CO₂ emissions with about 500.000 tons in the 15 years project period starting in 2002. The agreement implies that Norway will receive about 35.000 tons annually or in total 170.000 ton for the commitment period 2008-2012. The cost of the emissions reductions are about 30 NOK per ton of CO₂ which is relatively inexpensive compared to many national measures in Norway. The Erus will have а value when the Kyoto Protocol is ratified by both Parties and the Protocol enters into force. The Parties also need to fulfill the eligibility requirements under the Kyoto Protocol to take part in the so-called Kyoto mechanisms. Romania has already ratified the Kyoto Protocol and Norway plans to do so in spring 2002.

The European Bank of Reconstruction and Development (EBRD) has provided а loan to the project and the Romanian Government will contribute with а large share of the financial package. Norway will contribute with about 5 mill NOK to the project in 2002, which accounts for about 10% of the project investment.
(M2 Communications, December 27, 2001)

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12. Spanish EU Presidency Urged to Address Environment

Europeъs green movement threw down а green gauntlet to Spain, challenging it to deliver on environmental issues during its six-month term as the EU presidency.

Top of the agenda for the environmental organizations federation “The European Environmental Bureau” (EEB) is sustainable development, including а strengthening of EU sustainability indicators approved last month and а strong European input to Septemberъs world sustainability summit in Johannesburg.

Climate change is another of the Eebъs main preoccupations. It urges ratification of the Kyoto protocol by September and а "requirement" that all EU states' climate plans should be based "strictly" on domestic actions. The group also demands progress in long-running talks on EU energy taxation, even though Spain has been one of the principal obstacles to agreement.

Among current EU legislative initiatives, the Eebъs key concerns are а planned environmental liability directive, the Commissionъs recent proposal to amend the packaging directive, ongoing talks to finalize rules on electronic equipment, and а draft revision of EU public procurement rules.

In а departure from its usual focus entirely on EU policies in policy demands issued for each new presidency, the EEB makes а point of calling for а broad-ranging review of Spainъs controversial national hydrological plan. There should be no EU funding for the plan in its current form, the group urges.
(Environment Daily, January 8)

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13. UK Government Encourages Business to reduce GHG through Trading

The government is hoping to blaze а trail in trading greenhouse-gas emission permits by launching Europeъs first comprehensive, national scheme in April. Its ambition is to make London the hub for trading pollution permits in any eventual European or international system.

The government has already given businesses an extra month, until February 1, to calculate and verify their "baseline" - an average of 1998-2000 levels - and to register for the auction. So far 90 companies, including Anglia Water, British Airways, BP, Dupont, General Domestic Appliances, Rolls-royce and Somerfield, have expressed interest in taking part. But the government wants maximum participation, to get the largest reduction in emissions in return for the Pounds 215m it is offering in incentive money over the next five years.

Emissions trading is widely accepted as the most flexible, and least costly, way of controlling climate change. Trading would contain the cost to UK companies of pollution cuts to Pounds 133m over five years, according to The Environment Business, а London-based consultancy. This compares with а Pounds 247m cost in the absence of trading, or with an enormous Pounds 11bn burden on business that would be created if the government resorted to quadrupling the climate change levy.

One UK trade has already been made. Last autumn, Dupont, the US chemical company, sold 10,000 UK greenhouse gas emission allowances for 2002 forward to Mieco, an energy arm of Marubeni, the Japanese trading company. Dupont says its surplus pollution permits will come from reductions in nitrous oxide emitted by one of its UK chemical plants.

There are certain differences between the suggested EU and Great Britain systems. For example, the former will be mandatory and latter – voluntary. So, the end of Britainъs 2002-06 scheme will probably have to be adapted to conform with whatever international regime the EU, or parties to the Kyoto protocol on limiting greenhouse gas emissions, decide. By then, the government hopes the UK will be established as the leading trader - even if not legal framer - of emissions reductions.
(By DAVID BUCHAN, Financial Times, January 4)

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14. Low Carbon Vehicles а Priority for UK

The UK should become а "World leader" in low-carbon transport systems and set "challenging" targets for introducing more low-carbon vehicles, the government said. A draft strategy proposes а series of measures to identify and remove market barriers and address market failures.

The strategyъs key targets are for low-carbon vehicles to account for 8-12% of new vehicle sales by 2012, and for fuel cells to account for а similar proportion by 2020. Further 2012 targets might include specific goals for fuel cells and for low-carbon buses.

Low-carbon vehicles are flexibly defined, but could include all the main alternative technologies and fuels, such as liquefied petroleum gas (LPG), compressed natural gas (CNG) and battery electric vehicles, as well as cars powered by bioethanol and biomethanol.

However, the governmentъs says its main interest is to stimulate а long-term shift to hydrogen and to fuel cells. Hybrid petrol or diesel and electric vehicles could form an important "bridge" to this future, it states. Proposed actions to boost the share of low-carbon vehicles include enhanced research and development efforts and assisting development of alternative fuel distribution networks.
(Environment Daily, December 5)

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15. UK Bioenergy Will Take Off when Government Supports

LONDON - Willows, poplars and grass could one day be used to generate electricity for thousands of homes in Britain, if the biomass industryъs hopes of а big boost from the governmentъs renewables policy bear fruit.

Biomass, which uses plant and animal matter to provide power, has been in the doldrums for the last couple of years, hit by high costs and а hiatus in government support for new renewable energy schemes. Now hopes are rising the industry could be kick started by government plans to introduce а "Renewables obligation" in April, forcing electricity suppliers to buy at least three percent of their power from green sources this year.

The rules require companies to buy just over 10 percent of their supplies from green sources by 2010 and will create а renewables market worth around 750 million pounds by the end of the decade. Analysts expect wind and biomass to be the main winners under the renewables obligation as their technology is proven whereas the costs of solar power are still too high and tide and wave power technologies are in their infancy.

Wood chips, straw and poultry litter already produce small amounts of electricity for Britainъs homes. These schemes are backed by the Non Fossil Fuel Obligation system but funding for new schemes stopped three years ago while preparations were made for the renewables obligation. If biomass takes off, then farmers could plant thousands of acres of land with energy crops like willows and miscanthus, or elephant grass, а bamboo-type grass which would be harvested to fuel small power stations. Analysts say "bioenergy" will need help if it is to follow the example of wind power where government support, in countries like Denmark and Germany, led to the building of large-scale manufacturing plants and а sharp drop in costs.

Wind power generation costs have tumbled to around three pence а kilowatt hour, compared with 10-11 pence when the first turbines started whirring in Britain in the early 1990s. In contrast, biomass companies need at least five pence а kilowatt hour to make а profit at the moment compared with current wholesale prices of around two pence.

Signs are emerging that large utilities, which have announced big investments in wind in the last few months, are also gearing up to pour cash into biomass. Powergen plans to build 1000 megawatts of renewable generation by 2010, of which 800 MW will be wind power and 200 MW will be for bioenergy, said а spokesman. The biomass industry says Britain will needs to build about 1000 MW of biomass power stations, up from just over 100 MW, if it is to meet its target of 10 percent of power from green sources by 2010.
(by Margaret Orgill, REUTERS, January 16)

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16. Sanyo and Samsung Make First Step to Bring Fuel Cells to Common Use

Tokyo/osaka - Consumer electronics maker Sanyo Electric Co said it agreed with South Koreaъs Samsung Group to jointly develop fuel cells for small-scale home and commercial power generation.

The deal aimed to cut costs and speed up development of non-polluting fuel cell power systems, and Sanyo said collaboration between the two groups' research and development arms would expand to other technological areas as well. "Whatъs most important is that by combining our technologies we can speed up commercial availability", Fusao Terada, director of Sanyo Electricъs research and development center, told а news conference. "And by boosting efficiency, we can reduce the cost burden while improving the level (of technology)." At present, the collaboration would be limited to research and development and would not extend to manufacturing or other operations, he added.

Sanyo and other Japanese electronics makers are aiming to get household fuel cell power systems to the market within the next two to three years. The collaboration with Samsung would allow it to tap the South Korean groupъs expertise in miniaturisation and manufacturing processes. Presumably, the system, which extracts hydrogen from natural gas supplied by а local utility, would save users up to 50,000 yen ($380) per year on utility bills.

Fuel cells, which create electricity from а reaction between hydrogen and oxygen, are still largely at the prototype stage but hold promise as а clean, long-lasting energy source for products from cellphones to automobiles, as well as stand-alone or emergency power systems for homes and commercial buildings.

Last October, Matsushita Electric Industrial Co Ltd, the worldъs largest consumer electronics maker, demonstrated а 1.3 kilowatt fuel cell cogeneration and water heating system that it hoped to sell for 1-1.2 million yen ($7,600 to $9,100).
(by Edmund Klamann and Keiko Kanai, REUTERS, January 16)

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17. Canadian Utility Calls for GHG Project Proposals

VANCOUVER -- BC Hydro, Canadaъs third largest electric utility, has issued an international request for proposals for 5.5 million tonnes of greenhouse gas offsets.

BC Hydro has voluntarily committed to offsetting 50 per cent of the increase in greenhouse gas emissions through 2010 at two new natural gas-fired electricity generation plants. This voluntary commitment, which translates into 5.5 million tonnes of greenhouse gas offsets, is one of the most aggressive in the world and supports the companyъs goal of becoming the leading sustainable energy company in North America.

A greenhouse gas offset, recognized in the Kyoto Protocol, is а reduction in greenhouse gas emissions at one source that compensates for greenhouse gas emissions at another source.

BC Hydro is seeking proposals for quality greenhouse gas offset projects located anywhere in the world, including landfill gas, renewable energy, energy efficiency, fuel switching, industrial process improvements, agricultural waste management and other types. The company is looking to acquire offsets occurring between 2002 and 2020. The minimum project size is 100,000 tonnes over the contract term.

To start the process, proponents must submit а brief proposal to BC Hydro by May 1, 2002. BC Hydro will then initiate negotiations with the most promising opportunities with the aim of signing contracts by late 2002 or early 2003.

The request for proposals is posted on the Internet at
www.bchydro.com/environment/ghg/offsets.php
For more information on the request, please contact Tim Lesiuk, Tel. 1-604-623-4254, Fax. 1-604-623-4335
E-mail: tim.lesiuk@bchydro.com
(Canada Newswire, January 10)