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Wind energy CDM projects

The Clean Development Mechanism has, to some extent, contributed to the deployment of wind energy globally. As of 1 September 2008, a total of 504 wind energy projects were in the "CDM pipeline", totaling an installed capacity of 16,410 MW. This represents 13% of the total number of projects introduced into the pipeline. 4 million CERs have already been issued to wind projects, a number that will go up to 203 million by the end of the first commitment period in 2012.

The majority of these projects are located in China and India. In China, 90% of wind energy projects have applied for CDM registration, and there are now 235 projects in the CDM pipeline, making up almost 11.93 GW of capacity. India now has 216 projects in the pipeline, totalling close to 4.24 GW.

The narrow focus of CDM-supported wind projects in a very few countries is unfortunate but is a reflection of the fact that carbon finance is a useful, and in some cases necessary condition for the development of wind power, but it is by no means sufficient. In the case of both India and China, carbon finance functions alongside a wide range of other measures necessary for countries to diversify and decarbonise their power supply sectors.

There are signs that some other countries may join the list of major host countries for wind power projects assisted by CDM carbon finance. However, it is clear that the ultimate responsibility for this lies with active government implementation of policies and measures to create the enabling environment within which carbon finance can play its role, i.e. to be an important source to defray the marginal costs of wind power versus conventional fossil fuel plants. This is particularly the case in the absence of an economy-wide cap on carbon emission.

While clarification and simplification of the carbon finance mechanisms can assist in the broadening and deepening participation of developing countries in the carbon finance market, the fundamental responsibility lies with the host governments, at least as far as wind power is concerned.

Table 3.1: CDM projects in the pipeline, Source: UNEP, 2008.

Table 3.2: Wind CDM projects

Source: UNEP, 2008.

Wind energy JI projects

There are currently 16 wind energy projects in the JI Pipeline, totalling an installed capacity of 961 MW. The biggest of these (300 MW) is located in Ukraine, in the autonomous Republic of Crimea. Other projects are based in Bulgaria, Poland, Lithuania and Estonia.

While the JI market is very small today in terms of traded volume, the mechanism could serve to incentivise large countries such as Russia and the Ukraine to tap into their important wind energy potential.

Table 3.3: JI projects in the pipeline

Source :UNEP, 2008