[Kabar-indonesia] AES Taps Asia [incl: RI] For Carbon Credit Supplies

[Joyo at aol.com]

Interview: AES Taps Asia For Carbon Credit Supplies

By Gomati Jagadeesan Of DOW JONES NEWSWIRES

SINGAPORE, November 14 (Dow Jones)--AES Corp. (AES) is
looking to invest US$1 billion over the next three years in
clean energy technologies in developing countries to
capitalize on the emissions trading market, a top company
official said.

Veron Tan, director of climate change and technology
development, told Dow Jones Newswires in an interview that
AES will focus on Asian countries, particularly China,
Malaysia, Thailand, and Indonesia, to develop projects under
the clean development mechanism, or CDM.

If it is able to spend the $1 billion, then the Virginia-
based company will invest an additional $1 billion-$1.5
billion, Tan added.

The CDM, established under the Kyoto Protocol for curbing
greenhouse gases, allows countries that are unable to meet
emission reduction targets to invest in "clean" projects in
developing countries and get carbon credits that can be
offset against their commitments.

Asian countries are emerging as the largest suppliers for
such credits that can also be traded on the market.

The demand comes from companies in Europe, Japan, and
Canada, whose governments have ratified the Kyoto Protocol
and imposed national limits.

Close to 300 CDM projects worth $4 billion have been
approved world over so far.

The list excludes a deal signed in August whereby a World
Bank-led consortium will help two Chinese companies generate
$1 billion in carbon credits.

"Asia has the potential to sell a lot and what we are doing
here is generating credits for a secondary market," such as
Europe and U.S., Tan said.

AES has operations in China, India, Pakistan, and Sri Lanka
in Asia.

Its 13 power generating plants in the region have a combined
capacity of 5,369 megawatts.

AES recently acquired the carbon finance and the related
project development team of Singapore-based Byun & Co.,
which is already involved in CDM projects in Indonesia.

"China and Indonesia are potential places where investments
can happen. It's a big market in China and the government
has clear guidelines for CDM projects," Tan said.

AES is also looking at South Korea.

Fuzzy Guidelines A Challenge
Tan said the company will look at alternative energy as well
as CDM projects that can generate credits.

"At AES we're interested in both. From an alternative energy
perspective, we're interested in natural gas, wind etc.,
whereas a CDM perspective is more for new power plants,
renewable energy such as agricultural waste, and landfill,"
he said.

Specifically, AES is exploring investments in small scale
10-megawatt biomass power plants that will be fueled by
agricultural waste.

In addition to alternative energy projects, AES also plans
to expand technology development that will improve
efficiencies and generate carbon credits.

An internal study of its plants is now on to assess the
technologies and "maybe use cleaner coal," Tan said adding
that most of the research is still at an early stage.

The company's power plants in Pakistan, Oman and China will
use a mix of coal, oil and some natural gas, and any
activity that qualifies under the CDM process.

The projects could use equipment that lowers the consumption
of coal, Tan said.

AES is also exploring other technology such as capturing the
carbon dioxide emissions and sequestering them but the bulk
of such activity is happening in the U.S., Tan said.

Tan said a key challenge is the lack of clear guidelines and
the certification process for CDM projects.

The guidelines have been framed by an independent UN panel,
which also certifies these projects.

Also, many countries in Asia that are signatories to Kyoto
but are not bound by emission reduction targets still don't
have a designated national authority to administer CDM.

"What we would like to see is clear guidelines on CDM," and
a transparent and efficient national authority, he said.

Tan added that getting a project certified from the U.N.
body is problematic. "There is a template that certifiers
follow and if there is a new methodology you want to get
approved it takes a long time, which could postpone the
certification by two months or more," Tan said.

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Joyo Indonesia News Service
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