Scoping paper on new CDM baseline methodology for cross-border power trade

The screening of potential clean development mechanism (CDM) projects within the African Development Bank’s pipeline has identified a number of planned large scale hydropower projects, including ones that will be built primarily for export. Despite being a low carbon electricity source, these plants are only viable as CDM projects if their host country has a carbon intensive electricity grid. For Gibe III, for example, in Ethiopia, could not benefit from CDM because the Ethiopian grid is almost entirely hydropower. The challenge in the CDM is that there are no approved methodologies that address cross-border electricity trade, where low carbon electricity is exported to a country with a carbon intensive grid.

Several methodologies have been proposed for cross-border trade and new transmission systems, but almost all of these have been rejected. Pöyry has been sub-contracted by Carbon Limits, under the African Development Bank CDM Support Programme, to prepare a new CDM baseline methodology for cross border trade, based on a transmission line from Ethiopia to Kenya. The first step in that process is to review the response of the UNFCCC, particularly the Methodologies Panel (“Meth Panel”) of the CDM Executive Board, to the various proposals on cross-border trade and interconnection of grids. This report presents the findings of that review.   Methodoligies for Cambodia/Vietnam andColombia/Ecuador are also included.