Carbon MarketsMarket outlook for renewable energy and energy

ffi i j tefficiency projects

26th October 2010Mr Juha RuokonenMr. Juha Ruokonenfirstname.lastname@greenstream.netT l 358 40 840 8005Tel. +358 40 840 8005

GreenStream ServicesCore competence Services offered

• Fund management within carbon and renewable energy; current investment vehicles include

Asset Management Services

energy; current investment vehicles include- Multilateral Carbon Credit Fund (EBRD and EIB)- Fine Carbon Fund- Blåfall- Nordic Carbon Fund- Fine Post-2012 Carbon Fund- Climate Opportunity Fund

• Brokerage of carbon credits and green certificates• Portfolio management servicesGreen Certificates,

Broker of the Year

Intermediary Services

2004, 2005, 2006, 2007, 2008, 2009

• CDM, JI and GIS project cycle management• Investment opportunities and financing solutions for

blAd i S i renewable energy• Market analysis, policy design, carbon and renewable

energy business strategies

Advisory Services

2(c) GreenStream Network Plc26.10.2010 JR

Kyoto Protocol and other trading schemesCANADA• “Turning the

Corner" plan • Start after

2010 CHINA

MGGRA• 6 States and 1

Province (CAN)• Cap-and-trade• -60-80% in the “long-

EU ETS• Cap-and-tradeUSA

JAPAN• Semi-

voluntary scheme JVETS

2010• -20% by 2020

(2006)

CHINA• Pilot scheme for 8

cities and 5 provinces• Target to reduce

greenhouse gas i t it

• -60-80% in the long-run”

Cap and trade• 2005->• -21% by the

year 2020RGGI• 10 States

• Cap-and-trade scheme proposal in Congress

• -17% by 2020 from 2005 level

JVETS started 2005

• Climate bill incl. ETS in Parliament in

intensity

10 States• Cap-and-trade• -10% of the

year 2009 level by the year 2018

2005 level autumn 2010WCI• 7 States and 4

Canadian provinces• Cap-and-trade

TOKYO• Cap-and-trade• Started in 2010

25% f 20002018

CPRS, AUSTRALIA• Cap-and-trade• Proposal rejected

CCX• Voluntary

system• -4% from the

• Cap-and-trade• -15% from 205 level

by 2010• Start in 2012

• -25% from 2000 by 2020

Ratified

Signed, not ratified

NZ ETS• Cap-and-trade• 2010- (2008)

p jby Parliament. New proposal expected.

year 1998-2001 level by the year 2010

VOLUNTARY CARBON

KYOTO PROTOCOL• Start 2008• Mandatory for 37 developed countries

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No position

2010 (2008)CARBON MARKET• Strong

growth

Mandatory for 37 developed countries• -5% 2008-2012• International Emission Trading, CDM/JI

The rise of the global carbon and renewable energy marketsenergy markets

Global Carbon Market Value *EUR Billion

Global New Investment in Sustainable energyEUR

103120

140 118130

122

50

60

120

140

EUR Billion

42 7

86

60

80

100

57

8798 89

35

54

82

30

40

60

80

100

Govern

Third party investments

0.48.7

24

42.7

0

20

40

0.4 8.7 25 42.7 33 3214

31

5735

0

10

20

0

20

40Govern. R&D, Corporate R&DD, Small di ib d

Source: State and Trends of the Carbon Market 2006, 2007 2008 2009 d 2010 Th W ld B k

2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009

Source: Global Trends in Sustainable Energy Investments 2010 UNEP SEFI

distributed capacity

2007, 2008, 2009 and 2010, The World Bank 2010, UNEP SEFI

26.10.2010 JR 4(c) GreenStream Network Plc

Global CDM pipelinep p2 500

3 000

CO

2e) Forestry

HFC & N2O reduction

1 000

1 500

2 000

al v

olum

e (M

t C Fuel switchEnergy efficiency Methane reduction & cementRenewables

0

500

Cum

ulat

ive

tota

C

Number of CDM projects (Total 5529) (As of Oct 2010) Supply-side

EE

CER volume by 2012 (Total 2827 MtCO2e)(As of Oct 2010)

Methane19 %

Supply-side EE

10 %

Fuel switch2 %

Methane20 %

EE10 %

Fuel switch6 %

Demand-side EE

1 %

HFCs, PFCs

Renewables61 %

Demand-side EE

4 %Forestry

1 %Transport

HFCs, PFCs & N2O26 %

Renewables35 %

1 %Forestry

1 %

Transport0 %

Source: CDMpipeline.org

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HFCs, PFCs & N2O

2 %

p1 %

Renewables and Energy Efficiency projects gy y p j

EE

Energy Efficiency Energy Project types, total 778, (As of Oct 2010)

S l

Renewable Energy Project types, total 3351,(As of Oct 2010)

EE Service3 %

EE Households

8 %

Biomass

Geothermal0 %

Solar2 %

Tidal0 %

EE own generation

58 %

EE Industry18 %

Supply side

Hydro45 %

energy21 %

58 %

EE Supply side11 %

Energy distrib.2 %

Wind32 %

988 MtCO2 by 2012 322 MtCO2 b 2012

Theoretical CER potential of the current pipeline:

Source: CDMpipeline.org

988 MtCO2 by 2012 (35%from the total CDM pipeline)

322 MtCO2 by 2012 (11% from the total CDM pipeline)

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p p ) CDM pipeline)

Regionsg

6012

Cumulative total volume of expected CERs by 2012 by host country

Vietnam300012

Cumulative total volume of expected CERs by 2012 by host country

China

40

50

d C

ERs

by 2

01 Vietnam

Thailand

Lao PDR2000

2500

d C

ERs

by 2

01

India

Brazil

South

10

20

30

ons

of e

xpec

te Cambodia

500

1000

1500

ons

of e

xpec

te South KoreaMexico

Malaysia

0

10

Mill

io

0

500

Mill

io

Projects in Validation kCERs by 2012

Cambodia 7 1250

Source: CDMpipeline.org

Lao PDR 3 651

Thailand 123 26112

Vietnam 127 26892

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Vietnam 127 26892

CER price developmentp p

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CDM Challengesg• Development of the CDM projects takes time and

resources:resources: • Project lead times are long: it takes at least two years to

develop project idea to a registered CDM projectdevelop project idea to a registered CDM project• There is risk that project will not get registered as a

CDM projectp j-> Impact of CDM financing to the construction decision is small

but there are also exceptions in some project types

• In general, there is capital gap in early stage project development and investment financing• Traditional financing is available for advance stage project

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Market outlook• Climate policy negotiations continue

at international levelDemand&Supply of CDM/JI credits

Demand Supply

• Cancun, Mexico, 2010: No major breakthrough expected

• Johannesburg, South Africa, 2011: New

Total 1222 Total 1225

EU 890 CDM 1030

Japan 300 JI 195agreement for 2013- period?

• Flexible Mechanisms will be part of the new agreement

Japan 300 JI 195

Other 32

Source: States and Trends of the Carbon Market 2010, The World Bank

• CDM reform i.e. changes in the rules• New mechanisms: REDD (Forestry),

sectoral approach and NAMA creditingcrediting

• Carbon market will continue!!• CDM projects eligible in the EU ETS also

i 2013 2020in 2013-2020• New cap-and-trade schemes are likely to

include CDM and similar mechanisms

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GreenStream in Brief• GreenStream is a leading Northern European company focusing on:

• Asset Management and investments in carbon and bl k trenewable energy markets

• Climate Services covering tailored advisory and intermediary services

• GreenStream is licensed by the Finnish FSA• GreenStream is licensed by the Finnish FSA

• GreenStream's clients are energy and industrial companies, financial institutions and governments

• Some 40 professionals working in Helsinki, Oslo, Berlin, Stockholm, Vilnius, Kiev, Moscow, Beijing

• China is a key market in which GreenStream is engaged in a considerable number of y g gprojects, JV established with Juno Capital for cooperation on CDM projects and climate investments in China

• CarbonStream Africa – JV with CEF to develop CDM projects in Southern Africap p j

• Chosen as the Best Broker in green certificate markets in EU (excl. UK) six years in a row by the readers of Environmental Finance as well as runner-up in the category EU Emissions Trading Scheme – Best Advisory in 2006g y

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