Norway has agreed to buy 330,000 CERs from a solar power PoA in western Africa developed by Scatec Solar, the latest deal in the country’s ongoing open tender to help meets its 2020 Kyoto emissions target.
The units will be generated over 2018-2020, with the first three projects under the PoA being built in Mali, Burkina Faso, and Ghana, Norway-based Scatec announced.
“This region is struggling with major energy shortage, large populations without access to electricity, dependence on fossil fuels and high energy costs,” said Norway’s climate minister Vidar Helgesen in the statement.
Norway is one of the few remaining buyers of the UN-backed carbon credits and is negotiating deals with developers on a case-by-case basis, paying more than the market rate by applying stricter criteria that includes procuring a portion from the world’s poorest countries.
The price Norway will pay for the CERs was not disclosed.
The government has said it is prepared to pay a maximum of €4 per credit for CERs sourced in the world’s Least Developed Countries (LDCs), which include Mali and Burkina Faso.
Norway typically pays €3-4 per credit for LDC-based CERs, according to Sigurd Klakeg, an official in Norway’s environment ministry. This is around eight-to-nine times higher than the secondary market price for CERs in Europe.
BEYOND 2020
The deal includes an option to continue beyond 2020, when the Kyoto Protocol’s second commitment period expires.
However, it is still unclear whether CDM projects will have a role in helping countries to meet their pledges under the Paris Agreement, which is intended to succeed Kyoto, though Scatec appears confident that the mechanism will endure in some form.
“Over half of all developing countries stated that they wish to continue using the CDM to help deliver national climate change plans submitted for the Paris talks last year,” said Daniel Rossetto of consultancy Climate Mundial, Scatec’s carbon and climate finance advisor.
“Scatec Solar’s carbon program therefore positions it to make a very important contribution to countries’ climate ambitions both before and beyond 2020,” he added.
Scatec solar plants are generating some 383 MW of electricity in the Czech Republic, South Africa, Rwanda, Honduras, and the US. It has a pipeline to build more than 1.5 GW in the Americas, Africa, Asia, and the Middle East.
FACTFILE
- Norway has contracted a little over 10 million CERs over the past year via its open tender.
- The country needs to buy around 20 million more to reach the 60 million it needs to hit its target under Kyoto’s second commitment period (2013-2020).
- It has already contracted around 30 million via two tenders held by the Nordic Environment Finance Corporation (NEFCO), paying around €2.20 per unit.
By Ben Garside – ben@carbon-pulse.com
