International Conference on Small Hydropower - Hydro Sri Lanka, 22-24 October 2007

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Small Hydro Power Projects and CDM Benefits A Case Study of Obudu Plateau 1 MW Small Hydro Project, Nigeria
Ekpok Ekawon Erokoro, Citizens for Environmental Safety (CES), Po Box 541,Hepo, 65 Ndidem Usang Road Calabar, Cross River Nigeria Email: eekawon@yahoo.com

ABSTRACT
The aim of this paper is to set forth certain salient points on Small Hydro Power (SHP) development and Clean Development Mechanism (CDM) and how the former can reap the benefits of the later. Obudu ranch plateau 1MW small hydro project developed by Pembina Institute Canada and International Centre for Energy, Environment and Development (ICEED) Abuja with the presenter of this paper as an intern used as a case study is a 1 MW run-of-river hydroelectric project located in Obudu Ranch Plateau, Obanliku LGA, Cross River State of Nigeria. The paper briefly deals on the principle and concept of CDM and how it can help a project to be viable by the additional income generated from the CDM component.

1 INTRODUCTION
Nigeria has a population of about 126 million with a growth rate of 2.61 percent in 2001. The Gross National income (GNI) per capita in 2003 was US $320 .The country has a GDP of US $45 Billion in 2001 and per capita income of US $ 300 ranking her as one of the poorest countries in the world according to Central Bank of Nigeria Report (2002). The human Development Index (HDI) ranks Nigeria 152nd out of 175 countries of the world according to UNDP Development Profile, 2004. Other statistic includes: Population below $1 a day, 2001 Life expectancy in 2001 GDP growth rate in 2002 Population growth 2002

70.2% 58.1 yrs 3.3% 3.1 %

Table 1 :Commercial Power generation in the Nigeria (2004) Source of power MW Percentage Comments Hydro based 1930 33 Highly exploitable in excess of 11,0000MW Shiroro(600MW) Kainji (760MW) Jebba(560MW) Thermal/Fossil (six 3,915 67 Operating below thermal stations) capacity Total 5,845 100 Source: Energy Commission of Nigeria, June 2004

International Conference on Small Hydropower - Hydro Sri Lanka, 22-24 October 2007

2 SMALL HYDRO POWER

Small Hydro Power is generally define as hydropower below 10MW and utilizes low head ranging from 3 m to 20 m. It is further classified into mini hydro; micro hydro and Pico hydro. Mini hydro ranges from 10MW to 500MW Micro ranges from 500KW Pico hydro is below 10KW 2.1 Benefits of Small Hydro The decentralize nature of this form of power makes it suitable for the rural population that are disperse in nature. It offers employment opportunities to the rural populace who are engage in labour and material supply. The SHP is environmentally friendly for the following reasons: Does not generate air pollution No waste disposal and No fuel cost involves. Unlike the large dams, it does not result to significant environmental impacts such as loss of habitat, change in water quality and salination.

3 CLEAN DEVELOPMENT MECHANISM (CDM) ITS BENEFIT

The Clean Development Mechanism (CDM) is to assist parties not included in Annex 1 to the convention in achieving sustainable development and in contributing to the ultimate objective of the convention and to assist parties included in Annex 1 in achieving compliance with their quantified emission limitation and reduction commitment |. 3.1 CDM Life Cycle According to the Marrakech accord, the CDM project has five stages: 1. Identification and formulation 2. National approval 3. Validation and registration 4. Monitoring 5. Verification/certification The first three stages occur during preimplimentation of project while the last two are during the lifetime of the project. 3.2 Carbon Finance Carbons funds available include the prototype carbon fund (PCF), the Community Development Carbon Fund (CDCF). Of note is EcoSecurities that specializes in developing carbon credits from CDM projects. 3.3 Barriers Impeding Development of Renewable Energy CDM Projects Certain factors are militating against the development of small-scale renewable energy projects. These includes 1. High transaction cost of documentation, validation, on going monitoring and verification of emission reductions. 2. Renewable energy pay most of the their cost upfront 3. Cumbersome carbon accounting and the test of whether the project would have happened without the carbon credit. 4. Transaction cost of some micro hydro projects would be several hundred Euros per ton of carbon dioxide (CO2) equivalent against average price of CDM credits of less than 7 Euros/tonne.
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International Conference on Small Hydropower - Hydro Sri Lanka, 22-24 October 2007

5. CDM is dominated by big Non Renewable projects that generate more credit such as capturing and destroying HFC-23 and NO2 Just 7 gas capture projects of 265 projects registered by August 2006 accounted nearly three-quarters of all CDM projects. 6. Renewable Energy make up a mere 2 percent of CDM credits

4 OBUDU RANCH PLATEAU 1MW SMALL HYDRO PROJECT SUMMARY

Obudu Ranch Plateau Small Hydro Project A Title of the small-scale project activity The Obudu Ranch Plateau Small Hydro Project is a 1 MW runof-river hydroelectric project located in Obudu Ranch Plateau, Obanliku LGA, Cross River State. The 1 MW Obudu Ranch Plateau Small Hydro Project is expected to sell at least 6570 megawatt hours (MWh) of electricity per year. New economic activities that deliver or make use of energy services are expected to emerge It is estimated that the project would result in an annual emissions reductions of 6307 tonnes of CO2. The baseline for the project activity in accordance with Appendix B of the simplified modalities and procedures for small-scale CDM project activities tonnes CO2/yr. Date of completion of the baseline study: 30/04/2006 Expected operational period of the project is 25 years. Crediting period is 7 years starting from 01/01/2009 The project will apply a monitoring methodology Type 1D, and as outlined in Appendix B of the simplified modalities and procedures for small-scale CDM project activities, monitoring shall consist of metering Baseline emissions = annual electricity production by hydro facility (kWh/yr) X emissions factor for current mini-grid system. Annual emissions = 5256 tonnes CO2eq/yr Environmental Impact Assessment for the Obudu Cattle Ranch SHP is consistent with laws and regulations of the Federal Republic of Nigeria. The stakeholders were engaged in various meetings and consultations.

Description of the small-scale project activity: Contribution to Sustainable Development in the Host Country Environmental component B Baseline methodology

Duration of the project activity / Crediting period Monitoring methodology and plan

Calculation of GHG emission reductions by sources Environmental impacts Stakeholders comments

F G

CONCLUSION AND RECOMMENDATIONS

The issues raised in this paper borders on the need for SHP project developers to take advantage of accessing funds that currently is being overlooked. This will result to the improvement of socio economic activities where these projects are hosted. In view of the above scenario, we Recommend the following: The should be a public (Designated National Authority), private and civil society partnership in information dissemination on CDM projects and its inherent benefits. Designated National Authoritys should put forth simplified documentation on CDM project development. Tertiary institutions should include CDM development in their curriculum Designated National Authoritys should put forth an action plan for the dissemination of information on CDM project development.

International Conference on Small Hydropower - Hydro Sri Lanka, 22-24 October 2007

The transaction cost of documentation on developing renewable energy CDM projects should be reduce by the CDM Authority Carbon credit generated by CDM projects should be of high value so as to attract more investment in renewable energy projects

REFERENCES
Afolabi,A A 2006 small hydro power development in Nigeria:a paper presented at the CDM project facility organized by Pembina Institute and ICEED,Abuja. Carbon Market Europe, 24 June 2005, http//www.pointcarbon.com Carbon Trading; A Critical Conversion on Climatic Change, Privatization and Power.Developemnt Dialogue no.48 September 2006 Central Bank of Nigeria Report 2002 Establishing National Authorities for the CDM: A Guide for the Developing Nations (2002) Final Report on Renewable Energy Research and Development: The Obudu Ranch Plateau Case Study Prepared by Richard Ingwe Cradle, Calabar www.onesky.ca Jiandong, T (2004) Small hydro Power: Chinas Practice Hangzhou. China Water Press Karekezi, S etal(1997):Renewable Energy Technology Technologies in Africa London: Zed Books Kyoto protocol UNFCC/CP/1997/L.7/ac 10,1997 Kyoto, Japan Malcolm, D (2005). Wind of Change in Development Magazine. Issue No.32 New Internationalist-N391, July 2006] PCF Annual report, 2004 Small Hydro Power for Productive Use in Rural Areas-UNIDO Regional Center for Small Hydro Power in Africa, Abuja Nigeria: A Commemorative Publication 2006 UNFCCC, Marrakech Accords UNIDO Regional Industrial Center Renewable Energy for Rural Industrialization and Development in Nigeria (2003) Nwanchukwu, M (2004) Preliminary investigation report on the potential of the Obudu Hydro Power potential prepared for One Sky International www.onesky.ca