Clean Development Mechanism: Case Assessment of Wind Power
Site at Maharashtra
Loveleen sharma
1 a
, R. K. Viral
1 b
and Divya Asija
1 c
1
Amity School of Engineering and Technology, Amity University Uttar Pradesh Noida, India
Keywords: CDM, Sustainable Development, Economic, Clean, Wind, Power.
Abstract: A market-oriented approach aimed at addressing climate change, the clean development mechanism (CDM)
aims to decrease greenhouse gas emissions. However, there exists an uneven distribution of these projects in
developing nations, despite their increasing popularity. Consequently, it remains uncertain whether these
projects genuinely make a substantial contribution to both environmental and economic sustainability in
underdeveloped countries. To assess the impact of CDM on the sustainability of the Indian energy sector's
development, this study conducts a comparison between several ongoing projects and widely recognized
sustainable development criteria. The study's findings are then considered in light of future modifications on
their policy. Leading governments throughout the world are currently placing a high priority on addressing
the issues of how to combat climate change. After going through various reports published by the government
and research papers, it has been ventured to highlight the CDM projects, processes and case analysis.
1 INTRODUCTION
1.1 Purpose and Scope of Study
Studies on CDM have made a point that is the Earth's
ability to absorb carbon is limited and will eventually
run out. GHG emissions are rising, even if they are
dangerous to humanity at this point. Economic
success and per capita GHG emission have been
found to be highly connected. It is acknowledged that
developing countries wouldn't be able to achieve their
socio-economic objectives without any expand in
GHG emissions. The Kyoto Protocol encompasses
three primary mechanisms: the Clean Development
Mechanism (CDM), Emission Trading, and Joint
Implementation. This investigation places particular
emphasis on the CDM. Within the realm of CDM,
there is a notable emphasis on enhancing the
profitability of wind energy production.
It's worth noting that a significant portion of CDM
wind energy projects rely on power-generating
equipment. However, the extent of the advantage
a
https://orcid.org/0009-0003-5806-6096
b
https://orcid.org/0009-0001-7220-2742
c
https://orcid.org/0000-0003-4978-4216
varies depending on the technology and the specific
country. The central economic challenge lies in the
considerably higher costs associated with energy
generation in this context. When compared to other
project categories, wind energy projects do not
experience as substantial benefits from the CDM.
There are 1700 projects that are currently at an
advanced stage of CDM project cycle accounting for
21% of all projects, hydropower projects at 19%, and
wind energy at 12%. 59% of the portfolio of projects
are related to renewable energy [kingdom of Saudi
Arabia ,2006)]. Clean development activity involves
for example: A rural project using wind powerplant.
This project attracted the international investors from
developed countries and received CER’s for the
emission reduction which is achieved. CDM make it
simpler to reduce emissions globally. Institutions
from the public and business sectors can join the
CDM Compared to JI, rules for the CDM are a little
stricter project must meet the host nation
sustainability standards and cannot use ODA Funds.
Sharma, L., Viral, R. and Asija, D.
Clean Development Mechanism: Case Assessment of Wind Power site at Maharashtra.
DOI: 10.5220/0012506400003808
Paper published under CC license (CC BY-NC-ND 4.0)
In Proceedings of the 1st International Conference on Intelligent and Sustainable Power and Energy Systems (ISPES 2023), pages 51-58
ISBN: 978-989-758-689-7
Proceedings Copyright © 2024 by SCITEPRESS – Science and Technology Publications, Lda.
51
1.2 Basic Principles of CDM
An investor undertakes a project in a foreign country
to reduce emissions and, in return, receives emission
credits[Elsevier B.V.(2019)]. This project could
involve establishing a new facility using renewable
energy sources or upgrading an existing coal-fired
power plant with advanced technology to improve
efficiency.
These emission reductions are only granted if they
go beyond reductions that would have occurred
naturally without the project. This ecological
"additionally" is evaluated against a baseline, which
represents the emissions that would have occurred if
the project had not taken place [UNFCC’s,2003)].
Carbon emission reduction or carbon credits are
the currencies used in this trade.one metric ton of
carbon dioxide is equal to 1 unit of CER informally 1
CER is equal to 1 tons of CO2. Since they are now
recognized as the intangible good, carbon credits can
be exchanged on the commodities market. Certified
Emissions Reductions or CERs are the currency used
in the trading of carbon credits similar to stock
certificates CER’s come in the form of documents.
The CDM Executive Board validates that initiatives
in developing nations have diminished yearly
emissions of one metric ton of carbon dioxide through
the issuance of Certified Emission Reductions
(CERs).
Table 1: Objectives and Limitations of CDM.
S.no.
Objectives
Limitations
1
Contribute to halting
and prevention of
climatic change
Weak environmental
integrity
2
Assist developing
countries in strategy
development that is
long lasting
High transaction cost
and complex
governance
3
Assist industrialised
countries in reducing
emissions
Risk of non-
additionality
2 LITERATURE REVIEW
The Clean Development Mechanism (CDM) is a
process established under the United Nations
Framework Convention on Climate Change
(UNFCCC) to promote clean and sustainable
development in developing countries. Its primary
objective is to assist these countries in achieving
sustainable development while also reducing
greenhouse gas emissions. The CDM allows
developed countries that have emission reduction
commitments (known as Annex I countries under the
UNFCCC) to invest in emission reduction projects in
developing countries [UNFCC’s,2003)].
Table 2: Literature Review.
Author(s)
Details
Year
Surendran
SubrayanPill
ay
Clean Development Mechanism
(CDM) is a market-based climate
change instrument used to reduce
emissions of greenhouse gases and
have become popular in many
developing countries [Surendran
Subrayan Pillay(2015)].
2015
Semida
silveria
The CDM project can be developed
by public or private entities. The
objective is to create a clear line of
procedures so that participation is
facilitated, and CERs can become
internationally accepted and
tradeable [Semida silveria(2005)].
2005
Johannes
urpelainen
The Clean Development Mechanism
(CDM),a partnership tool founded
under the Kyoto Protocol, grants
potential opportunities to help
developing countries achieve
sustainable development[Johannes
urpelainen(2013)].
2013
3 PROCESS OF CDM
CDM is provided under article 12 of protocol which
states that “The clean development mechanism's
primary goal is to aid non-Annex I Parties in attaining
sustainable development and supporting Annex I
Parties in fulfilling their specified emission reduction
commitments, thereby contributing to the
Convention's overarching objectives [ UNEP DTU
CDM/JI database, 2021)]."
An industrialized nation needs to convince the
developing country hosting the Clean Development
Mechanism (CDM) project that it will contribute to
the host country's sustainable development goals
before it becomes eligible to receive credits from the
project. Additionally, the applicant must demonstrate,
using methods approved by the CDM executive
board, that the carbon project would not have been
ISPES 2023 - International Conference on Intelligent and Sustainable Power and Energy Systems
52
implemented otherwise. This also involves creating a
baseline that predicts future emissions in the absence
of the registered project, as depicted in Figure 1 of the
CDM project cycle [kingdom of Saudi Arabia,
2006)].
Figure 1: CDM project cycle.
3.1 Several Steps of CDM Process
Involved in Indian Power Sector
Step 1: Project Identification
This means to identify a project that can potentially
generate emission reductions, and this includes
renewable energy projects, energy efficiency
improvements etc. This entails investigating the
energy industry figuring out where the greenhouse
gas emissions come from and realizing the potential
for sustainable growth. Projects that meet certain
requirements are eligible for CDM funding. These
requirements include additionality, which confirms
the CDM support. The projects contribution to
sustainable development scalability and alignment
with the national interest may also be considered as
in additional criteria [UNFCC ,2023)]. Transparency,
impartiality and conformity to the predetermined
criteria are all the granted by this selection procedure.
This implementation phase which entails project
design, funding arrangement, monitoring and
reporting can begin after projects have been identified
[Cassimon, D., M. Prowse and D. Essers ,2014)]. The
CDM offers a framework for project developers to
gain the access to financial and technical assistance
promote sustainable development and help effort to
reduce global climate change.
In general, project identification in the CDM
entails a thorough review stakeholder involvement
setting eligibility criteria developing the reliable
methodologies and help to reduce emissions.
Step 2: Project Design Document and Monitoring
Plan Preparation
To seize the recognized opportunity, the project
sponsor is required to compose a CDM project design
document (PDD) using the PDD format officially
approved by the CDM executive board. In general,
sector specific strategies to earn carbon credit is
further describe the broad categories of domains in
which projects might be implemented [European
Bank for Reconstruction and Development (2004)].
Initiative participants that inform readers about the
project developer backgrounds and their duties.
Indicate the project’s host nation and any other
participating nation. Describe how the initiative will
help.
Demonstrating additionality in a project involves
proving that the emissions reductions or removals
achieved exceed what would have occurred without
support from the Clean Development Mechanism
(CDM). This involves identifying the financial,
technological, and regulatory barriers that necessitate
CDM assistance. Furthermore, outlining the
monitoring techniques is crucial, detailing the
procedures for assessing actual emission reductions
and specifying the methods for data collection,
measurement, and quality assurance. This ensures the
accurate measurement of a project's environmental
impact while avoiding any form of plagiarism.
Describe monitoring intervals and reporting
specifications.
Step 3: Additional Assessment
In order ascertain whether the proposed project leads
to emissions reductions that wouldn't have occurred
without it, additionality assessments are carried out.
In simpler terms, these assessments determine if the
project activities exceed what would have naturally
occurred under normal circumstances. Part of this
assessment involves examining the Baseline scenario,
which represents emissions in the absence of the
project. The emissions expected from the project's
implementation are compared to this baseline to
evaluate its additional impact. Various methods and
tools, such as financial analysis, technological
benchmarking, and industry-specific standards, are
employed in this [Nobuhiro Sawamura,2022)].
Overall, the CDM’s additionality assessment is an
important step in making sure that emission reduction
programs are actually aiding in sustainable
development and reducing climate change. The CDM
can give investors, host nations, and the international
community assurance that the emission reductions
achieved are reliable and deserving of being
recognized with CERs by proving
Clean Development Mechanism: Case Assessment of Wind Power site at Maharashtra
53
additionality. specialists to supply a nitty
gritty assess for your specific extend.
Step 4: Validation
Plans extend plan counting work portrayal, outflow
base, add and other points of interest. Venture plan
ought to take after rules endorsed by the CDM
Official Board. DOE produces a confirmation report
that incorporates discoveries and proposals with
respect to qualification for CDM enrollment. The
report was submitted to Official Board for review. On
off chance that venture completes the approval
prepare and meets all required criteria, it is enrolled
by the CDM Official Board. Once enrolled, extend
can produce Certified Emanation Diminishments
(CERs) for each ton of confirmed emanation
decreases achieved.
It is worth noticing that the work of the CDM
cycle isn't restricted to distinguishing proof, but to
incorporates checking, recognizable proof and
distribution of CERs. Another stage guarantees
coherence of operations and guarantees
straightforwardness and accountability. Validation of
the CDM venture cycle is required to guarantee the
keenness and unwavering quality of the CDM
prepare. By taking after the confirmation handle,
CDM points to guarantee that outflow lessoning
ventures are genuine, quantifiable and contribute to
feasible improvement of the nation [Howard,
Andrew, 2001)].
Step 5: Project Registration
The venture designer distinguishes a potential extend
that can contribute to the decrease of nursery gas
(GHG) outflows and economical improvement in
creating nations individuals. The extend must take
after CDM rules and procedures. Customary checking
and investigation are carried out after the ponders are
enlisted to guarantee outflow decreases. After
confirmation, ventures will get Certified Emanation
Diminishments (CERs) that can be exchanged or
utilized by creating nations to meet decrease
commitments. It is worth noticing that CDM trade
cycle proceeds after enrollment, counting normal
checking, confirmation and reestablishment periods.
Another step is to guarantee the unwavering quality
and astuteness of the proposed emanation
diminishment plan.
The CDM enlistment handle is complex and
requires broad assessment by free organizations to
guarantee that the extend contributes to economic
improvement and meets the specified guidelines yes.
Project sponsors are prompted allude to allude to the
CDM Rules, look for DOE back, and take after built
up methods for fruitful enrollment.
Step 6: Monitoring and Verification
Monitoring and verification is basic portion of the
Improvement Component (CDM) to guarantee the
precision, straightforwardness and unwavering
quality of outflow decreases detailed by enlisted
CDM ventures. In case the certificate is affirmed by
the CDM Controlling Committee, the extend is
qualified for a Certificate of Emanations Lessening
(CER) to approve the emanation diminishments
accomplished amid support. CERs are relegated to
producers and can be exchanged or utilized to meet
discount commitments [Jiwan Acharya,2012)].
Regular observing and confimation: CDM ventures
will be checked and confirmed amid the crediting
period.
Project engineers ought to proceed to gather and
report data as laid out within the observing arrange.
Customary surveys guarantee that outflows
diminishments proceed to be exact and reliable. The
CDM checking and confirmation prepare is planned
to supply straightforwardness and responsibility and
to guarantee that outflow decreases claimed by CDM
ventures are solid and consistent with CDM
standards. DOE's free certification makes a difference
construct believe and certainty within the judgment of
CDM ventures and their commitments to feasible
advancement and climate alter.
Step 7: Certified Emission and CER Calculation
Within the Clean Advancement Program (CDM), the
term "certificate" alludes to the arrangement of
Certified Emanation Diminishments (CERs) for
CDM ventures. CERs speak to confirmation and
approval of outflow diminishments accomplished by
projects. Once a CDM extend has completed the
checking and confirmation prepare and is found to
meet moderation prerequisites, it'll be qualified for
the issuance of CERs. The grant of CERs shows that
the venture has decreased nursery gas (GHG)
emanations and meets CDM requirements. CERs are
issued by the CDM Official Board or a Assigned
Working Organization (DOE) recognized by the
Official Board. The number of CERs issued by the
extend is decided based on real and confirmed
outflow diminishments over the observing period .
After the CER calculation is total, the CDM
Controlling Committee issues the CERs for the
project. Project designers get CERs that can be
utilized for a assortment of purposes, such as
offsetting emanations, following a trade or exchange.
The distribution of CERs gives unmistakable prove of
ISPES 2023 - International Conference on Intelligent and Sustainable Power and Energy Systems
54
outflow diminishments accomplished through CDM
ventures and serves to bolster and remunerate climate
alter relief endeavors. CERs issued beneath the CDM
have an compelling verification process to guarantee
they are solid and straightforward within the carbon
showcase.
4 RESULTS AND ANALYSIS
Data and parameters fixed in Table 3 & 4 (TWEPL,
2013) which include operating margin, build margin
etc.
Table 3: Data of operating margins and build margin.
Data/Parameter


Unit
tCO2/MWh
Description
Operating margin CO2
emission factor for the project
electricity system in the year y
Source of data
“CO2 Baseline database for
Indian power sector” version 8
(January 2013) published by the
Central Electricity Authority,
ministry of power, government
of India
Value applied
NEWNE grid- 0.9723
Choice of data or
Measurement methods
and procedures
Operating Margin Emission
Factor has been calculated
using the simple OM approach
in accordance with ACM0002
and “Tool to calculate the
emission factor for an
electricity system” Version
04.0.0. The generation
weighted average of simple
operating margins of the year
2009-10, 2010-11, 2011-12
have been used to calculate ex-
ante OM.
Purpose of data
Calculation of baseline
emissions
Additional comment
-
Data/Parameter


Unit
tCO2/MWh
Description
Build Margin CO2 emission
factor for the project electricity
system in the year y
Source of data
“CO2 Baseline database for
Indian power sector” version 8
Value applied
Choice of data or
Measurement methods
and procedures
Purpose of data
Additional comment
Table 4: Data and Parameters of Combined Margin.
Data/Parameter


Unit
tCO2/MWh
Description
Combined Margin CO2
emission factor for grid
connected power
generation in the year y
Source of data
“CO2 Baseline database
for Indian power sector”
version 8 (January 2013)
published by the Central
Electricity Authority,
ministry of power,
government of India
Value applied
NEWNE grid- 0.9583
Choice of data or
Measurement methods and
procedures
Combined Margin
Emission Factor has been
calculated ex ante as the
weighted average CO2 of
the operating margin
emission factor and build
margin emission factor.
Clean Development Mechanism: Case Assessment of Wind Power site at Maharashtra
55
In case of wind power
projects default weights
of 0.75 for operating
margin and 0.25 are
applicable as per
ACM0002 version
14.0.0.
Purpose of data
Calculation of baseline
emissions
Additional comment
-
STEP 1: Method to Determine Operating Margin
(OM) Emission
The method relies on calculating the operational
emission factor by considering the generation-
weighted average of CO2 emissions per unit of net
electricity production (measured in tCO2/MWh)
from all power plants within the system, excluding
those classified as low-cost or must-run units.








Table 5: Simple OM used as low cost.
Net generation in OM(GWH)
Region
2009-10
2010-11
2011-12
NEWNE
1590.00%
1760.00%
19.20%
STEP 2: Calculate Operating Margin Emission
Table 6: Simple operating margin emission factor.
Parameters
Units
2009-
10
2010-11
2011-12
Simple
OM
emission
factor
tCO
2
/
MWh
0.978
0.971
0.969
Table 7: The OM emission factor for the NEWNE grid.
Financial Year
2009-10
2010-11
2011-12
NEWNE Grid
Net Generation
in OM
4,58,042
4,76,986
5,02,301
Net electricity
import from
southern
(GWH)
0
0
0
Electricity
import from
other countries
(GWH)
5,342.10
5,611.00
5,285.50
Net generation
including
import (GWH)
4,63,385
4,82,596
5,07,584
Simple
operating
margin
(tco2/MWH)
0.9776
0.9706
0.9688
Weighted
generation
operating
margin (EFgrid
OMY)
0.9712
So, the final weighted generation operating margin is
estimated that is 0.9712.
STEP 3: The Build Margin (BM) Emission Factor
The latest available data for establishing the emission
factor margin during the PD submission relied on a
small sample group. This group was composed of M
energy systems, representing 20% of the total power
plant capacity additions. These systems were chosen
because they have been constructed most recently,
and their annual generation, measured in MWH,
surpasses that of the five most recently built power
plants in the sample group.








Central Electricity Authority (CEA) of government of
India has calculated the CO2 OM emission for in
table 8.
Table 8: NEWNE grid and build margin calculated.
Parameters
Units
2008-09
Simple
Build
Emission
Factor
tCO
2
/MWh
0.916
STEP 4: The Combined Margin Emission Factor
The baseline emission factor refers to the EF grid,
which is determined by combining the operating argin
emission factor (EF grid, OMy) and the build
emission factor (EF grid, BMy) through a weighted
average calculation.




 



 

This calculation involves using equal weights of 0.75
for operating margin emissions (WOM) and 0.25 for
ISPES 2023 - International Conference on Intelligent and Sustainable Power and Energy Systems
56
build emissions (WBM), both expressed in
tCO2/MWH, as described in steps 3 and 4.
Table 9: Calculation of Combined Margin.
Simple Operating
Margin
(tCO2/MWh)
Avera
ge OM
Build
Margi
n
Emissio
n factor
(EFgrid,
CM,y)
2009-
10
2010-
11
2011-
12
2011-
12
Region
South
0.978
0.971
0.969
0.972
0.916
0.958
So, combined margin is 0.958 in table 9.
STEP 5: Calculate Baseline Emission Factor and
Total Emission Reduction also Called CER
Calculation in Table 10 & Table 11
The provided electricity is used to calculate the
baseline emissions. Grid connected electricity
generated from renewable resources multiplied by an
emission factor determined in a transparent and
cautious manner, and then added to the grid. Version
14.0 of ACM002





The contrast between baseline emissions (BEy) and
project emissions (PEy) during a given year y
represents the emission reduction.





Table 10: Calculate baseline emission factor.
RCR Eco Power Wind Power
Project in Tamilnadu
Project
in
mahara
shtra
Parameters
Units
Valu
e
Refere
nce
Capacity of Windmill
No of WTGs
No.
3
Plant capacity
MW
52.8
MW
Purch
ase
order
Generation and sale of energy
Net generation
GWH
1453
566
Calcul
ated
Table 11: Calculation of total emission reduction.
Total
Saleble units
(EGy)
MWh
14535
66
Calculated
Baseline
Emission
Factor
(EFgrid,CM
,y)
tCO2/M
Wh
0.958
Refer
'EFgrid,CM
,y' sheet
Baseline
Emission
(BEy)
tCO2
89085
Calculated
As Ly = 0,
ERy = BEy
Total
Emission
Reduction
(ERy)
tCO2
89085
Calculated
So, total emission reduction is 89085.
5 CONCLUSION
Forecasting the potential opportunities available to
economically disadvantaged nations through the
Clean Development Mechanism (CDM) is a complex
task. Nevertheless, there are substantial reasons for
optimism due to the CDM's substantial capacity to
promote sustainable development and attract foreign
investment. Its capacity to address local and regional
environmental concerns and advance social
objectives becomes evident with meticulous planning
and the establishment of a national CDM strategy.
In situations where funding for greenhouse gas
emission reduction measures might be constrained by
Clean Development Mechanism: Case Assessment of Wind Power site at Maharashtra
57
other developmental priorities, the CDM offers
developing countries a pathway to engage in the
global fight against climate change. The CDM
acknowledges that only through enduring sustainable
development.
A summary of present state of Clean
Development Mechanism projects reveals that India
has the second-largest number of projects record
under the mechanism and biggest anticipated certified
emission reductions, after China. As a result, India
and Indian businesses have a fantastic opportunity to
earn from carbon credits.
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https://unfccc.int/files/cooperation_and_support/capaci
ty_building/application/pdf/unepcdmintro.pdf
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