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As CDM stall, wind energy drifts in China

Wind-energy advocates fear a recent decision by an international board overseeing the U.N. Clean Development Mechanism (CDM) may have dealt a devastating blow to China's CDM process. Others worry that the damage inflicted by a CDM executive board decision March 26 in Bonn may stretch beyond China, perhaps upsetting the entire global carbon-credits exchange market.

Wind power projects fail to win international funds, raising questions for sector

BEIJING -- Wind-energy advocates fear a recent decision by an international board overseeing the U.N. Clean Development Mechanism (CDM) may have dealt a devastating blow to China's CDM process.

Others worry that the damage inflicted by a CDM executive board decision March 26 in Bonn may stretch beyond China, perhaps upsetting the entire global carbon-credits exchange market.

On the other hand, some experts say the controversy has given the Chinese government a chance to expand support of the domestic industry and make electricity price-setting more transparent, which in turn could help rebuild the CDM board's trust in China.

One thing is for certain: By signaling no support for 14 Chinese wind-power applications, the board upheld an earlier decision effectively stalling CDM funds for new wind-power projects in China.

Before the decision turned the tide for Chinese CDM projects, the international funding mechanism had contributed significantly to the rapid development of China's wind-power industry.... more [truncated due to possible copyright]  

Wind power projects fail to win international funds, raising questions for sector

BEIJING -- Wind-energy advocates fear a recent decision by an international board overseeing the U.N. Clean Development Mechanism (CDM) may have dealt a devastating blow to China's CDM process.

Others worry that the damage inflicted by a CDM executive board decision March 26 in Bonn may stretch beyond China, perhaps upsetting the entire global carbon-credits exchange market.

On the other hand, some experts say the controversy has given the Chinese government a chance to expand support of the domestic industry and make electricity price-setting more transparent, which in turn could help rebuild the CDM board's trust in China.

One thing is for certain: By signaling no support for 14 Chinese wind-power applications, the board upheld an earlier decision effectively stalling CDM funds for new wind-power projects in China.

Before the decision turned the tide for Chinese CDM projects, the international funding mechanism had contributed significantly to the rapid development of China's wind-power industry. Developed countries benefited as well; CDM is considered a win-win arrangement that lets countries on the paying end reduce carbon-emission reduction costs, while qualifying developing countries get financial support for clean energy projects.

Through the end of 2009, wind power accounted for about one-third of all active CDM projects in China, according to the Global Wind Energy Council (GWEC), a trade group.

"China's wind-power industry has experienced four successive years of 100% growth," said GWEC Policy Director Qiao Liming. "In addition, 90% of wind-power projects in China are applying to become CDM projects."

An atmosphere of distrust toward China began spreading among CDM board members in spring 2009. Critics suspected China's project applications had received special treatment.

Suspicions mounted until the board, in an unprecedented move, announced in December that it was "cutting off" CDM support for 10 Chinese wind-power projects. The announcement came on the eve of the U.N. Climate Change Conference in Copenhagen.

As news of the decision shook the industry, nine Chinese wind-power enterprises jointly urged the board to take another look at registration qualifications for all of the country's wind-related CDM projects. In addition, the International Emission Trading Association wrote three letters criticizing the board's decision, calling it rash.

In February, the board reconsidered and granted approvals for two of 10 previously rejected projects. But they added six more Chinese projects to the rejection list, bringing the total to 14.

"This policy decision has greatly influenced the entire CDM market and renewable energy projects in developing countries by increasing uncertainty in the market and impacting industry investment," lamented GWEC Secretary General Steve Sawyer.

Pricing debate

The board claimed China manipulated power prices to qualify for CDM funding, charging that prices for electricity produced by wind power and other sustainable energy technologies had been intentionally lowered.


Source: http://www.marketwatch.com/...

APR 13 2010
http://www.windaction.org/posts/25660-as-cdm-stall-wind-energy-drifts-in-china
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