The Emerging CER Market and Geothermal Energy Potential

Abstract

CER is the abbreviation of Certified Emission Reduction. It will become new service business, which only could be produced in developing countries (Non-Annex 1) in cooperation with developed countries (Annex 1). It was created under Clean Development Mechanism (CDM), as stipulated in Article 12 Kyoto Protocol, United Nations Framework Convention on Climate Change (UNFCCC). The market should be commenced in January 2000, in order to stabilize the level of Greenhouse gas emission at 5% below 1990's level in 2010. The Annex 1 has committed to reduce the GHG emission at differentiated target (Japan 6%, USA 7% and EU 8%). These countries need help from Non-Annex 1, because the cost to reduce it, is much different between the two groups. The market is there, but the regulations are still pending. The last COP 6.a. was failed to reach agreement, particularly between USA and EU. It will resume in June/July 2001. For the benefit of all countries in the world, it is expected the COP 6.b. could reach promising agreement between all parties involved. The geothermal energy is the most favorable for Indonesia to participate actively in the global effort to reduce CO2 and selling the CER produced by the CDM project at the market price commencing 2008 to the Annex 1. At the same time Indonesia may reach sustainable development. Geothermal energy in Indonesia has the potential capacity up to 20.000 MW. And its emission rate only 115 grams per KWh. If we compare to the coal-fired power plant it is only approximately 10%. If the acceptable baseline in power generation sector for Indonesia is the coal-fired, Indonesia will get plenty of CER from geothermal sector. (23-02- 01)