Increasing the Value of the Carbon Credit Generated by Geothermal Power Projects Through Gold Standard Certification

Abstract

Geothermal is one of the renewable energy sources that can be utilized to generate electricity. Generating electricity utilizing these geothermal sources can be claimed as reducing emission, thus generating Certified Emission Reduction (CER) in accordance with the Clean Development Mechanism (CDM) Rules of the Kyoto Protocol.

Several Geothermal Power Plants have been developed as CDM projects and are currently in various stages of CDM cycles. Some projects have been registered within the Executive Board (EB) of CDM, such as San Jacinto Tizate Geothermal Project in Nicaragua, Lihir Geothermal Power Projects in Papua New Guinea, and Darajat Unit III Geothermal Power Project in Indonesia. Some are in the validation stage, such as Kamojang Geothermal Project in Indonesia. All of these projects have been following the normal CDM cycle.

To increase the value of carbon credit generated by a geothermal power project, it can apply for an additional certification scheme, the Gold Standard Certification. This certification can increase the value, since more than 40 non-governmental organizations have endorsed it and many buyers request Gold Standard Credit. Having this additional certification will allow the project owner to request a premium price for the CER generated.

The paper will describe how CDM can increase feasibility of geothermal power projects by claiming CER. Also, the paper will describe how the Gold Standard Certification can enhance the value of the CER generated by the geothermal power projects.