Potential of Kyoto Protocol Clean Development Mechanism in transfer of clean energy technologies to Small Island Developing States: case study of Cape Verde

The developed countries committed to greenhouse gases reductions under the aegis of the Kyoto Protocol of the United Nations Framework Convention on Climate Change will, in order to reduce the cost of meeting their commitments, depend on cheaper reductions elsewhere. The reductions will be materialised through several mechanisms of the Kyoto Protocol: the Emission Trade, Joint Implementation and Clean Development Mechanisms. The Mechanisms will carry a strong financial incentive for the dissemination of clean energy technologies, including renewable energy technologies and especially technologies that increase the efficiency of energy transformation and consume. This paper concentrates on the case typical of more than 30 Small Island Developing States, that all have a common situation of relatively low carbon intensity and high price of fossil fuel based economies, and on how the Clean Development Mechanism is expected to influence the transfer of clean energy technologies under the aegis of the Kyoto Protocol. The paper shows, by assessing a case of a small island, that although the emission reduction on global scale is small, there is great potential for establishing a strong market presence of renewable energy technologies in developing countries. A typical small island electricity generation is heavily dependent on Diesel engines, expensive and polluting, but still the most appropriate on such a small scale. This paper studies implications of different scenaria of development of electrical energy system on the island of Santiago, Cape Verde. An estimate of electricity demand for the period until 2030 is given. Baseline scenarium based on Diesel capacity is compared to a renewable energy scenario envisaging 30% of the electricity generated by the wind power, and the other supply side efficiency scenario replacing Diesel capacity with combined cycle. The declining price of clean energy technologies is taken into account. The possible influence of the Clean Development Mechanism is assessed. The potential for financing the technology transfer is quantified and its influence on different electricity system planning scenarios estimated. (C) 2003 Elsevier Science Ltd. All rights reserved.