• The mechanism will guarantee payment of the feed-in tariffs over a period of 20 years as long as the project is operated properly. • The mechanism will receive annual income from emissions trading or from direct funding.
FTSM: A SPECIAL FEED IN LAW PROPOSAL FOR DEVELOPING COUNTRIES
The FTSM would also seek to create the conditions for private sector actors, such as local banks and energy service companies, to gain experience in technology development, project development, project financing and operation and maintenance in order to develop track records which would help reduce barriers to further renewable energy development.
The key parameters for the FTSM fund will be:
• The mechanism will pay feed-in tariffs annually only on the basis of generated electricity. • Every FTSM project must have a professional maintenance company to ensure high availability. • The grid operator must do its own monitoring and send generation data to the FTSM fund. Data from the project managers and grid operators will be compared regularly to check consistency.
figure 1.1: ftsm scheme
FTSM roles and responsibilities
developing country:
(inter-) national finance institute(s)
OECD country
Legislation: • feed-in law • guaranteed grid access • licensing
Organizing and Monitoring: • organize financial flow • monitoring • providing soft loans • guarantee the payment of the feed-in tariff
Legislation: • CO2 credits under CDM • tax from Cap & Trade • auctioning CO2 Certificates
1 climate & energy policy |
In order to be eligible, all renewable energy projects must have a clear set of environmental criteria which are built into national licensing procedure in the country where the project will generate electricity. The criteria’s minimum environmental standards will need to be defined by an independent monitoring group. If there are already acceptable criteria developed these should be adopted rather than reinventing the wheel. The members of the monitoring group would include NGOs, energy and finance experts as well as members of the governments involved. Funding will not be made available for speculative investments, only as soft loans for FTSM projects.
© LANGROCK/ZENIT/GP
image THE WIND TURBINES ARE GOING TO BE USED FOR THE CONSTRUCTION OF AN OFFSHORE WINDFARM AT MIDDELGRUNDEN WHICH IS CLOSE TO COPENHAGEN, DENMARK.
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