Clean Development Mechanism Credits in Cuba
Energas S.A., the electricity generating joint venture enterprise operated by Sherritt in Cuba, installed a system that uses waste exhaust heat to generate steam and produce electricity (called a combined cycle generating unit) at its Varadero facility in 2003. In 2007, this unit was granted Clean Development Mechanism (CDM) status under the provisions of the Kyoto Protocol by the United Nations Framework Convention on Climate Change (UNFCCC). While the international framework containing the rules governing the CDM expired in 2012, the continuance of the CDM post-2012 has been supported through a commitment by certain regional and domestic emission-trading markets to allow entities to use certified emission reductions to meet their compliance obligations under these systems.
The Energas facilities comprise two combined cycle plants, one at Varadero with three gas turbines and one steam turbine, and the other at Boca de Jaruco with five gas turbines and one steam turbine, to produce electricity using steam generated from the waste heat captured from the gas turbines.
The Energas Varadero facility produces lower GHG emissions for each gigawatt hour (GWh) of electricity due to the conversion from open cycle to combined cycle technology, contributing to the reduction of GHG emissions in Cuba. This project involved the conversion of the existing open cycle thermal generation facility into a combined cycle facility by retrofitting the three existing gas turbines (GTs) with a heat recovery steam generator (HRSG) for generation of high-pressure steam to run a steam turbine with generation of 75 megawatt (MW) electric capacity. Apart from being environmentally friendly through the use of waste heat for power generation, this project also contributes to resource conservation.
By the end of 2014, 1,533 kt of CO2 emission reductions had been documented for the Kyoto credits. Of these, only 343 kt worth of credits were issued, mainly due to delays in verification and approvals. An additional 638 kt were approved and are ready for issuance, with 185 in the approval process for future issuance. At the end of that same year, a further 367 kt, covering the reporting periods of 2012 (172 kt), 2013 (127 kt) and 2014 (67 kt), were documented on a preliminary basis.
The first Energas CDM project at Varadero was approved to receive credits over a seven-year monitoring period. To continue receiving CDM credits, Energas must apply to the UNFCCC for renewal of the Varadero facility. We will make a decision on whether to proceed with this renewal on the basis of current economics, revised processes and any benefits or drawbacks associated with the registration of our second facility that would qualify – the recently built Boca de Jaruco combined cycle power generation site.
As of 2019, OGP has 638,000 verified Certified Emission Reduction credits banked with the United Nations.