Written by Asier Aramburu Climate Change RENEN Manager,.
It is estimated that approximately one billion people around the world do not have access to electricity. This fact slows down their socioeconomic development since it affects both their potential economic growth and key aspects of well-being such as health, nutrition and education.
In recent years, the countries of Central and South America have achieved high levels of electrification, but this evolution has moderated when they have reached to 90% -95% electrification. This is due to the fact that the remaining areas are difficult to access or they face some social or security difficulty. In the case of Colombia, these areas are concentrated in the so-called ZNIs.
The Non-Interconnected Zones (ZNI, acronym in Spanish) are formed by the Colombian territory that is not connected to the Central Interconnected System (SIN, acronym in Spanish). According to the latest data provided by the Superintendency of Home Public Services, it includes 52% of the country’s territory, with an estimated population of 1,900,000 inhabitants. Colombians living in these areas do not have public electricity service through the national grid and, therefore, depend on local generation solutions. These solutions are based mostly on diesel generators (96% of the total). The use of this fuel not only implies a considerable environmental impact, but also causes significant diseconomies of scale since 80% of the capacity is concentrated in plants with a capacity lower than 100 kW. Moreover, they have to deal with the high cost of the diesel and its volatility.
However, the electrification of these areas has been limited by geographical obstacles and conflicts in some regions, as well as the following barriers:
- The population density is extremely low (an average of 3 inhabitants/km2), which makes the logistics of service attention difficult (high investment and operating costs per user).
- Poor logistics and transportation infrastructure, and in some places non-existent.
- Low level of average consumption.
- Low payment capacity by users and therefore low level of collection of the companies’ portfolio.
- High levels of losses.
Therefore, a vicious circle that has not yet been broken is created. Getting out of this circle is even more important for Colombia if it is considering that the ZNIs concentrate most of the territory that has suffered most of the violence. Thus, ensuring their access to electricity is a necessary step to allow their development and advance in the resolution of the conflict.
As stated before, the traditional method of promoting electrification, the expansion of the national grid, has proven insufficient to achieve 100% of national coverage. For this reason, distributed generation has become the most suitable solution for the electrification of these areas. Although the electricity supplied with minigrids under normal conditions has a cost substantially higher than the average cost of the interconnected system, minigrids are competitive in those locations where extending the main network is even more expensive. In addition, in order to complete the cost-benefit analyses, the social cost of not having a basic minimum supply of electricity and the lack of reliability in the supply should be included as externalities. By including these costs, these projects would be more feasible and the considerable social benefit would be measured in economic terms. In contrary, not including them will lead to a minimum cost solution: not to incur in any cost, that is, not to electrify the area.
Furthermore, based on this alternative, the non-interconnected areas of Colombia have enormous potential to switch from fossil fuels to clean energy. And it is that, although Colombia is experiencing an accelerated expansion of its generation capacity from non-conventional renewable energies, most of these projects are focused on supplying energy to the SIN.
As previously stated, developers (both private and public) must overcome numerous difficulties to implement generation projects in the ZNIs. These regions are supplied by independent operators that do not have enough volume to launch massive electrification projects. Furthermore, the have serious difficulties in accessing financial markets due to limitations in the payment capacity of their users. Thus, these projects are generally not attractive projects for private investors and additional resources are required. The carbon market is one important source of income that can support these projects development.
ALLCOT has led the validation of the Inírida Solar Farm project (Inírida, Guainía), the largest solar project developed in the ZNI (2.5 MW). This project represents a fundamental milestone for these regions and offers a referent that can be replicated to allow the transition of these networks to renewable energies.
The Inírida Solar Farm project consists of a photovoltaic solar plant that covers around 22% of the municipality’s energy demand and allows an annual reduction in emissions of approximately 2,800 tCO2e. This reduction is achieved thanks to the fact that this plant replaces part of the energy generated by the diesel fuel plant that fed the entire local distribution network of Inírida. Now, this network will benefit from a hybrid generation system (solar + diesel), in such a way that the reliability of the system will be ensured due to the diesel generation when is needed.
The electrification of the ZNI through mini-grids powered by renewable energies will be key in achieving the Sustainable Development Goal (SDG) 7 and for universal access to energy in Colombia. Thanks to this important milestone, a gap that slows down the improvement in the quality of life of almost two million people will be closer to be overcome. We invite you to consult more information about the project at the following link.
ALLCOT will participate in two projects under Article 6.2 of the Paris Agreement for the generation of ITMOs.
ALLCOT has signed two consulting contracts for projects in Senegal and the Dominican Republic aiming to provide ITMOs to Switzerland and Sweden, respectively
An important difference between the approaches of Article 6 of the Paris Agreement and the market mechanisms of the Kyoto Protocol (CDM) is that, under the Paris Agreement, all countries have emission reduction targets in the form of Nationally Determined Contributions (NDCs). Article 6 of the Paris Agreement provides countries with a framework for cooperation in their efforts to limit climate change through the use of carbon units, called International Transfer Mitigation Results (ITMOs) to achieve their NDCs. The generation of ITMOs contribute to increasing the global ambition committed by countries under Article 6.2 of the Paris Agreement by promoting low-carbon technologies and accelerating the implementation of projects and programs. Cooperative approaches are a fundamental tool to achieve the Greenhouse Gas (GHG) emission reduction goals established by each country in its NDC. All projects and programs that voluntarily participate in these cooperative approaches must promote sustainable development and ensure environmental integrity as well as transparency.
At the end of last year, ALLCOT Group signed two contracts for ITMOS generation projects from two different countries:
- Senegal: project for sustainable waste management in Africa funded by the Foundation for Climate Protection and Carbon Offset KLIK (KLIK Foundation). ALLCOT Group will provide its consultancy services for the elaboration of technical documentation (Mitigation Activity Description Document – MADD) that will serve as the basis for the subsequent governmental approval and commercialization of ITMOs to comply with the Swiss NDC.
- Dominican Republic: it is a mitigation project managed by a Norwegian company, AMMADOL BIO, which consists of reducing greenhouse gases generated by the Agricultural and Farming Sector in the Dominican Republic through the implementation and transfer of Dutch technology to capture biogas and provide ITMOs to Sweden. Like with the Senegal project, ALLCOT Group will provide its consultancy services for the MADD elaboration.
Since its inception, ALLCOT Group has been committed to guaranteeing environmental integrity, transparency, and promoting sustainable development aligned with the 2030 Agenda and its 17 Sustainable Development Goals (SDGs) allowing for solid governance agreements.
With more than ten years of experience, the ALLCOT Group technical team is specialized in the market mechanisms of the Kyoto Protocol and, with the signing of these two new contracts, reaffirms and strengthens the trajectory to be one of the main players in the implementation of Article 6 of the Paris Agreement.
Mahindra Racing first Formula E team and FIA World Championship entrant to be certified net Zero Carbon Footprint since inception
- The most sustainable team on the grid becomes the first Formula E outfit and first FIA World Championship entrant to be certified Net Zero Carbon footprint
- Pledges to the UNFCCC Sports for Climate Action Framework
As it continues its vital sustainability work at pace, Mahindra Racing is pleased to announce that it is the first Formula E team, and first FIA World Championship entrant, to be certified Net Zero Carbon footprint since inception. The certification has been approved by the ALLCOT Group for carbon emission offsetting for the entirety of the team’s existence.
The emission allowances have been marked for permanent removal from the pool of offsetting credits at the Environmental Registry on behalf of the team’s chosen REDD+ Project.
Established in 2009, ALLCOT is a leader in greenhouse gas (GHG) emissions management tools and strategies for businesses of all sizes. By neutralizing GHG emissions, Mahindra Racing is not only able to protect the environment, but also provide community benefits that enhance profitability and brand value, increase employee satisfaction, to combat the climate crisis under Article 6 of the Paris Agreement, which is aligned with the UN 2030 Agenda, and promote the United Nations Sustainable Development Goals.
The REDD+ project protects 177,899 hectares of high conservation value rainforest in the state of Pará, Brazil and will prevent net emissions of >20 million tCO2e over the project lifetime. It is a registered Code REDD+ project; is validated and verified against VCS and in 2012 attained CCBA Gold level accreditation. This project protects threatened tree species like the pau rosa (Brazilian rosewood), provides jobs in forest management and monitoring, supports education in agro-forestry techniques to enable the community to grow cash crops, protects at risk animals like the Giant Anteater, Golden Parakeet and Ka’apor Capuchin Monkey and provides secured land tenure to villages committed to conservation.
In addition to Mahindra Racing’s Net Zero Carbon benchmark, it is also pleased to announce it has pledged to the UNFCCC Sports for Climate Action Framework alongside the FIA and Formula E. This initiative aims at supporting and guiding sports actors in achieving global climate change goals.
By committing to the framework, Mahindra Racing has pledged to five key principles; to undertake systematic efforts to promote greater environmental responsibility, to reduce overall climate impact, to educate for climate action, to promote sustainable and responsible consumption and to advocate for climate action through communication.
These new achievements add to the team’s previous sustainability endeavours including:
- Becoming the first Formula E team in history to receive Three-Star Accreditation– the highest accolade in the FIA’s framework.
- Committing to planting trees in the Araku Valley region of India thanks to its Season 6 tree planting campaign. Mahindra Racing’s efforts are in tandem with Mahindra Group’s commitment which has a commitment to plant 1 million trees every year
- Partnering with One All Sports as its team kit supplier; a natural choice due to their shared vision and dedication to the use of sustainable materials, applications and processes.
“We believe that ‘doing good’ goes beyond philanthropy and CSR, it is more than just random acts of kindness. ‘Doing good’ is a purpose, an attitude, and a way of life; it is our guide for conducting business and ourselves. As a team that is committed to finding credible, advanced and next generation mobility solutions while being kind to the planet. At Mahindra Racing, we pledge to greater ROCE, which, for us, stands for Return On Climate and Environment. This is ingrained into our ethos and a big part of the reason we are racing in Formula E. We have been on this path of reducing our impact on the planet since our birth in 2014 and six years later we are carbon neutral since inception. We are also certified with Three-Star Excellence in sustainability. To this end, our efforts are and will continue to be, in tandem with Mahindra Group’s commitment and quest to achieve group-wide carbon neutrality. We look forward to kickstarting season 7 with ROCE as our guiding principle, towards setting innovative, competitive yet sustainable mobility benchmarks for the world.”
Dilbagh Gill, CEO and Team Principal.
“It is a great achievement for Mahindra Racing to become certified net zero carbon since inception. Mahindra Racing has become a leader in sustainability across the sporting landscape and promotes sustainable business practices across their supply chain. As the first Formula E team to attain FIA Three-star Environmental Accreditation and the most recent team to sign the UNFCCC Sports for Climate Action Framework, they are the perfect partners in the fight against climate change. The first manufacturer to join the Formula E grid and now the first to commit to Gen3, we’re delighted to have a long and ongoing relationship with another organisation so aligned to our vision and values.”
Jamie Reigle, CEO, Formula E.
“We are very proud and excited to be part of the Mahindra Racing sustainability team. Mahindra’s values and beliefs echoes our own. Sustainability or good management through Sustainable Development Goals are at the heart of Mahindra’s drive. It translates into these great achievements that we hope will inspire and lead to a virtuous competition among its pairs. Regardless, it sets great precedents that we aim to continue working and exceed whenever possible”.
Alexis Leroy, CEO, ALLCOT Group.
ENGRAW contracted ALLCOT Group’s services for the ENGRAW’s 2019 Carbon Footprint report as part of its sustainability strategy.
ENGRAW is a company highly aware of caring for the environment. Its activity consists of processing mulesed-free Uruguayan wool, produced by healthy sheep and following the best livestock available practices. For the 2019 financial year, ENGRAW has decided to calculate its Carbon Footprint for the first time by turning to the expert company in Sustainability Services, ALLCOT Group.
The Carbon Footprint is calculated to know the amount of greenhouse gases (GHG) that are emitted directly or indirectly into the atmosphere as a result of the company’s activity. When referring to the carbon footprint of a company and the emission sources that are analyzed in its calculation, we use the term ‘scope’, classifying it into scope 1, 2 and 3. The scope of the calculation can be more or less ambitious depending on the interests of the company.
ENGRAW, being a company with a strong environmental commitment, has decided to calculate its carbon footprint at the corporate and factory level, covering the 3 scopes as follows:
- Scope 1: GHG emissions associated with the direct consumption of fossil fuels for the operation of internal machinery, as well as the supply and treatment of water necessary for the development of production: boilers, forklifts, and utility vehicles.
- Scope 2: indirect GHG emissions associated with the generation of electricity acquired and consumed by ENGRAW facilities. However, as this electricity was generated by its own wind turbines, these emissions were not accounted for.
- Scope 3: Other indirect emissions such as water consumption and treatment, travel, accommodation, and waste.
On the other hand, ENGRAW has allocated part of its facilities to a tree plantation that is irrigated with treated effluent water from the company’s mill. ALLCOT Group, as an expert developer of climate change mitigation projects, has calculated the total equivalent tons captured from the atmosphere by this plantation, proving that not only does it contribute to the water reuse process, but that the plantation itself acts as a CO2 capture mechanism, mitigating ENGRAW’s environmental impact.
As an objective for 2021, ENGRAW will include in the scope of its next Carbon Footprint report its suppliers of wool raw material. In this way ENGRAW increases its ambition towards its goal of becoming a carbon neutral company.
NOTE FROM FEDERICO RAQUET- Managing Director of Engraw
Last but not least, we applied for the green export award in Uruguay a few weeks ago. Your report was submitted to endorse our environmental impact. Last week we were awarded the prize as the most environmentally friendly large export company in Uruguay. So thank you for your contribution to this achievement that made us very pleased.
Witten by Asier Aramburu, Climate Change RENEN Manager.
In order to effectively advance in reducing the emission of Greenhouse Gases (GHG), the way in which energy is produced and consumed in the world must undergo radical changes. Currently, three quarters of GHG emissions correspond to the energy sector, mainly due to the use of fossil fuels. Although various competitive technologies based on renewable energies have been developed, there are sectors in which their capacity to mitigate GHG is very limited. This fact makes it necessary to develop complementary solutions to decarbonise sectors and applications in which electricity is not cost-efficient, accessible or feasible.
One of the most promising alternatives is based on the large-scale production and use of hydrogen, a gas known and used since the beginning of the industrial era. However, the massive use of this molecule has not been viable until now, thanks to the green hydrogen, the one that is produced through the electrolysis of water. This process is based on the separation of the water molecule into hydrogen and oxygen through the application of electricity from renewable sources. For this reason, production costs are highly dependent on the price of energy. Thus, the massification of renewable energies has allowed the commercial exploitation of this technology to become viable.
On the other hand, it has multiple applications, from domestic natural gas networks to fuel replacement for buses, trucks or ships. Its main advantage: when it burns, it only leaves water steam as a residue. The mechanism is simple: hydrogen reacts with air, generating energy and releasing water.
Attracted by its multiple benefits, an increasing number of countries are betting on its development. Germany is one of the main leaders as it has already committed to invest US $ 10.6 billion to create a local production of green hydrogen. Spain has also joined this race through a National Strategy that seeks to build 4 GW of green hydrogen capacity by 2030.
These efforts will be also supported by the European Post-COVID-19 Recovery Fund that focuses on clean investments, including green hydrogen. This plan is transferred to Spain by using more than 1,500 million euros until 2023 to boost renewable hydrogen.
In Latin America, Chile is leading this development and has just published its National Green Hydrogen Strategy which aims to achieve 5 GW capacity by 2025 (built or developing) and 200 kton/year of production and an installed capacity of 25 GW by 2030.
ALLCOT also wants to lead this sector, so it is actively supporting companies that are developing pilot projects for the production and use of green hydrogen. Due to their innovative nature, these projects require alternative income sources to be able to reach the financial sector. ALLCOT can go hand in hand with these companies so that they can generate carbon credits from GHG emission reductions. Thus, it can be an essential support to enable green hydrogen projects that can then be scalable and replicable.
Thanks to these first projects, progress will be made to get economies of scale that allow reducing costs, encouraging the creation of innovative industrial value chains, promoting technological knowledge and generating sustainable jobs, contributing with all of these to the reactivation of a green high added value economy.
Hydrogen can be a key player in the complete decarbonization of the economy. Its application in sectors where electrification is not cost efficient makes it an extremely competitive technology that has already been included in many NDCs. ALLCOT, as a veteran company in developing climate change mitigation projects, is committed to develop this technology so that its full potential is reached, and progress is made in the fight against climate change and in the achievement of the Development Goals Sustainable (ODS).
Nationally Determined Contributions (NDCs) are a series of measures and actions which countries that are party to the Paris Agreement plan to take to reduce their greenhouse gas emissions and adapt to climate change.