An alternative baseline methodology for the power sector - Taking a systemic approach

The objective of this study is to contribute to the process of improving the ACM0002 baseline methodology used to quantify emission reductions achieved through the implementation of renewable power technologies under the Clean Development Mechanism (CDM). Through a systemic analysis of the ACM0002 and its context, it is shown that this baseline methodology is facing a multitude of interrelated problems, divided on all elements of the methodology. These are proven complicated to manage under the present project-by-project approach. It is furthermore shown that a sector baseline methodology holds the potential for managing several of the identified problems. A sector approach is therefore adopted, based on both the estimated implementation of technologies and calculation methods of the ACM0002. For this purpose two forecasting methods are identified, namely the Delphi and the Scenario Forecasting method, the latter being a multivariate qualitative method developed from principles of both forecasting and scenario methodologies. Through the application of these methods in a case study in the Argentinean power sector, it is shown that this sector approach can potentially solve several of the identified problems inherent in the ACM0002. On the contrary the methods are time-consuming to perform, and furthermore set some higher demands for both expert assistance and availability of information than the ACM0002. The time consumption is proposed reduced through minimising the analyses included in the Scenario Forecasting method, but it is uncertain whether this is sufficient to make this approach practicable. More empirical experience is therefore needed to evaluate the true potentials of the proposed baseline methodology. Through expanding the boundaries for the study it is further discussed that future political choices, regarding managing uncertainty, increasing capacity development and taking into account sustainable development, are necessary parts of a viable alternative baseline methodology and should be seen as an integral part of the improvement process of the ACM0002.