Nordex expects increasing demand as a result of Kyoto

Hamburg, October 1, 2004.“With Russia’s acceptance of the Kyoto Protocol, this agreement to protect the climate has finally become internationally binding six years after its conclusion. Especially in the emerging markets, this may lead to a marked upturn in the demand for wind power,” says COO Sales and Marketing at Nordex AG, Carsten Pedersen. The company has already prepared for this new market. Together with a network of specialist partners, it offers its customers advice on the financing of wind farm projects using the instruments of CO2 trading.

According to “Kyoto”, above all CO2 emissions must be reduced by at least 5 per cent below the level of 1990 in the so-called obligation period from 2008 to 2012. The first advances will already be registered in 2005. Emissions are to be reduced in the most economical way possible. For example, if a country is able to achieve its reduction targets more favourably abroad, this measure can be counted towards the reduction. At the same time, countries which overshoot their targets may sell this emission volume as a right (CO2 certificate) to other parties.

In order to avoid a cold start in 2008, international preparatory initiatives have been launched. Nordex has already been able to acquire experience in the implementation of such measures in two cases. In 2003, for instance, this manufacturer erected the first wind farm to be supported by the World Bank’s “Prototype Carbon Fund“. The aim of the fund is to support climate-protection projects in emerging markets. In this concrete case the World Bank paid 3.24 mn US dollars to the Colombian operator of the warm for avoiding a calculated amount of 800,000 tonnes of the CO2 emissions, thus paving the way for realization of the project.

The second Nordex project to be financed via CO2 trading is currently being built in Estonia. The backdrop to this is the emission trading due to start in the European Union, which is also a co-signatory of the Kyoto Protocol, on January 1, 2005. Three parties are involved in this trade in CO2 certificates: Estonia, Finland and the customer of Nordex, the Norwegian power utility Vardar. In this deal Estonia, the party to the Kyoto Agreement, transfers the so-called emission-reduction units to the state of Finland. For the avoidance of 500,000 tonnes of CO2 the wind farm operator Vardar receives EUR 2.9 mn from Finland.

Says Pedersen: “Many potential wind farm operators are not aware of the opportunities they have within the framework of the existing provisions and offers, or are not familiar with the procedure, and therefore hesitate to start proceedings to obtain approvals. This means that they lose a potential for business which should be taken advantage of in the interest of protecting the climate”.