MTN cashes in on clean energy
Mobile network operator MTN has signed an agreement to sell its carbon credits to EDF Trading, a subsidiary of French utility company EDF, in the first project of its kind in the industry.
The credits will be produced by MTN's tri-generation plant, a 2MW clean energy facility situated at the company's 14th Avenue office park in Fairland, Johannesburg. The plant produces electricity, hot water, heating and air conditioning from natural gas, saving energy and making use of heat that would generally be wasted, says MTN.
The carbon credit project utilises a Clean Development Mechanism (CDM) methodology developed by MTN, which has been approved by the United Nations Framework Convention on Climate Change (UNFCCC). It is in the process of being registered with the UNFCCC, after which MTN will sell the carbon credits from the project to EDF Trading.
MTN has received approval from the Department of Energy, the local Designated Operational Entity for registering a carbon credit project with the UN, and the French government's Designated National Authority has also approved the agreement. According to MTN, this is the first time this technology has been submitted to the UN for approval as a CDM project.
“MTN considers climate as part of the natural capital of its business and as the issue of climate change continues to receive increasing attention, it is now at the top of the list of opportunities and sustainability risks facing the Group,” says Kanagaratnam Lambotharan, chief technical officer at MTN.
The tri-generation plant is 85% efficient, reducing greenhouse gas emissions (GHG) significantly. Since the plant's installation, MTN's emissions in tons of CO2 equivalent (CO2e) have seen a reduction of 15 000 tons per year. The excess heat, at some 400^0C, is captured and used to supply heating and to operate an absorption chiller, which creates the cool water used to power the air-conditioning system.
“Absorptions chillers are unique because they use heat to generate cold water without using electrical energy in the process,” explains Lambotharan. He adds that while natural gas is clean burning and offers a consistent supply, simply using this to generate electricity would have been too expensive. “The saving achieved by capturing the waste heat, combined with the additional revenue from the sale of the carbon credits, however, makes the project economically viable.”
MTN says the recent electricity price hikes coupled with the income from the carbon credits means the plant will pay itself off within five years.
One of the biggest long-term impacts of the project is that it opens the door to others like it across the continent, says Harmke Immink, advisor at Promethium Carbon, the advisory firm assisting MTN with the registration of the project. According to Promethium, the potential carbon credit market in SA after 2012 is set at $510 million.
Katie Ross, another Promethium carbon advisor, notes that many companies need to reduce their GHG emissions, in order to comply with EU regulations. “So companies are constantly looking for carbon credit projects that will help them achieve this,” she says. Coal produces 1.7 times more GHGs than natural gas to generate the same amount of energy, and for every tonne of CO2e reduced from the atmosphere, organisations can earn one carbon credit.
Ross says China and India are the front runners when it comes to CDM projects, while South America also has a fair deal in the pipeline. “In SA it has been a bit slower to pick up. The UN has around 4 000 registered carbon credit projects and SA only has 20. We're getting there but it's only been in the last two years really that interest has picked up.” Red tape and laborious registration processes have also hindered uptake, says Ross.
She adds that Promethium is involved with several other projects, across industry sectors, indicating a greater appetite for these kinds of solutions locally.
“People are taking it a lot more seriously. It's going to get to a point where you'll have to pay money if you emit and companies will have to choose - emit emissions and get taxed or reduce them now and save money.”