Carbon trading: PV “securitisation” breakthrough

Polaris solar PV net news: carbon dioxide emissions into the local Government’s performance appraisal, except perhaps to announce support for photovoltaic application development will contribute directly to local government measures, greater significance is likely to PV “securitisation” open breach.

PV “securitisation” the importance of needless to say, both photovoltaic power plant investment too high a threshold problem can be solved, expanded sources of funding, and can take this extension PV industry chain, Quicken the development of surrounding its derivatives business.

Just now, notwithstanding the photovoltaic project by way of introducing trust partly solve the financing problem, but from a system point of view, PV “securitisation”, the primary is still at a very primitive stage.

According to the national development and Reform Commission issued the carbon dioxide emissions per unit of GDP target responsibility assessment and evaluation methods, in provincial units of its unit GDP carbon dioxide emission reduction targets for assessment, as in the provinces (autonomous regions and municipalities) people’s Government leading bodies and leading cadres ‘ comprehensive evaluation of content. Among them, the evaluation result is not qualified for the provincial governments, to examination and evaluation within one month after the announcement of the result, make a written report to the State Council and propose rectification measures, and copy to the national development and Reform Commission.

The carbon dioxide emissions included in the performance appraisal, the most direct effect of the carbon market, perhaps regardless of transaction size and trading activity of, could have a positive impact.

As to reducing carbon dioxide emissions has a better effect of photovoltaic power plants, will undoubtedly benefit. Thereby increasing selling carbon emission rights in addition to the direct benefits, but more important is that the carbon trading the opportunity to gain access to opportunities in the financial markets, as well as a wide degree of “securitisation” is established.

Carbon trading opportunities

Statistics show that so far, including Shenzhen, Shanghai, Beijing, Guangdong and other 7 official start of emissions trading pilot.

Figures from Guangdong Province, the province in December last year officially launched the pilot carbon trading, 2013-total of 184 companies were incorporated into the control objectives, quotas paid income of about 667 million dollars that year.

The secondary market, there have been more than more than 10 investment houses, dozens of individual emissions Exchange in Guangzhou to open an account, participate in secondary market transactions. As of July 15, the province paid allocations and market trading a total of 12.31 million tons, turnover of 732 million dollars.

Guangdong Province, Guangdong provincial development and Reform Commission recently published the carbon emission quota allocation plan for 2014-, electric power, iron and steel, petrochemicals and cement industries a total of 211 control and new project include a carbon management and trading, including iron and steel co, Baosteel Zhanjiang within the province of new expansion of combined heat and power, gas and newly built projects are included in the scope.

From carbon trading, mostly free of charge distribution and possible combination of auction payment methods. This also means that if quotas are sufficient for free enterprise use, eliminates the need to purchase additional quota paid.

However, for including power, some high energy-consuming industries such as iron and steel, petrochemical and cement, you will need to purchase a certain proportion of the paid emission quotas.

And the incorporation of carbon dioxide emissions into the appropriate performance evaluation, may prompt local corresponding modifications to the existing carbon emissions rules, including expanding into the scope of carbon control industry and enterprise, reducing control free emission quotas for enterprises, which will on the subject of carbon market transactions increase, paid carbon dioxide emissions requirements, and secondary market activity has a positive impact.

A case study of Guangdong Province, the provincial development and Reform Commission has organized the relevant bodies to carry out ceramics, nonferrous metal, textile, papermaking, chemical industry and transport, carbon emission guidelines for work in the field of architecture, will be followed by group work such as historical inventory and allocation of quotas, strive for late 2014 or early 2015 into the scope of carbon trading.

“Securitization” beginning

Under the background of good policy, carbon trading market activity, or PV could significantly reduce carbon dioxide emissions to benefit directly.

Data show that relatively good in light of resources West, a 10MW solar plant, in duration of 25, compared with thermal power, and cumulative emission reduction of 400,000 tons of carbon dioxide, sulfur dioxide, 1850 tons, 120 tons of dust and ash 4.06 tons.

The wider significance is that, as a kind of financial trading platform, PV will be obtained through carbon trading market “securitisation” opportunity.

It is understood that the Guangdong carbon market activity and liquidity in order to enhance, head of Guangdong provincial development and Reform Commission will, in conjunction with provincial and municipal finance departments corresponding to the carbon finance and carbon derivatives products. Meanwhile, attract and mobilize other organizations including financial investment institutions to actively participate in carbon markets in Guangdong Province, strengthen control enterprise training, enhance awareness of carbon and carbon asset management and improving enterprise management level.

Its ultimate goal is to explore carbon benefits system, market mechanisms to encourage enterprise, low carbon behaviors such as voluntary public participation in energy conservation and emissions reduction.

To address the financing of PV is undoubtedly an opportunity.

Financing of PV power station, and present some of the Bank’s lending standards were not adapted solar industry, with many financial institutions, including banks, understanding of the PV industry are not related.

Wangjin, Director of the NDRC Energy Research Institute, Center for international cooperation in the international view that bank loans is through the traditional model of collateral and guarantees to avoid risk, as long as the company’s assets, reputation as collateral to get loans, which are more beneficial to state-owned enterprises and listed companies in the photovoltaic industry solve the loan problem, but SMEs are mainly based on distributed PV business more difficult. In addition, the loans with the Bank for the PV industry’s risk enough to learn more about.

King believes that for banks, you need innovative risk management and control mechanisms in this field. If the pilot succeeds, one or two domestic banks, other banks will follow later.

Therefore, for people who solve financing problem of the photovoltaic industry, also needs across all platforms to increase interaction and understanding of financial and other related industries. Carbon-trading platform, is undoubtedly a better chance.

Original title: carbon trading: PV “securitisation” breakthrough

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