Abstract
This Engineering Doctorate has made new findings to overcome the barriers for small-scale projects under the Clean Development Mechanism (CDM). It has built knowledge of how the CDM can work in practice, using the example of operational small renewables projects in rural Cajamarca, Peru. A multi-disciplinary study of the sustainable development, environmental and financial aspects of these technologies is carried out. The study explores sustainability aspects of micro-hydro and solar projects and proposes to the Peruvian CDM authority a new scheme for assessing the sustainable development delivery of similar proposals. It is concluded that the key requirements for successful projects are: a) local involvement at all stages, b) outside support to create utilisation activities, c) careful electricity tariff implementation to ensure long-term financial sustainability and d) local capacity building. This work establishes carbon emission factors of 0.4-3.5 tCO2/kW and 345 kCO2/household/year for mini-grid diesel and kerosene baselines respectively (when the plant capacity and number of households are known). The approach used can be applied in other developing countries projects. The research quantifies the costs of the two technologies studied over their lifetime and compares the costs to those of using typical sources of energy such as kerosene, candles, battery charging and mini-grid diesel. It is found that microhydro and solar electricity are cheaper options than other sources of energy used. Finally, the research makes clear that support and incentives are still needed to encourage national private investors and that international investors can find extra difficulties, as there are political, social and cultural barriers to face. The financial analyses show that bundling could be an alternative under the CDM only if microhydro and solar projects are proposed together with technologies of higher emission reductions potential and countries with greater baseline levels. Key words: small-scale projects, CDM, sustainability, CO2 reductions, bundling, additionality, Peru.