Carbon trading company Sempra Energy Europe Limited (SEEL) is helping small hydroelectric power developers in China to enter the carbon trading market by investing in schemes currently under construction.
Entering the carbon trading market can increase the rate of investment return of a project and encourage the development of clean energy projects and carbon emission control.
Before deciding whether to invest, SEEL wanted to assess the potential of seven such hydroelectric schemes to produce carbon credits, and appointed Halcrow to carry out high level due diligence on the projects.
Halcrow’s role was to produce a concise analysis of all the risks associated with each of the seven projects both prior to and during operation, including construction, financial, hydrological, energy yield and environmental risks
During that process we reviewed the feasibility studies, preliminary design reports and environmental impact assessment reports for each power project, together with documents related to their statutory approval status. We also undertook detailed inspections of all the works on site
We advised the client on the quality of construction and anticipated programme of each scheme, as well as the competence of the various developers and their apparent enthusiasm and motivation to complete the projects. We reported on whether each project is likely to be completed at the scheduled completion time, assessed the aims made in feasibility studies about the amount of water available to produce energy and determined if the projects are likely to generate the power rating and energy yield claimed in the documentation.
As a result of our due diligence the client was able to make a reasoned decision about the investment potential and risks for each project.