Concentrated Solar Power Project in Anantapur District of Andhra Pradesh

UNFCCC/CCNUCC
CDM Executive Board Page 1

PROJECT DESIGN DOCUMENT FORM
FOR CDM PROJECT ACTIVITIES (F-CDM-PDD)
Version 04.1

PROJECT DESIGN DOCUMENT (PDD)

Title of the project activity Concentrated Solar Power Project In Anantapur
District Of Andhra Pradesh
Version number of the PDD 01
Completion date of the PDD 12/12/2012
Project participant(s) MEIL Green Power Limited
(Private entity)
Host Party(ies) India (host Party)
Sectoral scope and selected methodology(ies) Energy industries(renewable-/non-renewable
sources)(1) Approved consolidated baseline
and monitoring methodology ACM0002
Consolidated baseline methodology for grid-
connected electricity generation from
renewable sources(Version 13.0.0)
Estimated amount of annual average GHG
emission reductions
80,968 tCO
2
e

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SECTION A. Description of project activity
A.1. Purpose and general description of project activity
>>
Concentrated Solar Thermal Power Project (here by refereed as project activity) in Anantapur District of
Andhra Pradesh state is being developed by MEIL Green Power Limited (here after referred as MGPL).
The capacity of the power plant is 50 MW.

The technology of Solar thermal power generation is based on the principle of producing steam by
concentrating the solar radiation from a large area on to a smaller area and the generated steam is used to
drive a turbine in a similar fashion as in thermal plant. Project activity uses parabolic trough technology
and the solar field for generation of power in the project activity.

The purpose of the proposed CDM project is to generate zero-emission solar power and supply it to
Southern regional grid. For the project activity:

(a) The scenario existing prior to the start of the implementation of the project activity is Southern
regional power grid providing the same electricity supply as the project activity will be delivering;

(b) The project scenario is the implementation of the proposed project (considering CDM revenue), i.e.,
the installation and operation of 50 MW concentrated solar power plant, which supply on an average
90,394 MWh to Southern regional power grid annually and replace the same amount of electricity
generated by the operation of grid-connected power plants and by the addition of new generation sources
into Southern regional grid.

(c) The baseline scenario is the same as the scenario existing prior to the start of implementation of the
project activity.

The project activity reduces greenhouse gas emissions by supplying zero-emission solar power to
Southern regional grid, which replaces the same amount of electricity generated by fossil fuel fired
power plants connected into Southern regional grid, and therefore, avoids the CO
2
emissions in
generating the same amount of electricity provided by the fossil fuel fired power plants, with an average
annual supply of 90,394 MWh.

As per the estimates the project activity would reduce 80,968 tonnes of CO
2
per annum and 566,773
tonnes of CO
2
over the chosen crediting period.

The contributions of the proposed project
1
to sustainable development goal are summarized as follows:
- Being located in a power grid dominated by fossil-fired power plants
2
, development of the
proposed project will not only reduce GHG emissions but also mitigate local environmental
pollution caused by air emissions from coal-fired power plants.
- The operation of the proposed project would increase employment and boost the economy in the
local region.

1
The project proponent commits 2% of CERs equivalent towards the welfare of local community leading to sustainable
development.
2
http://cea.nic.in/reports/monthly/inst_capacity/jul12.pdf

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Development of the proposed project could contribute to sustainable development in the local region. In
view of above, project activity is complying with the sustainable development criterion adopted by the
host country.

CER revenue sharing requirements with the utility as per the provisions of the Power Purchase
Agreement (PPA).

A.2. Location of project activity
A.2.1. Host Party(ies)
>>
India

A.2.2. Region/State/Province etc.
>>
Andhra Pradesh

A.2.3. City/Town/Community etc.
>>
Anantapur District

A.2.4. Physical/Geographical location
>>

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The proposed project is located in Nagalapuram Village, Peddavaduguru Mandal of Anantpur district.
Its geographical coordinates are northing 14.95
0
(14
0
5642N) and easting 77.58
0
(77
0
4150E

). The site
is well connected with National Highway-44 running close to the location. The nearest town is Pamidi
about ~12 km and the nearest railway line is through Anantapur-50 km to the south of the project site.
The nearest airport is Bangalore at around 150 km from the project site. The Nearest sea port is Chennai
at a distance of 500 km

A.3. Technologies and/or measures
>>
The purpose of the proposed project is to generate zero-emission solar power and supply it to southern
Power Grid. For the proposed project:

(a) The scenario existing prior to the start of the implementation of the project activity is that southern
regional Power Grid providing the same electricity supply as the proposed project; (b) The project
scenario is the implementation of the proposed project i.e., the installation and operation of 50 MW
Concentrated Solar Thermal Power Plant(CSP) using parabolic technology and will supply an average
of 90,394 MWh per annum to Southern regional Power Grid . Hence the solar thermal power project
replace the same amount of electricity generated by fossil fuel fired power plants connected into
Southern regional Power Grid;.

The purpose of the Project activity is to develop, operate and maintain a grid-connected concentrated
Solar power plant for power generation. Concentrating Solar Power systems use concentrated solar
radiation as a high temperature energy source to produce electricity using thermal route. The
mechanism of conversion of solar to electricity is fundamentally similar to the traditional thermal power
plants except use of solar energy as source of heat. Schematic diagram of the technology proposed to be
utilized in the project activity is as below:

Parabolic Trough Solar Thermal:-

Parabolic trough collector is composed of parabolic mirrors, Heat Collection Elements (HCE) and a
support structure. The HCEs are located at the focal line of the mirrors and utilizes the Direct Normal
Irradiance (DNI) from the sun that is concentrated onto the HCE. The support structure is a pedestal-
based mounting structure that employs a drive system to allow the collector to track the sun across the
sky throughout the day. The collectors are located on areas with very little slope and are arranged in
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parallel rows that typically run from North to South. These parallel rows of collectors are referred to as
the solar field. With this North-to-South arrangement, single-axis tracking allows the collectors to follow
the sun and maintain the reflectors focus on the heat collection elements. A working fluid, usually oil, is
circulated through the receiver and heated to temperatures of around 400C. After passing through the
collectors in the solar field, the heated Heat Transfer Fluid (HTF) flows to steam generators at a Power
Block, where it is cooled and returned to the solar field for re-heating. High-pressure superheated steam
will be generated from the heat in the HTF. The High pressure steam will be used to generate electricity
through a conventional steam turbine generator.
The proposed project activity consists of following major subsystems/ equipments
Solar Island

Steam Turbine and Accessories

Solar Collectors
Solar Collector element
Absorber Pipe
Support Structures, pylons, Drives
and controls
Tracking
Solar Field Heat Transfer Piping
System
Steam Generator and Auxiliaries
Expansion Vessel, Overflow Tanks
& Ullage system
Condensing Equipment
Condensate extraction pumps
Deaerating heater and closed heaters
Boiler feed pumps and drives
Feed water Heaters

he power generation system consists of one (1) number turbine generator (TG) of 50 MW rating. The
electricity generated from the project activity will be evacuated to the regional electricity grid ie southern
region through nearest 132kV generation/pooling substation at Gooty at distance of ~ 15 km from plant
location. Lifetime of the project activity is 25 years
3
.

Specifications of Steam generator
Quantity One number
Capacity 238 TPH
Pressure 103 kg/cm
2
(g)
Temperature 380 C

Specifications of Turbine and Generator set
Type of turbine Condensing type.
Quantity one in number
Capacity 50 MW
Steam 101 kg/cm
2
(g)
Temperature at the TG inlet 373 Deg C
Condensing system Water cooled type
Type of generator Synchronous
Quantity one in number
Out put 62.5 MVA
Power factor(pf) 0.8
Power (MVA pf) 50 MW
Voltage 11,000 V
Frequency 50 Hz

3
vide page 11 - http://www.cercind.gov.in/Final-Tariff_10.html

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Technology used in the project would result in transfer of technology from Annex-I (Portugal) to the
host country. The construction of the project activity power plant will transfer environmentally safe and
sound technology and the know-how to use it to the Host Country.

A.4. Parties and project participants
Party involved
(host) indicates a host Party
Private and/or public
entity(ies) project participants
(as applicable)
Indicate if the Party involved
wishes to be considered as
project participant (Yes/No)
India
(host)
Private entity :
MEIL Green Power Limited
No

A.5. Public funding of project activity
>>
The project does not receive public funding from parties included in Annex I
SECTION B. Application of selected approved baseline and monitoring methodology
B.1. Reference of methodology
>>
(a) selected methodology
Title:Consolidated baseline methodology for grid-connected electricity generation from renewable
sources
Reference:- ACM0002 (Version 13.0.0, EB 67, Valid from 11
th
May 2012 on wards)
(b) Any tools and other methodologies to which the selected methodology(ies) refer
o Tool for the demonstration and assessment of additionality(Version 07.0.0)
o Combined tool to identify the baseline scenario and demonstrate additionality(Version 05.0.0)
o Tool to calculate the emission factor for an electricity system,(Version 03.0.0)
o Tool to calculate project or leakage CO
2
emissions from fossil fuel combustion (Version 02.0)
For more information regarding the methodology and the tools as well as their consideration by the
Executive Board please refer to http://cdm.unfccc.int/methodologies/PAmethodologies/approved.html.

Further referred the
- Clean Development Mechanism Project Standard (Version 02.1.0,EB 70)
- Clean Development Mechanism Project Cycle Procedure (Version 03.1, EB 70)

B.2. Applicability of methodology
>>
The applicable methodology ACM0002, Version 13.0.0
4
states that - This methodology is applicable to
grid-connected renewable power generation project activities that
(a) install a new power plant at a site where no renewable power plant was operated prior to the
implementation of the project activity (greenfield plant);
(b) involve a capacity addition;
(c) involve a retrofit of (an) existing plant(s); or
(d) involve a replacement of (an) existing plant(s).

The proposed project activity is a grid-connected solar power generation project (i.e. renewable power
generation project activity) and installs a new power plant at the project site where no renewable power

4
The project being solar power generation activity there by the applicability criteria of Hydro plants has not been
assessed as per the applicable methodological version.
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plant is in operation/was operated prior to the implementation of the project activity (i.e. greenfield
plant). Hence, the project category qualifies under clause (a) of the above paragraph in the methodology
describing the category of projects applicable. Detailed assessment of applicability criteria as mentioned
in the applied methodological version are discussed below:

Applicability Condition Justification
This methodology is applicable to grid-
connected renewable power generation project
activities that (a) install a new power plant at a
site where no renewable power plant was
operated prior to the implementation of the
project activity (greenfield plant); (b) involve a
capacity addition; (c) involve a retrofit of (an)
existing plant(s); or (d) involve a replacement
of (an) existing plant(s).
The project activity is a new renewable solar
thermal power generation project at the project
site where no renewable power plant was
operated prior to the implementation of the
project activity (green field plant). The
renewable electricity generated from the project
activity will be supplied to Southern regional
power grid. Thus, meets the condition (a) as per
applicability criteria.
The project activity is the installation, capacity
addition, retrofit or replacement of a power
plant/unit of one of the following types: hydro
power plant/unit (either with a run-of-river
reservoir or an accumulation reservoir), wind
power plant/unit, geothermal power plant/unit,
solar power plant/unit, wave power plant/unit
or tidal power plant/unit;
The project activity is the new installation of a
solar power plant and not the capacity additions
retrofit or replacement of a power plant/unit of
one of the other types as stated in the
applicability condition. Thus the project meets
the applicability criteria.
In the case of capacity additions, retrofits or
replacements (except for wind, solar, wave or
tidal power capacity addition projects which
use Option 2: on page 10(of Methodology) to
calculate the parameter EG
PJ,y
): the existing
plant started commercial operation prior to the
start of a minimum historical reference period
of five years, used for the calculation of
baseline emissions and defined in the baseline
emission section, and no capacity or retrofit of
the plant has been undertaken between the
start of this minimum historical reference
period and the implementation of the project
activity;
The project is of new installation and not being
the capacity additions, retrofits or replacements,
thereby this clause does not apply.
In case of hydro power plants:
One of the following conditions must apply:

- The project activity is implemented in
an existing single or multiple
reservoirs, with no change in the
volume of any of the reservoirs; or
- The project activity is implemented in
an existing single or multiple
reservoirs, where the volume of any of
reservoirs is increased and the power
density of each reservoir, as per the
definitions given in the Project
Emissions section, is greater than 4
The project activity is not a hydro power plant.
Hence this condition(s) is not applicable to the
project activity.

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W/m
2
after the implementation of the
project activity; or
- The project activity results in new
single or multiple reservoirs and the
power density of each reservoir, as per
the definitions given in the Project
Emissions section, is greater than 4
W/m
2
after the implementation of the
project activity.
In the case of retrofits, replacements, or
capacity additions, this methodology is only
applicable if the most plausible baseline
scenario, as a result of the identification of
baseline scenario, is .the continuation of the
current situation, i.e. to use the power
generation equipment that was already in use
prior to the implementation of the project
activity and undertaking business as usual
maintenance.
The project is a new installation and is not a
retrofit, replacements, or capacity additions;
hence this criterion is not applicable.

The methodology is not applicable to the following:
Project activities that involve switching from
fossil fuels to renewable energy sources at the
site of the project activity, since in this case
the baseline may be the continued use of fossil
fuels at the site;
The proposed project does not involve an on-
site switch from fossil fuels to a renewable
source; hence this criteria is not applicable to
the project activity.
Biomass fired power plants; The proposed project is a new Solar power
plant that generates and supply electricity and
not the biomass power project activity. Thus
this condition does not met by the project
activity.
A hydro power plant that results in the creation
of a new single reservoir or in the increase in
an existing single reservoir where the power
density of the power plant reservoir is less than
4 W/m
2
.
The project activity is not a hydro power plant
and thus justified, the condition.

The description provided in the table above shows that the project activity satisfies the applicable
conditions of the methodology, ACM0002, Version 13.0.0.

The ACM0002 also refers to the latest approved versions of the following tools:

1) Tool to calculate the emission factor for an electricity system, Version 03.0:- This tool is used in
line with ACM0002 requirement. This tool is used to determine the CO
2
emission factor for the
displacement of electricity generated by power plants in an electricity system, by calculating the
combined margin emission factor (CM) of the electricity system. Since the project activity displaces the
grid generation by renewable energy power, hence the tool is applicable for project activity and used to
calculate emission reductions for the project activity. Further CEA database has also used the same tool
to calculate the OM, BM & CM for the electricity system.

2) Project activity has applied Tool for the demonstration and assessment of additionality (Version
07.0), which is not mandatory for project participants when proposing new methodologies. Since project
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activity is using the established methodology ACM0002, project participant has used this tool to
demonstrate the additionality of project activity. As per the tool project activities that apply this tool in
context of approved consolidated methodology ACM0002, only need to identify that there is at least one
credible and feasible alternative that would be more attractive than the proposed project activity.

Justification on alternatives has been provided in detail in section B.5 of PDD.

The geographic and system boundaries for the relevant electricity grid, i.e., the southern regional power
grid, can be clearly identified and information on the characteristics of the grid is available. Therefore,
ACM0002 (Version 13.0.0) methodology is applicable to the project activity.

B.3. Project boundary
The greenhouse gases and emission sources included in or excluded from the project boundary are shown
below
Source GHGs
Included
?
Justification/Explanation
B
a
s
e
l
i
n
e

CO
2
emissions from
electricity generation in
fossil fuel fired power
plants that are displaced
due to the project activity

CO
2
Yes Main emission source
CH
4
No Minor emission source
N
2
O

P
r
o
j
e
c
t

s
c
e
n
a
r
i
o

For geothermal power
plants, fugitive emissions
of CH
4
and CO
2
from non-
condensable gases
contained in geothermal
steam

CO
2

No

The project activity is a solar
thermal power project. Hence,
these project emission sources
and gases are not relevant
CH
4
No
N
2
O No
CO
2
emissions from
combustion of fossil fuels
for electricity generation in
solar thermal power plants
and geothermal power
plants
CO
2
No As per ACM0002 (Version
13.0.0) project emissions are
not considered for solar power
project.
CH
4
N
2
O No
Minor emission source
For hydro power plants,
emissions of CH
4
from the
reservoir
CO
2
No The project activity is a solar
power project. Hence, these
project emission sources and
gases are not relevant.
CH
4
No
N
2
O No
The spatial extent of the project boundary includes the project power plant and all power plants
connected physically to the electricity system
5
that the CDM project power plant is connected to.

5
Refer to the latest approved version of the Tool to calculate the emission factor for an electricity system for
definition of an electricity system.
UNFCCC/CCNUCC


Project Boundary Schematic

B.4. Establishment and description of baseline scenario
>>
According to ACM0002, Version 13.0.0, if the project activity is the installation of a new grid-connected
renewable power plant/unit, the baseline scenario is the following:
Electricity delivered to the grid by the project activity would have otherwise been generated by the
operation of grid-connected power plants and by the addition of new generation sources, as reflected in
the combined margin (CM) calculations described in the Tool to calculate the emission factor for an
electricity system.

The project activity is a new grid-connected solar thermal power plant, therefore, the baseline scenario is
electricity delivered to the southern regional grid by the project activity would have otherwise been
generated by the operation of grid-connected power plants and by the addition of new generation sources.

Hence, the baseline for the project activity is the equivalent amount of power from the Southern regional
grid.

The baseline emission factor or grid emission factor ie., combined margin (CM) calculations are
described in Sec B.6.1 as per the Tool to calculate the emission factor for an electricity system as
available at the time of PDD development.

B.5. Demonstration of additionality
>>
In accordance to the para 27 of Clean Development Mechanism Project Standard (here by referred
as PS) ( Version 02.1) which further refers to Clean Development Mechanism Project Cycle
Procedure (here by referred as PCP) Version 03.1 para 7 for the project activities with a starting
date on or after 2 August 2008, the PP must inform a Host Party designated national authority (DNA) and
the UNFCCC secretariat with regard to the commencement of the project activity and their intention to
seek CDM status. Such notification must be made within 180 days of the project activity start date using
the standardized form F-CDM-Prior Consideration.

The start date of the project activity is 05/11/2011 project proponent informed the UNFCCC secretariat
& Host Party designated national authority (DNA) of India National CDM Authority (Ministry of
Environment and Forests (MoEF) on 16/02/2012 using the standardized form F-CDM-Prior
Consideration, thus meets the requirements of the CDM Project cycle Procedure (PCP). The name of the
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project activity is in the list of notifications received by the UNFCCC available from the UNFCCC
website
6
. The relevant documents provided to DOE as a part of validation.

The project activity is not the baseline scenario and possesses additionality, which is demonstrated below
in a step-wise manner using the latest version of tool for the Tool for the demonstration and assessment
of additionality(Version 07.0.0.) The tool prescribes the following steps for proving additionality of a
project.
Step 1. Identification of alternatives to the project activity consistent with mandatory laws and
regulations
Sub-step 1a. Define alternatives to the project activity:

According to the applicable methodology ACM0002 (Version 13.0.0), as the Project activity is the
installation of a new grid connected solar thermal power plant, the baseline scenario of the project is
provide the same electricity output by Southern regional Power Grid as given in the selected
methodology and prescribes the baseline scenario, thus no further analysis is required
7
.

According to tool for the Tool for the demonstration and assessment of additionality (Version 07.0.0),
project activities that apply this tool in context of approved consolidated methodology ACM0002, only
need to identify that there is at least one credible and feasible alternative that would be more attractive
than the proposed project activity.

Outcome of Step 1a: According to the above, only two alternatives need to be listed here:
Alternative I: To implement the proposed project activity, but not as a CDM project activity;
Alternative II: To provide the same annual electricity output as the project by Southern regional Power
grid (the continuation of current situation).

Sub-step 1b. Consistency with mandatory laws and regulations:
Outcome of Step 1b: Both Alternative I and Alternative II comply with current laws and regulations of
host country India
8
.

In conclusion, the Alternative II is the only realistic, credible alternative which is in compliance with all
applicable legal and regulations, which can provide the same output or services as the project activity.

The investment analysis in Step 2 will show the project activity not undertaken as a CDM project and
without CERs income (alternative I) is lack of the attraction for the potential investors.

Step2. Investment analysis

Sub-step 2a. Determine appropriate analysis method.

6
Go to http://cdm.unfccc.int/Projects/PriorCDM/notifications/index_html and type the key word in the title of the
project in respective field.
7
Clean Development Mechanism Validation and Verification Standard (Version 02), paragraph 113.
8
The alternatives to the project activity are in compliance with all mandatory applicable legal and regulatory
requirements. The relevant national laws and regulations pertaining to generation of energy are
Electricity Act 2003
National Electricity Policy
Tariff Policy

UNFCCC/CCNUCC


Tool for the demonstration and assessment of additionality(Version 06.1.0) provides three analysis
methods: simple cost analysis, investment comparison analysis and benchmark analysis. If the CDM
project activity and the alternatives identified in Step 1 generate no financial or economic benefits other
than CDM related income, then apply the simple cost analysis (Option I). Otherwise, use the investment
comparison analysis (Option II) or the benchmark analysis (Option III).

The simple cost analysis is not applicable for the proposed project because the project activity will
produce economic benefit (from electricity sale) other than CDM related income. The investment
comparison analysis is also not applicable for the proposed project because the baseline scenario, as
identified in step1, providing the same electricity output by the Southern Regional Power Grid, is not a
new investment project.

As per para 19 of Guidelines on the assessment of investment analysis, EB 62, Annex 5, Version 05,
The benchmark approach is therefore suited to circumstances where the baseline does not require
investment or is outside the direct control of the project developer, i.e. cases where the choice of the
developer is to invest or not to invest.

Since, identified baseline is the continuation of current practice (i.e. equivalent amount of energy would
be generated by grid electricity system through its currently operating power plants and by new capacity
addition) and which is outside the direct control of the project developer, benchmark analysis (option III)
is chosen as the most appropriate analysis method and is is opted to demonstrate the additionality of the
project whether the financial indicator of the proposed project is better than relevant benchmark value.

Sub-step 2b Apply benchmark analysis.
Benchmark:
Paragraph 12 of the Guidelines on the assessment of investment analysis, Version 05, EB 62 states that
in cases where a benchmark approach is used the applied benchmark shall be appropriate to the type of
IRR calculated. Local commercial lending rates or weighted average costs of capital (WACC) are
appropriate benchmarks for a project IRR. Required/expected returns on equity are appropriate
benchmarks for an equity IRR.

Further, paragraph 13 of the same guidance states that In the cases of projects which could be developed
by an entity other than the project participant the benchmark should be based on parameters that are
standard in the market.

In the present context the subject project is a Greenfield activity that generates and supplies electricity to
the regional electricity grid, therefore the project has more than one possible developer. Therefore as per
guidelines the benchmark is based on parameters that are standard in the market.

Hence PP has selected weighted average costs of capital (WACC). The selection of the WACC as a
benchmark for the proposed project activity is appropriate in view of the fact that the investment for the
project includes two components viz.: loan and equity. In order to evaluate the financial viability of the
project, it is required to assess the expected minimum returns on debt as well as equity components of the
total investment. Hence, the benchmark selected needs to consider the risks associated with each of the
components of the total investment. Thus, from this perspective, WACC is one of the most appropriate
benchmark for comparing project IRR since it is the weighted average of the total cost of different
components of the investment.

It was calculated as
WACC = ({Cost of Equity % of Equity} + {Cost of debt (1- Tax rate) % of Debt} )

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Parameter Units Description
% of Debt

Currency Value considered is of 60% of the total investment
% of Equity

Currency Value considered is of 40% of the total investment
Cost of Equity % As per para 15 of Guidelines on the assessment of the
investment analysis (Version 05, EB 62), the value for
cost of equity can be selected from Appendix of the
guidance - The project is Solar power project, which falls
under Group 1 as Energy Industries. The default return
on equity value in real terms for India for Group 1, i.e.
11.75% is selected. Further, in accordance with paragraph
7 of the Appendix the value converted to nominal terms
using the inflation forecast of the central bank, i.e.
Reserve Bank of India (RBI). The forecasted inflation rate
of 6.00% was taken from Survey of Professional
Forecasters - Results published by RBI
9
- the central bank
of host country India . Default expected return on equity
value in real terms was converted to nominal terms by
adjusting with forecasted inflation rate as below:
Nominal Benchmark = ((1+Benchmark real)*(1+inflation
rate)-1))
Where:
Nominal Benchmark = Expected return on equity on
nominal basis
Benchmark real = Expected return on equity on real basis.
Inflation = Forecasted inflation rate
The value calculated from the above approach is
= {(1+11.75%) (1+6.0%) -1} = 18.46%
For the project activity that is Return on Equity is thus,
calculated as 18.46 %, which corresponds to the nominal
Return on Equity.
Cost of Debt % Cost of debt is defined as the rate at which lenders agree
to lend money to a project. The Guidance on the
Assessment of Investment Analysis clarifies that, In the
cases of projects which could be developed by an entity
other than the project participant, the benchmark should
be based on parameters that are standard in the market is
suitable in the context of he project activity.
Accordingly, lending rate of SBI
10
data available has been
considered the project activity.
T- tax rate % The applicable tax rate pertaining to date of decision

9
page 4/10 vide
http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/PRE12T050810.pdf
10
SBI PLR rates - http://in.reuters.com/article/2011/08/16/india-plr-idINL3E7JG1CV20110816
( Considered 12.75% for case I and 14.0% for case II) in WACC calculations

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making on the project activity in the host country of the
CDM project. The rate applicable
11
is 19.93%
12
for year
2010-11 & 20.01% for year 2011-12.

A debt to equity ratio of 60:40 has been considered for WACC calculation for the project activity

Based on above values for the cost of equity and using the prime lending rate (cost of debt) the weighted
average cost of capital (after tax) works out to be

For Case-I
13
-WACC works out to be 13.51 %
For Case-II
14
-WACC works out to be 14.10 %

The selected benchmark is in conformity with guidance 12 and 13 of Annex 5, EB 62. The WACC
calculation is provided in the IRR analysis worksheet.

Choice of Financial Indicator:

Project IRR (post tax) has been chosen as the financial indicator to compute returns of the project
activity. Having regard to the fact that the project involves investment and is funded by a mix of debt and
equity, and that guidance 12 of Annex 5, EB 62 permit the use of project IRR as one of the financial
indicators to demonstrate additionality, thus the selection of project IRR is appropriate for the project
type.

Sub-step 2c: Calculation and comparison of financial indicators:
1) Parameters needed for calculation of IRR

The assumptions used for the carrying out the IRR analysis are as shown below:

The key input parameters for financial analysis are based on the Detailed Project Report (DPR)
financials, tariff as per the PPA and permission/sanction letters. Copies of the relevant documents will be
provided to DOE for Validation.

Parameter Case-I Case-II
Plant Capacity 50 MW
+
50 MW
+

Total hours in year 8760
(=36524)
8760
(=36524)

11
In accordance with the Guidelines on Assessment on Investment Analysis version 05, as the project activity can be
developed by any entity other than the project participant, the tax rate used for computation of benchmark should
also be applicable to any investor investing in power sector projects in India. Tax holiday that is applicable to the
power sector projects (developed as Independent Power Producers) is ten years from the first fifteen years and
there by power sector projects do not have to pay normal tax rate as a result of tax holiday and have to pay only
the applicable Minimum Alternate Tax.Hence a Minimum Alternative Tax rate is applicable as per the provision of
taxation rules.

Projects being developed as independent power producer (IPP), for additionality one consider the returns from the
project activity as an independent project activity, even though the project is developed a business group. The
project activity is eligible for Tax holiday under the rules of Income Tax Act, Hence for IRR analysis, MAT rate as
prevailing is used in the calculations of the WACC.
12
http://taxguru.in/budget-2010/minimum-alternate-tax-%E2%80%93-enhancement-budget-2010.html
13
Case-I corresponds to the situation at the time of decision making
14
Case-II represents the scenario of the actual implementation.
+
Design capacity approved by NVVNL
UNFCCC/CCNUCC


Capacity Utilization
factor(CUF)
35%
v
23%
v

Energy generation @CUF 153,300 MWh/yr 100,740 MWh/yr
Auxiliary Consumption @10% 15,330 MWh/yr 10,074 MWh/yr
Net energy generation /
Exportable
137,970 MWh/yr 90,666 MWh/yr
Deration factor
+

-For 1
st
ten years of
operation)
0.10% 0.10%
-For next 15 years of
operation )
0.15% 0.15%
Tariff
v
11.31 INR/kWh 11.31 INR/kWh
Project cost INR 10,820 Million INR 7,060 Million
Debt Component @60% INR 6,492 Million INR 4,236 Million
Equity Component@40% INR 4,328 Million INR 2,824 Million
Interest on Term Loan 11.5%
13.25%

Moratorium 0.5 year 0.9 year

Loan Repayment 11.0 years 13.5 years

O& M expenses
V
INR 81.176 Million INR 81.176 Million
Escalation on O& M
V
5.72 % 5.72 %
Working Capital Margin
V

- Receivables 1 Month 1 Month
- O&M 2 Month 2 Month
- Maintenance spares @15% on O&M @15% on O&M
Interest rate on Working
Capital
12.0 % 13.25 %
Minimum Alternative Tax
(inc. Surcharge and Education
cess)
19.93%
(for FY 2010-11)
20.01%
(for FY 2011-12)
Corporate Tax Rate
15

(incl. Surcharge and
Educational cess)
33.2%
(for FY 2010-11)
32.45%
(for FY 2011-12)
Book Depreciation rates
16

- Civil Works
-Plant & Machinery

3.34%
5.28%
As per income tax
17

v
As per PPA
+
The estimated output from the solar power plant depends on the design parameters since there are several variables
which contribute to the final output from a plant. It is natural that any material used in the mirrors/reflectors,
receivers, etc. of Solar Thermal Power Plant, loses its efficiency due to aging these could be on account of de-rating
of modules at higher temperatures, other design parameters like ohmic loss, atmospheric factors such as prolonged
cloud cover and mist.
The Prime lending rate prevailing at the time of decision making
As per Loan Sanction

V
As per (Terms and Conditions for Tariff determination from Renewable Energy Sources) (First Amendment)
Regulations,2010
15
http://catuts.com/minimum-alternate-tax-mat/
16
Companies Act Schedule XIV www.fastfacts.co.in/resources/DepCoAct.rtf
17
Income Tax Act ( http://law.incometaxindia.gov.in/DIT/Fileopener.aspx?page=ITRU&schT
UNFCCC/CCNUCC


- Civil Works
- Plant & Machinery
10.00%
15.00%

IRR analysis has been prepared for a period of 25 years as per EB 62, Annex 05.

In the calculation of the project IRR, the PP had included the salvage value (taken at in the terminal year
as the expected realisation on the sale of the assets in accordance with the local accounting principles).
This is in conformance to the para 4 of the Guidelines on the assessment of investment analysis. Annex
5 EB 62.

In financial indicator computation, actual interest has been taken as required under Guidance 11, Annex
5, EB 62 which also conforms to Guidance 6 of the same.

The PP would further like to clarify that the proposed CDM project is not eligible for any subsidies or
financial incentives from National/ State governmental policies and also that the there are no
international or private financial support being received for the proposed project other than those
considered in the investment analysis.

Based on the assumptions presented above, the project IRR works out to be without consideration of
CDM revenues works out to be 9.23% (case-I) and 9.21% (case-II).
The comparison of financial indicator (Project IRR) as computed above and benchmark is presented
below:

For Case-I
Item Project IRR Benchmark
Internal Rate of
Return(IRR)
9.23% 13.51%

For Case-II
Item Project IRR

Benchmark
Internal Rate of
Return(IRR)
9.21% 14.10%

Clearly comparison of the benchmark and financial indicator would reveal that the project is additional
Sub-step 2d. Sensitivity analysis
In order to determine whether the conclusion regarding financial economic attractiveness is robust to
withstand reasonable variations in the critical assumptions, a sensitivity analysis of Project IRR has been
carried out. Generation/PLF , Project Cost and O&M costs as the key variables that will impact the
financial attractiveness of the project. In this context it may be stated that the tariff is fixed for a period
of 25 years by the PPA , there by the parameter has not been included in the sensitivity analysis .

However, as O&M cost is the only stand-alone expenditure, it has also been subjected to sensitivity
analysis. Therefore, the parameters selected for sensitivity analysis conform to Guidance 20 of Annex 5,
EB 62.

=rul&csId=4a23cee1-1818-45d6-ab19-f155e08ed789&rNo=&sch=&title=Taxmann%20-
%20Direct%20Tax%20Laws )

UNFCCC/CCNUCC


The project is under implementation and is likely to experience a cost overrun; the generation is based on
the solar energy source. Therefore variation even by 1% in any of these parameters is not possible.
However, as required by the Guidance the sensitivity analysis is done and the results are given below.

The results of the sensitivity analysis are shown below:
For Case-I- Variation in IRR due to reasonable variation of sensitive parameters

Parameter -10% Base case +10% The critical points of
the factors to make
the IRR reach
benchmark are :
Generation /PLF 8.01% 9.23% 10.39% 39.10%
Project cost 10.41% 9.23% 8.21% -29.75%
O&M Cost 9.33% 9.23% 9.13% >-100%

For Case-II- Variation in IRR due to reasonable variation of sensitive parameters

Parameter -10% Base case +10% The critical points
of the factors to
make the IRR
reach benchmark
are :
Generation /PLF 7.92% 9.21% 10.41% 34.40%
Project cost 10.37% 9.21% 8.20% -27.85%
O&M Cost 9.22% 9.21% 9.20% >-100%

As could be seen from above the project would not lose its additionality in case of an increase in the
generation by 10% or a reduction in the project cost and /or O&M by 10%.
To conclude, under the reasonable variations in the critical assumptions, the conclusion regarding the
financial additionality is robust and supported by sensitivity analysis.

Outcome of step 2:
From the above it is evident that the return on investment from the project activity is lower than the
established benchmark. Therefore the project activity is financially unattractive for the investment.

Step 3: Barrier analysis
Investment analysis has argued that the project is the economically less attractive than other alternatives
without the revenue from the sale of CERs. According to tool for the Tool for the demonstration and
assessment of additionality (Version 07.0.0), this PDD skips the barrier analysis and argues the
additionality. Proceeded to step 4 common practice analysis

Step 4. Common practice analysis

I. Definition
1. Applicable Geographical area covers entire host country as a default; as per the guidelines, host
country i.e. India is considered as the applicable geographical area.
2. Measure (for emission reduction activity): Project activity using solar energy ,falls under the option
(b) of the measures i.e. switch of technology with or without change of energy source.
3. Output: is good/services produced by the project activity including, among other things, heat steam,
electricity, methane, and biogas unless otherwise specified in the applied methodology.
The projects out put is solar power generation.
UNFCCC/CCNUCC


Tool for the demonstration and assessment of additionality (Version 07.0) referes Guidelines on
common practice (Version 02) and the proposed CDM project activity(ies) applies measure(s) that are
listed in the definitions section above, where analysis presented through the following

Sub-step 4a:The proposed CDM project activity(ies) applies measure(s) that are listed in the
definitions section as defined above.
Step 1: Calculate applicable output range as +/-50% of the design output or capacity of the proposed
project activity.
The project is concentrated solar thermal power project with capacity 50 MW. Hence applicable output
range will be 50% of 50MW, i.e. 25 MW to 75 MW.

Step 2: In the applicable geographical area, identify all plants that deliver the same output or capacity,
within the applicable output range calculated in Step 1, as the proposed project activity and have started
commercial operation before the start date of the project. Note their number N
all
. Registered CDM
project activities and projects activities undergoing validation shall not be included in this step;

As outlined in the definition above the electric power is considered as output. Hence, all the
technologies in the host country which delivers electric power within the applicable output range (i.e. 25
MW to 75 MW) and have started commercial operation before the start date of the project ie 05/10/2011
are considered for N
all
.

Step 3: Within plants identified in Step 2, identify those that apply technologies different that the
technology applied in the proposed project activity. Note their number N
diff
.

Ndiff = All the power plants with technologies different from that of the proposed project activity in the
applicable output range in the applicable geographical area. Hence for the proposed project activity, this
will include all the power plants in the range from 25 MW to 75 MW commissioned in India before the
start date of the proposed project activity i.e. 05/10/2011 and use technologies different from solar
thermal technology for power generation as will be used by the proposed project activity.

Step 4: Calculate factor F=1-N
diff
/N
all
representing the share of plants using technology similar to the
technology used in the proposed project activity in all plants that deliver the same output or capacity as
the proposed project activity.

(Nall Ndiff) represents all the plants using concentrated solar thermal technology in the range of 25 MW
to 75 MW installed in India before 05/10/2011.
As per the publically available information, from government department - MNRE report
18
on MW size
grid connected solar power plants in India, as on 31/07/2011, there was no solar power plant installed in
India in the range of 25 MW to 75 which use the concentrated solar thermal MW capacity till
05/10/2011.
Therefore, (Nall Ndiff) = 0 and F = (Nall Ndiff)/Nall = 0

The proposed project activity is a common practice, within a sector in the applicable geographical area if
both the following conditions are fulfilled:

(a) the factor F is greater than 0.2, and (b) N
all
-N
diff
is greater than 3.

As for the project activity F = 0 (< 0.2) and N
all
-N
diff
= 0 (< 3) .

18
http://mnre.gov.in/file-manager/UserFiles/MW_size_Grid_Solar_Power_Plants_in_India.pdf
UNFCCC/CCNUCC


Since any of the conditions are not fulfilled by the project activity, it is concluded that the project activity
is not a common practice.

Sub-step 4b. Discuss any similar options that are occurring:

It is not required as per Tool for the demonstration and assessment of additionality (Version 07.0)

There by the project passes the step 4.

Hence the project activity is additional

B.6. Emission reductions
B.6.1. Explanation of methodological choices
>>
Methodology ACM0002(Version 13.0.0) is used to calculate Baseline Emissions, Project Emissions and
Leakage. The project is a grid connected renewable energy project, emission reduction quantity depends
on the units of electricity exported to the grid (in MWh) and the baseline emission factor of the combined
regional grid. Formula used to calculate the emission reduction for the project activity is as below:

Baseline emissions
Baseline emissions include only CO
2
emissions from electricity generation in fossil fuel fired power
plants that are displaced due to the project activity. The methodology assumes that all project electricity
generation above baseline levels would have been generated by existing grid-connected power plants and
the addition of new grid-connected power plants. The baseline emissions are to be calculated as follows:
y CM grid y PJ y
EF EG BE
, , ,
* =
(1)

Where:
BE
y
= Baseline Emissions in year y (t CO
2/
yr)
EG
PJ,y
= Quantity of net electricity generation that is produced and fed into the grid as a result
of the implementation of the CDM project activity in year y (MWh/yr)
EF
grid, CM, y
= Combined margin CO
2
emission factor for grid connected power generation in year y
calculated using the latest version of the .Tool to calculate the emission factor for an
electricity system. (tCO
2
/MWh)
Calculation of EG
PJ,y
The calculation of EG
PJ,y
is different for: (a) greenfield plants, (b) retrofits and replacements; and
(c) capacity additions.

As the project activity is the green field thereby the following adapted from the methodology in
calculation of EG
PJ,y

Calculation of EG
PJ, y
for Greenfield plants
If the project activity is the installation of a new grid-connected renewable power plant/unit at a site
where no renewable power plant was operated prior to the implementation of the project activity, then:
y facility, y PJ,
EG EG =
(2)
Where:
y PJ,
EG
= Quantity of net electricity generation that is produced and fed into the grid as a result
of the implementation of the CDM project activity in year y (MWh/yr)
y facility,
EG
= Quantity of net electricity generation supplied by the project plant/unit to the grid in
UNFCCC/CCNUCC


year y (MWh/yr)

Calculation of EF
grid, CM, y

The baseline emission factor for the project is determined ex-ante as a combined margin, consisting of
combination of the operating margin (OM) and build margin (BM) of the Southern regional power grid.

Central Electricity Authority (CEA) (which is an official source of Ministry of Power, Government of
India) have worked out baseline emission factor for various grids in India and made them publicly
available i.e. CO
2
Baseline Database Version 07 , Jan 2012. The Combined margin is of 0.89571
tCO
2
/MWh for the southern regional grid the connected electrical sysytem.

See Appendix 5 for further details in this report.

Project emissions

For most renewable power generation project activities, PE
y
= 0. However, some project activities may
involve project emissions that can be significant. These emissions shall be accounted for by using the
following equation:

y HP y GP y FF y
PE PE PE PE
, , ,
+ + = (3)
Where:
y
PE
= Project emissions in year y (tCO
2
e/yr)
y FF
PE
,

= Project emissions from fossil fuel consumption in year y (tCO
2
/yr)
y GP
PE
,

= Project emissions from the operation of geothermal power plants due to the release of
non-condensable gases in year y (tCO
2
e/yr)
y HP
PE
,

= Project emissions from water reservoirs of hydro power plants in year y (tCO
2
e/yr)

According to the chosen baseline methodology ACM0002 (Version 13.0.0) for solar energy based
renewable power generation projects activities, PE
y
= 0.

Leakage
No leakage emissions are considered. The main emissions potentially giving rise to leakage in the context
of electric sector projects are emissions arising due to activities such as power plant construction and
upstream emissions from fossil fuel use (e.g. extraction, processing, transport). These emissions sources
are neglected.

Emission Reductions:
Since the project emissions as well as the leakage are zero, the emission reductions are equal to the
baseline emissions. These are calculated based on the monitored net amount of electricity supplied to the
grid, and the baseline emission factor.

ER
y
= BE
y
- PE
y

Where,
ER
y
= Emission reductions in year y (tCO
2
e)
BE
y
= Baseline Emissions in year y (tCO
2
e)

The sample estimates are shown in sec B.6.3 below
UNFCCC/CCNUCC


B.6.2. Data and parameters fixed ex ante
(Copy this table for each piece of data and parameter.)
Data / Parameter EF
grid,CM,y

Unit tCO
2
/MWh
Description Combined margin CO
2
emission factor for grid connected power
generation in year y calculated using the latest version of the Tool to
calculate the emission factor for an electricity system
Source of data
CEA published data. CO
2
Baseline Database, version 7.0, Jan 2012
http://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm
Value(s) applied
0.89571
Calculated as under :
EF
grid,CM, y
= W
OM
EF
grid, OM,y
+ W
BM
EF
grid,BM,y

= (0.75 0.94965 + 0.25 0.73389) = 0.89571
Choice of data
or
Measurement methods
and procedures
The grid emission factor is calculated from the OM & BM values
considered from CEA published values on Indian regional grid systems,
calculation is based on the guidelines in Tool to calculate the emission
factor for an electricity system (Version 03.0.0). As per the EB
guidelines a weightage of 75:25 is assumed in the calculation of emission
factor as this is a solar based power generation project.
Since, CEA is the prime authority for publishing all the relevant to Indian
power sector, the choice of the data is appropriate.
Purpose of data Calculation of baseline emissions
Additional comment The parameter has been calculated ex-ante and will remain fixed for the
first crediting period of the project activity.

Data / Parameter EFgrid,OM,y
Unit tCO
2
/MWh
Description Operating margin emission factor of southern region grid
Source of data
2
Value(s) applied 0.94965
Choice of data
or
Measurement methods
and procedures
Calculated it as CEA sourced data 3 years vintage data (2008-09, 2009-10
and 2010-11) and option of ex ante calculation based on Simple
Operating Margin Method. Computed once during PDD finalization. For
details

UNFCCC/CCNUCC


Data / Parameter EFgrid,BM,y
Unit tCO
2
/MWh
Description Build Margin emission factor for southern region grid
Source of data
2
Value(s) applied 0.73389
Choice of data
or
Measurement methods
and procedures
Calculated as per CEA sourced data for the year 2010-11. The build
margin is calculated in this database as the average emissions intensity of
the 20% most recent capacity additions in the grid based on net
generation and option of ex ante calculation. Computed once during PDD
finalization.

B.6.3. Ex ante calculation of emission reductions
>>
The ex-ante calculations of the emission reductions are given below. The applicable formulae are as
described in section B.6.1. of this document.

Base parameters considered for calculations
19
for the first year :

Gross energy generation = Plant capacity (MW) operation hours (h) Plant load factor (%)
= 50 8760 23% = 100,740 MWh /yr

Auxiliary Consumptio@10% on gross generation = 100,740 10% =10,074 MWh/yr

EG
facility, y
= Quantity of net electricity generation that is produced and fed into the grid as a result of the
implementation of the CDM project activity in year y (MWh/yr)
= (Gross energy generation Auxiliary Consumption )
= 100,740 MWh /yr -10,074 MWh/yr = 90,666 MWh/yr
20

Weighted average combined margin CO
2
emission factor for grid connected power generation
EF
grid,CM,y
= 0.89571 tCO
2
/MWh

Baseline emissions (BEy ):
As per Equation 1 in sec B.6.1

BE
y
= EG
PJ, y
* EF
grid, CM, y
= EG
facility, y
* EF
grid, CM, y

= 90,666 MWh/yr 0.89571 tCO
2
/MWh = 81,211 tCO
2
/yr

Project activity emissions

The project activity does not involve usage of fossil fuel. Thus, PE
FF,y
=0

19
The ERs estimations made based on the 23% PLF
20
The value is for the first year and the value quote in Sec A.1 is the average for the first crediting period which
accounts deration factor too.
UNFCCC/CCNUCC


The project activity does not involve operation of geothermal power plants, thus, PE
GP,y
= 0
The project activity does not involve water reservoir and hydro power plant, thus, PE
HP, y
=0
Thus, PE
y
= 0

EMISSION REDUCTIONS

Emission reductions from the project activity are estimated as the difference between baseline emissions,
project emissions.

ER
y
= BE
y
- PE
y
= 81,211 - 0 tCO
2
/yr = 81,211 tCO
2
/yr

B.6.4. Summary of ex ante estimates of emission reductions
The ex ante calculation of emission reductions for all years of the crediting period
21
, using the table
below.

Year
Baseline
emissions
(t CO
2
e)
Project
emissions
(t CO
2
e)
Leakage
(t CO
2
e)
Emission
reductions
(t CO
2
e)
09/05/2013 to 10/05/2014 81,211 0 0 81,211
09/05/2014 to 10/05/2015 81,130 0 0 81,130
09/05/2015 to 10/05/2016 81,048 0 0 81,048
09/05/2016 to 10/05/2017 80,967 0 0 80,967
09/05/2017 to 10/05/2018 80,886 0 0 80,886
09/05/2018 to 10/05/2019 80,806 0 0 80,806
09/05/2019 to 10/05/2020 80,725 0 0 80,725
Total 566,773 0 0 566,773
Total number of crediting
years
7
Annual
average over the crediting
period
80,968 0 0 80,968

[This space in the document left blank intentionally]

21
The change in the emission reductions is due to the duration factor
UNFCCC/CCNUCC


B.7. Monitoring plan
B.7.1. Data and parameters to be monitored
(Copy this table for each piece of data and parameter.)
Data / Parameter EG
Gross,y

Unit MWh/yr
22

Description Total electricity produced by the project activity, including the electricity
supplied to the grid and the electricity supplied to internal loads, in year y
Source of data Plant records at project site.
Value(s) applied Ex- post
Measurement methods
and procedures
The parameter is the value recorded from the measured values of the
electricity/energy meter located in the plant.
Monitoring frequency Measured continuously, the frequency of recording is at least monthly and
aggregated annually.
QA/QC procedures The Meters used for reading the Gross electricity generation will be
calibrated as per national standards and frequency of re-calibration will be
once in a year . The meter will be of accuracy class 0.5.
Purpose of data For cross checking purpose

Additional comment Data archiving: for two years after the end of the crediting period or the
last issuance of CERs, whichever occurs later;

Data / Parameter EGexported,y
Unit MWh/yr
Description Electricity exported/supplied to the grid by the project activity during the
year, y
Source of data Monthly Statement by APTRANSCO(and/or their Distribution
Company) /NVVN
Value(s) applied Ex-post
Measurement methods
and procedures
Readings of meter(s)
23
installed at inter connection point/grid interface
used for billing purposes i.e Energy statements.

Monitoring frequency It is continuous measurement, the frequency of recording is at least
monthly and aggregated annually. The accuracy class of the meter(s) used
for measuring the parameter will be 0.2s.
QA/QC procedures The re-calibration meter(s) will be in accordance with the Central
Electricity Authority (Installation and operations of Meters) Regulations
2006
24
, where in the frequency is of once in five years.
Cross check measurement results with records for sold electricity.
Purpose of data Calculation of baseline emissions; i.e to Calculate EG
facility, y


22
If meter reading is in kWh. The value is then converted to MWh. as 1,000 kWh = 1MWh ; 1,000 MWh= 1GWh
23
The standby meters or check meters if any installed also form a part of the monitoring plan.
24
Central Electricity Authority (Installation and Operation of Meters) Regulations, 2006.
http://www.powermin.nic.in/whats_new/pdf/Metering_Regulations.pdf -pg 12/20

UNFCCC/CCNUCC


Data / Parameter EGimported, y
Unit MWh/yr
Description Electricity imported/received by the project activity from the grid during
the year, y
Source of data Monthly Statement by APTRANSCO(and/or their Distribution
Company) /NVVN
Measurement methods
and procedures
Readings of meter(s)
25
installed at inter connection point/grid interface
used for billing purposes i.e Energy statements.

Monitoring frequency It is continuously measured and the frequency of recording is at least
monthly and aggregated annually. The accuracy class of the meter would
be 0.2s.
QA/QC procedures The re-calibration meter(s) will be in accordance with the Central
Electricity Authority (Installation and operations of Meters) Regulations
2006
26
, where in the frequency is of once in five years.
Cross check measurement results with records for bills.
Purpose of data Calculation of baseline emissions; ie to Calculate EG
facility, y


[This space in the document left blank intentionally]

25
The standby meters or check meters if any installed also form a part of the monitoring plan.
26
Central Electricity Authority (Installation and Operation of Meters) Regulations, 2006.
http://www.powermin.nic.in/whats_new/pdf/Metering_Regulations.pdf -pg 12/20

UNFCCC/CCNUCC


Data / Parameter EG
facility, y

Unit MWh/yr
Description Quantity of net electricity generation supplied by the project plant/unit to
the grid in year y
Source of data Plant Records
Value(s) applied Determined during ex-post as per the calculations presented in the PDD
sec B.6.1.
Measurement methods
and procedures
The following parameters shall be measured:
(i) The quantity of electricity supplied by the project plant/unit to the grid;
and
(ii) The quantity of electricity delivered to the project plant/unit from the
grid
The value is calculated from measured values of electricity supplied to the
grid and delivered from the grid interface.
The calculation formula used is: EG
facility,y
= EG
exported y
- EG
imported y .

Monitoring frequency Continuously measurement and at least monthly recorded for the
parameters used in deriving the value
QA/QC procedures Cross check measurement results with records for sold electricity.
Purpose of data Calculation of baseline emissions;

Data / Parameter EGAux, y
Unit MWh/yr
Description Electricity achieved by the proposed project for auxiliary usage in year y.

Source of data Plant records
Measurement methods
and procedures
The parameter is the value recorded from the measured values of the
electricity/ energy meter located in the plant.
Monitoring frequency Measured continuously, the frequency of recording is at least monthly and
aggregated annually
QA/QC procedures The Meter(s) used for reading the auxiliary electricity consumption will be
calibrated as per national standards and frequency of re-calibration is once
in a year. The meter will be of accuracy class1
Purpose of data Used for cross checking purposes

B.7.2. Sampling plan
>>
As the data and parameters monitored in Sec B.7.1 above are not determined by a sampling approach,
hence this doesnt apply to the project activity.
B.7.3. Other elements of monitoring plan
>>
UNFCCC/CCNUCC


Monitoring plan is a division and schedule of a series of monitoring tasks. Monitoring tasks must be
implemented according to the monitoring plan and actual conditions of the plant in order to ensure that
the real, measurable and long-term greenhouse gas (GHG) emission reduction for the proposed project is
monitored and reported.

The organizational structure for the monitoring plan is shown below.

Designation Responsibilities

Plant Manager

Verification of Data (Consistency & Completeness)
Ensuring Storage of Data (Archiving)
Review / Corrective and preventive Actions
QA/QC procedures
Site Engineer/Incharge
/ Operation and
Maintenance
engineer

Recording of monitored data
Storage of Data (Archiving)
Verification of Data
Operation & Maintenance
(Electrical/Mechanical will look after the respective
works)
Service
provider/Technician

Recording of monitored data

The parameters monitored ex-post are respectively the quantity of electricity supplied by the proposed
project activity in the year y (EG
exported,y
), the electricity imported from the grid by the project activity in
the year y (EG
imported,y
).The net electricity supplied to the grid (EG
facility,y
) in the year y is exports
subtracting imports (i.e.EG
exported,y
- EG
import,edy
). The grid interface/interconnection main and backup
meters measure both exports to the grid and imports from the grid. The on-grid electricity will be
monitored continuously and recorded on a monthly basis. The meters are bi-directional and their
accuracy is 0.2s.

All meters will be calibrated according to the relevant industrial/national standard.

Uncertainties:

Any uncertainty like inconsistency/discrepancy of data parameters will be dealt with through corrective
actions. These will be reported along with its time of occurrence, possible reasons and duration.
Uncertainty with metering will be dealt jointly both by PP and APTRANSCO and or NVVNL
27

representatives. Corrective actions will be undertaken after identification of reason for such uncertainty.
The back-up record of monitoring data will be taken, which can be presented in case of loss of original
data. In case of discrepancy in the measured parameters the suitable corrective action(s) will be taken to
rectify the error. The uncertainty will be reported and corrective actions will be taken.

Procedures of exception handling and reporting
Problem occurred in monitoring and measurement process will be recorded and reported to company
administrator or supervisor. Consequently, the corrective resolution will be adopted to deal with that
problem and to avoid it occur again in future.

Emergency:

27
The project participant has signed Power Purchase Agreement (PPA) for 25 years period, with NTPC Vidyut
Vyapar Nigam Limited (NVVN), New Delhi, India
UNFCCC/CCNUCC


The plant will be equipped with Automatic Alarming System to detect any emergency. This will help the
authority to take immediate preventive measures. All the critical & essential spares & consumables will
be kept at project site to reduce the breakdown time.

The project activity will not result in any unidentified activity that can result in substantial emissions
from the project activity. No need for emergency preparedness in data monitoring is visualized.

In addition the power plant will take standard measures for tackling emergency arising from black out
/load throw off etc.,

Data Management plan will develop to ensure adequate measures are in place during the operational
phase of the project activity.

Throughout the CDM crediting period + 2 years, the electricity generated from the project will be
monitored and electronically archived by the project proponent.

Action Plan for Monitoring of 2% CER Revenue Committed Towards Sustainable Development
Project proponent contributes 2% of the CDM revenue realized from the sale of CERs towards
sustainable development. Project proponent will undertake an annual review of the actual CERs accrued
and the price transacted. On the basis of the actual price and exchange rate, Project proponent will
commit 2% of the net revenue received from sale of CERs for sustainable development activities in the
local areas through an annual review process. PP commits to assign to an management representative to
oversee the activities towards sustainable development and to ensure that the activities are undertaken
and concluded in a timely manner each year.

As part of the annual review, Project proponent will undertake informal discussions with the local
community at the project site and commit the revenue towards society or community development
activities in areas that are of most concern to the local population. These areas could include health,
education, sanitation, skill development, infrastructure development, etc. The annual review process will
detail the exact activities that would be undertaken using the 2% revenue and the detailed mode of
implementation of the proposed activity.
SECTION C. Duration and crediting period
C.1. Duration of project activity
C.1.1. Start date of project activity
>>
05/10/2011 (Date of placement of EPC for the plant)
C.1.2. Expected operational lifetime of project activity
>>
25. years- 00 months
C.2. Crediting period of project activity
C.2.1. Type of crediting period
>>
Renewal
C.2.2. Start date of crediting period
>>
09/05/2013 (Or the date of registration of the project with UNFCCC, whichever is later)
C.2.3. Length of crediting period
>> 7 Years 00 Months
UNFCCC/CCNUCC


SECTION D. Environmental impacts
D.1. Analysis of environmental impacts
>>
As per the Environmental Impact Assessment (EIA) notification from MoEF dated September 14, 2006
28
,
and further order in June 2011
29
. given by the Ministry of Environment and Forests under the
Environment (Protection) Act 1986, the proposed project doesnt fall under the list of activities
Environmental Clearance(EC) Hence, Solar Thermal Power Projects are exempted from EC.

D.2. Environmental impact assessment
>>
As the Project uses the solar energy as source which is the clean power and environment friendly. Further
there are no polluting emissions or discharges in air or water bodies.

SECTION E. Local stakeholder consultation
E.1. Solicitation of comments from local stakeholders
>>
MEIL Green Power Limited invited the local stakeholders for the meeting through newspaper
advertisement (published newspapers 1.) Surya 2.) The Hans India , on 09/05/2012), direct verbal
communication and public notice prior to the scheduled date of the meeting was made in the project
area.
Place of meeting: MEIL Green Power Limited, Plant site, Anantapur District, Andhra Pradesh.
Date: 17/05/2012 Time: 11:00 Hrs to 13:30 Hrs.

E.2. Summary of comments received
>>
All the stakeholders agreed that the implementation of the project activity would not have any adverse
effect on environment and would result in the development of local communities.

The details of the comments / queries by various stakeholders and their reply are presented below:

S.No Question/Comment Response by PP Action Measure if
any
1. -Will there be any radiation
effects like heating or ill
health effects on the human
population in the area
surrounding the Project.

No, it will not have any effect on the
human population. As the Project
deploys the technology where in it uses
the heat energy in the solar rays for
generation of power. The Project has
already obtained the consent to establish
from the Pollution control Board. It was
clarified Solar Thermal Power project is
a non polluting clean energy project.
--
2 -Will there be any liquid
effluents discharge from the
Proposed Power Project

There shall be no liquid effluent
discharge from the Proposed Power
Project and the project will have septic
tanks to discharge and it adapts the
technology to maximize the re use of the
waste water with proper treatment with
--

28
http://envfor.nic.in/legis/eia/so1533.pdf
29
http://moef.nic.in/downloads/public-information/JNNSM.pdf

UNFCCC/CCNUCC


in the plant premises like gardening etc.,
3 the contribution of company
towards peripheral
development and increase of
basic eminites (like water,
transport etc.,)

It was clarified that the company will
provide assistance for social
development in the nearby villages up on
consultation with the local as required
and with development of project better
transport road and overall development
will take place.

The appropriate
action plans will be
made in
consultation with
local panchayat as
and when needed .
4 -about the increase in local
employment due to this
project.

It has been replied that, skilled and
trained people will be given priority
during the recruitment stage and non-
skilled worker will be taken from local
region only. As the Project is present in
the implementation stage that most of
the work would require technically
skilled manpower. Such manpower if
available with appropriate skills in the
local villages would be given preference.

The same will
considered if any
employment
/Recruitment takes
place.

E.3. Report on consideration of comments received
>>
Since there is no negative comment received and the local are unsupportive of he project activity its no
need to make adjustment on design, construction and operation of the proposed project.
SECTION F. Approval and authorization
>>
The letter(s) of approval from Party (ies) for the project activity is not available at the time of the
submission of PDD to the validating DOE.

- - - - -

UNFCCC/CCNUCC


Appendix 1: Contact information of project participants
Organization name MEIL Green Power Limited
Street/P.O. Box Technocrat Indl.Estate, Balanagar
Building S-2
City Hyderabad
State/Region Andhra Pradesh
Postcode 500037
Country India
Telephone +91-40- 44336700
Fax +91-40-44336800
E-mail ntr@meil.in
Website --
Contact person
Title Director-Finance
Salutation Mr
Last name Rao
Middle name Thirupathi
First name Nadipineni
Department Finance
Mobile +91-9908732288
Direct fax +91-40-44336800
Direct tel. +91-40-44336700
Personal e-mail ntr@meil.in
Appendix 2: Affirmation regarding public funding
Not applicable as no public funding to the project activity from Annex-I Parties
Appendix 3: Applicability of selected methodology
Relevant Info provided in SecB.2 of this PDD, the Project meets the applicable criteria of the
methodology ACM0002 (Version 13.0.0) due to following reasons:
- The Project is a newly-built grid-connected solar thermal power plant with zero-emission that install a
new power plant at a site where no renewable power plant was operated prior to the implementation of
the project activity (green field plant);
-The Project dose not involves switching from fossil fuels to renewable energy sources at the site of the
Project activity. Therefore the methodology ACM0002 (Version 13.0.0) is applicable to the Project

UNFCCC/CCNUCC


Appendix 4: Further background information on ex ante calculation of emission reductions
Calculation of EF
grid,CM,y

In accordance with the Tool to calculate the emission factor for an electricity system Version 03.0.0,
combined margin CO
2
emission factor for grid connected power generation is calculated stepwise as
below:
The data used for the calculation of the baseline emission factor was obtained from the baseline
calculations published by the CEA, CO
2
data base version 07.
Step 1: Identify the relevant electricity systems
For the purpose of determining the electricity emission factors, a project electricity system and
connected electricity systems are to be defined. The Indian power system is divided into two regional
grids, namely NEWNE and Southern grid. Each grid covers several states. Power generation and supply
within the regional grid is managed by Regional Load Dispatch Centre (RLDC). The Regional Power
Committees (RPCs) provide a common platform for discussion and solution to the regional problems
relating to the grid.
Each state in a regional grid meets their demand with their own generation facilities and also with
allocation from power plants owned by the central sector such as NTPC and NHPC etc. Specific quotas
are allocated to each state from the central sector power plants. Depending on the demand and
generation, there are electricity exports and imports between states in the regional grid. There are also
electricity transfers between regional grids, and small exchanges in the form of cross-border imports and
exports (e.g. from Bhutan).Recently, the Indian regional grids have started to work in synchronous mode,
i.e. at same frequency.
States connected to different regional grids
Regional grid NEWNE grid Southern
grid
Northern Eastern Western North
Eastern
States Haryana Bihar Gujarat Arunachal
Pradesh
Andhra
Pradesh
Himachal
Pradesh
Orissa Madhya Pradesh Assam Karnataka
Jammu&
Kashmir
West Bengal Maharashtra Manipur Kerala
Punjab Jharkhand Goa Meghalaya Tamil Nadu
Rajasthan Sikkm Chattisgargh Mizoram
Uttar Pradesh Nagaland
Uttarakhand Tripura
Union
Territory
Delhi Andaman-
Nicobar
Daman&Diu Pondichery
Chandigarh Dadar&Nagar
Haveli
Lakshwadeep

UNFCCC/CCNUCC


The Southern regional grid constitutes several states and union territories including Andhra Pradesh.
These states under the regional grid have their own power generating stations as well as centrally shared
power-generating stations. While the power generated by own generating stations is fully owned and
consumed through the respective states grid systems, the power generated by central generating stations
is shared by more than one state depending on their allocated share. Presently the share from central
generating stations is a small portion of their own generation.
Since the CDM project would be supplying electricity to the Southern regional grid, it is preferable to
take this grid as the project boundary rather than the state boundary. It also minimizes the effect of
interstate power transactions, which are dynamic and vary widely.

Step 2: Choose whether to include off-grid power plants in the project electricity system (optional)
Project participants may choose between the following two options to calculate the operating margin and
build margin emission factor:

Option I: Only grid power plants are included in the calculation.
Option II: Both grid power plants and off-grid power plants are included in the calculation.
The project participant has chosen Option I for the calculation of the operating and build margin
emission factor i.e. off-grid power plants are not being included in the calculation.

Step 3: Select a method to determine the operating margin (OM)
The calculation of the operating margin emission factor (EF
grid,OM,y

) is based on one of the following
methods:

(a) Simple OM, or

(b) Simple adjusted OM, or

(c) Dispatch data analysis OM, or

(d) Average OM.

For the proposed project activity, simple OM method (option a) has been chosen to calculate the
operating margin emission factor (EF
grid,OM,y
). However, the simple OM method can only be used if low-
cost/must-run resources constitute less than 50% of total grid generation in: 1) average of the five most
recent years, or 2) based on long-term averages for hydroelectricity production. The low-cost/must-run
resources are defined as power plants with low marginal generation costs or power plants that are
dispatched independently of the daily or seasonal load of the grid. They typically include hydro,
geothermal, wind, low-cost biomass, nuclear and solar generation
Table: Share of Low Cost / Must-Run (% of Net Generation)
2006-07 2007-08 2008-09 2009-10 2010-11
Average
NEWNE 18.53% 19.0% 17.4% 15.9% 17.6% 17.69%
Southern 28.3% 27.1% 22.8% 20.6% 21.0% 23.96%
India 20.9% 21.0% 18.7% 17.1% 18.4% 19.22%
Ref: CO
2

Baseline Database for the Indian Power Sector CEA, Version 07
UNFCCC/CCNUCC


Percentage of total grid generation by low cost/must run plants (on the basis of average of five most
recent years) = 23.96%
The calculation above shows that the generation from low-cost/must-run resources constitutes less than
50% of total grid generation, hence usage of the Simple OM method in the project case is justified.
The Simple OM emission factor can be calculated using either of the two following data vintages for
years(s) y:

- Ex ante option: If the ex-ante option is chosen, the emission factor is determined once at the
validation stage, thus no monitoring and recalculation of the emissions factor during the crediting
period is required. For grid power plants, use a 3-year generation-weighted average, based on the
most recent data available at the time of submission of the CDM-PDD to the DOE for validation.
For off-grid power plants, use a single calendar year within the 5 most recent calendar years prior
to the time of submission of the CDM-PDD for validation.

or

- Ex post option: If the ex post option is chosen, the emission factor is determined for the year in
which the project activity displaces grid electricity, requiring the emissions factor to be updated
annually during monitoring. If the data required to calculate the emission factor for year y is
usually only available later than six months after the end of year y, alternatively the emission
factor of the previous year (y-1) may be used. If the data is usually only available 18 months after
the end of year y, the emission factor of the year proceeding the previous year (y-2) may be used.
The same data vintage (y, y-1 or y-2) should be used throughout all crediting periods.

The project proponent chooses the Ex ante option for estimating the simple OM emission factor wherein
as described above a 3-year generation-weighted average, based on the most recent data available at the
time of submission of the CDM-PDD to the DOE for validation, without requirement to monitor and
recalculate the emissions factor during the crediting period will be undertaken.
Step 4: Calculate the operating margin emission factor according to the selected method
The generation weighted average CO2 emissions per unit net electricity generation (tCO
2
/MWh) of all
generating power plants serving the system, not including low-cost/must-run power plants/units. The
Simple OM must be calculated as:
Option A: Based on the net electricity generation and a CO2 emission factor of each power unit; or
Option B: Based on the total net electricity generation of all power plants serving the system and the
fuel types and total fuel consumption of the project electricity system.
The project proponent is using values for calculating OM that are published in the CEA database for
calculating CO2 emissions Version 7, dated Jan 2012 . These calculations are based on "Tool to Calculate
the Emission Factor for an Electricity System", Version 03.0.0, EB 70. These correspond with option A
of the current version of the Tool.

(a) Simple OM

The full generation weighted average for the most recent years has been considered from the Central
Electricity Authority data.

Operating
Margin
tCO
2
/ MWh
(A)
Net Generation in
Operating Margin
(MWh) (B)
Generation
(C=A*B)
2008-09 0.97044 121471250.5
117880640.08
UNFCCC/CCNUCC


2009-10 0.94113 134716872.2
126786214.66
2010-11 0.93963 137387256.6
129093635.82
Simple OM (tCO
2
/ MWh)
393575379.34 373760490.56
0.94965

CEA database CO
2
data base Version 07 Jan 2012

Step 5: Calculate the build margin emission factor (EF grid, BM,y)
In terms of vintage of data, PP has chosen option a) build margin emission factor ex ante based on the
most recent information available on units already built for sample group m at the time of CDM-PDD
submission to the DOE for validation.
Calculations were done by the CEA (database version 6) to determine Emission Factor. CEA adopted
build margin calculation based on an approach similar to Option b and c) for sample group of power
units m used to calculate the build margin of the current Tool to calculate emission factor in the
electrical system- Version 03.0.0 ,
Build margin is calculated by the formula:
EF
grid, BM,y
= (EG
m,y
EF
EL,m,y
)/ EG
m,y

Where:
EF
grid,BM,y
= Build margin CO
2
emission factor in year y (tCO
2
/MWh)
EG
m,y
= Net quantity of electricity generated and delivered to the grid by power unit m in year y (MWh)
EF
EL,m,y
= CO
2
emission factor of power unit m in year y (tCO
2
/MWh)
m = Power units included in the build margin
y = Most recent historical year for which power generation data is available

BM is calculated ex-ante based on the most recent information available at the time of submission of
PDD and is fixed for the entire crediting period.

Build Margin (BM)
(2010-11)
0.73389 tCO
2
/ MWh

Step 6. Calculate the combined margin emission factor

The calculation of the combined margin (CM) emission factor (EF
grid,CM,y
) is based on one of the
following
methods:
(a) Weighted average CM; or
(b) Simplified CM.
The weighted average CM method (option A) should be used as the preferred option.
The simplified CM method (option b) can only be used if:

The project activity is located in (i) a Least Developed Country (LDC) or in (ii) a country with less than
10 registered CDM projects at the starting date of validation or (iii) a Small Island Developing States
(SIDS);

The host country India is not a LDC or with less than 10 registered CDM projects or a Small Island
Developing States (SIDS); at the starting date of validation, thus PP has chosen option a) Weighted
Average CM, in calculation of combine Margin emission factor

(a) Weighted average CM
UNFCCC/CCNUCC


The combined margin emissions factor is calculated as follows:

The following default values should be used for w
OM
and w
BM
:
Wind and solar power generation project activities: w
OM
= 0.75 and w
BM
= 0.25 (owing to their
intermittent and non-dispatchable nature) for the first crediting period and for subsequent
crediting periods;
All other projects: w
OM
= 0.5 and w
BM
= 0.5 for the first crediting period , and w
OM
= 0.25 and
w
BM
= 0.75 for the second and third crediting period, unless otherwise specified in the approved
methodology which refers to this tool.
Combined Margin/ Grid Emission Factor
Parameter Value
Simple OM (tCO
2
/ MWh) 0.94965
Build Margin (BM)
(2010-11) ( tCO
2
/ MWh)
0.73389
Weighted Average Combined Margin (CM)
(tCO
2
/ MWh)
= ({0.750.94965} +.{0.25 0.73389})
= 0.89571
Ex-ante calculation of emission reductions is provided in section B.6.3.
Appendix 5: Further background information on monitoring plan
Detailed monitoring plan for the project activity is provided in section B.7.3.
Appendix 6: Summary of post registration changes
Not applicable, as the CDM project activity is not yet registered hence there are no post registration
changes.

- - - - -

UNFCCC/CCNUCC


History of the document

Version Date Nature of revision
04.1 11 April 2012 Editorial revision to change version 02 line in history box from Annex 06 to
Annex 06b.
04.0 EB 66
13 March 2012
Revision required to ensure consistency with the Guidelines for completing
the project design document form for CDM project activities (EB 66, Annex
8).
03 EB 25, Annex 15
26 July 2006

02 EB 14, Annex 06b
14 June 2004

01 EB 05, Paragraph 12
03 August 2002
Initial adoption.
Decision Class: Regulatory
Document Type: Form
Business Function: Registration

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