BCML II CDM PDD April 07 2004 PDF

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project
CONTENTS
Sections A. B. C. D. E. F. G. Annexes Annex 1: Information on participants in the project activity Annex 2: Information regarding public funding Annex 3: New baseline methodology Annex 4: New monitoring methodology Annex 5: Table: Baseline data Enclosures Enclosure I: Current Power Scenario & Policies Enclosure II: Baseline Study Report Enclosure III: Report on Environmental Impact Enclosure IV: Abbreviations Enclosure V: Reference List General description of project activity Baseline methodology Duration of the project activity / Crediting period Monitoring methodology and plan Calculations of GHG emissions by sources Environmental impacts Stakeholders comments
BCML - II Classified - Confidential
Project Design Document

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A.
A.1
GENERAL DESCRIPTION OF PROJECT ACTIVITY

Title of the Project Activity: BCML Haidergarh Bagasse Cogeneration Project
A.2
Description of the project activity:
Purpose The purpose of the project activity is to utilize the bagasse wastes of the Balrampur Chini Mills Limiteds (BCML) Haidergarh sugar mill in Uttar Pradesh, India to generate 20 MW of electricity for internal use and sale of the surplus electricity to the state power grid. By displacing imported carbon intensive grid energy with a renewable, zero-carbon energy source, the BCML Haidergarh Bagasse Cogeneration Project reduces carbon dioxide emissions over the project life. Replicable technology, environmental, and sustainable development benefits also result from the proposed CDM activity. These include: introducing efficient high pressure cogeneration technology to the Indian sugar industry; reducing power shortages in the state of Uttar Pradesh (UP) India; and, fostering sustainable economic growth through promoting energy self-sufficiency and resource conservation in Indias sugarcane industry. The BCML Haidergarh Bagasse Cogeneration Project is unique in India due to its use of high efficiency boilers for optimizing the energy produced per unit of bagasse burned. While many sugar mills burn their bagasse wastes, in 2003 less than 14% of the mills sold electricity to a regional grid and only 1% of the 450 sugar mills in the country had high pressure boiler systems (87 kg/cm2). With the goal of obtaining carbon revenues from the avoidance of grid-based greenhouse gas (GHG) emissions, the company took the investment risks to secure financing to invest in such high efficiency cogeneration systems, thereby demonstrating the attractiveness of clean power systems to the sugar manufacturing industry in India. The proposed activity is highly replicable as the countrys sugar mills produce vast quantities of bagasse wastes that could be far more efficiently burned to generate energy for on-and off-site use while also reducing grid based GHG emissions, which result from the countrys overwhelming (70%) dependency on coal. With an installed capacity of 20 MW, the BCML Project uses a portion of the steam-electricity to run its new cane crushing facility and cogeneration plant. The majority of the total electricity produced, however, will be exported to the regional state electricity authority, the Uttar Pradesh Power Corporation Limited (UPPCL), with 13.96 MW being sent from the plant during the cane crushing season and 17.95 MW during the off-season period. The emission reductions from the project activity will come from the avoidance of carbon dioxide emissions from fossil fuel use at the regional electricity grid due to the displacement by the zero carbon bagasse residues.

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Projects contribution to sustainable development The proposed project engenders important local, national and global sustainable development for India. First, the renewable energy project activity supports Indias national policy to rely on clean power. Second, the BCML Project will substitute, and hence decrease the future need, for primarily coal-based power generation by the grid, thereby reducing carbon dioxide (CO2) emissions from the Indian electricity sector. As coal supplied over 70% of the countrys electricity in 2003, and is expected to increase over time according to the Uttar Pradesh state electricity board expansion plan, diversification and energy self-reliance by the sugarcane industry creates global as well as local air pollutant benefits. The governments clean power diversification strategy includes a multipronged strategy focusing on reducing wastage of energy combined with the optimum use of renewable energy (RE) sources, as proposed by the project. The BCML Project will positively contribute towards the reduction in demand for Indias carbon intensive energy resources as well as more efficient waste disposal and resource conservation. Third, the project activity will contribute to local job and income creation in a very poor rural area where cane growers (local farmers) face highly cyclical income flows. It will create steady higher value jobs and skilled workers at the cogeneration facility. Finally, with the influx of carbon financing from the Projects net emission reductions, the BCML Bagasse Cogeneration Project will create a replicable, profitable model for the countrys sugarcane industry to diversify its product offerings and increase its sources of revenue.1 In summary, the projects sustainable development benefits and issues include: Export of 13.955 MW (say 13.96 MW) during sugar cane season and 17.95 MW during off-season, thereby eliminating the generation of same quantity of power using conventional fuel; Conserving coal, a non-renewable natural resource; Decreasing the growth in demand for coal, and making it available for higher-value economic applications; Reducing GHG emissions through the avoidance of fossil-fuel grid electricity generation; Contributing to an increase in the local employment in the area of skilled jobs for operation and maintenance of the cogeneration equipment; More efficient industry waste use;
Revenues from the sale of surplus electricity to a local grid is a critical source of additional revenues for most sugar companies throughout major cane producing areas where electricity prices are sufficiently high to warrant investment in power plants. These diversified cane/energy companies rely on electricity sales to dampen fluctuating cane revenues, and strengthen their corporate positions. BCML - II Classified - Confidential

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Capacity building through training the mill owners, farmers and power plant operators in high efficiency cogeneration and sale of electricity to the grid; Increasing the diversity and reliance of local energy resources, and improving the transmission grid reliability through distributed energy use; and, Providing a highly replicable, efficient model to other sugar mills in the state and country for use of bagasse as a renewable energy resource.
A.3.
Project Participants Balrampur Chini Mills Limited - Project Promoter
A.4 A.4.1
Technical Description of the project activity Location of the project activity A.4.1.1 Host country party(ies): A.4.1.2 Region / State / Province: A.4.1.3 City / Town / Community: India Uttar Pradesh Haidergarh
A.4.1.4 Detail on physical location, including information allowing the unique identification of this project activity: The BCML Project involves the company building a new cane facility along with the proposed cogeneration plant at its Haidergarh Chini Mills (HCM), a subsidiary of BCML, which is a sugar mill complex at the Pokhra Village, Haidergarh Tehsil, Barabanki District in Uttar Pradesh, India.2 The cogeneration plant was under construction in November 2003 located adjacent to the road connecting the town of Haidergarh and Pokhra village. The cogeneration plant consisting of the boiler, turbo-generator, auxiliary systems, switch yard etc. is located adjacent to the evaporator house of the sugar plant and the interconnection will be done for bagasse, steam, condensate, DM water and electrical systems. All other requirements of the cogeneration project are also available at site, including water requirement, infrastructure facilities etc. The 132 kV transmission lines from the cogeneration plants switchyard will be connected to the existing UPPCL sub-station at Jagadishpur, which is about 27 kms from the plant location.
The proposed CDM activity includes only the costs of the cogeneration plant. BCML - II Classified - Confidential

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A.4.2
Category of the project activity
The BCML Haidergarh Bagasse Cogeneration Project is a supply side, renewable energy cogeneration project activity that displaces the need for future grid electricity generation. It reduces grid electricity greenhouse gas (GHG) emissions from fossil fuel combustion, mostly coal, according to the list of sector/source categories listed in Annex A of the Kyoto Protocol. The project very closely matches the UNFCCC small-scale CDM project activity categories under Type-I, Electricity Generation for a system. The approaches used by the project for determining the baseline methodology, meeting the additionality test, and emission reduction estimations that are presented below are adapted from similar procedures used by the Vale Do Rosario Bagasse Cogeneration Project (NM0001), a similar bagasse cogeneration and grid-avoided emissions reduction that recently was approved by the CDM Executive Board. Main Category: Sub Category: Renewable Energy Power project (Type-I) D - Electricity Generation for a System (Bagasse-based Cogeneration Project) A.4.3 Technology to be employed by the project activity
Balrampur Chini Mills Limited (BCML) will use advanced cogeneration technology for the project at the Haidergarh Chini Mills cane processing facilities by introducing high pressure, high efficiency steam turbine configuration systems that exceed current Indian standards at sugar cane mills but are well proven internationally. Currently, the Indian sugarcane industry uses bagasse wastes in highly inefficient boilers with the primary goal being to dispose of the wastes rather than maximize the amount of energy produced per ton bagasse burned. The proposed technology employs the well proven steam-Ranking cycle process and condensing turbines in its combined heat and power (CHP) plant to provide the most efficient amount of energy per unit bagasse used to meet not only the mills cane processing and power plant needs but also have surplus electricity for sale to the grid. The Project will install a 20 MW power plant with the goal of exporting to the state grid, UPPCL, 13.96 MW during the cane crushing season increasing up to 17.95 MW during the off-season period after meeting its auxiliary power needs. The plant will run at an availability factor of 80% in first year and 90% from the third year onwards. To produce higher power output, BCML will implement a 110 tons per hour (TPH) nominal capacity boiler with the super heater outlet steam parameters of 87 kg/cm2 & 515 0C and a high efficiency extraction cum condensing (EC) turbogenerator set of 20 MW nominal capacity (operating with the steam inlet parameters of 84 kg/cm2 and 5100C ). The boiler is designed with a travelling grate with electric drive to burn the bagasse. The inlet feed water will be 1700C, with the feed water heated in a high pressure feed water heaters. The deaerator outlet water temperature will be 1150 C. The deaerator outlet water temperature will

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be 115oC. This steam to bagasse percentage will be achieved with a minimum efficiency of 70%. The cogeneration turbine will be a double extraction cum condensing machine. There will be one controlled extraction at 2.5 kg/cm2 and one uncontrolled extractions at 9 kg/cm2. The cogeneration cycle for the plant is designed as regenerative cycle with high pressure feed water heater and two low-pressure feed water heaters. Although very few bagasse based cogeneration power plants are designed with above mentioned high pressure and temperature parameters in India, the technology is well proven worldwide. The plant design with all auxiliary systems includes: Bagasse handling system with storage and processing arrangements High pressure feed water heaters Ash handling system Water treatment plant Compressed air system Air conditioning system Main steam, medium pressure and low pressure steam systems Fire protection system Water system that includes a raw water system, circulating water system, condensate system, de-mineralized water system and service with potable water system and, Electrical system The power plant will operate for 320 days per annum, which includes 200 days during the cane crushing season, which is the first week of November to last week of May, and the balance of 120 off-season days. After meeting the steam and power requirements of the cogeneration plants auxiliaries and proposed sugar plant (during season only), there will be 13.96 MW surplus power during the cane crushing season and 17.95 MW of power during the off season that will be exported to UPPCL. The power will be generated at 11 kV level. The internal consumption requirements for auxiliaries and equipment of the sugar plant and the cogen plant will be met by stepping down voltage level to 415V. The exportable power will be stepped up to 132 kV and paralleled with the UPPCL grid at the sub-station in Jagdishpur, which is about 27 kilo meters (km) from the plant. In addition to the surplus/saved bagasse (@2.26 TPH and a total of 9,700MT/annum) from the proposed Haidergarh sugar unit, surplus bagasse from the Babhnan plant of BCML (81,120 MT) will be procured for off-season operation of the cogeneration plant. The Babhnan plant of BCML is 160 km away from the Haidergarh sugar unit and surplus bagasse will be transported in trucks. Therefore, the total bagasse available (90,820 MT) for the cogeneration plant will be sufficient to operate the project for 120 days in the off-season.

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Complete construction and commissioning of a high-pressure sugar cogeneration plant requires around 16 -18 months from the start date. The start date can be the date of placement of the order for the main plant and equipment, which includes boiler and Steam Turbine Generator (STG) set. To achieve on time project implementation, good planning, scheduling and monitoring is required. Project activity implementation work of HCM is already going on and the commercial operation of the project was expected to commence by November 2003.
A.4.4
Brief explanation of how the anthropogenic emissions of anthropogenic greenhouse gas (GHGs) by sources are to be reduced by the proposed CDM project activity, including why emission reductions would not occur in the absence of the proposed project activity, taking into account national and/or sectoral policies and circumstances:
The sources of greenhouse gas emissions with the Project include potential emissions from the production of sugarcane and combustion of the bagasse in the boiler, as well as carbon dioxide emissions from the bagasse transported to the mill during the off-season. As the proposed cogeneration power plant uses sustainably-grown bagasse, there are no net carbon dioxide emissions released to the atmosphere during production of the cane because of the carbon recycling process. Also, the bagasse contains only negligible quantities of other elements like nitrogen, sulphur etc. and the combustion of the bagasse leads to minimal releases of GHG emissions that are considered as negligible. The bagasse is expected to contain 53% moisture; this will keep the temperatures at steam generator burners low enough not to produce nitrogen oxides. Moreover, the specification of the steam generator will stipulate over fire air system with staged combustion, which will ensure reduction in nitrogen-oxide emissions. The transport of bagasse to the mill during the off-season will result in some diesel fuel related carbon dioxide emissions. The BCML Project, hence, will release only a minimal amount of additional carbon dioxide or other GHG emissions to the atmosphere. Without the proposed project activity, the same energy load would have been supplied to the grid customers from a mix of fossil-fuel based thermal power plants. Emission of CO2 would have been occurred due to combustion of conventional fuels like coal by the state grid. The UPPCL grid relies heavily on coal, as does most of India, and this reliance is predicted to increase overtime given the significant power shortages and exponential demand growth in Uttar Pradesh. The Project will reduce the combined margin carbon intensity of the grid given the fuel mix and dispatching schedule of the grid. No transmission and distribution losses are considered in the greenhouse gas accounting since the project is exporting power at high voltage of 132 kV at a short distance. Hence, the BCML Project will result in lower anthropogenic emissions due to the avoidance of the grids carbon dioxide emissions.

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A.4.5
Public funding of the project activity
No public funding from parties included in Annex I is available to or involved in the BCML Haidergarh Bagasse Cogeneration project activity.

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B.
B.1
BASELINE METHODOLOGY
Title and reference of the methodology applied to the project activity: Title: BCML baseline methodology for emission reductions from grid-connected bagasse cogeneration projects [Based on the NM 0001 Vale do Rosario Bagasse Cogeneration (VRBC) project]
The BCML Haidergarh Bagasse Cogeneration Project is basically drawing upon the Vale do Rosario Bagasse Cogeneration Project (VRBC) - NM0001 approved baseline approach, but including a comparative analysis of the combined margin (CM) analysis used by VRBC to a new, more conservative modified combined margin (MCM) emission estimation methodology, which determines the baseline emission factor or rates for a grid connected renewable energy project given the availability of reliable data on future grid capacity additions. The proposed activity is similar to the VRBC Project in that it is a renewable energy/cogeneration project using sugarcane bagasse wastes that will produce steam and electricity for on-site mill and power plant use and surplus electricity sale to the regional power grid. The baseline approach, as described in Annex-3, is designed for and suitable to grid-connected renewable energy cogeneration projects.
B.2
Justification of the choice of the methodology and why it is applicable to the project activity
As per paragraph 48 of decision CP-7 of Modalities and Procedures for CDM as defined by Article 12 of the Kyoto Protocol (KP), project participants shall select baseline methodologies for a project activity from the following alternative approaches, selecting the one deemed most appropriate for the project activity taking into account any guidance by the CDM Executive Board and justify the appropriateness of their choice. 1. Existing actual or historical emissions, as applicable 2. Emissions from a technology that is the most economically attractive course of action taking into account barriers to investment; or, 3. The average emissions of similar project activities undertaken in the previous five years, in similar social, economic, environmental and technological circumstances, and whose performance is among the top 20 percent of their category. The BCML baseline scenario will be established by using the first methodological approach listed above, which is based on actual or historical business-as-usual conditions along with demonstrating

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that the proposed activity faces high barriers. The proposed baseline methodology is designed for and applicable to other bagasse or other renewable energy grid-connected projects. The use of a historical or actual baseline methodology suits the project conditions given: The applicability for renewable grid-connected cogeneration projects selling surplus power to a state/regional grid Data availability that supports the historical or actual business as usual (BAU) baseline scenario The additionality of the project cannot be based solely on the basis of an economic analysis
Similarity of the proposed project to the baseline conditions set forth in the VRCB Project, an Approved Methodology (NM0001) by the CDM Methodology Panel and Executive Board.
B.3
Description of how the methodology is applied in the context of the project
The selected historical baseline approach provides the best evidence of what are the expected greenhouse gas emissions of the without project case. The project can use a business as usual scenario for the sugarcane industry and electricity sector for the 10 year crediting period given: Lack of sugar cane mills using high pressure steam-turbine technology and selling power to a local grid Dominance of UPPCL in terms of electricity market share Expected fuel mix (mostly coal) Relative stability of its operating as well as build margins, from which the combined margin can be calculated for estimating the emission reductions. This baseline approach is applied and substantiated in Section 4.1 and Annex 3 by analyzing the alternative baseline options for the project given a business as usual and other conditions for the sugarcane and electricity industries in Uttar Pradesh. These analyses point to the baseline option as being the BAU supply of electricity from the fossil-based regional grid to the sugar mill given the absence of the project activity. The additionality requirements of the CDM also are demonstrated below to clearly show that the emission reductions result from the displacement of future GHG emissions from the grid by bagasse cogeneration. The baseline emissions estimation approach rests on a comparative analysis of the combined margin (CM) methodology (recommended for SSC projects and approved for VRBC) to the new

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proposed modified combine margin (MCM) methodology, which is adjusts CM given the availability of reliable, verifiable operating and build margin emission factors for future grid capacity additions from sector experts and documented studies. A replicable new baseline emission process is proposed to improve calculations of a renewable cogeneration projects emissions reductions anywhere in the world. More details are provided in the Baseline Study Report (along with data) in Enclosure II.
B.4
Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered CDM project activity (i.e., explanation of how and why this project is additional and therefore not the baseline scenario)
Currently, the Indian power sector and Uttar Pradesh are heavily reliant on coal to supply their power plants. With 70% of electricity in the country already coming from coal power plants, the portion is projected to grow over the coming decade as the country expands generation to meet its growing industrial and residential demand. In the UP electricity board expansion plan, new coal and fossil fuel plants are planned throughout the region to provide both operating and build margin power. Consequently, India faces a potential increase in its electricity sectors GHG emissions and emissions intensity factor over the projects 10 year crediting period. While the country has a clean energy strategy, the reality is that coal will continue to dominate in the near term and the sugarcane industry will burn their bagasse wastes in inefficient boilers unless financial incentives, such as carbon financing, exist to alter the relative prices of these energy resources. In applying the CDM additionality tests as per the prescribed methodology to the proposed project activity, it is ascertained that without the proposed carbon financing for the project the BCML project promoters could not have obtained their private sector financing (similar to VRBC and other CDM projects) and that the BAU baseline option is continued release of carbon dioxide emissions from the regional grid. The project would not have occurred in the absence of the CDM simply because no sufficient financial, policy, or other incentives exist locally to foster development of widespread high efficiency bagasse cogeneration in India. The fact that only 1% of the countrys 450 sugarcane mills now use high efficiency cogeneration to export power for sale underscores the projects ability to meet the CDM additionality requirement. B.4.1 Evaluation of likely non-project options: Business as Usual Baseline Options
The two significant attributes of that proposed CDM activity that make it additional and define the baseline scenario, as shown below, are that it will: use bagasse cogeneration to sell surplus electricity to the regional power grid; and.
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rely on high efficiency cogeneration technology (87 kg/cm2 outlet boiler pressure).
The facts presented below about the common practice in India regarding (1) bagasse cogeneration and (2) high efficiency power generation by the sugarcane industry establish the baseline or future without project scenario. Traditionally, the sugar-manufacturing sector in India and elsewhere has limited knowledge of and interest in commercial production and sale of electricity. Reasons are the high industrial barriers to enter new product lines, financial hurdles to obtain financing for high efficiency bagasse cogeneration systems, and difficulty of working with state electricity boards. Given these and other barriers mentioned in more detail in Section 4.2 below, Indias cane industry does not have the incentive to invest in high efficiency bagasse cogeneration for surplus electricity sale in the future. In such circumstances they will continue to use bagasse for in-efficient burning and either low or no export of electricity to the grid. In summary, the baseline scenario for the sugarcane industry in Uttar Pradesh is not the proposed project but to continue with the industrys business as usual (BAU) status quo, which is to burn its bagasse wastes in inefficient boilers and not sell power to the grid. B.4.2 Assessment of Barriers
Out of 450 sugar mills in India only 32 are generating surplus electricity using bagasse and selling power to the grid. The potential for power generation in UP using bagasse is estimated at 1,350 MW per year, which is roughly 15% of the installed capacity (9,000 MW) of the grid. There are several barriers due to which the above potential is not being harnessed. The proposed project is additional as it overcomes the barriers discussed further in this section: (a) Investment risk barrier
Project cost of conventional cogeneration project with low-pressure configuration for power generation with bagasse as a primary fuel is drastically lower than the project cost of proposed high-pressure configuration. High upfront cost, lack of easy and long-term financing, high project development to investment ratio, project cash flows etc. are the known investment barriers to the high efficiency bagasse cogeneration projects3. Most sugarcane owners and farmers do not have the creditworthiness to obtain private sector financing for investing in high efficiency cogeneration technology due to the cyclical nature of the primary product (sugar), hence their income flows, and lack of availability to the carbon financing market. The price of sugar cane in India is controlled and governed/pre-decided by the government. To protect sugar cane farmers interests a minimum sugar cane price based on the quality of sugar
As demonstrated by the approved Vale do Rosario CDM project in its use of a 48(b) economic attractiveness approach in establishing its baseline scenario. BCML - II Classified - Confidential
3

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cane is pre-decided. Also, till year 2002 the price of sale of sugar (as per the quota) was decided by government. Due to such restrictions, the accumulation of sufficient funds to finance a high investment and capital-intensive project, such as the proposed CDM cogeneration project is a quite difficult proposition. Most companies, including BCML, also have no background in selling power to the grid or other users, so seeking such financing from a private bank proves a key barrier. Thus, BCML by investing in the higher cost, high efficiency renewable energy project is taking investment risks that only two other sugar mill owners in India are willing to bear. Although BCML obtained bank funding for the proposed project, it assured the bank that it can repay the loans given its willingness to realize a lower internal rate of return and profit margin for the project if it is unable to obtain CERs from the emission reductions. Due to the present uncertainty involved with the transaction under the CDM and rate of CER, the financial viability of the proposed project cannot solely depend on CDM funds. The projects internal rate of return (IRR) is expected to improve by about 2% if at all the CDM funding is available by 2003-04 after registration at UNFCCC. BCML, hence, is shouldering a significant market or financial risk and taking a pro-active approach by showing confidence in the Kyoto Protocol/CDM system. Besides the direct financing risk, BCML is also shouldering the additional transaction costs such as preparing documents, supporting CDM initiatives and developing and maintaining M&V protocol to fulfil CDM requirements.
(b)
Technology Barrier
The typical alternative to the project activity is to continue to use low or medium pressure cogeneration configuration. The proposed project activity has adopted a high pressure co-generation technology, which is new in UP and in India as well, and has low market share and less penetration than its less efficient alternatives. The penetration of new high efficiency cogeneration technology requires greater economies of scale, trouble-free plant operation, availability of spares, availability of skilled manpower to operate the plant continuously etc. BCML is the first company in UP to take the risk by looking for carbon financing to overcome the technology barrier and investing in the 87 kg/cm2 pressure and STG of double extraction cum condensing technology. The technological barriers become even more significant considering the renewable energy potential in UP using bagasse as fuel. Success of the proposed CDM project will provide a trigger for replication in the other sugar mills thus further reducing the GHG emission to the atmosphere.
(c)
Other Barriers
Managerial resources barrier: BCML has 45 years of background with sugar cane and sugar production. The region where the plant is proposed is dominated by agriculture and there are no large industries nearby. Trained manpower capable of handling the power

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project is not readily available to BCML and BCML has to overcome this managerial and operational resource barrier. Organisational barrier: As stated earlier, BCML for long have been involved in business of sugar production and rural economics. They have to transform (overcome barrier) to deal with the economics of electricity generation, distribution and dealing with power sector economics, bureaucracy etc. Institutional Barriers: BCML has signed a Power Purchase Agreement (PPA) with UPPCL. For their earnings the project depends on the payment from UPPCL against the sale of electricity to the grid. Electricity boards in India are not very healthy (Reference # 32) and its likely that there could be problems with cash flows of BCML. BCML has to take this risk and face this institutional barrier on which they have limited or no control. This situation makes CDM funds even more critical for BCML. It is estimated that, of the total project proponents who get approval from central/state electricity authority to establish bagasse/biomass based power project in India, only a few are successful in commissioning of the plant due to some of the above mentioned barriers. The data on the state of bagasse-based cogeneration suggests that the barriers discussed are strong enough to hinder growth of the sector. The project is additional as it overcomes the above risks and barriers, which traditionally are not core business activities of the sugarcane industry. B.4.3 Additionality test for Prevailing/common practices
Regarding the use of bagasse for export sale of electricity to the grid, less than 14 percent of the 450 operating mills in Indias sugarcane industry produced electricity for sale to the grid in 2003. As of July 2003, only three sugar mills in India (less than 1% of the 450 operating) have installed a high pressure 87 kg/cm2 cogeneration configurations of the proposed project. Out of these three high efficiency cogeneration projects, one is in Uttar Pradesh. In Table 1, only seven out of 118 sugar mills in UP are generating and exporting surplus power to the grid. Most of them use less efficient technology (below 45 kg/cm2 outlet boiler pressure), and export power surplus power to the tune of 1 MW up to 3 MW. A few units use 67 kg/cm2 outlet boiler pressure and export up to 10 MW. Systems with outlet boiler pressures of 45 to 67 kg/cm2 produce less power are far less capital intensive than the proposed BCML Bagasse Cogeneration Project. BCML had an option to install low or medium pressure boilers as against the optimal selected configuration for the proposed CDM activity of 87 kg/cm2 outlet boiler pressure but chose riskier alternative of the latter given the possibility of obtaining carbon financing and demonstrating the viability of these systems in a global carbon economy.

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Table 1: Characteristics of Sugar Mills in Uttar Pradesh in 2003 Total number of Sugar Mills in UP Closed Sugar Mills Sugar Mills under private sector Sugar Mills under Government/semi Government sector Sugar Mills with co-generation and export of power to grid Sugar Mills with similar or better configuration as of HCM (Source : Indian Sugar Mills Association and field visits to UP) 118 17 52 49 7 14
BCML registered as a sugar mill in the year 1956 and has successfully completed forty-five seasons of sugar manufacturing. With long history of sugar production and no power export, BCML would have continued with its historical sugar and energy production processes in the future (i.e., for the baseline scenario) without the availability of carbon financing according to its owners and investors. B.4.4 Additionality test for Regulatory/Legal requirements
There is no legal requirement binding BCML to efficiently burn its bagasse wastes according to national and state environmental regulations. Hence, BCML is not legally bound to invest in the high efficiency bagasse cogeneration activity. The additionality tests in Section B.4 above, therefore, conclude that the proposed project activity is additional in that the anthropogenic emissions of GHGs from the grid would have occurred in the absence of the registered CDM project activity. B.5 Description of how the definition of the project boundary related to the baseline
methodology is applied to the project activity: For the proposed activity, the project boundary is from the point of fuel supply to the point of power export to the grid where the project proponent has a full control. Thus, the boundary covers fuel storage and processing, boiler, STG and all other power generating equipments, captive consumption units and steam consuming equipments, since along with the use of low-pressure extraction steam for the process, part of the electricity generated will be used for auxiliary consumption. Further, upstream emissions should be placed within the project boundary when the project developer can significantly influence these emissions. In principle this could mean that the bagasse source should be included within the system boundaries. However, the project will use only HCMs and another mills-generated bagasse that is available in abundance. Direct off-site
The first unit of BCML at Balrampur, UP. BCML - II Classified - Confidential

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emissions will result from transport of the latter mills bagasse, which are accounted for in the following project emission calculations. As per the baseline emission estimation methodology of the grid, the following grid characteristics apply: 1. UP state grid (UPPCL) is expected to be power deficit over the crediting period 2. The historical and actual records of UPPCL (reference # 17) suggests that there is no import or export of power to or from other states to UPPCL grid, hence, the grid acts as an island with no influence from power generated by other states 3. The UPPCL has the sole authority to make decisions on the purchase of power from BCML/HCM 4. Capacity of UPPCL grid is around 8,909 MW is sufficient to take into account the avoided emissions due to proposed project activity of exporting 14 to 17 MW to the grid. For the calculations of baseline emissions, the individual power plants (existing and proposed) are taken as the baseline boundary. Since the project would not have any T&D losses impacts it is not included in the project boundary. The flow chart and project boundary is illustrated in the following diagram:

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B abhnan S ugar M ills

B agasse B agasse
H aidergarh S ugar M ills
P roject B oundary
B agasse T em p. S torage
N ew B agasse F ired H P B oiler
C O 2 em issions
P ow er G eneration U nit
C O 2 em issions S equestered
S tate E lectricity G rid
E lectricity C aptive C onsum ption
S team for A uxiliary O peration
E nd U ser
C ondenser

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B.6 B.6.1
Details of baseline development Date of completing the final draft of this baseline section: July 2003
B.6.2
Name of person/entity determining the baseline:
BCML and their associated experts (see Annex 2).

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C.
C.1
DURATION OF PROJECT ACTIVITY / CREDITING PERIOD

Duration of the project activity: 30 years
C.1.1
Starting date of the project activity: The project is scheduled to commence commercial production by November 2003.
C.1.2
Expected operational lifetime of the project activity: Life time of the project: 30 years
C.2
Choice of crediting period and related information: Option 1: Option 2: 7 years (2003-2009) with renewals 10 years (2003-2012)
For proposed project, the preferred credit period is 10 years. C.2.2 Fixed crediting period; at most ten (10) years: November 2003 10 years
C.2.2.1 Starting date: C.2.2.2 Length (max 10 years):

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D.
D.1.
MONITORING METHODOLOGY AND PLAN

Name and reference of approved methodology applied to the project activity: Name: BCML monitoring methodology for grid connected renewable energy bagasse/biomass power projects.
A new monitoring methodology is designed in line with the proposed baseline methodology as proposed in Annex 4. The proposed monitoring methodology is for the grid connected renewable energy/bagasse cogeneration project and suitable for the project activity. D.2. Justification of the choice of the methodology and why it is applicable to the project activity: Since the project is a grid connected renewable energy project, the quantity of emission reductions totally depends on the amount of surplus power from the bagasse cogeneration project exported to the grid, which will avoid carbon intensive grid generation. The methodology covers the monitoring of the amount of power exported along with other parameters affecting the quantity of power exported and resulting CO2 emissions. Hence, this is the most suitable monitoring methodology applicable for the project and is similar to that proposed and approved for the Vale do Rosario Project (NM 0001). Description of the Monitoring Plan
The Monitoring and Verification (M&V) procedures define a project-specific standard against which the project's performance (i.e. GHG reductions) and conformance with all relevant criteria will be monitored and verified. It includes developing suitable data collection methods and data interpretation techniques for monitoring and verification of GHG emissions with specific focus on technical / efficiency / performance parameters. It also allows scope for review, scrutinize and benchmark all this information against reports pertaining to M & V protocols. The M&V Protocol provides a range of data measurement, estimation and collection options/techniques in each case indicating preferred options consistent with good practices to allow project managers and operational staff, auditors, and verifiers to apply the most practical and costeffective measurement approaches to the project. The aim is to enable this project have a clear, credible, and accurate set of monitoring, evaluation and verification procedures. The purpose of these procedures would be to direct and support continuous monitoring of project performance/key project indicators to determine project outcomes, greenhouse gas (GHG) emission reductions. The project revenue is based on the units of bagasse generated power exported as measured by power meters at cogeneration plant and check meters at the high-tension substation of the UPPCL.

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The monitoring and verification system would mainly comprise of these meters as far as power export is concerned. The bagasse input is also to be monitored. The measurement of the amount of exported electricity will be determined through looking at monthly sale invoices to UPPCL. The invoices, based on meter readings will also be covered in the regular finance audit. generated with zero net CO2 emissions. The project employs state of art monitoring and control equipment that will measure, record, report, monitor and control various key parameters. Parameters monitored will be quantity and quality of bagasse fuel used, total power generated, power exported to the grid, CO2 content in the flue gas, oxygen content in flue gas, particulate matter emissions from the project, etc.(Details enclosed in the tables given below). These monitoring and controls will be the part of the Distributed Control System (DCS) of the entire plant. All monitoring and control functions will be done as per the internally accepted standards and norms of HCM. The instrumentation system proposed for the project will mostly comprise microprocessor-based instruments of acceptable Indian and electricity sector standards with the mandated regulatory levels of accuracy. All instruments will be calibrated and marked at regular intervals so that the accuracy of measurement can be ensured all the time. The quantity of emission reduction units claimed by the project will be only a fraction of the total generated emissions, which depends on the actual generation mix of the grid in a particular year. UPPCL publishes yearly reports regarding the performance of all power generation units, which include private sector generation units and UPPCLs own generation units. Hence, authentic data related to the measurements, recording, monitoring and control of the generation mix of the UPPCL network is ensured. The UPPCL report contains all information regarding type of generation like hydro, thermal, nuclear, renewable etc., installed capacity, de-rated capacity, performance of generating unit, actual generation, capacity additions during the year, etc., which can be used for verification of generation mix and emission factors for baseline calculation for a particular year. BCML will have access to such information per their power purchase agreement and other negotiations with UPPCL. GHG SOURCES Direct On-Site Emissions Direct on-site emissions after implementation of the project arise from the burning of bagasse in the boiler. These emissions mainly include CO2. However, the CO2 released equals or more than the amount of CO2 taken up by the bagasse / biomass during the growth of sugar cane plants / biomass species, therefore no net emissions occur.
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The
measurement of the quantity of bagasse used will produce evidence that the energy is being
In Uttar Pradesh, sugar crop residues are only available for about 160 to 180 days a year; hence adequate storage facilities are required. This is not expected to generate significant GHG emissions. Methane emissions only occur in anaerobic circumstances and will not take place during the storage of dry bagasse residues as bagasse bales. In principle, nitrous oxide (N2O) emissions could arise from storage. However, no data on emission from storage is available and the amount is considered negligible. We assume the amount of nitrous oxide emissions formed during bagasse to be comparable to the amount of N2O emissions arising from agricultural residues when left on the field. As a consequence the N2O emissions will not be influenced by the project and will therefore not take into account for monitoring purposes. Direct Off-Site Emissions Direct off-site emissions in the proposed project arise from the bagasse transport. It is estimated that the transport of bagasse from Babhnan unit will contribute to emission of 1950 tCO2 per annum. To provide a conservative estimate of the emission reductions, the transport emissions considered as leakage. Since the proposed project uses mill generated bagasse waste only, no additional biomass is grown on account of the project. Therefore, the project does not result in an additional uptake of CO2 by sinks. Indirect On-Site Emissions The indirect on site GHG source is the consumption of energy and the emission of GHGs involved in the construction of bagasse base power plant. Considering grid emissions avoided through bagasse cogeneration and the life cycle assessment of the total power generated, the indirect off-site emissions source is too small vis a vis the project life, and hence not included in total project emissions. No other indirect on-site emissions are anticipated from the project activity. Indirect Off-Site Emissions The indirect off-site GHG source is the emission of GHGs that are involved in the process construction and erection of the transmission lines from the nearest sub station, up to the point from where the project wheels the power.

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Same as above, considering the life cycle assessment of the total power generated and the emissions to be avoided in the life span of 1520 years, the indirect off-site emissions are also negligible and ignored in the monitoring system. No other indirect off-site emissions could occur since the same mill generated bagasse will be used in the proposed project. The electricity generated less own consumption will be exported to the grid to meet the increasing demand of electricity services, and there will be no creation of new activities or demand in other places / sites caused by the project. Project Parameters affecting Emission Reduction Monitoring Approach The general monitoring principles are based on: Frequency Reliability Registration and reporting As the emission reduction units from the project are determined by the number of units exported to the grid (and then multiplying with appropriate emission factor) it becomes important for the project to monitor the net export of power to the grid on a real time basis. Frequency of monitoring The project developer will install all metering and check metering facilities within the plant premises as well as in the grid substation where exported power is connected to the grid. The measurement will be recorded and monitored on a continuous basis by both UPPCL and the project developer through DCS. Reliability The amount of emission reduction units is proportional to the net energy generation from the bagasse cogeneration project. Thus, the monthly kWh meter reading is the final value for estimation of emission reductions due to the project activity. All measurement devices will be of microprocessor based with best accuracy and will be procured from reputed manufacturers. Since the reliability of the monitoring system is governed by the accuracy of the measurement system and the quality of the equipment to produce the result all power measuring instruments must be calibrated against the Indian standards once a year for ensuring reliability of the system. All instruments carry tag plates, which indicate the date of calibration and the date of next calibration. Therefore, the system ensures the final generation is highly reliable.

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Registration and reporting Registration of data is on-line in the control cabin through a microprocessor. However, hourly data logging will be there in addition to software memory. Daily, weekly and monthly reports are prepared stating the generation. In addition to the records maintained by the HCM, UPPCL also monitors the power exported to the grid and certify the same. The other major factors that need to be ensured and monitored are: (1) the use of only bagasse (and if required biomass) fuel for power generation; and, (2) the parameters that would ensure smooth and regular operation of the cogeneration. No other project specific indicators are identified that affect the emission reductions claims. Bagasse Requirement and Utilization Availability of Bagasse The major fuel proposed to be used by the cogeneration plant is bagasse, stockpiled by the Haidergarh (HCM) and Babhnan sugar producing units of BCML. The bagasse saved by these sugar mills, after meeting the sugar plant requirement, will be supplied to the cogeneration plant. Hence, production of electricity is mainly dependant on the bagasse received from these sugar mills. The receipt of bagasse to the cogeneration plant mainly depends on the following parameters: Total cane crushed by the sugar mills Variety / fiber content of the sugar cane crushed In-house bagasse consumption by sugar mills As per the DPR there will be no shortage of bagasse.
Quantity of the Bagasse fuel used in the boiler The total amount of saved bagasse received from the Haidergarh and Babhnan mills will be based on the total sugar cane crushing, bagasse generated and use for internal consumption. The fuel entered into the plant premises will be first dumped in the fuel storage area from where it will be taken to the fuel processing machinery with the help of belt conveyors. The fuel processing machinery will cut the bagasse fuel into the required size and the processed bagasse fuel will be taken to boiler bunkers with the help of belt conveyors from where the fuel finally enters the boiler. The belt conveyors, which feed the bagasse fuel from processing machinery to boiler bunkers, consist of a metal detector, tramp iron detector, magnetic separator and online weighing system. Metal detector, tramp iron separator etc. will prevent any metal particles entering into the boiler and ensure that only fuel is conveyed to the boiler. An online weighing system provided to the belt conveyors measures, records and transmits the actual quantity of the fuel entering into the boiler for online monitoring in the DCS. The weighing system will be

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calibrated regularly to ensure the accuracy of the measurement. The data will be recorded for further verification. Since it is mandatory for sugar industries to submit yearly performance records (RT-8C form), which also includes above parameters, to the government, these figures are to be crosschecked from this record. The amount of biomass purchased, if any, will be based on invoices / receipts from farmers and/ or fuel contractors. In case any start-up fossil fuel would be purchased this amount will also become evident from the audit report. However the DPR clearly indicates that the bagasse generated at Haidergarh and Babhnan will be sufficient for 320 days of cogeneration operation.
Quantity of the additional biomass fuel purchased HCM will maintain proper records of additional biomass if procured and will be kept open for verification. The quantity of the fuel received / purchased will be measured, recorded and monitored from starting point in the project i.e. at the entry of the project premises. The project developers will install a computerized weighing system through which each truck of the fuel will pass through. The information of each truck of bagasse/biomass fuel will be monitored by promoters regularly, through computerized management information systems. No truck with bagasse/biomass fuel will be able to enter into the plant without weighing the fuel. The weighing system will be calibrated and sealed regularly as per the prevailing practices. Bagasse used in the boiler The main type of fuel proposed for the power generation is only bagasse. The properties of the bagasse fuels like ultimate analysis, calorific value, ash composition etc. are already established and will be consistent in the region. However, it is proposed to monitor various properties of bagasse fuels by taking samples at random from the fuel lots from the processed fuel so that in case of any drastic change in the properties, corrective actions can be taken. The measurement of fuel properties like ultimate analysis, calorific value etc. will be done at reputed laboratories as per international practices and data or documents will be kept open for verifiers. The data will also be computerized and monitored through management information system of the DCS.
Operational Parameters of the Cogeneration Unit Total Power Generated The total power generated by the power project will be measured hourly in the plant premises to the best accuracy and will be recorded, monitored on a continuous basis through DCS. All measurement devices will be microprocessor based with best accuracy and will be procured from reputed manufacturers. All instruments will be calibrated at regular intervals. All instruments

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carry tag plates, which indicate the date of calibration and the date of next calibration. The parameter will substantiate the smooth operations of the cogeneration plant. During verification, the total power generated per month would be verified against the monthly invoice /billing of the power exported to the grid. Power consumed by the plant auxiliaries The power consumed by plant auxiliaries will be recorded in the plant premises to the best accuracy. This will be recorded and monitored on a daily continuous basis through DCS. All measurement devices will be microprocessor based with best accuracy and will be procured from reputed manufacturers. All instruments will be calibrated at regular intervals. All instruments carry tag plates, which indicate the date of calibration and the date of next calibration. The total amount of power consumed hourly by the auxiliaries would affect the total power to the exported to the grid and therefore the amount of GHG reductions. Therefore, any increase in the consumption pattern of the auxiliary system would be attended to. Power exported to the grid The project developer will install all metering and check metering facilities within the plant premises as well as in the grid substation where exported power is connected to the grid. The measurement will be recorded and monitored on an hourly continuous basis by both UPPCL and the project developer through DCS. In addition to the records maintained by the promoter, UPPCL also monitors the actual power exported to the grid and certify the same. All measurement devices will be of microprocessor based with best accuracy and will be procured from reputed manufacturers. All instruments will be calibrated at regular intervals. All instruments carry tag plates, which indicate the date of calibration and the date of next calibration. Efficiency of the cogeneration project activity. High-pressure boiler of 87 kg/cm2 at 510oC will be used by the project. The performance of the boiler is already predicted and can be verified. However, the boiler proposed for the project is a multi-fuel fired boiler, which can use almost any type of biomass fuel. The inlet and outlet steam parameters will be measured and monitored along with the parameters of fuel and feed water. Extraction and condensing type of steam turbine with generator set of 20 MW will be used by the project. Quantity with major quality parameters of the steam at the inlet to the turbine will be measured on-line and monitored through DCS. Based on the measured input and output parameters cogeneration system efficiency would be identified and the necessary corrective actions will be taken.
will be
calculated and monitored by DCS. In case of any irregularity, the root cause of the deviations

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All the above parameters / factors will demonstrate the performance of the project at any point of time. Verification The performance of the bagasse based cogeneration project should lead to CO2 emission reductions by the avoidance of grid-based carbon dioxide emissions. In other words, the longer the cogeneration power plant runs and exports power to the grid, there higher the emission reductions. The project control system comprises a state of the art sophisticated control and monitoring system like Distributed Control System, which measures, collects the information about various process parameters, records, monitors and controls on a continuous basis. Fully functional management information systems will be built in DCS so that accessing and verification of actual data are possible at any point of time. The major activities to be verified are as under: Verification of various measurement and monitoring methods Verification of instrument calibration methods Verification of data generated by DCS Verification of measurement accuracy Like above activities, the following major project parameters affecting the emission claims need to be verified based on the available operating data: Cane crushing by Haidergarh and Babhnan sugar units Quantity of the bagasse / biomass fuel along with the additional biomass fuel purchased Type of biomass or other fuels used in the boiler Efficiency of cogeneration system. Total generation of power and captive & auxiliary power requirements. Power exported to the grid Particulate matter emissions

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D.3.
Data to be collected in order to monitor emissions from the project activity, and how this data will be archived:
Considering the above, the details of total power generated and other important project parameters to be monitored and verified are as under. Note CP: Credit Period a) Parameters affecting the Emission Reduction potential of the Project Activity
Data variable Data unit Measured (m), Recording calculated (c) Frequency or estimated (e) KWh Measured Continuous Proportion of data to be monitored 100% How will the data be archived? (electronic/ paper) Electronic For how long is archived data to be kept? Comment
ID Data type number
D.3.(a)1 Power
Total Electricity generated
CP+2 years
Measured in the plant premises to the best accuracy and will be recorded, monitored on a continuous basis through DCS. All measurement devices will be microprocessor based with best accuracy and will be procured from reputed manufacturers. As per the regulation of UPPCL. Details provided in Monitoring Approach
D.3(a).2 Power
Power export KWh
Measured
Continuous
100%
Electronic
CP+2 years

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(b) Fuel related Parameters affecting the Project Activity

ID number Data type Data variable Data unit Measured (m), Recording calculated (c) Frequency or estimated (e) MT Measured Hourly Proportion of data to be monitored 100% How will the data be archived? (electronic/ paper) Paper For how long is archived data to be kept? Comment
D.3.(b)1 Fuel
Quantity of Bagasse Quantity of Biomass Calorific value of Bagasse Calorific value of Biomass used, if any Quantity of fossil fuel(s) used if any Calorific value of Fossil fuel(s) used, if any
CP+2 years
D.3.(b)2 Fuel
MT
Measured
Hourly
100%
Paper
CP+2 years
D.3.(b)3 Fuel
Kcal/kg
Actual sample testing
Quarterly
100%
Paper
CP+2 years
D.3.(b)4 Fuel
Kcal/kg
Monthly
100%
Paper
CP+2 years
D.3.(b)5 Fuel
MT/KL
Measured
Monthly
100%
Paper
CP+2 years
D.3.(b)6 Fuel
Kcal/kg
Sample test report
Lot wise
Paper
CP+2 years
Supplier of fossil fuel will supply this data for each lot which can be rechecked by project proponent from test lab.

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(c)
Parameters affecting the efficiency of the Project Activity

Data type Data variable Data unit Measured (m), calculated (c) or estimated (e) Recording frequency Proportion of How will the For how long data to be data be is archived monitored archived? data to be (electronic/ kept? paper) 100% Paper CP+2 years Comment
ID number (Please use numbers to ease crossreferencing to table D.6) D3 (c) - 1
Equipment/ operation specific Operation specific
Efficiency of Cogeneration activity Cogen Plant Heat Rate
Calculated
Continuous (per hour) Continuous (per hour)
D3 (c) 2
kcal/kWh
Calculated
100%
Paper
CP+2 years

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(d)
Parameters for the environmental aspect monitoring

Data type Data variable Data unit Measured Recording Proportio How will (m), n of data the data be frequency calculated (c) to be archived? or estimated monitored (electronic/ (e) paper) Measured and Calculated Bimonthly Random Sample Paper For how long is archived data to be kept? CP+2 years Comment
ID number (Please use numbers to ease crossreferencing to table D.6) D3 (d) 1
Stack Emissions
Suspended Particulate Matter
Mg/Nm3
The project consists of Electro-Static Precipitator (ESP), which controls the particulate matter emissions within the prescribed levels. Regular monitoring of particulate matter emissions will be done by extracting air samples after the ESP and measuring the level of emission. The SPM levels in the stack emissions are measured to ensure environmental compliance

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D.4.
Potential sources of emissions which are significant and reasonably attributable to the project activity, but which are not included in the project boundary, and identification if and how data will be collected and archived on these emission sources.
ID number
Data type
Data variable Data unit Measured (m), calculated (c) or estimated (e)
Recording frequency
Proportion of data to be monitored
How will the data be archived? (electronic/ paper) paper paper
For how long is archived data to be kept? CP+2 years CP+2 years
Comment
D.4.1 D.4.2
Fuel Gas
Biomass trucks Emission by trucks
Nos. Kg
Measured Calculated
Daily Daily
100% 100%

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D.5.
Relevant data necessary for determining the baseline of anthropogenic emissions by sources of GHG within the project boundary and identification if and how such data will be collected and archived.
ID number
Data type
Data variable
Data unit
Will data be collected on this item? (If no, explain). Yes, from SEB*
How is data archived? (electronic/paper) Paper
For how long is data archived to be kept? Till completion of crediting period
Comment
D.5.1
Power
Sector wise installed capacities Sector wise power generation (all sources) CO2 emissions of coal plants CO2 emissions of gas plants
MW
HCM will communicate to UPPCL and request to provide the required data. Also, it can collect data taken from other reliable sources. HCM will communicate to UPPCL and request to provide the required data. Also, it can collect data taken from other reliable sources. HCM will communicate to UPPCL and request to provide the required data HCM will communicate to UPPCL and request to provide the required data
D.5.2
Power
Million kWh
Yes, from SEB
Paper
Till completion of crediting period
D.5.3
Gas
Kg/kWh
Yes, from SEB/
Paper
Till completion of crediting period Till completion of crediting period
D.5.4
Gas
Kg/kWh
Yes, from SEB / OECD
Paper
* SEB : State Electricity Boards

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D.6.
Quality control (QC) and quality assurance (QA) procedures are being undertaken for data monitored. (Data items in tables contained in section D.3., D.4. and D.5 above, as applicable)
Responsibility of project promoter includes development and implementation of QC & QA procedures for data collection of key parameters affecting the GHG claims of the project activity. The following measures are suggested for this purpose: To appoint a competent CDM in charge who will be accountable for generation of ERs. His task should include required data collection of required data, measurements, record keeping, monitoring, crosschecking, preparation of GHG emission worksheets, internal verification etc. To define the proper routine procedures for professional measurements, recording, data entry, reporting procedures with reasonable time and cost etc.
Uncertainty level of data
(High/Medium/Low)
Data
Are QA/QC procedures planned for these data? Yes
Outline explanation why QA/QC procedures are or are not being planned.
D.3.(a)1
Low
This data will be used in cross checking (QA) of power export and emission reduction claims by project activity.
D.3.(a)2
Low
Yes
This is the most important data for project promoter and power purchaser and will be used for calculation of emission reductions by project activity.
D.3.(b)1
Low
Yes
This data will be used as supporting information (QA) to calculate emission reductions by project activity.
D.3.(b)2
Low
Yes

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Data

(High/Medium/Low)
Are QA/QC procedures planned for these data? Yes
D.3.(b)3
Low
D.3.(b)4
Low
Yes
D.3.(b)5 D.3.(b)6 D.3.(c)1 D.3.(c)2 D.3.(d)1 D.4.1 D.4.2
Low Low Low Low Low Low Medium
Yes Yes No No Yes Yes No
This data will be used for calculation of leakage emissions. This data will be used for calculation of leakage emissions. This data is related to the performance of project activity This data is related to the performance of project activity This data will not be used for calculation of emission reduction This data will be useful to estimate leakage Emissions Calculated. Also Indian Trucks and Fuel companies will comply with Euro-II / Bharat-II and other advance emission norms.
D.5.1 D.5.2
Low Low
Yes Yes
This data will be collected from UPPCL This data will be collected from UPPCL

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Data

(High/Medium/Low)
Are QA/QC procedures planned for these data? No No
D.5.3 D.5.4
Medium Medium
This data will be collected from UPPCL This data will be collected from UPPCL
D.7
Name of person/entity determining the monitoring methodology:
BCML and their associated experts (see Annex 1).

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E.
CALCULATION OF GHG EMISSION BY SOURCES
The estimation approach used for the calculation of the greenhouse gas emission by sources for the BCML project is based on a comparative analysis of the methodology developed by and approved by the CDM EB for the Vale do Rosario Bagasse Cogeneration Project (NM 0001), a combined margin methodology to a new proposed modified combined margin method (MCMM) that may be more conservative to the former if reliable Ex Ante data is available regarding the future capacity additions and fuel mix of grid. The calculations presented below are based on the methodologies outlined in Annex 3.
E.1
Description of formulae used to estimate anthropogenic emissions by sources of greenhouse gases of the project activity within the project boundary: (for each gas, source, formulae/algorithm, emissions in units of CO2 equivalent)
The anthropogenic emissions from within the boundary of the bagasse cogeneration project activity (EMBC) are estimated on a yearly basis as follows: [EQ. 1] Where: EMBC = annual emissions from within the project boundary expressed in t CO2e/yr PSG = annual amount of exported power sold to the grid by the bagasse cogeneration plant in kWh/yr CB = carbon emission factor of bagasse in t CO2-e/kWh EMBC/yr = ( PSG) * CB in t CO2-e/yr
And the total project emissions that occur within the boundary over the crediting period are: [EQ. 2] Where: y = summation over project crediting years (yr) EMBC = y [(PSG)*CB] in t CO2-e for the project crediting period
The sources of greenhouse gas emissions with the Project within the project boundary include potential emissions from the production of sugarcane and combustion of the bagasse in the boiler. In terms of cane production, two potential sources of GHGs exist: any changes in carbon dioxide uptake from removing the cane from the fields and potential methane production from storing the bagasse prior to burning. As the proposed cogeneration power plant uses sustainably-grown bagasse (crops are annually re-grown and land is not permanently left fallow), the cane growing
BCML II Classified - Confidential
ANNEX : Project Design Document

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carbon emissions are zero due to the carbon recycling process. In regards to potential methane production from bagasse piles, this is negligible given the extremely short storage time of the bagasse piles. As with the Vale do Rosario Bagasse Cogeneration Project (NM 0001), both of these potential emission sources will be considered as zero. As, the bagasse also contains only negligible quantities of other elements like nitrogen, sulphur etc. and the combustion of the bagasse5 leads to minimal releases of GHG emissions these are considered as negligible also. Hence the Project will not release any additional carbon dioxide or other GHG emissions to the atmosphere within the project boundary on an annual basis or for the crediting period.
E.2
Description of formulae used to estimate leakage, defined as: the net change of anthropogenic emissions by sources of greenhouse gases which occurs outside the project boundary, and that is measurable and attributable to the project activity: (for each gas, source, formulae/algorithm, emissions in units of CO2 equivalent)
Anthropogenic emissions from any leakage activity associated with the project for any year are determined by the following algorithm: [EQ. 3] Where: EML L CL And: [EQ. 4] EML = y [(L) * CL] in t CO2-e for the project crediting period = annual emissions from leakages from the project activity in t CO2-e/yr = amount of leakage per year in units/yr = carbon emissions factor of leakage in t CO2-e/unit EML/yr = (L) * CL in t CO2-e/yr
The major leakage activity that contributes GHG emissions outside the project boundary for the project activity is the emission of carbon dioxide from transporting bagasse from the Babhnan Sugar Mill to the proposed cogeneration power project at Haidergarh. For transportation of 81,120 MT of bagasse on a yearly basis from Bhabnan to Haidergarh, the emissions from leakage are calculated as 1,950 t CO2-e per year due to the use of diesel trucks. 6 Detailed calculations are
The bagasse is expected to contain 53% moisture; this will keep the temperatures at steam generator burners low enough not to produce nitrogen oxides. Moreover, the specification of the steam generator will stipulate over fire air system with staged combustion, which will ensure reduction in nitrogen-oxide emissions. 6 Assumes 40 liters diesel per trip and 1,940 trips (one way) with 5 MT truck load. IPCC factor for Diesel 74.10 tones CO2/TJ. BCML II Classified - Confidential
ANNEX: Project Design Document

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provided in Enclosure-II. This is a conservative estimate as it does not take into account the expected efficiency improvement is transportation vehicles in next 10 years. Potential leakages from transmission and distribution (T&D) losses during power export from the cogeneration project to the substation (grid) would be very low as compared to the T&D losses of the UPPCL grid, which are about 25%. Since, the UPPCL grid is not considered in the baseline project boundary, it is conservative to exclude project T&D losses. Further, the T&D losses of UPPCL grid include theft, which is difficult to monitor and verify. E.3 The sum of E.1 and E.2 representing the project activity emissions:
The anthropogenic emissions of the proposed project are the sum of the within boundary project emissions (EMP) and leakage emissions (EML), which are represented as follows: [EQ. 5] E.1 +E.2 = EMP + EML = 0 + EML in t CO2-e/yr or t CO2-e over the crediting
period
The annual net project emissions for the proposed CDM activity are estimated below as 1,950 tones of CO2-e per year, which result entirely from transporting the bagasse by diesel trucks to the HCM cogeneration plant during the off-season (120 days per year).
E.4
Description of formulae used to estimate the anthropogenic emissions by sources of greenhouse gases of the baseline: (for each gas, source, formulae/algorithm, emissions in units of CO2 equivalent)
The algorithms for the calculations of the baseline anthropogenic emissions are determined by annually estimating and summing amount of power exported to the grid by the bagasse cogeneration plant multiplied by the emission factor for the avoided baseline generation by energy sources. Determining the avoided grid power displaced by the project activity The cogeneration plant will generate 20 MW and export to the UPPCL grid a capacity of 13.96 MW during the crushing season and 17.95 MW during the off-season period after meeting its auxiliary power needs, thereby delivering 93.05 GWh of electric energy in the first year of project operation, 98.86 GWh in the second year and 104.68 GWh/year in the third year and onward years to the UPPCL grid. No transmission and distribution losses are considered since the project is exporting power at high voltage of 132 kV at a short distance. Therefore, a conventional energy equivalent of 1,034.35

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million kWh for a crediting period of 10 years in UP would be replaced by exporting power from the proposed 20 MW non-conventional renewable sources bagasse based cogeneration power plant. Total exported power from the renewable energy project activity [EQ. 6] Where: TPexp - Total electricity exported to grid per annum by the project activity (kWh/yr) GPgen - Electricity generated per annum by project activity (kWh/yr) CPcap - Electricity captive consumption (sugar mill + cogeneration auxiliary) per annum (kWh/yr) Determining the emission factor of each baseline generation source The estimation methods of the baseline emission factors are most complicated, the procedures and values for such are provided in detail below. A realistic emission factor estimation process for grid connected renewable energy projects, where data is reliable and verifiable, needs to account for changes in the grids capacity additions operating and build margins over time as well as any impacts the project may have on the future installed grid capacity. The BCML project activity will increase installed capacity (marginally) of state grid, which will help to reduce energy and demand shortage. Also, it will avoid / delay the capacity addition of equivalent of project size and reduce the carbon intensity of the grid mix. The baseline methodology recommended by the UNFCCC CDM states that an emission coefficient (measured in kgCO2/kWh) calculated by using the following parameters: a) The average of the approximate operating margin (OM) and the build margin (BM), where; i) The approximate operating margin is the weighted average emissions (in kgCO2equ/kWh) of all generating sources surviving the system, excluding hydro, geothermal, wind, low-cost biomass, nuclear and solar generation;
TPexp = GPgen CPcap
ii)
The build margin is the weighted average emissions (in kgCO2equ/kWh) of recent capacity additions to the system, defined as the higher of most recent 20% of plants built or the 5 most recent plants;
OR b) The weighted average emissions (in kgCO2equ/kWh) of current generation mix.

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Simplistically, the formula for the baseline emission factor of each generation source is the product of the percentage of power generated without the low cost must-run projects (Pwlc) times the generation sources emission factors, determined annually over the credit period then summed. The specific formulae used for estimation of the anthropogenic emissions by the generation of the baseline are given below in a step-wise order. a) Estimation of the baseline without low run cost power generation percentages by fuel type The power generated without the low run cost projects (Pwlc) which is the amount of total power generated by the grid annually (Ptot) minus the amount of power generated by the low run cost projects (Plrc) In the proposed projects state generation mix, for example, coal and natural gas based power projects are responsible for most of the GHG emissions while renewable energy projects account for many of the must run projects in the future. Baseline power generation [EQ. 7] Where: Ptot - Power generation by all sources of grid mix (kWh/yr) Plrc - Power generation by low running cost projects (kWh/yr) Pwlc - Power generation by all sources, without low running cost plant (kWh/yr) Next, the percentage of power produced at the grid by each fuel type per year over the crediting period on a sector wide basis is determined: Sector wide baseline power generation percentages
Pwlc = Ptot Plrc
[EQ.8] PS fuel =
Pf Pwlc
x100
Where: PSfuel - Share (in %) of power generation by each fuel used (coal and gas in present scenario), out of total power generation excluding, power from low running cost plants Pf - Power generation by fuel used (in Million kWh units) This fuel percentage factor is critical to calculating the operating margin emission factor for each fuel type in the baseline generation mix.

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b) Estimation of the operating margin emission factor The operating margin emission factor is estimated next for each baseline generation source (i.e., without low run cost fuel type) for each year of the crediting period. The processes for calculating the operating margin is the same for the CM and CMM baseline emission factor methods. It is determined by the following algorithm: CM and MCM Operating Margin (OM) emission factors [EQ. 9] Where: OMbef - OM Emission factor of baseline calculated for each year (kg/kWh) Efuel - Emission factor (actual or IPCC) for each fuel type considered (e.g. coal, gas) in tons CO2-e/kWh fuel type). c) Estimation of the build margin using the combined margin and modified combined margin approaches of each baseline generation source The alternative options for estimating the build margin (BM) emission factors for each source of baseline generation by the grid per year over the credit period are presented below. The formulae for estimating the build margin emission factors are presented below using a comparative analysis of first the CMM estimation method (Scenario 1) as contrasted to use of the proposed new MCMM (Scenario 2) to determine the most conservative approach when estimating emission reductions. Scenario 1: Build margin emission factor estimation using the combined margin methodology, the average of the approximate operating margin and the build margin
OM bef = PS fuel x E fuel

credit period for scenario 2
for base year for Scenario 1 and for each year of
The following equations are adopted from the UNFCCC recommendations for estimating the CM and the approved CM procedures used by VRBC Project (NM0001). [EQ. 10] BMyr = weighted average of emissions by more than recent 20% capacity additions. Where: BMCMyr = Combined margin build margin for the base year.(kg/kWh)

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For scenario II: [EQ. 11] BM CPYR = BM yr + CPYR Where: BMCMCPYR -- Combined margin build margin for credit period (straight line over credit period) (in kg/kWh) BMCMyr10 -- Combined margin build margin at 2010 with 10% reduction, taking into account renewable energy expansion target set by state electricity board CPYR -- Year at which Build Margin is required to be calculated CP -- No. of years in Credit Period
BM yr10 BM yr CP
Approximate operating margin and build margin is calculated as per the OECD and IEA reference document (reference # 5) and UNFCCC methodology specified for small scale activities. For estimation of operating margin, weighted average of all resources, excluding hydro, geothermal, wind, low-cost biomass and solar generation is considered. For estimation of the build margin (or recently built) the weighted average emissions (in kgCO2/kWh) as most recent 20% of plants built or the 5 most recent plants of recent capacity additions, which ever is greater. In this case , actual performance data including CO2 emission figures of coal based thermal power plants operating in UP state are considered. Share of gas-based projects is very small (2.81%) as compared to coal based, hence standard value of CO2 emission by combustion of gas is considered for baseline calculations (and not actual values). For Natural Gas based power plants IPCC standard emission factor of 56.10 kg CO2/GJ and 45% efficiency is considered. For calculation of build margin, UPPCL data regarding recently build 5 power plants is used which accounts for more than 20 % of total installed capacity of UPPCL. As per the build margin factor for base year (2001) comes out to be 1.0750 kg of CO2/kWh. The following steps are used in calculating the CM emission factor for the grid generation sources by the project activity. The table presents the relevant project data used in the calculations. For calculation of build margin, following UPPCL data regarding recently build 5 power plants is used as under. Also this capacity is more than 20 % of total installed capacity As per above table, average build margin co2 emission factor is considered as 1.075 kg CO2/kWh. An improvement of 10 % is assumed for build margin, till 2010 considering the central government guideline regarding increase of renewable energy

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share in the present generation mix to 10% by the year 2010.The same trend has been extended till end of credit period i.e. 2013. This is a conservative assumption. Scenario 2: Build margin emission factor estimation using the modified combined margin methodology
In the combined margin methodology, the baseline build margin does not necessarily account for the effect of proposed / future capacity additions to the grid for estimation of carbon intensity of the grid for future years (credit period). The proposed Modified Combined Margin Method (MCMM) has both the components of combined margin i.e. operating margin and build margin and also takes into account the present generation mix as well as the capacity additions for the credit period (using Ex Ante data for the emission calculations). As stated above in MCMM, the pertaining margin is calculated as in combined margin method for each year of the credit period with capacity addition consideration. In the MCMM, the build margin for base year (latest year for which exact data is available) is calculated based on the current generation mix. The future capacity addition considerations are based on the research conducted by the project sponsors on the state electricity grid and government policy documents. The following equations are proposed as a new modified combined margin methodology that can be replicated for grid connected renewable energy projects where there exists reliable Ex Ante information regarding the future build margin capacity additions of a grid.
[EQ. 12]
BMyr = weighted average of emissions by recent 20% capacity additions.
Where:
BMyr = Build Margin for base year.(kg/kWh)

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For scenario II:

BM yr10 BM yr BM CPYR = BM yr + CPYR CP
[EQ. 13]
Where:
BMCPYR = Build Margin for credit period (straight line over credit period) (in kg/kWh) BMyr10 = Build Margin7 at 2010 with 10% reduction CPYR = Year at which Build Margin is required to be calculated CP = No of years (10 years for 10% reduction) OR Credit Period
[EQ. 14] Where: BMMCMyr -- Modified combined margin build margin for each year in the crediting period MCM = (OMbef + BMCPYR) / 2 (in Kg/kWh)
MCM
-- Modified Combined Margin (MCM) Factor
Using the above procedures, the calculation steps for the proposed project activity are:
Step 1 Step 2 : : Modified Combined Margin Factor Units exported UPPCL CO2 reduction to = = Selected lowest conservative value Combined Margin over of Credit Period. (Export in season x season days x hours of operation) + (Export in off-season x off-season days x hours of operation) Units exported to UPPCL grid x Modified Combined Margin Factor
Step 3
emission
The Modified Combined Margin is calculated as average of build and operating margin. As conservative estimate lowest value that is expected during the credit period is taken. This is illustrated by the graph below (Legends used on the Chart are OM: Operating Margin; BM: Build Margin; MCM: Modified Combined Margin; BEF: Baseline Emission Factor).
Even with Government encouragement there are hurdles (barriers) with implementation of renewable energy projects, which is evident from the fact that in 2003, less than 3 % is the share of renewable energy in the UP grid generation mix. Also, it is not very practical to estimate the build margin based on the future projects of next 10 years of credit period. However, to take into account the future capacity additions of renewable energy projects, build margin emission factor has been reduced by 10% over a period of 10 years (2001 - 2010 extended up to 2013 end of credit period) and is, therefore, a conservative estimate. BCML II Classified - Confidential

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Chart 1 : Baseline Carbon Intensity
1.10
Carbon Intensity (Kg/kWh)
1.05 1.00 0.95 0.90 0.85 0.80 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 OM BM MCM BEF
Credit Period
Final (Net) Baseline Emission Factor (NEFB) = Selected conservative value (0.928 kg/kWh)
E.4.1 Scenario-wise, description of estimation of CO2 emissions is as under The proposed bagasse cogeneration plant will displace 13.96 MW of fossil-fuel grid electricity during the crushing season and 17.95 MW during the off-season period (after meeting its auxiliary power needs). It is expected to deliver 93.05 GWh of electric energy in the first year of project operation, 98.86 GWh in the second year and 104.68 GWh/year in the third year and onward years to the UPPCL grid. No transmission and distribution losses are considered in the greenhouse gas accounting since the project is exporting power at high voltage of 132 kV at a short distance. Therefore, a conventional energy equivalent of 1,034.35 million kWh for a crediting period of 10 years in UP would be replaced by exporting power from the proposed 20 MW non-conventional renewable sources bagasse based cogeneration power plant. In the baseline scenario, there would be an estimated 936,289 tonnes CO2 equivalents being produced by the grid. As the BCML Haidergarh Bagasse Cogeneration Project produces no GHG emissions, the emission reductions from the Project over a 10 year crediting period are estimated to be 936,289 tonnes CO2 equivalents.
For detailed calculation refer Excel Spread Sheet of Enclosure II. BCML II Classified - Confidential

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E.4.2
Scenario-1: Combined Margin average of the operating margin and the build margin Approximate operating margin and build margin is to be calculated as per the OECD and IEA reference document (reference # 5) and UNFCCC methodology specified for small scale activities. Under this Scenario1, hydropower projects being an oldest way of generating electricity and are low operating cost and must run projects therefore the effect of hydro projects has not been considered for baseline calculations. Further, it is assumed that all the hydropower does not lead to emission of methane due to inundation of vegetation. As per the study from the OECD (OECD, 2000) and IPCC guidelines (IPCC, 1995) standard CO2 emission factors for coal and natural gas has been considered as follows. Coal Gas 96.10 kg CO2 / GJ 56.10 kg CO2 / GJ
Thermal efficiency of coal plants in UP is based on (i) actual data available on CO2 emissions from published information and (ii) using IPCC factors as mentioned above. The Table E4-1 below presents the actual emissions factor based on the respective plant efficiencies and CO2 emission for each coal based plant using IPCC emission factor. It is observed that use of IPCC emission factor gives conservative values.

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Table E4-1: Power Plant performance and CO2 emissions

Sr. No. Power plant location Installed Capacity (MW) 1630 385 848 1442 274 220 1000 2000 330 840 Generation Capacity (MW) 1630 135 653 1014 165 80 960 1545 195 826 Plant (%) 31 22 34 25 24 25 33 36 23 30 Coal (kg/kWh) 0.70 1.02 0.65 0.88 0.90 0.88 0.66 0.61 0.96 0.74 Coal CO2 emission (kg/kg) 1.329 1.329 1.329 1.329 1.329 1.329 1.217 1.620 1.329 1.329 Calculated CO2 emission (kg/kWh) 0.93030 1.35558 0.86385 1.16952 1.19610 1.16952 0.80322 0.98820 1.27584 0.98346 Efficiency Required Grade E,F E,F E,F E,F E,F E,F E,F E,F E,F E,F
1 Anpara 2 Harduaganj 3 Dadri 4 Obra 5 Panki 6 Paricha 7 Rihand 8 Singrauli 9 Tanda 10 Unchahar
Total / wt. 8969 7203 31.04 0.72 E, F 1.38 0.986 Avg. Source: A paper on Anthropogenic Emissions from Energy Activities in India: Generation and Source Characterization by Moti L. Mittal and C. Sharma
Share of gas-based projects is very small (2.81%) as compared to coal based, hence standard value of CO2 emission by combustion of gas is considered for baseline calculations (and not actual values). For Natural Gas based power plants IPCC standard emission factor of 56.10 kg CO2/GJ and 45% efficiency is considered. For estimation of operating margin, weighted average of all resources, excluding hydro, wind, low-cost biomass and solar generation is considered. Operating margin for the base year is calculated as 0.97 kg CO2 e/kWh. For calculation of build margin, UPPCL data regarding recently build 5 power plants is used which accounts for more than 20 % of total installed capacity of UPPCL. As per the Table-E4-2 build margin factor for base year (2001) comes out to be 1.0750 kg CO2/kWh.
Table E4-2: Build margin calculation

Sr.No. Power plant name / location Anpara A Anpara A-Phase II Anpara B Tanda Type Capacity (MW) 420 (2 x 10) 1x210 1x500 930 (3x310) Year of commissioning 1987 1988 1994 1987 CO2 emission (kg/kWh) 0.93030 0.93030 0.93030 1.27584
1. 2. 3. 4.
Thermal- coal based Thermal- coal based Thermal- coal based Thermal- coal based

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Sr.No.
Power plant name / location
Type
Capacity (MW)
Year of commissioning
Khara Hydro 1x22 1992 TOTAL 2082 Wt. Avg. 1.0750 Source: 1) UPPCL Report, Statistics at a Glance March 2002 2) A paper on Anthropogenic Emissions from Energy Activities in India: Generation and Source Characterization by Moti L. Mittal and C. Sharma
5.
CO2 emission (kg/kWh) 0.00
Combined margin for scenario 1 is calculated as 1.021 kg CO2 e/kWh. E.4.3 Scenario 2: Baseline estimation using Modified Combined Margin Method Since the selected state grid is power deficit, there is a continuous addition of capacity in all sectors of grid mix. To take care of this, a modified combined margin method (MCMM) as presented in annex 3 of this document takes into account the present generation mix as well as the capacity additions for the credit period. In the combined margin methodology (Scenario 1), the effect of proposed / future capacity additions are not considered for estimation of carbon intensity of the grid for future years (credit period). In the modified combined margin method, operating margin is calculated as in combined margin method for each year of the credit period with capacity addition consideration. It is expected that new coal based thermal power plants will have better efficiency, as a conservative measure, this is taken into account which calculating operating margin. The build margin is reduced by 10% over the credit period, which is based on the central / state policy and other intervention. For each year of the credit period, the combined margin is calculated by taking average of operating and build margin respectively. Following are the steps to calculate the CO2 emission reduction as per the modified combined margin:
Step 1 Step 2 : : Modified Combined Margin Factor Units exported UPPCL CO2 reduction to = = Selected lowest conservative value Combined Margin over of Credit Period. (Export in season x season days x hours of operation) + (Export in off-season x off-season days x hours of operation) Units exported to UPPCL grid x Modified Combined Margin Factor
Step 3
emission
The year-wise values of the credit period's modified combined margin (based on modified operating and build margin) are presented in following Table.

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Table - E4-3: Modified baseline emission factors

Sr. No. Operating Years Modified Operating Margin 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0.97 0.97 0.95 0.92 0.92 0.91 0.91 0.91 0.91 0.91 Modified Baseline Emission Factors (kg CO2 / kWh) Modified Build Margin 1.04 1.03 1.02 1.00 0.99 0.98 0.97 0.96 0.94 0.93 Modified Combined Margin 1.00 1.00 0.98 0.96 0.96 0.95 0.94 0.93 0.93 0.91
The lowest value of modified combined margin 0.91 kg CO2/kWh is selected as baseline emission factor for the credit period.
E.5
Difference between E.4 and E.3 representing the emission reductions of the project activity:
Finally, the annual emission reductions by the project activity can be calculated using the above derived values with the following equation: [EQ. 15] Where: ER - Emission reduction per annum by project activity (ton CO2-e/yr) TPexp - Total clean power export to grid per annum (kWh/yr) NEFB - Final Emission Factor of baseline (ton CO2-e/kWh) NEFP - Net Emission Factor of project activity baseline (ton CO2-e/kWh) EL Emission Leakage (ton CO2-e/kWh)
ER = TPexp x( NEFB NEFP ) EL
Following formula is used to determine the emission reductions for the project activity:
CO2 emission reduction due to project activity = Net CO2 baseline emission Project Emission x Electricity exported to grid (in kWh)

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The calculations are as follows for using the alternative build margin emission factors: For Scenario 1: Emissions reductions of the proposed project activity using the combined margin baseline emission methodology Emission reduction potential = ( 1.020874 kg/kWh PE ) x 1050.32 million kWh = 1,072,245 19,500 tones of CO2 (10 year credit period)
For Scenario 2: Emissions reductions of the proposed project activity using the modified combined margin baseline emission methodology
Emission reduction potential = ( 0.91 kg/kWh PE ) x 1050.32 million kWh = 955,790 19,500 tones of CO2 (10 year credit period). This illustrates that the selection of Scenario II using the modified combined margin methodology is a conservative approach for such grid connected renewable energy projects, and is preferable over the combined margin methodology where reliable data exists about a grids expansion plans.

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E.6
Table providing values obtained when applying formulae above: So as to be on conservative side, scenario-2 has been selected for estimation of emission reductions and is tabulated as under. Table E.6-1: Certified Emission Reductions with scenario- 2 MCMM approach
Sr. No. Operating Years Baseline Emission Factor (kg of CO2 / kWh) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91 Total Baseline Emissions (tones of CO2) 86,399 91,799 97,199 97,199 97,199 97,199 97,199 97,199 97,199 97,199 955,789 Project Emissions (tones of CO2) 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950 19,500 Certified Emission Reductions, CERs (tones of CO2 ) 84,449 89,849 95,249 95,249 95,249 95,249 95,249 95,249 95,249 95,249 936,289

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F.
F.1.
ENVIRONMENTAL IMPACTS
Documentation on the analysis of the environmental impacts, including transboundary impacts
The Assessment of Environmental Impacts due to the project activity was carried out by BCML and is provided in a separate EIA summary report, which is available as Enclosure III. F.2. If impacts are considered significant by the project participants or the host Party: please provide conclusions and all references to support documentation of an environmental impact assessment that has been undertaken in accordance with the procedures as required by the host Party. Host party regulations requires HCM to obtain environmental clearance in the form of No objection Certificate from Uttar Pradesh Pollution Control Board. The other condition is that the site of the project is to be approved from the environmental angle and that the Environmental Management Plans are to be prepared and submitted to the pollution control board. Environmental Impact Assessment has been conducted for the Proposed Sugar Factory (3500 TCD) and Cogeneration of Power (20MW) and the study indicates that the impacts for the proposed project are not significant. The assessment of Environmental Impact due to the project activity is carried out to understand if there are any significant environmental impacts and a management plan is prepared to minimise adverse environmental impact.

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G. G.1.
STAKEHOLDERS COMMENTS Brief description of the process on how comments by local stakeholders have been invited and compiled: Identification of Stakeholders
The proposed 20 MW non-conventional renewable energy source bagasse cogeneration plant will be implemented by Balrampur Chini Mills Limited at their proposed Haidergarh Chini Mills, adjacent to their sugar factory premises. The cogeneration project will use mill-generated bagasse from the BCMLs Haidergarh and Babhnan sugar mill operations as fuel. The stakeholders identified for the project are: Elected body of representatives administering the local area (village Panchayat) Uttar Pradesh Power Corporation Limited (UPPCL) Uttar Pradesh Electricity Regulatory Commission (UPERC) Non Conventional Energy Development Agency (NEDA) Uttar Pradesh Pollution Control Board (UPPCL) Environment Department, Government of Uttar Pradesh Ministry of Environment & Forest (MoEF), Government of India Ministry of Non Conventional Energy Sources (MNES) Ground water department Non-Governmental Organisations (NGOs) Consultants Equipment Suppliers
The stakeholders list includes the government and non-government parties, which are involved in the project at various stages. HCM applied and communicated to the relevant stakeholders to receive all of the necessary clearances for the proposed bagasse cogeneration project.
G.2.
Summary of the comments received: Stakeholders Involvement
The village Panchayat /local elected body of representatives administering the local area is a true representative of the local population in a democracy like India. Hence, their consent / permission to set up the project is necessary. HCM has already completed the necessary consultation and documented their approval for the project.

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Local population comprises of the local people in and around the project area. The role of the local people are as a beneficiary of the project. They supply raw material i.e. sugar cane for sugar mills and biomass (if required) for cogen plant. In addition to this, it also includes local manpower working at the plant site. Since, the project will provide good direct and indirect employment opportunities the local populace is encouraging the project. The project will not require any major displacement of any local population. The project is going to be set up on a barren land that has been purchased from the farmers. In addition, the local population is also an indirect consumer of the power that is supplied from the power plants. This is essentially because the power sold to the grid is expected to improve the stability in the local electricity network. Since, the distance between the electrical substation for power evacuation and the plant is not very high, installation of transmission lines will not create any inconvenience to the local population. Thus, the project will not cause any adverse social impacts on local population rather will help in improvising their quality of life. Uttar Pradesh Pollution Control Board (UPPCB) and Environment Department of Government of Uttar Pradesh have prescribed standards of environmental compliance and monitor the adherence to the standards. The project is in the process of receiving the No Objection Certificate (NOC) from UPPCB to start commissioning of the plant. HCM has also applied to the UPPCB for the Consent to Operate. As proposed by the project promoter, water requirements of the project will be met through bore wells. Study conducted to assess environmental impact suggests that the project is in Valey (Tarai) region, where sufficient ground water is available through out the year and there will be no scarcity of water in the surrounding due to the proposed project. Non-conventional Energy Development Agency (NEDA) is the one who implements policies in respect of non-conventional renewable power projects in the state of Uttar Pradesh. Further, States apex body of power is Uttar Pradesh Electricity Commission (UPERC) and they have already issued consent for the installation of co-generation power plant of 20 MW capacity under section 21 (4) of UP electricity reform act 1999 read with section 44 of the Indian Electricity Supply Act 1948. As a buyer of the power, the UPPCL is a major stakeholder in the project. They hold the key to the commercial success of the project. UPPCL has already cleared the project and HCM has already signed Power Purchase Agreement (PPA) with UPPCL. The government of India, through Ministry of Non-conventional Energy Sources (MNES), has been promoting energy conservation, demand side management and viable renewable energy projects including wind, small hydro and bagasse cogeneration / bio-mass power.

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Project consultants are to be involved in the project to take care of various pre contract and post contract project activities like preparation of Detailed Project Report (DPR), preparation of basic and detailed engineering documents, preparation of tender documents, selection of vendors / suppliers, supervision of project implementation, successful commissioning and trial runs. Equipment suppliers will be supplying the equipments as per the specifications finalized for the project and will be responsible for successful erection & commissioning of the same at the site.
Stakeholders Comments
HCM has already received the major necessary approvals and consents from various authorities, required for project implementation like Uttar Pradesh Electricity Regulatory Commission, Uttar Pradesh Power Corporation Limited etc. For getting the clearances / NOCs from the balance authorities, HCM has submitted the necessary documents to the respective authorities and the necessary clearances will be issued shortly.
G.3.
Report on how due account was taken of any comments received
The relevant comments and important clauses mentioned in the project documents/clearances like Detailed Project Report (DPR), environmental clearances, power purchase agreement, local clearance etc. were considered while preparation of CDM project development document. The BCML representative met the local NGOs and apprised them about the project and sought their support for the project. As per UNFCCC requirement the PDD will be published at the validators/UNFCCC web site for public comments.

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Sample Local Stake Holders Comment: National Eco Health Society

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ANNEXURES

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Annex 1
CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY
Organization: Street/P.O.Box: Building: City: State/Region: Postfix/ZIP: Country: Telephone: FAX: E-Mail: URL: Represented by: Title: Salutation: Last Name: Middle Name: First Name: Department: Mobile:
Haidergarh Chini Mills, a unit of Balrampur Chini Mills Limited Village:Pokhra, Tehsil: Haidergarh; Dist: Barabanki
Uttar Pradesh 227301 India +91 5244 48213 +91 5244 45180
Managing Director Mr. Saravagi Vivek -

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Annex 2 INFORMATION REGARDING PUBLIC FUNDING

No public funding for this project.

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Annex 3 NEW BASELINE METHODOLOGY (The baseline for a CDM project activity is the scenario that reasonably represents the anthropogenic emissions by sources of greenhouse gases that would occur in the absence of the proposed project activity. A baseline shall cover emissions from all gases, sectors and source categories listed in Annex A of the Kyoto Protocol within the project boundary. The general characteristics of a baseline are contained in para. 45 of the CDM M&P. For guidance on aspects to be covered in the description of a new methodology, please refer to the UNFCCC CDM web site. Please note that the table Baseline data contained in Annex 5 is to be prepared parallel to completing the remainder of this section.)
1.
Title of the proposed methodology: BCML methodology for grid connected bagasse/biomass based power projects. [Modified from the approved methodology used by NM 0001 Vale do Rosario Bagasse Cogeneration Project]
2.
Description of the methodology: 2.1 General approach (Please check the appropriate option(s)) [x] Existing actual or historical emissions, as applicable; Emissions from a technology that represents an economically attractive course of action, taking into account barriers to investment; The average emissions of similar project activities undertaken in the previous five years, in similar social, economic, environmental and technological circumstances, and whose performance is among the top 20 per cent of their category.
2.2
Overall description (other characteristics of the approach):
Among the three approaches of paragraph 48 of the UNFCCC CDM modalities and procedures, the baseline determination methodology selected for the proposed project is approach 48(a) for the following reasons: (1) The methodology [48(a) of CDM M&P CP17/7] can be applied is transparent manner as it uses authentic, published data, which can be verified conveniently; and,

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(2) Some overlap of 48(b) and 48(c) is possible considering the renewable energy CDM projects face barriers to investment and is an upcoming area with regular technological advancements. While developing the baseline, these barriers, socio-economic and technological circumstances are taken into account for the determination of project additionality. This proposed baseline determination approach, 48(a), is based on the use of historical and common practice information by the relevant industry worldwide to establish the without project conditions in the future (i.e., a business as usual baseline scenario being carried forward into the future). The use of a historical
or actual baseline methodology suits the project conditions given:

The applicability for renewable grid-connected cogeneration projects selling surplus power to a regional (state) grid where common practices are predicted to continue well into the crediting period (say 10 years); Reliable, credible and verifiable data is available that supports the historical or actual business as usual (BAU) baseline scenario The additionality of the project cannot be based solely on the basis of an economic analysis Existence of a large sugarcane industry in the country with historically stable energy use patterns and negative attitudes towards investing outside of the core product area into energy generation The dominance of the regional grid in terms of electricity market share and lack of interconnection to other regional (state) electricity grids The need to expand energy supplies in the region and increase reliability on a fossil fuel mix (mostly coal and natural gas over the future) This baseline approach is applied and substantiated by analyzing the alternative baseline options for the project given a business as usual and other conditions for the sugarcane and electricity industries. The suggested methodology is illustrated in the following flow charts (Flow Charts 1, 2 and 3) on the subsequent pages. Flow Chart 1 shows the steps involved in determination of additionality. Flow Chart 2 shows the steps for estimating carbon emission factor as per combined margin method and Flow Chart 3 shows the approach taken to develop the modified combined margin method. The approach taken by suggested methodology is further defined in Sections 2.2.1 and 2.2.2 in brief and is further elaborated in Section 6.

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Additionality Test : Evaluating likely non-project options [Is project activity additional ?]
NO
Additionality Test for Barriers (as per small scale PDD) [Is project activity additional ?]
NO
Additionality Test for prevailing/ common practices [Is project activity additional ?]
NO
YES
ADDITIONAL CDM PROJECT
NO
Additionality Test for Regulatory/ Legal requirements [Are there specific regulations?]
YES
Determination of Baseline Emission Rate based on CDM M&P, CP 17/7 48(a) taking into account - Boundary - Ex-Post Calculations - Ex-Ante Calculations - Application of Combined Margin Method
Flow Chart - 1

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NON ADDITIONAL
YES
YES
ALGORITHM FOR BASELINE CALCULATIONS ... contd to next page

Select the grid to which the project is exporting electricity Selection of Grid Generation mix with all sources exporting electricity to the selected grid As per UNFCCC small scale PDD identify lowcost must run projects and define the same in the PDD
Power generated by all the sources of Grid
Power generated by low cost must run projects
Baseline power generated Idetify recent capacity additions
Calculated by deducting low cost must run projects from power generated from all sources of the grid mix
Sectorwise baseline power generation
Segregating into sectorwise power generation e.g. Coal, Gas etc.
BM:Weighted average of greater of recent exsisting 20% or 5 most recent plants
Calculate Built Margin
Calculate Operating Margin
OM:Weighted average of selected generation mix CM:Average of BM and OM
Calculate Combined Margin
S1
All the data used upto calculation of CM (point S1) denoted by colour 'blue' is actual, historical actual data. The BM assumes that the same trend is anticipated in future
Flow Chart - 2

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ALGORITHM FOR BASELINE CALCULATIONS ... contd from earlier page
Flow Chart - 3
Capacity additions to generation mix as per the published data, plans etc.
Power generated by all the sources of grid for each year of credit period
Power generated by low cost must run projects calculated for each year of the credit period
As per UNFCCC small scale PDD identify lowcost must run project and define the same in the PDD
Calculated by deducted low cost must run projects from power generated from all sources Segregating into sectorwise power generation e.g. Coal, Gas etc. BM:Based on following hypothesis (a) Same trend of capacity addtions as calculated in part S1 of flow sheet will continue for entire credit period (b) Base on policy etc. changes in the capacity additions of the selected grid is possible. If changes are conservative then apply discount, else keep the earlier same BM as calculated inS1 for the credit period Calculate Operating Margin OM:Weighted average of selected generation mix seperate for each year MCM:Average of BM and OM All the data used after point S1 denoted by colour 'green' are based on anticipated capacity additions
Idetify policy, national plan, fuel cost availability projections etc.for the credit period
Baseline power generated calculated for each year of the credit period
Sectorwise Baseline Power Generation for each year of the credit period
Calculate Built Margin
Calculate Modified Combined Magin
S1
S2
Lower of S1 & S2
Emission Reduction = (BEF x elctricity exported )Project Emissions [if any] - Leakage [if any]
Baseline Emission Factor (BEF)

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2.2.1 Approach for assessment of additionality The recommended CDM procedures, also used by the approved NM0001 VRBC Project for grid connected bagasse cogeneration projects, suggest the option of using any of three potential tests for determining additionality of a project, defined as the reduction of GHG emissions what otherwise would have occurred in the baseline scenario due to the implementation of the proposed project. If any one or combination of these tests meets the defined requirements, the proposed CDM project activity can be considered as additional. The three tests are: Additionality test by assessment (qualitative or quantitative) of different potential options and an indication of why the non-project option is more likely; Additionality test by assessment (qualitative or quantitative) of one or more barriers facing the project activity. The barriers are defined as per the simplified project design document for small-scale CDM project activities (SSC-PDD). Additionality test that shows that the project is not a common practice in the proposed area of implementation, and not required by a Partys legislation/regulations. 2.2.2 Approach for determination of baseline emission / baseline emission rates (factor) 2.2.2.1 Overview of approach: Comparison of the Combined Margin to Modified Combined Margin Methodologies To determine the most conservative baseline emission factor or rate for the project, two baseline estimation approaches are compared: the combined margin methodology (CMM) that was approved by the CDM for the Vale do Rosario Bagasse Cogeneration Project (NM0001) and as well as the recommendations of UNFCCC CDM Executive Board9 for small-scale CDM projects (SSC-PDD); and, a proposed new baseline emission rate methodology, referred to as the modified combined margin methodology (MCMM). Both of these approaches are described and compared below, along with the rationale for choosing the latter optimal approach for many grid-connected renewable energy projects. The modified combined margin methodology (MCMM) improves on the accuracy of the more simplified CM emission factor using Ex Ante data and can be successfully used for CDM grid connected renewable energy projects where there exists sufficient, reliable information about the projected (future) grid electricity operating and, especially, build margin additions. This new methodology, as shown later, can provide a more conservative emission factor than a CM rate (that uses only historic data) as the MCMM takes into account future grid fuel-mix changes at the
9
EB 10 report, Annex-I: Further Clarifications on Methodological Issues. BCML II Classified - Confidential

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margin based on reliable Ex Ante information (e.g., projections of capacity changes in utility or electricity authority expansion plans). Also, it is easily replicable beyond the project country to many other CDM grid connected renewable energy projects. The discussion below sets out the justification and estimation procedures for both methodologies. 2.2.2.2 General elements of a baseline emission factor: Operating and build margins Relevant literature10 and baseline research documents of OECD and IEA provide a range of plausible baseline emission rate scenario/methodologies exist when using for 48(a) approach, in view of proposed grid connected renewable energy power project. The basic elements of estimating the baseline emission rate include determining the operating margin and the build margin emission factors, which are described as follows: Operating Margin (OM) This method proceeds with the assumption that the proposed GHG reduction project activity will change the operation of existing power plants, in this method, electricity demand and supply situation of selected grid to which project will be feeding electricity is quite important. Based on the different concepts, OM can be calculated by different methods, as explained below. a) OM1 Generation-weighted average emission rate (all plants): This method assumes that a project avoids a proportional fraction of all generating units in the system. b) OM 2 Generation weighted average emission rate, excluding must run / low running cost facilities: To be calculated excluding base load resources that are least likely to be on the operating margin and thus displaced by a new project. c) OM 3 Dispatch decrement analysis : This is based on a detailed continuous load analysis using actual dispatch data of each plant. The method provides empirical evidence of the actual generation mix of resources that are turned on and off across the year in response to the demand and supply situation. d) OM 4 Dispatch model simulation: The dispatch or production cost model simulates the complex operations of the electric system in response to the continuous change in demand. This is a most sophisticated and highly sensitive to the considered assumptions but considerably labour intensive and costly to implement.
Practical baseline recommendations for greenhouse gas mitigation projects in the electric power sector, an OECD and IEA Information paper by Sivan Kartha and Michael Lazarus with Martina Bosi, IEA BCML II Classified - Confidential
10

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Build Margin (BM) method: This method presumes that what type of electric facility would have been built (or built sooner, insofar as GHG reduction projects are likely to delay rather than displace other new plants) had the project not been implemented. Hence this methodology considers that the project will affect other electricity generation investments (recently built plants or new plants). Different method of estimation of build margin include: a) BM1 Average of recent capacity additions; This will be estimated by taking weighted average emissions rate of recently (or on going) implemented power projects or Cohort of facilities. Further it is recommended11 that the cohorts be constructed from the most recent 20% or most recent 5 plants, whichever is greater. b) BM2 Single, proxy plant type : This method will be used as alternative where sufficient data is not available for calculation. In this case a proxy plant is to be chosen based on the region specific level as the lowest cost resource like gas based combined cycle projects. In view of the OECD and IEA information document12 and the actual project situation, it seems that the weighted average emission method OM1 is not a true representation of baseline for calculation since this approach can be biased towards existing base-load thermal plants and low carbon intensity base load plants such as hydro and renewable resources. Dispatch data and modeling approaches (OM3 and OM4) might be usefully applied on a country specific basis, however with respect to the proposed project conditions, it cannot be applied due to requirement of large data and sophisticated model, which is not readily available (reference list no. 31 and UNFCCC technology information). Build Margin (BM1) in the combined margin methodology typically uses historical data that is 5 to 10 years old as compared to the capacity additions that a CDM project actually delays or displaces. While using BM1 another aspect is that this method does not considers year to year change in cohort as per the change in 20 % most recent additions, due to which the baseline may not remain realistic, specifically when the capacity additions are expected in the credit period. Considering the different concepts of baseline methods discussed above, it has been observed that most projects will have some effect on both the operating margin in the short term and the build margin in the longer term, hence the method that combines both effects will provide a more appropriate baseline. Based on this reality a relatively simple combined margin (CM) approach is recommended by the reference literature13 that draws from the elements of using the to determine the baseline emission factor operating margin and build margin.
11 12
OECD and IEA Information Paper, page 34 OECD and IEA Information 13 OECD and IEA Information Paper, page 36

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Alternative baseline emission methods: Combined margin and modified combined margin
After selection of the appropriate estimation methodology for determining the operating and build margin emission factors, the recommended next step is to combine these factors to obtain a combined margin (CM) baseline emission factor. As noted earlier, to ensure greater accuracy and comply with the CDM requirement for selecting the most conservative emissions estimation approach for a project, the two baseline estimation methodologies the combined margin (CM) and modified combined margin (MCM) are compared. Each of the procedures and algorithms for the methodologies are presented below.
Scenario 1: Combined Margin Methododology

The combined margin method (CMM) is a simplified baseline estimation approach recommended by the CDM for SSC-PDD and used by the approved Vale do Rosario Bagasse Cogeneration Project (NM0001). In this method elements of both the operating margin (OM2) and build margin (BM1) are covered effectively. For first crediting period (7 years or 10 years), CM is the straight average of the emissions rates of the operating margin and build margin calculated as of year 1. This method seeks to reflect the typical displacement effects. Considering the combined effect of CM method, it has been considered for the estimation of baseline emissions for the proposed project. In support of above, UNFCCC document (Reference # 5), Annex B to attachment 3 of Indicative simplified baseline and monitoring methodologies for selected small scale CDM project activity categories has also been referred which provide guidelines for preparation of PDD including baseline calculations. As per this document the proposed project matches closely under Type I.D Renewable electricity generation for a grid, it includes projects which generates electricity using renewable sources as solar, hydro, tidal / wave, wind, geothermal and biomass. As per the baseline methodology (a) i.e. the average of operating and build margin, mentioned in the point no. 29 of this document, baseline is the kWh produced by the renewable generating unit multiplied by an emission coefficient (measured in kgCO2/kWh) calculated as under:
The Combined Margin is the average of the approximate operating margin and the build margin, where:
The approximate operating margin is the weighted average emissions (in kgCO2equ/kWh) of all generating sources serving the system, excluding hydro, geothermal, wind, low-cost biomass, nuclear and solar generation;

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The build margin is the weighted average emissions (in kg CO2equ/kWh) of recent capacity additions to the system, which capacity additions are defined as the greater (in MWh) of most recent14 20%15 of existing plants or the 5 most recent plants.; Scenario-2: Modified Combined Margin Methodology: an Ex Ante Approach After estimation of baseline using Combined Margin method as discussed above, it is observed that the baseline emission factor possibly remains unchanged over the project crediting period due to the use of historical data for estimating CM, especially the build margin, in spite of reality for any proposed CDM project that there exist continuous yearly changes in baseline grid due to new annual capacity additions. The use of baseline emission factor based on a historically determined combined margin (CM) for the estimation of a CDM projects potential emission reductions may not be a true representation or necessarily the most conservative approach for grid connected CDM power projects where future capacity and generation-mix changes are expected. For estimation of a more realistic emission baseline, an extension or modification to the existing combined margin approach is developed or proposed as highly replicable and applicable to CDM grid connected projects, where reliable data exists that takes into account the future capacity additions in the generation mix. In this approach, the baseline emission factor is sensitive to sector wise capacity additions. Since, the MCM methodology deals with projections of future capacity additions (Ex Ante data), while developing the proposed baseline methodology the authentic sources of information, data and policies (see reference list) are used to project the sector-wise future generation mix in the state grid. If the capacity additions do not follow the exact time frame and / or the capacities as projected, such alterations from the baseline projections could be noted in the monitoring plan. In determining MCM baseline emission factor, first the operating margin is calculated for base year (latest year for which implemented projects data is available) of the credit period with current generation mix. For all the subsequent years of the credit period operating margin is calculated based on the future capacity additions as projected by relying on the best available, and expert confirmed, documentation. Second, the build margin in MCMM for base year is calculated (using BM1) based on current generation mix. Rather than calculating build margin for each year of the credit period either the same BM as in case of combined margin is taken or based on changes expected in the grid mix during the credit period due to policy and other interventions a conservative discounting factor is to be applied. For this, build margin of final year of the credit period is calculated by applying a conservative discounting factor to the BM of the base year. To calculate build margin for all the remaining years in credit period; progressive distribution (straight line) can be applied from base year to the last year of the credit period. Thus, the
14 15
Generation data available for most recent years. If 20% falls on part capacity of a plant, that plant is included in the calculation.

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baseline for the credit period will be the average of annual modified operating margin (MOM) and modified build margin (MBM) obtained using projected capacity additions and forecasted changes. Since, the emission factor would vary every year based on the respective sector wise capacity additions, to arrive at a single (constant) baseline emission factor over the entire credit period, as a conservative value lowest of the modified combined margin is taken as final value of MCM. Finally, the MCM emission factor of Scenario 2 is compared with CM emission factor of Scenario 1 and lowest value among these two scenarios is taken as a conservative and realistic baseline emission factor for the entire credit period.
3.
Key parameters/assumptions (including emission factors and activity levels), and data sources considered and used: The methodology is based on avoided emissions from the grid. Key parameters of the methodology are: project report, feasibility analysis, actual and historical electricity generation data of grid mix, plant efficiencies, future projections, government policies, expected interventions which can influence grid mix in the credit period and fuel emission factors. Sources of information for determination of baseline and additionality can include official and other sources focusing on: trends in power sector (finance, technology other resources) trends in renewable fuel / energy sources/sectors project report and feasibility analysis study reports on sector reforms
The key assumptions used to determined additionality and the baseline emission factors are as follows: 3.1 Assumption 1: Estimation of present and future generation mix The new proposed MCM methodology assumes that emission rates calculated by taking into account the Ex Ante projections of future capacity additions would give more a realistic, and perhaps, conservative emission baseline. The projections are based on published, authentic literature from reliable sources (i.e., reference list of PDD) Key Parameters: Sector wise capacity additions / projections affecting baseline. Emission Rates. Data Sources: Data collection from authentic sources for future sector wise capacity additions, such as, electricity boards, private researched data, published researched data, IPCC documents, and government policy circulars.

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3.2 Assumption 2: Selection of grid The proposed methodology is for grid connected renewable energy projects, based on historical and actual emissions. Following guidance is suggested to the project proponent for selection of grid. (a) The grid to which the project would supply the electricity (e.g. state, regional, regional etc.) (b) The grid status viz. power surplus or deficit. In case of power surplus then move to next level of grid (e.g. stage to regional; regional to national). (c) Grid connectivity, i.e. actual and/or historical inter- regional and inter-state flows of power. (d) National and/or State policies related to acceptance of power to the grid. (e) Size (export of power) of the project activity vis--vis the grid size (capacity). Key parameters: Baseline definition for generation mix and Government policies. Data: Generation mix data from central, state electricity authorities and their policies.
3.3 Assumption 3: Selection of generation mix Since the grid can be both in power surplus and/or power deficit conditions over time (e.g. in Indian scenario both cases are possible; example Uttar Pradesh and Orissa), it is assumed that the proposed project activity in any case will not displace renewable low running cost projects (must run). Hydro, wind, geothermal, solar and bagasse based power projects are considered as such low running cost16 projects with no net GHG emission. Key Parameters: Grid mix for power generation and share of must run projects. Low running cost of projects and Government policy. Data Sources: Generation mix data from state electricity documents. Data justifying that operational cost of Hydro, wind, geothermal, solar and bagasse based power project is lower that other power projects (e.g. coal, naphtha, gas based thermal projects). 3.4 Assumption 4: Emission Factors The CM and MCM methodologies suggest using actual emissions of fuels from published and reliable sources in the host country of the proposed CDM activity. In absence of such, one can use IPCC emission factors for fuels. However, it is suggested to use conservative values. The IPCC emission factors are in Tons CO2 equivalents/TJ (energy units), hence, efficiency of power plant under consideration is required to convert the same in Tons CO2e/kWh.
16
Because of the Indian Government policy, which generally encourages and promotes renewable energy projects that are environment friendly so that they remain must run to protect environment. In addition, the policy of the country is to increase renewable energy generation by 10% over the coming decade, a fact considered later in the calculation of the build margin. BCML II Classified - Confidential

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Key parameters: Emission factor, efficiency of power plants Data: Published literature from reliable sources on emission factors, efficiency
3.5 Assumption 5: Share of Future Renewable Energy Projects in Grid Mix It is assumed that realising the potential of a host countrys renewable energy resources under the Kyoto Protocol/CDM, the renewable energy projects may increase as a percentage of the grid mix in the future (e.g. Government of India policy for the renewable sources of power is encouraging). Though there are various barriers, which are reflected by the low share of renewable power in the current grid mix, this scenario is expected to change in the future. This clean energy grid mix change favouring renewable energy use over the credit period is captured in estimation of the Built Margin of the proposed MCM methodology by using a discounting factor due to increase in renewable energy percentage over the credit period, perhaps a conservative assumption. Key parameters: Share of renewable energy sources in the grid mix (present and future), policy documents Data: Generation mix data from state electricity documents
4.
Definition of the project boundary related to the baseline methodology: (Please describe and justify the project boundary bearing in mind that it shall encompass all anthropogenic emissions by sources of greenhouse gases under the control of the project participants that are significant and reasonably attributable to the project activity. Please describe and justify which gases and sources included in Annex A of the Kyoto Protocol are included in the boundary and outside the boundary.)
Out of the six gases as per the Annex A of the Kyoto Protocol carbon dioxide is the chosen GHG to which this methodology is applicable and included in the project boundary. This is considering carbon dioxide is the gas on which the proponent of grid connected renewable energy project will have control to the level of emission, monitoring and verification. The project boundary considered is from the point of fuel supply to the point of power input into the grid, the regions where the project proponent has a full control. Further, upstream emissions should be placed within the project boundary when the project developer can significantly influence these emissions. It is suggested to illustrate project boundary with diagram. A diagram for suggested methodology is given below (Flow Chart 4).

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Fuel Supply (if any)
Flow Chart - 4
Storage
Pre-Processes
CO2 emissions
Power Generation Unit
CO2 emissions Sequestered
State Electricity Grid
Electricity Captive Consumption Auxiliary Operation
End User
Other internal consumption

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5.
Assessment of uncertainties: (Please indicate uncertainty factors and how those uncertainties are to be addressed)
Potential errors in the estimation of the baseline emission values may occur due to following areas of data and assumption uncertainties. 5.1 If capacity additions in each sector will not takes place as predicted for baseline calculations The dynamic situation of future generation mix for credit period (next 7/10 years) cannot be accurately predicted a-priori. As a conservative estimate based line is averaged out by use of combined margin over the credit period. However, this remains a limitation of use of calculations based on forecasted data, which to a certain extent minimized by taking conservative of CM and MCM. 5.2 If the data is collected from the sources that are not credible and reliable The data used should be reliable and authentic. The actual, historical data should be traceable back to sales / purchase volume data provided by the off taker. The forecasted data should be from recent planning documents of Government or policy maker and can be tested with expert judgment (which can be applied to MBM). The data collection related to grid requires ascertaining the following about the information acquired when applying to the stated methodology: Data is established by organization having credibility that can be traced to institutions that have the authority to publish grid data; Data published by research and/or education organization of international repute where the data can be traced back to its original source(s); Organization with a minimum of publishing experience in grid related data of five years to eliminate any errors that may propagate into subsequent publishing. 5.3 If there is a significant change in the efficiencies of thermal power plants of the grid, which in turn will affect the baseline calculations. The methodology suggests to use direct value of emission factor to reflect accurately on emissions, taking into account the fuel type used (including its sub types, grades etc.) and in absence of such data IPCC emission factors to be considered. In case both the values are available the conservative values is to be taken for calculation of baseline emission factor. Further, methodology suggests considering efficiency improvement due to addition of better efficiency power plants in the selected grid mix, projected during the credit period.

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6.
Description of how the baseline methodology addresses the calculation of baseline emissions and the determination of project additionality: (Formulae and algorithms used in section E)
The suggested methodology first determines project additionality and then addresses the calculation of baseline emission rate (factor). 6.1 Determination of additionality
The additionality tests are as per the guidance of UNFCCC, Executive Board 10th meeting Annex-I. The proposed project activity meets all three CDM additionality tests in that:
Additionality Test 1: the quantitative assessment of the different potential options in Section 4.1 of the PDD indicate that the non-project option (continued inefficient burning of bagasse and no surplus electricity sales to the grid) for the sugar industry is the most likely baseline options given that only 1% of the sugar mills in India currently use high efficiency cogeneration systems and sell power to the grid. Additionality Test 2: there are significant financial, technological and institutional (in the sugar industry), and managerial barriers, with the most significant being the investment risks shouldered by the project sponsor that the majority of the sugar industry globally are unwilling or unable to carry. Investment risks include willingness to accept a lower rate of return for the project activity than alternative investments (Internal Rate of Return is 2% lower), bagasse fuel supply shortage risks, power purchase agreement risks, lack of financial health of the electricity authority, and demonstrating the viability of an advanced efficient technology. The NM 0001 VRBC Project similarly outlines such risks for grid connected renewable energy projects and the additionality criteria met by such projects. Additionality Test 3: the common practice of the sugarcane processing industry throughout the developing world is not to implement high efficient bagasse cogeneration systems that sell electricity to the grid given their lack of knowledge and interest in entering the power business. The additionality requirements of this type of CDM activity, hence, can be demonstrated though meeting one or all of the above tests to clearly show that real, verifiable, and replicable emission reductions from the displacement of fossil-fuel grid energy by bagasse cogeneration.

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6.1.1 Evaluation of likely non-project options (BAU)

The proposed methodology suggest to evaluate following likely non-project options to determine why they are more likely, supported by proper reasoning and/or qualitative / quantitative analysis. Following non-project options/scenario can be considered (project proponent can include other relevant scenarios) In absence of the project activity the grid receives power from generation mix such as natural gas, nuclear, diesel, coal, renewable etc. based on the prevailing practices of the region. The grid data of past few years and expansion plan of grid company, Government, power ministry policies etc. will provide an insight of what is most likely to happen in absence of proposed project activity. The evaluation on non-project option/s will help to decide the business as usual (BAU) scenario. Once the BAU scenario for grid connected power project is established, to determine additionality the project proponents must provide reasoning for the following: Why the non-project option/s is/are more likely? Why the project activity is not part of BAU? In case the reasoning or justification clearly establishes that in absence of CDM project activity the non-project options are more likely and BAU would continue for the entire credit period then the CDM project activity is additional. Answers to the above question would help the project proponent to identify the barriers to the project activity and if the project activity cannot be differentiated from the BAU it cannot be judged additional at this stage and project proponent can move to the next step of barrier analysis. 6.1.2 Assessment of barriers Additionality test by qualitative or quantitative assessment of one or more barriers defined as per the appendix B of the simplified M&P for small-scale CDM project activities. These barriers must be clearly evaluated and documented. For determination of additionality in the development and implementation of renewable energy projects, the project participants shall provide an explanation to show that the project activity would not have occurred anyway due to at least one of the following barriers mentioned below (a) Investment barrier: A financially more viable alternative to the project activity would have led to higher emissions. Following questions can be considered by project participants to evaluate barriers related to investment:
Is the project financing is straightforward and projects are easily bankable?

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Is the participation of private parties, financial institutions for equity is easy? Among available options is the project option is most financially viable or there are associated challenges? What type of financial risk are carried by the project developer? Is this risk level is higher than normal financial risks the project developer takes? Is there any risk related to international funding? Is the renewable energy sector (project type) is supported by government subsidy or incentive which are discontinued or likely to be discontinued. Policy changes expected that will impact the power sector economics of the grid to which project will operate.
Judgement based on above questions in view of recent development in the power sector economics, policies, investment opportunities in the renewable sector, return on investment, financial risks associated with project activity etc. will assist in identification of investment related barriers of the CDM project. If the CDM project activity needs to overcome the investment barriers it can be considered as additional. The project proponents can provide qualitative and quantitative (IRR, NPV) analysis to demonstrate how the CDM project activity would overcome such barriers.
(b) Technological barrier: a less technologically advanced alternative to the project activity involves lower risks due to the performance uncertainty or low market share of the new technology adopted for the project activity and so would have led to higher emissions; The
following questions can be considered by project participants to evaluate barriers related to technology: Is the technology a general practice in the region / country? Is the technology new and advanced? Is there sufficient local expertise available to use/apply the technology? What promoted to choose the technology, is it a regional / national standard? Is there any technology transfer from Annex-I involved?
Assessment based on above questions considering the technological advancements, comparison with prevailing alternative technologies, acceptability of the technology, knowhow available for adaptation of the technology, replication potential of the technology in the region etc. will assist in determination of technology barrier. The project activity is additional if taking guidance of above mentioned questions it is demonstrated that there is a technology barrier which the CDM project has to overcome.
(c) Other barriers: without the project activity, for another specific reason identified by the project participant emissions would have been higher, such as: Institutional barriers or limited information: Experience, institutional frame work., business exposure etc would determine the barriers.

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Managerial resources: hands on experience of project activity, availability of trained manpower, capacity to meet the challenges posed the project activity etc. would determine the barriers.
Organizational capacity: organisations capability that restricts funds required to initiate the project, establishment type, structures, systems, governance, leadership etc. would determine the barriers.
6.1.3 Assessment of prevailing common practice This test is recommended to identify that the proposed project activity is not a common practice. It is suggested to analyse the prevailing practices in the similar cases (project type, state, regional or national grid as applicable). The requirement as per UNFCCC is to provide an indication that the project type is not common practice (e.g. occurs in less than [<x%] of similar cases) in the proposed area of implementation. A qualitative and quantitative analysis of the activities undertaken in the past must be conducted to understand the common practices. The similar projects are defined as projects from same region or country, use similar technology, governed by similar policies, having similar investment or finance options etc. It is suggested that with the analysis it must be demonstrated that the proposed project activity is different from others and the overcome various barriers (as discussed earlier). A comparative discussion with quantitative information will demonstrate that the project type is not a common practice and there are very few similar cases. The test for prevailing/ common practices test is suggested when the barrier analysis is unable to establish additionality clearly and many a times this test is expected to complement and strengthen barrier analysis tests. Assessment of legal requirements This additionality test is to ascertain that project activity is not undertaken due to certain legal requirements of the host country. In cases where the aim of the project activity is meet the law of the land the project activity cannot be considered as additional. 6.2 Calculation of baseline emission factor As justified above, the baseline emission factor is determined using two alternative methodologies, the approved combined margin (CM) and the modified combined margin (MCM) approaches. The combined margin baseline estimation methodology selected is as per the OECD and IEA Information Document17 and UNFCCC document18.
17
Practical baseline recommendations for greenhouse Gas mitigation projects in the electric power sector, an OECD and IEA Information paper by Sivan Kartha and Michael Lazarus with Martina Bosi, IEA. 18 Annex B to attachment 3 of Indicative simplified baseline and monitoring methodologies for selected small scale CDM project activity categories BCML II Classified - Confidential

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As per the mentioned UNFCCC document, the proposed project fits under Type I.D Renewable electricity generation for a grid, it includes projects which generates electricity using renewable sources. Baseline calculation methods are specified in point no. 29 of this document of which, method (a) The average of approximate operating margin and the build margin has been chosen as a first approach for the baseline calculation of this project. As per the specified CM baseline methodology, baseline emissions for each year in the credit period are estimated by multiplying the amount of power (kWh) produced and sold to the grid by the renewable generating unit by the emission coefficient (measured in kg CO2-e/kWh) of the avoided grid fuel mix. The latter is calculated by determining the average of the grids operating margin and build margin for each year over the CDM credit period, where: The approximate operating margin is the weighted average emissions (in kgCO2equ/kWh) of all generating sources serving the system, excluding hydro, geothermal, wind, low-cost biomass, nuclear and solar generation; The build margin is the weighted average emissions (in kg CO2equivalents/kWh) of recent capacity additions to the system, which capacity additions are defined as the greater (in MWh) of most recent19 20%20 of existing plants or the 5 most recent plants.; Conservative emission factor of each fuel type is taken either based on actual data or IPCC fuel emission factors which ever is lower. Combined Margin (CM: Scenario-1) is calculated as average of approximate operating margin and build margin. Modified Combined Margin (MCM: Scenario-2) is applied to take into account changes in the baseline due to forecasted capacity additions, policy changes, other interventions etc. during the credit period. If the reliable forecasted data of capacity additions to the selected grid is not available then MCM cannot be applied and in that case baseline emission factor based on CM is to be used. For MCM, separate OM for each year of the credit period is calculated. For the first year of the credit period the OM is same as calculated in CM. For all the subsequent years of the credit period operating margin (i.e. MOM) is calculated based on the future capacity additions of the respective years. Build margin for the first year is to be calculated as earlier in CM. Either same BM can be continued in the subsequent years or a reduction factor to the BM can be applied based on the expected changes in the credit period. The expected changes
19 20

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needs to be conservative and typical examples are policy changes, legal enforcements, focuses on a particular sector such as renewable energy, availability of alternative fuels for fuel switch etc. Thus, the baseline for the credit period will be the average of annual modified operating margin (MOM) and modified build margin (MBM) obtained using projected capacity additions and forecasted changes. This is the Modified Combined Margin (MCM) for the credit period. Lowest of CM and MCM is selected as conservative and representative baseline for the credit period.
6.3 Formulae and algorithms for baseline calculations As noted above, baseline emissions (E) are estimated based on calculating the amount of power (P) avoided at the grid by the renewable energy project times the grid emission factors (EF) for each year. The algorithms for such calculations are presented in steps, first by determining the percentage of power generated without the low cost must-run projects (Pwlc), then the emission factors per year. Formulae used for estimation of the anthropogenic emissions by sources of greenhouse gases of the baseline are given below in a step-wise order. i) Baseline Power generation
Pwlc = Ptot Plrc

Where: Ptot - Power generation by all sources of grid mix (kWh/yr). Plrc - Power generation by low running cost projects (kWh/yr). Pwlc - Power generation by all sources, without low running cost plants (kWh/yr).
ii) Sectorwise baseline Power generation

PS fuel = Pf Pwlc x100
Where: PSfuel Share (in %) of power generation by each fuel used (coal and gas in present case), out of total power generation excluding, power from low running cost plants.

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Pf
Power generation by fuel used (in Million kWh units).
This fuel percentage factor is key to calculating the operating margin emission factor for each fuel type in the baseline generation mix. ii) Calculation of Operating Margin emission factor for each source of baseline generation mix
OM bef = PS fuel x E fuel for base year for Scenario-1 and for each year of credit
period for Scenario-2. Where: OMbef - Operating Margin Emission factor of baseline (kg CO2/kWh) Efuel
-
Emission factor (conservative value of actual data or calculated from
standard IPCC factor) for each fuel type considered (e.g. coal, gas).

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iii)
Calculation of Build Margin emission factor for each source of baseline generation mix The build margin is the weighted average emissions (in kg CO2equ/kWh) of recent capacity additions to the system, which capacity additions are defined as the greater (in MWh) of most recent21 20%22 of existing plants or the 5 most recent plants.; Where: BM = Build Margin in (kg CO2e /kWh) for base year.
v) Combined Margin (CM) Factor (Scenario 1: S1) CM Factor for base year of credit period will be calculated as: CM = (OMbef + BMyr) / 2 (in kg CO2e/kWh)
In the calculation of CM baseline factor, actual historic data is required and not the futuristic data. Thus, in case if the futuristic data is not available, CM method can be used for the estimation reduction due to project activity. In this case CM becomes the Baseline Emission Factor (BEF). For the projects, where the authentic predicted or forecasted data is available, Modified Combined Margin (MCM) factor is to be calculated to get a realistic estimation of GHG reductions by project activities. For which Modified Build Margin (MBM) and Modified Operating Margin (MOM) for the credit period is calculated using formulae given below:
vi) Modified Operating Margin (MOM) Factor

For MOM, using same formula as mentioned in (iii) above, separate OM is to be calculated considering the changes in the grid mix in each year of credit period due to projected capacity additions for the selected grid. In this methodology, the OM, thus calculated with future capacity additions for each year of credit period is termed as MOM.
21 22

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vii) Build Margin based on forecasted data (Scenario 2: S2)
BM yr + END CP BM yr BM CPYR = BM yr + CPYR CP

Where:
BMCPYR = Build Margin for any year of credit period (straight line equation23 over credit period); (in kg CO2/kWh) BMyr+END
CP
= Build Margin at the end of credit period anticipated based on future policies and other interventions.
CPYR = Year at which Build Margin is required to be calculated CP = No of years in Credit Period The modified build margin is the conservative value of build margin as calculated in Scenario-1 and Scenario-2.
if BM CPYR BM then BM CPYR = MBM yr ; else BM = MBM
yr
Where: MBMyr = Modified Build Margin for each year of the credit period. viii) Modified Combined Margin (MCM) Factor MCM Factor for each year of crediting period can be calculated as : MCMyr = (MOMyr + MBMyr) / 2 (in kg CO2/kWh)
To be on conservative side, lowest value of MCMyr will be selected as representative MCM value which will be further used for estimation of Net Baseline Emission Factor (BEF). ix) Baseline Emission Factor (BEF) of the selected grid To maintain the further effect of conservativeness in the methodology, BEF of baseline is to considered as the lowest of CM and MCM value as calculated above. Net Emission Factor of baseline(BEFnet). = Lowest of CM and MCM
23
The change of BM over credit period for simplicity modelled as straight line equation y=c+mx

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x)
Power generation and export by project activity
TPexp = GPgen PPcap FPff

Where: TPexp - Total electricity exported to grid per annum by project activity (kWh/yr) GPgen - Electricity generated per annum by project activity (kWh/yr) PPcap - Electricity captive consumption per annum by project activity (kWh/yr)
FPff - Electricity generated using fossil fuel, which can be calculated24 using actual monitored data of fossil fuel like quantity consumed and calorific value and efficiency of the system.
xi) Emission Reduction by project activity
ER = (TPexp xBEFnet ) PE EL
Where: ER - Emission reduction per annum by project activity (ton CO2 /yr) TPexp - Total clean power export to grid per annum (kWh/yr) BEFnet Baseline Emission Factor (ton CO2 /yr) PE Project Emission (if any25, depending on the project activity, other than fossil fuel consumption, tones/year) EL Emission Leakage (tones/year)
7.
Description of how the baseline methodology addresses any potential leakage of the project activity: (Please note: Leakage is defined as the net change of anthropogenic emissions by sources of greenhouse gases which occurs outside the project boundary and which is measurable and attributable to the CDM project activity.) (Formulae and algorithms used in section E.5)
The leakage is defined as the net change of anthropogenic emissions by sources of greenhouse gases, which occurs outside the project boundary. For the grid connected renewable power project the leakage is identified as the activity, which contributes for GHG emissions outside the project boundary. Following can be considered as leakage:
24 25
FPff = [Fossil fuel (kg)x Calorific value (kcal/kg) x efficiency)]/860 Other possible project emissions are due to either burning or storage of bagasse/biomass, which ares project specific. It is demonstrated in present CDM project application as well as other approved similar projects e.g. NM001 the project emissions other than use of fossil fuel is negligible. Also it is difficult to monitor the project emissions such as methane emission due to storage. BCML II Classified - Confidential

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(a) Transportation of fuel, material, manpower etc. Leakage due to transportation can be estimated based on the mode of transport, fuel required and the IPCC emission factor for the type of fuel used. (b) Other GHG sources considered. GHGs other than CO2 to be considered as leakage if there is a possibility of their emission and if they can be monitored and measured. (c) Transmission and Distribution losses if they are significant (d) Constriction of transmission lines (from project location to the sub-station) for grid connectivity (e) Based on the site-specific conditions and project type other leakages can be identified by project proponent (e.g. construction of infrastructure facilities like approach roads for wind farms, power plants in rural setting, bridges for mini hydro etc.). (f) If the renewable energy project type uses biomass as fuel, which affect the market and reduces availability of biomass to the former user so much so that they may switch over to use fossil fuel. In such cases equivalent quantity of fossil fuel used is termed as leakage. 8. Criteria used in developing the proposed baseline methodology, including an explanation of how the baseline methodology was developed in a transparent and conservative manner:
Document Annex B to attachment 3 of Indicative simplified baseline and monitoring methodologies for selected small scale CDM project activity categories, provides guidelines for preparation of Project Design Document (PDD) including baseline calculations. As per this document the proposed project falls under Type I.D Renewable electricity generation for a grid, it includes projects which generates electricity using renewable sources as solar, hydro, tidal / wave, wind, geothermal and biomass. As per the Para 29 of this document, method (a) has been chosen for baseline calculations for this project after modifications based on the recent recommendations of UNFCCC, CDM Executive Board. Further to above, the proposed baseline methodology is transparent and conservative due to following: The methodology builds upon guidelines of CDM Executive Board to identify the project additionalilty. It is based on the OECD and IEA literature and research information regarding baseline development. The methodology checks suitability of available methodologies before selecting an applicable methodology. It also refers to the UNFCCC guidelines of indicative simplified baseline and monitoring methodologies for selected small scale CDM project activity categories.

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For the estimation of baseline emission factor the methodology uses a modified combined margin approach taking into account the Ex Ante calculation of future operating and build margin due to capacity addition at the grid over the credit period, which is proposed as conservative than the combined margin (CM) method. To apply the methodology information / data collected from government, semigovernment, published and authentic private organisations are to be used. The proposed methodology is transparent since it uses authentic, published data with references, which can be easily verified. 9. Assessment of strengths and weaknesses of the baseline methodology:
The expected strengths and weaknesses of the baseline methodology are listed below: 9.1 Strengths of this methodology: It follows UNFCCC guidelines for determination of additionality and baseline. Simple in application. Baseline calculation procedure is not complicated and can be used by project proponent who does not have adequate energy background (e.g. sugar mills in some non Annex-I countries). The methodology has replication potential and can be applied to the variety grid connected renewable energy CDM projects irrespective of project capacity. It covers the effect of the proposed project activity on the operation of existing and/ or future power plants (operating margin and build margins) and the effect of the proposed project activity on the building of alternate power plants (build margin). It also incorporates the effect of future capacity additions on baseline emissions by taking Ex-Ante projections into account, hence, it is a more realistic and conservative approach for similar grid connected renewable energy projects. 9.2 Weaknesses of the methodology: Higher influence of recently build projects (20 % of total capacity or 5 projects) on net baseline factor for CM. Similarly, MCM can be influenced by non-realistic forecasted data. If CM and MCM both shows different (opposite) trends and its difficult to judge which one is representative of the baseline emission factor for the credit period (rather that just being conservative), then one way of arriving at a realistic and conservative baseline is to take average of CM and MCM. Future capacity additions may differ from the proposed values, which may affect the baseline factors. The methodology applicability is subject to data availability.

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10.
Other considerations, such as a description of how national and/or sectoral policies and circumstances have been taken into account:
The proposed methodology takes into consideration the following data/information of national and state government along with their policies regarding power sector: Future plans for capacity additions so as to meet the energy requirements Policy for private sector participation Policy for renewable energy development The data to be used for preparation of future generation mix of the state grid for baseline calculations. Also the Government policies and regulations are to be analyzed to determine the baseline and additionality of the project.

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Annex 4 NEW MONITORING METHODOLOGY
Proposed new monitoring methodology

Name: 1. BCML monitoring methodology bagasse/biomass power projects. Brief description of new methodology At present guidelines regarding approved methodology for monitoring of CDM projects of capacity more than 15 MW is not available on the UNFCCC website. Hence a new monitoring methodology has been developed in accordance with the new Baseline methodology. Monitoring methodologies / guidelines mentioned in the UNFCCC document available for small scale projects [Type:I-D] (Reference # 5) and OECD information paper (Reference # 31) has been used as reference documents for development of new monitoring methodology. Since the project revenue is based on the units exported as measured by meters at plant and check meters at the high-tension substations, the monitoring and verification system would mainly comprise of these meters as far as power export is concerned. Accurate measurement of electricity in kWh/year is to be done, as this is equivalent to the reduction in CO2 emissions. The proposed monitoring methodology suggests to measure, record, report, monitor and control various key parameters like quantity of renewable fuels like bagasse/biomass used (if any), total power generated as well as the power exported to the grid, fossil fuel consumption (if any), efficiency of the system, environmental parameters etc. Relevant parameters related to estimation of GHG emissions due to identified leakage as per section 7 of Annex 3, are to be monitored. It is suggested that all monitoring and control functions will be done as per the internally accepted standards and norms and should be verifiable. for grid connected renewable energy

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2.
Data to be collected or used in order to monitor emissions from the project activity, and how this data will be archived
Considering the above, the details of total power generated and other important project parameters to be monitored and verified are as under. a) Parameters affecting the Emission Reduction potential of the Project Activity
Data variable Data unit Measured (m), Recording calculated (c) Frequency or estimated (e) kWh Measured Continuous Proportion of data to be monitored Total How will the data be archived? (electronic/ paper) Electronic For how long is archived data to be kept? Credit Period plus 2 years Measured in the plant premises to the best accuracy and will be recorded, monitored on a continuous basis through DCS. All measurement devices will be microprocessor based with best accuracy and will be procured from reputed manufacturers. As per the regulation of UPPCL. Details provided in Monitoring Approach Comment
ID Data type number (ID nos to be used) D.3.(a)1 Power
Total Electricity generated
D.3(a).2 Power
Power export kWh
Measured
Continuous
> 95%
Electronic
2 years

Page 90 of 90
(b) Fuel related Parameters affecting the Project Activity (applicable to bagasse/biomass projects)
ID number Data type Data variable Data unit Measured (m), calculated (c) or estimated (e) Measured Recording Frequency Proportio How will the data For how long is archived data to be archived? n of data be kept? (electronic/ paper) to be monitored > 95%* Paper 2 years Comment
D.3.(b)1 Fuel
Bagasse /Biomass
MT
Hourly
D.3.(b)2 Fuel
Bagasse / Biomass Coal, Fuel oil, Gas Coal, Fuel oil, Gas
Kcal/kg
Actual sample testing Measured
Fortnightly
Paper
2 years
D.3.(b)3 Fossil Fuel D.3.(b)4 Fossil Fuel
MT
Hourly
Paper
2 years
Kcal/kg
Fortnightly
Paper
2 years
Fossil fuel supplier can provide this data for each lot/batch which can be checked / reconfirmed.
* 95% is of the hourly data recorded.
(c)
Parameters affecting the efficiency of the Project Activity

Data type Data variable Data unit Measured (m), calculated (c) or estimated (e) Calculated Recording frequency Proportion of How will the For how long data to be data be is archived monitored archived? data to be (electronic/ kept? paper) Total Paper 2 years Comment
ID number (Pl. use nos. to ease crossreferencing to table D.6) D3 (c) - 1
Equipment/ operation specific Operation specific
Efficiency of the project activity Heat Rate {for biomass}
Continuous (per hour) Continuous (per hour)
D3 (c) 2
kcal/kWh
Calculated
Total
Paper
2 years

Page 91 of 91
(d)
Parameters for the environmental aspect monitoring

Data type Data variable Data unit Measured Recording Proportio How will (m), n of data the data be frequency calculated (c) to be archived? or estimated monitored (electronic/ (e) paper) Measured and Calculated Bimonthly Random Sample Paper For how long is archived data to be kept? 3 years Comment
ID number (Please use numbers to ease crossreferencing to table D.6) D3 (d) 1
Stack Emissions
Suspended Particulate Matter
Mg/Nm3

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(e)
Parameters for the monitoring capacity additions to the grid (within project boundary)
Data type Data variable Data unit Will data be collected on this item? (If no, explain). Yes, from SEB* How is data archived? (electronic/paper) Paper For how long is data archived to be kept? Till completion of crediting period Comment
This actual monitored data can be used for preparation of baseline for 2nd credit period
ID number
D.5.1
Power
Sector wise installed capacities Sector wise power generation (all sources) CO2 emissions of coal plants CO2 emissions of gas plants
MW
HCM will communicate to UPPCL and request to provide the required data. Also, it can collected taken from other reliable sources. HCM will communicate to UPPCL and request to provide the required data. Also, it can collected taken from other reliable sources. HCM will communicate to UPPCL and request to provide the required data HCM will communicate to UPPCL and request to provide the required data
D.5.2
Power
Million kWh
Yes, from SEB
Paper
Till completion of crediting period
D.5.3
Gas
Kg/kWh
Yes, from SEB/
Paper
Till completion of crediting period Till completion of crediting period
D.5.4
Gas
Kg/kWh
Yes, from SEB / OECD
Paper
* SEB : State Electricity Boards

Page 93 of 93
3.
Potential sources of emissions which are significant and reasonably attributable to the project activity, but which are not included in the project boundary, and identification if and how data will be collected and archived on these emission sources
ID number
Data type
Data variable Data unit Measured (m), calculated (c) or estimated (e)
Recording frequency
Proportion of data to be monitored
How will the data be archived? (electronic/ paper) paper paper
For how long is archived data to be kept? 2 years 2 years
Comment
D.4.1 D.4.2
Fuel Gas
Trucks (other carriers) Emission by trucks
Nos. kg
Measured Calculated
Daily Daily
> 95% > 95%

Page 94 of 94
4.
Assumptions used in elaborating the new methodology: (Please list information used in the calculation of emissions which is not measured or calculated, e.g. use of any default emission factors) The proposed methodology makes use of actual measured quantities so as to maintain the accuracy and authenticity of monitoring process. The data related to grid mix, Government and future capacity additions needs to be collected from reliable and authentic sources. The methodology suggests using conservative values from the available data. Following assumptions are used in developing the monitoring methodology: IPCC standard emission factors are to be considered for estimation of emissions and emission reductions due to project activity if they are lower than the actual emission factors. All the meters/equipments used for measurement and monitoring are accurate and timely calibrated. During the 1st crediting period, actual electricity grid data will be monitored, which can be used for preparation of baseline for 2nd credit period of the project activity.

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5.
Please indicate whether quality control (QC) and quality assurance (QA) procedures are being undertaken for the items monitored.
Data
Uncertainty level of data (High/Medium/Low )
Are QA/QC procedures planned for these data?
D.3.(a)1 D.3.(a)2 D.3.(b)1 D.3.(b)2
Low Low Low Low
Yes Yes Yes Yes
This data will be used as supporting information to calculated emission reductions by project activity. This data will be used for calculation of emission reductions by project activity. This data will be used as supporting information to calculated emission reductions by project activity. This data will be used as supporting information to calculated emission reductions by project activity.
D.3.(b)3 D.3.(b)4 D.3.(c)1 D.3.(c)2 D.3.(d)1 D.4.1
Low Low Low Low Low Low
Yes Yes Yes Yes Yes Yes
This data will be used as supporting information to calculated emission reductions by project activity. This data will be used as supporting information to calculated emission reductions by project activity. This data will not be directly used for calculation of emission reduction This data will not be directly used for calculation of emission reduction This data will not be used for calculation of emission reduction This data will be useful to estimate leakage

Page 96 of 96
Data
Uncertainty level of data (High/Medium/Low )
Are QA/QC procedures planned for these data?
D.4.2
Medium
No
Emissions Calculated. Also Indian Trucks and Fuel companies will comply with Euro-II / Bharat-II and other advance emission norms.
D.5.1
Low
Yes
This data will be collected from grid company. If from other sources them must be traced backed to its origin (either off-taker or supplier).
D.5.2
Low
Yes
D.5.3
Medium
Yes
D.5.4
Medium
Yes
6.
What are the potential strengths and weaknesses of this methodology? (please outline how the accuracy and completeness of the new methodology compares to that of approved methodologies).
There is no approved methodology available on UNFCCC web site for similar project type. Strength of this methodology is, use of authentic and accurate data for estimation of emission reductions, generated by using DCS for entire plant. With minor project specific modifications the methodology can be applied to grid connected renewable energy projects. Weakness of the methodology is it can not be applied as it is to a project activity which does not have sufficient DCS or other form of monitoring system.

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7.
Has the methodology been applied successfully elsewhere and, if so, in which circumstances? The data monitoring and quality control suggested are common for bagasse / biomass based power plants supplying electricity to the grid. Since no methodologies are available at UNFCCC it cannot be compared, elsewhere applied or not. (After completing above, please continue filling sub-sections D.2. and following.)

Page 98 of 98
Annex 5 TABLE: BASELINE DATA (Please provide a table containing the key elements used to determine the baseline (variables, parameters, data sources etc.). For approved methodologies you may find a draft table on the UNFCCC CDM web site. For new methodologies, no predefined table structure is provided.) Kindly refer to Baseline Study report attached as Enclosure-II. -----

Page 99 of 99

BCML II CDM PDD April 07 2004 PDF

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CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

BCML - II Classified - Confidential

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

GENERAL DESCRIPTION OF PROJECT ACTIVITY

Description of the project activity:

BCML - II Classified - Confidential

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

Project Participants Balrampur Chini Mills Limited - Project Promoter

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

Category of the project activity

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

Public funding of the project activity

BCML - II Classified - Confidential

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

Description of how the methodology is applied in the context of the project

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

BCML - II Classified - Confidential

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

BCML - II Classified - Confidential

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

BCML - II Classified - Confidential

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

The first unit of BCML at Balrampur, UP. BCML - II Classified - Confidential

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

BCML - II Classified - Confidential

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

B abhnan S ugar M ills

H aidergarh S ugar M ills

N ew B agasse F ired H P B oiler

S tate E lectricity G rid

E lectricity C aptive C onsum ption

S team for A uxiliary O peration

BCML - II Classified - Confidential

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

Name of person/entity determining the baseline:

BCML and their associated experts (see Annex 2).

BCML - II Classified - Confidential

Project Design Document

CDM-PDD for BCML Haidergarh Bagasse Cogeneration Project

DURATION OF PROJECT ACTIVITY / CREDITING PERIOD

C.2.2.1 Starting date: C.2.2.2 Length (max 10 years):

BCML - II Classified - Confidential