Sie sind auf Seite 1von 48
Cogeneration Projects within the CDM Framework Author: Thomas Esdaile-Bouquet COGEN Europe Email:

Cogeneration Projects within the CDM Framework

Author:

Thomas Esdaile-Bouquet

COGEN Europe Email: Thomas.bouquet@cogen.org

T@W: Sustainable Energy Technology at Work www.setatwork.eu

March 2007

Please note: While this guide provides some background information about the Clean Development Mechanism, readers are expected to have prior knowledge of the CDM framework. Should this not be the case, it is possible to acquire the necessary basics through the material presented on the United Nations Framework Convention on Climate Change’s Website, particularly its section devoted to the CDM. 1

T@W: Sustainable Energy Technology at Work on the market generated by the EU Emission Trade Scheme and the linked CDM and JI markets

© March 2007, COGEN Europe

T@W is supported by the European Commission under the Sixth RTD Framework Programme Contract: TREN/05/FP6EN/S07.55796/020065

T@W Website: http://www.setatwork.eu

Legal notice: Neither the members of the T@W project nor the European Commission nor any person acting on their behalf may be held responsible for the use to which information contained in this publication may be put, nor for any errors that may appear despite careful preparation and checking. The opinions expressed do not necessarily reflect the views of all members of the T@W project, nor the European Commission.

Non-commercial reproduction is authorized, provided the source is acknowledged.

1 http://cdm.unfccc.int

Table of Contents About T@W 2 1 The Clean Development Mechanism: the Essential Facts 3
Table of Contents About T@W 2 1 The Clean Development Mechanism: the Essential Facts 3

Table of Contents

About T@W

2

1 The Clean Development Mechanism: the Essential Facts

3

1.1 The principle behind the CDM

3

1.2 Types of Projects under the CDM

3

1.3 Parties involved in the CDM

5

1.4 The price of CERs

6

1.5 CDM related costs

6

1.6 CDM related risks

7

2 Cogeneration Projects and the CDM: a Nice Fit

8

3 Overall Trends for Cogeneration Projects in the CDM 9

4 Overview of the CDM project cycle for cogeneration projects

10

4.1 Screening and Planning a CDM Project

11

4.2 Preparing the Project Design Document (PDD)

12

4.3 Obtaining National Approval

19

4.4 Validation and Registration

19

4.5 Project Activity and Monitoring

20

4.6 Verification and Certification

20

4.7 Issuance of CERs

21

4.8 Approved CDM methodologies relevant to cogeneration projects

21

5 Country Profile – China

25

5.1 CDM in China

25

5.2 Potential for cogeneration projects in China

29

6 Country Profile – India

32

6.1 CDM in India

32

6.2 Potential for cogeneration projects in the CDM in India

36

 

7 Conclusion

38

7.1

Political Uncertainty: Post-Kyoto Arrangements

38

8 Glossary

39

Annex I – List of registered CDM cogeneration projects and cogeneration projects that have requested registration (17/01/2007) in China

41

Annex II – List of registered CDM cogeneration projects and cogeneration projects that have requested registration (17/01/2007) in India

42

Annex III – List of registered CDM projects and projects that have requested registration (17/01/2007) in Malaysia

45

Annex IV – List of Cabinet approved cogeneration projects in Thailand (as of 31/01/2007)

46

1

About T@W

About T@W The overall objective of the T@W project is to undertake thematic promotion of RES-e,
About T@W The overall objective of the T@W project is to undertake thematic promotion of RES-e,

The overall objective of the T@W project is to undertake thematic promotion of RES-e, RES heating and cooling and Polygeneration (Sustainable Energy Technologies, SET) at emerging Emission Trading Scheme markets in EU (EU ETS) and CDM markets in Asia. The T@W action aims to exploit FP RTD results at these markets, thereby bringing SET to the market. Hence the short title:

Technology at Work - T@W.

The T@W project has the expected impact of paving the way for SET uptake on the EU ETS covered companies and in the Asian CDM field and raising a general awareness of high standard SET/RTD technologies, thereby facilitating European companies to comply with their CO 2 obligations, and providing markets for the SET in EU and Asia.

To summarise, the key aims of the T@W Project are to:

! Assist EU ETS companies to develop CO 2 projects at their own installations

! Assist EU ETS companies to develop CDM projects in Asia

! Assist European SET suppliers in entering EU ETS and CDM markets

The T@W action consists of 5 work packages:

! WP1 T@W Co-ordination

! WP2 SET Promotion at EU ETS market

! WP3 SET Promotion at CDM markets

! WP4 Dissemination

! WP5 Evaluation and Strategy

The T@W project is coordinated by Energy Consulting Network (ECNet), Denmark and the partners are: Zentrum für Rationelle Energieanwendung und Umwelt (ZREU), Germany; KanEnergi Sweden AB; CPL Press, UK; Sofia Energy Centre (SEC), Bulgaria; ETA - Renewable Energies, Italy; EC Baltic Renewable Energy Centre (EC BREC), Poland; Institute of Mechanical Engineering (IDMEC- IST), Portugal; Energy Centre Bratislava (ECB), Slovak Republic; Ente Vasco de la Energía (EVE), Spain; COGEN Europe; European Biomass Industry Association (EUBIA); European Small Hydropower Association (ESHA); Guangzhou Institute of Energy Conservation, Chinese Academy of Science (GIEC); Zhejiang Energy Research Institute of China (ZERI); The Energy and Resource Institute (TERI), India; Pusat Tenaga Malaysia (PTM); Centre for Energy Environment Resource Development (CEERD), Thailand

Project acronym: T@W Project full title: Sustainable Energy Technology at Work on the market generated by the EU Emission Trade Scheme and the linked CDM and JI markets Contract no: TREN/05/FP6EN/S07.55796/020065 Start date of contract: 1 April 2006 Duration: 24 Months

2

1 The Clean Development Mechan ism: the Essential Facts 1.1 The principle behind the CDM
1 The Clean Development Mechan ism: the Essential Facts 1.1 The principle behind the CDM

1 The Clean Development Mechanism: the Essential Facts

1.1 The principle behind the CDM

The Clean Development Mechanism (CDM) enables countries that are signatories of the Kyoto Protocol to meet part of their GHG reduction commitment through projects located in another host country. Participation is on a voluntary basis and more and more Kyoto signatories have put in place the necessary administrative structures.

In the specific case of CDM, countries belonging to the Annex I of the Kyoto protocol can fund and help implement projects in non-Annex I countries. Non-Annex I countries are typically developing countries.

Successful CDM projects generate Certified Emission Reduction credits (CERs), each CER representing a quantity of avoided GHG emissions in the non-Annex I host country, which are then transferred to the Annex I country.

1.2 Types of Projects under the CDM

Any project that can demonstrate that it achieves GHG emission reductions is eligible under the CDM.

CDM projects are categorised and one can distinguish 3 types of CDM projects:

! Renewable Energy Projects (Type I)

! Energy Efficiency Improvement Projects (Type II)

! Other Projects (Type III)

In most cases, cogeneration projects are classified as Type I projects. Type I projects are further categorised, a distinction being made between projects depending on the type of energy generated. The 4 sub-categories of Type I projects are:

! I-A Electricity generation by the user

! I-B Mechanical energy for the user

! I-C Thermal energy for the user

! I-D Renewable electricity generation for a grid

In some cases however, cogeneration projects will be classified as Type II or Type III. Type II projects cover both supply side and demand side energy efficiency improvements and fuel-switching, while Type II projects could be methane recovery projects, possibly linked to a cogeneration plant.

Because the administrative costs for CDM projects can outweigh the financial gain derived from CER generation, small-scale projects form a special category of projects and have simplified procedures to follow 2 .

2 UNFCCC Webpage on Small scale CDM project activities: http://cdm.unfccc.int/Projects/pac/pac_ssc.html

3

Eligibility for Small scale CDM project status Small-scale CDM projects are projects that apply to
Eligibility for Small scale CDM project status Small-scale CDM projects are projects that apply to

Eligibility for Small scale CDM project status

Small-scale CDM projects are projects that apply to one of the following three definitions:

- Type I project activities: renewable energy project activities with a maximum output capacity equivalent to up to 15 megawatts.

- Type II project activities: energy efficiency improvement project activities, which reduce energy

consumption, on the supply and/or demand side, by up to the equivalent of 15 gigawatt hours per year.

Graph: Illustration of eligibility condition for Type II project activities (prior to revision)

GWh Business as usual Must be < 15 GWh Project Project start Time
GWh
Business as usual
Must be
< 15 GWh
Project
Project start
Time

- Type III project activities: other project activities that both reduce anthropogenic emissions by sources and directly emit less than 15 kilotonnes of carbon dioxide equivalent annually.

4

Graph: Illustration of eligibility condition fo r Type III project activities (prior to revision) kt
Graph: Illustration of eligibility condition fo r Type III project activities (prior to revision) kt

Graph: Illustration of eligibility condition for Type III project activities (prior to revision)

kt CO 2 Business as usual Project Must be < 15 kt CO 2 Project
kt CO 2
Business as usual
Project
Must be
< 15 kt CO 2
Project start
Time

Please note:

The CDM EB has revised the definition of small-scale project activities by increasing the energy saving threshold for small-scale energy efficiency projects (type II projects) from 15GWh/year to

60GWh/year.

For type III small-scale projects, the definition has been modified to avoid large-scale projects with few direct emissions to qualify as small-scale: the former definition applied to projects with less than 15ktCO2e/year total direct emissions whereas the new definition focuses on the amount of emission reduction, which is now capped at 60ktCO2e/year.

1.3 Parties involved in the CDM

The table below gives an overview of the various parties involved in the CDM.

Global level

! Conferences of the Parties to the Kyoto protocol (COP)

!

Designated Operational Entities (DOEs)

! CDM Executive Board (CDM EB)

 

National level

! Designated National Authority (DNA)

Project level

! Annex I Party

! Non-Annex I Party

! Investors (CER buyers)

5

The CDM Executive Board (CDM EB) is responsible for the management of the CDM. It
The CDM Executive Board (CDM EB) is responsible for the management of the CDM. It

The CDM Executive Board (CDM EB) is responsible for the management of the CDM. It plays a very important role as it is responsible for:

! Accrediting the Designated Operational Entities (DOE)

! Approving the methodologies for GHG emission reduction calculations

! Keeping the CDM project Registry

! Issuing the Certified Emission Reductions.

In addition, the CDM EB regularly publishes technical reports.

The Designated Operational Entities (DOE) are independent organisations, accredited by the CDM EB, that validate CDM project proposals before they are submitted to the CDM EB. The DOE will also verify the emissions reductions achieved by the project before the CDM EB issues the corresponding CERs.

A list of accredited DOEs can be found on the CDM part of the UNFCCC’s Website. 3

Designated National Authorities (DNAs) are responsible for implementing the CDM at the national level. In many cases the DNA is an integral part of the natural resources or environment ministry.

DNAs play an important role in non-Annex I countries as they set up the specific procedures for CDM activities in the country.

A project developer wishing to register his project as a CDM project must first get approval from his

DNA before applying for registration with the CDM EB. In addition both the host country (non- Annex I) DNA and the Annex I DNA have to give their approval before any credits can be issued.

DNAs are listed on the UNFCCC’s Website.

1.4 The price of CERs

Prices of CERs generated by CDM projects are influenced by several factors, the main of which are:

! Price of European allowances traded under the European Emissions Trading Scheme

! Demand from other Annex I countries (e.g. Japan)

! Delivery stage of the CER credits (e.g. registered project with delivery guarantee, without guarantee, CER futures from project not yet registered…).

The price range for CERs has hovered around 7-14 EUR, with variations in prices depending on the host countries. China for example has set a floor price for CERs issued for projects on its territory at 8 USD per CER.

1.5 CDM related costs

Projects willing to register as CDM projects and generate CERs face additional costs compared to similar non-CDM projects.

3 http://cdm.unfccc.int

6

Each step of the CDM procedure involves costs. Th e total up-front costs to prepare,
Each step of the CDM procedure involves costs. Th e total up-front costs to prepare,

Each step of the CDM procedure involves costs. The total up-front costs to prepare, register and validate a CDM project are in the 50,000-100,000 EUR range. This figure is likely to drop as more projects become eligible.

Besides the up-front costs, a small fraction of the value of the CERs generated will be used to cover CER sale costs as well as the monitoring and verification of the project’s emissions reductions. These “operational costs” would typically amount to a few percents of the value of the generated CERs.

1.6 CDM related risks

CDM projects have a complex risk profile. It is possible to distinguish between several different types of risks for CDM projects, namely:

! Registration risk

! Performance risk

! Counterparty risk

! Country risk

! Market risk

Registration risks derive from the possibility that the DOE does not validate the project and that it is not registered by the CDM EB. This can stem from

1. the non approval of a new methodology,

2. the unsuccessful validation of a methodology for calculating emissions reduction,

3. the non-approval by the host country,

4. a request for review by the CDM EB at either the registration or CER issuance step.

Performance risk is similar to that of any projects, although in the case of cogeneration projects technological risk is lower as cogeneration is a proven mature technology.

Counterparty risk resides in the fact that CERs are usually sold in the form of forward contracts. There is always the risk that one of the parties defaults on its contractual obligation.

Country risk reflects the importance of host country regulations. CER ownership rights may differ from country to country.

Market risk is directly linked to the fluctuations in the price of CERs. This creates uneven flows of CER-derived cash flows and can endanger the viability of CDM projects, should they rely heavily on CER revenue streams.

When looking at the issues facing the parties involved in project financing, it is apparent that for investors the main problem with CDM projects is their financial uncertainty. The risks related to the CDM’s procedures, their costs, and the CER delivery risk still put off many financing organisations from investing in CDM projects. As a result, project developers are faced with limited availability of project funding, a problem the CDM was supposed to solve. It should be noted however that with additional know how being added on an on-going basis financing is less problematic than a few months or indeed years ago.

7

2 Cogeneration Projects and the CDM: a Nice Fit Cogeneration is a cost-effective way of
2 Cogeneration Projects and the CDM: a Nice Fit Cogeneration is a cost-effective way of

2 Cogeneration Projects and the CDM: a Nice Fit

Cogeneration is a cost-effective way of reducing CO 2 emissions from power generation. By using both the heat and electricity produced in the single generation process, cogeneration installations reach very high overall efficiencies and effectively lower the need for grid electricity or, put differently, avoid investments in central power generation and electricity transmission and distribution infrastructure.

The benefits of cogeneration are numerous: not only does this technology reduce CO 2 emissions but it is suitable to many types of fuel and can run on biomass, making it very suitable for applications in rural backgrounds. It should be noted that cogeneration using biomass as a fuel has very positive impacts on emission reductions and hence offers very positive perspective in the CDM framework.

At the same time, cogeneration is not size-specific and can be applied in large-scale industrial sites as well as in small district heating or manufacturing installations. Large-scale cogeneration installations can generate substantial amounts of CERs, thus allowing industrial organisations to invest in on-site, reliable cogeneration technology instead of relying on outside supply of energy.

Competitiveness and reliability of cogeneration as a technology need no longer be proved, as cogeneration is considered to be a mature technology. The competitiveness of cogeneration as a technology is particularly clear when the fuels powering the installation are locally sourced at low cost. In addition, cogeneration installations burning agricultural residues can be seen as solving a waste issue, as is recognised in some methodologies that take into account the avoided methane emissions from decomposing biomass when used in cogeneration installations.

The reliability of cogeneration as a technological solution is backed by thousands of MW of cogeneration capacity operating around the world, with most installations having operational lifetime well beyond 20 years. This is in stark contrast with other technologies used in the CDM and is a strong incentive to invest in cogeneration technology as the benefits will extend far beyond the CER crediting period.

While technology providers have so far mostly been European or North American companies, technological capabilities in countries across Asia and Latin America have augmented steadily over the years and with the creation of the CDM market cogeneration technology know-how can also be found in these regions, a very important point given the need for permanent operational management of the installations and periodical maintenance activities.

8

3 Overall Trends for Cogeneration Projects in the CDM As of the 15 January 2007
3 Overall Trends for Cogeneration Projects in the CDM As of the 15 January 2007

3 Overall Trends for Cogeneration Projects in the CDM

As of the 15 January 2007 out of a total of 489 registered CDM projects, an estimated 70 were cogeneration projects.

Most of the CDM cogeneration projects are located in India and Brazil and rely on locally-sourced risk husk, bagasse or biomass residues as primary energy inputs. Malaysia has also a few cogeneration projects that are registered as CDM projects. These typically rely on palm oil.

While several other countries have approved cogeneration projects for the CDM, China has remained

a country where cogeneration projects are rare, with only one registered CDM project so far, in a cement factory.

Initially, the majority of cogeneration projects registered were biomass-fired applications in small food manufacturing. Particularly the sugar industry was strongly represented. Recently the types of projects registering have been diversifying, and a number of other biomass cogeneration projects have been registered.

From April 2006 industrial waste-heat recycling projects have been registered as well. These represent

a different type of cogeneration projects, but they can deliver many of the same benefits. All of these are in India, except the system at the Taishan Cement Works in China.

These projects are generally larger and located at heavy industrial sites, rather than small manufacturing facilities. It has taken longer for the first of these projects to register, because they are larger and drafting the PDD can be complicated, but they represent a huge potential for energy efficiency improvement in large industry, so the emission reductions obtained through these is likely to overtake those from conventional biomass cogeneration in the near future.

9

4 Overview of the CDM project cycle for cogeneration projects The figure below outlines the
4 Overview of the CDM project cycle for cogeneration projects The figure below outlines the

4 Overview of the CDM project cycle for cogeneration projects

The figure below outlines the CDM project cycle, showing the seven stages, and the participants involved and documents produced at each stage, where “PP” stands for project partners. The CDM project cycle is identical for all projects under the CDM, although in its fine details the cycle is simplified for small-scale projects.

Project Stage 1. Screening and Planning CDM Project
Project Stage
1. Screening and
Planning CDM Project
2. Preparing the Project Design Document (PDD)
2. Preparing the Project
Design Document (PDD)
3. National Approval of Involved Parties 4. Validation and Registration
3. National Approval of
Involved Parties
4. Validation and
Registration
5. CDM Project Activity and Monitoring 6. Verification and Certification
5. CDM Project Activity
and Monitoring
6. Verification and
Certification

7. Issuance of CERs

Figure 1 The CDM project Cycle

Party

Output

PP

PP

Project Design

Document

DNA

Letter of Approval

PP

DOE 1 CDM-EB
DOE 1
CDM-EB

Validation Report

 

PP

Monitoring Report

DOE 2

Verification and

Cerification Reports

CDM-EB

CERs

Measurable emmissions savings & additionality
Measurable emmissions
savings & additionality
Baseline & monitoring methodologies
Baseline & monitoring
methodologies
Host-country approval
Host-country approval
Validation of proposed methodologies
Validation of proposed
methodologies
Monitor emissions from the project Verify emissions reductions
Monitor emissions from
the project
Verify emissions
reductions

Source: Wade, 2006; Based on IGES, CDM in Charts, 2006; and DTI, A Climate Change Projects Office Guide,

2004

10

4.1 Screening and Planning a CDM Project Project developers interested in registering their pr oject
4.1 Screening and Planning a CDM Project Project developers interested in registering their pr oject

4.1 Screening and Planning a CDM Project

Project developers interested in registering their project for the CDM must first check that they meet the criteria of the CDM. They must then determine whether the benefits of registering as a CDM project outweigh the associated costs.

STEP0
STEP0

Preliminary screening based on the starting date of the project activity

 
 
PASS
PASS
 
STEP1
STEP1

Identification of alternatives to the project activity consistent with current laws and regulations

 
PASS
PASS
consistent with current laws and regulations   PASS STEP2 Investment   STEP3 Barrier analysis
consistent with current laws and regulations   PASS STEP2 Investment   STEP3 Barrier analysis
STEP2
STEP2

Investment

 
STEP3
STEP3

Barrier

analysis

analysis

 
PASS
PASS
 
STEP4
STEP4

Common practice

 
 
PASS
PASS
 
STEP5
STEP5

Impact of CDM registration

 
 
PASS
PASS
 
 

PROJECT ACTIVITY IS ADDITIONAL

 

MINISTRY OF THE ENVIRONMENT JAPAN AND GLOBAL ENVIRONMENT CENTER FOUNDATION, CDM MANUAL FOR PROJECT DEVELOPERS AND POLICY MAKERS, 2005.

4.1.1 Eligibility of the project

Project eligibility for CDM is depend on the project meeting the three global criteria (voluntary participation, real and measurable emissions savings, additionality), as well as the project being in line with the host-country’s criteria for sustainable development.

Of greatest importance is the additionality of the GHG emissions savings over the baseline scenario alternatives, as derived from the methodology.

11

Additionality is a necessary pre-condition for any pr oject to qualify as a CDM project
Additionality is a necessary pre-condition for any pr oject to qualify as a CDM project

Additionality is a necessary pre-condition for any project to qualify as a CDM project and it must be demonstrated 4 . A simple definition of additionality is that a future CDM project’s additionality is proven when the project developer can demonstrate that the CER revenue stream was necessary for the project to be implemented. In other words additionality implies that the project was only able to overcome the barriers thanks to the CERs it will generate, and not, for example, thanks to government subsidies.

It must be noted that it is in some case difficult to show that a project faces particular barriers for implementation, and that the removal of these particular barriers would make the project viable, and that the CDM would remove these barriers.

For cogeneration projects a good element towards meeting the additionality criteria is the absence of cogeneration in the baseline scenario.

4.1.2 The benefit of registration as a CDM project

By definition, if a project meets the eligibility criteria the project would not be economically viable (or financially viable) without the stream of CERs that will be issued after the start of the project activity.

CDM revenue through CER must be greater than the costs incurred in the registration process (and subsequent steps).

Because CDM-related costs are proportionally lower for larger projects with a greater flow of CERs, initially only large projects with substantial emission reductions were considered to be economically attractive. The CDM EB has recognised this and improved the economics of small-scale projects by simplifying the procedures and lowering costs while allowing for the bundling of similar small-scale projects, thereby reducing costs even further.

It is important to mention that due to the risk of failure associated with registration, but also CER delivery, some borderline projects may prefer not to go through the registration process. This situation however is becoming less likely as the uncertainties surrounding the registration process have been lifted. Because cogeneration technology is well-proven, the level of emission reductions is relatively safe over time.

4.2 Preparing the Project Design Document (PDD)

The PDD is the key document for a project’s CDM registration application.

The PDD is the standardised application format for CDM projects. The form can be downloaded from the CDM Executive Board (CDM EB)’s Webpage. The PDD is important in that it gives a description of the project activity, it indicates which the baseline methodology will be used and demonstrates the additionality of the project. The PDD also indicates which monitoring methodology will be used and highlights the project’s contribution to sustainable development.

4 The UNFCCC has prepared tools to help project developers assess the additionality of their project. These can be downloaded at http://cdm.unfccc.int/methodologies/PAmethodologies/approved.html

12

A CDM Project Design Document consists of 7 sections and is available from the UNFCCC
A CDM Project Design Document consists of 7 sections and is available from the UNFCCC

A CDM Project Design Document consists of 7 sections and is available from the UNFCCC website 5 .

The baseline methodologies applicable for cogeneration projects are presented further in this document.

4.2.1 Language requirement

The PDD must be written in English for the CDM-EB. In addition, some countries also require a translation in the national language for national approval.

A. Description of the Project Activity

B. Application of the Baseline Methodology

C. Crediting Period

D. Application of the Monitoring Methodology and Plan

E. Estimation of the GHG Emissions by Sources

F. Environmental Impacts

G. Stakeholder Comments

UNFCCC CDM, Project Design Document Form

A. Description of the project activity

The Project Design Document starts with a description of the project, covering its location, its aims, the local circumstances, the technology used and the type of project activity.

Can the project be registered without an Annex I party involved?

Some host countries will only approve of a project if it has secured the involvement of an Annex I party. Such is the case in Malaysia. However, India for example does not impose such a restriction.

What should the technology description include?

It is important that the technology description should contrast the prevalent local practice or the

current technology on-site with the best technology available, in this case cogeneration. This helps

establish the additionality of the project later on. For biomass cogeneration, the standard technology is

a Rankine Cycle Steam Turbine, which can be compared to a boiler for combustion of biomass for heat only, combined with grid electricity.

B. Baselines and additionality

The baseline methodology explains how the project activity will be compared with baseline scenarios “that reasonably represent the anthropogenic emissions by sources of greenhouse gases that would occur in the absence of the proposed project activity” 6 . The baseline methodology describes how to

5 http://cdm.unfccc.int/Reference/Documents/cdmpdd/English/CDM_PDD.pdf

6 UNFCCC, CDM Modalities and Procedures, paragraph 44.

13

establish this baseline, against which the GHG emissi on savings of the CDM project can
establish this baseline, against which the GHG emissi on savings of the CDM project can

establish this baseline, against which the GHG emission savings of the CDM project can be measured. This is the foundation of establishing the additionality of the CDM project, and is therefore essential for project approval.

The baseline methodology should be project specific, cover all significant emissions within the project boundary that are in control of the project participants and can reasonably be attributed to the project. These should be adjusted for leakage – anthropogenic emissions of GHG outside the project boundary that can be reasonable attributed to the CDM project activity. The baseline should reflect local standards and policies, to give a reasonable business-as-usual case. The methodology and data used should be transparent, and specified in the PDD.

The CDM EB has approved standard baseline methodologies for various types of projects.

These can be used directly and applied to comparable projects. Alternatively, a project developer can propose a new methodology, which will then need to be approved by the CDM EB.

Baseline methodologies generally take one of three approaches:

! Using actual or historical GHG emissions (i.e. by extrapolation)

! Using the emissions data of a technology that represents an economically attractive course of action (e.g. Cost Benefit Analysis)

! Using the emissions data from similar projects undertaken in the previous 5 years, in similar social, economic, environmental and economic circumstances.

A number of baseline methodologies have been proposed for cogeneration projects, so generally it

should be possible to find a methodology applicable to a new cogeneration project.

Consolidated methodologies are general versions of project-specific methodologies, so they are easy

to replicate. Approved methodologies are project-specific, but this can be an advantage if used for

projects with similar circumstances. Each baseline methodology outlines the criteria for its application.

The additionality of CDM projects is established in comparison with the baseline scenarios. Firstly, the PDD should show that the project activity is not one of the baseline options. This is the case if the project is not the most economically attractive option, it is not common practice, it is not economically viable without CDM registration, or faces other barriers. Secondly, additionality requires that the estimated GHG emissions of the project activity are lower than any of the baseline cases. The UNFCCC has developed the ‘Tool for Demonstrating Additionality’, which is available on the UNFCCC CDM website 7 .

The drawbacks of presenting a new methodology

Drafting, submitting and registering a new methodology is a time and money intensive process. Hence

in most cases it makes more sense to use an existing approved methodology. Not only does this limit

methodology registration risk (in the past the CDM EB has been very selective when registering

methodologies), but finding a DOE to validate the project PDD can be easier.

7 http://cdm.unfccc.int/methodologies/PAmethodologies/AdditionalityTools/Additionality_tool.pdf

14

However, if no suitable baseline methodology exists , a new methodology will have to be
However, if no suitable baseline methodology exists , a new methodology will have to be

However, if no suitable baseline methodology exists, a new methodology will have to be prepared and registered.

More information on how to do this can be found in the CDM User Manual.

Potential for new methodologies:

EMISSION REDUCTIONS FROM ON-SITE GENERATION

One of the main advantages of cogeneration and other on-site generation is the avoidance of losses in the electricity network. However, most approved methodologies for cogeneration projects assume that this is negligible, and no emission reductions are credited for this. It would be possible, though, to develop a methodology that includes the emission reductions resulting from avoided network losses due to on-site generation of electricity. The calculation of emission reductions can be based on the total amount of grid electricity used, the average T&D losses of the local electricity network, and the average CO 2 emission factor of the grid electricity, as shown in the example below.

Calculating the CO 2 emission reductions from avoided T&D losses

This simplified example considers the CO 2 emission reductions from a hypothetical on-site generation project at an industrial facility in India. If we assume the facility currently uses 40

GWh/yr of grid electricity, local network losses are 20% and the average emission factor of the supplied electricity

is 600t CO 2 /GWh, then the resulting emission reductions from on-site generation of the same amount of electricity

are: 40 GWh/yr * 0.20 * 600 t CO 2 /GWh = 4800 t CO 2 /yr

The example shows that the emission reductions from avoided T&D losses are relatively small, unless the total electricity consumption and gird losses are large. Emission reductions through on-site generation are therefore maybe not attractive as a stand-alone methodology, but it can form an important part of other methodologies for on-site generation projects. The incorporation of T&D losses in other methodologies would recognise one of the key benefits of on-site generation, and the additional emission reductions could improve the economic viability of decentralised energy projects.

COGENERATION REPLACING CCGT

Cogeneration projects currently registered for the CDM have particularly focussed on biomass cogeneration, so that fossil-fuel cogeneration has been very much neglected. There is one methodology for natural-gas based cogeneration (AM0014), but this is a very specific case, and the only relevant project in Chile has not been submitted to the CDM-EB yet. The potential for emission reductions from fossil-fuel cogeneration projects is significant, but for the number of applications to rise a general methodology for fossil-fuel cogeneration projects is required.

A methodology for fossil-fuel based cogeneration can be based on methodology AM0014, but it would also make

sense to develop a methodology for cogeneration replacing CCGT, as there is already a methodology for conversions from single cycle to combined cycle power generation (ACM0007). The upgrade from CCGT to cogeneration is a similar improvement of efficiency of the generation system, so that the new methodology could be based on the existing methodology.

Which approved baseline methodology is most appropriate for cogeneration projects?

Not all cogeneration projects have relied on the same methodology. In fact, as long as the cogeneration project satisfies the methodology’s application criteria, the methodology is applicable.

15

Cogeneration project developers how ever have an incentive to use methodologies that have already been
Cogeneration project developers how ever have an incentive to use methodologies that have already been

Cogeneration project developers however have an incentive to use methodologies that have already been applied with success to similar cogeneration projects, even if the project was located in another country. In such a case the only important modifications that will have to be made concern the data on the host country’s electricity sector (e.g. different fuel mix).

Demonstrating additionality

The UNFCCC has developed a ‘Tool for Demonstrating Additionality’.

How are project alternative scenarios identified?

The UNFCCC Tool for Demonstrating Additionality indicates that three alternative scenarios are to be considered in the baseline:

! the same project outside the CDM;

! other projects that deliver the same energy outputs and services; and

! continuation of the current situation.

Because a cogeneration plant produces both heat and electricity, the alternative scenarios must indicate how the heat and electricity are normally generated. It should be noted that electricity can be either taken from the public grid or generated on-site (e.g. with a diesel generator).

Alternatives must comply with existing legislation.

What existing laws and regulations should be considered for the baseline?

The UNEP’s CDM User Guide distinguishes between 4 types of law and regulations that have to be considered in the baseline methodology 8 :

! Type E+: legislation that gives competitive advantages to more GHG-intensive practices

! Type E-: legislation that gives competitive advantages to less GHG-intensive practices

! Type L-: sectoral mandatory regulations that internalise environmental externalities and incidentally reduce GHG emission

! Type L+: sectoral mandatory regulations that internalise environmental externalities, and prevent implementation of less GHG-intensive technologies

How does one identify barriers to the project activity?

The CDM project activity must face barriers to meet the additionality requirement of the CDM. There are three steps in assessing these barriers 9 :

1. Investment analysis: the project without a stream of CERs is not a financially attractive option.

2. Barrier analysis: the project cannot secure investment, infrastructure or the local skill base is insufficient, or the project is ‘the first of its kind’.

3. Common practice analysis: similar projects are not already occurring in the area.

8 UNEP Energy and Environment Group, The CDM – A User’s Guide, 2003.

9 UNFCCC, Tool for the demonstration and assessment of additionality (version 2), 2005.

16

Investment analysis provides the strongest case fo r additionality. For cogeneration projects the fact that
Investment analysis provides the strongest case fo r additionality. For cogeneration projects the fact that

Investment analysis provides the strongest case for additionality. For cogeneration projects the fact that there is no previous expertise with such projects in the country or sector can also be important. However, this argument is fast loosing steam as more and more cogeneration projects are being implemented and cogeneration looses its “technology transfer” qualification. On the other hand cogeneration projects are often still a marginal solution; hence the common practice analysis is still a potent tool to demonstrate additionality, in conjunction with other arguments.

How can be shown that the project removes these barriers?

The final step in proving additionality is showing that the benefits of the CDM remove the barriers identified. The primary benefit is the CER revenue, but also the opportunity to attract new players able to provide funding or technical expertise, and reduced investment risks. Cogeneration projects are often cost-effective, making additionality difficult to prove. In such cases additionality assessment can focus on the up-front capital required, which is often unavailable to small manufacturers. Projects can sometimes not achieve the required rate of return to pay back commercial loans, unless CER revenue is included. Baseline methodology AM0007 proves additionality by showing that biomass is not the cheapest available fuel for cogeneration.

The definition of the project boundaries

The project boundary is defined so that it covers all emissions that can reasonably be considered direct result of the project activities. Emissions not directly resulting from the project are outside the boundary. For cogeneration projects emissions within the boundary include those from the generation process and heat and electricity distribution.

What is leakage?

Leakage is defined as “the net change of anthropogenic emissions by sources of GHG, which occurs outside the project boundary, and which is measurable and attributable to the CDM project activity.” In most cases, this refers to imports and exports of fuels. For biomass-fired cogeneration projects, the transport of biomass is normally the main type of leakage, assuming that the transport vehicles run on fossil fuel.

C. Crediting period

Project developers are faced with a choice between two options: either they opt for a fixed one 10-year crediting period or they can alternatively opt for a 7-year crediting period which can be renewed twice.

The choice will be dictated by the expected timing of the delivery of emissions savings (some projects have a short operational lifespan, although this is rarely the case for cogeneration projects). In addition, the choice can be influenced by the level of risk aversion of the parties involved. The aim is to optimise CER revenue streams.

Cogeneration projects aiming for a renewal of their 7-year crediting period will have to have the baseline methodology and alternative scenarios re-validated by a DOE, in order for the methodology to account for evolutions in the host’s energy sector and changes in technologies.

17

D. Monitoring methodologies Monitoring methodologies describe how GHG emissions from the project activity will be
D. Monitoring methodologies Monitoring methodologies describe how GHG emissions from the project activity will be

D. Monitoring methodologies

Monitoring methodologies describe how GHG emissions from the project activity will be measured during implementation and operation of the project. Monitoring methodologies are part of baseline methodologies, so that the choice of baseline methodology also determines the monitoring methodology. They are approved by the CDM EB in the same way as baseline methodologies are. New monitoring methodologies can also be submitted for approval.

Monitoring methodologies for energy generation projects generally require measuring the fuel used for electricity and heat generation from the project activity, as well as the electricity and heat output of the process. These then serve to calculate the emissions reductions from the project activities and the baseline alternatives.

Monitoring of a CDM project requires the project developer to gather and file (for 2 years after the end of the crediting period) of three kinds of data:

! estimate or measurement of GHG emissions from the project activity (based on the measurement of electricity and heat output of the project activity);

! calculation of emissions from the baseline; and

! identification of emissions outside the project boundary (leakage).

E. Estimation of the GHG Emissions by Source

In the PDD, the project developer must give an initial estimate of the GHG emissions by source for the project scenario and baseline alternatives. This enables the calculation of the expected emissions reductions from the project, based on the formulas described in the baseline methodology. For cogeneration projects, baseline emissions can be calculated from the heat and electricity output of the project, and the GHG emission factor of the baseline technologies used to generate these. Different baseline alternatives can therefore have different total GHG emissions.

For energy generation, GHG emissions from the project activities are normally calculated on a fuel- consumption basis (this is also true for cogeneration projects, with operational conditions and efficiencies coming into play), while baseline emissions are based on the electricity and heat output, and the alternative processes through which these would be generated.

By comparing the GHG emission in the baseline scenario(s) and the project scenario, one gets the GHG emission saving from the project activity.

F. Environmental Impacts

The PDD requires the project developer to indicate the environmental impacts the project activity might have, other than GHG emissions. Only those impacts deemed significant will have to be detailed. The most straightforward way of doing this is by conducting an Environmental Impact Assessment.

Many registered CDM projects have carried out Environmental Impact Assessments and these can be used as useful sources of information. It should be noted that such assessments should be adapted to be in line with the host country’s regulations.

18

Although the impacts on soils and biodiversity from cogeneration projects are not substantial, these points
Although the impacts on soils and biodiversity from cogeneration projects are not substantial, these points

Although the impacts on soils and biodiversity from cogeneration projects are not substantial, these points nevertheless also have to be covered by the Environmental Impact Assessment study, as this document incorporates all impacts, both negative and positive.

G. Stakeholder Consultation

It is mandatory to hold meetings, record the involvement and include the results of consultations with the local communities and stakeholders in the PDD, under the form of a consultation report. The project developer must take into consideration the inputs from the consultations and if need be must amend his project proposal to address any concerns raised.

The consultation phase takes place throughout the initial project scoping and development stage. The exact requirements for the stakeholder consultations vary between the various CDM host countries and it is therefore advised to contact the host country’s DNA before launching the stakeholder consultation process.

4.3 Obtaining National Approval

Once the PDD is ready it must be submitted to the host country’s DNA for approval. Usually the PDD has to be accompanied by an application form, while the DNA sometimes requires additional information to be submitted.

The DNA will check if the project complies with all local procedures and regulation. This process is not ruled by international accords and is left up to the host countries. Therefore, the approval process can take more or less time, depending on the host country the project is located in. However, in most cases the process will take about 2 to 3 months, provided no requests for additional information are made.

Because there is always the possibility that the host country will not grant approval, it is important to thoroughly check the DNA’s requirements, besides complying with all host-country laws and regulations. Many countries have indicated priority areas for CDM projects, with cogeneration sometimes mentioned as one of these. This should be emphasised in the PDD. Support and involvement of local organisations also bolsters the project proposal.

4.4 Validation and Registration

After the project is approved by the host-country DNA, the PDD and letter of approval from the host country are submitted to a DOE, which will validate the PDD and the methodologies proposed.

Not all DOEs are accredited to validate all methodologies, so one must check before hand whether the DOE pre-selected can perform the validation process. However, all DOEs are validated for Type-I activities.

Note that the project developers bear the costs of the validation process and may wish to compare not only the track record of a DOE in a given country or for a given type of project but also their fees with that of other DOEs.

19

The DOE will evaluate whether the project proponent: 1) has calculated the baseline in a
The DOE will evaluate whether the project proponent: 1) has calculated the baseline in a

The DOE will evaluate whether the project proponent:

1) has calculated the baseline in a conservative and transparent manner and made a reasonable estimate of the volume of emissions reductions; and

2) convincingly demonstrated that the project is additional. There is a risk that the project is not validated if the baseline calculations are inappropriate or inaccurate, or if the project is not deemed to be additional.

The DOE assesses the PDD, checks whether it complies with the CDM requirements, and validates the baseline scenarios, additionality, and emission reductions formulas of the PDD.

The DOE then writes a validation report, which it must make available for 30 days for public consultation, and records comments. The time of the validation period depends on the DOE, but generally not less than two months should be reserved for it, as the validation report must be publicly available for at least 30 days.

Once validated, the DOE will send the PDD, the letter of approval and its Validation Report to the CDM EB for registration. Project registration takes 8 weeks. If no objections from the CDM-EB have been made within that period, the project is officially registered. For small-scale projects this period is reduced to 4 weeks.

4.5 Project Activity and Monitoring

The start of the project activity does not have to coincide with the start of the crediting period and can even come before the project registers as a CDM project. However, this raises the risk of failing to meet the CDM eligibility criteria.

Projects that have been started between 1 January 2000 and 18 November 2004 could request retroactive credits, if they submitted a new methodology or requested validation with a DOE before 31 December 2005, and were registered by the CDM-EB no later than 31 December 2006. Projects that have not requested for validation yet are not eligible for retroactive credits.

Once the project has been registered as a CDM project and has entered the crediting period, the emissions reductions have to be monitored and the information collected (as defined in the methodology) in the Monitoring Report, which must be kept in electronic format for two years after the end of the crediting period.

4.6 Verification and Certification

Once the crediting period has elapsed, the project participants submit the Monitoring report to a DOE for verification of the achieved emission savings. The DOE produces Verification and Certification Reports, which it sends to the CDM EB with a request for issuing the CERs.

The DOE that validated the PDD cannot also verify the project emission reductions (except for small- scale project activities), hence another DOE accredited for the chosen methodology must be chosen.

The DOE prepares its verification report based on the monitoring report.

20

The DOE checks if the submitted information meets the requirements of the monitoring methodology and
The DOE checks if the submitted information meets the requirements of the monitoring methodology and

The DOE checks if the submitted information meets the requirements of the monitoring methodology and verifies the monitoring results to check that the methodology has been applied correctly, and then determines the GHG emission reductions achieved by the project activity.

If necessary, the DOE can conduct site-visits or request additional information. It can also recommend changes to the monitoring methodology for future applications. All information is included in the verification report, which will be made publicly available.

Based on the verification report, the DOE certifies the amount of CERs. CERs are issued if no requests for review are made within 15 days.

The time required for the verification and certification process depends on the DOE, as there are no specific guidelines or time limits.

Please note: a document providing guidance on Validation and Verification can be downloaded from the website http://www.vvmanual.info.

4.7 Issuance of CERs

CERs are issued each time GHG emissions reductions are verified and certified. The project developer can choose when and how often to have this done. Clearly, more frequent verification increases the verification costs, but it ensures a steady issuance and revenue from CERs. A single verification is cheaper, but also reduces the occasions CERs are issued and can be sold. The choice depends therefore on the cash flow of the project, and on the CER purchasing agreement with the buyer.

The regulations and laws of the host country determine the ownership arrangements.

CERs are normally issued to the project proponents, but the national government can claim national ownership (as is the case in China). If the project proponents receive the CERs, their legal ownership is determined by the contractual arrangements between the project proponent, investors, and CER buyers.

4.8 Approved CDM methodologies relevant to cogeneration projects

The nomenclature of CDM methodologies distinguishes between several types of methodologies:

AM: Approved methodologies for CDM projects AR-AM: Approved afforestation and reforestation methodologies (not applicable to cogeneration projects) ACM: Approved consolidated methodologies AMS: Approved small-scale methodologies

The table below outlines baseline methodologies used for cogeneration projects. Please note that methodologies are being revised on an on-going basis, while some methodologies are replaced by other methodologies (e.g. ACM0006 replaces both AM0004 and AM0015).

21

Table 1 Methodologies applicable to cogeneration projects (as of 11/01/2007) Methodology Methodology Title Comments
Table 1 Methodologies applicable to cogeneration projects (as of 11/01/2007) Methodology Methodology Title Comments

Table 1 Methodologies applicable to cogeneration projects (as of 11/01/2007)

Methodology

Methodology Title

Comments

Number

AM007

Analysis of the least-cost fuel option for seasonally-operating biomass cogeneration plants

Refurbishment only

AM0014

Natural gas-based package cogeneration (Version 2)

Cogeneration systems must be owned by third party

AM0024

Methodology for greenhouse gas reductions through waste heat recovery and utilization for power generation at cement plants

 

AM0029

Methodology for Grid Connected Electricity generation Plants using natural Gas

Only savings on the electricity production side appear to be taken into account. Cogeneration does not seem to be advantaged by this methodology

AM0032

Methodology for waste gas or waste heat based cogeneration systems

 

AM0036

Fuel switch from fossil fuels to biomass residues in boilers for heat generation

Applicable to cogeneration but no extra electricity can be generated for cogeneration to be eligible than under the previous situation.

AM0042

Grid-connected electricity generation using biomass from newly developed dedicated plantations

Seems applicable to cogeneration but the project has to be a Greenfield project (i.e. totally new with no prior on-soite power production). Biomass produced exclusively for the installation.

AM0044

Energy efficiency improvement projects: boiler rehabilitation or replacement in industrial and district heating sectors

ESCO-focused methodology. Uncertain whether cogeneration applications eligible.

ACM0001

Consolidated methodology for landfill gas project activities (version 5)

 

ACM0004

Consolidated methodology for waste gas and/or heat for power generation (version 2)

 

ACM0006

Consolidated methodology for grid- connected electricity generation from biomass residues (version 4)

 

22

Table 1 Methodologies applicable to cogeneration projects (as of 11/01/2007) Methodology Methodology Title Comments
Table 1 Methodologies applicable to cogeneration projects (as of 11/01/2007) Methodology Methodology Title Comments

Table 1 Methodologies applicable to cogeneration projects (as of 11/01/2007)

Methodology

Methodology Title

Comments

Number

ACM0008

Consolidated methodology for coal bed methane and coal mine methane capture and use for power (electrical or motive) and heat and/or destruction by flaring (version 3)

 

AMS-I.C.

Thermal energy for the user

Applicable to biomass cogeneration systems with a 45 MWth total output upper limit.

AMS-I.D.

Grid connected renewable electricity generation

Applicable to biomass cogeneration systems with a 45 MWth total output upper limit.

AMS-II.B.

Supply side energy efficiency improvements - generation

Applicable for cogeneration pant improvements, if up to 60 GWhe of energy/fuel savings, equivalent to 180 GWhth per year (maximum)

AMS-II.D.

Energy efficiency and fuel switching measures for industrial facilities

Unclear whether cogeneration projects can use this methodology

AMS-II.E.

Energy efficiency and fuel switching measures for buildings

Unclear whether cogeneration projects can use this methodology

AMS-III.E.

Avoidance of methane production from biomass decay through controlled combustion

This methodology is being used, in conjunction with AMS-I.C., in several biomass-cogeneration projects.

23

Procedures and modalities applicab le to Small-scale CDM projects Project Design Document (PDD): requirements and
Procedures and modalities applicab le to Small-scale CDM projects Project Design Document (PDD): requirements and

Procedures and modalities applicable to Small-scale CDM projects

Project Design Document (PDD): requirements and time taken to complete reduced through simplified PDD 10 particularly in the baseline methodologies, monitoring methodology and plan, additionality checklist and environmental impact requirements.

Baseline methodologies: simplified standardised baseline methodologies provided for project activities to reduce the cost of developing a project baseline, these methodologies simplify the baseline calculations for example by the use of default emission factors for certain project activities

Monitoring methodology and plan: simplified monitoring requirements are specified per project category, including a less frequent and reduced monitoring plan, such as the metering of a sample of renewable energy systems.

Additionality requirements: project developers can determine additionality using a simple barrier analysis showing the existence of investment barriers, of technological barriers, barriers due to prevailing practice, or other barriers such as institutional barriers or information requirements that affect the project.

Environmental impacts: documentation of environmental impacts must be provided only if required by host country.

Leakage: no calculation is required if the technology is installed for the first time.

Validation/verification and Certification: the same designated operational entity (DOE) may undertake validation, verification and certification.

Registration: a shorter review period for registration is required and registration costs are lower for small-scale projects (e.g. in the 5,000 USD range for emission reductions of 15 ktCO2/year compared to up to 30,000 USD for larger projects with emission above 200 ktCO2/year).

In addition to cost reductions in the project cycle thanks to the simplifications outlined above, the CDM EB has also allowed the bundling of several small-scale projects, thereby lowering even further the costs for the various stages.

Bundled small-scale CDM project activities are interesting for cogeneration projects because such cogeneration projects are often similar in that they will use the same type of biomass as fuel and will be found in similar industrial sector, meaning that replicability is high.

10 The UNFCCC has published a document entitled “Clean Development Mechanism simplified Project Design Document for small-scale project activities (SSC-CDM-PDD) [Version 2 of 7 December 2006] that can be downloaded from the following address:

http://cdm.unfccc.int/UserManagement/FileStorage/6NP36K05XX134ZP12JA48EMCN9EVIT

24

5 Country Profile – China 5.1 CDM in China 5.1.1 Organisational structure The CDM in
5 Country Profile – China 5.1 CDM in China 5.1.1 Organisational structure The CDM in

5 Country Profile – China

5.1 CDM in China

5.1.1 Organisational structure

The CDM in China is regulated through the Measures for Operation and Management of Clean Development Mechanism Projects in China, (12 October 2005).

This document stipulates that China’s DNA is the National Development and Reform Commission (NDRC), which operates under the joint supervision of the National Coordination Committee on Climate Change (NCCC) and the National CDM Board (NCB).

The CDM Bodies, Members and Tasks in China

Body

Represented parties

Responsibilities

NCCC

NDRC (chair) Ministry of Foreign Affairs (vice chair) Ministry of Science and Technology State Environmental Protection Administration China Meteorological Administration

Review national CDM policies

Approve members of NCB

Review other relevant issues

NCB

NDRC (chair) Ministry of Foreign Affairs (vice chair) Ministry of Science and Technology State Environmental Protection Administration China Meteorological Administration Ministry of Agriculture

Review project applications

Report overall progress of CDM activities to NCCC

Recommend interim measures

NDRC

 

Assess and approve project applications

Supervise implementation of CDM projects

Establish CDM management institute

INSTITUT FOR GLOBAL ENVIRONMENTAL STRATEGIES, CDM COUNTRY GUIDE FOR CHINA, 2005.

The NDRC (i.e. the Chinese DNA) is central in the CDM process in China, and manages the involvement of the relevant ministries and other government organisations. It functions as a one-stop shop for project application and approval, and regulates the implementation of CDM projects in China through the CDM Management Institute.

Other relevant organisations

The main parties involved in the CDM in China are state-organisations, both at national and local level. However, any foreign company doing business in China needs to work with a local partner company, and the applicant for CDM endorsement must be a Chinese company, so CDM projects necessary involve local industries and manufacturers as well.

25

5.1.2 Sustainability Criteria

5.1.2 Sustainability Criteria Sustainability Criteria for CDM Projects in China Category Criteria Environmental
5.1.2 Sustainability Criteria Sustainability Criteria for CDM Projects in China Category Criteria Environmental

Sustainability Criteria for CDM Projects in China

Category

Criteria

Environmental Sustainability

Reduce GHG emissions Maintain resource sustainability and avoid degradation Maintain biodiversity

Economic Sustainability

Additional investment consistent with needs of the people Funding additional to ODA

Social Sustainability

Alleviate poverty by generating employment Remove social disparities Contribute to the provision of basic amenities

Technological Sustainability

Transfer of environmentally safe and sound technologies

INSTITUT FOR GLOBAL ENVIRONMENTAL STRATEGIES, CDM COUNTRY GUIDE FOR CHINA, 2005.

The Chinese government’s sustainable development strategy emphasises the harmonic development of the economy, society and the environment. Social aspects are important, but for CDM projects the focus is on the environmental criteria. Projects are evaluated primarily on the basis of their impact in the three designated priority areas: energy efficiency; renewable energy; and methane recovery. The NDRC focuses on CO 2 and CH 4 , rather than the other four GHG. Cogeneration projects improve energy efficiency of generation, and can use renewable fuels or recovered methane, so they are suitable for meeting these criteria.

5.1.3 Country approval application process

CDM project application letter Completed application form

PDD

General information on project construction and financing

Certificate of the applicant’s enterprise status

INSTITUT FOR GLOBAL ENVIRONMENTAL STRATEGIES, CDM COUNTRY GUIDE FOR CHINA, 2005.

The NDRC regulates the CER value for Chinese CDM projects, to avoid unacceptably low prices. Project developers must indicate the CER price agreed with the buyer in their project application. However, without government approval it is difficult to find a buyer. To avoid this ‘catch-22’, the NDRC has an initial screening process to provide preliminary endorsement for projects before they are officially approved.

To apply for national approval in China the project developer must submit the required documentation to the NDRC. After endorsement, the NDRC will review the PDD and consult experts to reach its decision, which is communicated to the project developer within 50 days. If further review is needed, additional information may be requested, but otherwise an approval letter is issued.

26

After registration by the CDM-EB the project developer must notify the NDRC within 10 days.
After registration by the CDM-EB the project developer must notify the NDRC within 10 days.

After registration by the CDM-EB the project developer must notify the NDRC within 10 days. During project operation the developer must submit the implementation report and monitoring reports to the NDRC, so that the NDRC can check that the project meets the criteria set for CDM projects.

Government Incentives

The Chinese government has been increasing its support for energy efficiency and renewable energy in recognition of their importance for the country’s development. Current government incentives are:

! Favourable energy prices for Independent Power Producers

! 2-year taw breaks for cogenerators and energy saving generators

! Favourable rates on loans for energy efficiency projects (about 30% lower than average)

! Quotas for energy consumption in key industries

! Subsidies for Renewable Energy Sources (RES)

! Reduced-VAT and income tax rates

! Favourable customs duties for some RES equipment

Financial and legal arrangements

The NDRC regulates the CER price for Chinese CDM projects to ensure that it does not fall below a set minimum. This aims to secure a good CER revenue for Chinese projects, but it also complicates the contractual arrangements between the project developer and the CER buyer. To guarantee the minimum set price there needs to be an advance contract, which specifies this price before a project can apply for national approval. However, contracts are hard to agree without national approval, and rules out certain CER contract types, like market price based agreements. This complicates the implementation of CDM projects in China.

The Chinese banking system is traditionally centralised and state dominated, but it is gradually being restructured and Chinese banks are increasingly able to provide financing and services to foreign investors. However, for CDM financing the problem remains that most knowledge concentrated in government offices, not banks. This situation is gradually improving, and as a result of the government’s encouragement of Foreign Direct Investment (FDI) different kinds of financing available from Chinese and international institutions.

27

Optional,

subject to

project

proponent

request

Optional, subject to project proponent request PIN submission by project proponents No Initial screening by the
Optional, subject to project proponent request PIN submission by project proponents No Initial screening by the
Optional, subject to project proponent request PIN submission by project proponents No Initial screening by the
PIN submission by project proponents No Initial screening by the DNA Rejection / resubmit Letter
PIN submission by project
proponents
No
Initial screening
by the DNA
Rejection /
resubmit
Letter of
endorsement
Submission of PDD and CDM project applicaton by project proponents DNA No Rejection / Expert
Submission of PDD and CDM project
applicaton by project proponents
DNA
No
Rejection /
Expert review
resubmit
Yes
DNA
Decision of the
National CDM Board
meeting
May be
reconsidered
subject to further
improvements
Reconsider
Letter of
DNA
rejection
Approve
Letter of approval

INSTITUT FOR GLOBAL ENVIRONMENTAL STRATEGIES, CDM COUNTRY GUIDE FOR CHINA, 2005.

28

However, the complicated international and national rules pose a major obstacle. The Measures for Operation
However, the complicated international and national rules pose a major obstacle. The Measures for Operation

However, the complicated international and national rules pose a major obstacle.

The Measures for Operation and Management of Clean Development Mechanism Projects in China specify that the CER revenues from CDM projects belong to the Chinese government and enterprises implementing the project. The government fixes the distribution proportions of the revenue and before the fixation, the revenue shall belong to enterprises. The CER revenue is subject to government levies (table 14), additional to normal taxes for foreign-led projects.

LEVIES ON CER REVENUE IN CHINA

GHG

Regulated base price +

HFC and PFC

65%

N

2 O

30%

Other

2%

INSTITUT FOR GLOBAL ENVIRONMENTAL STRATEGIES, CDM COUNTRY GUIDE FOR CHINA, 2005.

5.2 Potential for cogeneration projects in China

5.2.1 Cogeneration status and potential

Cogeneration Potential in China (2010)

6000 5000 4000 3000 2000 1000 0 Power gas Oil & Chemicals Pulp & paper
6000
5000
4000
3000
2000
1000
0
Power
gas
Oil & Chemicals
Pulp & paper Steel
Cement
Biomass
Coal-bed
methane
Landfill gas
Potential (in MWe)

The present installed cogeneration capacity in China is 48.1 GWe, 10,9% of total capacity, which generates 10% of the country’s electricity 11 . There is still ample potential for further cogeneration development, though.

The table below illustrates that the cogeneration potential in China is large. Biomass availability and potential is significant, but the main sectors for CDM cogeneration projects in China are industry and power generation, as much of the biomass-cogeneration potential lies in very small projects, while China’s industries are very energy-intensive and inefficient.

11 WADE, DE World Survey 2006.

29

The number of registered CDM projects in China is surprisingly small (36 out of 489),
The number of registered CDM projects in China is surprisingly small (36 out of 489),

The number of registered CDM projects in China is surprisingly small (36 out of 489), considering that the country is thought to represent about half of the global CDM potential. Projects in China are generally large, though, with an average of over 1.8 Mt/yr. The one cogeneration project registered so far is a waste-heat-driven electricity generation project in a cement plant. It is interesting to note however that the three cogeneration projects awaiting registration are relatively large scale biomass- fired projects. This is a recent evolution and could point towards an upturn in the number of CDM cogeneration projects in China.

Table 2 Chinese CDM projects (as of 17 January 2007)

 

Number of

Number of

Name of projects

GHG reductions (metric tonnes per annum)

approved

projects

projects

requesting

registration

 

All Chinese CDM projects

36

7

-

51505765

Of which,

1

3

Taishan Cement Works Waste Heat Recovery and Utilisation for Power Generation Project

Hebei Jinzhou 24MW Straw-Fired Power Project

659736

cogeneration

projects

(i.e. circa 1.3% of total Chinese requested CERs)

Shandong Yucheng Xinyuan Biomass Heat & Power (“Yucheng Biomass CHP”)

 

Henan Luyi 25MW Biomass Cogeneration Project

Source: COGEN Europe, based on UNFCCC Website, 17 th January 2007.

Table 3 SWOT analysis for CDM projects in China

 

Strengths

Weaknesses

 

Opportunities

Rapidly rising energy demand Power market restructuring Large CDM potential Government’s policies prioritize electricity

Large

potential

for

industrial

efficiency improvements

Threats

Continued government control of power sector Slow liberalisation

Government ownership of CERs CER price regulation Lack of financing opportunities

30

5.2.2 Prospects

5.2.2 Prospects The potential for CDM projects in China is the largest of any country in
5.2.2 Prospects The potential for CDM projects in China is the largest of any country in

The potential for CDM projects in China is the largest of any country in the world: about 50% of the global CER potential. A large part of the potential can be achieved through cogeneration application in industrial energy efficiency and power generation projects. However, CDM project implementation has been remarkably slow and has only started to accelerate. While the vast majority of Chinese CDM projects have been windfarm project or HFC decomposition projects, we can expect many new biomass-fired cogeneration projects.

31

6 Country Profile – India 6.1 CDM in India 6.1.1 Organisational structure The National Clean
6 Country Profile – India 6.1 CDM in India 6.1.1 Organisational structure The National Clean

6 Country Profile – India

6.1 CDM in India

6.1.1 Organisational structure

The National Clean Development Mechanism Authority (NCA) is the Designated National Authority in India, supervised by the Ministry for Environment and Forests. The NCA consists of representatives from various ministries, and aims to ensure successful implementation of CDM projects that promote sustainable development. It set guidelines and administers the project approval process. It consults local experts for technological information, and works with stakeholders and other government organisations to allow for a wide range of inputs during the process. It reports to the Ministry for Environment and Forests at least once every 3 months.

Body

Represented parties

Responsibilities

NCA

Ministry of Environment and Forests (chair) Ministry of Foreign Affairs Ministry of Finance Industrial Policy and Promotion Ministry of Non-Conventional Energy Sources Ministry of Power Planning Commission

Take measures to improve environment

Project evaluation and approval

Recommend additional requirements for CDM projects in India

Maintain a CDM registry

State-level

State-level government officials

Capacity building

CDM

Creating a forum for parties involved in CDM projects

promotional

cell

Help with project identification and planning

Analysing state-level potentials and sectors

Disseminate information

INSTITUT FOR GLOBAL ENVIRONMENTAL STRATEGIES, CDM COUNTRY GUIDE FOR CHINA, 2005.

Three states with a particular interest in the CDM have established state-level promotional cells: the Environmental Protection and Training Research Institute (EPTRI) in Andhra Pradesh; the Madhya Pradesh Pollution Control Board (MPPCB) in Madhya Pradesh; and the West Bengal Renewable Energy Development Agency (WBREDA) in West Bengal. Currently these focus mostly on capacity building and promotion, but they are expected to be involved in project identification and implementation in the future too.

Other relevant organizations

Currently the only India-based DOE accredited for project validation and emission reduction verification is the Indian Council for Forestry Research and Education, which only deals with afforestation projects. However, the NCA is expected to establish DOEs in other sectors as well to support local projects and reduce procedural costs. These would be relevant for cogeneration projects.

Most CDM projects in India are small-scale projects, which require bundling to keep CDM related costs down. Several local bundling organisations have therefore emerged, most notably the Small Industries Development Bank of India and National Bank for Agriculture and Rural Development.

32

These banks have strong links to small food production and processing, and can therefore provide
These banks have strong links to small food production and processing, and can therefore provide

These banks have strong links to small food production and processing, and can therefore provide valuable services for cogeneration projects in the sugar industry and other food manufacturing.

The NCA has been working closely with other stakeholders through sectoral initiatives, education and training. Organisations currently involved in the CDM in India include Apex industry bodies, NGOs, Consulting firms, ESCOs, private and public sector companies, International development organisations and International lending institutions.

6.1.2 Sustainability Criteria

Category

Criteria

Environmental Sustainability

Environmental Impact Assessment

Economic Sustainability

Additional investment consistent with local needs

Social Sustainability

Generate employment Remove social disparities Improve quality of life

Technological Sustainability

Technology transfer

INSTITUT FOR GLOBAL ENVIRONMENTAL STRATEGIES, CDM COUNTRY GUIDE FOR CHINA, 2005.

The sustainability criteria used by the NCA to evaluate submitted CDM projects focus on the social benefits of the project. CDM projects are expected to have a direct positive effect on the lives of the local community, and promote development. This shows the importance of using local skills and resources, and working with local partners. It also suggests that cogeneration projects in food manufacturing using local biomass, like the sugar industry, are well-positioned for CDM approval.

The economic criterion for additional investment is also important, and implies that the CDM related investment must be additional to normal Official Development Assistance (ODA).

6.1.3 Country approval application process

The table below shows the documents required for submitting a project for CDM approval in India. A Project Concept Note, as well as the PDD must be submitted, together with any supporting documents.

Required Documentation for National Approval In India

Electronic copy of the Project Concept Note (PCN) Electronic copy of the PDD 20 hard copies of the PCN and PDD each Supporting documents Two CDs containing all information Cover letter signed by the project developers

INSTITUT FOR GLOBAL ENVIRONMENTAL STRATEGIES, CDM COUNTRY GUIDE FOR CHINA, 2005.

The documents submitted are circulated among the members of the NCA for initial evaluation, and the developer is invited to present the proposal, so that NCA members can ask for clarification. Simultaneously NCA members and experts assess the PDD in detail, producing an assessment report.

33

The NCA will check that the CER revenue is additional to ODA (i.e. they are
The NCA will check that the CER revenue is additional to ODA (i.e. they are

The NCA will check that the CER revenue is additional to ODA (i.e. they are not sold to an organisation using ODA funds). Once the NCA is satisfied, Host Country Approval is granted.

There is no indication of the length of the process.

Government Incentives

The Indian government considers the CDM as a promising opportunity to achieve its sustainable development goals and attract foreign investment. It therefore offers a number of incentives to promote CDM projects in the country.

For cogeneration projects the most important of these are:

! National Programme on promotion of Biomass Power/Bagasse-based cogeneration (capital grants and interest subsidies)

! 80% depreciation on cogeneration equipment may be claimed in first year

! 5-year tax break with 30% exemption for projects with power Purchasing Agreements (PPAs)

! Customs duty for RE projects under 50 MW fixed at 20% ad valorem

! Central sales tax exemption, in addition to general sales tax exemption in certain states for RE projects

! Minimum purchase rates of Rs 2.25 per unit (for all renewable sources)

! Encouragement of bundling to bring down transaction costs

! Incentives to promote rural energy generation and rural electrification

Financial and legal arrangements

The general investment climate in India is good, which facilitates Foreign Direct Investment (FDI) in CDM projects. The governments promotes FDI through the Foreign Investment

Promotion Board and Foreign Investment Implementation Authority. No government approval is needed, Indian capital markets are freely accessible, and tax incentives are available for investment in the power sector.

A more problematic issue is the legal status of CERs in Indian law. They are defined as “intangible assets that can be traded and transferred”, but their ownership is not clearly defined. Investors have avoided this uncertainty through clear contractual arrangements with the project developers about the ownership rights of the CERs. However, the taxation of CERs is still unclear too, hampering CDM investment.

34

The Project Approval Process in India PCN and PDD submitted by the project developer Initial
The Project Approval Process in India PCN and PDD submitted by the project developer Initial

The Project Approval Process in India

PCN and PDD submitted by the project developer Initial screening by Rejection / the DNA
PCN and PDD submitted by
the project developer
Initial
screening by
Rejection /
the DNA
resubmit
secretariat
In-depth assessment by
NCA members and other
consultants
In-depth assessment by
NCA members and other
consultants
Assessment
report
DNA
Rejection /
decision
resubmit
Approval letter

INSTITUT FOR GLOBAL ENVIRONMENTAL STRATEGIES, CDM COUNTRY GUIDE FOR CHINA, 2005.

35

6.2 Potential for cogeneration projects in the CDM in India 6.2.1 Cogeneration status and potential
6.2 Potential for cogeneration projects in the CDM in India 6.2.1 Cogeneration status and potential

6.2 Potential for cogeneration projects in the CDM in India

6.2.1 Cogeneration status and potential

In Indian cogeneration facilities represent 16% of total installed capacity (18.7 GWe), and generate 12.1% of the country’s electricity. Most of this is located in food manufacturing plants, particularly in the sugar sector. There is therefore already a strong tradition and expertise with bagasse cogeneration, but in other sectors cogeneration is also used. The total potential for cogeneration is estimated at 20,000 MWe, most of which is in the food processing sector.

Cogeneration Potential in India

3500 3000 2500 2000 1500 1000 500 0 Sugar Iran &steel Dairies; Distilleri Potential in
3500
3000
2500
2000
1500
1000
500
0
Sugar
Iran &steel
Dairies; Distilleri
Potential in MWe
Pulp & paper
Rice mills
Textiles
Cement
Fertiliser

CDM Status in India

 

Approved Projects

Installed Capacity

GHG Emissions Reductions (t/yr)

(MWe)

All CDM projects

104

-

10,975,109

CHP projects

23

298.5

1,295,246

Sugar

8

91.8

340,526

Iron and Steel

7

158

653,466

Textiles

3

13.0

75,804

Pulp and Paper

1

3.0

14,744

Other

4

32.7

210,706

WADE, 2006.

India represents almost one-third of all registered CDM projects, and over one-third of registered cogeneration projects. Initially most projects were in sugar mills, but throughout 2006 the range of projects has diversified. The sugar sector still has most registered projects, but represents only 26% of GHG emissions reductions from approved projects, as most projects are small.

Since May various waste-heat driven energy generation projects in industry have been registered, lead by the iron and steel sector, which now represents over half of all registered emission reductions.

36

Cogeneration Potential in India by Sector India - CHP and CDM Potentials 3500 8 CHP
Cogeneration Potential in India by Sector India - CHP and CDM Potentials 3500 8 CHP

Cogeneration Potential in India by Sector

India - CHP and CDM Potentials

3500 8 CHP Potential 7 3000 CDM Potential 6 2500 5 2000 4 1500 3
3500
8
CHP Potential
7
3000
CDM Potential
6
2500
5
2000
4
1500
3
1000
2
500
1
0
0
Sugar
Iron & Steel
Beverages
Rice mills
Textiles
Pulp & Paper
Cement
Fertiliser
CHP Potential (MWe)
CDM Potential (Mt/yr)

INSTITUTE FOR GLOBAL ENVIRONMENTAL STRATEGIES, CDM COUNTRY GUIDE FOR CHINA, 2005.

The above graph shows that the CDM potential mirrors energy use in India: 65-70% of India’s total energy use by 7 sectors: cement, pulp & paper, fertiliser, iron & steel, textiles, aluminium and refineries, all of which can benefit from cogeneration. The food sector is still the most significant, but many large industrial energy recovery projects are attractive as well. For food-processing cogeneration represents a large share of the CDM potential, while for industrial energy efficiency many more technologies and measures can deliver emission reductions, so cogeneration is a smaller segment of the total potential. However, potentials in industries are generally larger, so the opportunities for cogeneration are still significant.

SWOT analysis

 

Strengths

Weaknesses

Opportunities

Strong governmental support for CDM Good investment climate

CDM transaction costs

Threats

Low reliability of grid electricity

Uncertainty around taxation Need for clarification concerning ownership of CERs No fixed timelines for approval process

6.2.2 Prospects

The potential for cogeneration projects in the CDM in India is substantial, particularly in industrial and food manufacturing applications. Furthermore, the long tradition of bagasse cogeneration makes such projects relatively low-risk. However, there is no clarity yet about the legal and fiscal status of CERs, and the approval process and related costs. This needs to be resolved to reduce risks and make CDM more attractive for investors.

37

7 Conclusion

7 Conclusion The CDM provides a major opportunity for cogeneration projects in developing countries. The necessary
7 Conclusion The CDM provides a major opportunity for cogeneration projects in developing countries. The necessary

The CDM provides a major opportunity for cogeneration projects in developing countries. The necessary conditions for cogeneration often do exist in these places, although project implementation is hampered by lack of experience or resources. The CDM can alleviate these problems by facilitating knowledge and technology transfer from Annex I countries, and giving the projects an additional source of revenue through CERs.

The CDM EB has established the general procedures for the CDM, although the scheme is still being perfected.

Among the first registered CDM projects were biomass-fired cogeneration projects, often in small food transformation plants. Currently the share of cogeneration projects in the CDM is about a fifth of all registered projects, with only a few large cogeneration projects. However, more industrial cogeneration projects are to be expected with new methodologies targeting industrial waste-heat recovered and utilisation.

India leads by far when it comes to cogeneration projects, but more countries are becoming involved, such as Malaysia.

The potential for future cogeneration projects registering as CDM projects is good, in particular thanks to the dual opportunities offered both by small-scale biomass-fired units and larger industrial projects.

Some commentators have also argued that building integrated cogeneration projects could be implemented but this will require a widespread familiarity with the CDM registration process. WADE research has indicated that the potential emission reductions from building-integrated cogeneration in China are 135 Mt CO2 eq/yr in 2020, and 40 Mt CO2 eq/yr in 2020 in India.

7.1 Political Uncertainty: Post-Kyoto Arrangements

The future development of the CDM is generally thought to be promising, but a number of uncertainties remain. On a political level it is not yet clear what kind of climate change agreement will emerge in 2012 after the first commitment period of the Kyoto Protocol.

Negotiations are still taking place, and the main questions are whether the US will be involved, and whether developing countries will adopt emission caps. American participation would be a huge boost for the CDM, as it would raise the expected demand for CERs, and increase prices. The effect of emission caps for developing countries is more complicated to predict, because emission reductions currently in the CDM would then also have be used for meeting targets in the host countries themselves. This would not have to mean the end of the CDM, but it would be more like the Joint Implementation mechanism. It is therefore conceivable that the two will merge in the future.

Whatever happens after Kyoto, any future global climate agreement is likely to include international trading and project implementation mechanisms such as JI and CDM, because these are supported by all major parties in the negotiations.

38

8 Glossary

8 Glossary Additionality Principle – The requirement for CDM projects that ‘the reduction of emissions through
8 Glossary Additionality Principle – The requirement for CDM projects that ‘the reduction of emissions through

Additionality Principle – The requirement for CDM projects that ‘the reduction of emissions through the CDM project must be additional to reductions that would occur without the CDM project’.

Annex I country – Country signed up to the Kyoto Protocol that has a GHG emission cap.

Baseline Methodology – Methodology for assessing the scenario and emissions for a project in absence of the CDM project activity.

Certified Emission Reduction (CER) – Tradable emission reduction certificates issued to

CDM projects for GHG emission reductions achieved.

Clean Development Mechanism (CDM) – Mechanism that allows Annex I countries to meet part of their emission reductions through projects in non-Annex I countries.

CDM Executive Board (CDM-EB) – International supervisory board for the CDM, operated by the UNFCCC.

Combined Heat and Power (COGENERATION) – The combined thermal generation of heat and electricity for local use.

CO 2 equivalent (CO 2 -eq) – The effective global warming effect of a GHG expressed in the amount of CO 2 with equivalent warming effect.

Conference of the Parties (COP) – Annual meeting of the Parties of the Kyoto Protocol. Since ratification of the Protocol in 2005, this is combined with the Meeting of the Parties (MOP) of countries that have ratified the treaty.

Crediting Period – The period over which CERs are issued for a CDM project.

Decentralised Energy (DE) – Electricity generation at the point of use.

Designated National Authority (DNA) – National supervisory organisation, which regulates and manages the CDM procedures and implementation in a county.

Designated Operational Entity (DOE) – Independent organisation accredited by the CDMEB to validate the baseline methodology for CDM projects, and verify the emission reductions achieved.

EU Emissions Trading Scheme (EU ETS) – European market-based mechanism tha distributes emission quota between major GHG emitting industries, and allows trade between these to meet emission caps cost-effectively.

First Commitment Period – First period during which Annex I countries must meet their emission caps (2008 – 2012).

Greenhouse Gas (GHG) – Chemical substance, which has a net positive global warming effect when released into the atmosphere. GHGs covered by the Kyoto Protocol are: CO2, CH4, N2O, HFCs, PFCs and SF6.

39

‘Hot air’ – Excessive emission quota of former Soviet Un ion countries, which do not
‘Hot air’ – Excessive emission quota of former Soviet Un ion countries, which do not

‘Hot air’ – Excessive emission quota of former Soviet Union countries, which do not account for the sharp reduction in economic output during the collapse of communism.

Joint Implementation (JI) – Mechanism that allows Annex I countries to meet part of their emission reductions through projects in other Annex I countries.

Kyoto Protocol – International agreement adopted at the 3 rd COP in Kyoto in 1997, which quantifies emission reduction targets and establishes the mechanisms to reduce global GHG emissions.

Leakage – ‘Net change of GHG emissions which occurs outside the project boundary and which is measurable and attributable to the CDM project activity’.

Marrakech Accords – Agreements adopted during the 1st meeting of the CDM-EB at COP 7 in 2001 in Marrakech, which specify the procedures and rules for the CDM.

Monitoring Methodology – Methodology for monitoring the GHG emissions from CDM

40

Annex I – List of registered CDM cogeneration projects and cogeneration projects that have requested
Annex I – List of registered CDM cogeneration projects and cogeneration projects that have requested

Annex I – List of registered CDM cogeneration projects and cogeneration projects that have requested registration (17/01/2007) in China

For an updated list of all projects already registered or requesting registration in China, please follow this link: http://cdm.unfccc.int/Projects/projsearch.html and use the advanced search function in order to select “China” as host country. In addition, it is possible to access all the relevant documentation for each project.

Registered

Title

Host

Other Parties

Methodology *

Reductions

Ref

/ Status

Parties

(kt/y)**

24 Jun 06

Taishan Cement Works Waste Heat Recovery and Utilisation for Power Generation Project

China

United Kingdom

AM0024

105894

366

Requesting

Hebei Jinzhou 24MW Straw- Fired Power Project

China

United Kingdom

ACM0006 ver.

178626

778

Registration

3

Requesting

Shandong Yucheng Xinyuan Biomass Heat & Power (“Yucheng Biomass CHP”)

China

United Kingdom

ACM0006 ver.

189552

811

Registration

3

Requesting

Henan Luyi 25MW Biomass Cogeneration Project

China

United Kingdom

ACM0006 ver.

185664

825

Registration

3

41

Annex II – List of registered CDM cogenerati on projects and cogeneration projects that have
Annex II – List of registered CDM cogenerati on projects and cogeneration projects that have

Annex II – List of registered CDM cogeneration projects and cogeneration projects that have requested registration (17/01/2007) in India

Please note: due to the high number of registered projects in India (190), some cogeneration projects may have been overlooked when compiling this table.

For an updated list of all projects already registered or requesting registration in India, please follow this link: http://cdm.unfccc.int/Projects/projsearch.html and use the advanced search function in order to select “India” as host country. In addition, it is possible to access all the relevant documentation for each project.

Registered

Title

Host

Other

Methodology

Reductions

Ref

Parties

Parties

23

Sep 05

SRS Bagasse Cogeneration Project

India

United

AMS-I.D. ver. 5

22000

80

 

Kingdom

11

Dec 05

3.5

MW Rice Husk based

India

 

AMS-I.C. ver. 6

22267

117

 

Cogeneration Project at Nahar

Spinning Mills Ltd.

16

Dec 05

3.5

MW Rice Husk based

India

 

AMS-I.C. ver. 6

22267

118

 

Cogeneration Project at Oswal

Woolen Mills Ltd.

15

Jan 06

RSCL cogeneration expansion project

India

United

AM0015

80157

127

 

Kingdom

03

Feb 06

Rice Husk based Cogeneration project at Shree Bhawani Paper Mills Limited (SBPML), Rae Bareli, Uttar Pradesh, India

India

United

AMS-I.D. ver. 6

14744

195

 

Kingdom

6 Mar-06

Grid connected bagasse based cogeneration project of Ugar Sugar Works Limited (USWL).

India

Sweden

AM0015

63934

189

01

May 06

Ajbapur Sugar Complex Cogeneration Project

India

United

AMS-I.D. ver. 7

40392

332

 

Kingdom

Rejected

Cogeneration system based on biomass (rice-husk) replacing oil fired boiler for process steam and generating power for partly replacement of grid power supply to the plant at M/s Indian Acrylics Ltd., District Sangrur, Punjab, India.

India

 

AMS-I.C. ver. 7

47463

348

15

May 06

Waste Heat Recovery Power Project at JK Cement Works (Unit of JK Cement Limited), Nimbahera, Chittorgarh, Rajasthan

India

 

ACM0004 ver. 1

70796

284

29

May 06

Process Waste Heat utilization for power generation at Phillips Carbon Black Limited, Gujarat

India

Sweden

ACM0004 ver. 1

45721

309

 

Netherlands

42

Registered Title Host Other Methodology Reductions Ref Parties Parties 12 Jan 07
Registered Title Host Other Methodology Reductions Ref Parties Parties 12 Jan 07

Registered

Title

Host

Other

Methodology

Reductions

Ref

Parties

Parties

12

Jan 07

Generation of Electricity through combustion of waste gases from Blast furnace and Corex units at JSW Steel Limited (in JPL unit 1), at Torangallu in Karnataka, India

India

United

ACM0004 ver. 1

767325

325

 

Kingdom

31

Aug 06

Waste heat recovery project based on technology up-gradation at Apollo Tyres, Vadodara, India

India

 

AMS-II.D. ver. 7

23429

389

08

Aug 06

Bagasse Based cogeneration power project of Rana Sugars Limited, Amritsar District, Punjab;

India

 

AMS-I.D. ver. 8

24539

355

12

Jan 07

Use of waste gas use for electricity generation at JSW Energy Limited

India

United

ACM0004 ver. 2

1267392

350

 

Kingdom

19

Jun 06

Power generation from waste heat of non-recovery type coke ovens at JSPL

India

 

ACM0004 ver. 1

387643

351

29

Aug 06

Ganpati co-generation project at Medak, Andhra Pradesh

India

United

AMS-I.D. ver. 7

48552

370

 

Kingdom

17

Jul 06

VGL - Waste Heat based 4 MW Captive Power Project at Raipur

India

 

ACM0004 ver. 2

18965

432

Registering

Efficient utilisation of waste heat and natural gas at Dahej complex of GACL

India

 

AMS-II.D. ver. 7

4631

500

with

Corrections

15

Dec 06

OSIL - Waste Heat Recovery Based Captive Power Project

India

 

ACM0004 ver. 2

41052

515

15

Dec 06

MAHARASHTRA, INDIA- Kurkumbh, 1.5 MW Biomass / Bagasse Based Co-generation Power Project

India

 

AMS-I.C. ver. 8

36897

581

15

Dec 06

12MW Captive Power Project based on Waste Heat Recovery of Industrial Waste Gases

India

United

ACM0004 ver. 2

78380

556

 

Kingdom

Under

“16 MW Bagasse based cogeneration plant” by GMR Industries Ltd. (GIDL)

India

 

ACM0006 ver. 3

40182

552

Review

3 Nov 06

Deoband Bagasse based Co- generation Power Project

India

 

ACM0006 ver. 3

85470

578

ACM0002 ver. 6

13

Nov 06

12MW Captive Power Project based on Waste Heat Recovery of Industrial Waste Gases

India

United

ACM0004 ver. 2

52330

588

 

Kingdom

Review

Sesa-Waste Heat Recovery Based Power Generation

India

 

ACM0004 ver. 2

112357

535

Requested

43

Registered Title Host Other Methodology Reductions Ref Parties Parties Review The Godavari
Registered Title Host Other Methodology Reductions Ref Parties Parties Review The Godavari

Registered

Title

Host

Other

Methodology

Reductions

Ref

Parties

Parties

Review

The Godavari Sugar Mills Ltd (TGSML)’s 24 MW Bagasse Based Co-generation Power Project at Sameerwadi

India

 

ACM0006 ver. 3

64084

577

Requested

17

Dec 06

“Waste Heat Recovery based captive power generation by SKS Ispat Ltd”

India

 

ACM0004 ver. 2

116773

674

23

Dec 06

Usha Martin Limited - Waste Heat Recovery Based Captive Power Project activity

India

 

ACM0004 ver. 2

54340

696

29

Dec 06

Biomass based captive cogeneration project at Shri Renuga Textiles Limited

India

 

AMS-I.C. ver. 8

19369

713

Review

Power generation from the proposed 11.2 MW waste heat recovery boiler at the ISA Smelt furnace of the Copper Smelter, Sterlite Industries India Limited (SIIL), Tuticorin

India

 

ACM0004 ver. 2

22473

683

Requested

15

Jan 07

Rice husk based cogeneration power plant-II at SBPML

India

 

AMS-I.D. ver. 9

13993

802

Requesting

Waste Heat based 4.75 MW captive power project "RSIPL- WHRB(1&2)" CDM PROJECT ACTIVITY

India

 

ACM0004 ver. 2

23887

783

Registration

Requesting

Waste Heat based 10 MW captive power project “GPIL- WHRB 2” CDM PROJECT ACTIVITY

India

 

ACM0004 ver. 2

50620

772

Registration

Requesting

Bagasse based Co-generation Project at Titawi Sugar Complex

India

 

ACM0006 ver. 3

21704

803

Registration

Requesting

Bagasse based Co-generation Project at Nanglamal Sugar Complex.

India

 

ACM0006 ver. 3

65493

804

Registration

Requesting

Installation of co-generation project at sugar manufacturing unit of Mawana Sugars Limited

India

 

ACM0006 ver. 3

26321

813

Registration

Requesting

Bagasse based Co-generation Project at Mawana Sugar Works

India

 

ACM0006 ver. 3

60267

805

Registration

44

Annex III – List of registered CDM proj ects and projects that have requested registration
Annex III – List of registered CDM proj ects and projects that have requested registration

Annex III – List of registered CDM projects and projects that have requested registration (17/01/2007) in Malaysia

For an updated list of all projects already registered or requesting registration in Malaysia, please follow this link: http://cdm.unfccc.int/Projects/projsearch.html and use the advanced search function in order to select “Malaysia” as host country. In addition, it is possible to access all the relevant documentation for each project.

Registered

Title

Host

Other

Methodology *

Reductions **

Ref

(status/date)

Parties

Parties

24

Feb 06

Biomass Energy Plant- Lumut.

Malaysia

Denmark

AMS-I.C. ver. 7

32545

249

23

Apr 06

Sahabat Empty Fruit Bunch Biomass Project

Malaysia

United

AMS-I.C. ver. 7

53986

288

 

Kingdom

10

Jun 06

LDEO Biomass Steam and Power Plant in Malaysia

Malaysia

Canada

AMS-I.C. ver. 7

208871

395

 

AMS-III.E. ver. 7

10

Jun 06

SEO Biomass Steam and Power Plant in Malaysia

Malaysia

Canada

AMS-I.C. ver. 7

216831

402

 

AMS-III.E. ver. 7

2 Sep 06

Bentong Biomass Energy Plant in Malaysia

Malaysia

Canada

AMS-I.C. ver. 8

380934

501

AMS-III.E. ver. 8

24 Sep 06

Jendarata Steam & Power Plant

Malaysia

Denmark

AMS-I.C. ver. 8

8851

558

* AMS - Small scale

** Estimated emission reductions in metric tonnes of CO2 equivalent per annum (as stated by the project participants)

45