VER + Verification Report

Transcription

1 VER + Verification Report Enecore Carbon Initial Verification and Verification of the First Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Report No March 2008 TÜV SÜD Industrie Service GmbH Carbon Management Service Westendstr Munich - GERMANY

2 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 1 of 17 Report No. Date of first issue Version: Date of this revision Certificate No Subject: Executing Operational Unit: Client: Contract approved by: Report Title: Initial and First Periodic Verification of a VER+ Project TÜV SÜD Industrie Service GmbH Carbon Management Service Westendstr Munich, Federal Republic of Germany Enecore Carbon Hongkong; Encore Carbon Ltd, unit 1601, Tower 16, Jianwai SOHO Werner Betzenbichler Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Number of pages 17 (excluding annexes) Summary: TÜV SÜD Industrie Service GmbH has performed a verification of the VER+ project: Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas. The verification is based on the currently valid documentation of the UN Framework Convention on Climate Change (UNFCCC). In this context, the relevant documents are the "Marrakesh Accords". The management of Enecore Carbon is responsible for the preparation of the GHG emissions data and the reported GHG emissions reductions of the project Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas on the basis set out within the project Monitoring and Verification Plan indicated in the final PDD version dated August 2007 (The project has been registered as CDM project No on ). The development and maintenance of records and reporting procedures is in accordance with that plan. The calculation and determination of GHG emission reductions from the project is in the responsibility of the management of the project. The verifier confirms that the project is implemented as planned and described in the VER+ monitoring report. Installed equipment being essential for generating emission reduction runs reliably. The monitoring system is in place and the project is ready to generate GHG emission reductions. The verifier can confirm that the GHG emission reduction is calculated without material misstatements. Our opinion relates to the project s GHG emissions and resulting GHG emissions reductions reported and related to the VER+ monitoring report and its associated documents. Based on the information we have seen and evaluated we confirm the following statement: Reporting period: From to Verified emission in the above reporting period: Baseline emissions: t CO 2 equivalents Project emissions: t CO 2 equivalents Leakage t CO 2 equivalents Emission reductions: t CO 2 equivalents Work carried out by: Dr. Sven Kolmetz; Xiaoying Chen; Mr. Sun Baoqi; Ms. Fang Liu Internal Quality Control by: Javier Castro

3 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 2 of 17 Abbreviations CAR CDM CR DNA DOE EB ER FAR GHG JI KP MP NGO PDD TÜV SÜD UNFCCC VVM VER Corrective Action Request Clean Development Mechanism Clarification Request Designated National Authority Designated Operational Entity Executive Board Emission Reduction Forward Action Request Greenhouse gas(es) Joint Implementation Kyoto Protocol Monitoring Plan Non Governmental Organization Project Design Document TÜV SÜD Industrie Service GmbH United Nations Framework Convention on Climate Change Validation and Verification Manual Verified Emission Reduction

4 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 3 of 17 Table of Contents Page 1 INTRODUCTION Objective Scope GHG Project Description 5 2 METHODOLOGY Review of Documents Follow-up Interviews Resolution of Clarification, Corrective and Forward Action Requests 9 3 VERIFICATION FINDINGS Discussion Project Implementation Discussion Findings Conclusion Internal and External data Discussion Findings Conclusion Environmental and Social Indicators Discussion Findings Conclusion Management and Operational System Discussion Findings Conclusion Accuracy of Emission Reduction Calculations Findings Conclusion Quality of Evidence to Determine Emission Reductions Management System and Quality Assurance 14 4 PROJECT SCORECARD VERIFICATION STATEMENT Annex 1: Verification Protocol Annex 2: Information Reference List

5 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 4 of 17 1 INTRODUCTION 1.1 Objective Enecore Carbon has commissioned an independent verification by TÜV SÜD Industrie Service GmbH (TÜV SÜD) of its VER+ project: Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas. Verification is the periodic independent review and ex post determination by the Designated Operational Entity / Independent Entity of the monitored reductions in GHG emissions during the defined verification period. The objective of verification can be divided in Initial Verification and Periodic Verification: Initial Verification: The objective of an initial verification is to verify that the project is implemented as planned, to confirm that the monitoring system is in place and fully functional, and to assure that the project will generate verifiable emission reductions. Periodic Verification: The objective of the periodic verification is to verify that actual monitoring systems and procedures are in compliance with the monitoring systems and procedures described in the monitoring plan; further more the periodic verification evaluates the GHG emission reduction data and express a conclusion with a high, but not absolute, level of assurance about whether the reported GHG emission reduction data is free of material misstatements; and verifies that the reported GHG emission data is sufficiently supported by evidence, i.e. monitoring records. If no prior initial verification has been carried out, the objective of the first periodic verification also includes the objectives of the initial verification. The verification shall consider both quantitative and qualitative information on emission reductions. Quantitative data comprises the monitoring reports submitted to the verifier by the project entity. Qualitative data comprises information on internal management controls, calculation procedures, and procedures for transfer, frequency of emissions reports, review and internal audit of calculations/data transfers. The VER+ verification follows UNFCCC criteria, refer to the Kyoto Protocol criteria and the CDM rules and modalities as agreed in the Bonn Agreement and the Marrakech Accords besides the requirements regarding publication and registration. 1.2 Scope Verification scope is defined as an independent and objective review and ex post determination by the Designated Operational Entity of the monitored reductions in GHG emissions. The verification is based on the VER+ monitoring report. This document is reviewed against Kyoto Protocol requirements, UNFCCC rules and associated interpretations. TÜV SÜD has, based on the recommendations in the Validation and Verification Manual, employed a risk-based approach in the verification, focusing on the identification of significant risks and reliability of project monitoring and generation of VERs. The verification is not meant to provide any consulting towards the client. However, stated requests for clarifications and/or corrective actions may provide input for improvement of the project design.

6 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 5 of GHG Project Description Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas is located in Yungang area, Fengtai District of Beijing, China and is a natural gas-steam combined cycle power plant with rated capacity of 1 400MW. The rated annual electricity generation is 1400 GWh with 3500 hours of designed annual operation hour, by consuming about 300 million Nm 3 of natural gas annually. The generated electricity is delivered to the North China Power Grid. The gas turbine power unit was put into operation in November, The proposed project is covered by and connected to the North China Power Grid (NCPG), which is dominated by coal-fired power plants. The electricity generated by using natural gas which is clean energy with less carbon content, in the project site, can displace electricity generated by coal-fired thermal plants which would have been built otherwise. Thus the proposed project activity can reduce CO 2 emission accrued from the NCPG.

7 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 6 of 17 2 METHODOLOGY The project assessment aims at being a risk based approach and is based on the methodology developed in the Validation and Verification Manual an initiative of all Applicant Entities, which aims to harmonize the approach and quality of all such assessments. In order to ensure transparency, a verification protocol was customized for the project, according to the Validation and Verification Manual. The protocol shows, in a transparent manner, criteria (requirements), means of verification and the results. The verification protocol serves the following purposes: It organizes, details and clarifies the requirements a VER+ project is expected to meet; It ensures a transparent verification process where the verifier will document how a particular requirement has been proved and the result of the verification. The verification protocol consists of four tables. The different columns in these tables are described in Figure 1. The completed protocol is enclosed in Annex 1 to this report. Initial Verification Checklist table 1 OBJECTIVE Ref. COMMENTS Concl.(incl FARs/CARs) The requirements the project must meet. Gives reference to the legislation or agreement where the requirement is found. Description of circumstances and further commendation to the conclusion. This is either acceptable based on evidence provided (OK), or a Corrective Action Request (CAR) of risk or noncompliance with stated requirements. The corrective action requests are numbered and presented to the client in the Verification report. The Initial Verification has additional Forward Action Requests (FAR). FAR indicates essential risks for further periodic verifications

8 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 7 of 17 Periodic Verification Checklist Table 1: Data Management System/Controls Expectations for GHG data management system/controls The project operator s data management system/controls are assessed to identify reporting risks and to assess the data management system s/control s ability to mitigate reporting risks. The GHG data management system/controls are assessed against the expectations detailed in the table. Score A score is assigned as follows: Full all best-practice expectations are implemented. Partial a proportion of the best practice expectations is implemented Limited this should be given if little or none of the system component is in place. Verifiers Comments (including Forward Action Requests) Description of circumstances and further commendation to the conclusion. This is either acceptable based on evidence provided (OK), or a Corrective Action Request (CAR) of risk or noncompliance with stated requirements. The corrective action requests are numbered and presented to the client in the Verification report. The Initial Verification has additional Forward Action Requests (FAR). FAR indicates essential risks for further periodic verifications Periodic Verification Checklist Table 2: GHG calculation procedures and management control testing Identification of potential reporting risk Identification of potential reporting risks based on an assessment of the emission estimation procedures. Identification of key source data. Focus on those risks that impact the accuracy, completeness and consistency of the reported data. Identification, assessment and testing of management controls Identification of the key controls for each area with potential reporting risks. Assessment of adequacy of the key controls and eventually test that the key controls are actually in operation. Internal controls include, Understanding of responsibilities and roles, Reporting, reviewing and formal management approval of data; Procedures for ensuring data completeness, conformance with reporting guidelines, maintenance of data trails etc. Areas of residual risks Identification of areas of residual risks, i.e. areas of potential reporting risks where there are no adequate management controls to mitigate potential reporting risks Areas where data accuracy, completeness and consistency could be improved are highlighted.

9 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 8 of 17 Periodic Verification Checklist Table 3: Detailed audit testing of residual risk areas and random testing Areas of residual risks List of residual areas of risks of Periodic Verification Checklist Table 2 where detailed audit testing is necessary. In addition, other material areas may be selected for detailed audit testing. Figure 1 Verification Protocol Tables Additional verification testing performed The additional verification testing performed is described. Testing may include: Sample cross checking of manual transfers of data Recalculation Spreadsheet walk throughs to check links and equations Inspection of calibration and maintenance records for key equipment Check sampling analysis results Discussions with process engineers who have detailed knowledge of process uncertainty/error bands. Conclusions and Areas Requiring Improvement (including FARs) Having investigated the residual risks, the conclusions are noted here. Errors and uncertainties are highlighted. 2.1 Review of Documents The monitoring report submitted by the client and additional background documents related to the project performance were reviewed. A complete list of all documents reviewed is attached as Annex 2 to this report. 2.2 Follow-up Interviews On-site interviews have been conducted at the project site in in Yungang area, Fengtai District of Beijing, P.R China, on July 2 nd 2007 by an auditing team of TÜV SÜD: Validation team: Dr. Sven Kolmetz Ms. Xiaoying Chen Mr. Sun Baoqi Ms. Fang Liu CDM Auditor, TUV SÜD Industrie Service GmbH TUV SÜD China, Beijing branch TUV SÜD China, Beijing branch TUV SÜD China, Beijing branch Interviewed persons: Mr. An Zhenyuan Mr. Tian Jianmin General Manager of Beijing Jingfeng Gas Turbine Power Co., Ltd. Vice General Manager of Beijing Jingfeng Gas Turbine

10 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 9 of 17 Mr. Zhou Fusheng Mr. Cao Mansheng Mr.Li Xiaobin Mr. Wangyongjun Mr. Daijie Ms. Huangqun Mr. Dc. Andrea Camponogara Ms. Wangyuanyuan Ms. Tangxuemei Mr. Liu Deshun Mr. Li Yong Mr. Zhang Shuwei Power Co., Ltd. Vice General Manager of Beijing Jingfeng Gas Turbine Power Co., Ltd. Maintenance Dept.Leader of Beijing Jingfeng Gas Turbine Power Co., Ltd. Vice Leader of Safety Department of Beijing Jingfeng Gas Turbine Power Co., Ltd. Construction Engineer Leader of Beijing Jingfeng Gas Turbine Power Co., Ltd. Construction Engineer Leader of Beijing Jingfeng Gas Turbine Power Co., Ltd. Engineer manager of Beijing Huajinhao Company Enecore Carbon Co., Ltd. Project assistant of Enecore carbon Co., Ltd. Manager of Dept of Beijing Tianqing Power International CDM Consulting Co.,Ltd Director of GCCI,Tsinghua University GCCI,Tsinghua University GCCI,Tsinghua University 2.3 Resolution of Clarification, Corrective and Forward Action Requests The objective of this phase of the verification was to resolve the requests for clarification and any other outstanding issues which needed to be clarified for TÜV SÜD`s positive conclusion on the GHG emission reduction calculation. The Clarification Requests, raised by TÜV SÜD were resolved during communication between the client and TÜV SÜD. Forward Action Requests are indicated issues which do not effect the generation of emission reduction in the verified period, but shall be improved in order to ensure the reliability of future data. To guarantee the transparency of the verification process, the concerns raised and responses that have been given are summarized in chapter 3 below and documented in more detail in the verification protocol in Annex 1.

11 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 10 of 17 3 VERIFICATION FINDINGS In the following sections the findings of the verification are stated. The verification findings for each verification subject are presented as follows: The findings from the desk review of the final monitoring report and the findings from interviews during the follow up visit are summarized. A more detailed record of these findings can be found in the Verification Protocol in Annex 1. 1) Where TÜV SÜD identified issues that needed clarification, corrective action or that represented a risk to the fulfillment of the project objectives, a Corrective Action Request or Forward Action Request, respectively, was issued. The Requests are stated, where applicable, in the following sections and are further documented in the Verification Protocol in Annex 1. The verification of the project resulted in two Corrective Action Request and one Forward Action Request. 2) Where Corrective Action Requests have been issued, the exchanges between the Client and TÜV SÜD to resolve these Requests are summarized. 3) In the context of Forward Action Requests, risks have been identified, which may endanger the delivery of high quality VER+ in the future, i.e. by deviations from standard procedures as defined by the MP. As a consequence, such aspects should receive a special focus during the next consecutive verification. A FAR may originate from lack of data sustaining claimed emission reductions. Forward Action Requests are understood as recommendation for future project monitoring; they are stated, where applicable, in the following sections and are further documented in the Verification Protocol in Annex 1. 4) The final conclusions for verification subject are presented. The verification findings relate to the project implementation as documented and described in the final monitoring report.

12 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 11 of 17 Initial Verification Findings 3.1 Remaining issues, CARs, FARs from previous validation Discussion Based on the validation report the verification team identified no missing steps. 3.2 Project Implementation Discussion The Project has been implemented as defined in the PDD. The power generation system is delivered by Mitsubishi as announced in the PDD. The gas engine is a Mitsubishi with 400 MW. The system is running stable as could be confirmed during the on-site visit. 1,866,037.4 MWh were submitted to the grid during the monitored period according to the invoices of the local grid company. The physical components comprise the power generation system, the measurement equipment including the control system. The project boundaries are according to the PDD. The data to be collected in order to monitor project emissions comprise the Natural Gas consumption (Nm3) and the electricity delivered to the grid. The gas flow metering is based on the measurement of the Natural gas content as stated in the monitoring plan. The resulting standardized gas flow is calculated by the Daniel S600 flow computer system. The electricity meter is calibrated by the power supply company four times per year, once every three months. The third party calibration record has been reviewed by the auditor. The Natural gas flow meter will be calibrated by the gas supplier annually. The generation operation data has to be recorded continuously and automatically and the records are archived on CD monthly. All paper based information will be stored by the CDM group and have at least 2 hard copies. The company has clearly defined procedures for monitoring and measurement of process parameters as mentioned above. The staff will be trained in operating of the NGPG plant according to the training contract included in the equipment purchasing contract, CDM consultants will support the staff of the CDM knowledge. The overall authority of the project is Mr Zhou Fusheng (the chief engineer), who supervises the engineers and workers as well as the CDM monitoring group. In case the power plant shut down, the electricity generation will be recorded as zero, and in case of the meter failure, it should be substituted by the backup meter Findings Corrective Action Request 1: A data manager should be nominated. And the data processing system should be clearly defined in the operation manual.

13 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 12 of 17 Response: Mr. Tian Jianmin, vice general manager of Beijing Jingfeng company is the leader of CDM group responsible for all the relevant activities during project operations and maintaining period. Mr.Cao Mansheng, the leader of maintenance department and Mr. Li Xiaobin, the vice leader of safety department, are both authorized by Mr Tian Jianmin for organizing and managing data reading and verifying team. Process responsibilities and data processing system are both In the Operation Manual, which has been developed by the safety department. The Manual incorporates natural gas-turbine technical standard guidelines with CDM process management. As clarified in the manual, the whole electricity monitoring system employed in the project is a remote electricity billing system, which is the billing system for the electricity trading clearance between the Beijing No.3 thermal power plant and the power grid the project is connected to. The data processing system is clearly defined in the Operation Manual. Corrective Action Request 2: A CDM project management and operation manual should be developed. Response: A CDM operation manual has been developed and is available for consultation Conclusion Since the CARs have been closed the project is in compliance with the requirement. 3.3 Internal and External data Discussion The following internal parameters need to be obtained according to the monitoring plan: Net electricity generation continuously measured by calibrated meters Natural gas flow (quantity, NCV) The data reader is responsible for the data monitoring and recording in the log book daily, the Data verifier should be responsible for the data verification and confirmation, the verified data will be archived in the finance department, the financial person is responsible for the data energy balancing and management of the energy supply/consumption receipts. All the data to be collected according to the monitor plan have to be recorded on hourly basis. And the electricity export to the grid has to be recorded by local power company. The chances of misstatement are hereby low. External data could be obtained by Yearbooks and IPCC default data Findings None Conclusion The project complies with the requirements.

14 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 13 of Environmental and Social Indicators Discussion No environmental and social indicators are defined in the monitoring plan. Hence the question is not applicable Findings None Conclusion The project complies with the requirements. 3.5 Management and Operational System Discussion The procedures are clearly defined in the PDD. The overall responsible person of the project is Mr. Zhou (Chief Engineer) who supervises further shift engineers. Routines for the archiving of data are defined and documented. The data trail from the meter to the monitoring report is clearly described in the PDD. The monitoring report has been send by to the verifier; hence the source can be retraced. No CDM specific internal audits are required because the monitoring and measurement of power exports are done diligently every month as core business and hence a permanent control of the figures in main and auxiliary supply meter readings takes place Findings Forward Action Request No. 1: Future monitoring reports should include a legally binding signature Conclusion The project complies with the requirements.

15 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 14 of 17 Periodic Verification Findings 3.6 Completeness of Monitoring It has been verified on-site that the data are complete since the beginning of the monitoring period until the date of verification. During the time the power system stops there is no data measured and recorded. It has been verified that in this cases no extrapolation has been applied. 3.7 Accuracy of Emission Reduction Calculations The critical parameters for the determination of GHG emissions are the produced amount of electricity and the natural gas flow. The calibration and maintenance procedures are in appliance as described in the initial verification protocol. The data of the monitoring report have been traced back exemplarily for one day from the original records to the excel sheet attached to the monitoring plan. The invoices of the grid company have been compared with the reported electricity supply Findings None Conclusion The project complies with the requirements. 3.8 Quality of Evidence to Determine Emission Reductions The calculations reflect the methodology as mentioned in the initial verification and are applied according to monitoring plan. The procedures are mainly applied according to the monitoring plan. The procedures are described in the initial verification protocol. The data reader is responsible for the data monitoring and recording in the log book daily, the Data verifier should be responsible for the data verification and confirmation, the verified data will be archived in the finance department. In case meter number 1 is failing, meter number 2 will serve as back up meter to measure the electricity delivered to the grid. 2 flow meter are available for the Natural Gas consumption measuring, when the main meter is failing, the system will use the standby meter and shut down the failed meter. 3.9 Management System and Quality Assurance See Initial verification. The above mentioned procedures are applied and working.

16 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 15 of 17 The audit team did verify the following parameters: Invoices from the power grid Natural gas consumption invoice All data were in compliance with the figures stated in the monitoring report. The data measured on site are recorded manually and electronically. The electronic data are archived on CD. The net electricity supply to the grid is measured internally as well as externally by the grid company. The IT system is based on standard PC and MS-office and ORACLE solutions. Hence the verification team feels confident about its use.

17 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 16 of 17 4 PROJECT SCORECARD Risk Areas Conclusions Summary of findings and comments Baseline Emissions Project Emissions Emission Reductions Completeness Source coverage/ boundary definition There were no findings regarding the completeness. Accuracy Physical Measurement and Analysis There were no findings regarding the physical measurement and analysis. Data calculations There were no findings regarding the data calculation. Data management & reporting There were no findings regarding the data management and recording. Consistency Changes in the project There were no changes.

18 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Page 17 of 17 5 VERIFICATION STATEMENT TÜV SÜD Industrie Service GmbH has performed a verification of the VER+ project: Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas. The verification is based on the currently valid documentation of the UN Framework Convention on Climate Change (UNFCCC). In this context, the relevant documents are the "Marrakesh Accords". The management of Enecore Carbon is responsible for the preparation of the GHG emissions data and the reported GHG emissions reductions of the project Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas on the basis set out within the project Monitoring and Verification Plan indicated in the final PDD version dated August 2007 (The project has been registered as CDM project No on ). The development and maintenance of records and reporting procedures is in accordance with that plan. The calculation and determination of GHG emission reductions from the project is in the responsibility of the management of the project. The verifier confirms that the project is implemented as planned and described in the VER+ monitoring report. Installed equipment being essential for generating emission reduction runs reliably. The monitoring system is in place and the project is ready to generate GHG emission reductions. The verifier can confirm that the GHG emission reduction is calculated without material misstatements. Our opinion relates to the project s GHG emissions and resulting GHG emissions reductions reported and related to the VER+ monitoring report and its associated documents. Based on the information we have seen and evaluated we confirm the following statement: Reporting period: From to Verified emission in the above reporting period: Baseline emissions: t CO 2 equivalents Project emissions: t CO 2 equivalents Leakage t CO 2 equivalents Emission reductions: t CO 2 equivalents Munich, Munich, Dr. S. Kolmetz

19 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Annex 1: Verification Protocol

20 Final Report Initial Verification and Verification of the First Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 1 of 20 1 INITIAL VERIFICATION CHECKLIST 1. Opening Session OBJECTIVE Ref. COMMENTS Conclusion.(incl FARs/CARs) 1.1. Introduction to audits The intention and the target of the audit were illustrated to the participants of the audit Clarification of access to data archives, records, plans, drawings etc Contractors for equipment and installation works 6 The verification team got open access to all required plans, data, records, drawings and to all relevant facilities. 1, 6 The Project has been implemented as defined in the PDD. The power generation system is delivered by Mitsubishi as announced in the PDD Actual status of installation works 1, 6 The gas engine is from Mitsubishi with 400 MW. The system is running stable as could be confirmed during the on-site visit. 1,866,037.4 MWh were submitted to the grid during the monitored period according to the invoices of the local grid company. 2. Open issues indicated in validation report 2.1. Missing steps to final approval 1 Based on the validation report the verification team identified no missing steps. 3. Implementation of the project Page A-1 Report No , rev 3

21 Final Report Initial Verification and Verification of the First Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 2 of 20 OBJECTIVE Ref. COMMENTS Conclusion.(incl FARs/CARs) 3.1. Physical components 6, 4 The physical components comprise the power generation system, the measurement equipment including the control system Project boundaries 1, 6 The project boundaries are according to the PDD Monitoring and metering systems 1, 6 The data to be collected in order to monitor project emissions comprise the Natural Gas consumption (Nm3) and the electricity delivered to the grid. The gas flow metering is based on the measurement of the Natural gas content as stated in the monitoring plan. The resulting standardized gas flow is calculated by the Daniel S600 flow computer system Data uncertainty 1, 6 It has been verified on-site that the data are complete since the beginning of the monitoring period until the data of verification. During the time the power system stops there is no data measured and recorded. It has been verified that in this cases no extrapolation has been applied. In case meter number 1 is failing, meter number 2 will serve as back up meter to measure the electricity delivered to the grid. 2 flow meter are available for the Natural Gas consumption measuring. When the main meter is failing, the system will automatically use the standby meter and shut down the failed meter. Page A-2 Report No , rev 3

22 Final Report Initial Verification and Verification of the First Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 3 of Calibration and quality assurance 1, 6, 11, 12, 13 The electricity meter is calibrated by the power supply company four times per year, once every three months. The third party calibration record has been reviewed by the auditor. The Natural gas flow meter will be calibrated by the gas supplier periodically Data acquisition and data processing systems 1, 6 Corrective Action Request 1: A data manager should be nominated. And the data processing system should be clearly defined in the operational manual Reporting procedures 1, 4, 6 The operational data of power generation is recorded continuously and automatically and the records are archived on CD monthly. All paper based information will be stored by the CDM group with at least 2 hard copies Documented instructions 1, 6 The company has clearly defined procedures for monitoring and measurement of process parameters as mentioned above. Corrective Action Request 2: A CDM project management and operational manual should be developed Qualification and training 1, 6 The staff will be trained in operating the NGPG plant according to the training contract included in the equipment purchasing contract, CDM consultants will support the staff regarding the CDM knowledge Responsibilities 1, 4, 6 The overall authority of the project is Mr Zhou Fusheng (the chief engineer), who supervises the engineers and workers as well as the CDM monitoring group. Page A-3 Report No , rev 3

23 Final Report Initial Verification and Verification of the First Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 4 of Troubleshooting procedures 1, 4, 6 In case the power plant shut down, the electricity generation will be recored as zero, and in case of meter failure, it should be substituted by the backup meter. 4. Internal Data 4.1. Type and sources of internal data 1, 4, 6, 14, 15 The following internal parameters need to be obtained according to the monitoring plan: Net electricity generation continuously measured by calibrated meters Natural gas flow (quantity, NCV) 4.2. Data collection 6 The data reader is responsible for the data monitoring and recording in the log book daily, the data verifier should be responsible for the data verification and confirmation, the verified data will be archived in the finance department, the financial person is responsible for the data energy balancing and manage of the energy supply/consumption receipts Quality assurance 1, 4, 6 Not specified in a CDM manual, but the data collection system as defined is reliable. See CAR Significance and reporting risks 6 All the data to be collected according to the monitor plan have to be recorded on hourly basis. And the electricity export to the grid has to be recorded by local power company. The chances of misstatement are hereby low. 5. External Data Page A-4 Report No , rev 3

24 Final Report Initial Verification and Verification of the First Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 5 of Type and sources of external data 1 External data include fuel consumption and generation electricity of fossil fuel fired power plant connected to the grid in the latest three years, NCV, EF, OXID and so on Access to external data 1 External data could be obtained by Yearbooks and IPCC default data Quality assurance Not applicable 5.4. Data uncertainty Not applicable 5.5. Emergency procedures Not applicable 6. Environmental and Social Indicators 6.1. Implementation of measures 1 No environmental and social indicators are defined in the monitoring plan. Hence the question is not applicable Monitoring equipment See chapter Quality assurance procedures See chapter External data See chapter 6.1. Report No , rev 3 Page A-5

25 Final Report Initial Verification and Verification of the First Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 6 of Management and Operational System 7.1. Documentation 1 The procedures are clearly defined in the PDD. See CAR Qualification and training 1 The overall responsible person of the project is Mr. Zhou (Chief Engineer) who supervises further shift engineers Allocation of responsibilities 1 see CAR Emergency procedures 1 See Data archiving 1 Routines for the archiving of data are defined and documented Monitoring report 4 The data trail from the meter to the monitoring report is clearly described in the PDD. The monitoring report has been send by to the verifier; hence the source can be retraced. Forward Action Request No. 1: Future monitoring reports should include a legally binding signature Internal audits and management review 1, 4 No CDM specific internal audits are required because the monitoring and measurement of power exports are done diligently every month as core business and hence a permanent control of the figures in main and auxiliary supply meter readings takes place. Report No , rev 3 Page A-6

26 Final Report Initial Verification and Verification of the Second Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 12 of 20 1 PERIODIC VERIFICATION CHECKLIST Table 1: Data Management System/Controls Expectations for GHG data management system/controls Score Verifiers Comments (including Forward Action Requests) 1. Defined organizational structure, responsibilities and competencies 1.1. Position and roles Full The overall authority of the project is supervised by Mr. Zhou fusheng (chief engineer). Mr.Zhou is an experienced project manager and executive in operation and maintenance of the plant and academically qualified to carry out the task. Meanwhile, all the staff is trained for daily operation and maintenance by Misubithi Responsibilities Full The responsibilities are clearly defined as detailed in section 8.1 of the initial verification checklist Competencies needed Full All competencies needed are met by the operating staff. 2. Conformance with monitoring plan 2.1. Reporting procedures Full The reporting procedures are working as described in the initial verification protocol. The required documents were shown to the audit team and Mr. Zhou was totally aware of the reporting procedures. Report No , rev 3 Page A-12

27 Final Report Initial Verification and Verification of the Second Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 13 of 20 Expectations for GHG data management system/controls Score Verifiers Comments (including Forward Action Requests) 2.2. Necessary Changes Full No changes to the monitoring plan are required. 3. Application of GHG determination methods 3.1. Methods used Full The calculations reflect the methodology as mentioned in the initial verification and are applied according to monitoring plan Information/process flow Full The procedures are mainly applied according to the monitoring plan. The procedures are described during the initial verification protocol Data transfer Full The data reader is responsible for the data monitoring and recording in the log book daily, the Data verifier should be responsible for the data verification and confirmation, the verified data will be archived in the finance department Data trails Full The data of the monitoring report have been traced back exemplarily for one day from the original records to the excel sheet attached to the monitoring plan. The invoices of the grid company have been compared with the reported electricity supply. 4. Identification and maintenance of key process parameters Report No , rev 3 Page A-13

28 Final Report Initial Verification and Verification of the Second Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 14 of 20 Expectations for GHG data management system/controls Score Verifiers Comments (including Forward Action Requests) 4.1. Identification of key parameters Full The critical parameters for the determination of GHG emissions are the amount of electricity produced and the natural gas flow Calibration/maintenance Full The calibration and maintenance procedures are in appliance as described in the initial verification protocol. 5. GHG Calculations 5.1. Use of estimates and default data Full The carbon emission factor is used as a predetermined default value which has been defined in the PDD and confirmed during validation of the project Guidance on checks and reviews Full See Initial verification. The above mentioned procedures are mainly applied Internal validation and verification Full The above mentioned procedures are working. The audit team did verify the following parameters: Invoices from the power grid Natural gas consumption invoice All data were in compliance with the figures stated in the monitoring report. Report No , rev 3 Page A-14

29 Final Report Initial Verification and Verification of the Second Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 15 of 20 Expectations for GHG data management system/controls Score Verifiers Comments (including Forward Action Requests) 5.4. Data protection measures Full The data measured on site are recorded manually and electronically. The electronic data are archived on CD. The net electricity supply to the grid is measured internally as well as externally by the grid company IT systems Full The IT system is based on standard PC and MS-office and ORACLE solutions. Hence the verification team feels confident about its use. Report No , rev 3 Page A-15

30 Final Report Initial Verification and Verification of the Second Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 16 of 20 Table 2: GHG calculation procedures and management control testing Identification of potential reporting risk Potential reporting risks based on an assessment of the emission estimation procedures can be expected to occur in the following fields of action: 1. raw data collection 2. calculation methods 3. data transfer Key source data applicable to the project assessed are hereby: Metering records (for electricity production, and Natural gas flow) Invoices from the grid company Appropriate calibration and maintenance of equipment resulting in a high accuracy of data supplied should be in place. It is hereby needed to focus on those risks that impact the accuracy, completeness and consistency of the reported data. Risks are weakness in the GHG calculation systems and may include: manual transfer of data/manual calculations, position of metering equipment Identification, assessment and testing of management controls Regarding the potential reporting risks identified in the left column the following mitigation measures have been observed during the document review and the on site mission: Raw data collection: All data are metered twice and cross checked regularly. The meters are purchased from well-known international companies. Key source data for this parameter are: Main & backup meter readings Invoices for electricity supply Calculation methods: The reporting procedures reflect the monitoring plan content and the calculation of the emission reduction is applied correctly. Data transfer: It has been verified that the data transfer is applied according to the described procedures. Areas of residual risks There were some inconsistencies between the invoices and the meter records and the more conservative values have been used in the monitoring report. Page A-16 Report No , rev 3

31 Final Report Initial Verification and Verification of the Second Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 17 of 20 Identification of potential reporting risk unclear origins of data, accuracy due to technological limitations. Identification, assessment and testing of management controls Areas of residual risks Report No , rev 3 Page A-17

32 Final Report Initial Verification and Verification of the Second Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 18 of 20 Table 3: Detailed audit testing of residual risk areas and random testing Areas of residual risks There were some inconsistencies between the invoices and the meter records and the more conservative values have been used in the monitoring report. Additional verification testing performed The invoices have been checked in detail. As the invoices are legally binding the invoices have been prioritized during the verification. Conclusions and Areas Requiring Improvement (including Forward Action Requests) Having investigated the residual risks, the audit team comes to the following conclusion: Corrective Action Request 1: A data manager should be nominated. And the data processing system should be clearly defined in the operation manual. Corrective Action Request 2: A CDM project management and operational manual should be developed. Report No , rev 3 Page A-18

33 Final Report Initial Verification and Verification of the Second Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 19 of 20 Table 4: Compilation of open issues Draft report corrective and forward action requests by audit team Summary of project owner response Audit team conclusion Corrective Action Request 1: A data manager should be nominated. And the data processing system should be clearly defined in the operation manual. Mr. Tian Jianmin, vice general manager of Beijing Jingfeng company is the leader of CDM group responsible for all the relevant activities during project operations and maintaining period. Mr.Cao Mansheng, the leader of maintenance department and Mr. Li Xiaobin, the vice leader of safety department, are both authorized by Mr Tian Jianmin for organizing and managing data reading and verifying team. Process responsibilities and data processing system are both In the Operation Manual, which has been developed by the safety department. The Manual incorporates natural gasturbine technical standard guidelines with CDM process management. As clarified in the manual, the whole electricity monitoring system employed in the project is a remote electricity billing system, which is the billing system for the electricity trading clearance be- Report No , rev 3 Page A-19

34 Final Report Initial Verification and Verification of the Second Monitoring Period of the Beijing No.3 Thermal Power Plant Gas-Steam Combined Cycle Project Using Natural Gas Page 20 of 20 Draft report corrective and forward action requests by audit team Summary of project owner response Audit team conclusion Corrective Action Request 2: A CDM project management and operational manual should be developed. tween the Beijing No.3 thermal power plant and the power grid the project is connected to. The data processing system is clearly defined in the Operation Manual. A CDM operation manual has been developed and is available for consultation. Report No , rev 3 Page A-20

35 Initial Verification and Verification of the First Monitoring Period of the BEIJING NO.3 THERMAL POWER PLANT GAS-STEAM COMBINED CYCLE PROJECT USING NATURAL GAS Annex 2: Information Reference List