APPLICTION OF CDM TO WASTE MANAGEMENT PROJECTS IN PUNJAB

Transcription

1 APPLICTION OF CDM TO WASTE MANAGEMENT PROJECTS IN PUNJAB Presentation made to the CM Punjab on 29/06/06 M.P. Singh B. Tech.(Civil); M.I.E. (Mech.) Geetika Kalha IAS Principal Secretary, Govt. of Punjab

2 What is Kyoto Protocol? Binding emission targets for industrialised countries (called Annex I Countries) Voluntary participation of developing countries (called Non-Annex I countries, e.g. India)

3 How is CDM relevant for such Projects? Current Fine $50, Fine will double in 2008 Annex I Country Renewable energy CDM project Carbon Credits Emission cap Buyer Actual emissions Carbon value ($) By selling the carbon credits CERs from a GHG reduction/ Carbon sequestering project to a buyer additional cash flow can be realised for projects. IN the Host Country: 1) Projects reduce emissions 2) Projects Sequester Carbon. Current value $25/CER

4 Relevant Green House Gases 1) Carbon Dioxide Global Warming Potential 1* 2) Methane Global Warming Potential 21* 3) Nitrous Oxide Global Warming Potential 310* * tco 2 e *Times Carbon dioxide

5 The concept of Baselines Without project emission level (e.g. grid baseline) Carbon credits GHG emissions With project emission level Project commissioned Time The baseline for a CDM project activity is the scenario that reasonably represents the anthropogenic emissions by sources of greenhouse gases that would occur in the absence of the

6 Bundling of Small Scale CDM & A/R CDM Project Activities Small Scale CDM Projects can be bundled together. Upper limits for bundling exist. This helps the tiniest of projects to benefit from the CDM Cost is further reduced after bundling.

7 Bundling Small Scale & Community development Projects GHG offsets (tco 2 ) Validation, verification, PDD Payment (Rs/$) CERs VER Buyers CER buyers Payment (Rs) Payment ($) Bundling organisation Grant/Funds? ODA, Government, NGOs etc. Loan Repayment Financial Institution Bio Methanation Small Scale A/R Projects

8 Possible Range of Projects (Urban) for Punjab 1. Sewage Treatment: Methane Capture: Power Generation 2. Wet Garbage, Fruit & Veg.. Market Waste Treatment 3. Industrial waste Treatment & energy saving/fuel switching 4. Avoidance of Nitrous Oxide emission. 5. Low emission and high output brick kilns. 6. Energy conserving/waste disposal of Housing Projects etc. 7. Small Hydro Projects 8. Vertcal Shaft Brick Kilns 9. Bricks from Fly ash

9 Possible Range of Projects (Rural) 1. Afforestation & Reforestation Projects 2. Agri-biomass based Energy Projects a. Bio-Methanation Methanation: : Power Generation route: Organic Fertilizer b. Energy Generation by controlled Combustion 3. Wastewater Projects: Methane Capture: Methane capture & Flaring: Organic Fertilizer 4. Wastewater Cum Solid Waste Treatment: Methane Capture: Power Generation. 5. Avoidance of Methane & Nitrous Oxide emission from paddy fields. 6. Household level biogas plants treating organic farmyard, kitchen, and bio-wastes. 7. Solar energy. 8. Special Manure making Practices

10 Case Study: Kishengarh : Total Waste Management& elec gen The Waste consists of: Kitchen waste from a population of Cow dung from 500 cattle Fruit and vegetable market waste = 2 tons/day = 6 tons/day = 12 tons/day Wastewater from = 2 mld /day The net methane capture/annum Certified Emission Reduction eligibility = Tons = 2961tCO 2 e/annum Translated into money this comes to Rs.. 40,00,000/annum

11 Case Study: Kishengarh : Total Waste Management The methane calculated above is capable of generating 100 KW (0.1MW) in a day running 24 hours. At 80% efficiency, this =700 MWh per annum Emission of replaced electy.. = mixed cycle = 0.4tCO 2 /MWh Carbon Credit At current CER rate this comes to Rs =280 tco 2 Rs.. 3,50,000 per annum. Revenue from Sale of Rs.2/- per unit, leaving 30 units per day for self consumption. = Rs.. 10, 08,000 per Annum Revenue from Sale of 2 t of Organic Rs.. 2/- = Rs.. 14, 60,000 per Annum

12 Case Study: Kishengarh : Total Waste Management Total Projected project cost = Rs Lacs Loan Amount (Say) Total Revenues Generated Less Estimated O&M Cost Net Revenue before Interest = Rs Interest on Loan Net Revenue Earned = Rs Lacs = Rs Lacs/Annum = Rs Lacs/Annum Rs Lacs/Annum = Rs Lacs/Annum = Rs Lacs/Annum Return on Investment = 7.05 %

13 CDM Impact: Only Wastewater Treatment 1500 Villages A total of 1500 villages are proposed to be modernised in Punjab. Assume an average population of 2000 per village. Total affected population = 2000*1500= 30, 00, 000 Sewage 120LPD = 360 MLD Projected Biogas recovery/ day = Mt. Methane = Mt. Methane Recovery/Annum = 10,348 MT Global warming potential of methane = 21t CO2 equivalent CO2 emitted while Flaring/t methane = 3 MT Net Global Warming Factor = (21-3)=18t CO2e No. of CERs earned/annum = 1,86,264 Value of $25/CER = $ 46,56,600 = Rs crores Earning potential over 10 years = Rs crores

14 CDM Impact: Combined Wastewater & Wet Garbage Treatment 1500 Villages W/O Electricity Gen. Assume per capita wet garbage = Kg/day Wet Garbage Generated/village = 200 Kg/Day Assume average of 500 cattle Cow dung in one village = 6000 Kgs/Day Total Degradable Solids = 6200 Kgs/Day Expected Biogas Capture = 170 Kgs/Day Methane 70% = 120 Kgs/Day Methane Captured: 1500 villages = 180 MT/ Day CER = 3780 t CO2e Annual CER Potential = 13,80,000 tco2e $25/CER/ annum = $ 3,45,00,000/ Revenue in Rupees/Annum for wet garbage = Rs Crores Total Revenue (wastewater + solids) = Rs Crores Revenue in 10 years = Rs Crores

15 Bundling of Household Level Biogas Digesters Household level digesters running on kitchen waste, cheap flour, and sugar cane wastes are now available. Cow-dung can be added, if available. World Bank has, in May this year, signed an Emission Reduction Purchase Agreement with Nepal for such plants. In the case of Nepal even latrine waste goes through this biogas digester.

16 Integrated Rural Sanitation and bio-energy production MANURE DAIRY WASTE LEAFY BIOMASS WASTE POWER GENERATION METHANE BIOMETHANATION CROP & VEGETABLE WASTE SEWAGE TREATMENT PLANT JATROPHA OIL EXTRACTION DEOILED CAKE

17 Application of CDM: Ongoing Rural Two Catagories: Sanitation Projects 1. Taken up by the Govt.: Mostly Small bore settled Sewerage System is being used, with septic tank outside each house. Since Methane is let out into the atmosphere and cannot even be flared, CDM will not be applicable to any of these projects. 2. Taken up by Village Life Improvement Foundation: Brahmpur & Kharaudi cannot qualify at this stage, since the projects are complete. Langheri, Jian, Deingrian and Jandiala can qualify with fresh modifications. 3. Daulatpur: This is yet to be taken up. We had received a query from the DC, Nawanshahar,, we had sent our recommendations to him. This village is yet to be started.

18 Case Study: Solid and Liquid Waste Management: Nawanshahar We were asked by DC Nawanshahar to suggest solid and liquid waste management for Nawanshahar. Untreated Sewage is currently flowing into the bein. Solids are being dumped outside the village. We proposed: 1) Collection of kitchen waste vegetable market waste, and dairy waste from Banga, Rahon and Nawanshahar at proposed STP site and set up a methanation plant there using the wastewater. 2) Treatment of sewage of Nawanshahar by the UASB technology and capturing Methane. 3) Removing the Hydrogen Sulphide gas from the Methane. 4) HARNESSING the Methane to generate electricity.

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20 Pre-treated influent upflow chamber solid media (plasitc (beverage crates) Vertical baffles effluent gutter gas/liquid/solids phase separator settling zone granular sludge bed sludge blanket downflow chamber Baffled Module UASB Module Modified Septic Tank/ Reactor for Primary Treatment

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22 Cost of Project & Revenue Constituents of the Project: Primary Sewage Treatment Section design year 2034 Segregated Organic Waste Handling Section High Rate Digestion Section - Modified UASB Process: design year 2008: 8mld sewage. Modified two stage high Biomethanation reactors. Aeration Section Disinfection section Manure Handling Section Biogas Collection Scrubbing Section Power Generation Section Final Disposal of Treated Effluents Projected Cost of Project 8 MLD Sewage and 30 TPD Organic solid Waste: 700 lacs. Land required: 5 acres (Cost of acquisition not included)

23 Cost of project & Revenue Net annual methane recovery = MT CER Potential =7424 tco2e Annual Revenue from CDM (Methane) = Rs.. 92,80,000 The methane calculated above is capable of generating 250 KW (0.25 MW) in a day running 24 hours. At 80% efficiency, this =1750 MWh per annum Emission factor of replaced electy.. = mixed cycle = 0.4tCO 2 /MWh Carbon Credit (Electricity Gen) Annual Revenue (Electricity Gen) Sale of units/day Annual rev.from 5 t fertilizer/ Rs Total Revenue/Annum =700 tco 2 =Rs.. 8,75,000 = Rs.. 35,00,000 Rs /t =Rs. 36,50,000 = Rs.. 1,73,05,000

24 Return on Investment: Nawanshahar Total Projected project cost = Rs Lacs Loan Amount (Say) Total Revenues Generated Less Estimated O&M Cost Net Revenue before Interest = Rs Interest on Loan Net Revenue Earned = Rs Lacs Return on Investment = 15 % = Rs Lacs/Annum = Rs Lacs/Annum Rs Lacs/Annum = Rs Lacs/Annum = Rs Lacs/Annum

25 Additionality The gap between the project return and the required return on investment threshold CDM revenue CDM cash flow Required return on investment threshold Project return excluding CDM revenue Project return including CDM revenue

26 Additionality test Need to prove the project would not have happened without CDM Some steps in the test: 1. Initial Project Stage: Proof of CDM influencing decision -> > Key for all projects stared before registration 2. Investment or barrier analysis Projects that lack sufficient proof of additionality become rejected by the CDM EB.

27 Application of CDM to Ongoing Urban Sanitation Projects Ongoing Urban Sanitation Projects under the Satluj Action Plan, may be made eligible for Carbon Credits, after restructuring the projects suitably. Solid waste Management with the same wastewater will have a ballooning effect on the revenues, as we have seen in the case of Rural Projects.

28 Application of CDM to Ongoing Urban Sanitation Projects The CDM eligibility as per existing structure is: 1. Ludhiana: Total sewage from three plants= 311 MLD Methane Recovery/annum = 8513 MT CERs = 1,53,000 tco2 Revenue Earning Capacity = 19 Crores 2. Calculations for Jullunder would be on the same lines. 3. However, projects like Phagwara etc., which are still in their nascent stage can be conveniently altered to convert them into CDM Projects.

29 The CDM Process Task Responsibility Step 1 Project Assessment Step 2 Project Financing Project Developer Step 3 Project Construction Project Developer and and/or Executing agency Step 4 Methodology /Consultant/buyer Step 5 Project Design Document /Consultant/buyer Baseline Calculation of credits Monitoring and verification plan Step 6 Host Country Approval DNA (arranged by /GTZ) Step 7 Validation DOE (arranged by /GTZ) Step 8 Registration EB (arranged by Buyer) Step 9 Monitoring Project Developer Step 10 Verification DOE (arranged by Step 11 Issuance of CERs Executive Board

30 Methodology Criteria A Methodology is the method for estimating carbon emissions from a technology/project If a methodology exists, this simplifies the CDM process. In the present case, methodologies exist. Methodology for Biomethanation of MSW (Lucknow( Lucknow, India) is approved by the CDM Board. Small Scale Methodology for untreated wastewater stream has now been added to the approved list. Methane capture and power generation methodologies always existed.

31 Selling your CERs: : risks! If the Project does not take off or does not deliver Risks can be carried by the buyer or the seller. Examples: -Buyer can take on the entire expected CERs or parts -Penalties in case CERs do not accrue Price of CERs and risk go hand in hand

32 Value of Carbon Credits A sale of CERs made after issuance, fetches the highest price ( currently $25, and expected to treble) But then the risk is all of the project developer. Advance against CERs: : penalties for non- deliverance Advance sale of CERs: : all risks and cost to the buyer s account. Value goes down.

33 Concept of VERs VER is a verified emission reduction. Many Annex one companies trade in VERs. These are mutual arrangements between buyers and sellers. They are verified by Designated Operational entities in the Host country. Later approved by the host country. They need not go to the CDM Executive Board for approval. These have the minimum risks as well as the minimum costs. These can be beneficial for very small projects.

34 Other Projects All renewable energy Projects. All housing Projects, energy saving, localized sanitation. Upgrading Brick Kilns: VSBC, Fly ash Organic Fertilizer: Preventing N2O emission Emission of Methane & N2O from paddy.

35 Suggested Road Ahead Project Idea Notes (PIN) should be got made for all projects/bundles that have CDM potential: just a prima facie yes is required. can do it at nominal cost. All ongoing and future projects must go through a scanner for possible CDM benefits. Ongoing Rural Projects should be reviewed, technology upwards. is already deeply involved in the selection of appropriate technology and its design.