CPA VALIDATION REPORT

Transcription

1 CPA VALIDATION REPORT ALTERNATIVE ENERGY PROMOTION CENTRE (AEPC) CPA TITLE: NEPAL BIOGAS SUPPORT PROGRAM - CPA 4: 19,970 DIGESTERS POA TITLE: NEPAL BIOGAS SUPPORT PROGRAM (UNFCCC Ref No. 9572) REPORT NO. CPA04 KBS Certification Services Pvt. Ltd. Registered Office: , Om Shubham Tower, Neelam-Bata Road, N.I.T., Faridabad , Haryana India. Contact us at: Tel.: , , , Fax: Webpage:

2 Date of this issue: 17/04/2014 Organisational Unit: Climate Change Division, KBS CPA Design Document First CPA DD: KBS Ref. No.: CPA04 Client: Alternative Energy Promotion Centre (AEPC) Final CPA DD: Version: 01 Version: 03 Date: 25/11/2013 Date: 05/02/2014 Summary of validation: Alternative Energy Promotion Centre (AEPC) has commissioned KBS to perform the validation of the proposed CPA inclusion: CPA Title: Methodology Applied: Sectoral Scopes: 01 Validity of methodology/ies (for RfR): Valid from 03 Aug 12 onwards Nepal Biogas Support Program - CPA 4: 19,970 digesters Switch from non-renewable biomass for thermal applications by the user (AMS I.E. version 05) The scope of the validation is defined as an independent and objective review of the CPA design document, the project s baseline study and monitoring plan and other relevant documents. The information in these documents is reviewed against the latest version of CDM Validation and Verification Standard, Project Cycle Procedure and Project Standard, Kyoto Protocol requirements and UNFCCC rules. The report is based on the assessment of the CPA design document undertaken through stakeholder consultations, application of standard auditing techniques including but not limited to desk review, follow up actions (e.g., on site visit, electronic (telephone or ) interviews) and also the review of the applicable approved methodological and relevant tools, guidance and CDM decisions. The review of the CPA design documentation and the subsequent follow-up interviews have provided KBS with sufficient evidence to determine the project s fulfillment of all the stated criteria. In our opinion, the project meets all applicable UNFCCC requirements for the CDM. Will be recommended to the CDM Executive Board with a request for registration Is not recommended for registration Validation Status: Findings not closed Project type: Small scale Draft validation report Subject: CDM Validation Validation Team: Team Leader: Sanjay Kandari Validator: Gagandeep Kakkar Local Expert: Jyangjee Kharel Technical Expert (TA 1.1): Gagandeep kakkar Technical Review Team: Manager T&C Technical Reviewer: Kaushik Pal Date: 08/04/2014, 22/04/2014 Technical Expert: Kaushik Pal Authorized by: Name: Kaushal Goyal, Managing Director Date: 08/05/2014 Rev Number: Date: 0 21/03/ /04/2014 Name: Kaushik Pal Date: 25/04/2014 Final validation report Document Distribution No Distribution without permission from the Client Limited Distribution Unrestricted Distribution Page 2 of 49

3 Abbreviations. AEPC AMS BE BM BSP BUS CAR CDM CM CME CER CL COP CPA CPA-DD DOE DNA DPR EB EF ERs FAR FSR GHG GPS GSC HCA IPCC KP LSC LE LoA ISO MOP MoC MoV MP NRB OM PA PE PoA PoA DD PP PS PO PCP QA/QC RfR Alternative Energy Promotion Centre Approved Methodology for Small-scale Baseline Emissions Build Margin Biogas Support Program Biomass User Survey Corrective Action Request Clean Development Mechanism Combined Margin Coordinating and Managing Entity Certified Emission Reduction Clarification request Conference of Parties Component project activity CPA Design Document Designated Operational Entity Designated National Authority Detailed Project Report Document Review Executive Board Emission Factor Emission Reductions Forward Action Request Feasibility Study Report Greenhouse gas(es) Global Positioning System Global Stakeholder Consultation Host Country Approval Intergovernmental Panel on Climate Change Kyoto Protocol Local Stakeholder Consultation Leakage Emissions Letter of Approval/Authorization International Organization for Standardization Meeting of Parties Modalities of Communication Means of Verification Monitoring Plan Non Renewable Biomass Operating Margin Project Activity Project Emissions Programme of Activities PoA Design Document Project Participant Project Standard Purchase Order Project Cycle Procedure Quality Assurance/Quality Control Request for Registration Page 3 of 49

4 T&C UNFCCC VVS Technical & Certification United Nations Framework Convention on Climate Change Validation & Verification Standard Page 4 of 49

5 Table of Content 1. Validation Opinion Introduction Objective Scope Methodology Review of CPA- DD and Additional Documentation Site Visit Major Milestones in validation Use of the Validation Protocol Findings Internal Quality Control Validation Findings CPA Design Document Changes in CPA PDD CPA Description Baseline and monitoring methodology Duration and Eligibility of CPA Additionality Application of Monitoring Methodology and Monitoring Plan Environmental Impacts Local Stakeholder Comments Project design of small-scale Component Project activities References es: 1: Validation Protocol : Detailed Findings : Certificate of Competence Page 5 of 49

6 1. Validation Opinion KBS Certification Services Pvt. Ltd. has been contracted by Alternative Energy Promotion Centre to perform a validation of the CPA: CPA title: Nepal Biogas Support Program - CPA 4: 19,970 digesters Host Party: Nepal The validation was performed in accordance with the UNFCCC criteria for the Clean Development Mechanism, latest version of Validation and Verification Standard and related Standards/Guidance and host country criteria, as well as criteria given to provide for consistent project operations, monitoring and reporting. The proposed CDM project activity will result in reductions of greenhouse gas (GHG) emissions that are real, measurable and give long-term benefits to the mitigation of climate change. In our opinion, the project meets all relevant UNFCCC, CDM criteria and all relevant host country criteria. The project correctly applies methodology AMS I.E. version 05. It is demonstrated that the project is not a likely baseline scenario. The emission reductions attributable to the project are hence additional to any that would occur in the absence of the project activity. The total emission reductions from the project are estimated to be 464,779 tco2e over a 7 year crediting period during 08/05/2014 to 07/05/2021, averaging 66,397 tco2e annually. The emission reduction forecast has been checked and it is deemed likely that the stated amount is achievable given the underlying assumptions do not change. The project will hence be recommendedd by KBS for request for registration with the UNFCCC. Authorized Signatory Signature: Name: Kaushal Goyal Place: Faridabad, India Date: 08/05/2014

7 2. Introduction 2.1 Objective Alternative Energy Promotion Centre has commissioned KBS to perform the validation of the CPA: Nepal Biogas Support Program - CPA 4: 19,970 digesters with regard to the relevant requirements for Clean Development Mechanism (CDM) project activities. The purpose of validation is to ensure a thorough, independent assessment of proposed CDM project activities submitted for registration as a proposed CDM project activity against the applicable CDM requirements. In particular, the project's baseline, the monitoring plan (MP) and the project s compliance with relevant UNFCCC and host country criteria are validated in order to confirm that the project design as documented is sound and reasonable and meets the stated requirements and identified criteria. The validation is seen as necessary to provide assurance to stakeholders of the quality of the project and its intended generation of certified emission reduction (CER). UNFCCC criteria refer to the Kyoto Protocol criteria and the CDM rules and modalities and related decisions by the COP/MOP and the CDM Executive Board. 2.2 Scope The scope of the validation is defined as an independent and objective review of the CPA design document, the project s baseline study and monitoring plan and other relevant documents. The information in these documents is reviewed against Kyoto Protocol requirements, UNFCCC rules and associated interpretations. KBS has employed a rule-based approach in the validation, focusing on the identification of significant risks for project implementation and the generation of CERs. Page 7 of 49

8 3. Methodology 3.1 Review of CPA- DD and Additional Documentation The validation is performed primarily as a document review of the publicly available project document version 01 dated 25/11/2013 and the subsequent versions dated 02, 03 (05/02/2014). The assessment is performed by a validation team using a validation protocol attached as 1. The cross checks between information provided in the CPA DD and information from sources other than those used, if available, the validation team s sectoral or local expertise and, if necessary, independent background investigations. 3.2 Site Visit The site visit was undertaken by Sanjay Kandari(Team Leader), Gagandeep Kakkar (Technical Expert) & Jyangjee Kharel (Local Experrt) and details are mentioned below; Location: Dist. Chitwan & Makwanpur Dates: 29 th Dec 2013 to 2 nd Jan 2014 Key points discussed: Name of person, interviewed Designation, Organization Eligibility Criteria for Mr. Raju Laudari Assistant Director, AEPC Inclusion of a CPA in the PoA Competence of CME to evaluate the inclusion of a CPA Technology/measure employed in specific CPA; Baseline identification and Additionality demonstration of the CPA Mr. Neelam Sharma Rijal Mr. Krishna Kumar Shrestha Program officer, AEPC Rastriya Gobar Gas Company Emission reductions calculations. Monitoring plan Implementation, Operation and Management of specific CPA; Training of personnel Local laws and regulations in Nepal applicable to the project activity. 3.3 Major Milestones in validation Validation Contract 15/11/2013 Mr. Raju Laudari Mr. Neelam Sharma Rijal Mr. Raju Laudari Mr. Neelam Sharma Rijal On site verification 29/12/2013 to 02/01/2014 Draft Verification Report 21/03/2014 Final Verification Report 17/04/ Use of the Validation Protocol Assistant Director, AEPC Program officer, AEPC Assistant Director, AEPC Program officer, AEPC The validation protocol used for the assessment is designed in accordance with the latest version of Validation and Verification Standard. It serves the following purposes: Reference to available information relating to projects or technologies similar to the proposed project activity under validation; Review, based on the approved methodology being applied, of the appropriateness of formulae and accuracy of calculations. Organises, details and clarifies the requirements the project is expected to meet; and Page 8 of 49

9 Documents both how a particular requirement has been validated and the result of the validation (reporting). The validation protocol consists of several tables. The different columns in these tables are described below. Checklist Question Ref ID Means of Verification (MoV) The various requirements are linked to checklist questions the project should meet. Lists any references and sources used in the validation process. Full details are provided in the table at the bottom of the checklist. Explains how conformance with the checklist question is investigated. Examples of means of verification are document review () or interview (I). N/A means not applicable. Validation Assessment The section is used to elaborate and discuss the checklist question and/or the conformance to the question. It is further used to explain the conclusions reached. The completed validation protocol for this project is attached as 1 to this report 3.5 Findings Draft and/or Final Conclusion This is either acceptable based on evidence provided (Y), or a Corrective Action Request (CAR) due to noncompliance with the checklist question (See below). Clarification Request (CL) is used when the validation team has identified a need for further clarification. As an outcome of the validation process, the validation team can raise different types of findings A Clarification Request (CL) is raised if information is insufficient or not clear enough to determine whether the applicable CDM requirements have been met Where a non-conformance arises the validator shall raise a Corrective Action Request (CAR). A CAR is issued, where: The project participants have made mistakes that will influence the ability of the project activity to achieve real, measurable additional emission reductions; The CDM requirements have not been met; There is a risk that emission reductions cannot be monitored or calculated. A Forward Action Request (FAR) is raised during validation to highlight issues related to project implementation that require review during the first verification of the project activity. FARs shall not relate to the CDM requirements for registration. Corrective Action Requests and Clarification Requests are raised in the draft validation protocol and detailed in a separate finding document ( 2). In this document, the project participant is given the opportunity to resolve the outstanding CARs and respond to CLs and FARs. 3.6 Internal Quality Control Following the completion of the assessment process and a recommendation by the assessment team, the validation opinion prepared by Team Leader is independently reviewed by internal Technical Reviewer. TR reviews if all the KBS procedures have been followed and all conclusions are justified in accordance with applicable standards, procedures, guidance and CDM decisions. The TR either is qualified for the technical area within the CDM sectoral scope(s) applicable to project activity or is supported by qualified independent technical expert at this stage. The Technical Reviewer will either accept or reject the recommendation made by the assessment team. The findings can be raised at this stage and PP must resolve them within agreed timeline. The opinion recommended by Technical Reviewer will be confirmed by Manager Technical & Certification and finally authorized by the Managing Director on behalf of KBS as final validation opinion. The Technical Reviewer and Manager T&C maybe be same person. Page 9 of 49

10 4. Validation Findings 4.1 CPA Design Document Discussion: The CPA DD /2/ applied the component project design document form for Small-scale component project activities (F-CDM-SSC-CPA-DD) version 02, which is a valid form available on UNFCCC/CDM website. The validation team confirms that the CPA DD is completed in accordance with the Guidelines for completing the component project design document form for small-scale component project activities /13/, version-01.0 same is confirmed from Relevant information was provided by the Managing Entity and the CPA Implementers (both are same in case of this CPA) in the applicable CPA-DD sections. Completeness was assessed through the protocol included in 1. Findings: CAR #01 was raised and closed successfully. Please refer annex 2 of this report for details. Opinion: The assessment team confirms that the CPA-DD /2/ is prepared in accordance with the latest valid template and guidance from the CDM Executive Board available on the UNFCCC CDM website. 4.2 Changes in CPA PDD Key revisions between the final PDD against the first version published for the international stakeholder consultation PDD Section no. Brief description of the changes Indicate relevant finding All Sections CPA DD template changed from VVM to VVS track CAR #1 A.3 No of CPA changed due to change in start date of CPA #2 CAR #1 E Information regarding LoA included in section E CAR #4 4.3 CPA Description Discussion: The CPA is developed under the Small-Scale Programme of Activities (PoA) titled Nepal Biogas Support Program-PoA /4/. The CPA implementer is Alternative Energy Promotion Centre (AEPC) a government body. The CPA involves implementation of biogas applications at individual household in Nepal. These applications displace firewood with biogas from animal waste and human excreta. The biogas is used as a fuel for cooking. Following the methodological guidance under Programme of Activities (PoA), only the replacement of non renewable biomass (NRB) is counted as emission reduction under the Clean Development Mechanism (CDM). Target group under the BSP are households who currently use non renewable biomass (firewood) for cooking. This CPA includes 19,970 digesters /20/ which were implemented between 20/02/2011 and 28/02/2012. The total no. of installation under this CPA has been restricted to less than The CPA implementation schedule provided in the CPA-DD has been checked by the validation team against submitted documentary evidence /20/ and interviews /28/. The CPA is expected to result in an average annual emission reduction of 66,397 tco2e. The digesters under this CPA receive subsidies and technical support under the BSP program. The BSP program is funded by the following entities /26/ : Danida Page 10 of 49

11 Norway The starting date of the CPA is 20/02/2011 /19/ based on the construction of the first digester. The starting date of CPA is after the start date of PoA /4/. Hence, it is in line with paragraph 162 of Project standard Version 5.0 /8/. As per EB54, 13 /27/, paragraph 10, it is clearly explained in CPA DD that the CPA of PoA is exempted from performing de-bundling check i.e., considering as not being a de-bundled component of a large scale activity Findings: CAR #01 was raised and closed successfully. Please refer annex 2 of this report for details. Opinion: The assessment team confirms that (a) The project description as mentioned in CPA DD /2/ is validated by reviewing the supporting evidence and same has been also confirmed during site visit by interviewing the technical personnel involved in project activity. (b) Based on discussion above the assessment team confirms that project description provided in CPA DD /2/ is complete and accurate, hence complies with para 64 of VVS V05.0 /7/. (c) The validation team has conducted site visit /28/ for the proposed project activity on 29/12/2013 to 02/01/ Baseline and monitoring methodology General requirement Discussion: The CPA applies the approved methodology for proposed CDM project activity categories, Switch from nonrenewable biomass for thermal applications by the user, AMS I.E. version 05/ 10/ Opinion: The assessment team confirms: (a)the baseline and monitoring methodology selected by the CPA Implementer is the valid version approved by the Board. (b) The CPA Implementer has applied the latest applicable version of tools referred by the methodology Applicability of selected methodology to the CPA Discussion: The applicability of the selected methodology is justified and assessed as follows: Applicability conditions in V5.0 of AMS l.e Characteristics of the project activity Means of Validation Page 11 of 49

12 Small-Scale project requirement: For biomass, biofuel and biogas project activities, the maximal limit of 15MW (e) is equivalent to 45 MW thermal output of the equipment or the plant (e.g. boilers). For thermal applications of biomass, biofuels or biogas (e.g. the cookstoves), the limit of 45 MWth is the installed/rated capacity of the thermal application equipment or device/s (e.g. biogas stoves). This category comprises activities to displace the use of non-renewable biomass by introducing renewable energy technologies. Examples of these technologies include but are not limited to biogas stoves, solar cookers, passive solar homes, renewable energy based drinking water treatment technologies (e.g. sand filters followed by solar water disinfection; water boiling using renewable biomass). Project participants are able to show that non-renewable biomass has been used since 31 December 1989, using survey methods or referring to published literature, official reports or statistics. The biogas capacity of each stove is 400 litre/hour. With a methane content of 52%, this gives an annual natural gas capacity of not more than 1.86 kw th per stove (Refer Calculation in the emission reduction spreadsheet). This means that around 24,000 stoves would still have an aggregated capacity below the 45MW th small scale threshold value; however the CPA#4 is limited to 19,970 installations only. The digesters are indeed small thermal appliances that displace the use of non-renewable biomass by introducing new renewable energy end-user technologies. AMS-I.E. even lists biogas stoves as an example of eligible end user technologies. The annual BUS conducted in 2012 demonstrated that the time needed to gather firewood, the price of firewood and the distance travelled to gather firewood is increasing at least since December This conclusion was confirmed in the NRB survey, conducted as a part of BUS, conducted during July/August In that survey the respondents were asked to provide averages for the time needed to gather firewood, the distance travelled and the price. The average of the estimates from all respondents, showed a clear increase on all three indicators, pointing towards the use of NRB. The validation team has checked the supporting evidence /17/ for capacity of stove and methane content in Biogas and reproduced the calculation for thermal capacity. It has been confirmed that capacity of one stove is not more than 1.86KWth and total thermal capacity of 19,970 biogas stove is less than 45MWth. The digesters are small thermal appliances that displace the use of non renewable biomass by introducing new renewable energy end-user technologies. Same was witnessed during site audit /28/. The use of NRB since 31st December 1989 has been established with Biogas User Survey Report. The Non Renewable Biomass (NRB) survey /15/ conducted in 2012 confirms that the biomass used by households has been subject to the trends listed in AMS-I.E. paragraph 7 since 31 December Same was also found in interview of user households during site audit by audit team. Most of the interviewed users were referring use of NRB since long back. The finding that NRB was used is also backed by independent report such as The Page 12 of 49

13 In addition, these trends seen are not on the account of the enforcement of national legislation. A relevant policy initiative is the development of community forests. However, the Nepal National Action Programme shows that community forestry has the opposite effect and significantly reduces the time spend on firewood gathering. Therefore the increase demonstrated by the BUS cannot be a result of this policy. Environmental Impact of Poverty: Evidence from Firewood Collection in Rural Nepal /29/. Findings: CL#02 (2) was raised and closed successfully. Please refer annex 2 for details. Opinion: The validation team confirms that a) The applicability conditions of the selected approved methodology AMS l.e. V5.0 /10/ is appropriately described in CPA DD. b) The validation of each relevant applicability conditions is described above c) The applied methodology is applicable in the context of the proposed CPA CPA boundary Discussion: The CPA boundary was assessed considering information gathered from the physical site inspection, interviews, and secondary evidence received on the design of the PoA. The project boundary is the physical, geographical location of each measure (i.e. each biogas digester) installed and area of the use of biomass or the renewable energy. The sources and gases within the boundary have been considered in a clear manner. The CO2 emissions from NRB use for cooking have been included. Opinion: The assessment team confirms that the identified boundary, the selected sources, and gases as documented in the CPA-DD are justified for the project activity and are fully in line with the requirements set by the applied methodology and registered PoA DD Baseline identification Discussion: As per the registered PoA-DD, the possible alternative scenario is: The baseline scenario is continued use of NRB. Rural households use non renewable firewood. Based on the on-site interviews /28/ with the power utilities, AEPC & BSP officials and the host country experience of the audit team it is confirmed that there is no mandated legal requirement for installation of biogas system in households of Nepal. There are two main explanations why the baseline scenario is continued use of NRB: The first is that firewood is an effective and ready available fuel in particular during the winter season when heat demand is higher. Page 13 of 49

14 Secondly, Nepal has a low population density and the area is mountainous. This makes the availability of alternative fuels very low. This is also evident from the fact that Nepal is a Least Developed Country (LDC) and alternative fuels require better economic condition. Additionally to confirm continued use of NRB, PP conducted a survey /15/. The following indicators have been captured from the Annual Biogas Users Survey to confirm that NRB is used in Nepal since 31 December a) Trends in distance travelled for firewood gathering or trends in time needed for firewood gathering indicating depletion of resources available b) Trends in price of firewood indicating demand and scarcity c) Trends in type of cooking fuel collected that could indicate scarcity of fire wood Validation team therefore confirms that the selected baseline scenario represents what would happen in the absence of the project activity. Opinion: The assessment team confirms that: (a) All the assumptions and data used by the CME/PP are listed in the CPA DD, including their references and sources; (b) All documentation used is relevant for establishing the baseline scenario and correctly quoted and interpreted in the CPA DD; (c) Assumptions and data used in the identification of the baseline scenario are justified appropriately, supported by evidence and can be deemed reasonable; (d) Relevant national and/or sectoral policies and circumstances are considered and listed in the CPA DD; (e) The approved baseline methodology has been correctly applied to identify the most plausible baseline scenario and the identified baseline scenario reasonably represents what would occur in the absence of the proposed project activity Algorithms and/or formulae used to determine emission reductions Discussion: The assessment team has assessed the calculations of emission reductions. Corresponding calculations have been carried out based on calculation spreadsheets /3/. The parameters and equations presented in the CPA-DD& Spread sheet have been compared with the information and requirements presented in the PoA- DD, CPA-DD and the methodology. An equation comparison has been made to ensure consistency between all the formulae presented in the PoA-DD, CPA-DD, Spread sheets and methodology. The CPA-DD confirms to meet the procedures provided in the methodology and PoA-DD viz. It has been indicated that the fraction of non renewable biomass used in the absence of the project activity has been determined from Default values of fraction of non-renewable biomass for Least Developed Countries and Small Island Developing States (version 01.0)" EB as 86% The average daily consumption of woody biomass before and after implementation has been sourced from BUS Survey. Performance of digester has also been referred from BUS Surveys. The Emission factor for the substitution of non-renewable woody biomass by similar consumers and Net Calorific Value of the NRB that is substituted have been taken from applied methodology. Also, it has been clarified that the emission factor is fixed ex-ante. Project Participants have opted to use the default factor of 0.95 to account for any potential leakage, as prescribed by the methodology. The parameters that are determined ex-ante are: 1. fnrb Fraction of biomass used in the absence of the project activity in year y that can be established as non renewable biomass using nationally approved methods 2. NCVBiomass - Net calorific value of the non-renewable biomass that is substituted. 3. EF Projected Fossil Fuel Emission factor for the substitution of non-renewable woody biomass by similar consumers. Page 14 of 49

15 4. Ns,r Number of digesters in each size category (in m3) and region (Terrai, Hill and, if available, Remote Hill or Mountain) implemented under the CPA 5. Q NRBrepl.- Quantity of woody biomass that is substituted or displaced in tonnes per year and appliance Finding: CL # 04 was raised and closed successfully. Please refer annex 2 of this report. Opinion: The assessment team confirms that (a) All assumptions and data used by the project participants are listed in the CPA DD, including their references and sources; (b) All documentation used by project participants as the basis for assumptions and source of data is correctly quoted and interpreted in the CPA DD; (c) All values used in the CPA DD are considered reasonable in the context of the proposed CPA. (d) The baseline methodology and corresponding tool(s) have been applied correctly to calculate project emissions, baseline emissions, leakage and emission reductions; (e) All estimates of the baseline emissions can be replicated using the data and parameter values provided in the CPA DD. 4.5 Duration and Eligibility of CPA Duration of CPA Discussion: The validation team is able to verify that the start date of the proposed CPA determined as 20/02/2011 /19/ in the CPA-DD is appropriate and is the earliest of the dates at which the real action of the CPA began. This is confirmed from the Plant completion report of first digester included in this CPA. The CPA consists of 19,970 units /20/. The operational lifetime of each digester is 20 years. The same has been confirmed from the technical specification manual of Digester /16/. Since the first digester covered by the CPA was implemented on 20/02/2011, the operational lifetime of the small scale CPA is up to 19/02/2031. The CME has selected 7 years renewable crediting period /2/ for the proposed CPA and the start date of the crediting period of the CPA is 07/05/2014 or the date, on which it is included in the PoA, whichever is late. This is correctly identified in the CPA DD. Finding: CL # 02 (1) was raised and closed successfully. Please refer annex 2 for details. Opinion: The validation team checked the database and finds out that 20/02/2011 is the earliest date on which real action towards the project activity has occurred, hence, accepts this as the start date of the CPA Eligibility of CPA The validation team has assessed the proposed CPA to determine whether it complies with the eligibility criteria specified in the PoA-DD including confirmation of additionality of the CPA. The assessment of compliance with the eligibility criteria are specified as follows: Eligibility Criteria Geographical - All biogas digesters in the CPA#4 are located within the geographical boundaries of Nepal. Means Of Validation The CPAs has been implemented within geographical boundary of Nepal, that is confirmed by unique digester number and Page 15 of 49

16 boundary - This is confirmed by the CME by ensuring that each individual installation is a) located at an address that lies within the geographical boundaries of Nepal as demonstrated by providing the address of all biogas digesters in the CPA database; and b) has GPS coordinates that are situated within the geographical boundaries of Nepal. Double counting - Double counting is avoided by assuring that no digester is already included to a different CDM project or CPA. - This is confirmed by the CME based on a) the digester codes listed in the BSP database and b) if necessary also GPS coordinates (the latter applies if biogas projects emerge under the CDM that is not part of the BSP). Technology - AEPC has implemented this CPA as part of the BSP. - All digesters listed in the CPA#4 are household biogas digesters with a sludge and gas holding capacity range of 2-10 m3. - Biogas is supplied to a stove with a maximum capacity of 400 l/h leading to a maximum annual gas capacity of not more than 1.86 kwth per stove. - The equipment for each biogas plant installation under CPA#4 is new and not transferred from other project activities. Start Date - The start date of a CPA#4 is the date of commissioning of the first biogas digester included to that respective CPA. - The start date of CPA#4 is 20/02/2011, which is the date of commissioning of the first digester in CPA#4. - The start of CPA#4 is after the date of commissioning of the last installation included in CPA#3 i.e. 19/02/ The date of commissioning is recorded in the Commissioning Report, which is archived and the date recorded in the CPA database. Compliance with applied methodology Diversion official of - The activity replaces non renewable biomass. This is confirmed through Biogas Users Survey conducted by an independent third party for the biogas digesters implemented by BSP. - The CPA does not result into the diversion of official development assistance. GPS coordinates /20/. This has also been validated from the commissioning report /19/ of digester submitted to DOE for verification. This has been confirmed by unique digester number in the database and GPS coordinates /20/. The validation team has also checked the unique no. engraved on the pipe of digesters on sample basis and found consistent with the data base. This has been checked from the digester commissioning reports /20/ and technical specification Manual of digester and stove /16/. This has been checked from the digester commissioning reports /19/ of first unit included in this CPA #4 and last unit included in the CPA#3 /14/. The CPA meets all applicability criteria of applied methodology i.e AMS I.E, Version 05 /10/ as discussed under section of this report This has been validated against ODA nondiversion letter issued from the office of Assistant Director, AEPC /21/. Page 16 of 49

17 development assistance Target Group and distribution mechanism Threshold check Other / Voluntary action - The target groups within the CPA are households. - Number of biogas digester included in each CPA shall not exceed 20,000 units, which assures compliance with the small scale limit of 45MWth. - The owners of the digesters listed in the CPA#4 have signed an agreement in which it allows AEPC to market the emission reductions from the installation and operation of the digester. - Digesters implemented in CPA#4 is a voluntary action and not mandated by the Government of Nepal This has been checked from the plant completion report. The digesters implemented in the range of 2-10 m 3/25/, the owner of the biogas digester is an individual and the feeding material is dung. It has also been checked from the Renewable Energy subsidy policy /24/ and completion reports that owners of bio disasters received subsidy under the scheme for installation of digesters at household. Hence it is evident that the installation of digesters has been done at household level. The no of digester included in this CPA are less than 20,000 as evident from the no. i,e 19,970 /20/. This has been checked from the CPA database also. This has been checked from the agreements signed between the owner of digester and AEPC /23/. This is confirmed by the local expert that there is no regulation in Nepal which mandates the use of Biogas digester at household level. Finding: CL # 03 was raised and closed successfully. Please refer annex 2 for details. Opinion: Based on the above assessment validation team confirms that the CPA #4 is complying with all the eligibility criteria defined in registered PoA -DD and therefore eligible for inclusion under the proposed PoA. 4.6 Additionality Discussion: The additionality of the SSC-CPA is demonstrated using the following approach: As per the Standard on the Demonstration of additionality, development of eligibility criteria and application of multiple methodologies for programme of activities, Version 03 the additionality of CPA has been demonstrated using the EB 68, 27 /30/, Guidelines on the demonstration of Additionality of Small-Scale Project Activities. According to this guideline, Documentation of barriers is not required for the positive list of technologies and project activity types that are defined as automatically additional for project sizes up to and including the small-scale CDM thresholds (e.g. installed capacity up to 15 MW). The sub-section 2 (c) of paragraph states that: Project activities solely composed of isolated units where the users of the technology/measure are households or communities or Small and Medium Enterprises (SMEs) and where the size of each unit is no larger than 5% of the small-scale CDM thresholds. The size of each unit under 750 kw installed capacity or under 3000 MWh of energy savings per year or 3000 tonnes of emission reductions per year. It has been confirmed by document review and during site visit that each unit of biogas digester has the capacity of not more than 1.86 kwth which is less than 5% of the small scale CDM threshold, or 750 kw installed capacity. The CPA is thus additional and there is no need for further assessment and demonstration of additionality. Page 17 of 49

18 Opinion: On the basis of description of additionality in PoA-DD and in this CPA, documents and references reviewed, it can be confirmed that the criteria for qualifying under the positive list have been met in the design documents. Based on the aforementioned approach assessment team confirms the additionality of the CPA Common practice analysis This section is not applicable as the project activity is a small scale project activity. 4.7 Application of Monitoring Methodology and Monitoring Plan Discussion: The monitoring plan presented in the CPA-DD complies with the requirements of the PoA /4/. The assessment team has verified all parameters in the monitoring plan against the requirements of the methodology and no deviations have been found. The procedures have been reviewed by the assessment team through document review and interviews with the relevant personnel. The information provided has allowed the assessment team to confirm that the proposed monitoring plan is feasible within the CPA design. The relevant points of monitoring plan have been discussed with the PoA managing entity and the CPA implementer (both are same in case of this CPA). Specifically, these points include the monitoring methodology, data management, quality assurance and quality control procedures to be implemented in the context of the activity. The parameters that are to be monitored ex-post are: P - The share of digesters implemented that is operational - The parameter will be monitored with help of Performance report elaborated at least biennial (as part of BUS or as part of internal quality control reports of AEPC or other monitoring reports). Sampling Plan: CPA-DD provides description of sampling plan and indicates that the Biogas User Survey (BUS) will be the basis for ex-post emission reduction calculation and preparation of monitoring report. BUS will be carried out for each CPA. In carrying out BUS "Standard for sampling and surveys for CDM project activities and PoAs (EB74, 6 /11/ )" will be applied. A stratified random sampling method will be applied during sample selection in the Biogas User Survey. Sample size will be chosen for 90% confidence interval and 10% margin of error for parameter values as stipulated by the Executive Board. The sample size is calculated using the procedure outlined in EB75 8 /12/, Guidelines on Sampling and surveys for CDM project activities and programmes of activities, thus each CPA will be verified selecting the sample of biogas digester included in the CPA. Opinion: The parameters determined ex-post has been presented correctly according to requirements of the applied methodology. The responsibilities and institutional arrangements for data collection and archiving have been clearly provided. The information provided in the CPA-DD could be confirmed based on the on-site interviews and also through the submitted documentary evidence - implementation Agreement between AEPC and CPA implementers covering all requirements as stated in PoA section E.7.2. Based on the same, it can be confirmed that the PoA managing entity and the CPA implementer (both are same in case of this CPA) will be able to implement the monitoring plan and the achieved emission reductions can be reported ex-post and verified. 4.8 Environmental Impacts Discussion: The environmental analysis is performed at the PoA level; the choice has been justified by the CME in the registered PoA DD /4/. The assessment team hereby confirms that the CME has undertaken an analysis of Page 18 of 49

19 environmental impacts at PoA level and information is provided therein which is in accordance with procedures as required by the host Party. 4.9 Local Stakeholder Comments Discussion: The local stakeholder consultation process is performed at the PoA level, the choice has been justified by the CME in the registered PoA DD /4/ Project design of small-scale Component Project activities The assessment team confirms that the proposed small scale CPA is not a debundled component of a largescale project activity in accordance with the Guidelines on assessment of debundling for SSC project activities, as no individual system is having capacity more than 1% of the 15 MWel (45MWth) threshold for type I projects. The capacity of a digester is 1.86 kw th and hence remains well below the 1% of 15 MW thresholds. Page 19 of 49

20 5. References S. No. Name of document (Validation/Registration Process) /1/ /1.1/ CPA DD Version 01 dated 25/11/2013 /1.2/ CPA DD Version 02 dated 17/01/2014 /2/ CPA DD Version 03 dated 05/02/2014 (final version) /3/ ER spreadsheet corresponding to CPA DD Version 01 ER spreadsheet corresponding to CPA DD Version 02 ER spreadsheet corresponding to CPA DD Version 03 /4/ /4.1/ Registered PoA DD version 4.0 dated 13/01/2013 /4.2/ Validation Opinion of registered PoA DD dated 31/01/2013 /5/ Validation Opinion of registered CPA#1 dated 31/01/2013 /6/ Letter of Approval /5.1/ Letter of Approval from Nepal (host Party) dated 31/12/2009 ref. no.838 S. No. Name of document (Background documents used during validation process) /7/ CDM VVS Version 5.0 dated 04/10/2013 available during validation CDM VVS Version 6.0 dated 11/04/2014 /8/ CDM PS Version 5.0 dated 04/10/2013 available during validation CDM PS Version 6.0 dated 11/04/2014 /9/ CDM PCP Version 5.0 dated 04/10/2013 available during validation CDM PCP Version 6.0 dated 11/04/2014 /10/ Applied Methodology AMS l.e Switch from non-renewable biomass for thermal applications by the user version 5.0 /11/ Standard for sampling and surveys for CDM project activities and PoAs, EB74, 6 /12/ Guidelines on Sampling and surveys for CDM project activities and programmes of activities, EB75 8 /13/ Guidelines for completing the component project design document form for small-scale component project activities, EB /14/ /14.1/ CPA-DD and Final Validation Report for CPA # 2 /14.2/ CPA-DD and Final Validation Report for CPA # 3 /15/ Biogas User Survey Report dated July 2012 issued by Motherland Energy Group Pvt Ltd. /16/ Technical Specifications Manual prepared by BSP, Nepal /17/ Analysis of Biogas leakage from the household Digester dated August 2003 /18/ Nepal National Action program on Land Degradation and Desertification issued by Ministry of Population and Environment, Kathmandu, dated April 2004 /19/ Plant commissioning reports issued by Rastriya Gobar Gas Nirman Tatha Sewa Pvt. Ltd. /20/ Database for CPAs included in Proposed CPA # 4 prepared by AEPC Page 20 of 49

21 /21/ Declaration for ODA Non Diversion from the office of Assistant Director, AEPC dated 16/01/2014 /22/ List of AEPC certified installation company for digesters. /23/ Emission Reduction Right Transfer Agreements between Digester Owner and AEPC /24/ Renewable Energy Subsidy Policy 2009 /25/ Purchase orders and contract documents for valves, multilayer pipes, and pressure meter issued by AEPC /26/ Annual work plan; Govt. of Nepal, Ministry of science, technology and environment /27/ Guidelines on Assessment of Debundling for SSC Project Activities, Version 03, (EB 54, 13). /28/ Details of site visit conducted from 29/12/2013 to 02/01/2014 /29/ Jean Marie Baland, The Environmental Impact of Poverty: Evidence from Firewood Collection in Rural Nepal, Boston University - The Institute for Economic Development Working Papers Series, 30 June /30/ EB 68, 27, Guidelines on the demonstration of Additionality of Small-Scale Project Activities - Page 21 of 49

22 Validation Report (VVS) 1: Validation Protocol Table 1 Validation Requirements for Clean Development Mechanism (CDM) Component Project Activities (CPA) Conclusion Checklist Question(s) Ref MoV* Validation Assessment Draft Final SECTION A. Description of Project Activity A.1. Title of the proposed or registered PoA A.1 Is the reference and title of the PoA provided to which this CPA is to be included?. EB 66 17, the reference and title of the PoA is provided to which this CPA is to be included. The same has been confirmed from the UNFCCC website and found to be correct. A.2. Title of the CPA A.2 Does the Section A.2 of CPA DD contains information as required by Guidance for completing the CPA DD Form? A.3. Description of the CPA A.3 Is the description of the proposed activity in the CPA DD accurate, complete, and provides an understanding of the proposed CDM project activity? EB EB 66 17, I Section A.2 of CPA DD contains information as required by Guidance for completing the CPA DD Form. However CAR #01 is raised due to inconsistencies in the template used to prepare the CPA DD. /No The title of the CPA and the unique identification of the CPA The current version number of the CPA-DD; The date the CPA-DD was completed (DD/MM/YYYY). The correction has been made hence CAR #01 is closed. The description of the proposed activity is included in section A.3 and it has been confirmed during site visit that the information provided in CPA DD is accurate, complete, and provides an understanding of the proposed CDM project activity. CAR #01 Pending Site Visit ok Page 22 of 49

23 A.1.5 Is all information provided consistent and in compliance with the actual situation or planning? EB Validation Report (VVS), I The information provided has been checked during site visit and it is found consistent with the actual situation. Pending Site Visit A.1.6 Is all information with respect to project description deemed accurate and complete? A.4. Entity/individual responsible for CPA A.4 Does the Section A.4 of CPA DD contains information as required by Guidance for completing the CPA DD Form? EB A.4, EB 66 17, I Pending Site Visit the information provided in final CPA DD is accurate and complete. Same has been checked during site visit Is the Information of CPA implementer included, Is the CPA implementer a project participant of the PoA, under which the CPA is submitted? /No Pending Site Visit A.5. Technologies and/or measures A.5.1 Does the CPA DD defines the technologies and measures to be employed and/or implemented by the project activity, including a list of the facilities, systems and equipment that will be installed and/or modified by the project activity? A.5 of EB 66 17, the CPA DD defines the technologies and measures to be employed and/or implemented by the project activity. The technologies used in this CPA are household biogas digesters with a sludge and gas holding capacity range of up to 10 m3. The different sizes of the digesters that would be included in the programme would be of 2, 4, 6, 8 and 10 m3. However CL #02 is raised for evidence to substantiate the Operational Life time considered for the Bio gas Digester. CL 02 The age and average lifetime of the equipment defined based on manufacturer s specifications and industry standards Existing and forecast installed capacities, load factors and efficiencies defined Monitoring equipments and locations are defined. Energy and mass flows and balances of system and equipments included in the project activity Is description complete with regards to as how the same types and levels of services provided by the project activity would have been provided in the baseline scenario /No Evidence has been provided by CME; hence CL 02 is closed Page 23 of 49

24 A.5.2 Does the CPA DD contains list of equipments in the scenario existing prior the implementation of PA and/or the baseline scenario? A.5.3 Is the existing scenario prior to the implementation of the project activity same as baseline scenario identified in Section D.4 of CPA DD? A.5 of EB A.5 of Validation Report (VVS) There are no equipments identified in the existing scenario prior the implementation of Project activity. The household were using non renewable biomass and fossil fuel for cooking. /No Facilities, systems and equipment in operation under the existing scenario prior to the implementation of the project activity Facilities, systems and equipment in the baseline scenario, as established in section D.4 of CPA DD. existing scenario prior to the implementation of the project activity is same as baseline scenario identified in Section D.4 of CPA DD A.6. Party(ies) A.6.1.Is the table required for the indication of Party(ies) and CPA implementer(s) correctly applied? Para 33 of PS table required for the indication of Party(ies) and CPA implementer(s) is correctly applied. A.6 of EB A.6.2.Is all information provided in consistency with details provided by further chapters of the CPA DD (in particular Appendix 1)? A.6 of EB A.7. Geographic reference or other means of identification A.7.1 Is the Proposed CPA is stationary or Mobile? A.7 of EB 66 17,SV all information provided in consistency with details provided by further chapters of the CPA DD The proposed CPA is a stationary CPA and includes installation of a Biogas digester ranging from 2m3 to 8m3 in rural households of Nepal. Page 24 of 49