VALIDATION REPORT RENEWAL OF CREDITING PERIOD

Transcription

1 VALIDATION REPORT RENEWAL OF CREDITING PERIOD Kanfeng 15MW Hydropower Station Project, Min County, Dingxi City Prefecture, Gansu province, China REPORT NO. CDM-0111-RCP1 No distribution without permission from the client or responsible organizational unit

2 Report No. Date of first issue Revision No. Date of this revision CDM-0111-RCP1 29/05/ /01/2014 Project name: Kanfeng 15MW Hydropower Station Project, Min County, Dingxi City Prefecture, Gansu province, China Reference number of the registered CDM project activity: 0555 Date of registration: 15/10/2006 Client: Gansu Gongjiaotou Kanfeng Hydropower Development Co., Ltd Host country: China Methodology: AMS-I.D.: Grid connected renewable electricity generation --- Version 17.0 GHG reducing Measure/Technology: Renewable energy from hydropower plant. CER estimate: 46,120 tco 2 e/year Size: Large Scale Small Scale Validation Status: Corrective Actions Requested Clarifications Requested Full Approval and Submission for Approval of Renewal of Crediting Period Rejected Summary of the Validation Opinion: The review of the project design documentation and the subsequent follow-up interviews have provided CEPREI with sufficient evidence to determine the fulfillment of all stated criteria. In our opinion, the project correctly applies the baseline and monitoring methodology and meets the relevant UNFCCC requirements for renewal of crediting period and provides for appropriate baseline and its update. Hence CEPREI will recommend the project for renewal of crediting period by the CDM Executive Board. The review of the project design documentation and the subsequent follow-up interviews have not provided CEPREI with sufficient evidence to determine the fulfillment of all stated criteria. Hence CEPREI will not recommend the project for renewal of the crediting period by the CDM Executive Board and will inform the project participants and the CDM Executive Board on this decision. Report title: Kanfeng 15MW Hydropower Station Project, Min County, Dingxi City Prefecture, Gansu province, China Report No.: CDM-0111-RCP1 Date of this revision: 06/01/2014 Rev. No.: 3.1 Validated by: Guo Zhiyuan Work period: 01/03/ /01/2014 Reviewed by: Chen Chunyan Work period: 01/03/ /01/2014 Approved by: Wang Xiuci Date: 06/01/2014 CEPREI Certification Body TEL: (O) (O) FAX: Physical address: No.110, Dongguanzhuang RD, Tianhe District, Guangzhou City, P.R.C. Postal Code: chency@ceprei.org 2 / 40

3 Abbreviations: BM Build Margin CAR CDM CEF CER CL CM CO 2 e DNA CEPREI DOE GHG GWP IPCC MP NDRC NWPG OM PDD PS QA/QC UNFCCC VVS Corrective Action Request Clean Development Mechanism Carbon Emission Factor Certified Emission Reduction Clarification Request Combined Margin Carbon Dioxide Equivalent Designated National Authority CEPREI Certification Body Designated Operational Entity Greenhouse Gas(es) Global Warming Potential Intergovernmental Panel on Climate Change Monitoring Plan National Development and Reform Commission North West China Power Grid Operating Margin Project Design Document CDM Project Standard Quality Assurance / Quality Control United Nations Framework Convention on Climate Change CDM Validation and Verification Standard 3 / 40

4 TABLE OF CONTENTS Page 1 INTRODUCTION Objective Scope METHODOLOGY The Desk Review of the Project Design Documentation Follow-up Interviews with Project Stakeholders Resolution of Outstanding Issues Internal Quality Control Validation Team VALIDATION FINDINGS Participation Requirements Project Design Application of latest approved version of a baseline and monitoring methodology Project boundary Validity of the original baseline or its update Monitoring Calculation of GHG Emissions Reductions VALIDATION OPINION ANNEX A ANNEX B / 40

5 1 INTRODUCTION Gansu Gongjiaotou Kanfeng Hydropower Development Co., Ltd has commissioned CEPREI Certification Body, hereafter referred to as CEPREI, to perform a validation of renewal of the crediting period for registered CDM project entitled Kanfeng 15MW Hydropower Station Project, Min County, Dingxi City Prefecture, Gansu province, China (hereafter referred to as the Project ). This report summarizes the findings of the validation of the project, performed on the basis of UNFCCC criteria for the CDM, as well as criteria given to provide for consistent project operations, monitoring and reporting. 1.1 Objective The purpose of a validation is to have an independent third party assess the project design. In particular, the project's baseline, monitoring plan (MP), and the project s compliance with the requirements of Article 12 of the Kyoto Protocol; the CDM modalities and procedures as agreed in the Marrakech Accords under decision 3/CMP.1 ; the annex to the decision; subsequent decisions made by COP/MOP & CDM Executive Board and other relevant rules, including the host country legislation and sustainability criteria are validated in order to confirm that the project design, as documented, is sound and reasonable and meets the identified criteria. Validation is a requirement for all CDM projects and is seen as necessary to provide assurance to stakeholders of the quality of the project and its intended generation of certified emission reductions (CERs). 1.2 Scope The validation scope is defined as an independent and objective review of the project design document (PDD). The PDD is reviewed against the criteria stated in Article 12 of the Kyoto Protocol, the CDM modalities and procedures as agreed in the Marrakech Accords and the relevant decisions by the CDM Executive Board, including the approved baseline and monitoring methodology. The validation team has, based on the recommendations in the Validation and Verification Standard employed a risk-based approach, focusing on the identification of significant risks for project implementation and the generation of CERs. The validation is not meant to provide any consulting towards the project participants. However, stated requests for clarifications and/or corrective actions may have provided input for improvement of the Project design. 5 / 40

6 2 METHODOLOGY The validation consisted of the following three phases: i. The desk review of the project design documents. ii. The follow-up interviews with project owner. iii. The resolution of outstanding issues and the issuance of the final validation report and opinion. The following sections outline each step in more detail. 2.1 The Desk Review of the Project Design Documentation The following table outlines the documentation reviewed during the validation: Background investigation and assessment documents Reference No. Reference Document /1/ AMS-I.D.: Grid connected renewable electricity generation, version 17.0 /2/ Tool to calculate the emission factor for an electricity system, version /3/ CDM Validation and Verification Standard, version 04.0 /4/ CDM Project Standard, version 04.0 /5/ CDM Project Cycle Procedure, version 04.0 /6/ /7/ Assessment of the validity of the original/current baseline and update of the baseline at the renewal of the crediting period, version Guidelines for completing the project design document form for small-scale CDM project activities (EB66 Annex 09) /8/ China Electric Power Yearbook, 2007~2011 /9/ 2012 Baseline Emission Factors for Regional Power Grids in China 6 / 40

7 2.1.2 Documentation provided by the PP Reference No. /10/ /11/ /12/ /13/ /14/ Reference Document Registered PDD named: Kanfeng 15 MW Hydropower Station Project, Min County, Dingxi City Prefecture, Gansu province, China, version 3.1, dated 17/05/2006. Revised PDD named: Kanfeng 15 MW Hydropower Station Project, Min County, Dingxi City Prefecture, Gansu province, China, version 4.0, dated 18/07/2011, which approved by EB. Project Design Document named: Kanfeng 15MW Hydropower Station Project, Min County, Dingxi City Prefecture, Gansu province, China, version 4.1 of 20/03/2013 and version 4.3 of 06/11/2013. Technical agreement of generator specifications, signed with Hangzhou Chunjiang generating equipment Co., Ltd, dated 05/12/2005. The contract of hydro generator group, signed with Hangzhou Chunjiang generating equipment Co., Ltd, dated 05/12/2005. /15/ Letter of Approval issued by China DNA on 12/07/2006. /16/ Grid scheduling agreement signed with Gansu Power Company, date 22/11/2010. /17/ Power purchase contract with Gansu Power Company, date 01/06/2012. /18/ Reservoir surface area measurement report issued by Gansu Geological Engineering Investigation Institute in March / 40

8 2.2 Follow-up Interviews with Project Stakeholders On 26/04/2013, the representatives of the project owner, Gansu Gongjiaotou Kanfeng Hydropower Development Co., Ltd and the project consultant, CVDT were interviewed to resolve the issues identified during the desk review of the PDD. Identified documents and information, PDD and additional background documents related to the project design and baseline were effectively assessed as a part of the validation. Table below provides the information regarding the issues discussed during the site visits: Table 2-1 Information of Interview Date Name Organization Topic 26/04/20 13 Jia BaoAn Liu Yi Gansu Gongjiaotou Kanfeng Hydropower Development Co., Ltd Project background information; Project technology, operation, maintenance and monitoring capability; Project monitoring and management implement; Sustainable development issues 26/04/20 13 Niu Mucheng Li Yuxiu CVDT Applicability of selected methodology; baseline study; Emission reduction; Monitoring plan. 2.3 Resolution of Outstanding Issues The objective of this phase of the validation was to resolve any outstanding issues which need to be clarified prior to CEPREI s positive conclusion on the project design. In order to ensure transparency a validation protocol is customized for the project. The protocol shows in transparent manner criteria (requirements), means of verification and the results from validating the identified criteria. The validation protocol serves the following purposes: It organizes, details and clarifies the requirements a CDM project is expected to meet; It ensures a transparent validation process where the validator will document how a particular requirement has been validated and the result of the validation. The validation protocol consists of four tables. Table 1: validation requirements based on the CDM validation and verification standard (Version 04.0); 8 / 40

9 Table 2: resolution of Corrective Action and Clarification Requests; Table 3: Forward Action Requests. The completed validation protocol for Kanfeng 15MW Hydropower Station Project, Min County, Dingxi City Prefecture, Gansu province, China is enclosed in ANNEX A to this report. Findings established during the validation can either be seen as a non-fulfillment of CDM criteria or where a risk to the fulfillment of project objectives is identified. A corrective action requests (CAR) are issued, where: (a) The project participants have made mistakes that will influence the ability of the project activity to achieve real, measurable additional emission reductions; (b) The CDM requirements have not been met; (c) There is a risk that emission reductions cannot be monitored or calculated. A clarification request (CL) is raised if information is insufficient or not clear enough to determine whether the applicable CDM requirements have been met. 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. 9 / 40

10 2.4 Internal Quality Control The validation report underwent a technical review before requesting registration of the project activity. The technical review was performed by a technical reviewer qualified in accordance with CEPREI s qualification scheme for CDM validation and verification. 2.5 Validation Team On the basis of a competence analysis and individual availabilities a validation team was appointed. Furthermore also the personnel for the technical review and the decision making were determined. The validation team has been noticed to the project participants on 01/03/2013. No rejection from the PP was received hence no changes happened. The validation team consisted of the following personnel as following: Table 2-3 Validation Team Information Type of involvement Technical Name Function 1 Role 2 area competence Appointment date Guo Zhiyuan TL V/E X 01/03/2013 Chen Chunyan TR -- X 01/03/2013 Wang Xiuci TCD/FA ) Function: TL: Team Leader; TM: Team Member; TR: Technical review; FA: Final Approval TCD: Technical Committee Director 2) Role: V : Verifier; E : Expert; T : Trainee Desk review On-site Reporting Supervision of work Technical review Expert input 3) Selection of TR and TR procedural administration 10 / 40

11 3 VALIDATION FINDINGS The findings of the validation are stated in the following sections. The validation criteria (requirements), the means of validation and the results from validating the identified criteria are documented in more detail in the validation protocol in ANNEX A. The final validation findings relate to the project design as documented and described in the revised and resubmitted project design documentation version 4.3 of 06/11/ Participation Requirements The project participant is Gansu Gongjiaotou Kanfeng Hydropower Development Co., Ltd of China. Host party P.R. of China meets the requirements to participate in the CDM (Table 3-1). Table 3-1 Project Parties and Project Participants Characteristic Party Project participants Host County China Gansu Gongjiaotou Kanfeng Hydropower Development Co., Ltd Because of the Certified Emission Reductions Purchase Agreement signed with The Kansai Electric Power Co., Inc. has been expired at the end of last year, the MoC has been updated and submitted to EB. 3.2 Project Design Kanfeng 15MW Hydropower Station Project, Min County, Dingxi City Prefecture, Gansu province, China was registered as a CDM project on 15/10/2006. It is a hydropower project, located at the main stream of the Tao River in the west of Min County. The project is developed and operated by Gansu Gongjiaotou Kanfeng Hydropower Development Co., Ltd. Table 3-2 Information of the Project No. Item Data 1. Location of Project Activity The project site is located in Gaoshiya village of Xizhai township near the border between Dingxi City Prefecture and Gannan Autonomous Tibetan Prefecture. The coordinates of the Project are: Dam: E, N 11 / 40

12 Plant: E, N 2. Installed Capacity 15 MW (5 MW 3) Type: Fixed-blade propeller Type: Kaplan 3. Technical specification of Turbine Model: ZD987-LH-270 Units: 2 Rated Flow Rate: 45.5 m 3 /s Model: ZZ987-LH-270 Units: 1 Rated Flow Rate: 45.5 m 3 /s Rated output: 5200 kw Rated output: 5200 kw Technical specification of Generator Crediting period Model: SF /4250 Units: 3 Rated Voltage: V Rated current: A Rated Power: 5000 kw Renewable Crediting Period (7 years) The first renewable crediting period is from 01/01/2007 to 31/12/2013. The PP applies for a second crediting period starting from 01/01/2014 till 31/12/ CDM registration No Date of registration 15/10/2006 A notification of changes from the project activity as described in the registered PDD has been submitted and was approved by CDM EB on 08/09/2011. Through on-site interviews and observation, the validation team confirms that the implementation of the project is consistent with the description in the registered PDD approved by EB on 08/09/2011. In addition, no main equipment exchange happened. 12 / 40

13 3.3 Application of latest approved version of a baseline and monitoring methodology At the time of registration, the PP had used the methodology Grid connected renewable electricity generation, AMS-I.D, version 08. The updated PDD applies the latest available version of the same valid approved methodologies of AMS-I.D version 17 Grid connected renewable electricity generation. Therefore it meets the condition that for renewal of the crediting period, the methodology shall not change. The applicability of the methodology was re-assessed based on the knowledge of the project from the initial validation, subsequent verifications and the confirmation from the project participant. Therefore, the validation team confirms the Project meets all the applicability conditions and is in line with all the requirements and stipulations mentioned in applied methodology. 3.4 Project boundary The project boundary is delineated by the physical, geographic site of the renewable generation source, which includes the reservoir, water diversion system, the powerhouse and the auxiliary substation. The spatial extent of the Project boundary also includes all the power plants physically connected into the North West China Power Grid (NWPG). The NWPG is a regional power grid in China. Provincial Grids included in the NWPG are: Gansu, Shaanxi, Ningxia, Qinghai and Xinjiang Municipal Grid. The designation of the NWPG has been made by the National Development and Reform Commission of China. The Grid Connected Agreement has been checked by the validation team. Emission sources and gases included in the project boundary are as below table3-4: Table 3-3 Description of sources and gases in the boundary variety GHGs involved Justification / Explanation Baseline emissions Project emissions Leakage CO 2 No project emissions No leakage As per the calculation of expected emission reductions as a result of displacing electricity which would otherwise been supplied by power plants connected to the NWPG. The project is a hydropower activity with new reservoirs with power density greater then greater than 10 W/m 2. PD=68.8 W/m 2 No leakages that need to be considered in applying this methodology AMS-I.D (version 17). 13 / 40

14 3.5 Validity of the original baseline or its update As demonstrated in the registered PDD, the baseline scenario for the project is the continued operation of the existing power plants in the system and the addition of new generation sources to meet electricity demand. As per AMS-I.D (version 17), the baseline for the project remains the same as that in the registered PDD as the electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources into the grid. According to version of the Assessment of the validity of the original/current baseline and update of the baseline at the renewal of the crediting period, the assessment is done in steps as follows: Step 1: Assess the validity of the current baseline for the next crediting period The Procedures for the renewal of the crediting period of a registered CDM project activity approved by the CDM Executive Board require assessing the impact of new relevant national and/or sectoral policies and circumstances on the baseline. The validity of the current baseline is assessed using the following Sub-steps: Step 1.1: Assess compliance of the current baseline with relevant mandatory national and/or sectoral policies The current baseline remains the same as it was in the registered PDD. There are no changes in the relevant national and/or sectoral policies since the date of earlier registered PDD. Although the national policies encourage the development of renewable energy, but the renewable energy resources are not mandatory. Electricity generated by fossil fuel based plants still dominates the power supply (refer to China Electric Power Yearbook). Hence, it can be concluded that the current baseline still complies with all relevant policies. Step 1.2: Assess the impact of circumstances The existing scenario is that NWPG provides the same electricity service as the proposed project and NWPG is dominated by the coal fired power plants. At the time of requesting approval of renewal of crediting period, the baseline conditions used to determine the baseline emissions in the previous crediting period are still valid. In conclusion, as per the requirement of this sub-step, it has been assessed that there were no impact of circumstances existing at the time of requesting renewal of the crediting period on the current baseline scenarios. Step 1.3: Assess whether the continuation of use of current baseline equipment(s) or an investment is the most likely scenario for the crediting period for which renewal is requested This sub step is no applicable, as the baseline scenario is electricity provided by the grid, other 14 / 40

15 than continuation of the current practice which is defined in the requirement of this sub-step. Also, it is clear that the grid equipments as a system has longer lifetime and will exceed the next 7-year crediting period. Step 1.4: Assessment of the validity of the data and parameters The emission factor that was determined only at the start of the previous crediting period is no more valid due to the change of the grid configuration. As per the requirement of AMS-I.D (version 17), new data available should be used to revise the baseline scenario and emissions for updating the baseline at the start of the second and third crediting period. Hence, the emission factor needs to be updated accordingly. Step 2: Update the current baseline and the data and parameters Step 2.1: Update the current baseline As per the requirement of the sub-step, the update for baseline emissions of the second crediting period should be based on the latest approved version of the methodology applicable to the project activity. As per AMS-I.D (version 17), the baseline for the project remains the same as that in the registered PDD, i.e. electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources into the grid. Step 2.2: Update the data and parameters The baseline emission from the project has been calculated as per the Tool to calculate the emission factor for an electricity system (version ). In addition, the calculation refers to the latest version of Notification on Determining Baseline Emission Factor of China s Grid published by China s DNA on 15/10/2012, which is the latest valid available data at the time of requesting for the crediting period renewal. The combined margin emission factor (CM) is calculated by six separated steps as following: Step 1.Identify the relevant electricity power systems North West China Power Grid (NWPG) is selected as the electric power system of the Project. There is no electricity imported from other grids. The validation team was able to verify the data sources of Notification of China-Grid EF, and confirms that the identified electric power systems are appropriate. Step 2.Choose whether to include off-grid power plants in the project electricity system (optional) Option I: Only grid power plants are included in the calculation. 15 / 40

16 Step 3.Select a method to determine the operating margin (OM) For the calculation of the OM emission factor, the simple OM emission factor calculation method is selected because low cost/ must-run projects constitute less than 50% of the total grid generation during the last 5 years. The validation team has checked the calculation for low cost/must-run constitution of the total grid generation and confirmed the calculation is correct. Therefore, simple OM emission factor calculation method is selected reasonable. Data from China Electric Power Yearbook has been applied correctly. Step 4.Calculate the operating margin emission factor according to the selected method The data on electricity generation and auxiliary electricity consumption are obtained from the China Electric Power Yearbook from 2009 to 2011 (published annually). The data on different fuel consumptions for power generation and the net caloric values of the fuels are obtained from the China Energy Statistical Yearbook from 2009 to The emission factors of the fuels adopted are obtained from Table 1-2 and Table 1-4 of the 2006 IPCC Guidelines for National Greenhouse Gas Inventories: Workbook. The renewable crediting period is adopted for the Project and the OM will be fixed for the second crediting period. The data source are deemed reasonable and the validation team confirms that the calculation is able to be replicated using the data and parameter provided in the PDD. Step 5.Calculate the build margin (BM) emission factor The BM emission factor of the power grid is calculated by multiplying the emission factor of the thermal power with the share of the thermal power in the most recently added approach to 20% of total installed capacity. The emission factor for thermal power is determined based on the most advanced and commercially available technology endorsed by China s DNA. The validation team confirms that the data sources are deemed reliable and calculation is appropriate. Step 6.Calculate the combined margin (CM) emission factor According to the Tool to calculate the emission factor for an electricity system (version ), the default weights: W OM =0.25 for Operating Margin and W BM =0.75 for build Margin in the second crediting period of hydropower Projects are adopted. The resultant electricity baseline emission factor EF grid,cm,y works out as tco2e/mwh. The validation team is convinced of the result of the emission factor calculation. It is deemed to be adequate and transparent. 16 / 40

17 3.6 Monitoring The project monitoring plan is in accordance with the monitoring methodology AMS-I.D (version 17) which is the same as that in the registered PDD. The monitoring plan has been focused on monitoring the electricity delivered to and bought from the NWPG by the project. The monitoring plan gives opportunity for real measurements of achieved emission reductions and contains principles and concepts on which it is based, operational and monitoring obligations of the project owner like resources involved in the monitoring process, training, support activities, calibration and collection data, quality assurance procedures, data management, electronic support tools, etc. The application of the monitoring methodology is transparent. It is the opinion of the Validation team, that the project participants are able to implement the monitoring plan as described in the PDD Parameters determined ex-ante The calculation of the grid emission factor in the PDD has been updated to the latest data available at the commencement of validation. The data used in the emission factor calculation is in accordance with data in the Baseline Emission Factors for Regional Power Grids in China published by China DNA on 15/10/2012, China Electric Power Yearbook from 2009 to 2011 (published annually) and the China Energy Statistical Yearbook from 2009 to Ex-ante emission factor in year y EF grid, CM, (tco 2 /MWh) is determined as combined margin (CM), which is combined from operating margin (OM) and build margin (BM) according to the Tool to calculate the emission factor for an electricity system version and it will be fixed in the 2 nd crediting period. NWPG was determined as the relevant grid system. Table 3-4 Parameters determined ex-ante Data and Parameters Unit Value applied Source of data used Operational Margin (EF grid,om,y ) Build Margin (EF grid,bm,y ) CM EF (EF grid,cm,y ) tco 2 /MWh tco 2 /MWh tco 2 /MWh Baseline Emission Factors for Regional Power Grids in China published by China DNA on 15/10/2012. China Energy Statistic Yearbook( ), China Power Yearbook( ) The validation team can confirm that the data sources are reliable and that the calculation and 17 / 40

18 results are correct Parameters monitored ex-post The following parameters were identified to be monitored ex-post: EG facility, y ; Cap PJ ; A PJ. Due to the Power Density of the project being much greater than 10W/m 2, there is no need to monitor the total power generation of the project. The data to be monitored continuously by the electricity meters only refers to electricity delivered to the grid by the project activity and electricity consumed by the project activity. The electricity meter (M0) which is bi-direction, has been installed at the inlet of the grid transformer station. The electricity meter (M1) has been installed at project site which used to check quantity of electricity into and out. Electric energy measuring equipment of the Project has been collocated and installed according to relative national standard and regulations. The installed capacity of the hydro power plant and area of the reservoir measured in the surface of the water should be monitored yearly Management system and quality assurance The monitoring arrangement for the CDM project has been described in the PDD (version 4.3, 06/11/2013): The accuracy of electric meter (0.2s) and record frequency have been identified in the PDD appropriately; Monitoring frequency of surface area of the reservoir (A PJ ) and installed capacity of the project activity (CAP PJ) has been indicated in the PDD appropriately; The operation and management structure of the monitoring have been described appropriately; The electric meters will be annually calibrated by a qualified third party according to the related standard; The emergency procedure and the correctness action have been identified appropriately; In summary, a formal set of monitoring procedures were in place prior to the start of the 2 nd crediting period, with details on the organization, data control, QA/QC procedures, procedures for calibration of metering equipment and training. Hence, the validation team is convinced that the application of monitoring methodology was transparent and the participant is able to 18 / 40

19 implement the monitoring plan. 3.7 Calculation of GHG Emissions Reductions For Greenfield hydropower plant: BE y = EG BL,y * EF CO2,grid, y = EG facility,y * EF grid,cm,y ER y = BE y PE y LE y PEy =0, as following: Power Density of the Project (PD) PD = Installed Capacity of Project (W) / Surface Area of Reservoir (m 2 ) PD =15,000,000 W/217, m 2 =68.8 W/m 2 As we can see the results above, the PD of the project is much greater than 10 W/m 2, Hence, the emissions of project are equal to zero. LE y =0, As per AMS-I.D, version 17, no leakage emissions are considered. Thus, ER y = BE y = EG BL,y * EF CO2,grid, y = EG facility,y * EF grid,cm,y = (70,660 MWh 0 ) * = 46,120 tco 2 e. (EG facility,y =quantity of net electricity, EF grid,cm,y =combined margin CO 2 emission factor of NWPG). In summary, the GHG calculations are complete and transparent, and the data accuracy has been verified. 19 / 40

20 CCEPREI CERTIFICATION BODY 4 VALIDATION OPINION CEPREI Certification Body (CEPREI) has performed a validation of renewal of the crediting period for registered CDM project Kanfeng 15MW Hydropower Station Project, Min County, Dingxi City Prefecture, Gansu province, China (UNFCCC registration No.0555) in China on the basis of UNFCCC criteria for the Clean Development Mechanism and host Party criteria, as well as criteria given to provide for consistent project operations, monitoring and reporting. UNFCCC criteria refer to Article 12 of Kyoto Protocol, the CDM modalities and procedures and the subsequent decision by the CDM Executive Board. The review of the project design documentation and the subsequent follow-up interviews has provided CEPREI with sufficient evidence to determine the fulfillment of stated criteria. In the course of the validation 1 Corrective Action Requests (CARs) and 3 Clarification Requests (CLs) were raised and successfully closed. No FAR has been raised. In detail the conclusions can be summarized as follows: - The project correctly applies the methodology AMS-I.D version 17 Grid connected renewable electricity generation. - The monitoring plan is transparent and adequate. - The calculation of the project emission reductions is carried out in a transparent and conservative manner, so that the calculated emission reductions of 46,120 tco2e are most likely to be achieved within the 2 nd renewable crediting period. In summary, it is CEPREI s opinion that the project Kanfeng 15MW Hydropower Station Project, Min County, Dingxi City Prefecture, Gansu province, China (UNFCCC registration No.0555), as it was described in the project design documentation, correctly applies the baseline and monitoring methodology and meets the relevant UNFCCC requirements for the renewal of crediting period and provides for appropriate baseline and its update. Signed on Behalf of the Validation Body by Authorized Signatory Signature: Name: Wang Xiuci Date: 06/01/2014 CEPREI CERTIFICATION BODY

21 ANNEX A Validation Protocol 21 / 40

22 ANNEX 1: CDM PROJECT VALIDATION PROTOCOL VALIDATION PROTOCOL Table 1: validation requirements based on the CDM validation and verification manual (EB55 annex 1) CHECKLIST QUESTION Ref. MoV COMMENTS A. General Description of Project Activity Draft Final A.1. PDD editorial aspects A.1.1. Have relevant sections of the PDD been updated? CL-1: More information should be provided in B.3 of the PDD according to Guidelines for completing the project design document form for small-scale CDM project activities (EB66 Annex 09) VVS, 297 Conclusion: The PDD has been updated which is in line with the guidelines. Hence, CL-1 has been closed. CL-1 Yes. The baseline, the estimated emission reductions and the monitoring plan have been clearly described and updated. 22 / 40

23 CHECKLIST QUESTION Ref. MoV COMMENTS Draft Final A.1.2. Have other section in the PDD been identified to be updated? A.1.3. Are the names of the project participants of the registered project still consistent with the PPs as per this request for renewal of crediting period? CL-2: Please provide further information to demonstrate the geographic coordinates of the project are the same as described in the PDD. Conclusion: Geographic coordinates of the project are revised to more accurate one according to that measured by the qualified third party, Gansu Geological Engineering Investigation Institute. Hence, CL-2 has been closed. Yes. The PDD has been updated which is in line with the AMS- I.D version 17, which is compared to the registered PDD. CL-3: The Certified Emission Reductions Purchase Agreement signed with Kansai Electric Power Co., Inc. has been expired at the end of last year. The information of the Project participants in the PDD should be modified. Conclusion: The information of the PP in the PDD is updated and the MoC has been updated and submitted to EB. Hence, CL-3 has been closed. CL-2 CL-3 23 / 40

24 CHECKLIST QUESTION Ref. MoV COMMENTS Draft Final A.2. Technology to be employed Validation of project technology focuses on the project engineering, choice of technology and competence/ maintenance needs. The DOE should ensure that environmentally safe and sound technology and know-how is used. The name of the host country of the registered project had no change, and is still consistent with the PP as per this request for renewal of crediting period. A.2.1. Is the description of the technology employed in the PDD in accordance with the real situation? Yes By means of checking the updated PDD, registered PDD, project layout, nameplate of the power generation units and the hydro generator group purchase contract, all the technology of project activity doesn t involve technology transfer. The description of the technology employed in the PDD is in accordance with the real situation. B. Project Baseline and Monitoring Plan B.1. Reference of the Methodology 24 / 40

25 CHECKLIST QUESTION Ref. MoV COMMENTS Draft Final B.1.1. Does the PDD correctly quote an applicable version of the methodology? VVS, 74 Yes The proposed project applied the approved methodology AMS-I.D.: Grid connected renewable electricity generation (Version 17). Furthermore, Tool to calculate the emission factor for an electricity system (Version ) is also applied. B.2. Applicability of the Methodology Yes. B.2.1. Does the project apply an approved and applicable CDM methodology and a valid version there of? VVS, 70, 74, 76, 77 The applied version of the baseline and monitoring methodology is valid at the time of submission for stakeholder consultation. All applicability criteria in the methodology, the applied tools or any other methodology component referred to therein are fulfilled. B.2.2. In case one or more applicability criteria have not been met, has the validation team requested clarification to, revision of or deviation from the methodology in accordance with the latest guidelines? VVS, Yes. Every applicable criterion prescribed in AMS-I.D was assessed and confirmed through on-site visit. All applicability criteria in the methodology and the applied tools are fulfilled. 25 / 40

26 CHECKLIST QUESTION Ref. MoV COMMENTS B.3. Validity and update of the baseline The assessment of the continued validity and update of the baseline at the renewal of the crediting period is carried out according to the stepwise approach given in the tool to assess the validity of the original/current baseline and to update the baseline at the renewal of the crediting period, version B.3.1. Step 1: Assess the validity of the current baseline for next crediting period The validity of the current baseline is assessed using the following Sub-steps: Draft Final B What has been identified as original/current baseline scenario The original baseline was determined according to the UNFCCC approved methodology AMS-I.D. The new baseline scenario is determined applying the requirements of the approved methodology AMS-I.D. version 17. The baseline scenario is the electricity delivered to the grid by the project activity would have otherwise been generated by the operation of gridconnected power plants and by the addition of new generation sources into the grid, as reflected in the combined margin (CM) calculations described in the Tool to calculate the emission factor for an electricity 26 / 40

27 CHECKLIST QUESTION Ref. MoV COMMENTS system (version ). The baseline scenario was identified correctly and in line with the methodology Draft Final B Step 1.1: Assess compliance of the current baseline with relevant mandatory and/or sectoral policies Does the current baseline comply with all relevant mandatory national and/or sectoral policies which came into effect after the submission of the project activity for validation or the submission of the previous request for renewal of the crediting period and are applicable at the time of requesting renewal of the crediting period? AMS- I.D17 Yes. The baseline scenario has not been changed during the second crediting period and is in compliance with all the relevant mandatory national and/or sectoral policies. If yes go to step 1.2, otherwise the baseline needs to be updated. B Step 1.2: Assess the impact of circumstances Do new circumstances existing at the time of requesting renewal of the crediting period make the continued validity of the baseline not plausible? Assess the impact of circumstances existing at the time of requesting renewal of the crediting period on the current baseline emissions, without reassessing the baseline scenario. If new AMS- I.D17 The emission factor has been changed to tco2e/mwh in the second crediting period due to the change of the OM, BM and the calculation formula. The minor change of OM and BM value is because the operation margin and build margin of NWPG has been changed between the 1st crediting period and 2nd crediting period. As per the description in the China Electric Power Yearbook ( ), it can be confirmed that most of the electricity is generated by 27 / 40

28 CHECKLIST QUESTION Ref. MoV COMMENTS Draft Final circumstances make the continued validity not plausible, then the current baseline needs to be updated for the subsequent crediting period. coal fired power plants during the past 5 years. So the scenario existing is NWPG providing the same electricity service as the proposed project and NWPG is dominated by the coal fired power plants. At the time of requesting renewal of the crediting period, the conditions used to determine the baseline emissions in the previous crediting period are still valid. So there is no necessary for assessing new fuels or raw materials and the impact of electricity or fuel prices in the identification of the current practice for the baseline emissions. B Step 1.3: Assess whether the continuation of the use of current baseline equipment(s) is technically possible Does the remaining lifetime of the current equipment that would continue to be used exceeds the crediting period for which renewal is requested (more 7 years)? The step should only be applied if the identified baseline in the previous crediting period was the continuation of the current practice. AMS- I.D17 This sub step is no applicable as the baseline scenario is electricity provided by the grid other than investment by PP or third party(ies) and there is no follow-up investment for the existing baseline scenario which is defined in the requirement of this sub-step. B Step 1.4: Assessment of the validity of the data and parameters Are all data and parameters that were only AMS- I.D17 The emission factor that was determined only at the start of the previous crediting period is no more valid due to the change of the grid configuration. As per the 28 / 40

29 CHECKLIST QUESTION Ref. MoV COMMENTS Draft Final determined at the start of the (previous) crediting period and not monitored during the (previous) crediting period still valid or should they be updated? Updates should be undertaken: Where IPCC default values are used, the values should be updated if any default values have been adopted and published by the IPCC; Where emission factors, values or emission benchmarks are used and determined only once for the crediting period, they should be updated, except if the emission factors, values or emission benchmarks are based on the historical situation at the site of the project activity prior to the implementation of the project and cannot be updated because the historical emission does not exist anymore as a result of the CDM project activity If any of the data and parameters that were only determined at the start of the crediting period and not monitored are not valid anymore, the current baseline needs to be updated for the subsequent crediting period. If the application of steps 1.1, 1.2, 1.3 and 1.4 confirm that the current baseline as well as data and parameters are still valid for the subsequent crediting requirement of AMS-I.D. version 17, new data available should be used to revise the baseline scenario and emissions for updating the baseline at the start of the second and third crediting period. Hence the emission factor needs to be updated accordingly. 29 / 40

30 CHECKLIST QUESTION Ref. MoV COMMENTS period, then this baseline, data and parameters can be used for the renewed crediting period. Otherwise, proceed to Step 2. B.3.2. Step 2: Update of the current baseline and the data and parameters This step is only applicable if any of the Steps 1.1, 1.2, 1.3 and/or 1.4 showed that the current baseline needs to be updated. Draft Final B Step 2.1: Update the current baseline Have the baseline been updated according to the latest approved version of the methodology? The procedure shall be applied in the context of the sectoral policies and circumstances that are applicable at the time of request for renewal of the crediting period. AMS- I.D17 Not applicable. The baseline has not been changed during the second crediting period and is in compliance with all the relevant mandatory national and/or sectoral policies. B Step 2.2: Update the data and parameters Have all data and parameters that were identified in Step 1.4 above as not valid anymore been updated? AMS- I.D17 The baseline emission from the project has been calculated as per the Tool to calculate the emission factor for an electricity system (version ). In addition, the calculation refers to the latest version of Notification on Determining Baseline Emission Factor of China s Grid published by China s DNA in 2012, which is the latest valid available data at the time of requesting CAR-1 30 / 40

31 CHECKLIST QUESTION Ref. MoV COMMENTS B.4. Algorithms and/or formulae used to determine emissions reductions It is assessed whether the steps taken and the equations and parameters applied in the PDD to calculate project emissions, baseline emissions, leakage and emission reductions comply with the requirements of the selected methodology including applicable tool(s). for the crediting period renewal. CAR-1: The calculation of combined margin emissions factor in PDD is inconsistent with the Tool to calculate the emission factor for an electricity system, version Conclusion: The default weights for weighted average CM should be 0.25 and 0.75 for the second crediting period. Therefore, the calculation of CM is revised in PDD. The value of emission reductions is also updated. Draft Final B.4.1. Are the equations applied correctly according to the applied approved methodology? VVS, 72(c), 96 Yes. The equations applied for calculation are correctly applied according to the approved methodology. B.4.2. In case the methodology allows for different VVS, N/A 31 / 40

32 CHECKLIST QUESTION Ref. MoV COMMENTS Draft Final methodological choices, are the equations applied properly justified and have they been used reflecting the other methodological choices (i.e. baseline identification)? B.4.3. Have conservative assumptions been used when calculating the project emissions? B.4.4. Are all data sources and assumptions appropriate and parameters which remain fixed throughout the crediting period correct, applicable to the project and will lead to a conservative estimation of emission reductions? 97, 98 VVS, 98, 99(a) VVS, 98 N.A. N.A. B.4.5. Have emission sources been identified, which are expected to contribute more than 1% of the overall expected average annual emissions reductions and which are not addressed by the selected approved methodology? VVS, 87 The implementation of the project activity will not lead to GHG emissions within the project boundary which are expected to contribute more than 1% of the overall expected average annual emission reductions, which are not addressed by the methodology. B.4.6. Are all ex-ante calculation values for monitoring parameters (as defined as per chapter B.7.1) reasonable? VVS, 98 Yes. All Values of data to be applied for the purpose of calculating expected emissions reductions are considered to be reasonable, applicable and 32 / 40

33 CHECKLIST QUESTION Ref. MoV COMMENTS conservative. Draft Final B.4.7. Are the emission reductions real, measurable and give long-term benefits related to the mitigation of climate change. Yes. The emission reductions are real, measurable and give long-term benefits related to the mitigation of climate change. B.5. Monitoring of Emission Reductions It is assessed whether the monitoring plan is appropriate for the project activity and in line with the applied methodology. Yes Three monitoring parameters are included in the monitoring plan. B.5.1. Are all monitoring parameters required by the applied methodology contained in the monitoring plan? VVS, 72 (e), 131, 132 (a) (i) - Quantity of net electricity generation supplied by the project plant/unit to the NWPG in year (EG facility, y ) - Installed capacity of the hydro power plant after the implementation of the project activity(cap PJ ) - Area of the single or multiple reservoirs measured in the surface of the water, after the implementation of the project activity, when the reservoir is full (A PJ ) All monitoring parameters required by the applied 33 / 40

34 CHECKLIST QUESTION Ref. MoV COMMENTS methodology are contained in the monitoring plan Yes Draft Final B.5.2. Are the means of monitoring of all parameters contained in the monitoring plan feasible within the project design? VVS, 132 (b) (i), 133(b) The electricity supplied to the grid and imported from the grid by the project activity is measured continuously and recorded monthly. According to the real operation period over the past 5 years, all the parameters contained in the monitoring plan has been monitored continuously which is in line with the revised MP which was approved by EB. In the updated PDD, the MP is in line with the methodology AMS-I.D version 17, there are three parameters to be monitored which are EG facility, y, Cap PJ, A PJ which are feasible within the project design. Yes B.5.3. Have all means of implementing the monitoring plan, e.g. equations necessary for ex-post emission reduction calculation, been described clearly and in line with the methodology? VVS, 131 The equations necessary for ex-post emission reduction calculation have been described clearly in the PDD, the following equations are used: BE y = EG BL,y * EF CO2,grid, y = EG facility,y * EF grid,cm,y ERy = B Ey P Ey - L Ey = E Gfacility,y * EF grid, CM, y Baseline emission factor (EF grid, CM, y ) is calculated as per Tool to calculate the emission factor for an electricity 34 / 40

35 CHECKLIST QUESTION Ref. MoV COMMENTS system. Project emission and leakage are set as zero for the project as per AMS-I.D version 17. Yes Draft Final B.5.4. Is it likely that the monitoring arrangements described in the PDD can properly be implemented in the context of the project activity? VVS, 132(b) (i) The project has been put into operation successfully over the past 5 years as during the on-site investigation and the emission reduction has been issued four times which can prove that the monitoring arrangements has been done well by the project owner. The monitoring arrangements are also the same compared to the one within the first crediting period and it will continue to carry out in consistent with description in the PDD. Yes. B.5.5. Are the QA/QC procedures appropriate sufficient to ensure the emission reductions achieved from the project activity can be reported ex-post and verified? VVS, 132(b) (ii) The monitoring plan described in the updated PDD can be implemented with regard to the description of QA/QC procedures. The procedures for calibration, accuracy and maintenance of monitoring equipment are clearly mentioned as per QA/QC procedure of PDD which is in line with the applied methodology. B.5.7. Are procedures identified for data management? VVS, 132(b) (ii) Yes. The QA/QC procedures were established as per applied methodology. The responsibility is defined. Appropriate 35 / 40

36 CHECKLIST QUESTION Ref. MoV COMMENTS C. Duration of the Project/ Crediting Period It is assessed whether the temporary boundaries of the project are clearly defined. data management and storage have been addressed. Draft Final C.1. Is the start of the crediting period clearly defined and reasonable? Yes The date of starting of the second crediting period is 01/01/2014 which is appropriately and clearly defined. And as the EB was notified prior to the expiration of the first crediting period, the starting date of the second crediting period is correctly selected being the first day after the end of the first crediting period. Ok 36 / 40

37 Table 2: Resolution of CARs and CLs Table 2.1: List of Requests for Corrective Action (CAR) No. CAR Reference to Validation Protocol Summary of project owner response Validation team conclusion 1 The calculation of combined margin emissions factor in PDD is not complies with the Tool to calculate the emission factor for an electricity system, version B According to the Tool to calculate the emission factor for an electricity system, the default weights for weighted average CM should be 0.25 and 0.75 for the second crediting period. Therefore, the calculation of CM is revised in PDD. The value of emission reductions is also updated. The revised PDD has been checked. Hence, this CAR has been closed. Table 2.2: List of Requests for Clarification (CL) No. CL Reference to Validation Protocol Summary of project owner response Validation team conclusion 1 More information should be provided in B.3 of the PDD according to Guidelines for completing the project design document form for small-scale CDM project activities (EB66 Annex 09) A.1.1 The PDD has been updated which is in line with the guidelines. The revised PDD has been checked. Hence, this CL has been closed. 2 Please provide further information to demonstrate the geographic coordinates of the project are the A.1.2 Geographic coordinates of the project are revised to more accurate The revised PDD and the evidence have 37 / 40

38 same as described in the PDD. one according to that measured by the qualified third party, Gansu Geological Engineering Investigation Institute. Evidence is also provided to the DOE. been checked. Hence, this CL has been closed. 3 The Certified Emission Reductions Purchase Agreement signed with Kansai Electric Power Co., Inc. has been expired at the end of last year. The information of the Project participants in the PDD should be modified. A.1.3 The information of the PP in the PDD is updated and the MoC has been updated and submitted to EB. The revised PDD and the updated MoC have been checked. Hence, this CL has been closed. Table 3: Forward Action Requests Table 3: List of Forward Action Requests (FARs) No. FAR Reference Summary of project owner response Validation team conclusion N.A. There is no FAR of the project. 38 / 40

39 ANNEX B Certificate of Appointment 39 / 40

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