Report No: QT-EC /126. Date:

Transcription

1 VALIDATION REPORT ENBW TRADING GMBH ANHUI SUZHOU MW BIOMASS POWER GENERATION PROJECT Report No: QT-EC /126 Date: TÜV NORD CERT GmbH JI/CDM Certification Program Langemarckstraße, Essen, Germany Phone: Fax: S01-VA010-A1 Rev.4/

2 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Date of first issue: Project No.: QT-EC /126 Final Approval by: Organisational unit: Martin Saalmann Client: EnBW Trading GmbH TÜV NORD JI/CDM Certification Program Client ref.: Markus Schaller Summary: positive validation opinion negative validation opinion EnBW Trading GmbH has commissioned the TÜV NORD JI/CDM Certification Program (CP) to validate the project: Anhui Suzhou 2x12.5MW Biomass Power Generation Project with regard to the relevant requirements of the UNFCCC for CDM project activities, as well as criteria for consistent project operations, monitoring and reporting. UNFCCC criteria include article 12 of the Kyoto Protocol, the modalities and procedures for CDM (Marrakech Accords) and the relevant decisions by COP/MOP and CDM Executive Board In the course of the pre-validation 17 Corrective Action Requests (CARs) and 9 Clarification Requests (CLs) were raised and successfully closed. The review of the project design documentation and additional documents related to baseline and monitoring methodology; the subsequent background investigation, follow-up interviews and review of comments by parties, stakeholders and NGOs have provided TÜV NORD JI/CDM CP with sufficient evidence to validate the fulfilment of the stated criteria. In detail the conclusions can be summarised as follows: - The project is in line with all relevant host country criteria (China) and all relevant UNFCCC requirements for CDM. Project activity approval has been obtained from DNA of China vide the Letter of Approval (HCA) dated in April 2010 and from DNA of Germany dated The project additionality is sufficiently justified in the PDD. - 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 864,129 tco 2e are most likely to be achieved within the (1 st renewable) crediting period. The conclusions of this report show, that the project, as it was described in the project documentation, is in line with all criteria applicable for the validation. Report No.: Subject Group: QT-EC /126 Climate Protection Report title: Anhui Suzhou 2x12.5MW Biomass Power Generation Project Work carried out by: Mr. Li Yong Jun Mr. Lin Yi Mr. Lars Kirchner Final technical review by: Stefan Winter, Martin Saalmann Local technical review by Date of this revision: Rev. No.: Number of pages: Indexing terms Climate protection Kyoto Protocol CDM Validation No distribution without permission from the client or responsible organisational unit Limited distribution Unrestricted distribution Page 2 of 129

3 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Abbreviations BAU CA CAR CDM CER CL CO 2 CO 2e CP DNA EB EIA FAR GHG NDRC IPCC PDD PP QC/QA UNFCCC VVM Business as usual Corrective Action / Clarification Action Corrective Action Request Clean Development Mechanism Certified Emission Reduction Clarification Request Carbon dioxide Carbon dioxide equivalent Certification Program Designated National Authority CDM Executive Board Environmental Impact Assessment Forward Action Request Greenhouse gas(es) The National Development and Reform Commission Intergovernmental Panel on Climate Change Project Design Document Project Participants Quality control/quality assurance United Nations Framework Convention on Climate Change Validation and Verification Manual Page 3 of 129

4 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Table of Contents Page 1 OBJECTIVE / SCOPE GHG PROJECT DESCRIPTION Project Characteristics Involved Parties and Project Participants Project Location Technical Project Description 8 3 METHODOLOGY AND VALIDATION SEQUENCE Validation Steps Contract review Appointment of team members and technical reviewers Consideration of Public Stakeholder Comments Validation Protocol Review of Documents Follow-up Interviews Project comparison Resolution of Clarification and Corrective Action Requests Definition Draft Validation Final Validation Technical review Final approval 16 4 VALIDATION FINDINGS VALIDATION ASSESSMENT SUMMARY General Description of the Project Activity Participation Contribution to Sustainable Development PDD editorial Aspects Technology to be employed Small Scale Projects Project Baseline, Additionality and Monitoring Plan Application of the Methodology Project Boundary Baseline Identification Calculation of GHG Emission Reductions Additionality Determination Monitoring Methodology Monitoring Plan Project Management Planning 44 Page 4 of 129

5 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Crediting Period Environmental Impacts Comments by Local Stakeholders 45 6 VALIDATION OPINION REFERENCES ANNEX 1: VALIDATION PROTOCOL ANNEX 2: ASSESSMENT OF BASELINE IDENTIFICATION ANNEX 3: ASSESSMENT OF FINANCIAL PARAMETERS ANNEX 4: ASSESSMENT OF BARRIER ANALYSIS ANNEX 5: OUTCOME OF THE GSCP ANNEX 6: STATEMENTS OF COMPETENCE OF TEAM MEMBERS Page 5 of 129

6 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 1 OBJECTIVE / SCOPE The purpose of a validation is to have an independent third party assess the project design. In particular the project's baseline, the 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 stated requirements and identified criteria. Validation is seen as necessary to provide assurance to stakeholders on the quality of the project and its intended generation of certified emission reductions (CERs). The validation scope is given as a thorough independent and objective assessment of the project design including especially: the correct application of the methodology, the project s baseline study, additionality justification, local stakeholder commenting process, environmental impacts and monitoring plan, which are included in the PDD and other relevant supporting documents, to ensure that the proposed CDM project activity meets all relevant and applicable CDM criteria. The information included in the PDD and the supporting documents were reviewed against the requirements as set out by the UNFCCC. The validation team has, based on the requirements in the Validation and Verification Manual /VVM/, carried out a full assessment of all evidences to assess the compliance of the project with the key areas as outlined in section V.E. and V.F. of the VVM (version 1.1, EB 51). The validation is based on the information made available to TÜV NORD JI/CDM CP and on the contract conditions. TÜV NORD JI/CDM CP can not be held liable by any entity for making its validation opinion based on any false or misleading information supplied to it during the course of validation. The validation is not meant to provide any consulting to the project participants. However, stated requests for clarifications and/or corrective actions may provide input for improvement of the project design. Page 6 of 129

7 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 2 GHG PROJECT DESCRIPTION 2.1 Project Characteristics Essential data of the project is presented in the following Table 2-1. Table 2-1: Project Characteristics Item Data Project title Anhui Suzhou 2x12.5MW Biomass Power Generation Project Project size Large Scale Small Scale Project Scope (according to UNFCCC sectoral scope numbers for CDM) 1 Energy Industries (renewable- /non-renewable sources) 2 Energy distribution 3 Energy demand 4 Manufacturing industries 5 Chemical industry 6 Construction 7 Transport 8 Mining/Mineral production 9 Metal production 10 Fugitive emissions from fuels (solid, oil and gas) Fugitive emissions from production and consumption of 11 halocarbons and hexafluoride 12 Solvents use 13 Waste handling and disposal 14 Afforestation and Reforestation 15 Agriculture Applied Methodology ACM0006 (Version 09) Technical Area(s) e.g: U: Non-renewable Biomass Residues Crediting period Renewable Crediting Period (7 y) Fixed Crediting Period (10 y) Start of crediting period Involved Parties and Project Participants The following parties to the Kyoto Protocol and project participants are involved in this project activity (Table 2-2). Table 2-2: Project Parties and project participants Characteristic Party Project Participant Host party China Huadian Suzhou Biomass Power Industrial Co. Ltd. Other involved party/ies Germany EnBW Trading GmbH 1 As per the final PDD (version 02.2) Page 7 of 129

8 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 2.3 Project Location The details of the project location are given in table 2-3: Table 2-3: Project Location No. Project Location Host Country China Region: Auhui Province Project location address: No 28, Jintai South Road, Economical Zone, Suzhou City Latitude: 33º35'20'' N Longitude: 117º01'55'' E 2.4 Technical Project Description The technical key data are provided in table 2-4 below Table 2-4: Technical data of the project activity Parameter Unit Value Stalk Direct Burning Boiler Manufacturer - Wuxi Huaguang Boiler Co., Ltd. Type - UG-75/3.82-JM_ Boiler Type - Grate Boiler Quantity - 2 Boiler Rated Evaporating Capacity t/h 75 Rated Steam Temperature 450 Boiler Feed-water Temperature 150 Rated Steam Pressure Mpa 3.82 Boiler Efficiency % Life Time Years 20 Turbine Manufacturer - Qingdao Jieneng Turbine Co., Ltd. Type - N Quantity - 2 Rated Capacity MW 12.5 Steam Temperature 435 Steam Pressure Mpa 3.43 Standard Rotational Speed r/min 3000 Life Time Years 20 Generator Manufacturer - Jinan Power Equipment Factory Type - QF-12-2 Quantity - 2 Rated Capacity MW 12.5 Rated Output Voltage kv 6.3 Page 8 of 129

9 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Parameter Unit Value Rated Current A 1374 Rated Rotational Speed r/min 3000 Life Time Years 20 Page 9 of 129

10 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 3 METHODOLOGY AND VALIDATION SEQUENCE 3.1 Validation Steps The validation of the project consisted of the following steps: Contract review Appointment of team members and technical reviewers Publication of the project design document (PDD) A desk review of the PDD submitted by the client and additional supporting documents with the use of customised validation protocol /CPM/ according to the Validation and Verification Manual /VVM/ Validation planning On-Site assessment Background investigation and follow-up interviews with personnel of the project developer and its contractors Draft validation reporting Resolution of corrective actions (if any) Final validation reporting Technical review Final approval of the validation The sequence of the validation is given in the table 3.1 below: Table 3.1: Validation sequence Topic Time Assignment of validation Submission of PDD for global stakeholder commenting process to On-site visit to Draft reporting finalised Final reporting finalised Technical review on final reporting finalised Page 10 of 129

11 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 3.2 Contract review To assure that the project falls within the scopes for which accreditation is held, the necessary competences to carry out the verification can be provided, Impartiality issues are clear and in line with the CDM accreditation requirements a contract review was carried out before the contract was signed. 3.3 Appointment of team members and technical reviewers On the basis of a competence analysis and individual availabilities a verification team, consistent of one team leader and 1 additional team members, were appointed. Furthermore also the personnel for the technical review and the final approval were determined. The list of involved personnel, the tasks assigned and the qualification status are summarized in the table 3-2 below. Table 3-2: Involved Personnel Name Company Function 1) Qualification Status 2) Scheme competence Technical competence 4) Host country Competence Team Leading competence Mr. Ms. Li, Yongjun TÜV NORD China, Shanghai TL SA - Mr. Ms. Lars Kirchner Mr. Ms. Lin, Yi Mr. Ms. Stefan Winter TÜV NORD CERT, Germany TÜV NORD China, Shanghai TÜV NORD CERT, Germany TM TE, E U TM E - TR 3) TE, E U Mr. Martin TÜV NORD TR 3), FA SA - Page 11 of 129

12 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Name Company Function 1) Qualification Status 2) Scheme competence Technical competence 4) Host country Competence Team Leading competence Ms. Saalmann CERT, Germany 1) TL: Team Leader; TM: Team Member, TR: Technical review; FA: Final approval 2) GHG Auditor Status: A: Assessor; E: Expert; SA: Senior Assessor; T: Trainee; TE: Technical Expert 3) No team member 4) As per S01-MU03 or S01-VA070 A2 (such as A, B, C...) Certificates of appointment for the above mentioned team members are enclosed in annex 6 of this report. 3.4 Consideration of Public Stakeholder Comments Acc. to the modalities and procedures the draft PDD, as received from the project participants, has been made publicly available on the dedicated UNFCCC CDM website prior to the validation activity commenced. Stakeholders have been invited to comment on the PDD within the 30 days public commenting period. In case comments were received, they are taken into account during the validation process. The comments and the discussion of the same are documented in annex 5 of this report. Page 12 of 129

13 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 3.5 Validation Protocol In order to ensure consideration of all relevant assessment criteria, a validation protocol is used. The protocol shows, in a transparent manner, criteria and requirements, means of validation and the results from pre-validating the identified criteria. The validation protocol reflects the generic CDM requirements each CDM project has to meet as well as project specific issues as applicable. The validation protocol serves the following purposes: - It organises, details and clarifies the requirements that a CDM project is expected to meet; - It ensures a transparent validation process where the validating entity will document how a particular requirement has been validated and the result of the determination. The validation protocol as described in Figure 1. Validation Protocol Table A-1: Requirement checklist Checklist Item Validation Team Comment Reference Draft Conclusion Final Conclusion The checklist items in Table A-1 are linked to the various requirements the project should meet. The checklist is organised in various sections. Each section is then further subdivided as per the requirements of the topic and the individual project activity. The section is used to elaborate and discuss the checklist item in detail. It includes the assessment of the validation team and how the assessment was carried out. The reporting requirements of the VVM shall be covered in this section. Gives reference to the information source on which the assessmen t is based on Assessment based on evidence provided if the criterion is fulfilled (), or a CAR, CL or FAR (see below) is raised. The assessment refers to the draft validation stage. In case a corrective action or a clarification the final assessment at the final validation stage is given. Figure 1: Validation protocol tables The completed validation protocol is enclosed in Annex 1 to this report. 3.6 Review of Documents The published PDD (version 1) and supporting background documents related to the project design and baseline were reviewed. Furthermore, the validation team used additional documentation by third parties like host party legislation, technical reports referring to the project design or to the basic conditions and technical data. Page 13 of 129

14 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 3.7 Follow-up Interviews The validation team has carried out interviews in order to assess the information included in the project documentation and to gain additional information regarding the compliance of the project with the relevant criteria applicable for CDM. During validation the validation team has performed interviews to confirm selected information and to resolve issues identified in the document review. The main topics of the interviews are summarized in table 3-3. Table 3-3: Interviewed persons and interview topics Interviewed Persons / Entities Project proponent representatives /IM01/ Project consultant representatives /IM02/ Local stakeholder /IM03/ Interview topics - Chronological description of the project activity - Technical details of the project realisation and Project Design Report - Host Government Approval / Annex I country approval - Approval procedures and status - Quality management system - Monitoring and measurement equipment - Crediting period and its starting date - Project activity starting date - Power purchase agreement with grid - Sustainable development benefits because of project - Analysis of local stakeholder consultation - Operational data technical specification (capacity of project), startup power supply, stalk availibility, plant load factor - Training & competency of the staff members w.r.t project management, monitoring and reporting - Baseline scenario before the implementation of CDM project activity - Editorial aspects of PDD - Methodology selection aspects - Baseline study, project emission, leakage and additionality - Details of emission reduction calculation - Sustainable development aspects - Project related legal requirements - Baseline scenario before the implementation of CDM project activity A comprehensive list of all interviewed persons is part of section 7 References. Page 14 of 129

15 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 3.8 Project comparison The validation team has compared the proposed CDM project activity with similar projects or technology that have similar or comparable characteristics and with similar projects in the host country in order to achieve additional information esp. regarding: Project technology Additionality issues Reasons for reviews, requests for reviews and rejections within the CDM registration process. 3.9 Resolution of Clarification and Corrective Action Requests Definition A Corrective Action Request (CAR) will be established where: mistakes have been made in assumptions, application of the methodology or the project documentation which will have a direct influence the project results, the requirements deemed relevant for validation of the project with certain characteristics have not been met or there is a risk that the project would not be registered by the UNFCCC or that emission reductions would not be able to be verified and certified. A Clarification Request (CL) will be issued where information is insufficient, unclear or not transparent enough to establish whether a requirement is met. A Forward Action Request (FAR) will be issued when certain issues related to project implementation should be reviewed during the first verification Draft Validation After reviewing all relevant documents and taken all other relevant information into account, the validation team issues all findings in the course of a draft validation report and hands this report over to the project proponent in order to respond on the issues raised and to revise the project documentation accordingly. Page 15 of 129

16 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Final Validation The final validation starts after issuance of the proposed corrective action (CA) of the CARs, CLs and FARs by the project proponent. The project proponent has to reply on those and the requests are closed out by the validation team in case the response is assessed as sufficient. In case of raised FARs the project proponent has to respond on this, identifying the necessary actions to ensure that the topics raised in this finding are likely to be resolved at the latest during the first verification. The validation team has to assess whether the proposed action is adequate or not. In case the findings from CARs and CLs cannot be resolved by the project proponent or the proposed action related to the FARs raised cannot be assessed as adequate, no positive validation opinion can be issued by the validation team. The CAR(s) / CL(s) / FAR(s) are documented in chapter Technical review Before submission of the final validation report a technical review of the whole validation procedure is carried out. The technical reviewer is a competent GHG auditor being appointed for the scope this project falls under. The technical reviewer is not considered to be part of the verification team and thus not involved in the decision making process up to the technical review. As a result of the technical review process the validation opinion and the topic specific assessments as prepared by the validation team leader may be confirmed or revised. Furthermore reporting improvements might be achieved Final approval After successful technical review of the final report an overall (esp. procedural) assessment of the complete validation will be carried out by a senior assessor located in the accredited premises of TÜV NORD. Only after this step the request for registration can be started (in case of a positive validation opinion). Page 16 of 129

17 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 4 VALIDATION FINDINGS In the following table the findings from the desk review of the published PDD, visits, interviews and supporting documents are summarised: Table 4-1: Summary of CARs, CLs and FARs issued Validation topic 1) No. of CAR No. of CL No. of FAR General description of project activity (A) - Project specification - Technical project description - Participation - Contribution to sustainable development - PDD editorial aspects - Technology to be employed Project Baseline, Additionality and Monitoring Plan (B) - Application of the Methodology - Project Boundary - Baseline identification - Calculation of GHG emission reductions Project emissions Baseline emissions Leakage - Additionality determination - Monitoring Methodology - Monitoring Plan - Project management planning Duration of the Project / Crediting Period (C) Environmental impacts (D) Stakeholder Comments (E) SUM ) The letters in brackets refer to the validation protocol The following tables include all raised CARs, CLs and FARs. For an in depth evaluation of all validation items it should be referred to the validation protocols (see Annex 1). Page 17 of 129

18 Validation Report: Anhui Suzhou MW Biomass Power Generation Project The findings of validation process are summarized in the tables below. Finding Classification CAR CL FAR Description of finding Describe the finding in unambiguous style; address the involved parties are pending. At the time of the (pre-) validation, the letters of approval of all context (e.g. section) Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Corrective Action #2 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #2 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. A1 The LoA and the amendment letter issued by DNA of host country (P.R. China) have been obtained. The relevant documentations have been provided to DOE for verifying. The letter of approval /HCA-1/ for the project which was issued by China s DNA, the National Development and Reform Commission (NDRC), has been submitted to the DOE by the PP as scanned version. The authenticity of the approval has been cross-checked with publicly available information on the NDRC s official website /bcc/. By means of checking the approval, the validation team confirms that all the relevant information, like project s title and the name of the project participants for instance, are valid and consistent with the updated PDD and MOC. In addition, the LOA clearly addresses that the participation is voluntary and that the project activity assists China in achieving sustainable development. However, the letter of approval from the Annex I party is pending. LOA of Germany has been provided. The letter of approval has been provided by the PP as scanned version. It is issued by the German DNA (DEHSt). The letter clearly references the proposed project activity. It is indicated in the approval that 1. Germany is a party to the KP. 2. The participation is voluntarily. The LOA provides the precise title of the proposed project activity. Further it is confirmed that the LOA is unconditional in any terms. The LOA further confirms that EnBW Trading GmbH is a participant to the project activity. It could not be observed that other PPs are approved but not listed in the PDD. The validation team checked the LOA, the MOC and the PDD to confirm the information provided in this CAR. Further interviews have been conducted to receive oral confirmation on the information. In conclusion, TÜV NORD confirms that the LOA is meeting the CDM requirements. All necessary information are addressed. CAR is closed. Page 18 of 129

19 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Conclusion Tick the appropriate checkbox A1 To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding The difference of the title of the proposed project activity was Describe the finding in unambiguous style; address the context (e.g. section) identified between the PDD submitted for global stakeholder consultation and the updated PDD for registration. The clarification Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox A2 is required. The title of the proposed project in GSP PDD was wrongly given. The new name which is in compliance with LoA of host country has been used in the PDD for registration. Please reference the section A.1.. By checking the approval letter /HCA/ which was issued by China s National Development and Reform Commission, it was confirmed that the exact title of the proposed project is Anhui Suzhou 2x12.5MW Biomass Power Generation Project. This title is identical with the title in the Emission Reduction Purchase Agreement /EPRA/ and the MOC of the proposed project. In addition, by comparing the approval letter /HCA/, the project s FSR and the MOC with the GSP PDD, it was confirmed that the detailed information (like the installed capacity, the host country s PP, the technical specifications and the financial information, etc.) which was stated in the mentioned documents lead to the clear identification of the project. Therefore it was assessed that the title of the proposed project in the PDD for global stakeholder consultation was not correct. Then the correct title of the project was used in the updated PDD for registration. Then the CL A2 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR A3 Page 19 of 129

20 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Description of finding Describe the finding in unambiguous style; address the context (e.g. section) Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. A3 Some information inconsistencies were identified between the PDD submitted for global stakeholder consultation and PDD submitted for registration as following: - The Annex I Party and the project participant of the Annex I Party - The estimated emission reductions. - The geographic coordinates of the proposed project activity. - Model and rated capacity of steam turbine, model and rated current of generator in section A The amount of the annual production of biomass residues at the project site. - The Annex 1 was different due to the change of project participants in Annex I Party. The information listed is in consistent with new ERPA. - The estimated emission reductions have been updated as per methodology, the previous CER amount was wrongly calculated due to i) the neglect of project emission caused by electricity consumption for biomass pre-treatment on the collection stations and; ii) the inappropriate value selected, e.g. AVD, TL y, EF km,co2,y, etc. And the re-justification is clearly shown in Section B.6. - The previous geographic coordinates was wrongly given, relevant information and evidences will be submitted to DOE. - The parameters of main equipments were not in compliance with the technical annexes and nameplates, the new information has been updated and evidences will be provided to DOE for verification. - The annual production amount of biomass is updated and corrected according to FSR, which has been approved by local government. -. By checking the host country s approval note /HCA-2/, it was confirmed by the DOE that the Chinese government approved the application for changing of the project participant of Anhui Suzhou 2x12.5MW Biomass Power Generation Project. The CERs buyer of the project is changed from the previous Deutsche Bank AG, London Branch /VWL/ which is authorized by the Government of the United Kingdom to EnBW Trading GmbH which is authorized by the Government of Germany. And any other provision in the letter of approval /HCA-1/ remains unchanged. A letter of voluntary withdrawn has been provided to the validation team by Deutsche Bank AG. -. It was confirmed that the total amount of the estimated emission reductions in the GSC PDD was wrongly calculated due to the reason of PE EC,y was wrongly calculated without considering power consumption for biomass pre-treatment. And it was confirmed that some values, like AVD y, TL y, EF kmco2,y, and NCV were wrongly applied. In addition, the values in the updated PDD were assessed to be correct against the applied methodology and the methodological tools. Page 20 of 129

21 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Conclusion Tick the appropriate checkbox A3 -. It was validated by the DOE via internet (Google Earth), to confirm that the original geographic coordinates for the proposed project were wrongly stated. The coordinates indicate a place in the boundary of another province- Jiangsu Province but not Anhui Province where the proposed project is located. In addition, the current coordinates in the revised PDD is correct and evidenced by Anhui Hydraulic and Geological Project Company /GCP/. -. By means of checking the relevant technical specifications /MES/ and on site validation, it is confirmed that the technical information in Table A.2 of the revised PDD is stated correctly to indicate the actual implementation. -. By checking the feasibility study report, it was confirmed that the value of the annual production of biomass residues at the project site in the revised PDD is consistent with the value in the FSR which has been the basis of the decision to proceed with the investment in the project. Based on the specific local expertise /MAW/, it was confirmed that the value from the FSR is valid and applicable at the time of the investment decision. Therefore, it was assessed in line with the VVM paragraph 111. The CL A3 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding The description of the project s technology should be stated in a Describe the finding in unambiguous style; address the context (e.g. section) detailed and transparent manner in the PDD, e.g. the information on the auxiliary fuel, pre-treatment system, boiler type, manufacture Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. A4 of equipment and estimated lifetime. In the proposed CDM project, there is no need to consume auxiliary fossil fuel. That means coal, natural gas or diesel and similar fossil fuel will not be used for boiler starting up. Please reference the 4 th paragraph Section A.2. The boiler applied in the proposed project is grate boiler. Please refer to 3 rd paragraph of Section A.2. and Table A.2 of Section A.4.3. The other related information e.g. manufacturer and estimated lifetime could be found in the same table. The pre-treatment process of biomass is illustrated in Page 6 of PDD. 6 large biomass stations equipped with crushers and package machines consists the pre-treatment system. In the project, there is no washing process for biomass pretreatment. Hence, the WWT system is not constructed by project owner. Please refer to the page 6, the 3 rd paragraph. Page 21 of 129

22 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox A4. By checking the revised PDD against the project s feasibility study report /FSR/ and environmental impact assessment report /EIA/, it was assessed that the description of the project s technology is sufficient and correct. The relevant technical information and the estimated lifetime (20 years) have been cross-checked against the main equipment s technical specifications /MES/. It was assessed to be credible. Therefore, the CAR A4 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding Describe the finding in unambiguous style; address the should be made, and the related evidences should be provided. The justification of technology transfer in section A.4.3 of the PDD context (e.g. section) Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox A5 There is no technology transfer in project activity, the previous developer made an editorial error on this point, information regarding this has been revised in Section A By checking the main equipment purchase contract /ESD-3/, it was confirmed that the three main equipment: boiler, turbine and generator are all domestic-made, there is no technology transfer internationally. The statement in the PDD for global stakeholder consultation is wrong. The correct statement has been updated in the revised PDD. Then the CL A5 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding The justification of the applicability of the methodology in section Describe the finding in unambiguous style; address the B.2 of the PDD should be stated in a more transparent manner; the documented evidences (e.g. storage period, predominant fuel of context (e.g. section) proposed project) should be provided and cited clearly and transparently in the PDD. B1 Page 22 of 129

23 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox h Finding B1 The justification of applicability of the methodology has been more detailed in Section B.2. The documented evidence will be provided to DOE for verification.. By checking the revised PDD, it was confirmed that the four conditions as described in the applied methodology are all met. The FSR has been checked to confirm that, firstly only biomass residues (mainly are wheat straws and corn stalks) other than any other biomass types was used in the project plant and these biomass residues are the predominate fuel used in the project plant. Secondly, the project that use biomass residues are mainly wheat straws and corn stalks but not from a production process. Thirdly, the biomass residues will be treated as first in first out which can guarantee the residues will not be stored for more than one year and the daily s operation of the first in first out will be recorded for quality control. Fourthly, the biomass residues will be combusted directly without any special pre-treatment, it was evidenced by the boiler s technology specifications /MES-1/. Therefore, the CAR B1 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Classification CAR CL FAR Description of finding The plant load factor shall be defined ex-ante in the CDM-PDD Describe the finding in unambiguous style; address the according to one of the following options: (a) The plant load factor provided to banks and/or equity financiers context (e.g. section) while applying the project activity for project financing, or to the government while applying the project activity for implementation approval; (b) The plant load factor determined by a third party contracted by the project participants (e.g. an engineering company). Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. B2 The PLF was defined ex-ante by FSR institute, which is a third party entity. Please see more details in Section A.2 and the evidences will be submitted to DOE.. The revised PDD and the FSR have been checked, it was confirmed that the plant load factor was derived from FSR which was determined by a third party- Anhui Electrical Power Design Institute. And it was also confirmed that the PLF provided to the government while applying the project activity for implementation approval /AFSR/. Therefore, the CAR B2 is closed. Page 23 of 129

24 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Conclusion Tick the appropriate checkbox B2 To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding Describe the finding in unambiguous style; address the the PDD. The project boundary should be clearly defined and documented in context (e.g. section) Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox B3 The project boundary is clearly defined in revised PDD. Please see details in par.5 of Section A.2 and Section B.3.. By checking the revised PDD and the applied methodology, it was confirmed that the project boundary is clearly defined and stated in section A.2 which is in line with the requirement to define project s boundary in the applied methodology. A diagram in section B.3 also clearly indicated the project s boundary. Therefore, the CL B3 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding It was required to further justify that: Describe the finding in unambiguous style; address the - The reasonability to select B1 as one of the most plausible baseline scenario since the biomass residues are either context (e.g. section) dumped or left to decay in absence of the project activity when the financial analysis includes a purchase price for the residues. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. B4 - Justification of the purchase price for the residues is required. Please reference the PDD section B.4, Sub-step 3d, O&M costs part, biomass paragraph. The explanation of biomass price is detailed. If the biomass is left to decay without any utilization, no price will be quoted. But the biomass power plant is not the owner of farmland, where the biomass residues is generated. The local residences have rights to quote a price for providing the biomass. According to analysis, the biomass cost is attributing to the collection cost, transportation cost and market factors. The three above factors will make the biomass valuable. Based on the third Page 24 of 129

25 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox B4 party experts analysis, the biomass cost which is estimated based on the local labour cost, collection cost, transportation cost and pretreatment cost, as mentioned before, is reasonable and will not decrease in the future, thus our justification is logical and appropriate.. Based on the documented evidences /FSR//MAW/ and the DOE s sectoral expertise, it was assessed that to select B1 as one of the most plausible baseline scenario is reasonable for the following reasons: Firstly, the total amount of the biomass residues at the project site is x 10 6 t/year, and the designed consumption by the proposed project is x 10 6 t/year which only takes 3.9% of the total amount of the biomass residues. Secondly, all the biomass residues at the project site are all owned by the local farmers /BRC/ but not the project owner. In the absence of the project activity, it s a common practice in China that the biomass residues are either dumped or left to decay by the farm land owner because without the proposed project, there is nothing to use with the biomass residues. And with the proposed project, the residues cost was attributed to two main reasons /MAW/ : labour and transportation. And the project s residues purchasing price was assessed to be reasonable by considering the third-party s assessment /MAW/ which was indicated that the reasonable range for biomass residues price is from 200 to 300 CNY/t. Therefore, it is reasonable to understand the local farmers to sell their biomass residues to the proposed project. Therefore, the CL B4 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding The justifications of the exclusions of baseline scenario B2, B4, B8 Describe the finding in unambiguous style; address the in section B.4 of the PDD were neither sufficient nor reasonable, context (e.g. section) documented evidences should be submitted and clearly referred. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. B5 The explanations on exclusion of B2, B4, B8 have been updated in revised PDD, the source of evidence is stipulated and will be submitted to DOE. B2, B4 are excluded because according to FSR and other evidences, there is neither has landfill for biomass residues which is deeper than 5 meters nor power plant at the project site. B8 is excluded because in local area, only 41.8%of biomass residue generated will be used for different purposes while others are left to decay, the large amount of surplus biomass will ensure Page 25 of 129

26 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox B5 the operation of the project. In fact, the project will use these surplus biomass residues in local area, it is neither reasonable nor appropriate to consider this scenario as baseline. See more details in Section B.4. (Section B.4 For Use of Biomass Table). It was assessed to be credible by checking the FSR and the relevant evidence /MAW/ to confirm that, for the scenario B2, there is neither has landfill nor deeper than 5 meters biomass residues treatment. Based on the DOE s sectoral expertise, there is no mandatory regulation to require treating biomass residues in the landfill. For the scenario B4, there were no heat and/or electricity generation facility at the project site before the proposed project /FSR/. And it was also confirmed by the DOE by checking the official approval document /ALO/ from the host country s government. For the scenario B8, it was assessed to be credible to exclude this scenario for the reason of the biomass residues were mainly dumped or left to decay. The total amount of the biomass residues at the project site is t/year, and only t/year of the residues were used as feedstock for paper industry which only takes 6.3% of the total amount. Therefore, the scenario B8 is not considered as a plausible baseline scenario. For detailed information, please refer to the Annex 2 of this report. The CAR B5 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding The plausible alternative B3 (the biomass residues are burnt in an Describe the finding in unambiguous style; address the context (e.g. section) uncontrolled manner without utilizing it for energy purposes) was not consistent with the host country s applied environment laws, Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. B6 clarification and re-justification is required. Although uncontrolled burning is the common practice for biomass residues, due to mandatory regulations and laws, it is excluded from plausible baseline scenario for conservative purpose. Rejustification has been done in sub-step 1b in Section B.4.. By checking the official announcement /mep/, the DOE confirms that the biomass residues which are burnt in an uncontrolled manner is prohibited in China. Therefore, it was assessed to be credible and correct to exclude the alternative B3. The revised PDD has been revised. The CAR B6 is closed. Page 26 of 129

27 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Conclusion Tick the appropriate checkbox B6 To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding In section B.4 of the PDD, the baseline scenario P5, P6, P7 and P8 Describe the finding in unambiguous style; address the have been eliminated without sufficient justification. A detailed context (e.g. section) justification is required. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. B7 The reason why exclude P5, P6, P7 and P8 has been updated in revised PDD, relative evidences are clearly showed in the footnotes and correspondent section. P5 and P6 are excluded because their bad financial return, at the same time, they face technological barrier and the policy barrier which are detailed in the PDD, please reference Section B.4 Substep 2b for more information. P7 and P8 are eliminated for there is no existing biomass power plant at the project site according to FSR and other evidences, please see more details in Section B.4 For Power Generation Table.. By checking the statement in sub-step b2 in the revised PDD against registered information /RP/ on UNFCCC s website, it was assessed that to exclude alternative P5 is credible for the reason of the plants efficiencies (range from 13.5% to 27.1%) of the similar projects /RP/ have been compared with the proposed project s (20.1%), the proposed project is in a reasonable range, if a low efficiency scenario was chosen, the electricity output would be lower and then with lower revenues. And it was concluded that the alternative P5 is less attractive financially than the alternative P1. In addition, the relevant national regulations /LEG//cgp//FPE/ have been checked by the DOE to confirm that the low efficiency projects are not encouraged by the Chinese government. For detailed information, please refer to the Annex 2 of this report. The alternative P6 was excluded for the same reason as the P5, it was assessed to be credible. Furthermore, by checking the FSR and the official approval document /ALO/, it was confirmed that there are no existing biomass residues fired power at the project site before the proposed project. Then these alternatives were not assessed to be the plausible baseline scenarios. Therefore, the CAR B7 is closed. Page 27 of 129

28 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Conclusion Tick the appropriate checkbox B7 To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding The justifications of technological barriers and lack of prevailing Describe the finding in unambiguous style; address the practice in step 2 in the section B.4 of the PDD was not convincing, context (e.g. section) correction is necessary. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox B8 The revised PDD has removed the prevailing barrier of the project, the technological barrier is more specified in PDD section B.4 step 2.. By checking the revised PDD, it was concluded that step 2 in the section B4 has been revised and sufficiently stated the reasons of the technological barrier to eliminate the relevant alternatives. The alternative B7 was eliminated for the reason that in China it is still in an early stage to use biomass residues for other energy purposes, such as the generation of bio-fuels. It was confirmed /BDA//BA/ by the DOE. Therefore, the CAR B8 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Page 28 of 129

29 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Classification CAR CL FAR Description of finding Describe the finding in unambiguous style; address the and justified according to the applied tool in section B.4 of the PDD. The common practice analysis in step 4 should be demonstrated context (e.g. section) Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox B9 According to the combined tool, the common practice analysis has been revised. Please see more details in Step 4 in section B.4.. By checking the revised PDD, it was concluded that the common practice analysis has been revised according to the applied methodological tool: Combined Tool to Identify the Baseline Scenario and Demonstrate Additionality, version The geographic boundary was clearly defined as provincial level and the capacity range of other similar projects for common practice analysis was clearly defined, which were assessed to be credible. Therefore, the CAR B9 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding The key data/references used to determine the baseline scenario Describe the finding in unambiguous style; address the should be illustrated in a more transparent manner, (preferably in a context (e.g. section) tabular form) Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. B10 The key references are clearly illustrated in the revised PDD through footnotes, please see more details in Section B.4.. By checking the revised PDD, it was confirmed by the DOE that the key data which were used to determine the baseline scenario were clearly stated from table B3 to table B10 and evidenced /IRR/ in section B4 of the revised PDD. And the relevant references which were listed in the section B.4 as footnotes were checked to confirm their validity. It was assessed that the baseline scenario was selected in an evidenced and transparent manner. Therefore, the CAR B10 is closed. Page 29 of 129

30 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Conclusion Tick the appropriate checkbox B10 To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding Several issues were detected relate to the investment analysis as Describe the finding in unambiguous style; address the followings: 1) All the key parameters for IRR calculation should be clearly context (e.g. section) referred and related evidences should be submitted. 2) The tariff should be adopted as a key variation in the sensitive analysis. 3) The difference of the project s tariff was identified between the PDD submitted for global stakeholder consultation and the PDD for registration. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. B11 1) The sources of parameters for IRR have been clearly referred in PDD Section B.4. 2) The tariff is adopted in the sensitivity analysis, plus, the justification of parameters variety has also been added in PDD. 3) The tariff used in GSP PDD was an editorial error. The data applied previously was 0.513*1.17=0.60 RMB/kwh, which is not in consist with relevant regulations on biomass power generation in China. The new feed-in tariff is 0.529*1.17=0.619 RMB/kwh, which is in compliance with feed-in tariff approval and other relevant materials. The detailed justification of the tariff used in the PDD for registration is in Section B.4, Sub-step 3d. 1.. By checking the revised PDD in section B4, the IRR calculation spreadsheet /IRR/ and the project s feasibility study report /FSR/, it was confirmed that the key parameters sources were clearly referred and evidenced. 2.. By checking the revised PDD, it was confirmed that the tariff of the proposed project was adopted as a key variation in the sensitive analysis and the analysis was assessed to be sufficient and credible. 3.. By checking the relevant regulations /NPE/, it was confirmed by the DOE that the tariff in the GSP PDD was wrongly stated. And it was confirmed by DOE that the wrongly-used value in the GSP PDD was not consistent with the value in the FSR which has been the basis of the decision to proceed with the investment in the project. In addition, the one in the revised PDD is assessed to be credible which is in line with the current Page 30 of 129

31 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Conclusion Tick the appropriate checkbox B11 regulations /NPE/ and the FSR. For detailed information and assessment, please refer to the Annex 3 of this report. Therefore, the CAR B11 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding Describe the finding in unambiguous style; address the should be addressed in detail (It s better to use time table). The key events of the CDM consideration of the proposed project context (e.g. section) Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. B12 The key events are shown in Section B.5 with a time table. Please see more details in revised PDD.. By checking the revised PDD, it was confirmed that the key events of CDM consideration and the real actions to secure CDM status were listed in table B11 of the revised PDD. The milestones of CDM consideration and the relevant evidences have been checked by the DOE as following: Milestones Date Made the CDM Investment /MD/ Decision Signed the Construction /ESD-2/ Contract Equipment Purchase /ESD-3/ Contract Sent the Notification of CDM /dna-c/ Status to China s NDRC Signed the EPRA Contracted with DOE Get the Host Country s /HCA/ LOA Withdraw Letter from Deutsche /VWL/ Bank AG, London Branch Signed ERPA with EnBW /EPRA/ April, 2010 It was assessed to be in line with the requirement of VVM that the time gap between the documented evidences is less than 2 years. Therefore, the CL B12 is closed. Page 31 of 129

32 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Conclusion Tick the appropriate checkbox B12 To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding Several issues were detected in the project emission calculation: Describe the finding in unambiguous style; address the 1) PETy: AVDy=84, EF kmco2, y = , TLy=5 were not context (e.g. section) reasonable. 2) The justification of exclusion of PE EC,y was not reasonable, more detailed information requested Esp. in case of system start up and in winter season. 3) PE biomass, CH4,y : the choice of NCV ( TJ/t) was not Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. B13 reasonable. 1) The average vehicle distance has been revised to 100, which is the return trip of collection radius; the vehicle emission factors is , which is stipulate in revised 1996 IPCC; the truck load is 10 tons based on FSR and onsite visit. 2) The justification of exclusion of PE EC,y was not reasonable as electricity will be consumed on the biomass collection stations for pre-treatment of biomass. In updated PDD, more than 4,000MWh of power, which is estimated based on the rated capacity of installed equipment, will be used after the implementation of the project. More details are added in CER calculation. 3) The NCV of biomass is revised to GJ/t which is in compliance with FSR. Please see more details in Section B By checking the project s feasibility study report, it was confirmed that the residues collection radius is 50 km. Therefore, the value of AVDy in the revised PDD is correct and conservative. And by means of on site validation, the DOE checked on-site trucks randomly to confirm that using 10 tons as the truck load is correct. In addition, it was confirmed by means of on site visit that for the reason of the actual quantity of fossil fuels consumed for transportation is not acquirable. Thus, the IPCC s default value of the average CO 2 emission factor was applied and assessed to be correct. The PDD has been revised accordingly. 2. According to the applied methodology and the methodological tool, it was assessed that the exclusion of PE EC,y is not correct. The calculation to consider PE EC,y was recalculated and revised conservatively according to the applied methodology. The values which were used to calculate PE EC, y were derived from Page 32 of 129

33 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Conclusion Tick the appropriate checkbox B13 the FSR and assessed to be credible. 3.. By checking the project s feasibility study report, it was confirmed that the value of NCV was revised to GJ/t which was defined in the FSR. Therefore, the CAR B13 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding The ex-ante calculation of BM should be justified and the most Describe the finding in unambiguous style; address the recently data for EF coke and refinery dry gas from IPCC2006 context (e.g. section) value should be adopted. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox B14 The calculation of BM is revised to ex-ante and the most recent data has been adopted. Please see more details in Step 2 of Section B.6.1 and Annex 3.. By checking the revised PDD and the ER calculation spreadsheet, it was confirmed that the default values of coke and refinery gas which were used to calculated project s emission factor are correctly applied /IPCC-RM/. And the project s emission reduction was recalculated by the DOE to confirm that the value which was available at the time of the project s investment decision was correctly applied. Therefore, the CAR B14 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding As per guideline of completing of CDM-PDD, the date and Describe the finding in unambiguous style; address the parameters which are available during the validation should be context (e.g. section) listed in the table B.6.2. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. B15 The parameters which can be available during the validation are all listed in Section B.6.2. Page 33 of 129

34 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox B15. By checking the revised PDD against the applied methodology, it was confirmed that all required parameters which were used to calculate ex-ante emission reduction were listed in section B. 6.2 of the revised PDD. Therefore, the CL B15 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding The EG NET,y, BF T,K,Y, Moisture content of the biomass residues, Describe the finding in unambiguous style; address the EF CH4,BF, TL y, EF km, CO2,y, NCV K and CH 4,k,y should be defined as monitoring parameters and the relevant measurement method as context (e.g. section) well as the related QA/QC procedures should be clearly Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox B16 documented. The relevant parameters: EG project plant,y, BF T,k,y, moisture content of the biomass residue, TL y and NCV k have been added in Section B.7.1, the monitoring and measurement method as well as QA/QC procedures are also elaborated. And the parameters EF CH4,BF and EF km,co2,y, according to ACM0006, the above parameters are default values or stipulated value based on relevant IPCC reports. Hence, according to methodology, they have been added in Section B.7.1 separately.. By checking the revised PDD in section B7.1, it was confirmed that all the parameters which are required to be monitored by the applied methodology were listed. The parameters which were not listed in section B.7, like EG project plant,y, BF T,k,y, moisture content of the biomass residue, TL y, EF CH4,BF and EF km,co2,y and NCV k have been added for monitoring as well. The relevant measurement method and the QA/QC procedures were clearly stated. It was assessed to be correct and in line with the methodology requirement. Therefore, the CAR B16 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding B17 Page 34 of 129

35 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Classification CAR CL FAR Description of finding Describe the finding in unambiguous style; address the is not correct. Revision is requested The description of the measurement method of NCV in table B.7.1 context (e.g. section) Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox B17 The revision on NCV measurement has been done, please see details in Section B.7.1.In GSP-PDD P34, the measurement method of NCV is wrongly given. During the crediting period, the project owner will use scale to weigh the difference between fresh and dry biomass to calculate the water content.. By checking the revised PDD in section B.7.1, it was confirmed that an appropriate revision was done. In addition, by checking the project s FSR and the technical specifications /MES-4/ of the monitor to monitor NCV, it was assessed that the description of the measurement method and the QA/QC procedures were stated clearly and correctly and in line with the applied methodology. Therefore, the CL B17 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding Detailed information of monitoring of GHG emission reductions, i.e. Describe the finding in unambiguous style; address the context (e.g. section) meters system (i.e. location, function, accuracy), monitoring of Net calorific value of stalks as well as the backup/cross check method Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. B18 should be provided. The detailed information of monitoring and QA/QC procedures are added in revised PDD, please see more details in Section B.7.2. During the crediting period, the project owner will use the calibrated meters system to monitor. Furthermore, the designated manager will be assigned to be responsible for monitoring. The recorded data will be archived 2 years following the end of the crediting period.. By checking the revised PDD in section B.7.2, it was confirmed that the information of monitoring project s GHG emission reductions, in detail, net power, quantity of consumed biomass residues, transport system, NCV, biomass resources and fossil fuel consumed are stated clearly with function, accuracy and calibration description. Therefore, the CAR B18 is closed. Page 35 of 129

36 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding Conclusion Tick the appropriate checkbox B18 To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding More information on the maintenance and calibration of the weight Describe the finding in unambiguous style; address the meter and NCV calorimeter (HWR-15D) should be described in the context (e.g. section) PDD section B.7.2 Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox B19 The details on weight meters and NCV calorimeters have been updated in Section B.7.2. The model of NCV calorimeter was wrongly given, it was updated in revised PDD.. By means of document /FSR//MES-4//EMC/ checking and on site visitation, it was confirmed that the type of the project s calorimeter is SDACM4000U and the detailed calibration information has been stated in the revised PDD. In addition, the weight meter s information which regards to the maintenance and calibration was stated as well. The description was assessed to be sufficient. The CL B19 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding The quantity of the stalk utilized for energy generation in the Describe the finding in unambiguous style; address the defined geographical region and the quantity of available biomass residues in the region should be monitored and the related context (e.g. section) measurement and QA/QC procedures should be established and Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. B20 implemented. The monitoring and measurement of the quantity of utilized and available biomass residues have been detailed in PDD, please see more information in Section B.7.1 and B.7.2. During the crediting period, the project owner will reference official information, literature, statistic or authorized third-party entities report to monitor the total available biomass amount. The different source information such as agriculture statistic will be applied to crosscheck the result for QA/QC. Page 36 of 129

37 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Finding DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox B20. By checking the revised PDD, it was confirmed that the relevant information which was required was clearly stated in the section B.7. In addition, by means of document /FSR//CSS/ checking and on site interviewing /IM01/, it was assessed that the statement is credible. Therefore, the CAR B20 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Finding Classification CAR CL FAR Description of finding Describe the finding in unambiguous style; address the reasonable. Revision is necessary. The starting date of crediting period i.e. (1 st July 2008) was not context (e.g. section) Corrective Action #1 This section shall be filled by The starting date of crediting period is revised in Section C the PP. It shall address the corrective action taken in details. DOE Assessment #1 The assessment shall encompass all open issues in annex A- 1. In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox C1. By checking and assessing the revised starting date of the project s crediting period, it was concluded that the date has been revised to which is reasonable. The CAR C1 is closed. To be checked during the first periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements Page 37 of 129

38 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 5 VALIDATION ASSESSMENT SUMMARY 5.1 General Description of the Project Activity Participation LOA The approval letter (for approving the participation of Huadian Suzhou Biomass Power Industrial Co. Ltd. and EnBW Trading GmbH) for Anhui Suzhou 2x12.5MW Biomass Power Generation Project has been already issued by China s DNA respectively. The German project participant has been confirmed by the German DNA (DEHSt). EnBW Trading GmbH is appointed as PP from Germany. The precise title of the project is Anhui Suzhou 2x12.5MW Biomass Power Generation Project. It is consistent with the title in the approval letter of the host party, Annex I party, PDD and the MOC. The National Development and Reform Commission acts as the China s DNA for the CDM, and for issuing letters of approval for voluntary participation to prospective project participants. It has been confirmed by cross-checking the UNFCCC website. The German Emissions Trading Authority (DEHSt) acts as the German DNA for the CDM, and for issuing letters of approval for voluntary participation to prospective project participants, also confirmed by the UNFCCC website. The Host Country Approval confirms that: Huadian Suzhou Biomass Power Industrial Co. Ltd is authorized as China s participants to participate in and carry out the project activity voluntarily. The project complies with the permission requirements provided in the measures for operation and management of CDM project in China, and assists China in achieving sustainable development. Project Participants There are two project participants to this project and they are: - Huadian Suzhou Biomass Power Industrial Co. Ltd. - EnBW Trading GmbH Huadian Suzhou Biomass Power Industrial Co. Ltd. is authorized as China s participant according to the approval letter of China s DNA /HCA/. EnBW Trading GmbH is authorized as Germany s participant according to the approval letter /LOA/. Page 38 of 129

39 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Contribution to Sustainable Development The Chinese DNA confirms that the project complies with the permission requirements provided for in the measures for operation and management of CDM project and assists China in achieving sustainable development /HCA/. Several sustainability targets have been defined in the PDD and could be confirmed by the validation team by means of on-site visit and interview PDD editorial Aspects The PDD for GSP is in compliance with the latest version of PDD Template (version 03) as per EB28, Annex 34. The latest revised PDD has been submitted to the validation team on June 23 rd, 2010 and its template version is 02.2 which is the lasted one. The contents of the PDD comply with the latest PDD guidance Technology to be employed A physical site visit was carried out to confirm that the description of the project design in the PDD reflects the real situation of the proposed CDM project activity, and the technological parameters of main equipments indicated in A.4.3 of the final PDD (version 02.2) are consistent with the documented evidences /MES/. The project does not involve alteration of the existing installation or process. A clear description of the differences between the project scenario and the scenario existing prior to the start of the implementation of the project which is also the baseline scenario is provided in A.2 and A.4.3 of the PDD. The project is a biomass based power generation project, and the technology employed is environmentally safe and sound Small Scale Projects Not applicable. 5.2 Project Baseline, Additionality and Monitoring Plan Application of the Methodology The proposed project activity is a large-scale biomass project. The DOE confirms that the project applies to a valid version of a CDM methodology - ACM0006 Consolidated methodology for electricity generation from biomass residues (version 09) and the methodological tools as approved by the board by cross checking the PDD and the website of UNFCCC. Page 39 of 129

40 Validation Report: Anhui Suzhou MW Biomass Power Generation Project The DOE confirms that the methodology and the tools are eligible for the proposed project for the following reasons: No other biomass types than biomass residues are used in the project plant and these biomass residues are the predominant fuel used in the project plant (some fossil fuels may be co-fired) /FSR/ ; The implementation of the project is not resulting in an increase of the processing capacity of raw input /FSR//MAW/ ; The biomass residues used by the project facility are not stored for more than one year /QAQC/ ; No significant energy quantities, except from transportation or mechanical treatment of the biomass residues, are required to prepare the biomass residues for fuel combustion /PTD//MES/. The DOE confirms that the methodology and the tool are correctly applied to the project. All the applicability conditions of the methodology are met and the project activity is not expected to result in emissions including leakage and any other significant emissions not addressed by the applied methodology Project Boundary By means of on-site visiting and document reviewing, the DOE confirms that the project s boundary is clearly delineated according to the definition of project boundary by the applied methodology, namely, the power plant, the vehicles for transporting the biomass residues from residues location to the project site. The site where the biomass residues are left for decay or dumped, all power plants physically connected to the electricity system that the CDM project power plant is connected to. In this specific case, the project is connected to Anhui Grid and then to East China Power Grid (ECPG) Baseline Identification The validation team confirms that the baseline for the proposed project is identified as per the applied methodology in the PDD and it was assessed to be transparent and verifiable. The baseline scenario is defined as: - For Power Generation: P4 - The generation of power in the grid. - For the Use of Biomass Residues: B1 - The biomass residues are dumped or left to decay under mainly aerobic conditions. This applies for example to dumping and decay of biomass residues on fields. Or the biomass residues are burnt in an uncontrolled manner without utilizing for energy purposes. For the detailed information, please refer to the Annex 1 of this report. Page 40 of 129

41 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Calculation of GHG Emission Reductions There are two CARs: CAR B13 and CAR B14 which relate to emission reductions calculation were raised during the validation process. After the corrective actions were done by the PP, the DOE assessed that the CARs were closed successfully. And the calculation was done as per the applied methodology and the methodological tools. All data which are not be monitored are correctly applying IPCC default values. The values for the monitoring parameters which were based on the project s feasibility study report are plausible. After assessing all the data and recalculating the project s GHG emission reductions, the DOE confirmed that estimated amount of emission reductions of the proposed project - 864,129 tco 2 e is plausible and conservative Additionality Determination Consideration of CDM in decision making By checking the relevant evidence /ESD-1/, it was confirmed that the starting date of the proposed project dated on as per CDM glossary of terms. The CDM was considered at the time of the decision making on /MD/ by the project s board members. All the relevant documents and evidences which have been forwarded by the PP were checked by the validation team. It s confirmed that all relevant documents and evidences are valid and can testify that CDM is seriously considered by the project owner for the reason of considering the low level of the project s IRR which would otherwise cause no financial attractiveness of the project. In summary, the validation team concludes that CDM was seriously considered to carry out the proposed CDM project activity. Hence the DOE confirms that the proposed project activity meets all stipulations as set out in EB49, Annex 22. Application of methodology / methodological tools The additionality of the project activity was demonstrated and assessed using the latest version of the "Combined tool to identify the baseline scenario and demonstrate additionality" Version 02.2 according to applied methodology ACM0006, version 09. Alternatives The PDD contains a complete list of all realistic alternatives to the project scenario. In applying Step 1 of the Combined Tool to Identify the Baseline Scenario and Demonstrate Additionality, the realistic and credible alternatives were separately determined regarding the following topics: How power would be generated in the absence of the CDM project activity; What would happen to the biomass residues in the absence of the project activity; Page 41 of 129

42 Validation Report: Anhui Suzhou MW Biomass Power Generation Project According to the applied methodology, 11 alternatives have been identified for power generation and 8 alternatives have been identified for the use of biomass residues. The DOE assessed that the list of alternatives is complete. In addition, the DOE assessed the alternatives which was listed in the revised PDD and ensures that: (a) The list of alternatives includes as one of the options that the project activity is undertaken without being registered as a proposed CDM project activity; (b) The list contains all plausible alternatives that the DOE, on the basis of its local and sectoral knowledge, considers to be viable means of supplying the outputs or services that are to be supplied by the proposed CDM project activity; (c) The identified plausible alternatives comply with all applicable and enforced legislation. In conclusion, the most plausible alternative was selected as the most realistic baseline scenario for the proposed project. Investment analysis The project scenario is not the most attractive alternative or economically feasible without benefits from CER sales. The valid version of the Guidance on the Assessment of Investment Analysis (version 03) was applied in the assessment. The calculation approach is assessed to be correct. The parameters are assessed to be plausible. The benchmark is appropriately chosen. Please refer to the Annex 3 of this report for the detailed information. Barrier analysis N/A Common practice analysis The DOE confirms that the proposed CDM project activity is not a common practice for the following reason: a) The geographical boundary (e.g. the defined region of Anhui Province) of the common practice analysis is appropriate for the assessment of common practice related to the project activity s technology or industry type. b) There are six biomass power projects in Anhui Province and all of them have applied CDM according to information on UNFCCC s website /unfccc/. In conclusion, no similar activity other than CDM activities to the proposed project activity is identified. Page 42 of 129

43 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Summary Based on the evidences, the validation team concludes that the consideration of CDM for the project is serious and the timeline is valid and clearly described in the PDD. The project s post-tax IRR is 3.03% without CDM revenues, which is lower than the benchmark of 8%. And the key parameters, e.g. total investment, annual O&M cost, related taxes, depreciation rate, annual net electricity generation are derived from the project s feasibility study report /FSR/ which was approved by the local authority /AFSR/. The additionality of the project has been demonstrated with the Investment Analysis approach. The benchmark analysis along with the sensitivity analysis insures that the proposed CDM project activity is unlikely to be financially attractive. Therefore it can be concluded that the project faces an investment barrier. In addition, it can be confirmed by the validation team that the guidance to conduct a financial analysis as set out in EB 51, Annex58 is fully met and that the stipulations as set out in EB 51, Annex 3, paragraph 111 are considered. The time between FSR finalizing and investment decision is sufficiently short (within one month), the values used for the financial analysis and the values are applicable and valid (refer to Annex 3 of this report) Monitoring Methodology The monitoring plan of the proposed CDM project activity is based on and in compliance with the applied monitoring methodology ACM0006 Consolidated methodology electricity generation from biomass residues Version Monitoring Plan Based on the requirement of VVM, the validation team has applied a two-step validation process to assess compliance with the requirement as follows: a) Compliance of the monitoring plan with the approved methodology: (i) The list of parameters required by the selected approved methodology by means of document review has been identified; (ii) It is confirmed that the monitoring plan contains all necessary parameters, that they are clearly described and that the means of monitoring described in the plan complies with the requirements of the applied methodology ACM0006 (version 09); b) Implementation of the plan: (i) The monitoring arrangements described in the monitoring plan are feasible within the project design; (ii) The means of implementation of the monitoring plan, including the data management and quality assurance and quality control procedures, are Page 43 of 129

44 Validation Report: Anhui Suzhou MW Biomass Power Generation Project sufficient to ensure that the emission reductions achieved by/resulting from the proposed CDM project activity can be reported ex post and are verified. Based on the information of the on-site visit, the team confirms that the monitoring arrangements described in the monitoring plan are feasible within the project design. The procedures for calibration, accurate identifying and maintenance of monitoring equipment are clearly mentioned as QA/QC procedures in the PDD and will be conducted by qualified organization and in compliance with the national standard. The assessment has been conducted by the DOE by means of reviewing of the documented procedures, interviewing the relevant personnel /IM01/ and visiting project plants and physical inspections of the proposed CDM project activity site Project Management Planning The operational and management structure, the project operator will implement in order to monitor emission reductions, is described in section B.7.2 of the PDD. It clearly indicates the responsibilities and institutional arrangements for data collection and archiving. The applicability of the structure and procedures have been validated and ensured during the on-site visit by means of comparing the interview results with the characteristics of the proposed project Crediting Period The project activity applies a renewable crediting period. The length of the first crediting period is 7 years according to the PDD. The starting date of the first crediting period of the proposed CDM project activity is or the date of the project registration by the UNFCCC whichever is later. Based on the entire PDD it s been stated clear and unambiguous. This is assessed as appropriate Environmental Impacts In China an Environmental Impacts Assessment is required according to Chinese legislation. The EIA report of the project has been approved by the local government. The analysis of the environmental impacts of the project activity is sufficiently described according to the EIA. In addition, there is no trans-boundary environmental impact created by the project activity which has not been identified and reported in the EIA. Page 44 of 129

45 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Comments by Local Stakeholders By means of document /SSR/ reviewing and on-site visit, the validation team verified that the stakeholders such as local governmental officials, local residents and related employees have been informed about the project in detail through questionnaires. A summary of the comments received and a note on how due account was taken of the concerns raised in the above public consultation are included in PDD. No negative comments were identified. The DOE confirms following statements by means of document review and interviews with local stakeholders: a) Comments by local stakeholders that can reasonably be considered relevant for the proposed CDM project activity have been invited /IM01/, /IM02/, /SCD/ ; b) The summary of the received comments as provided in the PDD is complete; No negative opinion for the proposed project has been identified. Page 45 of 129

46 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 6 VALIDATION OPINION EnBW Trading GmbH has commissioned the TÜV NORD JI/CDM Certification Program (CP) to validate the project: Anhui Suzhou 2x12.5MW Biomass Power Generation Project with regard to the relevant requirements of the UNFCCC for CDM project activities, as well as criteria for consistent project operations, monitoring and reporting. UNFCCC criteria include article 12 of the Kyoto Protocol, the modalities and procedures for CDM (Marrakech Accords) and the relevant decisions by COP/MOP and CDM Executive Board. In the course of the pre-validation 17 Corrective Action Requests (CARs) and 9 Clarification Requests (CLs) were raised and successfully closed. The review of the project design documentation and additional documents related to baseline and monitoring methodology; the subsequent background investigation, follow-up interviews and review of comments by parties, stakeholders and NGOs have provided TÜV NORD JI/CDM CP with sufficient evidence to validate the fulfilment of the stated criteria. In detail the conclusions can be summarised as follows: - The project is in line with all relevant host country criteria (China) and all relevant UNFCCC requirements for CDM. Project activity approval has been obtained from DNA of China vide the Letter of Approval (HCA) dated in April 2010 and from DNA of Germany dated The project additionality is sufficiently justified in the PDD. - 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 864,129 tco 2 e are most likely to be achieved within the (1 st renewable) crediting period. The conclusions of this report show, that the project, as it was described in the project documentation, is in line with all criteria applicable for the validation. Shanghai, Essen, Li Yong Jun TÜV NORD JI/CDM CP Validation Team Leader Martin Saalmann TÜV NORD JI/CDM CP Final Approval Page 46 of 129

47 Validation Report: Anhui Suzhou MW Biomass Power Generation Project 7 REFERENCES Table 7-1: Reference /AEIA/ /AFSR/ /OP/ /ALO/ Documents provided by the project participant Document Approval of Environmental Impact Assessment, Anhui Province Environmental Protection Bureau (No. ( ), dated on ). Approval of FSR issued by Anhui Province Development and Reform Commitment, dated on Operational Procedures. Approval of Land Occupation for the Proposed Project by Ministry of Land and Resources of the People s Republic of China, dated on [2007]No.698 /AOT/ /BLC/ Approval of On-Grid Tariff for Anhui Suzhou MW Biomass Power Generation Project which was issued by Anhui Province Price Bureau, dated on Bank Loan Contract which was signed between Huadian Suzhou Biomass Power Industrial Co., Ltd. and National Development Bank, dated on /BRC/ Biomass Residues Purchase Contract, dated on /CSS/ /ESD/ /EIA/ /EMC/ /EPRA/ Contracts of the stalk collection stations (including the distance and transportation) Evidences of the Project s Starting Date: 1. Approval of Construction of the Proposed Project by China Huadian Group, dated on Zhong Guo Hua Dian Gong [2007]No Evidence to substantiate the construction starting data of the proposed project is on Main Equipment Purchase Contract, dated on Environmental Impact Assessment which was compiled by Anhui Environmental Science Study Institute in August Certification of Anhui Environmental Science Study Institute The Evidence of the Model of the Project s NCV Calorimeter. Emission Reduction Purchase Agreement which was signed between Page 47 of 129

48 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Reference Document Huadian Suzhou Biomass Power Industrial Co., Ltd. and EnBW Trading GmbH, dated on /FAR/ /FSR/ /GCP/ Financial Auditing Report which was compiled by RSM China Certified Public Accountants, dated on Feasibility Study Report which was compiled by Anhui Electrical Power Design Institute in May Certification of Anhui Electrical Power Design Institute. Detailed Geographic Coordinates of the Proposed Project by Anhui Hydraulic and Geological Project Company, dated on /HCA/ /IRR/ 1. Host Country Approval for Anhui Suzhou MW Biomass Power Generation Project which was issued by the National Development and Reform Commission, dated on [2008]No Approval Note on Change of Project Participants of Anhui Suzhou MW Biomass Power Generation Project by the Department of Climate Change, National Development and Reform Commission of the People s Republic of China in April IRR Calculation Spreadsheet. /ISP/ Invoice samples of power selling from year 2008 to /LOA/ Letter of Approval from Germany s DNA /MAW/ /MD/ /MES/ /MOC/ Minutes of Anhui Suzhou MW Biomass Power Generation Project Workshop by Anhui Electrical Power Design Institute, [2010]No.019 Management Decision for Carrying-out CDM activity for the Proposed Project, dated on Main Equipment s technical specifications: 1. Technical specification of boiler, provided by Wuxi Huaguang Boiler Ltd Co. 2. Technical specification of Turbine, provided by Qingdao Jieneng Turbine Ltd Co. 3. Technical specification of Generator, provided by Shandong Jinan Factory of Equipment for Power Generation. 4. Technical specification of Monitor to monitor NCV, Modality of Communication Form Page 48 of 129

49 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Reference /NPE/ /O&M/ /PCD/ Document The Notification on Proportion of Electricity Price Management by Using Renewable Energy which was issued by the National Development and Reform Commission, dated on [2006]No.7 The Overhaul Contract for Year 2009 which was signed between Huadian Suzhou Biomass Power Industrial Co., Ltd. and Anhui Suzhou Huiyuan Electrical Examine and Repair Co., Ltd, dated on Power connection diagram - Project Design Document entitled Anhui Suzhou Biomass Power Generation Version 01 (hosted for public comments during 08/05/08 to 07/06/08) - Project Design Document entitled Anhui Suzhou MW Biomass Power Generation Project Version 02.4 ( ) /PHT/ /POP/ /PTD/ /QAQC/ /SDCP/ /SSR/ /TPR/ /VWL/ /XCS/ Photographs of progress of construction activity at the project site date on 26. May Proposal of the Proposed Project 1. Technical drawing of boiler 2. Drawing of stalk pre-treatment system 3. Drawing of stalk feed-in system 4. Power plant layout and processes flow chart Quality procedures of monitoring and measurement Statistic of average distance from the collection stations to the power plants Stakeholders Survey Records (questionnaires) Training Plan and Records Voluntary Withdraw Letter from Deutsche Bank AG, London Branch Excel calculation sheets baseline and project emission reduction Table 7-2: Background investigation and assessment documents Page 49 of 129

50 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Reference /ACM6/ /BDA/ /BA/ Document ACM0006- Consolidated methodology for electricity generation from biomass residues. (Version 09) Bio-fuel Development Analysis Bio-fuel analysis information from the website of China New Energy /CEY/ China Energy Yearbook /CPM/ TÜV Nord JI / CDM CP Manual (incl. CP procedures and forms) /CTA/ Combined tool to identify the baseline scenario and demonstrate additionality Version 02.2 /DTL / /EMP/ /EB22a3/ /FPE/ /GAI/ Technical Administrative Code of Electric Energy Metering Economic Evaluation Methods and Parameters for Construction Project (Version 3) Clarifications on the consideration of National and/or Sectoral Policies and Circumstances in Baseline Scenarios. The 11 th Five-Year Plan of Energy Development in China which was issued by the National Development and Reform Commission in April Guidance on the Assessment of the Investment Analysis (Version 03: EB 51, Annex 58) /GCP/ UNFCCC: Guidelines for completing CDM-PDD and CDM-NM (Version 07) /GEF/ /GEF/ /GET/ Official data sources for Grid Emission Factor (NCPG Grid) published by the Chinese DNA in Aug Official data sources for Grid Emission Factor (CCPG Grid) published by the Chinese DNA. Tool to calculate the emission factor for an electricity system (Version 02: EB 50) /GPLF/ Guidelines for the Reporting and Validation of Plant Load Factors, version 01. /GRE/ Guidance on Renewable Energy Development which was issued by the National Development and Reform Commission. Page 50 of 129

51 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Reference /IPCC-GP/ /IPCC-RM/ /IREA/ Document IPCC Good Practice Guidance & Uncertainty Management in National Greenhouse Gas Inventories, 2000 Revised 2006 IPCC Guidelines for National Greenhouse Gas Inventories: Reference Manual Interim Rules on Economic Assessment of Electric Engineering Retrofit Projects /KP/ Kyoto Protocol (1997) /MA/ /No.6/ /No.22/ /PDS/ /RP/ /SCPN/ /SIB/ Decision 17/CP. 7 (Marrakesh Accords & Annex to decision 17/CP.7) Notice on Strictly Prohibiting the Rule-breaking Installation of Fuel-fired Generators with a Capacity of 135MW or Below which was issued by the State Council Office. Reference: Guo Ban Fa Ming Dian [2002] No.6. Notification on Prohibition of Burning the Biomass Residues. Huan Fa [2008]No.22 The Paper of Discussing the Development of Straw(biomass)-fired Generation in China, authored by XU Yongjin,CHEN Shuming, National Bio Energy Co., Ltd., Beijing. Registered CDM Projects Reference: 1375, 2230,2161, 1263, 1032, 1546, 2440, 2561, 1366, 2563,778, 825, 819, 1892, 820, 1293, 811 State Council Public Notice [2002] No.6, date on (Strictly Prohibiting the Installation of Fossil Fuel-fired Power Plant with the Capacity of 135 MW or Below) Statistic information on biomass resideues power generation from China Climate Change Info-Net. /TA/ Tool for the demonstration and assessment of additionality (Version 05.2) /TDL/ Tool to determine the remaining lifetime of equipment, version 01. /LEC/ The Law of Energy Conservation of the People s Republic of China. /TRE/ Tax rate evidences: 1. Interim Regulations on the People's Republic of value-added tax Page 51 of 129

52 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Reference Document 2. People's Republic of China Enterprise Income Tax Law 3. Interim Regulations on People's Republic of China s City Maintenance and Construction Tax 4. State Council Notice on Education Tax, GuoFaMingDian[1994]2,07/02/ Document No.[1994]004, issued by the National Financial Ministry and National Revenue Ministry regarding Value Added Tax, 6. Documents [1998]843 and [2006]47 issued by National Revenue Ministry regarding Value Added Tax. 7. Notice from National Tax Bureau about adjusting the residual value rate of fixed assets, [2005]883 /VVM/ UNFCCC Validation and Verification Manual Page 52 of 129

53 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Table 7-3: Websites used Reference Link Organisation /ahsz/ /aee/ /ccchina/ /cgp/ /dna-c/ /bcc/ model/newinfo/newinfo.do?inf oid= ws.asp?id=135 index.asp lish/index.asp Suzhou City People s Government Anhui Society for Electrical Engineering China Climate Change Info-Net The Central s Government of the People s Republic of China National Development and Reform Commission (DNA of China) National Development and Reform Commission- The Bureau for Climate Changing /cd4cdm/ UNEP Riso Centre /eia/ cies_regulations/policies/eia 1/200711/t _ htm Ministry of Environmental Protection. The People s Republic of China. /web/ ontent/2005/content_91662.h tm /63/67/102/1985/2/ad c.htm The Central People s Government of the People s Republic of China /hvdc/ /mep/ /gzdt/ n hbb/bwj/200910/t _ htm National power monitoring commission Ministry of Environmental Protection of the People s Republic of China Guiding List on Energy Industry Restructure Page 53 of 129

54 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Reference Link Organisation /unfccc/ UNFCCC /ipcc/ IPCC publications Table 7-4: List of interviewed persons Reference MoI 1 Name Organisation / Function /IM01/ V Mr. Ms Li Dongfa Huadian Suzhou Biomass Power Industrial Co. Ltd./vice general manager /IM01/ V Mr. Ms Sha Na Huadian Suzhou Biomass Power Industrial Co. Ltd./ vice manager of planning dept. /IM01/ V Mr. Ms An Zhi Yong Qingdao Huatuo technology joint-stock Co. Ltd / supervisor equipment installation company /IM01/ V Mr. Ms Xue Huai Jiangsu Hongyuan construction surveillance company / supervisor. /IM01/ V Mr. Ms Shi Wanzhong Yongqiao district, Dadian county / supervisor of stalk collection station /IM01/ V Mr. Ms Hu Jianming Huadian Suzhou Biomass Power Industrial Co. Ltd./ supervisor for stalk collection in business dept /IM02/ V Mr. Ms. Feng Lan Beijing Green capital energy and environment investment Co., Ltd./PDD developer /IM02/ V Mr. Ms. Zhangna Beijing Green capital energy and environment investment Co., Ltd./PDD developer /IM03/ V Mr. Ms. Zhang Daofeng Environment science research institute in Suzhou / director Page 54 of 129

55 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Reference MoI 1 Name Organisation / Function /IM03/ V Mr. Ms. Zhu Dongqin Development and reform committee of Suzhou/ dept. supervisor /IM03/ V Mr. Ms. Wang Jin Li qiao county/ farmer /IM03/ V Mr. Ms. Wang Yanhua Li qiao county/ farmer 1) Means of Interview: (Telephone, , Visit) Page 55 of 129

56 Validation Report: Anhui Suzhou MW Biomass Power Generation Project ANNEX A1: Validation Protocol A2: Assessment of Baseline Identification A3: Assessment of Financial Parameters A4: Assessment of Barrier analysis A5: Outcome of the GSCP A6: Appointment certificates of the team members Page 56 of 129

57 Validation Report: Anhui Suzhou MW Biomass Power Generation Project ANNEX 1: VALIDATION PROTOCOL Table A-1: Requirements Checklist Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final A. General Description of Project Activity A.1. Approval The written approval of the parties involved is a mandatory requirement A.1.1. Has the project provided written approvals of all parties involved? (EB 51 Annex 3 44) Indicate whether a letter of approval has been received, with a clear reference to the supporting documentation. Indicate whether this letter was provided to the DOE by the project participants or directly by the DNA At the time of the (pre-) validation the letters of approval of all involved parties are pending. - /unfccc/ CAR A1 The CAR A1 was raised. A.1.2. Are the approvals issued from orgainsations listed as DNAs on the UNFCCC CDM website? (EB 51 Annex 3 44, 47, 48, 49 (b), 49 (c), 53) At the time of the (pre-) validation the letters of approval of all involved parties are pending. /unfccc/ CAR A1 Page 57 of 129

58 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final Indicate the means of validation employed to assess the authenticity, i.e. in case of doubt whether LoA has been verified with the DNA. Further describe which entity submitted the LoA for validation. - The CAR A1 was raised. A.1.3. Do the written approvals confim that the corresponding party is a Party to the Kyoto Protocol? (EB 51 Annex 3 45, (a)) At the time of the (pre-) validation the letters of approval of all involved parties are pending. /unfccc/ CAR A1 - The CAR A1 was raised. A.1.4. Do the written approvals confim that the participation is voluntary? (EB 51 Annex 3 45, (b)) At the time of the (pre-) validation the letters of approval of all involved parties are pending. /unfccc/ CAR A1 - The CAR A1 was raised. A.1.5. Does the written approval from the host country confim that the project contributes to the sustainable development in the country? (EB 51 Annex 3 45, (c)) At the time of the (pre-) validation the letters of approval of all involved parties are pending. /unfccc/ CAR A1 Page 58 of 129

59 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final A.1.6. Do the written approvals refer to the precise project title in the PDD submitted for registration or an additional specification of the project activity, e.g. PDD version number? (EB 51 Annex 3 45 (d), 50) A.1.7. Are the written approvals unconditional with regard to A.1.3 to A.1.6? (EB 51 Annex 3 46) A.1.8. Is the information regarding the project participants listed in section A3 and in Annex 1 of the PDD internally consistent to each other? (EB 51 Annex 3, 51) - The CAR A1 was raised. At the time of the (pre-) validation the letters of approval of all involved parties are pending. - The CAR A1 was raised. At the time of the (pre-) validation the letters of approval of all involved parties are pending. - The CAR A1 was raised. Yes, the information regarding project participants listed in section A3 and in Annex 1 of PDD is consistent to each other. /unfccc/ /unfccc/ CAR A1 CAR A1 Page 59 of 129

60 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final A.1.9. Are all project participants listed in the PDD approved at least by one Party involved? (EB 51 Annex 3, 51) Indicate whether the participation of the project participant(s) has been approved by a Party to the Kyoto Protocol. Describe the means of validation employed to draw this conclusion. A Are any other project participants approved but not listed in the PDD? (EB 51 Annex 3, 52) A Does the DOE have a direct contractual relationship with the PP? The PDD which has been provided by the PP was checked by the validation team. It is confirmed that section A3 and Annex 1 of the PDD are internally consistent to each other with regards to the project participants information. At the time of the (pre-) validation the letters of approval of all involved parties are pending. - The CAR A1 was raised. At the time of the (pre-) validation the letters of approval of all involved parties are pending. - The CAR A1 was raised. A contract has been signed between the validating DOE and a project participant. /unfccc/ /unfccc/ CAR A1 CAR A1 /POP/ Page 60 of 129

61 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (EB 51 Annex 3, 51 and EB 50, Annex 48, 7-9) Check whether the PPs listed in the published PDD are still listed in the PDD going to be submitted to request for registration. The contract can be provided upon request of CDM EB. A direct contractual relationship between a PP and the DOE is existent. A.2. Contribution to Sustainable Development The project s contribution to sustainable development is assessed. A.2.1. Has the host country confirmed that the project assists it in achieving sustainable development? (EB 51 Annex 3, ) Contain a statement confirming whether the letter of approval by the DNA of the host party confirmed the contribution of the project to the sustainable development of the Host Party. At the time of the (pre-) validation the letters of approval of all involved parties are pending. - The CAR A1 was raised. /unfccc/ CAR A1 A.2.2. Will the project create other environmental or social benefits than GHG emission reductions? (EB 51 Annex 3, ) Describe the other positive aspects not related to GHG emission reduction on the environment. The main targets will be achieved as following: 1. Increasing Job opportunity 2. Local industry developing 3. Meeting the local power shortage /IM01/ Page 61 of 129

62 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final 4. Contributing to economic stabilization and sustainable development By interviewing with the project owner /IM01/ and the official /IM03/ of the local development and reform committee to confirm the main targets will be achieved. The description provided in the PDD is convincing based on the sectoral knowledge of the validation team. It is confirmed that the project creates other environmental and social benefits. A.3. PDD editorial aspects The PDD used as a basis for validation shall be prepared in accordance with the latest template and guidance from the CDM Executive Board available on the UNFCCC CDM website. A.3.1. Has the latest version of the PDD form been applied? (EB 51 Annex 3, 55) Yes, the latest template version has been applied. /unfccc/ The version applicable on the UNFCCC website has been used to check. It s assessed to be correct. Page 62 of 129

63 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final A.3.2. Has the PDD been duly filled in accordance with the latest guidance(s)? (EB 51 Annex 3, 56, 57) The latest version of PDD Guideline (Ver.07, EB41/Annex 12) was followed when completing the PDD. /GCP/ The PDD was checked by comparing the requirements as set out in the guidelines. It was confirmed that all sections have been duly filled. A.4. 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 knowhow is used. A.4.1. Does the PDD contain a clear, accurate and complete project description? (EB 51 Annex 3, 58, 59) The PDD shall contain a clear description of the project activity which provides the reader with a clear understanding of the precise nature of the project activity and the technical aspects of its implementation. Pl. consider esp. chapters A.2, A.4.2 and A.4.3 (in case of LSC PDD) for assessment. In general the project description can be assessed as clear, accurate and complete to provide the reader with a sufficient understanding of the project activity. However, some issues which relate to the topic were identified as following: The difference of the title of the proposed project activity was identified between the PDD submitted for global stakeholder consultation and PDD submitted for registration. The clarification is required. There are some information inconsistencies were identified CAR A2 CL A3 CAR A4 CL A5 Page 63 of 129

64 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final Describe the process undertaken to validate the accuracy and completeness of the project description. between the PDD submitted for global stakeholder consultation and PDD submitted for registration as following: Contain the DOE s opinion on the accuracy and completeness of the project description. 1. The Annex I Party and the project participant of the Annex I Party 2. The estimated emission reductions. 3. The geographic coordinates of the proposed project activity. 4. Model and rated capacity of steam turbine, model and rated current of generator in section A The amount of the annual production of biomass residues at the project site. The description of project technology should be stated in a detailed and transparent manner in the PDD, e.g. the information on the auxiliary fuel, pre-treatment system, boiler type, manufacture of equipment and estimated lifetime. The justification of technology transfer in section A.4.3 of the PDD should be made, and the related evidences should be provided. - The CAR A2, CL A3, CAR A4 and CL A5 were raised. A.4.2. Is this description in accordance with the real situation or (in case of greenfield projects) is it most likely that the project will be implemented acc to the project description? The description of project technology should be stated in a detailed and transparent manner in the PDD, e.g. the information on the auxiliary fuel, pre-treatment system, boiler type, manufacture of equipment and estimated lifetime. CAR A4 Page 64 of 129

65 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final - The CAR A4 was raised. A.4.3. In case the project involves alteration of the existing installation or process, is a clear description available regarding the differences between the project and the pre-project situation? EB 51 Annex 3, 63, 64) Describe the steps taken to validate this issue. The project is a newly built biomass project. Therefore, the assumption is not applicable. By checking the relevant documents /FSR/ and interviewing the relevant personnel /IM01//IM03/ : Mr. Li Dongfa and Ms. Zhu Dongqin, the validation team is convinced that no alteration is envisaged by this proposed project. /FSR/ /IM01/ /IM03/ It s concluded that there is no alteration of the existing installation or process has been involved. A.4.4. Does the project design engineering reflect current good practices? Consider the equipment specifications, literature (e.g. EU BREF papers) and professional experiences. Describe the process undertaken to assess the engineering. The project activity consist of two 75t/h biomass direct burning boilers and two 12.5 MW generator driven by steam turbine units, both the boilers and turbine generator units are manufactured by advanced domestic suppliers. /FSR/ /MES/ By means of documents checking. The technical specifications of the generators and the FSR have been checked. Page 65 of 129

66 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final A.4.5. Does the project use state of the art technology or would the technology result in a significantly better performance than any commonly used technologies in the host country? Describe the process undertaken to assess the state of the art technology. It was assessed that project design engineering reflect current good practices. In China the commonly used technology to generate electricity is based on fossil fuels. The project technology s aim is to utilize renewable energy. By using the potential energy from the water it will be transformed into kinetic energy and converted into electrical energy. (A.4.3.) /IM01/ It can be confirmed by means of on-site visit and documents checking and in addition, judged by the team s sectoral knowledge. It was assessed that the project uses a state-of-the-art technology. A.4.6. Does the project make provisions for meeting training and maintenance needs? Describe the process undertaken to assess the maintenance and training needs. The training and maintenance will be conducted It s confirmed by interviewing the relevant personal /IM01/ : Ms Sha Na during the on-site and by checking the relevant training and maintenance plan of the proposed project. /IM01/ /TPR/ The project makes provisions for meeting training and maintenance needs. Page 66 of 129

67 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final A.5. Small scale project activity It is assessed whether the project qualifies as smallscale CDM project activity A.5.1. Does the project qualify as a small scale CDM project activity as defined in decision 4 / CMP.1 annex II? (EB 51 Annex 3, 135 (a)) A.5.2. Does the project apply one of the approved small scale categories and any methodology and tool referred therein? (EB 51 Annex 3, 135 (b)) Check, if applicable the expiry dates of the applied methodology. Further, take into consideration the general guidance to the methodologies 2, which provide guidance on equipment capacity, equipment performance, sampling and other monitoring related issues. A.5.3. Is the small scale project activity not a debundled component of a larger project activity? N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 2 Page 67 of 129

68 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (EB 51 Annex 3, 135 (c)) Describe the steps taken to validate this issue. Pl refer to the Compendium of guidance on debundling (EB 36, Annex 27). A.5.4. Is an assessment of the environmental impacts of the proposed SSC CDM project activity required by the host Party? (EB 51 Annex 3, 135 (d)) B. Project Baseline, Additionality and Monitoring Plan N/A N/A N/A N/A N/A N/A N/A N/A B.1. Application of the Methodology B.1.1. Does the project apply an approved and applicable CDM methodology and a valid version thereof? (EB 51 Annex 3, 65) Describe the steps taken to validate this issue. The applied methodology of the proposed project activity is ACM0006 Consolidated methodology for electricity generation from biomass residues (version 09) /ACM6/ /unfccc/ The validity of the methodology was cross-checked against Page 68 of 129

69 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final UNFCCC website s information. The version of the methodology is a valid one. B.1.2. Is the applied CDM methodology identical with the version available on the UNFCCC website? (EB 51 Annex 3, 65, 69) Describe the steps taken to validate this issue. The applied methodology of the proposed project activity is ACM0006 Consolidated methodology for electricity generation from biomass residues (version 09) /ACM6/ /unfccc/ The validity of the methodology was cross-checked against UNFCCC website s information. The applied CDM methodology is identical with the version on the UNFCCC s website. B.1.3. Are all applicability criteria in the methodology, the applied tools or any other methodology component referred to therein fulfilled? (EB 51 Annex 3, 66 (a), 66 (b), 68, 70, 75) Describe for each applicability criterion listed in the selected approved methodology the steps taken to assess the information contained in the PDD. The justification of the applicability of the methodology in section B.2 of the PDD should be stated in a more transparent manner; the documented evidences (e.g. storage period, predominant fuel of proposed project) should be provided and cited clearly and transparently in the PDD. /ACM6/ CAR B1 - The CAR B1 was raised. Page 69 of 129

70 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final B.1.4. 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? (EB 51 Annex 3, 71-74) The CAR B1, CL B4, CAR B5, CAR B6, CAR B7 and CAR B8 were raised regards to the topic. By means of documents checking. Several CARs and CLs were raised. /ACM6/ CAR B1 CL B4 CAR B5 CAR B6 CAR B7 CAR B8 B.1.5. Is the project in accordance with every other stipulation or requirement mentioned in all sections of the methodology? (EB 51 Annex 3, 70) Describe the steps taken to check whether the proposed project activity meets all the other possible stipulations and /or limitations mentioned in all sections of the approved methodology selected. Please refer to section B.1.4 of this section. - The relevant CARs and CLs need to be closed. /ACM6/ CAR B1 CL B4 CAR B5 CAR B6 CAR B7 CAR Page 70 of 129

71 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final B8 B.2. Project Boundaries Project Boundaries are the limits and borders defining the GHG emission reduction project B.2.1. Are the project s spatial boundaries (geographical) clearly defined? (EB 51 Annex 3, 67 (a), 77 79) Provide information on how the validation of the geographical boundary has been performed either based on reviewed documented evidence or by describing what was observed/viewed during a site visit. The project boundary should be clearly defined and documented in the PDD. - /ACM6/ CL B3 The CL B3 was raised. B.2.2. Are all sources and GHGs included in the project boundary as required in the applied methodology? (EB 51 Annex 3, 67 (a), 77 79) Provide information on how the validation of the GHGs and sources has been performed either based on reviewed documented evidence or by describing what was observed/viewed during a site visit. The CL B3 needs to be closed firstly. - The CL B3 was raised. /ACM6/ CL B3 B.2.3. In case the methodology allows to choose whether a source and/or gas is to be included, is the choice sufficiently explained and justified? The inclusion and exclusion of the sources and gases that occur under the baseline scenario and the project activity were sufficiently explained and justified. /ACM6/ Page 71 of 129

72 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (EB 51 Annex 3, 67 (a), 77 79) Confirm if the justification provided by the PPs is reasonable, based on assessment of supporting documented evidence provided by the PPs or by onsite observations. The description in section B3 of the PDD has been checked against the applied methodology. It was assessed to be credible. B.3. Baseline Identification The choice of the baseline scenario will be validated with focus on whether the baseline is a likely scenario, and whether the methodology to define the baseline scenario has been followed in a complete and transparent manner. B.3.1. What possible baseline scenarios have been considered? (EB 51 Annex 3, 67 (b), 82) Fill in all alternatives in table A-2. B.3.2. Is the list of alternatives complete? (EB 51 Annex 3, 67 (b), 82) Describe how it was validated that all alternatives are plausible and no plausible alternative is excluded from the Please refer to the Annex 2 of this report for detailed information. The applied methodology has been checking. The possible baseline scenarios have been listed in Annex 2 of this report. All plausible alternative scenarios listed in the approved methodology have been considered. In the course of document review and site visit, it has been validated that no other alternatives which supply comparable outputs and / or services are to be taken into consideration. Thus /ACM6/ /ACM6/ Page 72 of 129

73 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final consideration no plausible scenario has been omitted. The following alternative scenarios/options have been omitted. Corresponding CAR(s)/CL(s) has /have been issued B.3.3. What has been identified as the baseline scenario? (EB 51 Annex 3, 80, 81, 85) Describe the chosen BL scenario, taking into consideration the technology that would be employed and / or the activities that would take place in the absence of the proposed CDM project activity. B.3.4. Has the baseline scenario been determined according to the methodology? (EB 51 Annex 3, 81, 86 (e)) Describe how it is validated that the identification of the most plausible baseline scenario is carried out in accordance with the applied methodology and applied methodological tools. Please refer to table A-2. B.3.5. Has any plausible alternative scenario been excluded? The options P4 and B1 have been identified as the baseline scenario. Please refer to the Annex 2 of this report. The baseline scenarios for the proposed project were identified as the proposed project activity not undertaken as a CDM project activity and the biomass residues are dumped or left to decay under mainly aerobic conditions, this applies, for example, to dumping and decay of biomass residues on fields. For details of the assessment regarding the evaluation of the baseline scenario pl. refer to table A-2. The determination has been carried out as per the procedure contained in the applied methodology. The following CARs / CLs have been identified with respect to the selection of the baseline scenario: For details of the assessment regarding the evaluation of the baseline scenario pl. refer to table A-2. /ACM6/ /ACM6/ Page 73 of 129

74 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (EB 51 Annex 3, 82) Describe how it is validated that no plausible alternative scenario has been excluded. No plausible baseline scenario has been excluded. The following plausible baseline scenarios have been excluded though no adequate justification has been provided for elimination. The following CARs / CLs have been issued: /ACM6/ B.3.6. Is the identified baseline scenario reasonable and has the baseline scenario been determined using conservative assumptions where possible, including relevant references and sources? (EB 51 Annex 3, 83-86(a)-(c) Describe whether the choice of the identified baseline scenario is reasonable by validating the key assumptions, calculations and rationales used in the PDD. Describe whether these are listed, relevant and conservatively interpreted in the PDD. The baseline scenario is reasonable and has been determined using conservative assumptions where possible. Please refer to comments in table A-2 and sections B.3.2 to B.3.5 above. The following CARs / CLs have been issued because assumptions used in the baseline determination have been assessed to be not conservative 1. It was required to justify further the reasonability to select B1 as one of the most plausible baseline scenario since the biomass residues are either dumped or left to decay in absence of the project activity when the financial analysis includes a purchase price for the residues. /ACM6/ CL B4 CAR B5 CAR B6 CAR B7 2. The justifications of the exclusions of baseline scenario B2, B4, B8 in section B.4 of the PDD were neither sufficient nor reasonable, documented evidences should be submitted and clearly referred. 3. The plausible alternative B3 (the biomass residues are burnt in an uncontrolled manner without utilizing it for energy purposes) was not consistent with the host country s applied environment laws, clarification and re-justification is required. 4. In section B.4 of the PDD, the baseline scenario P5, P6, P7 Page 74 of 129

75 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final and P8 have been eliminated without sufficient justification. A detailed justification is required. By means of documents checking. The CL B4, CAR B5, CAR B6 and CAR B7 were raised regards to the topic. B.3.7. Does the baseline scenario sufficiently take into account relevant national and/or sectoral policies, macro-economic trends and political aspirations? (EB 51 Annex 3, 84, 86(d)) Describe whether the PP has shown that all relevant policies and circumstances have been identified and correctly considered in the PDD in accordance with the guidance by the Board. Pl. consider the guidance EB 22 annex 3 (regarding E+ and E- policies). The baseline scenario is defined as: - For Power Generation: P4 - The generation of power in the grid. - For the Use of Biomass Residues: B1 - The biomass residues are dumped or left to decay under mainly aerobic conditions. This applies for example to dumping and decay of biomass residues on fields. Or the biomass residues are burnt in an uncontrolled manner without utilizing for energy purposes. The baseline scenario sufficiently takes into account of macroeconomic trends and political aspirations. /EB22a3/ /ACM6/ No E + after 1997 and E - after have been observed and are therefore not taken into account to determine the baseline scenario. By checking the PDD against the applied methodology- ACM0006 version 09. Page 75 of 129

76 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final It was assessed to be credible. B.3.8. Is the baseline scenario determination compatible with the available data and are all literature and sources clearly referenced? (EB 51 Annex 3, 86 (a) (c)) Describe whether the documents and sources referred to in the PDD are correctly quoted and clearly referenced. The key data/references used to determine the baseline scenario should be illustrated in a more transparent manner, (preferably in a tabular form) - /ACM6/ CAR B10 The CAR B10 was raised. B.3.9. Does the PDD contain a verifiable description of the identified baseline scenario, including a description of the technology that would be employed and/or the activities that would take place in the absence of the proposed CDM project activity. (EB 51, Annex 3, 85) The key data/references used to determine the baseline scenario should be illustrated in a more transparent manner, (preferably in a tabular form) - /ACM6/ CAR B10 The CAR B10 was raised. Page 76 of 129

77 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final B.4. Additionality Determination The assessment of additionality will be validated with focus on whether the project itself is not a likely baseline scenario. B.4.1. Methodology B Does the PDD describe how the project is additional and does the additionality justification follow the requirements of the applied methodology and/or methodological tools? (EB 51 Annex 3, 67 (d), 93, 94) Describe how it is validated that additionality justification is carried out in accordance with the applied methodology and/or applied methodological tools. Further focus your assessment on the reliability and credibility of data, rationales and assumptions, justifications and documentations provided by the PP. The PDD described the project is additional in four steps by following the requirement of the applied methodology and methodological tools. Through step one and step two, the baseline scenario has been identified. Then the IRR analysis demonstrated that the proposed project lacks of financial attractiveness. And the common practice analysis demonstrated that there are essential distinctions between the proposed project and the other similar activities. The PDD has been checked against the applied methodology and the methodological tools. /ACM6/ /CTA/ It was assessed that the proposed project is additional. B.4.2. Consideration of CDM before project start B Is the project starting date reported in accordance with the CDM glossary of terms? The project starting date reported is which is the earliest date on which the implementation or construction or real /ESD/ Page 77 of 129

78 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (EB 51, Annex 3, 103 (a)) Describe the steps taken to validate this issue. action of this project activity, and it is in accordance with the CDM glossary of terms. The credibility was confirmed by checking the project s main equipment purchase contract, the project s construction approval and the website to substantiate the construction starting date. The starting date of the project is assessed to be credible in accordance with the CDM glossary of terms. B In case the project start date is on or after 2 nd August 2008 has the PP informed the DNA and UNFCCC about the intension to seek CDM status? (EB 51 Annex 3, 98, 99, 100) Describe whether such a notification has been provided by the project participants within six months of the project activity start date; if NOT it shall be determined that the CDM was not seriously considered. The project s starting date is before N/A N/A /ESD/ N/A N/A B In case the project start date is before commencing of validation and 2 nd August 2008, was the incentive from the CDM seriously considered and are details given in the PDD? (EB 51 Annex 3, 99, 101) The key events of the CDM consideration of the proposed project should be addressed in detail (It s better to use time table). - CL B12 Page 78 of 129

79 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final Describe whether the evidence to support such consideration is adequately and transparently described in the PDD. The CL B12 was raised. B How and when was the decision to proceed with the project taken? Describe the steps taken to validate the starting date. The investment decision was made on as the consequence of the project IRR was lower than the benchmark which indicated the project is financial unattractive. /MD/ The documented minutes of the board decision was checked as well as the FSR. It was assessed to be credible. B Is the project start date consistent with the available evidences? (EB 51 Annex 3, 101) Describe the evidence assessed regarding the prior consideration of the CDM (if necessary). Describe whether the evidence to support such consideration is adequately and transparently described in the PDD. Yes. The starting date is consistent with the available evidences. The relevant evidences and information /ESD//aee/ have been checked and confirmed. /ESD/ /aee/ It was assessed to be credible. B Was the decision to proceed with the project taken by a person which has the authority to do so? (EB 51 Annex 3, 100 (a)) The decision was proposed by Huadian Suzhou Biomass Power Industrial Co., Ltd. and the final approval was made by Mr. Xu Xu, Mr. Wang Cun Zhou, Mr. Ren Xi Kun, Ms. Si Pin, Mr. Yu Shi Qiu, Mr. Tong Wen Jun and Mr. Zhang Wei Qing who are the /MD/ /IM01/ Page 79 of 129

80 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final Describe the steps taken to validate this issue. shareholders of the proposed project. The relevant documentation /MD/ has been checked and double confirmed by the validation team during the on-site visit. The decision was made by the project s shareholders who have the authority to do so. B How was the CDM involved in the decision making process? (EB 51 Annex 3, 101) Describe why CDM was a decisive factor in the decision making process. Based on the feasibility study report, it s indicated that the proposed project lacks of financial attractiveness by applying the electricity tariff. Therefore, in order to bridge the gap of the project s financial attractiveness, then the CDM has been involved in the decision making process. And the board s decision of applying for CDM supporting was made on by the company s shareholders. /MD/ /FSR/ /IM01/ The original documentations have been checked by the validation team during the on-site visit. It s assessed that the applying of CDM for the project is seriously considered by the project owner and comply with the CDM requirements. B Do the evidences provided doubtlessly prove that continuous and real actions were taken in order to secure the CDM Please refer to the CL B12. CL B12 Page 80 of 129

81 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final status? (EB 51 Annex 3, 101; EB 49 Annex 22, 7) Please refer to B in this section. The CL B12 was raised. B Is the gap of documented evidences to secure the CDM status less than 3 years and are the evidences relevant for substantiating the action taken, credible, reliable and complete? Please refer to the CL B12.. Please refer to B in this section. CL B12 (EB 49 Annex 22, 8) The CL B12 was raised. B Did implementation of the project ceased after its commencement and did implementation recommence after consideration of the CDM? (EB 51 Annex 58, 7) Describe the reasons for ceasing the project and explain why the incentive from CDM was necessary to recommence the implementation. The time gap between the documented evidences is less than 2 years. The documented evidences indicate no information regards to the implementation of the project ceased after its commencement. Please refer to the assessment of the CL B12. The documented evidences which were listed in the assessment of the CL B12 have been checked. It was confirmed that the project didn't cease implementation after its commencement. /MD/ /ESD-2/ /ESD-3/ /dna-c/ /EPRA/ /HCA/ /VWL/ /IM01/ B Can the CDM involvement in the decision assessed as serious? Yes. The CDM involvement in the decision can be assessed as /MD/ Page 81 of 129

82 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final Describe whether or not the project would have been undertaken without the incentive of the CDM. serious. /FSR/ (EB 51 Annex 3, 103 (b) (c)).by checking the documented evidences which were listed in the assessment of the CL B12. The time gap between the documented evidences is less than 2 years. The CDM involvement in the decision can be assessed as serious. B.4.3. Identification of alternatives Step 1 (in case of SSC projects pl. Skip steps 1 and 2) B Does the list of alternatives contain the status-quo situation, the project not undertaken as a CDM project as well as all other viable means of supplying the outputs or services that are to be supplied by the proposed CDM project activity? (EB 51 Annex 3, ) Describe the steps taken to validate this issue on the basis of your local and sectoral knowledge. Yes. Please refer to the Annex 2 of this report. Please refer to the Annex 2 of this report. It was assessed that the list of alternatives contains the status-quo situation, the project not undertaken as a CDM project as well as all other viable means of supplying the outputs or services that are supposed to be supplied by the proposed CDM project activity. /ACM6/ B Have all realistic alternatives been identified to the project? (EB 51 Annex 3, ) Yes. Please refer to the Annex 2 of this report. /ACM6/ Describe whether the list of alternatives is credible and complete. Describe how it is validated that the alternatives Please refer to the Annex 2 of this report. Page 82 of 129

83 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final are realistic. It was confirmed that all realistic alternatives have ben identified to the project. B Do all identified alternatives comply with enforced legislations? (EB 51 Annex 3, 105 (c)) Describe the steps taken to validate this issue. Refer to the legislations. Yes. Please refer to the Annex 2 of this report. Please refer to the Annex 2 of this report. It was confirmed that all identified alternatives comply with enforced legislations. /ACM6/ /No.6/ /No.22/ /mep/ B.4.4. Investment analysis Step 2 In case the investment analysis as per step 2 is chosen to justify the additionality Annex 2 Assessment of Financial Parameters has to be used to provide additonal details of the the calculation parameters.. B Does the PDD provide evidence that the project would not be the most economically or financially attractive alternative or economically / financially feasable without the revenues from the sale of CERs? (EB 51 Annex 3, 107) Yes. It was indicated in the PDD that the IRR of the proposed project is 3.03% which is lower than the benchmark. And detailed sensitivity analysis was provided. The IRR calculation spreadsheet has been checked to confirm that the project is not the most economically or financially attractive without the revenues from the sale of CERs.h /IRR/ Page 83 of 129

84 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final It was assessed to be credible. B Is an appropriate analysis method chosen for the project (simple cost analysis, investment comparison analysis or benchmark analysis)? (EB 51 Annex 3, 107, EB 39 Annex 10) Describe why the selected analysis method is appropriate under consideration of potential revenues and costs, potential project alternatives and potential available benchmark values. The benchmark analysis is chosen for the project. Benchmark analysis was chosen by considering the characteristics of the project activity. The selected value of the benchmark is 8% which was derived from Interim Rules on Economic Assessment of Electrical Engineering Retrofit Projects. Simple cost analysis (Option I) is not applicable for the reason that the project will produce financial/economic benefits by selling electricity other than CDM related income. /IRE/ And in this case, the investment comparison analysis (Option II) is not applicable because the project investor does not have alternative and comparable investment choice. The validation was carried out by means of documentation checking and on-site visiting. The selection is assessed to be appropriate and credible. B Is a clear, viewable and unprotected Excel spreadsheet available for the investment calculation? (EB 51 Annex 3, 109, EB 51, Annex 58, 8) Describe the steps taken to validate this issue. Yes. A clear, viewable and unprotected Excel spreadsheet is available for the investment calculation. The latest Excel spreadsheet has been provided by the project participants and checked by the validation team. /IRR/ Page 84 of 129

85 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final It s assessed to be. B Does the period chosen for the investment analysis reflect the technical lifetime of the project activity or in case a shorter period is chosen, is the fair value of the project activity s assets at the end of the investment analysis period (as a cash inflow) included? (EB 51 Annex 3, 108; EB 51 Annex ) Describe how the technical lifetime / period chosen for calculating financial parameter(s) is reviewed and which documents were utilised in the course of review. Describe furthermore the approach used to check the inclusion of a potential fair value. Yes, the period chosen for the investment analysis is 20 years and it reflects the technical lifetime of the project activity /FSR/. The project IRR calculations reflects the period of expected operation of the underlying project activity (technical lifetime) and therefore fair value is not applicable to the project. Documents such as FSR, equipment technical agreement /EPA/ and IRR calculation were utilised in the course of review and are assessed appropriate regarding the 20 years of assessment period. It was assessed to be credible. /FSR/ /IRR/ B Is the (remaining) technical lifetime of existing or project equipment defined in accordance with the guidance of the Tool to determine the remaining lifetime of equipment? N/A N/A /TDL/ N/A N/A (EB 50 Annex 15) N/A B Is the fair value calculated in accordance with local accounting regulations (where available) or international best practice? The fair value was not considered for the proposed project. /FSR/ N/A N/A Page 85 of 129

86 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (EB 51 Annex 3, 108; EB 51 Annex 58 4) State the accounting regulations applied for calculating the fair value and describe why these are applicable under the project specific circumstances. Describe potential mismatches between regulations and the approach applied for calculating the fair value. The period which was chosen for the investment analysis in the IRR calculation spreadsheet already reflects the technical operational lifetime /FSR//MES/ of the project activity. The residual value has been added back into cash-in flow and the benchmark was still not crossed. /MES/ It s assessed to be correct. B Is the book value as well as the expectation of the potential profit or loss included in the fair value calculation? (EB 51 Annex 3, 108; EB 51 Annex 58 4) Please refer to B4.4.6 Please refer to B4.4.6 /FSR/ /MES/ N/A N/A Please refer to B4.4.6 B Are depreciation and other non-cash related items added back to net profits for the purpose to calculate the financial indicator? (EB 51 Annex 3, 108; EB 51 Annex 58 5) The residual value was added back to net profits for the purpose to calculate the IRR of the proposed project. The values were derived from the feasibility study report. And the FSR, the approval of FSR and the IRR calculation spreadsheet have been checked by the validation team during the on-site visit. /FSR/ /AFSR/ /IRR/ It s assessed to be correct. Page 86 of 129

87 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final B Is taxation excluded in the investment analysis or is the benchmark intended for post tax comparisons? (EB 51 Annex 3, 108; EB 51 Annex 58 5) The benchmark comparison of the proposed project is intended for post-tax comparisons. And, the loan interest was considered to calculate the income tax. /FSR/ /IRR/ The IRR calculation spreadsheet has been checked. It is confirmed that the benchmark comparison of the proposed project is intended for post-tax comparisons. B Were the input values used in the investment analysis valid and applicable at the time of the investment decision? (EB 51 Annex 3, 108, 111; EB 51 Annex 58 6) In case the basis for input values is a Feasibility Study Report (FSR) describe how it has been ensured that the period in time between the finalisation of the FSR and the investment decision is sufficiently short so that it is unlikely that input values would have materially changed. Further confirm the consistency of values in FSR and PDD. Several issues were detected related to the investment analysis as followings: 1) All the parameters for IRR calculation should be clearly referred and related evidences should be submitted. 2) The tariff should be adopted in the sensitivity analysis. And the determination of tariff by considering tax calculation based on the national regulations should be justified clearly and transparently. 3) The difference of the project s tariff was identified between the PDD submitted for global stakeholder consultation and the PDD for registration. /IRR/ CAR B11 - The CAR B11 was raised. B Is the plant load factor (PLF) chosen in a conservative manner, taking into account The plant load factor shall be defined ex-ante in the CDM-PDD /GPLF/ CAR B2 Page 87 of 129

88 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final that the PLF may be different in the framework of demonstrating additionality and calculating the ex-ante ER? (EB 48, Annex 11) according to one of the following options: (a) The plant load factor provided to banks and/or equity financiers while applying the project activity for project financing, or to the government while applying the project activity for implementation approval; (b) The plant load factor determined by a third party contracted by the project participants (e.g. an engineering company). - The CAR B2 was raised. B In case of project IRR: Are the costs of financing expenditures (loan repayments and interests) excluded from the calculation of project IRR? Costs of financing expenditures have not been considered as cashoutflow. However, for calculating the income tax they have been considered. Please refer to assessment in B /FSR/ /IRR/ (EB 51 Annex 3, 108; EB 51 Annex 58 9) The IRR calculation spreadsheet has been checked against the FSR. The calculation of project IRR complies with EB51 Annex 58. B In cases where a post-tax benchmark is applied please ensure that actual interest payable is taken into account in the calculation of income tax. The interest payable is taken into account in the calculation of income tax. /FSR/ /IRR/ Page 88 of 129

89 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (EB 51 Annex 58 11) As per the guidance it is recommended to select a pre tax benchmark in order to Describe the steps taken in assessing this requirment. The feasibility study report and the IRR calculation spreadsheet have been checked. It was assessed to be credible. B In case of equity IRR: Is the part of the investment costs, which is financed by equity considered as net cash outflow and is the part financed by debt excluded in net cash outflow? Not applicable, since the project applies project IRR. N/A /IRR/ /FSR/ N/A N/A (EB 51 Annex 3, 108; EB 51 Annex 58 10) N/A B Is the type of benchmark chosen appropriate for the type of IRR calculated (e.g. local commercial lending rates or weighted average costs of capital for project IRR; required/expected returns on equity for equity IRR)? (EB 51 Annex 3, 110; EB 51 Annex ) In case risk premiums are applied precisely describe its suitability to reflect the risks associated with the project activity, considering the project type and market situation. The project IRR is adapted to the proposed project. It s based on China s official guidance Interim Rule on Economic Assessment of Electric Engineering Retrofit Projects. It s an official industrial guidance which lists the benchmark. It s been checked to ensure the property of the type of benchmark of the proposed project. It s confirmed that the type of benchmark which was chosen is appropriate for the type of IRR calculated. /IRE/ B Is the benchmark value suitable for the project activity and is it reasonable to The benchmark value for the proposed project activity is 10%. /IRE/ Page 89 of 129

90 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) assume that no investment would be made at a rate of a lower return than the benchmark? (EB 51 Annex 3, 108; EB 51 Annex ) Describe whether it is reasonable to assume that a lower rate of return would consequently result in the baseline scenario. B Is it ensured that the project cannot be developed by other developers than the PP? (EB 51 Annex 3, 108; EB 51 Annex ) Describe why the benchmark does not include the subjective profitability expectations or risk profile of the project developer. If applicable assess the past financial behavior of the entity during at least the last 3 years in relation to similar projects. B Was the benchmark consistently used in the past for similar projects with similar risks? (EB 51 Annex 3, 108) Validation Team Comments (justification and substantiation of information, data and evidences) It s based on China s official guidance Interim Rule on Economic Assessment of Electric Engineering Retrofit Projects. The benchmark value is suitable for the project activity. For the reason that the referenced guidance is an official guidance which is widely used in China to select benchmark, it s reasonable to assume that no investment would have been made at the rate of a lower return than the benchmark. Internal company benchmark/expected returns won t be applied for the proposed project. Therefore, it s not applicable. Not applicable. N/A The benchmark applied is consistently used for other biomass residues projects in China. Recommendation in guidance from Chinese government is provided where it is recommended to apply the benchmark. Based on the information of the registered biomass residues projects, TÜV NORD can confirm that the benchmark is commonly utilized. Ref. Draft Final N/A N/A /IRE/ Page 90 of 129

91 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final Benchmark is commonly utilized for small hydro power plants in China. B Does the PDD and related spreadsheets contain a sensitivity analyis and does the same contain variation of parameters which may vary throughout the project lifetime, (EB 51 Annex 3, 108, 109 (e); EB 51 Annex ) Describe relevance of parameters used in the sensitivity analysis as well as their likeliness to vary during the project s lifetime. Parameters which are fixed on the basis of contracts, PPAs etc. may not be subject to variation and not adequate. In general, the PDD and the related spreadsheet contain a sensitivity analysis. However, the tariff should be adopted as a key variation in the sensitive analysis. In the updated PDD, five parameters (fixed assets, operation hour, biomass price, electricity tariff and O&M cost) were analyzed. And it s unlikely for the parameters may vary throughout the project life time. The project s financial audit report, the feasibility study report, the biomass residues purchase contract, the government tariff guidance have been checked by the DOE. CAR B11 It s confirmed that the mentioned parameters are unlikely to vary throughout the project lifetime. However, the CAR B11 was raised during the on-site validation course.. B Were only variables that constitute more than 20% of either total project costs or total project revenues subjected to reasonable variation? (EB 51 Annex 3, 108; EB 51 Annex 58 17) For the proposed project, not only variables that constitute more that 20% of either total project costs or total project revenues subjected to a reasonable variation. The O&M cost were also involved in the sensitive analysis by considering its material impact on the analysis. However, the tariff should be adopted as a key variation in the sensitive analysis. /IRR/ CAR B11 Page 91 of 129

92 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final The PDD and the IRR calculation spreadsheet have been checked. The CAR B11 was raised. B Have parameters, constituting less than 20% of total project costs or revenues, been identified with potential material impact on the financial parameter? (EB 51 Annex 3, 108; EB 51 Annex 58 17) Describe whether those parameters are considered in the sensitivity analysis? There are no parameters constituting less than 20% of total project costs or revenues has been identified. The IRR calculation has been checked. /FSR/ /IRR/ It s assessed to be credible. B Is the range of variation reasonable in the specific context of the project activity, taking into consideration historic trends in the business sector? (EB 51 Annex 3, 108; EB 51 Annex 58 18) Describe whether the range of variation is appropriate with focus on historic developments, e.g. price of oil / labour etc., energy potential in the region in question. The range of variation is ±10% of the proposed project activity. This is commonly chosen in China. The fluctuation of more than 10 % is unlikely. By checking the similar registered projects /RP/ in China, it s confirmed that 10% variation is commonly used. Hence, the validation team considered this range as applicable. /FSR/ /RP/ /AFSR / The range of ±10% is reasonable. B.4.5. Barrier analysis Step 3 or SSC additionality assessment Page 92 of 129

93 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final B Are there any barriers given which have a clear and direct impact on the financial returns of the project? (EB 51 Annex 3, 114, 133, 136) In case of LSC projects those issues cannot be considered as barriers and shall be assessed in the investment analysis. In case of SSC projects the same fundamentals as for LSC projects shall apply, i.e. the assessment of the investment barrier according to EB 51 Annex 58. B Are the barriers described risk related (e.g technology failure, other performance related risks)? (EB 51 Annex 3, 115, 133, 136) Are there other barriers or barriers due to prevailing practice existent which would have led to higher emissions? B Has the unavailabilty of means of finance for the proejct been described and adequately substantiated? Do evidences doubtlessly prove that the financing of the project was assured only due to the benefit of the CDM? (EB 51 Annex 3, 115, 136, EB 50 Annex 13, 9) B How is it justified and evidenced that the barriers given in the PDD are real? N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Page 93 of 129

94 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (EB 51 Annex 3, 115 (a)) B How is it justified that one or a set of real barriers prevent(s) the implementation of the project activity and do not prevent the implementation of at least one of the alternatives? (EB 51 Annex 3, 115 (b)) B Does the review of relevant background information on the nature of the company(ies) and entitiy(ies) involved in the financing and implementation of the project sufficiently justify that the barriers related to the lack of access to capital, technologies and skilled labour are real? (EB 50 Annex 13, 4) B Has it been demonstrated in an objective way how the CDM alleviates each of the identified barriers to a level that the project is not prevented anymore from occurring by any of the barriers? (EB 50 Annex 13, 5) B Would provision of additional financial means lead to the mitigation of the barrier(s) demonstrated? N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Page 94 of 129

95 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (EB 50 Annex 13, 7) Describe why provision of additional financial means would not lead to mitigation of the barrier(s) demonstrated and hence analysing the project s additionality within the framework of an investment analysis is inappropriate. B.4.6. Common practice analysis Step 4 (in case of SSC projects skip this step) B Is the defined region for the common practice analysis appropriate for the technology/industry type? (EB 51 Annex 3, 119 (a)) Describe why the project activity is not common practice in a transparent and unambiguous manner. If a region other than the entire host country is chosen, describe why this region is more appropriate. B To what extent similar projects have been undertaken in the relevant region? (EB 51 Annex 3, 119 (b)) The common practice analysis in step 4 should be demonstrated and justified according to the applied tool in section B.4 of the PDD. - The CAR B9 was raised. The common practice analysis in step 4 should be demonstrated and justified according to the applied tool in section B.4 of the PDD. - The CAR B9 was raised. B In case similar projects are identified, are CAR CAR B9 CAR B9 Page 95 of 129

96 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final there any key differences between the proposed project and existing or ongoing projects and what kind of differences are observed? (EB 51 Annex 3, 119 (c)) The common practice analysis in step 4 should be demonstrated and justified according to the applied tool in section B.4 of the PDD. - B9 The CAR B9 was raised. B.5. Ex-Ante Calculation of GHG Emission Reductions It is assessed whether the ex-ante calculations of project emissions, baseline emissions, leakage emissions are stated according to the methodology and whether the argumentation for the choice of default factors and values where applicable is justified. Furthermore calculation of emission reductions shall be assessed. B.5.1. Are the equations applied correctly according to the applied approved methodology? (EB 51 Annex 3 67 (c), 88, 89, 91) Describe clearly the steps taken to assess whether the methodology has been applied correctly to calculate project emissions, baseline emissions, leakage and emission reductions. Further take into consideration that all estimates of the baseline emissions can be replicated using the data and parameter values provided in the PDD. The equations applied for calculation are correctly applied according to the approved methodology. The following mistakes have been identified in this context: Several issues were detected in the project emission calculation: 1) PETy: AVDy=84, EF kmco2, y= , TLy=5 were not reasonable. 2) The justification of exclusion of FE EC,y was not reasonable, more CAR B13 Page 96 of 129

97 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final detailed information requested Esp. in case of system start up and in winter season. 3) PE biomass, CH4,y : the choise of NCV ( TJ/t) was not reasonable. - The CAR B13 was raised. B.5.2. In case the methodology allows for different methodological choices, are the equations applied properly justified and have they been used reflecting the other methodological choices (i.e. baseline identification)? The equations which were applied are properly justified. By means of checking the PDD and the applied methodology. /ACM6/ (EB 51 Annex 3 89, 90) Assess the correct selection and application of methodological choices. Describe whether proper justification has been provided (based on the choice of the baseline scenario, context of the project activity and other evidence provided) and whether the correct equations have been used reflecting the relevant methodological choices. It was assessed to be credible. B.5.3. Have conservative assumptions been used when calculating the project emissions? (EB 51 Annex 3 89, 90) Describe clearly the steps taken to assess whether all the assumptions and data used by the PP are listed in the PDD including references and sources and are conservatively As per guideline of completing of CDM-PDD, the date and parameters which are available during the validation should be listed in the table B.6.2. CL B15 Page 97 of 129

98 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final interpreted in the PDD. - The CL B 15 was raised. B.5.4. Does the implementation of the project activity 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? (EB 51 Annex 3, 76) There is no GHG emissions within the project boundary which are expected to contribute more than 1% of the overall expected averaged annual emission reductions are not addressed in the project s design document. By means of document checking. /ACM6/ It was assessed to be credible. B Has a plant load factor (PLF) been defined ex-ante and considered for determination of baseline emissions? (EB 48 Annex 11, 1, 3, 4) Describe why the PLF is conservative in the framework of calculating emissions reductions and whether the PLF is the same in the framework of demonstrating additionality by applying the investment analysis. Note, in order to be conservative in both cases the PLF may be different. Please refer to the CAR B2. - The CAR B2 was raised. CAR B2 B.5.5. Are all data sources and assumptions appropriate and parameters which remain fixed throughout the crediting period correct, As per guideline of completing of CDM-PDD, the date and parameters which are available during the validation should be /ACM6/ CL B15 Page 98 of 129

99 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final applicable to the project and will lead to a conservative estimation of emission reductions? (EB 51 Annex 3, 90) Describe clearly the steps taken to assess whether the values used for the fixed parameters are considered reasonable, correct and applicable in the context of the project activity. Check esp. chapter 6.2 of the PDD. listed in the table B The CL B15 was raised. B.5.6. Are all ex-ante calculation values for monitoring parameters (as defined as per chapter B.7.1) reasonable? (EB 51 Annex 3, 90) Describe clearly the steps taken to assess whether the values used for the monitoring parameters are considered reasonable, applicable and conservative in the context of the project activity All Values of data to be applied for the purpose of calculating expected emissions reductions are considered to be reasonable, applicable and conservative. The following mistakes have been identified in this context: The ex-post calculation of BM should be justified and the most recently data for EF coke and refinery dry gas from IPCC2006 value should be adopted. CAR B14 - The CAR B14 was raised. B.5.7. Are the emission reductions real, measurable and give long-term benefits related to the mitigation of climate change. Describe the steps taken to validate this issue. All the CARs and CLs in this section need to be closed firstly. /ACM6/ CAR B2 CAR 13 Page 99 of 129

100 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final - The CAR B2, CAR 13, CAR 14 and CL B15 were raised. CAR 14 CL B15 B.6. Monitoring of Emission Reductions It is assessed whether the monitoring plan is appropriate for the project activity and in line with the applied methodology. B.6.1. Are all monitoring parameters required by the applied methodology contained in the monitoring plan? (EB 51 Annex 3, 67 (e), 120, 122 (a), 123) Assess whether all applicable parameters listed in the methodology are included in the monitoring plan. Pl. check further whether the selection of parameters not to be monitored (section B.6.2) is appropriate and in line with the applied methodology. In case of different approaches can be chosen acc. to the methodology assess whether the selection of parameters is justified and correct. The EG NET,y, BF T,K,Y, Moisture content of the biomass residues, EF CH4,BF, N y, TL y, EF km, CO2,y, FC TR,I,y, NCV K, EF burning, CH 4,k,y the should be defined as monitoring parameters and the measurement method as well as the related QA/QC procedures should be clearly documented. - The CAR B16 was raised. /ACM/ CAR B16 B.6.2. Are the means of monitoring of all parameters contained in the monitoring plan feasible and in accordance with the requirements of the applied methodology? The description of the measurement method of NCV in table B.7.1 is not correct. Revision is requested CL B17 Page 100 of 129

101 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (EB 51 Annex 3, 122 (a), 122 (b), 123) Assess whether the provided information for all parameters w.r.t. a) Label (name of the data / parameter) b) data unit - The CL B17 was raised. c) description d) source of data e) measurement equipment / method / procedure f) monitoring frequency g) QA/QC procedures are appropriately described and in compliance with the requirements of the methodology.. B.6.3. 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? - Detailed information of monitoring of GHG emission i.e. meters system (i.e. location, function, accuracy), monitoring of Net calorific value of stalks as well as the backup/cross check method should be provided. /ACM6/ CAB 18 CL B19 (EB 51 Annex (b), 123) Check whether all necessary equations have been provided in the PDD. Pl. consider that ex-post and ex-ante calculations might be different. Please consider that additional equations might be necessary to calculate auxiliary parameters. - More information on the maintenance and calibration of the weight meter and NVC calorimeter (HWR-15D) should be described in the PDD section B Page 101 of 129

102 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final B.6.4. Is it likely that the monitoring arrangements described in the PDD can properly be implemented in the context of the project activity? (EB 51 Annex (c)) Assess whether the described monitoring arrangements are sufficient and realistic to enable a thorough monitoring. Pl. consider also special monitoring conditions, e.g. downtimes of monitoring equipment etc. The CAR B18 and the CL B19 were raised. Please refer to the CAR B18. - The CAR B18 was raised. /ACM6/ CAR B18 B.6.5. Are the QA/QC procedures appropriate sufficient to ensure the emission reductions achieved from the project activit can be reported ex-post and verified? (EB 51 Annex (b)) Please consider the description given in section B.7.2. Describe which QA/QC provisions are considered. Address Quality Management System provisions, calibration and maintenance of equipment. Address further any review procedures. The quantity of the stalk utilized for energy generation in the defined geographical region and the quantity of available biomass residues in the region should be monitored and the related measurement and QA/QC procedures should be established and implemented. - /ACM6/ CAR B20 The CAR B20 was raised. B.6.6. Are procedures identified for data management? (EB 51 Annex (b)) Check whether appropriate provisions are considered for All the hard-copy of the data will be stored. And all the data will be kept for an additional period of 2 years following the end of the crediting period. /IM01/ Page 102 of 129

103 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final data management including responsibilities, what records to keep, storage area of records and how to process performance documentation It was checked and confirmed by the team during the on-site visit. Check further the data archiving provisions for the project activity and ensure that provisions are made to archive data for the whole crediting period + 2 years. The procedures for data management are identified appropriately. C. Duration of the Project/ Crediting Period It is assessed whether the temporary boundaries of the project are clearly defined. Page 103 of 129

104 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final C.1. Is the project s starting date clearly defined and evidenced? (EB 51 Annex 3, 98) Check whether the starting date is correct. Apply the definition of the project starting date as per the Glossary of CDM terms. The project starting date reported is which is the earliest date on which the implementation or construction or real action of this project activity, and it is in accordance with the CDM glossary of terms. /ESD/ The relevant documents have been checked. The starting date of the project is assessed to be credible in accordance with the CDM glossary of terms and evidenced C.2. Is the project s operational lifetime clearly defined and evidenced? Check whether the project lifetime is correctly defined. Consider the guidance on the assessment of investment analysis (annex to the additionality tool). Check in case of phased implementation this has been reflected throughout the whole PDD incl. the financial assessment, if applicable. The project s operational lifetime is 20 years. The feasibility study report and the main equipment s technical specifications were checked to confirm. It was assessed that the project s operational lifetime is clearly defined and evidenced. /FSR/ /MES/ C.3. Is the start of the crediting period clearly defined and reasonable? Check whether the envisaged starting date of the crediting period is realistic, taking into consideration the times needed for validation and registration. The starting date of crediting period i.e. (1 st July 2008) was not reasonable. Revision is necessary. - CAR C1 Page 104 of 129

105 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final The CAR C1 was raised. D. Environmental Impacts Documentation on the analysis of the environmental impacts will be assessed, and if deemed significant, an EIA should be provided to the DOE. D.1.1. Are there any Host Party requirements for an Environmental Impact Assessment (EIA)? (EB 51 Annex 3, ) Check the host party regulations, regarding EIA. In China, an Environmental Impacts Assessment is required according to the relevant Chinese legislation /eia/. No trans-boundary environmental impact created by the project activity has been identified and reported in the EIA. /eia/ /EIA/ The requirement for compiling an Environmental Impact Assessment was indicated on the website 1/t _ htm. The validation team confirms that in China, to compile an Environmental Impact Assessment Report is compulsory for the construction project D.1.2. In case an Environmental Impact Assessment (EIA) is requested by the host party, has it been carried out and if applcable duly approved? The EIA Report of the proposed project has been compiled in August 2007 and gained an approval from the local Environmental /EIA/ /AEIA/ Page 105 of 129

106 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (EB 51 Annex 3, ) Check the EIA and its approval, if applicable. Protection Bureau on By means of checking the EIA Report and the approval letter during the on-site visit. It s assessed as credible. The EIA Report has been compiled according to China s regulations and there is no negative impact for the local environment due to the proposed project. In addition, the report was duly approved by the Chinese government. D.1.3. Has an analysis of the environmental impacts of the project activity been sufficiently described and in line with the host party environmental legislation? (EB 51 Annex 3, ) Check the PDD (section D). Check whether the project will create any adverse environmental effects. Check the relevant national environmental legislation. The analysis of the environmental impacts of the project activity has been sufficiently described and there is no negative impact for the local environment due to the proposed project. In addition, the report was duly approved by the Chinese government. By means of checking the EIA Report, PDD and the approval letter during the on-site visit. /EIA/ /AEIA/ It s assessed to be credible. D.1.4. Are transboundary environmental impacts considered in the analysis? (EB 51 Annex 3, ) Check the documents and local official sources / expertise regarding transboundary environmental impacts. According to the EIA, there is no trans-boundary environmental impact created by the project activity. The description based on the EIA Report. /EIA/ Page 106 of 129

107 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final The validation team confirms that there is no trans-boundary environmental impact of the project activity. E. Stakeholder Comments The DOE should ensure that stakeholder comments have been invited with appropriate media and that due account has been taken of any comments received. E.1. Have relevant local stakeholders been invited to consultation prior to the publication of the PDD? (EB 51 Annex 3, 127) Check by means of document review and interviews with local stakeholders if and when a local stakeholder consultation process has been carried out. The relevant local stakeholders have been invited to consultation prior to the publication of the PDD. The relevant documentations /SSR/ have been checked. It s assessed to be credible. /EIA/ /IM01/ /M02/ /SSR/ E.2. Can the local stakeholder consultation process be assessed as adequate? (EB 51 Annex 3, 128 (a) 128 (c)) Describe what assessment steps have been undertaken to assess the adequacy of the stakeholder consultation process. Give a final opinion on the adequacy. Please consider the following requirements in this context: The local stakeholder consultation process can be assessed as adequate. The assessment is based on the questionnaire. The questionnaire covers the stakeholder s opinion and the project s impacts on the local environment were described in the PDD. /EIA/ /IM01/ /M02/ /SSR/ Page 107 of 129

108 Validation Report: Anhui Suzhou MW Biomass Power Generation Project Checklist Item (incl. guidance for the validation team) Validation Team Comments (justification and substantiation of information, data and evidences) Ref. Draft Final (a) Comments by local stakeholders that can reasonably be considered relevant for the proposed CDM project activity, have been invited; Due accounts were also taken in response to the questions raised. (b) The summary of the comments received as provided in the PDD is complete; It was assessed to be credible. (c) The project participants have taken due account of any comments received and have described this process in the PDD. Page 108 of 129

109 ANNEX 2: ASSESSMENT OF BASELINE IDENTIFICATION Table A-2: Assessment of Baseline Identification (EB 51 Annex 3, 82 85) Baseline is not identified Assessment of baseline see below Baseline Alternatives identified Inline with the Method ology? Elimi nated Reasons for elimination / nonelimination from list of alternatives Evidence used Appropriaten ess of eliminat ion DOE Assessment Assessment of validation team (results and means of assessment) For Power Generation P1 The proposed project activity not undertaken as a CDM project activity. P2 The continuation of power generation in an existing biomass residue fired power plant at the project site, in the same configuration, without retrofitting and fired with the same type of biomass residues as (co-)fired in the project activity. This alternative is economically unattractive. Without the proposed project, the project site is a farmland and there is no exiting biomass residue fired power plant. /IRR/ /FSR/ /FSR/ /AFSR/ /ALO/ /IM01/ /IM03/ It was assessed to be credible to eliminate this alternative for the reason that the financial indicator of the project (IRR) is lower than the industrial benchmark, therefore, it is not financially attractive. It was assessed to be credible. By means of the on site interview and inspection, the DOE confirmed that the project site is a farmland before the implementation of the proposed project and there is no exited biomass residue fired power plant. Page 109 of 129

110 P3 The generation of power in an existing captive power plant, using only fossil fuels. P4 The generation of power in the grid. There are some coal-fired power plants around the project site. However, they can t supply more electricity as they have reached fullload running due to rapid increasing of energy demanding in Suzhou City. Without the proposed project, the consumption of the equivalent quantity of electricity in the proposed project site will be provided by the ECPG, which is the continuation of current practice. Nowadays, the current installed capacity and newly added capacity of ECPG will generate more power to meet the increasing energy demand in the local area and is also commercially viable. /ahsz/ The reason of eliminate this alternative is assessed to be credible. The relevant information on Suzhou City People s Government official website has been checked to confirm that the power shortage (approximately higher than 300MW) of the whole city of Suzhou city is still a big problem for economic developing. - It was not eliminated. Page 110 of 129

111 P5 The installation of a new biomass residue fired power plant, fired with the same type and with the same annual amount of biomass residues as the project activity, but with a lower efficiency of electricity generation (e.g. an efficiency that is common practice in the relevant industry sector) than the project plant and therefore with a lower power output than in the project case. According to Law of the People s Republic of China on Conserving Energy and the 11 th Five-Year Plan of China, it was encouraged to adopt technology-advanced projects to instead the low efficient projects. And by building a new power plant with low efficiency lead to a higher operational cost and then poor financial returns, in details: Project No. Eletricity Delivered (GWh/ a) Biomass Amount (10 4 t/ a) Biomass NCV (GJ/t ) Plant Efficiency (%) % % % % % % % % % % % % % % % % N/A N/A Proposed % Project /ccchina / /RP/ /LEG/ It was assessed to be credible. The relevant national regulations have been checked by the DOE to confirm that the low efficiency projects are not encouraged by the Chinese government. In addition, the plants efficiencies (range from 13.5% to 27.1%) of the similar projects /RP/ have been compared with the proposed project s (20.1%), the proposed project is in a reasonable range, if a low efficiency scenario was chosen, the electricity output would be lower and then with lower revenues. Page 111 of 129

112 P6 The installation of a new biomass residue fired power plant that is fired with the same type but with a higher annual amount of biomass residues as the project activity and that has a lower efficiency of electricity generation (e.g. an efficiency that is common practice in the relevant industry sector) than the project activity, therefore, the power output is the same as in the project case. P7 The retrofitting of an existing biomass residue fired power, fired with the same type and with the same annual amount of biomass residues as the project activity, but with a lower efficiency of electricity generation (e.g. an efficiency that is common practice in the relevant industry sector) than the project plant and therefore with a lower power output than in the project case. According to the law of the People s Republic of China on conserving energy and the 11 th Five-Year Plan of China, it was encouraged to adopt technology-advanced projects to instead the low efficient projects. And by building a new power plant with low efficiency lead to a higher operational cost and then poor financial returns. According to FSR and the local power yearbook, without the proposed project, the project site is a farmland and there is no exiting biomass residue fired power plant. /ccchina / /RP/ /LEG/ /FPE/ /FSR/ /ALO/ /IM03/ It was assessed to be credible. The relevant national regulations have been checked by the DOE to confirm that the low efficiency projects are not encouraged by the Chinese government. This alternative was eliminated for the same reason as P5. It was assessed to be credible. By means of the document checking and on site interview and inspection, the DOE confirmed that the project site is a farmland before the implementation of the proposed project and there is no exited biomass residue fired power plant. Page 112 of 129

113 P8 The retrofitting of an existing biomass residue fired power that is fired with the same type but with a higher annual amount of biomass residues as the project activity and that has a lower efficiency of electricity generation (e.g. an efficiency that is common practice in the relevant industry sector) than the project activity. P9 The installation of a new fossil fuel fired captive power plant at the project site. P10 The installation of a new single- (using only biomass residues) or cofired (using a mix of biomass residues and fossil fuels) cogeneration plant with the same rated power capacity as the project activity power and heat plant, but that is fired with a different type and/or quantity of fuels (biomass residues and/or fossil fuels). The annual amount of biomass residue used in the baseline scenario is lower than used in the project activity. According to FSR and the local power yearbook, without the proposed project, the project site is a farmland and there is no exiting biomass residue fired power plant. This alternative is not compliance with the Chinese laws and regulations. There is no other type of biomass residues mainly dominated around the project site. And any newly built biomass power plant (including cogeneration plant) will face technology and financial barriers. /FSR/ /ALO/ /IM03/ /SCPN/ /IM03/ /IRR/ /FSR/ /GRE/ /SIB/ /PDS/ It was assessed to be credible. By means of the document checking and on site interview and inspection, the DOE confirmed that the project site is a farmland before the implementation of the proposed project and there is no exited biomass residue fired power plant. Chinese government has published a regulation /SCPN/ in 2002 to prohibit constructing new fossil fuel power plants with capacity below 135MW By means of on site interview, it was confirmed that there is no other type of biomass residues mainly dominated around the project site in the radius of 50km. And by checking the relevant documentation /GRE//PDS/, it was confirmed that the technology of utilizing biomass residues to generate or cogenerate is still in the early developing and researching stage, and the type of the biomass is biomass residues mainly, like wheat straw and corn stalk. And there were only three biomass power plant started to operation by the end of 2006 /SIB/. It was assessed that the elimination of the alternative P7 is credible and reasonable and well evidenced. Page 113 of 129

114 P11 The generation of power in an existing fossil fuel fired cogeneration plant co-fired with biomass residues, at the project site. For the Use of Biomass Residues B1 The biomass residues are dumped or left to decay under mainly aerobic conditions, this applies, for example, to dumping and decay of biomass residues on fields. B2 The biomass residues are dumped or left to decay under clearly anaerobic conditions, this applies, for example, to deep landfills with more than 5 meters, and it does not apply to biomass residues that are stock-piled or left to decay on fields. B3 The biomass residues are burnt in an uncontrolled manner without utilizing it for energy purposes. B4 The biomass residues are used for heat and/or electricity generation at the project site. According to the FSR, the project site is a farm land and there is no cogeneration plant at the project site. Within the radius of 50km of the proposed project site, part of stalks would have been dumped or left to dacay. There is no landfill which is deeper than 5 meters in local area. If the biomass residues are left to decay under clearly anaerobic conditions, they should be covered with sand or soil, and certain investment will be required. Thus, considering that no mandatory regulations or laws have ever request the biomass residues to be treated in landfill. It is not in compliance with mandatory regulations and laws According to FSR and official land use approval, before the implementation of the project, the project site is a farmland with no boiler or power plant. /FSR/ /IM01/ /IM03/ /ALO/ It was assessed to be credible. By means of the document checking and on site interview and inspection, the DOE confirmed that the project site is a farmland before the implementation of the proposed project and there is no exited biomass residue fired power plant. - It was not eliminated. /FSR/ /IRR/ /mep/ /FSR/ /ALO/ It was assessed that the elimination of the alternative B2 is credible. By means of document /FSR/ checking, it was confirmed that there is neither has landfill nor deeper than 5 meters biomass residues treatment. Based on the DOE s sectoral expertise, there is no mandatory regulation to require treating biomass residues in the landfill. To let the biomass residues under clearly anaerobic conditions needs more efforts and investment, which would not bring attractive profit return. Burning biomass residues is strictly forbidden by the official announcement /mep/ because uncontrolled burning had caused serious air pollution and fire dangerous in the relevant area. It was assessed to be credible that there were no heat and/or electricity generation facility at the project site before the proposed project /FSR/. And it was also confirmed by the DOE by checking the official approval document /ALO/ from the host country s government. Page 114 of 129

115 B5 The biomass residues are used for power generation, including cogeneration, in other existing or new gridconnected power plants. B6 The biomass residues are used for heat generation in other existing or new boilers at other sites. B7 The biomass residues are used for other energy purposes, such as the generation of bio-fuels. According to the public available information, Wuhe Kaidi Biomass Power Plant is the closest biomass power plant in the region, which is about 100km away from the project site. For the reason that the costs on transportation are very high, it is not financially viable to use the biomass residues from project location. Plus, within a radius of 50km of proposed project, the total generation amount of biomass is 4.22 million tons, while 2.45 million tons are not utilized. The proposed project will utilize the surplus biomass, even if Wuhe biomass power plant uses the same kind of fuel from the same source instead of near region for them, it can only consume 186,196t biomass, which will not affect the project. In conclusion, this alternative cannot be a credible baseline scenario. Without the project, the project site is a farmland and there is no heating demand around it. According to the FSR and relevant evidences, there is no heat generation project using biomass residues as fuel in large scale and located close to proposed project. Previously, the local residents used part of total biomass for cooking or heating This alternative will face technology barrier /FSR/ /FSR/ /ALO/ /FSR/ /BDA/ /BA/ By means of document checking and on site interview and visitation, it was confirmed that no other power plant or cogeneration plant using biomass residues around the project site within the radius of 50km. The elimination of alternative B5 is assessed to be reasonable. It was assessed to be credible that there were no heat and/or electricity generation facility at the project site before the proposed project /FSR/. And it was also confirmed by the DOE by checking the official approval document /ALO/ from the host country s government. And based on the DOE s sectoral expertise, it was confirmed that the heat demand in the local area is not extremely severe, if there were a heat generation plant, it would be unlikely to consume all the biomass residues. The alternative B6 is not a realist baseline alternative. By checking the relevant evidences /FSR//BDA//BA/, it was confirmed that the technology of using biomass residues to generate bio-fuel is still in the early development stage. It is not a credible baseline alternative. Page 115 of 129

116 B8 The biomass residues are used for non-energy purposes, e.g. as fertilizer or as feedstock in processes. According to the FSR and relevant evidences, with a radius of 50kms from the project site, there are only 5 paper manufacturers which consume 6.3% of total biomass generation amount annually. Using biomass residues as fertilizer is viable for local residents, but the consumption amount is limited. Considering all potential biomass consumption, according to statistic only 41.9% of the total amount will be used. In conclusion, the surplus biomass cannot be consumed totally. All of these prove that this scenario is not appropriate baseline scenario for annual 2.47 million tons surplus biomass residues. /FSR/ By checking the project s feasibility study report, it was assessed to be credible that excluding this alternative is credible for the reason of the biomass residues were mainly dumped or left to decay, and only pretty small part (6.3%) of the residues were used as feedstock for paper industry. The alternative B8 is not a realist baseline alternative. Page 116 of 129

117 ANNEX 3: ASSESSMENT OF FINANCIAL PARAMETERS Table A-3: Assessment of Financial Parameters (EB 51 Annex 3, 110, 111, 113/ in case financial parameters stem from FSR 112,) No financial parameters are used for additionality justification Assessment of all financial parameters see below Parameter Value applied Unit Source of Information (please indicate document and page) Reference Correctness of value applied Appropriateness of information source DOE ASSESSMENT Comment The value of total investment was derived from the project feasibility study report which was compiled by a national authorized third party- Anhui Electrical Power Design Institute. The investment per unit cost of the proposed project is 10,524 CNY/kW. Total investment 26, CNY Feasibility Study Report / page116 /FSR/ /FAR/ By comparing with the similar registered projects: Reference No. Investment per Unit Capacity (CNY/kW) Page 117 of 129

118 N/A N/A It was indicated that the value of the proposed project is in the reasonable range. Considering the increasing material price and labor cost in China during the recent years, the total investment is unlikely to decrease up to 28.1% to exceed the benchmark. In addition, the actual investment /FAR/ of the proposed project is 241,280, CNY which is 92% of the estimated total investment till Therefore, the total investment of the proposed project was assessed to be credible and conservative. The value of generated electricity was derived from the project feasibility study report which was compiled by a national authorized third party- Anhui Electrical Power Design Institute. Generated Electricity 162,500 MWh Feasibility Study Report / page120 /FSR/ /AFSR/ /EB48 A11/ The generated energy is determined by using the installed capacity multiply the annual operation time of the project. The operation hour is 6500 hours which was derived from the project feasibility study report /FSR/. The plant load factor is 74.2% which was defined ex-ante in the CDM-PDD is verified by the DOE that it is in line with the following: (a) The plant load factor is determined by a third party design institute (Anhui Electrical Power Design Institute) which was contracted by the Page 118 of 129

119 project participants; (b) The plant load factor has been provided to the government while applying the project activity for implementation approval /AFSR/. By comparing with the similar registered projects: Reference No. Operation Hour It was concluded that the operation hour of the proposed project is in the reasonable range. Furthermore, only if the operation hour of the biomass residues decreased 35.9%, the IRR would hit the benchmark of 8% This is unlikely to happen by considering the immature technology. In conclusion, it is confirmed by the DOE that the input value of operating hours is valid and conservative at the time of investment analysis. Page 119 of 129

120 The annual net power supplied to the grid is calculated as generated electricity multiplied with (1-auxiliary consumption rate): 162,500 (1-15%)=138,125 MWh Net electricity supplied to the grid 138,125 MWh Feasibility Study Report / page120 /FSR/ /TRE/ And the auxiliary consumption rate is assumed as 15% in the FSR. The value in compliance with the requirements defined in the Economy Evaluation Method and Parameter for Constructing Projects issued by NDRC and Construction Ministry of China. In addition, by comparing with another 3 registered similar projects: Reference Auxiliary Consumption % % % It was concluded that the auxiliary consumption rate of the proposed project was assessed to be credible. Electricity (without VAT) tariff for the first 15 years for the rest 5 years CNY/k Wh Feasibility Study Report / page 119 /FSR/ /NPE/ /AOT/ /ISP/ /MAW/ Therefore, the net electricity supplied to the grid is assessed to be credible and conservative. The tariff of electricity which was generated by using renewable energy was prescribed by NDRC /NPE/ : The Notification on Proportion of Electricity Price Management by Using Renewable Energy, valid from It s regulated that the tariff contains two part: local provincial-level s fossil fuel power plant s ongrid demo price + subsidy of 0.25 CNY/kWh. This policy is valid for the first 15 years of the project s operation, and for the rest operation years there will be no subsidy any more. For the proposed project activity, the tariff for Page 120 of 129

121 the first 15 operation years is CNY/kWh without VAT. In detail, CNY/kWh without VAT /AOT/ (the on grid demo price of coal fired power plants in Anhui Province in 2005) plus 0.25 CNY/kWh of subsidy. The tariff for the rest five years is CNY/kWh without VAT. In addition, by the project s power selling invoice /ISP/, it was confirmed that the tariff which was used to calculate project s IRR is appropriate. In addition, by comparing the registered project in the same area: Anhui province Registration No Tariff (CNY/kWh) with VAT (17%) for the first 15 years Tariff (CNY/kWh) without VAT (17%) for the first years Tariff (CNY/kWh) with VAT (17%) for the rest years Tariff (CNY/kWh) without VAT (17%) for the rest years From the table above, it s indicated that the proposed project s tariff is the same with the registered project. Furthermore, only if the tariff increased 16.25% for the first 15 years, the IRR l would hit the benchmark of 8%. However, by considering the electricity tariff is strictly controlled by the Chinese government in a macro-scale manner, and by considering the external experts opinion that the tariff will keep stable in the current level. Therefore, the tariff is unlikely to be changed. Page 121 of 129

122 In conclusion, the tariff of the proposed project is assessed to be appropriate. The O&M consists of fuel cost, overhaul cost, salary & welfare fee, and other operational cost. Annual O&M costs Average 4, CNY Feasibility Study Report / page 118 /FSR/ The fuel cost takes more than 72% of the total annual average operation cost. The value was calculated as the quantity of annual fuel consumption multiply the price:169,000 t/yr x 200 CNY = million CNY/yr. In addition, by comparing with the similar registered projects /RP/ as following: Reference No. Price (CNY/t) N/A 811 N/A 2561 N/A It was concluded that the price of the biomass residues of the proposed project is in a reasonable range. The overhaul cost was calculated as 2.5% of the value of fixed assets. It was indicated in Page 122 of 129

123 the project s feasibility study report. By checking the actual overhaul contract /O&M/ which indicates that the overhaul cost for the proposed project annually is 1,990,000 which including equipment s overhaul and maintenance. Even if the overhaul cost decreased to 0, the IRR would still less than the benchmark of 8%.The value was assessed to be credible. The salary is calculated as the number of employees (72) multiplied with the average annual salary of 35,000 CNY per person and the welfare fee (58% of the salary) is derived from the project s feasibility study report which is in accordance with policy of the host county. Other operation cost contains water fee, material fee, management fee and incidental fee. The total value is 3,368,000 CNY. All the above parameters are calculated in compliance with the requirements defined in the Economy Evaluation Method and Parameter for Constructing Projects issued by NDRC and Construction Ministry of China. In addition, only if the price of the biomass residues decreased 28.1%, the IRR l would hit the benchmark of 8%. However, based on external expert s conclusion /MAW/, it was concluded that the price of the biomass residues is unlikely to decrease but increase. Income tax 33 % Feasibility Study Report / page 119 /FSR/ /TRE/ /BLC/ To conclude, the O&M cost is conservative. The assumption 33 % is based on Chinese national regulations. ( nfagui/ /63781.html). TÜV NORD Page 123 of 129

124 Value added tax (VAT) for electricity City maintenance & construction tax 17 % Feasibility Study Report /TRE/ 5 % Educational surtax 3 % Feasibility Study Report / page 118 Feasibility Study Report / page 118 Project Lifetime 20 year Feasibility Study Report /FSR/ /TRE/ /FSR/ /TRE/ /FSR/ /MES/ confirms that it is in accordance with income tax policy issued by local government. The interest payment of the proposed project has been involved to calculate the income tax. The IRR calculation spreadsheet has been checked. The correctness of the interest rate was cross-checked with the People s Bank of China s public information on the website The value is derived from the national policy Interim Regulation of the People's Republic of China on Value Added Tax issued by the State Council on Dec and revised in Nov According to the China s national regulations, the rate of city construction fee is 5%. The value is derived from the Interim Regulations on City Maintenance and Construction Tax of the People's Republic of China (promulgated on Document [1985] No. 19 of the State Council on Feb. 8, 1985). The tax rate is mandatory and applicable since According to the China s national regulations, the rate of education tax is 3%. The value is derived from the document Decision of the State Council on Amending the Interim Provisions on the Collection of Educational Surcharges (promulgated on Document Order of the State Council No. 448 on August 20, 2005) which is effective since The value is indicated in the FSR and double verified by technical data sheet of the main equipment. The depreciation rate of the project is 5% from the FSR. And the residual value has been identified at the last year of the project s lifetime and added it back to calculate Page 124 of 129

125 the IRR. Benchmark 8 % Interim Rules on Economic Assessment of Electric Engineering Retrofit Projects /IREA/ The benchmark was derived from the official guidance /IREA/ which is widely applied in power industry of China. Page 125 of 129

126 ANNEX 4: ASSESSMENT OF BARRIER ANALYSIS Table A-4: Assessment of Barrier Analysis (EB 51 Annex 3, 117) No barrier parameters are used for additionality justification Assessment of barriers see below Kind of Barrier (invest, tech, other) Description of Barrier Evidence used Appropriat eness of information source Assessment of validation team Explanation of final result Page 126 of 129

127 ANNEX 5: OUTCOME OF THE GSCP Table A-5: Outcome of the Global Stakeholder Consultation Process ( 41, 42 VVM Version 1) Comment No.: No comments were received during the global stakeholder consultation period Comments were received during the global stakeholder consultation period. The comments (in unedited form) and the consideration/response of the validation team are presented below: Comment by: Inserted on: Subject Comment *) validation team to take due Action taken by the account on the comment *) Conclusion (incl. CARs CLs or FARs) *) In case clarifications have been requested by the validation team corresponding rows shall be added Page 127 of 129

128 ANNEX 6: STATEMENTS OF COMPETENCE OF TEAM MEMBERS Page 128 of 129