VER + Validation Report

Transcription

1 VER + Validation Report VALIDATION OF THE VER+ PROJECT: KUMKÖY HYDROELECTRIC POWER PLANT, SAMSUN PROVINCE, TURKEY REPORT NO February 23, 2012 TÜV SÜD Industrie Service GmbH Carbon Management Service Westendstr Munich GERMANY

2 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 2 of 26 Report No. Date of first issue Revision No. Revision Date Certificate No Subject: Validation of a VER+ Project Accredited TÜV SÜD Unit: TÜV SÜD Industrie Service GmbH Certification Body climate and energy Westendstr Munich Germany TÜV SÜD Contract Partner: TÜV SÜD Industrie Service GmbH Carbon Management Service Westendstr Munich Germany Project Participant : It is unilateral project. The company AES-IC İçtaş Enerji Üretim ve Ticaret A.Ş has transferred its right to Kumköy Enerji Üretim A.Ş as the project participant (IRL69). Address : Çetin Emeç Bulvarı 65. Sokak No: 4 Balgat, Ankara Turkey Project Title: Project Site(s): The project activity Kumköy Hydroelectric Power Plant is located on Yeşilırmak River, Çarşamba Plain, Samsun Province,, Turkey. Coordinates : The project activity is located between 41º05'40"- 41º05'50" North and 36º41'10"-36º41'25" East. Power House and Regulator : N and E Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Applied Methodology / Version: ACM00002 / Version 12.2 Scope(s): 1 Technical Area(s): 1.2 First PDD Version: Date of issuance: Version No.: 03 Starting Date of GSP Estimated Annual Emission Reduction: Assessment Team Leader: Khalid Mahmood Assessment Team Members: Dr. Nuri Mol* Nevena Pingarova Final PDD version: Date of issuance: Version No.: tco 2 e Technical reviewer: Thomas Kleiser Certification Body responsible: Thomas Kleiser *: The TA s of this project were covered during the on-site mission by Dr. Nuri Mol as per the appointments valid at that time.

3 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 3 of 26 Summary of the Validation Opinion: The review of the project design documentation and the subsequent follow-up interviews have provided TÜV SÜD with sufficient evidence to determine the fulfilment of all stated criteria. In our opinion, the project meets all relevant UNFCCC requirements for the CDM. Hence TÜV SÜD is recommending the project for registration by the CDM Executive Board if letters of approval of all Parties involved will be available before the expiring date of the applied methodology(ies) or the applied methodology version respectively. The review of the project design documentation and the subsequent follow-up interviews have not provided TÜV SÜD with sufficient evidence to determine the fulfilment of all stated criteria. Hence TÜV SÜD will not recommend the project for registration by the CDM Executive Board and will inform the project participants and the CDM Executive Board on this decision. The project owner or an another authorized entity by project owner is obliged to register the VER+ project in the Blue Registry of TÜV SÜD in order to avoid any double issuing or double selling of VER+ carbon credits.

4 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 4 of 26 Abbreviations ACM Approved Consolidated Methodology BM Build Margin CAR Corrective Action Request CDM Clean Development Mechanism CDM EB CDM Executive Board CER Certified Emission Reduction CM Combined Margin CMP Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol CR / CL Clarification Request DNA Designated National Authority DOE Designated Operational Entity EF Emission Factor EIA / EA Environmental Impact Assessment / Environmental Assessment ER Emission Reduction FAR Forward Action Request FSR Feasibility Study Report GHG Greenhouse Gas(es) IPCC Intergovernmental Panel on Climate Change IRL Information Reference List IRR Internal Rate of Return KP Kyoto Protocol MP Monitoring Plan NGO Non Governmental Organisation OM Operational Margin PDD Project Design Document PP PMUM Project Participant Electricity Market Finance Settlement Centre (affiliate of the grid operator TEIAS) TEIAS Turkish Public Grid Operator TÜV SÜD TÜV SÜD Industrie Service GmbH UNFCCC United Nations Framework Convention on Climate Change VVM Validation and Verification Manual, version 01.2

5 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 5 of 26 VER VER+ Voluntary Emission Reduction TÜV SÜD Standard for voluntary emission reduction projects, version 2.0

6 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 6 of 26 Table of Contents Page 1 INTRODUCTION Objective Scope METHODOLOGY Appointment of the Assessment Team Review of Documents Follow-up Interviews Further cross-check Resolution of Clarification and Corrective Action Requests Internal Quality Control SUMMARY Approval Participation Project design document Project description Baseline and monitoring methodology Applicability of the selected methodology Project boundary Baseline identification Algorithm and/or formulae used to determine emission reductions Project emissions Leakage Emission Reductions Additionality Prior consideration of the clean development mechanism Identifications of alternatives Investment analysis Barrier analysis Common practice analysis Monitoring plan Sustainable development Local stakeholder consultation Environmental impacts... 24

7 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 7 of 26 4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS VALIDATION OPINION Annex 1: Validation Protocol Annex 2: Information Reference List Annex3: Appointment Certificates

8 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 8 of Introduction 1.1 Objective The validation objective is an independent assessment by a Third Party (Designated Operational Entity = DOE) of a proposed project activity against all defined criteria set by the Clean Development Mechanism (CDM) and VER+ Standard GHG 30 version 2.0 requirements. Validation is part of the VER+ project cycle and results in a conclusion by the executing DOE whether a project activity is valid and should be submitted for registration to the Blue Registry of TÜV SÜD. The ultimate decision on the registration of a proposed project activity rests with the CB. The project activity covered by this validation report has been submitted under the project title: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey 1.2 Scope The scope of any assessment is defined by the underlying legislation, regulation and guidance given by relevant entities or authorities. In the case of CDM project activities the scope is set by: The Kyoto Protocol, in particular 12 and modalities and procedures for the CDM Decision 2/CMP1 and Decision 3/CMP.1 (Marrakech Accords) Further COP/MOP decisions with reference to the CDM (e.g. decisions 4 8/CMP.1) Decisions and specific guidance by the EB published under Guidelines for Completing the Project Design Document (CDM-PDD), and the Proposed New Baseline and Monitoring Methodology (CDM-NM) Baselines and monitoring methodologies (including GHG inventories) Management systems and auditing methods Environmental issues relevant to the sectoral scope applied for Applicable environmental, social impacts and aspects of VER+ project activity Sector specific technologies and their applications Current technical and operational knowledge of the specific sectoral scope and information on best practice The validation is not meant to provide any consulting towards the project participant (PP). However, stated requests for clarifications, corrective actions, and/or forward actions may provide input for improvement of the project design. Once TÜV SÜD received t VER+ PDD version, it is made publicly available at TÜV SÜD s webpage in order to start a 30 day global stakeholder consultation process (GSP): The purpose of a validation is its use during the registration process at Blue Registry as part of the VER+ project cycle. Therefore, TÜV SÜD cannot be held liable by any party for decisions made, or not made, based on the validation opinion, which will go beyond that purpose.

9 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 9 of 26 2 METHODOLOGY The project assessment applies standard auditing techniques to assess the correctness of the information provided by the project participants. The assessment is based on the Clean Development Mechanism Validation and Verification Manual version The work starts with the appointment of the team covering the technical scope(s), sectoral scope(s) and relevant host country experience for evaluating the VER+ project activity. Once the project is made available for the stakeholder consultation process, members of the team carry out the desk review, follow-up actions, resolution of issues identified, and finally preparation of the validation report. The prepared validation report and other supporting documents then undergo an internal quality control by the CB climate and energy before submission to Blue Registry. In order to ensure transparency, assumptions are clear and explicitly stated; the background material is clearly referenced. TÜV SÜD developed methodology-specific protocol customised for the project. The protocol shows, in a transparent manner, criteria (requirements), the discussion of each criterion by the assessment team, and the results from validating the identified criteria. The validation protocol serves the following purposes: It organizes details and clarifies the requirements a VER+ project is expected to meet; It ensures a transparent validation process where the validator has to document how a particular requirement has been validated, as well as the results of the validation and any adjustments, if any, made to the project design. The validation protocol consists of three tables. The different columns in these tables are described in the figure below. Validation Protocol Table 1: Conformity of Project activity and VER+ PDD Checklist Topic / Question The checklist is organised in sections following the arrangement of the applied VER+PDD version. Each section is then further subdivided. The lowest level constitutes a checklist question / criterion. Reference Comments VER+ PDD in GSP Final VER+PDD Gives reference to documents where the answer to the checklist question or item is found in case the comment refers to documents other than the VER+ PDD. The section is used to elaborate and discuss the checklist question and/or the conformance to the question. It is further used to explain the conclusions reached. In some cases sub-checklist are applied indicating yes/no decisions on the compliance with the stated criterion. Any Request has to be substantiated within this column Conclusions are presented based on the assessment of the first VER+ PDD version. This is either acceptable based on evidence provided (), or a Corrective Action Request (CAR) due to noncompliance with the checklist question (See below). Clarification Request (CR) is used when the validation team has identified a need for further clarification. Forward action request to highlight issues related to project implementation that require review during the first verification. Conclusions are presented in the same manner based on the assessment of the final VER+ PDD version and documents including assumptions presented further in the documentation. Validation Protocol Table 2: Resolution of Corrective Action and Clarification Requests Clarifications and cor- Ref. to table 1 Summary of project Validation team conclusion

10 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 10 of 26 rective action requests owner response If the conclusions from table 1 are either a Corrective Action, a Clarification or a Forward action Request, these should be listed in this section. Reference to the checklist question number in Table 1 where the issue is explained. The responses given by the client or other project participants during the communications with the validation team should be summarised in this section. This section should summarise the discussion on and revision to project documentation together with the validation team s responses and final conclusions. The conclusions should be reflected in Table 1, under Final VER+ PDD. In case of a denial of the project activity more detailed information on this decision will be presented in table 3. Validation Protocol Table 3: Unresolved Corrective Action and Clarification Requests Clarifications and corrective action requests If the final conclusions from table 2 results in a denial the referenced request should be listed in this section. Id. CAR/CR of Identifier of the Request. Explanation of the Conclusion for Denial The completed validation protocol is enclosed in Annex 1 to this report. 2.1 Appointment of the Assessment Team This section should present a detail explanation, why the project is finally considered not to be in compliance with a criterion with a clear reference to the requirement which is not complied with. According to the technical scopes and experiences in the sectoral or national business environment TÜV SÜD has composed a project team in accordance with the appointment rules of the TÜV SÜD Certification Body climate and energy. The composition of an assessment team has to be approved by the Certification Body (CB) to assure that the required skills are covered by the team. The CB TÜV SÜD operates four qualification levels for team members that are assigned by formal appointment rules: Assessment Team Leader (ATL) Greenhouse Gas Validator (GHG-V) Greenhouse Gas Validator Trainee (T) Experts (E) It is required that the sectoral scope and the technical area linked to the methodology has to be covered by the assessment team. Name Qualification Coverage of scope Coverage of technical area Khalid Mahmood ATL Dr. Nuri Mol* Coverage of financial Aspect Host country experience Nevena Pingarova GHG-V *: The TA s of this project were covered during the on-site mission by Dr. Nuri Mol as per the appointments valid at that time.

11 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 11 of 26 Technical Reviewer: Thomas Kleiser 2.2 Review of Documents The first version of the VER+ PDD was submitted to the DOE on 14 April The first VER+ PDD version submitted by the PP and additional background documents related to the project design and baseline have been reviewed to verify the correctness, credibility, and interpretation of the presented information. Furthermore, a cross-check between information provided and information from other available sources has been done as initial step of the validation process. A complete list of all documents and proofs reviewed is attached as annex 2 to this report. 2.3 Follow-up Interviews Between 04 July 2008 and 08 July 2008, TÜV SÜD performed interviews, telephone conferences, and physical site inspection with project stakeholders to confirm relevant information and to resolve issues identified in the first document review. The table below provides a list of all persons interviewed in this context. Name Fatma Adıgüzel Ufuk Akbulut Ohad Agranat Barak Guzner Ofer Ben-Dov Birkan Özen Ercüment Yaşar Sertaç Akdemir Celal Öztop Organisation AES-IC, Hydro B.D. Director AES-IC, Hydro B.D. Manager Elysium Ltd. Elysium Ltd. Elysium Ltd. AES-IC, CFO AES-IC, Finance Manager AES-IC, EPC Procurement Director AES-IC, Lead Electrical Engineer 2.4 Further cross-check During the validation process the team makes reference to available information related to similar projects or technologies as the VER+ project activity. The documentation has also been reviewed against the approved methodology applied to confirm the appropriateness of formulae and correctness of calculations. 2.5 Resolution of Clarification and Corrective Action Requests The objective of this phase of the validation is to resolve the requests for corrective actions, clarifications, and any other outstanding issues which needed to be clarified for TÜV SÜD`s conclusion on the project design. The CARs and CRs raised by TÜV SÜD were resolved during communication between the client and TÜV SÜD. To guarantee the transparency of the validation process the con-

12 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 12 of 26 cerns raised and responses that have been given are documented in more detail in the validation protocol in annex 1. The final VER+ PDD version submitted serves as the basis for the final assessment presented. Changes are not considered to be significant with respect to the qualification of the project as a VER+ project based on the two main objectives of the VER+. These are an achievement of reduction of anthropogenic GHG emissions and to contribute to a sustainable development. 2.6 Internal Quality Control As final step of a validation activity the final documentation, which includes the validation report and the validation protocol, has to undergo an internal quality control by the CB climate and energy. That means that each report has to be approved either by the head of the CB or the deputy. In projects where either the Head of the CB or his/her Deputy is part of the assessment team approval can only be given by the either one not serving on the project. It rests at the decision of TÜV SÜD s Certification Body whether a project will be registered at TÜV SÜD Blue Registry or not.

13 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 13 of 26 3 SUMMARY The assessment work and the main results are described below in accordance with the VVM reporting requirements. The reference documents indicated in this section and Annex 1 are stated in Annex Approval The project participant in GSP-PDD was AES-IC Içtaş Enerji Üretim ve Ticaret A.Ş. of Turkey but the license (license No: EÜ/3519-1/2152) has been granted to Kumköy Enerji Üretim Anonim Sirketi for operation at the Kumköy Hydroelectric Power Plant production facility in Samsun Province by Energy Market Regulatory Authority Republic of Turkey on 01/12/2011 and prevoius license provided to AES IC Içtas Enerji Üretim ve Ticaret (license no. EÜ/1245 8/899) has been cancelled (IRL 69). The host Party Turkey has ratified the Kyoto Protocol on 13 May 2009, but it is not Party to the Kyoto Protocol. Turkey does not meet the requirements to participate in the CDM. Usual CDM mechanisms are implemented, but a DNA for issuance of LoA does not exist. Projects generated in Turkey are actually running as Voluntary Emission Reduction projects (VER). The participation in the project activity Kumköy Hydroelectric Power Plants, Samsun Province, Turkey,is voluntary. 3.2 Participation The participant of the project activity has been identified by the DOE. The production license has been issued on the name of AES IC Ictas Enerji Uretim ve Ticaret A.S. But the license (license No: EÜ/3519-1/2152) has been granted to Kumköy Enerji Üretim Anonim Sirketi for operation at the Kumköy Hydroelectric Power Plant production facility in Samsun Province by Energy Market Regulatory Authority Republic of Turkey on 01/12/2011 and previous license provided to AES IC Içtas Enerji Üretim ve Ticaret (license no. EÜ/1245 8/899) has been cancelled (IRL 69). 3.3 Project design document The VER+ PDD is compliant with relevant form and guidance as provided by UNFCCC. The most recent version of the CDM-PDD form was used for this VER+ project. TÜV SÜD considers that the guidelines for the completion of the VER+ PDD in their most recent version have been followed. Relevant information was provided by the participants in the applicable VER+ PDD sections. Completeness was assessed through the checklist included in Annex 1 of this report. 3.4 Project description The run-of-river type Kumköy Hydroelectric Power Plants, Samsun Province, Turkey project (in the following: Kumköy HEPP) is located on the ilırmak River, Province Samsun, Black Sea region of Turkey. The generated electricity will be supplied to the Turkish public grid. The available net head of the hydro power plant is 9.41 m and the total design flow rate is 210 m 3 /s. The installed capacity of each turbine is MW m, corresponding to 5.89 MW e (generator efficiency factor of 0.97). The available power after the transformer results in to 5.83 MW (transformer efficiency 0.99). With 3 in-

14 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 14 of 26 stalled bulb type turbines and an available capacity of MW (after consideration of generator and transformer losses), the power plant is estimated to supply 85,987 MWh of electricity to the Grid with the plant load factor of The energy facilities including the electromechanical equipment and transmission line will be implemented by the project participant, while the weir has been constructed and handed over to the project participant on 02 July 2009 by DSI (State Water Works). The approved revised electricity generation license for an installed capacity of MW m and MW e does not consider any energy reduction due to irrigation purposes (IRL No. 42, 43, 44). The information presented in the VER+ PDD on the technical design is consistent with the actual planning and implementation of the project activity as confirmed by: review of data and information (see annex 2) This was verified with other available sources An on-site visit has been performed and relevant stakeholder and personnel with knowledge of the project were interviewed. Finally, information related to similar projects or technologies as the VER+ project activity have been used to confirm the accuracy and completeness of the project description. The project activity aims to generate electricity from a renewable source and by displacement of fossil fuels, it will contribute to the reduction of greenhouse gas emissions and sustainable development. In conclusion, TÜV SÜD confirms that the project description, as included to the VER+ PDD, is sufficiently accurate and complete in order to comply with the requirements of the VER+ standard. 3.5 Baseline and monitoring methodology Applicability of the selected methodology Compliance with each applicability condition as listed in the chosen baseline and monitoring methodology ACM0002 Version 12.2 has been demonstrated. The assessment was carried out for each applicability criteria and included, among others, the compliance check of the local project setting with the applicability conditions in regard to baseline setting and eligible project measures. This assessment also included the review of secondary sources, which sustain that applicability conditions are complied with. The Methodology specific protocol, included to the Annex 1, documents the assessment process, which also includes the steps taken. The results on the compliance check, as well as the relevant evidence, are detailed in Annex 1. TÜV SÜD confirms that the chosen baseline and monitoring methodology is applicable to the project activity. Emission sources, which are not addressed by the applied methodology, and are expected to contribute more than 1% of the overall expected average annual emission reductions, have not been identified Project boundary The spatial extent of the project boundary was assessed in the context of physical site inspection, interviews, and on the secondary evidence received on the design of the project. The project boundary is the Turkish public grid. The Kumköy HEPP project is located on the Yeşilırmak river, near the city of Çarşamba, province Samsun, Black Sea region. The generated electricity will be supplied via transmission line to 31.5 kv Çarsamba Transformer Station to the Turkish public Grid. Relevant documentation assessed to confirm the project boundary are as follows :

15 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 15 of 26 - PDD IRL No.32 - Google Map in IRL No.31 - Electricity Generation License issued by Energy Market Regulatory Authority (EMRA) with information on project location and details on grid connection IRL No.17 - Single line diagram IRL No.28 - Onsite visit on 06 July 2008 This was also confirmed during the validation process. Details and/or observations, if applicable, are listed in Annex 1. Therefore, TÜV SÜD confirms that the identified boundary, the selected sources, and gases as documented in the VER+ PDD are justified for the project activity Baseline identification The VER+ PDD defines the following baseline scenario: The electricity generated by the new Kumköy Hydroelectric Power Plants, Samsun Province, Turkey project will be supplied to the Turkish public grid. Without the Project Activity this electricity would have otherwise been generated by the operation of grid-connected power plants and by the addition of mainly fossil fuel new generation sources, as reflected in the Combined Margin (CM) calculations described in the Tool to calculate the emission factor for an electricity system, version Therefore, the baseline was determined according to the baseline methodology guidelines. The information presented in the VER+ PDD has been validated by an initial document review of all data. Further confirmation is based on the on-site visit and researching information from similar projects and/or technologies. The sources referenced in the VER+ PDD have been quoted correctly. The information was verified against credible sources, such as: TEIAS web site: Similar run-of-river hydro power plant projects with the same baseline scenario have been validated within the project boundary : - Firnis 9.8 MW Hydroelectric Power Plant Project, Maraş Enerji (VER+ Standard) - Azmak 24.3 MW Hydroelectric Power Plan Project, Özgür Elektrik TÜV SÜD has determined that no reasonable alternative scenario has been excluded. Based on the validated assumptions on calculations TÜV SÜD considers that the identified baseline scenario is reasonable. Taking the definition of the baseline scenario into account, TÜV SÜD confirms that all relevant VER+ requirements, including relevant and/or sectoral policies and circumstances, have been identified correctly. A verifiable description of the baseline scenario has been included in the VER+ PDD. In regard to item 87 of VVM, TÜV SÜD confirms that: 1. All the assumptions and data used by the project participants are listed in the VER+ PDD, including their references and sources; 2. All documentation used is relevant for establishing the baseline scenario and correctly quoted and interpreted in the VER+ PDD; 3. Assumptions and data used in the identification of the baseline scenario are justified appropriately, supported by evidence, and can be deemed reasonable; 4. Relevant national and/or sectoral policies and circumstances are considered and listed in the VER+ PDD;

16 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 16 of The approved baseline methodology has been correctly applied to identify the most reasonable baseline scenario, and the identified baseline scenario reasonably represents what would occur in the absence of the proposed VER+ project activity Algorithm and/or formulae used to determine emission reductions TÜV SÜD has assessed the calculations of project emissions, baseline emissions, leakage, and emission reductions. Corresponding calculations were carried out based on calculation spreadsheets. The parameters and equations presented in the VER+ PDD, as well as other applicable documents, have been compared with the information and requirements presented in the methodology and respective tools. The equation comparison has been made explicitly following all the formulae presented in the calculation files. The assumptions and data used to determine the emission reductions are listed in the VER+ PDD and all the sources have been checked and confirmed. Based on the information reviewed it can be confirmed that the sources used are correctly quoted and interpreted in the VER+ PDD. The values presented in the VER+ PDD are considered reasonable based on the documentation and references reviewed, as well as, the result of the interviews. The baseline methodology has been correctly applied according to requirements. The estimate of the baseline emissions can be confirmed as the same that have been replicated by the audit team using the information provided. Detailed information on the verification of the parameters used in the equations can be found in Annex 1. The algorithms for the determination of the baseline, project, and leakage emissions are discussed in the following sections Baseline Emissions The calculation of the baseline emissions followed the procedures described in the methodology ACM0002 Version The Turkish public grid is considered to be the project boundary. The operating margin emission factor (EF OM ) was determined based on the simple OM method. The ex-ante option was chosen for this calculation. The calculation of the build margin emission factor (EF BM ) was based on modified methods agreed by the EB, because plant specific data are not available in Turkey. The emission factor of the fossil fuel power plants was calculated by the proportion of the emissions of coal, gas and oil times the emission factor of the best available coal, gas and oil power plants as defined and published by the public grid operator TEIAS. The new thermal capacity installation that exceeded 20% in the last years, for which data was available, was finally assessed with this factor. EF factors need to be revaluated once it has been decided which values can be applied. The value for the combined margin emission factor (EF CM )=0.628 was determined using the weighted average of the EF BM =0.642 and EF OM =0.614 using the default values for the factors as described in the methodology (i.e. 0.5 for hydro plants). As per the methodology, the project does not need to consider leakage or project emissions. As a result, the annual emission reductions are equal to the annual baseline emissions. The corresponding values of other VER+ projects implemented within the project boundary are as follows : For Firnis HEPP (applied 2007), EF OM = 0.777, EF BM = 0.533, EF CM = 0.653, for Azmak HEPP (applied 2009), EF OM = 0.668, EF BM = 0.546, EF CM = , thus the calculated emission factors of Kumköy HEPP are found to be consistent Project emissions There are no project emissions in this project.

17 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 17 of Leakage There are no leakage emissions in this project Emission Reductions In summary, the calculation of the baseline emissions and the emission reductions, respectively, can be considered as correct. Please note that according to our VER+ standard, version 02 (item 6), the crediting period of VER+ activity ends with the latest agreed commitment period under the UNFCCC scheme (recently 31/12/2012). At the end of 2012 a brief ratification status check of the host country under the KP or any subsequent follow up regime will be carried out by the Blue Registry administrator to avoid double counting. Please refer to FAR No.2 in Table of the Annex 1 of the validation report. 3.6 Additionality The additionality of the project has been presented in the VER+ PDD using following approach: The additionality analysis is based on the Tool for the demonstration and assessment of additionality, (version 6). The project participant has followed the steps 1, 2, 3 and 4. The approach used in the VER+ PDD has been assessed initially through document review, during which following documents have been reviewed: - IRR calculation: Turkey Historic Spreads (IRL No.36) - IRR calculations: Beta calculation (IRL No.37) - IRR calculation: Base case with 4 sensitivity scenarios (IRL No.38) - Detailed Financial Analysis regarding Investment Analysis (IRL No.40) Onsite, the additionality issue has been discussed principally with: Mrs. Fatma Adıgüzel, the Project Manager,Mr. Birkan ÖZEN and Mr. Ercüment Yaşar, both AES IC, Finance Department. Further documents regarding the project related expenditures, e.g. Harbin supply contract (IRL No.24), share purchase agreement (IRL No. 39), license bidding fee (IRL No. 58) have been reviewed onsite. Finally, the data, rationales, assumptions, justifications, and documentation provided have been verified using local knowledge as well as sectoral and financial expertise. This information was also confirmed through the following documentation: - Benchmark Analysis: Turkey Historic Spreads.xls IRL No.36 - Benchmark Analysis: Beta Calculation v01.xls IRL No.37 Based on these validation steps we can confirm that the documentation assessed is appropriate for this project Prior consideration of the VER As per CDM Glossary of Terms, version 05, the starting date of the project activity is determined as the date of the signing of the Share Purchase Agreement (IRL No.39) between AES Energy Ltd and IC Ibrahim Çeçen Yatırım Holding A.Ş in relation to AES IC ICTAS ENERJI URETIM ve TICARET A.S. It is dated , amended by a letter agreement and approved on by the shareholders. It clearly shows the financial commitment of AES Enerji Ltd. in the project activity. The

18 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 18 of 26 starting date of the project activity is determined to be , which is before 02 August 2008, as well as prior to the GSP ( upload date on TÜV SÜD web page, IRL No. 59). The project participant has committed to further expenditures related to the project activity as summarized below: - The project participant AES IC ICTAS ENERJI URETIM ve TICARET A.S. (in the following : AES IC) has signed on a lump sum, turnkey, engineering, procurement and construction (EPC) contract with IC ICTAS INSAAT SANAYI ve TICARET A:S. (in the following: IC ICTAS) for Kumköy HEPP. The EPC contract entitles IC ICTAS to act in all project related steps including expenditures on behalf of the project participant (IRL No.22) - The contract between IC ICTAS and HARBIN ELECTRIC (HE) CORPORATION for the Supply and Installation of Electro-Mechanical Equipment for Kumköy HEPP. The signed contract is dated (IRL No.24). The PP has provided further documents demonstrating the prior consideration and his commitment related to the implementation of the project activity: - Payment of the license acquisition fee to the Energy Market Regulatory Authority (EMRA) by the project participant following the tendering process, dated (IRL No.58) - Advanced Payment to the Harbin Electric Corporation, dated (IRL No. 25) - Contract with payment obligation by the project participant to DSI regarding the usage of the weir construction facilities and water for power generation, dated (IRL No.51) The above mentioned provided documents have been assessed onsite and in follow-up interviews with Mrs. Fatma Adıgüzel, AES IC, Mr. Ufuk Akbulut AES IC, Mr. Birkan Özen AES IC Finance and Mr. Ercüment Yasar, AES IC Finance. The above mentioned documents can be considered appropriate to confirm the prior consideration of VER+. Additionally, in order to confirm that the PPs have taken real action to continue the activity as VER+, the following timeline has been reviewed against the respective documents presented in the table below (project history): Activity / Date Document Auditor conclusion The project participant (PP) has considered carbon revenues within his project finance plans. /from onwards The project participant (PP) has asked various companies on carbon revenues in his project finance. / Share Purchase Agreement (SPA) signed between AES Enerji Ltd. and IC İbrahim Çeçen Yatırım Holding A.Ş approved by share- Communication on the Project Finance and Carbon Credits with International Finance Corporation IFC (IRL No.13) Feasibility Study on GHG Mitigation Project for Hydro power plant projects of AES IC, by Energy & Commodity Services GmbH (IRLNo.14) Excerpts of the signed agreement delivered. The PP has clearly shown evidence of early consideration of VER carbon revenues in his hydro power project (IRL 13). The PP has clearly shown evidence of early consideration of VER carbon revenues in Kumköy hydro power project (IRL 14). The financial obligations of AES Enerji Ltd. have been confirmed.

19 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 19 of 26 holders / (approved on ) The PP has signed an agreement on consultancy contract with Elysium Ltd. / The Local Stakeholder Consultation Meeting related to Kumköy HEPP. / TÜV SÜD has been given the order for Kumköy HEPP validation services / GSP of the project activity at TÜV SÜD webpage has been published. / Contract signed by AES IC and Elysium Ltd. (IRL No.45) MoM of Local Stakeholder Consultation Meeting (IRL No.20) Order sheet signed by AES and TÜV SÜD (IRL No. 60) (IRL No. 59) TÜV SÜD has checked the authenticity of consultancy contract. TÜV SÜD confirms that this is in line with EB 62, Annex 13 paragraph 6 (b). TÜV SÜD has checked the evidences of Stakeholder consultation. TÜV SÜD confirms that this is in line with EB 62, Annex 13 paragraph 6 (b) The PP has continued the process of validation. The DOE has announced the process of validation for Kumköy HEPP. The above mentioned actions confirm that the project complies with the requirements to demonstrate the prior consideration of the CDM Identifications of alternatives The output of the project is electricity supplied to the public grid of Turkey. The list of alternatives to supply the above mentioned results, which are also presented in the VER+ PDD, includes the project activity undertaken without being registered as VER+ project. One alternative to the project activity refers to power plants using other renewable energy sources (wind, solar, geothermal). It has been demonstrated that these energy sources are not available or sufficient for a feasible power plant operation in the region. The alternative operation of a fossil fuel power plant with the same capacity in the region is found to be not realistic. Finally, the continuation of the current situation, i.e. purchasing electricity from the grid without the implementation of the project activity is a realistic option. The remaining alternatives presented do include all plausible scenarios taking into account the local and sectoral situations for the mentioned results. The list of alternatives is therefore considered complete Investment analysis The PP uses the investment analysis to demonstrate the additionality. The financial returns of the proposed project are insufficient to justify the investment. The input parameters used in the financial calculations have been validated based on the sources presented in the VER+ PDD (sub-step 2c and 2d), inter alia: investment costs, electricity generation,

20 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 20 of 26 electricity sale price, O&M costs were the same that were confirmed verbally on-site. Furthermore, the period of time between the finalization of the FSR (IRL No. 26) and the investment decision is only 7 months, therefore it can be confirmed that it is unlikely that the input values have significantly changed. Following references regarding the data source used for input parameters have been provided: Investment costs (including the supply and installation costs of the complete turbinegenerator units) are indicated in EPC (IRL No. 22); O&M costs consist of many components: Water Usage fee (IRL No.15) License tender fee (IRL No.58), staff salaries, and other foreseen repair costs; electricity generation data is indicated in FSR (IRL No. 26). Additionally, confirmation with the loan conditions of the financing institution Yapı Kredi Bankası (IRL No. 42), interest rates of Central Bank for bonds, electricity sale prices estimated by Pöyry Energy Consulting (IRL No. 65), VER revenues estimated in the carbon market report by Energy & Commodity Services GmbH report (IRL No. 14)show, that the parameters are plausible and can be considered acceptable under the project situation. The post-tax equity IRR calculation is prepared for 40 years period. No residual value is applied due to full depreciation of the assets. The financial calculations have been verified and no mistakes have been found. This confirms that the calculations are correct. The equity IRR is calculated to 9.50%. The benchmark used for the financial comparison of the Equity IRR is the Cost of the Equity and has been calculated with CAPM model, taking into account the relevant values at the moment of taking the investment decision, i.e. the Share Purchase Agreement dated , between AES Enerji Ltd. and IC İbrahim Çeçen Yatırım Holding A.Ş., that confirms the expenditures by AES Enerji Ltd. for the project activity. As per the EB 62, Annex 5 Guidelines on the Assessment of Investment Analysis (version 05) paragraph 12, required/expected cost of the equity is an appropriate benchmark for equity IRR. The benchmark has been derived based on the publicly data sources which have been clearly validated by TÜV SÜD. Cost of equity The cost of equity has been determined using the Capital Asset Pricing Model (CAPM). The CAPM approach to risk analysis calculates the risk premium associated with the project. The CAPM assesses risks at a market level and not by looking at an individual s risk preferences and therefore is sufficient to analyze the appropriate rate of return necessary to compensate investors for the risk faced in the proposed project activity. The assumptions used in this model to arrive at the cost of equity have been validated as follows: Risk free rate of 4.7% corresponding to the return of 30Y US T-bills (source Average total return of common stocks over the income return of long-term treasury securities ( )-Working assumption - Ibbotson Associates and cross checked with Bloomberg (IRL No. 66). It is considered conservative to use the USA data and the 30 long-term bills rate is suitable considering the period of the project. Market risk premium is 6.8% and is calculated as average yearly return on S&P500 index between Jan 1950 and Dec The value is close to the value for equity risk premium (6.5%) in Appendix I to Guidance on assessment of Investment analysis. the EB 62, Annex 5 can be confirmed as plausible.

21 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 21 of 26 Beta coefficient is calculated as an average beta for the period 2001 till 2006 for 15 U.S. Electric Utilities companies. The beta is unlevered taking into account the specific debt/equity ratio for each company. Source: Average unlevered Beta is calculated as 0.58 which is considered as conservative value. This total Equity Risk Premium (Beta x Equity risk premium) is considered reasonable as it measures the rate of return investors seek to compensate them for investing in higher risk equity based assets rather than risk free securities. This is deemed appropriate and acceptable. Country Risk Premium 2.4 % is calculated as spread between the dollar denominated sovereign debt of the project country and the corresponding US Treasury bond. The applied value is more conservative compared to the country risks premiums presented by Damodaran Datasets- Risk Premiums for Other Markets, At the moment when AES took the decision to acquire the 51% of AES-IC capital, the benchmark calculated in the following way was used as a discount rate to calculate equity return of the hydro projects in AES-IC portfolio and in the estimation of the contract cost of hydro projects under EPCs (Engineering Procurement & Constructions Contract). The applied benchmark Return on equity 11% is appropriate and applicable to the project activity and is suitable to be compared with post-tax equity IRR. Sensitivity analysis As per Guidance on the Assessment of Investment Analysis (IRL No. 67), only variables that constitute more than 20% of total project costs or total project revenues have been subjected to reasonable variations. The sensitivity analysis has been carried out for ±10% variation in following key parameters: project investment cost, O&M cost, electricity sales price, and electricity output. The IRR values vary in a range between 8.19 % and %. The sensitivity analysis indicates, that an increase of 10 % in electricity generation and price would put the IRR with % close to the benchmark of 11 %, but the benchmark is not crossed for the variation of the aforementioned parameters; thereby indicating that the economic unattractiveness is robust to reasonable variations in the critical assumptions. In light of the above it can be stated that the input values used in the investment analysis are suitable for the project type Barrier analysis Other related barrier has been discussed below. Investment barriers Following the privatization of the energy market in 2001, the renewable energy law was introduced in 2005 with the fixed feed-in tariffs of 5.50 Euro-Cent/kWh. At the time of tendering for Kumköy HEPP in 2006, the loan conditions for renewable energy investments were not favorable, because the mechanisms of the new liberal energy market were not predictable for the finance institutions. According to the privatization procedures, projects are tendered by the state and awarded to the highest bidder, this leads to additional expenditures for the project participants. The energy estimates in tender documents are based on the feasibility studies that have been prepared by the State Water Works DSI. Revised feasibility studies from 2005 and 2008 and preliminary consultations with the technology supplier in 2008 have resulted in a lower net head and an adjustment of energy estimates of the project activity. Technological Barriers

22 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 22 of 26 The application of bulb type turbine-generator technology is rare within the project boundary. The bulb-type technology is the first of its kind to be implemented by a private investor, the reliable operation and maintenance of the new technology represents a risk for the project participant. The other three existing bulb-type hydro power plants that are located in different regions of the grid are of different size and capacity and owned and operated by the state electricity company EUAS. Prevailing Practice and Other Barriers According to the information of State Water Works DSI and state Power Company EUAS in 2008, no grid connected, privately operated bulb type power plants were reported. As indicated in the water usage rights agreement with the State Water Works DSI, the priority of the river basin water management focuses mainly on irrigation, thus a reduced capacity in the river and a limited water diversion to Kumköy HEPP may lead to a decrease of power generation. This uncertainty in power generation prevents attractive long-term contracts with private consumers, who in turn would demand a continuous power supply. The license for Kumköy HEPP is issued for about 40 years, however the water usage rights are granted for 20 years. There are no indices regarding the extension of the agreement after that period, thus this means a risk in the long term. Please note that the barrier analysis is given as supportive information to present the project specific difficulties and market situation Common practice analysis The region for the common practice analysis has been defined as Turkey. A general overview of the hydro power generation in Turkey has been given in the webpage of the State Water Works DSI (IRL No. 9). The number and capacity of applications and approvals of hydro power plants based on the new energy market regulation directives are summarized in Table 12 of the VER+ PDD (IRL No. 32). The data has been cross checked with the reference source of the Energy Market Regulatory Authority EMRA and found to be consistent. As of 2008, 26 mostly run of river hydro power plants with a total capacity of 396 MW were built and operational in accordance with the Renewable Energy Law (IRL No.7), by making use of the feed-in tariff. Compared with the total installed hydro power capacity of 13,700 MW, it can be concluded that the privately owned and operated hydro power plants make only 3 % of the total hydro power capacity of Turkey. Regarding hydro power plants of similar size, type and technology, only 3 hydro power plants with bulb-type turbine units have been identified in Turkey: MW Karkamis HEPP - 6 MW Kepez II HEPP MW Seyhan HEPP The above mentioned information was cross checked with the publicly available data of the licensing authority EMRA (IRL No.61) and the State Water Works DSI (IRL No. 9) and found correct. In a letter, the state electricity generation company EUAS has confirmed this information (IRL No. 48). It was stated, that these 3 hydro power plants are built, owned and operated by Government. So, it can be confirmed that the proposed project activity is not a common practice in host country in the form of private investment.

23 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 23 of Monitoring plan The monitoring plan presented in the VER+ PDD complies with the requirements of the applicable methodology. The assessment team has verified all parameters in the monitoring plan against the requirements of the methodology; no relevant deviations have been found. The procedures have been reviewed by the assessment team through document review and interviews with the relevant personnel. This information, together with a physical inspection, allows the assessment team to confirm that the proposed monitoring plan is feasible and within the project design. The major parameters to be monitored have been discussed with the PP, especially the location of meters, data management, and the quality assurance and quality control procedures to be implemented in the context of the project. The main parameter to be monitored for the emission reduction calculations is the net electricity EGy. EGy is the result of electricity supplied to the grid minus electricity supplied from the grid. According to the single line diagram (IRL No.28), two bidirectional meters are installed at the end of the 31.5 kv transmission line to Carsamba TM station. The ACTARIS electricity meters, type SL 7000 SL 761 A, bi-directional, accuracy class 0.2s (at transformer) are checked and reset on by the grid operator TEIAS (IRL No. 54). The meters (main and backup) are owned by the grid operator TEIAS, they will be maintained and controlled by TEIAS, who will be notified of any failure or malfunction of the meters. The calibration of meters follows the procedures set by the Ministry of Industry and Trade, they shall be calibrated every 10 years. The data will be read and recorded in the internal meter storage. At the end of the month the stored data will be read and recorded to external backup systems by TEIAS staff. This mutually signed monthly data protocol is the basis for emission reduction calculations. The consistency of daily meter data will be cross checked by using the SCADA data available online. Invoice data will also be used as a mean of cross check. Further parameters in the monitoring plan are the installed available capacity Cap PJ and the surface area of the reservoir A PJ during the operation. By monitoring these two parameters, the project participant will check, whether the power density is greater than the critical limit of 4 W/m 2 set by the methodology. Therefore, we find that the PP s will be able to implement the monitoring plan and the emission reductions achieved can be reported ex-post and verified. 3.8 Sustainable development The Host country is not Party to the Kyoto Protocol and does not have the relevant entities, e.g. an LoA has not been issued. Nevertheless the project has been evaluated within the environmental aspects of the Host country and contributes to the sustainable development of Turkey. 3.9 Local stakeholder consultation The relevant local stakeholders have been invited by the external organizing company Çınar Mühendislik Ltd. Şti. to a meeting in the local café of the village Kumköy dated (IRL No. 20). The agenda of the meeting was clearly referring to the Emission Reduction impact of the project activity. The local stakeholder consultation meeting was announced on in a local newspaper. Furthermore invitation letters to official entities, i.e. Directorate of Environment and Forestry, Mayor of the Provincial Community, Mayors of Kumköy, Orduköy villages and the public in the surrounding villages. The assessment team has reviewed the documentation in order to validate the inclusion of relevant stakeholders. It can be confirmed that the communication method used to invite the stakeholders was considered appropriate. The summary of comments presented in the VER+ PDD has been verified with the documentation (hard copies, video CD) of the stakeholder consultation and is found to be complete. The participant list was signed by the present stakeholders. A summary of the project description in Turkish was submitted to the participants. Also a questionnaire was distributed for any comments by the stakeholders.

24 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 24 of 26 Comments presented by the local stakeholders have been taken into account by the PP. This has also been verified with information obtained during interviews. No issues on resettlement were raised during the meeting. The main concern of the participating villagers was about the impact of the new reservoir and the embankments in case of flooding. The project participant referred to the responsibility of the State Water Works DSI in this issue, who was directly supervising the construction works regarding the project activity. Hence the local stakeholder consultation has been adequately performed according to the CDM and VER+ requirements Environmental impacts The project participant was applied to the General Directorate of Environment Impact Assessment Affairs at the Ministry of Environment and Forestry. Considering the current regulations, that power plants with capacities less than 50 MW are not obliged to prepare an EIA study, a confirmation of non-eia necessary has been issued to the project participant by the Ministry of Environment and Forestry. (IRL19). Nevertheless the project participant contracted the external company PPT Ltd. to implement an analysis of environmental impacts at the Kumköy Hydro Power Plant area. The assessment team reviewed the documentation of the presented information Environment Impact of Kumköy Hydroelectric Power Plant (IRL No.18) and confirms the correctness of the approach used by the PP. We conclude that the PP followed the requirements of the host country in regards to environmental impacts. There was no resettlement due to the Project Activity.

25 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 25 of 26 4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS TÜV SÜD published the project documents on TÜV SÜD s own website, and invited comments by affected Parties, stakeholders, and non-governmental organisations during a 30 day period. The following table presents all gathered key information: webpage: Starting date of the global stakeholder consultation process: Comment submitted by: Issues raised: None - Response by TÜV SÜD: - No comments were received.

26 Validation of the VER+ Project: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Page 26 of 26 5 VALIDATION OPINION TÜV SÜD has performed a validation of the following proposed VER+ project activity: Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Standard auditing techniques have been used for the validation of the project. Methodology-specific protocol for the project has been prepared to carry out the audit in order to present the outcome in a transparent and comprehensive manner. The review of the project design documentation, subsequent follow-up interviews and further verification of references have provided TÜV SÜD with sufficient evidence to determine the fulfilment of stated criteria in the protocol. In our opinion, the project meets all requirements of VER+ Standard GHG 30 v.2.0. Therefore, TÜV SÜD will recommend the project for registration by the Blue Registry. An analysis as provided by the applied methodology demonstrates that the proposed project activity is not a likely baseline scenario. Emission reductions attributable to the project are additional to any that would occur in the absence of the project activity. Given that the project is implemented as designed, the project is likely to achieve the estimated amount of emission reductions as specified within the final VER+ PDD version. The validation is based on the information made available to us, as well as the engagement conditions detailed in this report. The validation has been performed following the VVM requirements. The single purpose of this report is its use during the registration process as part of the VER+ project cycle. TÜV SÜD can therefore not be held liable by any party for decisions made, or not made, based on the validation opinion beyond that purpose. Munich, Munich, Thomas Kleiser Certification Body climate and energy TÜV SÜD Industrie Service GmbH Khalid Mahmood Assessment Team Leader

27 Validation of the VER+ Project: Kumköy 17.5 MW Hydroelectric Power Plant, Turkey Annex 1: Validation Protocol

28 Table 1 Conformity of Project Activity and PDD CHECKLIST TOPIC / QUESTION Ref. COMMENTS A. General description of project activity A.1. Title of the project activity A.1.1. A.1.2. A.1.3. Does the used project title clearly enable to identify the unique CDM activity? Are there any indication concerning the revision number and the date of the revision? Is this consistent with the time line of the project s history? A.2. Description of the project activity A.2.1. Is the description delivering a transparent overview of the project activities? The project title indicates several power plants, in fact there is only one power plant onsite. The hydroelectric power plant (HEPP) Kumköy consists of 3 turbine/generator units. CAR #1 : There are some errors (such as syntax, spelling, a.o) through the whole PDD document. The project participant and PDD consultant should pay more attention to avoid such mistakes. 31 The revision number and the date of the issuance of this revision we received is indicated (version 03, June 10, 2008). 31 The dates in the project documents are in consistency with the time line of the project development. 31 The description of the project activity does not reflect a transparent overview of the project details. The licence issued on 05 July 2007 is for a capacity of 15 MW. The project owner applied to EMRA by 13 June 2008 for an upgrade of installed capacity from 15 MW to 18 MW and expects an annual electricity production of MWh (table A.4.4). However the turbine supplier estimates a capacity of 17.5 MW. Another critical issue is the water being diverted for irrigation purposes. The energy generation capacity will be reduced by approx. 20 to 25 % once the irrigation systems for Çarşamba Plain are in operation. PDD in GSP CAR #1 CAR #2 FAR#1 CAR #3 Final PDD Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-1

29 CHECKLIST TOPIC / QUESTION Ref. COMMENTS CAR#2 : The annual energy generation data should be adjusted according to the design data of the purchased turbines. FAR#1: For the first verification an updated license for 18 MW should be provided. CAR#3: It is assumed, that the irrigation system will not go into operation within the first crediting period (table A.4.4), a reduction in energy production is not considered. But the irrigation of the Çarşamba Plain is important for agro-economic and social reasons and will be dealt with priority. Therefore the approach of AES IC is maybe not conservative. Any kind of evidence (e.g. schedules) should be provided which shows when irrigation system will go earliest into operation. PDD in GSP Final PDD A.2.2. A.2.3. What proofs are available demonstrating that the project description is in compliance with the actual situation or planning? Is the information provided by these proofs consistent with the information provided by the PDD? 31 Relevant documents were presented and checked. They include: Production licence from EMRA Water Rights Permission by DSI EIA of the HEPP Turbine purchase and delivery agreement Financial Feasibility Report Data on the flow rates and design flows delivered by the DSI Single line diagram of the electrical system of the Hydro PP On site assessment (pictures) 32 The information provided by the PDD corresponds principally with the information surveyed by the assessment team. 2 The on site assessment resulted following facts : The weir built by DSI across the river Yeşilırmak consists of 4 sections with differ- CAR #4 Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-2

30 CHECKLIST TOPIC / QUESTION Ref. COMMENTS ent functions : - Construction unit on the left and right side of the weir for irrigation purposes. - Construction unit with several gates for flood control - Construction unit for HEPP - Construction of dykes left and right of the riverbank close to the weir for diverting the river flow to the power plant and a run of river reservoir Under full operation, the whole river flows through the HEPP, unless there is overflooding and/or irrigation due agriculture. There will be a storage capacity at the weir due to run of river reservoir. CAR#4 : It must be clarified anyway, whether this is a run-of-river project (usable maximum volume of water intake area, average flow of river, design flow of turbine). CAR#5 : The technical data which should be consistent to the design data and the real situation has to be added (technical data of turbine and generator plate and the physical possible maximum capacity, max. flow, minimum flow, net-head). Higher capacity data must be explained clearly. The PDD states that This project is the first emission reduction project in Turkey, and by that, the project will contribute to establishing high social standards and practices. CAR#6 : This project is not the first VER project in Turkey, it is one of the first hydropower VER projects. Beyond that, it is a rather standard approach and clear evidence of particularly high standards and PDD in GSP CAR #5 CAR# 6 Final PDD Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-3

31 A.2.4. CHECKLIST TOPIC / QUESTION Ref. COMMENTS Is all information presented consistent with details provided by further chapters of the PDD? IRL3 2 practices has to be demonstrated. Detailed information as well as summaries are consistent throughout the PDD. The PDD text states Improving the local and regional economic development by providing electricity to meet increased demand by: (a) alleviating poverty by creating job opportunities, and (c) contributing to the local investment environment. PDD in GSP CAR #7 Final PDD CAR#7 : The argument (b) is missing. Further, the numbering of the following figures is not correct : In PDD A / B.4: fig.2 is in A.4.1.4, fig.1 is in B.4. A.3. Project participants A.3.1. Is the form required for the indication of project participants correctly applied? IRL3 2 IRL4 5 According to the reviewed documents, AES IC ICTAŞ is the project owner (participant) and not project developer as mentioned in the PDD. The project participant of the host country is clearly indicated according in section A.3 to the required form. Elysium Ltd. is responsible for the completion of the PDD. It is also listed in Annex 1 together with AES Carbon Exchange Ltd. Elysium Ltd. is also entitled to keep the backup metering data (see monitoring plan B.7.2.) CAR#8 CAR#8 : The role of mentioned project proponents must be clarified (project participant?, developer, consultant?). Also the role and function of AES Carbon Exchange Ltd. must be explained. PDD has to be consistent, too. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-4

32 CHECKLIST TOPIC / QUESTION Ref. COMMENTS PDD in GSP Final PDD A.3.2. A.3.3. Is the participation of the listed entities or Parties confirmed by each one of them? Is all information on participants / Parties provided in consistency with details provided by further chapters of the PDD (in particular annex 1)? A.4. Technical description of the project activity There is just one participant. The participation of AES IC is confirmed. He has been contacted directly. See remarks in A.3.1. All provided information on the participant AES IC Içtaş Enerji Üretim ve Ticaret A.Ş.is consistent with the whole PDD. See also A.3.1 A.4.1. Location of the project activity A Does the information provided on the location of the project activity allow for a clear identification of the site(s)? In the PDD there is one overview map and one detailed map which indicate clearly the position of the Hydro PP on the Yeşilırmak River, in the Province Samsun / Çarşamba. This has been verified by the audit team during an onsite visit on 06 July A How is it ensured and/or demonstrated, that the project proponents can implement the project at this site (ownership, licenses, contracts etc.)? IRL17 The production license issued (05 July 2007) for AES IC IÇTAŞ by EMRA, the Turkish Energy Market Regulatory Authority, indicates the site of HEPP clearly. The purchase agreement for the turbines and the respective loan contracts with financial institutions are presented. The permissions for the grid-connections are not documented yet. FAR#2 (see CR#3) : FAR#2 For the first verification the permissions for the grid-connections should be provided. A.4.2. Category(ies) of project activity A To which category(ies) does the project activity belonging to? Is the category cor- IRL2 The project belongs to the category grid-connected renewable power generation project activities. This is correctly identified and Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-5

33 A.4.3. A A A A A CHECKLIST TOPIC / QUESTION Ref. COMMENTS rectly identified and indicated? Technology to be employed by the project activity Does the technical design of the project activity reflect current good practices? Does the description of the technology to be applied provide sufficient and transparent input/ information to evaluate its impact on the greenhouse gas balance? Does the implementation of the project activity require any technology transfer from annex-i-countries to the host country(ies)? Is the technology implemented by the project activity environmentally safe? Is the information provided in compliance with actual situation or planning? IRL32 indicated. Even if the project will generate VERs, CDMmethodology has been applied to be prepared for a time where a registration of Turkish projects as JI or CDM activity is possible. ACM0002 is the most appropriate CDM methodology for gridconnected hydro power plants, version According to Annex A of Kyoto Protocol the project is in category 1 Energy Industries... The project reflects a professional standard scale HEPP as it can be found in many European countries. As part of the new energy strategy of the host country, renewable energy sources will be exploited intensively. No. Important electromechanical components such as turbines, generators and other equipment are imported from a non-annex I country, i.e. China. HARBIN is the supplier.. The project complies with the directives on environment. This is supported with the Environmental Impact Assessment report and the approval by the Ministry of Environment and Forestry. The plant is expected to go into operation in 01 April The construction works are not yet completed by DSI and can not be handed over to AES IC. AES IC is unable to proceed with its work as scheduled. Furthermore the reservoir barriers alone the left and right side of the riverbank and the diversion weir on the Yeşilırmak river are not completed yet. CAR#9 : PDD in GSP CAR#9 Final PDD Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-6

34 CHECKLIST TOPIC / QUESTION Ref. COMMENTS The planning schedule must be modified in view of these obstacles. Hence also the startup date and the crediting period has to be adjusted accordingly. PDD in GSP Final PDD A A A A Does the project use state of the art technology and / or does the technology result in a significantly better performance than any commonly used technologies in the host country? Is the project technology likely to be substituted by other or more efficient technologies within the project period? Does the project require extensive initial training and maintenance efforts in order to be carried out as scheduled during the project period? Is information available on the demand and requirements for training and maintenance? A Is a schedule available for the implementation of the project and are there any risks for delays? IRL24 The Project Activity will use Bulb type turbines. Similar HEPP with the same turbine-type will be built in the next future in Turkey. No. It is not expected that today s highly efficient turbines will be substituted by better technologies within the project period.. In the first two years the turbine manufacturer will be responsible for the guarantee. The warranty period is 6 months. Training of the operation and maintenance personnel is part of the contract. IRL49 Extensive documentation and instruction material is not yet worked out. FAR#3 (see FAR#1) : The documentation for training and maintenance should be considered with priority by the project management. A training and maintenance program must be implemented. IRL32 A detailed implementation schedule does not exist. Starting date of the project is fixed as 01 May 2010 according to C Unforeseen delays, however, cannot be excluded. The purchase agreement with the turbine supplier is signed, the first steps for the placement within the power house and other details are still pending. See comment above A FAR#3 Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-7

35 A.4.4. A CHECKLIST TOPIC / QUESTION Ref. Estimated amount of emission reductions over the chosen crediting period Is the form required for the indication of projected emission reductions correctly applied? COMMENTS The form should follow the guidelines for applying the -PDD format. The period for the emission reduction is 7 years as indicated in Table A.4.4. It is planned to be extended by 2x7 years. The scenario of reduced energy generation due to irrigation is not considered for the first crediting period. See comment above section A.2.1 PDD in GSP Final PDD A Are the figures provided consistent with other data presented in the PDD? IRL32 IRL35 The figures are not consistent with the data in the PDD and in the supporting documents. CAR#10 : The emission reduction amounts in Table A.4.4 must be consistent within the PDD, e.g. using the same emission factor. CAR#10 A.4.5. A A Public funding of the project activity Is the information provided on public funding provided in compliance with the actual situation or planning as available by the project participants? Is all information provided consistent with the details given in remaining chapters of the PDD (in particular annex 2)? IRL7 IRL32 B. Application of a baseline and monitoring methodology No public funds is required for the financing of the project (IRL 7) All information provided is consistent with the details given in remaining chapters of the PDD. B.1. Title and reference of the approved baseline and monitoring methodology B.1.1. Are reference number, version number, and title of the baseline and monitoring methodology clearly indicated? IRL2 IRL32 The methodology ACM0002, version 12.2 are clearly indicated in section B1 and B.2 of the PDD. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-8

36 B.1.2. B.1.3. CHECKLIST TOPIC / QUESTION Ref. COMMENTS Is the applied version the most recent one and / or is this version still applicable? Does the methodology refer to the following tools with its latest approved versions: - Tool to calculate the emission factor for an electricity system - Tool for the demonstration and assessment of additionality - Tool to calculate project or leakage CO 2 emissions from fossil fuel combustion IRL32 CAR #11 : Version 04 of the additionality tool is mentioned in PDD but it is not any more valid.. In IRR calculation sheet the 3rd year the '-Commercial Credit- EUR ( Converted to USD) in inflow has negative value ( ) Please provide explanation how the benchmark for equity IRR is calculated. All data has to be evidenced with sources of information. A sensitivity analysis has to be included. ACM0002, version 12.2, is applicable to determine the baseline and the monitoring. B.2. Justification of the choice of the methodology and why it is applicable to the project activity... PDD in GSP CAR#11 Final PDD B.2.1. Is the applied methodology considered the most appropriate one? IRL2 IRL4 Even if the project will generate VERs, a CDM-methodology has been applied to be prepared for a time where a registration of Turkish projects as JI or CDM activity is possible. CAR#12 ACM0002 is the most appropriate CDM methodology for gridconnected electricity generation from renewable sources. The power density of the reservoir is approx. 27 W/m2. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-9

37 CHECKLIST TOPIC / QUESTION Ref. COMMENTS Futhermore, for the calculation of BM the standard options of ACM0002 were not used. An alternative methodology was choosen which was used for Chinese projects. CAR#12: The used method is not acceptable as we know that better information about the recent implemented power plants is available, e.g. by Turkish Electricity Transmission Company (TEIAS). This gives a more actual percentage of used fuel types and technologies. PDD in GSP Fill in the required amount of sub checklists for applicability criteria as given by the methodology applied and comment at least every line answered with No B.2.2. Criterion 1: Type of electricity capacity addition by grid-connected renewable power generation The following types are possible: hydro power plant/unit (either with a run-of-river reservoir or an accumulation reservoir), wind power plant/unit, geothermal power plant/unit, solar power plant/unit, wave power plant/unit or tidal power plant/unit. B.2.3. Criterion 2 (in the case of hydro plants): -The project activity is implemented in an existing reservoir, with no change in the volume of reservoir or -The project activity is implemented in an existing reservoir, where the volume of reservoir is increased and the power density of the project activity is greater than 4 IRL2 Applicability checklist Criterion discussed in the PDD? Compliance provable? Evidences provided in the PDD? Compliance verified? Applicability checklist Criterion discussed in the PDD? Compliance provable? Evidences provided in the PDD? Compliance verified? / No / No The project results in a new reservoir, the power density is 27 W/m2. Final PDD Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-10

38 B.2.4. CHECKLIST TOPIC / QUESTION Ref. COMMENTS W/m2 or -The project activity results in new reservoirs and the power density of the power plant is greater than 4 W/m2. Criterion 3 (in the case of modification/retrofit in existing power plants): 5 years of historical data (or 3 years in the case of non hydro project activities) are available Not applicable. B.2.5. Criterion 4: Defined electricity grid boundaries Applicability checklist / No Criterion discussed in the PDD? Compliance provable? Evidences provided in the PDD? Compliance verified? PDD in GSP Final PDD B.2.6. Criterion 5: Approved inclusion in other methodologies (if applied only) Applicability checklist Criterion discussed in the PDD? Compliance provable? Evidences provided in the PDD? Compliance verified? / No NA NA NA NA B.2.7. Criterion 6: Exclusion of fuel switching activities Applicability checklist / No Criterion discussed in the PDD? Compliance provable? Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-11

39 CHECKLIST TOPIC / QUESTION Ref. COMMENTS Evidences provided in the PDD? Compliance verified? PDD in GSP Final PDD B.2.8. Criterion 7: Exclusion of biomass fired power plants Applicability checklist Criterion discussed in the PDD? Compliance provable? Evidences provided in the PDD? Compliance verified? / No B.2.9. Criterion 8: Exclusion of hydro power plants that result in new reservoirs or in the increase in existing reservoirs where the power density of the power plant is less than 4 W/m2. Applicability checklist Criterion discussed in the PDD? Compliance provable? Evidences provided in the PDD? Compliance verified? / No B.3. Description of the sources and gases included in the project boundary Integrate the required amount of sub-checklists for sources and gases as given by the methodology applied and comment on at least every line answered with No B.3.1. B.3.2. Source: Fugitive Emissions from non-condensable gases contained in geothermal steam (geothermal power plants only) Gas(es): CO 2, CH 4 Type: Project Emissions Source: Emissions from combustion of fossil fuels required to operate the geothermal power plant (geothermal power plants only) Gas(es): CO 2 Not applicable Not applicable Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-12

40 B.3.3. B.3.4. CHECKLIST TOPIC / QUESTION Ref. COMMENTS Type: Project Emissions Source: Emissions from the reservoir (hydro power plants only) Gas(es):, CH 4 Type: Project Emissions Source: Emissions from electricity generation in fossil fuel fired power plants that is displaced due to the project activity Gas(es): CO 2 Type: Baseline Emissions The power density PD is determined to 27 W/m2, according to the criteria (PD>4 W/m2) in the methodology ACM0002, no methane emissions are expected. Boundary checklist Source and gas(es) discussed by the PDD? Inclusion / exclusion justified? Explanation / Justification sufficient? Consistency with monitoring plan? / No PDD in GSP Final PDD B.3.5. Source: Emissions from electricity generation in fossil fuel fired power plants of any connected electricity system Gas(es): CO 2 Type: Baseline Emissions IRL2 IRL5 Boundary checklist / No Source and gas(es) discussed by the PDD? NA Inclusion / exclusion justified? NA Explanation / Justification sufficient? NA Consistency with monitoring plan? NA B.3.6. Source: Emissions from electricity generation in fossil fuel fired power plants of imported electricity (project electricity consumption) Gas(es): CO 2 IRL8 IRL32 IRL35 Boundary checklist / No Source and gas(es) discussed by the PDD? Inclusion / exclusion justified? No Explanation / Justification sufficient? No Consistency with monitoring plan?? CAR#13 CAR#13 It has to be explained how imported electricity is considered. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-13

41 B.3.7. CHECKLIST TOPIC / QUESTION Ref. COMMENTS Do the spatial and technological boundaries as verified on-site comply with the discussion provided by the PDD? IRL2 The description of project boundaries and spatial extent of project boundaries are not applied in consistency to the definitions in the ACM0002 methodology. CAR# 14 : The project boundaries should be described according to the definitions given in the ACM0002 methodology. B.4. Description of how the baseline scenario is identified and description of the identified baseline scenario PDD in GSP CAR#14 Final PDD B.4.1. Is it clearly described that the baseline is IRL2 Combined margin approach is used. represented by the combined margin of the grid the activity will be connected to? B.4.2. In case of any modification or retrofit of Not applicable. existing facilities: Is data available to determine the historic production level? B.4.3. In case of any modification or retrofit of existing facilities: Have conservative assumptions been applied in order to estimate the point in time when the existing equipment needs to be replaced? Not applicable. Changes required for methodology implementation in 2 nd and 3 rd crediting periods B.4.4. B.4.5. Has the continued validity of the baseline been correctly assessed? Has the baseline been updated with new data? n.a. n.a. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-14

42 CHECKLIST TOPIC / QUESTION Ref. COMMENTS PDD in GSP B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered CDM project activity (assessment and demonstration of additionality): Final PDD B.5.1. Is evidence provided, that CDM/VER has been considered seriously in the decision to proceed with the project activity (climate change project decision before project start)? IRL13 IRL14 IRL31 IRL45 Not yet. In PDD it is stated only because of the mitigation of financial and bureaucratic risks, it was considered to apply as a climate change project. The project developer won the bid for the operation license rights in CR#1 CR#1: Please provide the respective evidence of considering the mechanism of climate change projects. B.5.2. B.5.3. B.5.4. Have realistic and credible alternatives been identified providing comparable outputs or services? (step 1a) Is the project activity without CDM included in these alternatives? (step 1a) Is a discussion provided for all identified alternatives concerning the compliance with applicable laws and regulations? (step 1b) IRL3 IRL32.. No. CAR#15 : A discussion has to be provided in the PDD for all identified alternatives concerning the compliance with applicable laws and regulations. CAR#15 B.5.5. B.5.6. In case the PDD argues that specific laws are not enforced in the country or region: Is evidence available concerning that statement? (step 1b) In case of applying step 2 / investment analysis of the additionality tool: Is the analysis method identified appropriately IRL3 See CAR above, however version 6.0 of Additionality Tool is chosen. The recent version of Additionality Tool should be used. See also comment above B.1.1. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-15

43 B.5.7. B.5.8. B.5.9. CHECKLIST TOPIC / QUESTION Ref. COMMENTS (step 2a)? In case of Option I (simple cost analysis): Is it demonstrated that the activity produces no economic benefits other than CDM income? In case of Option II (investment comparison analysis): Is the most suitable financial indicator clearly identified (IRR, NPV, cost benefit ratio, or (levelized) unit cost)? In case of Option III (benchmark analysis): Is the most suitable financial indicator clearly identified (IRR, NPV, cost benefit ratio, or (levelized) unit cost)? IRL3 IRL3 The simple cost analysis is not applicable for the proposed project because the project activity will produce benefit (from electricity sale) other than carbon credits income. Option III is chosen for the investment analysis. So this section is not applicable. Equity IRR is compared with Cost of the Equity calculated with CAPM model. This is an appropriate benchmark to be compared with equity IRR. See CAR #11 PDD in GSP Final PDD B B B In case of Option II or Option III: Is the calculation of financial figures for this indicator correctly done for all alternatives and the project activity? In case of Option II or Option III: Is the analysis presented in a transparent manner including publicly available proofs for the utilized data? In case of applying step 3 (barrier analysis) of the additionality tool: Is a complete list of barriers developed that prevent the different alternatives to occur? IRR calculation has been reviewed. The calculations of financial figures and equity IRR are correct for all alternatieves. See CAR #11 The difficulties related with specific turbines of the Project Activity and the barriers encountered during the development processs of hydropower projects in Turkish Electricity Market wereanalysed in the PDDs ver 1 to 5. However, in PDD ver 6 and 7, the format of the section has been changed as per the Methodology Tool considering the comment stated in CAR#17. In Step 3 of PDD ver 7, the barriers are discussed according to Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-16

44 B CHECKLIST TOPIC / QUESTION Ref. COMMENTS In case of applying step 3 (barrier analysis): Is transparent and documented evidence provided on the existence and significance of these barriers? IRL48 the additionality tool 6, i.e. Investment barriers, Technological barriers (special turbine) and Other barriers. By means of this evaluation, it has been presented that hydropower projects development is a rather difficult process in Turkey and the market conditions are not favourable. Please note that the barrier analysis is given as supportive information to present the project specific difficulties and market situation. Regarding the additionality issue, the investment analysis in step 2 has been identified and presented as the main appropriate analysis method for the demonstration of additionality in the revised PDD version 7. The Project Activity will be the fourth power plant which is using bulb type turbines in Turkey. The Project Activity is different than the other 3 power plants as the Project Activity has been developed by private sector. According to the information provided officially from Electricity Generation Cooperation (EÜAŞ), there are only three hydropower projects equipped with Bulb-type turbines in Turkey (Annex 10). PDD in GSP Final PDD B In case of applying step 3 (barrier analysis): Is it transparently shown that the execution of at least one of the alternatives is not prevented by the identified barriers? IRL3 The continuation of the current situation, i.e. the purchase of electricity from the existing generation mix of the Turkish public grid is not prevented by the identified barriers in Barrier Analysis in VER+ PDD ver 7. B Have other activities in the host country / region similar to the project activity been identified and are these activities appropriately analyzed by the PDD (step 4a)? IRL3 IRL32 CAR#16 Common practice analysis (step 4 of additionality tool) has to be carried out and explained in the PDD. Furthermore it should be explained how the approval of the project activity will help to overcome the economic and financial hurdles or other identified bar- CAR#16 Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-17

45 B B CHECKLIST TOPIC / QUESTION Ref. COMMENTS If similar activities are occurring: Is it demonstrated that in spite of these similarities the project activity would not be implemented without the CDM component (step 4b)? Is it appropriately explained how the approval of the project activity will help to overcome the economic and financial hurdles or other identified barriers? riers. PDD in GSP Final PDD See CAR above This issue needs further explanation. If the CDM does not alleviate the identified barriers that prevent the proposed project activity from occurring, then the project activity is not additional. See also CAR#16 B.6. Emissions reductions B.6.1. Explanation of methodological choices B Is it explained how the procedures provided in the methodology are applied by the proposed project activity? B Is every selection of options offered by the methodology correctly justified and is this justification in line with the situation verified on-site? B Are the formulae required for the determination of project emissions correctly presented, enabling a complete identification of parameter to be used and / or monitored? B Are the formulae required for the determination of baseline emissions correctly presented, enabling a complete identification of parameter to be used and / or mo- IRL32 IRL3 IRL5 IRL8 it is explained. Step 2: Table 1 is not below, but in appendix 3. See also CAR#1. No. Operating Margin OM: All used data should be explicitly mentioned and their source has CAR#17 Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-18

46 CHECKLIST TOPIC / QUESTION Ref. COMMENTS nitored? to be given at the appropriate tables. At present, no source is given for all 7 tables in annex 3. Therefore the annual electricity production and the annual CO2 emission cannot be matched with other data. There is statistical data available for the Turkish generation mix, in the form of the Turkey s Statistical Yearbook that is released every year by the State Institute of Statistics within the Prime Ministry. It holds data on annual CO2 emissions by sector as well as on electricity generation by sources and electricity imports. This data is more reliable, up-to-date and conservative than own calculations of OM. See also CAR#12 Above section B.2.1 CAR#17A: Please use values from Turkey s Statistical Yearbook for CO2 emissions by electricity production. Electricity generation by fuel types: The calculation for Annual electricity generation (MWh) by fuel types or imported electricity in Turkey is non-conservative. The listed fuel amounts include quantities which are combusted in CHP plants. CAR#17/B: The fuel amount equivalent for heat production has to be excluded from the calculation. PDD in GSP Final PDD Furthermore the calculation considers the total (gross) produced electricity amount and not only the amount of current that was effectively fed to the grid. CAR#17/C: Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-19

47 CHECKLIST TOPIC / QUESTION Ref. COMMENTS The electricity consumption of the plant has to be excluded.only net electicity production can be used for the calculation. Remark: Additionally by summing up figures of OM emission factor all products have been rounded down in a non-conservative manner. PDD in GSP Final PDD B B B Is the choice of options to determine the emissions factor (OM, BM) justified in a suitable and transparent manner? Are the six steps as defined per the Tool for calculation of emission factor for electrical systems correctly applied by the project participants? In case of alternative weighing factors for the Combined Margin: Is the quantification of the alternative weighing factor justified in a suitable and transparent manner? Build Margin BM Calculation: At present not comprehensible. In other projects the required data of capacity addition are readily available. Results from other projects differ considerably from the chosen approach. According to our expertise the last 20% of capacity addition go back to mid 2003, but not 1999, and much more than 8 power units are involved. CAR#17/D: More conservative emission factor assumptions for the BM has to be used, at least according to the 2006 IPCC Guidelines. Also the used efficiencies for the different technologies are not consistent to values for best-available-technologies. IRL4 IRL4 n.a. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-20

48 CHECKLIST TOPIC / QUESTION Ref. COMMENTS PDD in Final GSP PDD B In case of alternative weighing factors for n.a. the Combined Margin: Is the guidance for the PDD concerning the acceptability of alternative weights considered in the discussion? B Are the formulae required for the determination of leakage emissions correctly presented, enabling a complete identification of parameter to be used and / or monitored? n.a. Tool to calculate project or leakage CO2 emissions from fossil fuel combustion B Is the formula required for the determination NA of CO2 project emissions from fossil fuel combustion correctly presented, enabling a complete identification of parameter to be used and / or monitored B Is option A (preferred approach) or option B chosen for the determination of the CO2 emission coefficient COEFi,y and is COE- Fi,y correctly determined?. B Are formulae required for the determination of emission reductions correctly presented?. B.6.2. Data and parameters that are available at validation B Is the list of parameters presented in chapter B.6.2 considered to be complete with regard to the requirements of the applied methodology?. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-21

49 CHECKLIST TOPIC / QUESTION Ref. COMMENTS PDD in Final GSP PDD B Is the choice of ex-ante or ex-post vintage of OM and BM factors clearly specified in the PDD?. Fill in the required amount of sub checklists for monitoring parameter and comment any line answered with No n.a. B Parameter Title: GWP CH4 Global warming potential of methane valid for the relevant commitment period (tco2/tch4) B Parameter Title: EG historical (only applicable to modification/retrofit of an existing gridconnected renewable power plant/unit) n.a. Average of historical electricity delivered by the existing facility to the grid (MWh) B B Parameter Title: DATE BaselineRetrofit (only applicable to modification/retrofit of an existing grid-connected renewable power plant/unit) Point in time when the existing equipment would need to be replaced in the absence of the project activity. Parameter Title: EF Res (only applicable to hydro-power plants with reservoir) n.a. n.a. Default emission factor for emissions from reservoirs (kgco2e/mwh) B Parameter Title: CAP BL (W) (only applicable to modification/retrofit of an existing grid-connected renewable power n.a. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-22

50 CHECKLIST TOPIC / QUESTION Ref. COMMENTS plant/unit) Installed capacity of the hydro power plant before the implementation of the project activity. For new hydro power plants, this value is zero. PDD in GSP Final PDD B Parameter Title: A BL (only applicable to hydropower plant projects with reservoir) Area of the reservoir measured in the surface of the water, before the implementation of the project activity, when the reservoir is full (m2). For new reservoirs, this value is zero (m 2 ). n.a. B Parameter Title: Emission factor of the grid (EF CM in tco2/mwh) IRL32 Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? / No No No No CAR#18 B Parameter Title: Operating margin (EF OM in tco2/mwh) emission factor of the grid CAR#18 The list of parameters which are not monitored has to be completed. Data Checklist Title in line with methodology? / No CAR#18 Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-23

51 CHECKLIST TOPIC / QUESTION Ref. COMMENTS Data unit correctly expressed? Appropriate description? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? PDD in GSP Final PDD B Parameter Title: Build margin (EF BM intco2/mwh) emission factor of the grid See CAR above Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? / No No No No See CAR above B Parameter Title: FC i,m,y, FC i,y, FC i,j,y, FC i,k,y, FC i,n,y and FC i,n,h Amount of fossil fuel type i consumed by power plant / unit m,j,k or n (or in the project electricity system in case of FC i,y ) in year y or hour h (mass or volume unit) Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? / No Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-24

52 CHECKLIST TOPIC / QUESTION Ref. COMMENTS Measurement method correctly described? PDD in GSP Final PDD B Parameter Title: NCV i,y Net calorific value (energy content) of fossil fuel type i in year y (GJ / mass or volume unit) See CAR above Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? / No B Parameter Title: EF CO2,i,y and EF CO2,m,i,y CO2 emission factor of fossil fuel type i in year y (tco2/gj) Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? / No B Parameter Title: EG m,y, EG y, EG j,y, EG k,y and EG n,h Net electricity generated and delivered to the grid by power plant / unit m,j,k or n (or in the project electricity system in case of Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? / No Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-25

53 CHECKLIST TOPIC / QUESTION Ref. COMMENTS EGy) in year y or hour h (MWh) Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? PDD in GSP Final PDD B Parameter Title: EG PJ,h Electricity displaced by the project activity in hour h of year y (in MWh) n.a. (only applicabe for the dispatch data OM) B Parameter Title: η m,y Average net energy conversion efficiency of power unit m in year y Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? / No Parameter Title: A PJ (only applicable to hydropower plant projects with reservoir) Area of the reservoir measured in the surface of the water, after the implementation of the project activity, when the reservoir is full. See CAR above Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? / No No No No Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-26

54 CHECKLIST TOPIC / QUESTION Ref. COMMENTS Has this value been verified? Choice of data correctly justified? Measurement method correctly described? No No No PDD in GSP Final PDD B Parameter Title: fraction of time with low costs /must run plant at the margin (for simple adjusted OM only) See CAR#4 Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? / No B.6.3. Ex-ante calculation of emission reductions B B B Is the projection based on the same procedures as used for future monitoring? Are the GHG calculations documented in a complete and transparent manner? Is the calculation of the operating margin and build margin emission factors documented electronically in a spreadsheet with the relevant information as defined per the Tool for calculation of emission factor for electrical systems? Has this spreadsheet been submitted to the validation team? IRL32 IRL35 See CAR above Mainly yes.. CAR#19 The calculation spreadsheet for OM and BM should be submitted also in electronic form. CAR#19 Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-27

55 B CHECKLIST TOPIC / QUESTION Ref. COMMENTS Is the data provided in this section consistent with data as presented in other chapters of the PDD? B.6.4. Summary of the ex-ante estimation of emission reductions B B B B Will the project result in fewer GHG emissions than the baseline scenario? Is the form/table required for the indication of projected emission reductions correctly applied? Is the projection in line with the envisioned time schedule for the project s implementation and the indicated crediting period? Is the data provided in this section in consistency with data as presented in other chapters of the PDD? The calculated and given values should correspond with each other. However according to CAR#17 the whole CM needs to be recalculated so no particular CAR is made at this section. See CARs above B.7. Application of the monitoring methodology and description of the monitoring plan B.7.1. Data and parameters monitored PDD in GSP. See B See B B Is the list of parameters presented by chapter B.7.1 considered to be complete with regard to the requirements of the applied methodology?. Integrate the required amount of sub-checklists for monitoring parameter and comment on any line answered with No B Parameter Title: EGy Electricity supplied by the project activity Monitoring Checklist / No Title in line with methodology? Final PDD Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-28

56 CHECKLIST TOPIC / QUESTION Ref. COMMENTS to the grid (in MWh) Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided for estimation? Has this value been verified? Measurement method correctly described? Correct reference to standards? Indication of accuracy provided? QA/QC procedures described? QA/QC procedures appropriate? PDD in GSP Final PDD B Parameter Title: TEGy Total electricity produced by the project activity, including the electricity supplied to the grid and the electricity supplied to internal loads, in year y (in MWh). n.a. B Parameter Title: EF grid,cm,y Combined margin CO2 emission factor for grid connected power generation in year y calculated using the latest version of the Tool to calculate the emission factor for an electricity system (tco2/mwh) B Parameter Title: PEFC,j,y CO2 emissions from fossil fuel combustion in process j during the year y (tco2/yr). Calculated as per the latest version of the Tool to calcu- Not applicable, as this protocol refers to the ex-ante determination of CM EF. Not applicable, as this protocol refers to the ex-ante determination of CM EF. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-29

57 CHECKLIST TOPIC / QUESTION Ref. COMMENTS late project or leakage CO2 emissions from fossil fuel combustion B Parameter Title: Cap PJ (only applicable to hydropower plant projects) Installed capacity of the hydro power plant after the implementation of the project activity (W). IRL32 IRL34 Monitoring Checklist / No Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided for estimation? Has this value been verified? Measurement method correctly described? Correct reference to standards? Indication of accuracy provided? QA/QC procedures described? QA/QC procedures appropriate? See CAR#4 PDD in GSP Final PDD B Parameter Title: A PJ (only applicable to hydropower plant projects with reservoir) Area of the reservoir measured in the surface of the water, after the implementation of the project activity, when the reservoir is full (m 2 ). IRL32 IRL34 Monitoring Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided for estimation? Has this value been verified? Measurement method correctly described? Correct reference to standards? Indication of accuracy provided? QA/QC procedures described? QA/QC procedures appropriate? / No See CAR#4 Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-30

58 CHECKLIST TOPIC / QUESTION Ref. COMMENTS See CAR#4 B Parameter Title: w Main,CO2 Average mass fraction of CO 2 in the n.a. produced steam tco2/t steam (for geothermal projects only) B Parameter Title: w Main,CH4 Average mass fraction of CH 4 in the Not applicable produced steam (tch4/t steam). for geothermal projects only) B Parameter Title: M S,y Quantity of steam produced during the year y. Not applicable (for geothermal projects only) Parameters related to the Tool to calculate project or leakage CO2 emissions from fossil fuel combustion B Parameter Title: Quantity of fuel type i combusted in process j during the year y FCi,j,y B Parameter title: Weighted average mass fraction of carbon in fuel type i in year y n.a. n.a. PDD in GSP Final PDD W C,I,y B Parameter title: Weighted average density of fuel type i in year y n.a. ρ i,y Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-31

59 CHECKLIST TOPIC / QUESTION Ref. COMMENTS B Parameter title: Weighted average net calorific value of fuel type i in year y NCVi,y B Parameter title: Weighted average CO2 emission factor of fuel type i in year y n.a n.a PDD in GSP Final PDD EF CO2,i,y B.7.2. Description of the monitoring plan B B B B Is the operational and management structure clearly described and in compliance with the envisoned situation? Are responsibilities and institutional arrangements for data collection and archiving clearly provided? Does the monitoring plan provide current good monitoring practice? If applicable: Does annex 4 provide useful information enabling a better understanding of the envisoned monitoring provisions? IRL2 IRL32 The structures on operational management are not defined clearly. The management has not sufficiently planned the monitoring phase. CAR#20 CAR# 20 : The participant should complete a monitoring plan in detail and define the responsibility and qualification of the personnel. IRL2 See B IRL32 IRL1 IRL2 IRL32 Annex 4 is completely missing. See B Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-32

60 CHECKLIST TOPIC / QUESTION Ref. COMMENTS PDD in GSP B.8. Date of completion of the application of the baseline study and monitoring methodology an the name of the responsible person(s)/entity(ies) B.8.1. B.8.2. B.8.3. B.8.4. Is there any indication of a date when the baseline was determined? Is this consistent with the time line of the PDD history? Is the information on the person(s) / entity(ies) responsible for the application of the baseline and monitoring methodology provided consistent with the actual situation? Is information provided whether this person / entity is also considered a project participant? C. Duration of the project activity / crediting period C.1. Duration of the project activity 01 February 2009 See also A.3 Final PDD C.1.1. Are the project s starting date and operational lifetime clearly defined and reasonable? IRL22 IRL24 IRL25 The starting date may have some delays due to several risks. The technical lifetime is set to 50 years. However the contract for water use rights is set to 20 years. With the version March 2009 the operational lifetime was changed to 38 years which is quite reasonable. However the starting date of project activity is not defined according to CDM requirements. CAR#21 The starting date shall be considered to be the date on which the Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-33

61 CHECKLIST TOPIC / QUESTION Ref. COMMENTS C.2. Choice of the crediting period and related information C.2.1. Is the assumed crediting time clearly defined and reasonable (renewable crediting period of max 7 years with potential for 2 renewals or fixed crediting period of max. 10 years)? D. Environmental impacts project participant has committed to expenditures related to the implementation or related to the construction of the project activity. This, for example, can be the date on which contracts have been signed for equipment or construction/operation services required for the project activity. The crediting period is set to 7 years, with an additional period of further 2x7 years. The startup of operation is foreseen for 01 April FAR#4 (see FAR#2): According to TÜV SÜD VER+ standard, the project has to be reviewed latest together with verification of the year 2013, due to maybe changed status of Turkey regarding Kyoto-Protocol. D.1. Documentation on the analysis of the environmental impacts, including transboundary impacts PDD in GSP FAR#4 Final PDD D.1.1. D.1.2. D.1.3. Has the analysis of the environmental impacts of the project activity been sufficiently described? Are there any Host Party requirements for an Environmental Impact Assessment (EIA), and if yes, has an EIA been approved? Will the project create any adverse environmental effects? IRL18 IRL19 IRL32 IRL32. AES IC submitted an EIA feasibility report for the Kumköy HEPP project to the Ministry of Forestry and Environment. The legislation requests EIA for capacities greater than 50MW, actually no EIA was requested by the authorities. It is a multipurpose project: Irrigation, flood control and energy generation. Each of the tasks were evaluated separately. No significant adverse effects are expected. A good example in this context is the fish ladder, which provides a passage up- and down- Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-34

62 D.1.4. CHECKLIST TOPIC / QUESTION Ref. COMMENTS Were transboundary environmental impacts identified in the analysis? stream. PDD in GSP No. Final PDD D.2. If environmental impacts are considered significant by the project participants or the host Party, please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party D.2.1. D.2.2. Have the identified environmental impacts been addressed in the project design sufficiently? Does the project comply with environmental legislation in the host country? E. Stakeholders comments.. E.1. Brief description how comments by local stakeholders have been invited and compiled E.1.1. E.1.2. E.1.3. E.1.4. Have relevant stakeholders been consulted? Have appropriate media been used to invite comments by local stakeholders? If a stakeholder consultation process is required by regulations/laws in the host country, has the stakeholder consultation process been carried out in accordance with such regulations/laws? Is the undertaken stakeholder process that was carried out described in a complete and transparent manner?.. The public stakeholder meeting was announced by a local newspaper. There are no regulations regarding the local stakeholder consultation process (LSC) in the host country. The LSC has been organized due to the CDM mechanisms.. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-35

63 CHECKLIST TOPIC / QUESTION Ref. COMMENTS E.2. Summary of the comments received PDD in GSP Final PDD E.2.1. Is a summary of the stakeholder comments received provided?. E.3. Report on how due account was taken of any comments received E.3.1. F. Annexes 1 4 Has due account been taken of any stakeholder comments received?. Annex 1: Contact Information F.1.1. F.1.2. Is the information provided consistent with the one given under section A.3? Is the information on all private participants and directly involved Parties presented?. See also A 3.1 Annex 2: Information regarding public funding F.1.3. F.1.4. Is the information provided on the inclusion of public funding (if any) in consistency with the actual situation presented by the project participants? If necessary: Is an affirmation available that any such funding from Annex-Icountries does not result in a diversion of ODA? There is no public funding. See A Not relevant Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-36

64 CHECKLIST TOPIC / QUESTION Ref. COMMENTS Annex 3: Baseline information PDD in GSP Final PDD F.1.5. F.1.6. If additional background information on baseline data is provided: Is this information consistent with data presented by other sections of the PDD? Is the data provided verifiable? Has sufficient evidence been provided to the validation team? IRL6 IRL6. The baseline data is utilized form the webpage of the grid operator TEIAS.. The baseline data is utilized form the webpage of the grid operator TEIAS. F.1.7. Does the additional information substantiate / support statements given in other sections of the PDD?. Annex 4: Monitoring information F.1.8. F.1.9. F If additional background information on monitoring is provided: Is this information consistent with data presented in other sections of the PDD? Is the information provided verifiable? Has sufficient evidence been provided to the validation team? Do the additional information and / or documented procedures substantiate / support statements given in other sections of the PDD? The information on monitoring program is sufficient. The reference source of TEIAS web page can be identified clearly.. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-37

65 Table 2 Resolution of Corrective Action and Clarification Requests Clarifications and corrective action requests by validation team CAR #1 : There are some errors (such as syntax, spelling, a.o) through the whole PDD document. The project participant and PDD consultant should pay more attention to avoid such mistakes. Ref. to table 1 IRL32 Summary of project owner response The PDD has been revised; all the syntax and spelling errors have been corrected. Validation team conclusion The PDD has been revised. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-38

66 CAR#2 : The annual energy generation data should be adjusted according to the design data of the purchased turbines. IRL26 FSR EN-SU The installed capacity and the annual energy generation of the project stated in the license are 15 MW and 96 GWh, respectively. These values have been determined by DSI and the license application has been made accordingly. As a result of the engineering studies carried out by the Owner after the licensing process, the installed capacity has been revised as 18 MW and energy generation as 101 GWh. These revised values have been used in the PDD prepared in 2007 and submitted as version 1. With the design calculations of the project conducted by the turbine supplier, the net head, the efficiencies of turbine, the generator and transformer have been revised and the installed capacity and energy generation changed to 17.5 MW and 97.7 GWh respectively. The version 4 PDD is revised under the consideration of final technical characteristics. The total generator capacity is MWe, by considering transformer losses of 1%, the available electricity generation capacity after the transformer results in to 17.5 MWe, thus all calculations have been adjusted accordingly. The issue is closed. Due to some local generation losses (12%), the total net electricity that would be supplied by the project activity to the grid would be GWh. This last figure was the annual energy generation data used throughout all the updated PDD emission calculations. The final feasibility report has been prepared and the application has been made to file a license amendment according to the updated installed capacity as per the regulations. The final feasibility report has been approved by DSI and the license amendment procedure is underway. Such revisons and updated studies are usual cases of business development activities for all hydropower projects in Turkey. In conclusion, the agreement of electromechanical equipment has been signed according to 17.5 MW. The PDD is revised under the consideration of final technical characteristics and all emission calculations have been changed accordingly. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-39

67 CAR#3: It is assumed, that the irrigation system will not go into operation within the first crediting period (table A.4.4), a reduction in energy production is not considered. But the irrigation of the Çarşamba Plain is important for agro-economic and social reasons and will be dealt with priority. Therefore the approach of AES IC is maybe not conservative. Any kind of evidence (e.g. schedules) should be provided which shows when irrigation system will go earliest into operation. IRL26 FSR EN-SU IRL32 PDD v07 It is the usual case that the construction of the irrigation system can not be completed by the State within the predetermined time due to insufficient budget allocated for the irrigation projects. In addition to which, the irrigation projects at the planning stage, especially the Çarşamba plain irrigation project, need revision studies because of drainage problems in the Çarşamba plain. Furthermore construction of Kumköy weir had started in 1997 but it is still under construction due to insufficient State Budget. Therefore the project in-process irrigation plan is predicted to start in 2020, and the complete development of the irrigation facilities is predicted to be in The details are presented in A.2. Description of The Project Activity section in PDD. This projection was considered in the final feasibility report which was examined and approved by DSİ. DSI approval letter is attached as Appendix 1. That is why that will not affect the Kumköy HEPP flow capacities at the first crediting period operation ( ). DSI approval letter has been presented. The irrigation of the Çarşamba Plain will not affect the Kumköy HEPP flow capacities in the first crediting period operation ( ), because the irrigation plan is expected to start in 2020, and the development of the irrigation facilities is planned to be completed by In sections A.2. Description of Project Activity and A.4.3. Technology to be Employed by the Project Activity of the PDD, it has been explained in detail that the irrigation schedule and the energy generation that have been provisioned accordingly in the feasibility study report prepared by EN-SU Ltd. in June 2008, have been examined and approved by DSI. As the development of irrigation facilities is a large scale ( ha) and long term project, the project activity is unlikely to be affected during the first crediting period operation ( ). The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-40

68 CAR#4 : It must be clarified anyway, whether this is a run-of-river project. (usable maximum volume of water intake area, average flow of river, design flow of turbine). IRL26 IRL32 A detailed explanation regarding the type of hydropower plant and the technical characteristics of the Project Activity are given in section A.2. Description of the Project Activity of PDD and in section A.4.3. Technology to be employed by the Project Activity. The version 4 of the PDD in section A.2. and A.4.3. presents a detailed information about run-of-river characteristics of the project activity, including surface area, operational elevation range of the reservoir between 28m and 30 m, average flow rate of river, design flow rate of turbines. This information is clear and sufficient. The operation time harnessing the active volume with the average flow is about 2 hours. Please note that in section A.2. Description of the Project Activity and in section A.4.3. Technology to be employed by the Project Activity of the PDD, the term hm 3 is used to describe the volume of the reservoir of the weir. On the other side for the description of annual flow the term (hm 3 /year) is used. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-41

69 CAR#5 : The technical data which should be consistent to the design data and the real situation has to be added (technical data of turbine and generator and the physical possible maximum capacity, max. flow, minimum flow, nethead). Higher capacity data must be explained clearly. IRL26 FSR IRL32 IRL17 license IRL43 FSR hidrodizayn The PDD submitted as Version 1.0 was prepared according to 2005 Feasibility report prepared by Hidro Dizayn Ltd in November 2005 (IRL No.44). After the submission of the PDD, Final Feasibility Studies of the project activity have been completed. Hence, all the related parts of this version of the PDD have been revised accordingly. All detailed technical explanations and data are given in section A.2. Description of the Project Activity of PDD and in section A.4.3. Technology to be employed by the Project Activity. The version 4 of the PDD in section A.2. and A.4.3. presents technical data of turbine and generator, max. flow, minimum flow, net-head, physical possible maximum capacity. Maximum power capacity of each turbine is MW, whereas after thegenerator and the transformer, capacity is 5.89 MW and 5.83 MW respectively. The power of the generator at a power factor of 0.90 is determined as MVA (=5.89/0.90). See CAR25 as well. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-42

70 CAR#6 : This project is not the first VER project in Turkey, it is one of the first hydropower VER projects. Beyond that, it is a rather standard approach and clear evidence of particularly high standards and practices has to be demonstrated. IRL32 IRL44 COB Correction was done in the designated section (A.2) following this specific CAR. Quotation: The Kumkoy project is one of the first run-of-river HEPP VER projects developed in Turkey. The high standards and practices of the project were demonstrated all along the PDD and clearly are not derived from the fact that the project is attempting to be validated as a VER project. Hence the statement CAR#6 refers to was changed (see above quotation). The version 4 of the PDD has been revised, the remark has been deleted. The issue is closed. CAR#7 : The argument (b) is missing. Further, the numbering of the following figures is not correct : In PDD A / B.4: fig.2 is in A.4.1.4, fig.1 is in B.4. IRL32 Argument (b) was added instead of argument (c). Further, the numbering of the related figures was corrected. The version 4 of the PDD has been corrected. The first item under the Our Win-Win-Win model section of PDD (page number 5), the labels of arguments were corrected. Same as the numbering of the figures in PDD. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-43

71 CAR#8 : The role of mentioned project proponents must be clarified (project participant?, developer, consultant?). Also the role and function of AES Carbon Exchange Ltd. must be explained. PDD has to be consistent, too. IRL32 IRL45 For this project activity: AES-IC ICTAS Enerji Üretim ve Ticaret A.Ş is the Project Owner, as demonstrated in Section A.3. of the PDD. Elysium Carbon Trade & Investment Ltd is a Consultant to AES-IC ICTAS. As part of an internal agreement between AES-IC and Elysium concerning the distribution of the project s predicted VERs, Elysium is not considered a Project Participant in this specific project activity. Elysium as a Consultant is only considered as a service provider to AES-IC ICTAS. Since AES-IC ICTAS benefits from the framework agreement signed previously between TUV SUD Indusrie Service and AES Carbon Exchange Limited, AES Carbon Exchange Limited was mentioned as a Participant in Version 1. Since there is no relation between the Project Activity (PA) and AES Carbon Exchange Limited, the AES Carbon Exchange Limited was excluded from being the Participant in this final version of PDD. In version 4 of the PDD the role of project proponents has been clearly explained. The project participant and contact information have been defined in the table of A.3. Project Participants and also Annex-1 of the PDD. The consulting contract with Elysium Ltd. has been provided. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-44

72 CAR#9 : The planning schedule must be modified in view of these obstacles. Hence also the startup date and the crediting period has to be adjusted accordingly. IRL32 IRL46 It is the fact that DSI is delayed in delivery of the site according to the preliminary program and AES-IC IC- TAS signed the WURA with DSI under the condition that AES-IC ICTAS will not have any right to claim about the delay caused by DSI. In the meantime, offer collection and tendering period of the project became a long process since it was not easy to find a good supplier because of special type of turbines. Design studies of the Project Activity are under process by the turbine supplier company. According to the timeline foreseen in the agreement signed between the Owner and the supplier, there is no delay on the predetermined timeline, so no modification is needed to be made on the schedule for the time being. On the other hand, the site delivery process has been initiated by DSI. All the necessary precautions are being taken by the Owner in order to combine the timeline of the supplier with site delivery schedule of DSI. The explanations regarding time schedule are sufficient. Nevertheless there are still remarkable risks given that the implementation and commissioning could be delayed. The site of the PA has been taken over from DSİ on 02 July 2009.The evidence is given in Appendix 5. Manufacturing of the equipment is ongoing and by means of taking over the site there is no problem regarding implementation. For the time being, according to the timeline foreseen in the agreement signed between the Project Owner and the supplier, there is no delay on the predetermined timeline, so no modification is needed to be made on the schedule. The project owner is continuing the studies in order to complete the PA till the planned COD. Relating to this issue, it has been corrected in the PDD ver 5, in the section This Specific Project that the site has been taken over from DSI. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-45

73 CAR#10 : The emission reduction amounts in Table A.4.4 must be consistent within the PDD, e.g. using the same emission factor. IRL32 IRL35 The baseline emission factor was recalculated, dates in the table were updated and as a result, the emission reduction amounts in the table were refinalized. The emission reduction data is now consistent within the PDD. Turkey s grid emission factor is calculated as tco2/mwh and the calculation procedure is given in section B.4. in PDD. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-46

74 CAR #11 : Version 04 of the additionality tool is mentioned. it is not any more valid In IRR calculation sheet the 3rd year the '- Commercial Credit-EUR (Converted to USD) in inflow has negative value ( ) Please provide explanation how the benchmark for equity IRR is calculated. All data has to be evidenced with sources of information. A sensitivity analysis has to be included IRL3 IRL32 IRL36 IRL37 IRL38 Section B.1 has been rewritten, and in the updated PDD version 06 of the additionality tool was used for all analysis. An updated version of the baseline methodology was also published and the PDD has been updated accordingly (ACM0002/version 12.2). Credit has been corrected in IRR calculations. The version 4 of PDD includes calculation and explanation of used benchmark. Benchmark at the time of taking the inversment decision is 11%. The benchmark used in the financial model corresponds to the required equity return of AES-IC. It was calculated taking into account the risk free rate, market premium, equity beta coefficient and debt to equity structure at the moment of calculation. The risk free rate corresponds to the return of 30Y US T- bills and the risk premium for Turkey was based on country bond spread. This value was used as a discount rate to calculate the equity return of the hydro projects in the AES-IC portfolio and in the estimation of the contract cost of hydro projects under EPCs (Engineering Procurement Contract). The details of financial parameters that used for determination of benchmark given pages in PDD. Accordingly sensitivity analysis is prepared and presented in the PDD. The version 6 of additionality tool has been applied. The calculations of IRR have been corrected. Equity IRR is compared with Cost of the Equity calculated with CAPM model. This is an appropriate benchmark to be compared with equity IRR. In version 06 of the PDD, a sensitivity analysis is presented and the IRR is below the benchmark after the ±10% variation in following key parameters: investment cost, O&M cost, electricity sale price, and electricity output. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-47

75 CAR#12: The used method is not acceptable as we know that better information about the recent implemented power plants is available, e.g. by Turkish Elecricity Transmission Company (TEDAS). This gives a more actual percentage of used fuel types and technologies. IRL32 IRL35 The whole combined margin baseline emission factor (BM & OM) was recalculated (see section B.4). Section B.2 was redesigned into a table format in order to ease its understanding. The open issue was resolved in the new version of the PDD. The Operating Margin (OM) emission factor and Build Margin (BM) emission factor are calculated as tco 2 /MWh and tco 2 /MWh respectively in the PDD ver 4. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-48

76 CAR#13 It has to be explained how imported electricity is considered. IRL4 IRL35 According to the UNFCCC baseline methodology (ACM0002/version 12.2), imported electricity to the HEPP is neither part of the baseline emissions, project emissions nor the leakage emissions. This is the reason why imported electricity is not discussed in this section. The Tool to calculate the emission factor for an electricity system clearly states that For imports from connected electricity systems located in another host country(ies), the emission factor is 0 tons CO 2 per MWh. (See step 1 latest paragraph) Thus the amount of imported electricity has to be regarded and multiplied with emission factor 0 in order to calculate the the OM. Imported electricity was already considered in the last PDD submitted. Please see the PDD "Operating Margin calculations; section B.4./Table 6 and the paragraph below. The imported electricity issue was also presented in the spreadsheet regarding the calculation of the Emission Factor (OM Emission Factor Tab). The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-49

77 CAR# 14 : The project boundaries should be described according to the definitions given in the ACM0002 methodology. IRL2 IRL32 According to baseline methodology (ACM0002/version 12.2), the project boundaries were defined and described in the appropriate section (B.3). With provision of PDD version 8 this issue is considered to be resolved. The issue is closed. CAR#15 : A discussion has to be provided in the PDD for all identified alternatives concerning the compliance with applicable laws and regulations. IRL32 IRL47 Section B.5 has been rewritten. The requested data is presented in step 1 of the additionality tool which is demonstrated in the section. Moreover in the identification of the alternatives of the Project Activity a case study regarding Levelized Generation Cost has been mentioned in the Table 10 in PDD. This study is given as Appendix 2. The version 4 of the PDD has been corrected. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-50

78 CAR#16 Common practice analysis (step 4 of additionality tool) has to be carried out and explained in the PDD. Furthermore it should be explained how the approval of the project activity will help to overcome the economic and financial hurdles or other identified barriers IRL32 IRL48 IRL51 IRL53 A comprehensive study regarding Barrier Analysis, Additionality Tool study and Common Practice Analysis have been carried out in this version of PDD. Section B.5. has been rewritten accordingly. The special turbine type of this project is presented as technological barrier in the PDD. The official letter notified by EUAS is given in Appendix 3a (IRL48) Additionality tool step 2 in the updated PDD section B.5, clearly demonstrate throught the project financial analysis why VER incentives would help overcoming these project economic and financial hurdles. Financial analysis of the project submitted to the DOE has been revised in accordance with final proceedings regarding the project. The energy contribution fee to be paid to DSI by the Owner during operation stage for the common facilities constructed by DSI has been recalculated by DSİ. A notification has been received from DSİ on this issue. In the financial analysis the new figures has been considered (Appendix 3b), IRL51. The common practice analysis is carried out with version 04 of PDD. It is demonstrated that 26 hydro power plants have been put into operation since These projects have to be analyzed whether they are comparable to the project activity in question. The PDD ver 5 presents a detailed examination of the distribution of operating private runof-river HEPPs in Turkey as part of the project common practice analysis (sub-step 4a). In addition, a table with all the accessible data regarding these HEPPs is attached to this validation protocol IRL53 (appendix6). Similar activities have been discussed and relevant references provided (sub-step 4b). The issue is closed. Please refer to CAR28 Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-51

79 IRL3 IRL32 Second answer In the previous PDD ver_5, the barrier analysis/technological barrier related with the special turbine of the PA was already mentioned. In the PPD ver_6, this issue has been highlighted and presented as one of the additionality tools under the section of Step_3 Barrier Analysis besides the common barriers associated with the development of hydro projects under the current market situation. Regarding the issue of Barrier Analysis (step 3), that is discussed in the revised PDD version 06 in the context of CAR17, plese refer to the discussion in CAR28. The issue is closed. CAR#17A: Please use values from Turkey s Statistical Yearbook for CO2 emissions by electricity production. IRL1 IRL5 IRL8 In the PDD ver_6, an additional analysis specific to the project has been made in the section of Step 4 Common Practice Analysis in order to present that the special characteristics of PA distinguishing the project than the other 26 HEPPs those are put into operation. According to the UNFCCC PDD guidelines, the baseline scenario should be presented in section B.4 and not in section B.6.Thus, sections B.4 & B.6 have been rewritten and the baseline emission factor recalculations are now presented in B.4. In the updated section B.4, the values that were used have been taken from the recent Turkey s Statistical Yearbook and from TEIAS website updated data. In the version 4 of the PDD section B.4, the recent Turkey s Statistical Yearbook and TEIAS updated data are used. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-52

80 CAR#17/B: The fuel amount equivalent for heat production has to be excluded from the calculation. IRL4 IRL5 The fuel amount used for the OM calculations is the fuel used only for electricity generation [Annex 3/ tables (see tables references)]. Out of this data, the only fuel amount equivalent for heat production is some portion of the fuel amount used in the co-generation facilities. According to the updated UNFCCC baseline emission factor calculation tool ( The tool to calculate the emission factor for an electricity system : version 2.2.1), it is not required to exclude the fuel amount equivalent for heat production in the cogeneration facilities from the OM calculations. Following these direct guidelines that is why; the fuel amount equivalent for heat production in the cogeneration facilities was not excluded from the OM calculations. However this issue from the technical point of view is not correct, we have to accept that the tool does not consider this aspect. Nevertheless the list of plants which are used for OM-calculation should be checked again whether there are power plants which are dispatched independently of the daily or seasonal load of the grid due heat demand. Those have to be excluded from the set of plants which are used for OM-calculation. Those have to be considered as low-cost-resources. The only reliable data of fuel consumption in thermal power plants in Turkey by electric utilities is published by TEIAS, and this includes fuels used in CHP plants. However, heat production in CHP electric utilities is usually considered as a byproduct and dispatch data for Turkey's power plants is not available from any public source. Based on the above and without dispatch data, there is no reason to claim that CHP electric utilities is more likely to be low-cost-must-run than any other power plant. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-53

81 CAR#17/C: The electricity consumption of the plant has to be excluded. Only net electicity production can be used for the calculation. IRL32 IRL35 The electricity generation and consumption data were changed according to this specific CAR. Only the net electricity production was used. The updated data is presented in section B.4. Electricity consumption of the plant is excluded and only the net production is considered in the calculations. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-54

82 CAR#17/D: More conservative emission factor assumptions for the BM has to be used, at least according to the 2006 IPCC Guidelines. Also the used efficiencies for the different technologies are not consistent to values for bestavailable-technologies. IRL2 IRL4 IRL5 The BM calculation method was totally changed and is now presented in section B.4. In this updated method the guidelines of the The tool to calculate the emission factor for an electricity system/ version 2.1 were used. The updated method is much more conservative and in addition only values of the best available technologies were used. Only for Lignite the indicated efficiency is not a BAT value. The given reference here does not demonstrate BAT value. According to the UNFCCC Tool to calculate the emission factor for an electricity system/ version 2.1 the BM should be determined as per the guidance in step 3 (a) for the simple OM, using options B1, B2 or B3. Option B2 which uses the efficiency rates of power units in the calculations, clearly does not require to use the BAT efficiency rates; it requires to use the average net energy conversion efficien- cies. The PDD does not claim to present the lignite BAT efficiency rates; it presents the most accurate as possible average efficiency rates of lignite power plants in Europe (therefore, this data is being considered as very conservative also for Turkey). The data pre- sented in the European Commission (July 2006): IPPC for Large Combustion plants/table 4.38 de- monstrates the most accurate as possible average efficiency rates of lignite power plants in Europe. As for now, this data is the most accurate data which could be obtained relating to lignite power plants in Turkey. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-55

83 CAR#18 : The list of parameters which are not monitored has to be completed. IRL32 The list of parameters which are not monitored was completed and is fully presented in section B.6.2. PDD has been updated accordingly. The issue is closed. CAR#19 The calculation spreadsheet for OM and BM should be submitted also in electronic form. CAR# 20 : The participant should complete a monitoring plan in detail and define the responsibility and qualification of the personnel. CAR#21 The starting date shall be considered to be the date on which the project participant has committed to expenditures related to the implementation or related to the construction of the project activity. This, for example, can be the date on which contracts have been signed for equipment or construction/operation services required for the project activity. IRL35 IRL32 IRL1 IRL32 The calculation spreadsheet of the OM, BM and CM is attached (excel file) to the Kumkoy version 2 PDD. The monitoring plan was updated and completed (see section B.7 & Annex 4). One and a half years before the project starts, it would be an impossible or incorrect estimation of the exact (by name) project personnel responsibility and qualification. Still, in order to fulfill TUV demands, the project Owner defined the hydroelectric power plant s operation organization chart (Annex 4). The PDD is corrected. The excel workbook on OM / BM calculation is submitted. The issue is closed. Section B.7 & Annex 4 has been fully revised in version 4 of the PDD. The issue is closed. Project Activity starts with the signing of the Share Purchase Agreement (EPC Term Sheet) (Appendix 7) between AES Energy Ltd and IC Ibrahim Çeçen Yatırım Holding A.Ş. The starting date of Project Activity is 17 May 2007 and it is corrected at C Starting Date of the Project Activity section of PDD ver 5. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-56

84 Clarifications and corrective action requests by validation team Ref. to table 1 Summary of project owner response Validation team conclusion CR#1: Please provide the respective evidence of considering the mechanism of climate change projects. IRL32 The project was tendered in March The Owner has seriously considered the CDM/VER during the decision to proceed with the project activity. The events and the proceedings about the previous studies during the business development process are explained in the MOU that is attached to this validation report and the respective evidences are also presented in additional submitted documents. MOU and respective evidences of considering the mechanism of climate change projects are given in the following submitted to DOE documents: Application letter to DSI about Project Activity License application letter of Project Activity to EMRA Acceptance letter of DSI application Acceptance letter of License application to EMRA Notification about Bidding Rules of Project Activity Draft of Project Activity Water Usage Agreement Notification letter to EMRA about submitting the performance bond for Kumköy HEPP License application Mails and proposal for Development and Realisation of GHG Mitigation Projects. The presented documents show that he owner has considered the CDM/VER in the decision process. Please refer to discussion section 3.6., PDD. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-57

85 CR#2 (former FAR#1) For the first verification an updated license for MWm MW should be provided. IRL17 The installed capacity of the Project Activity has been revised as 17.5 MW according to the Final Feasibility Report as explained in PDD. The license amendment procedure is still underway. In the first verification, the updated license will be provided. The approval letter by the Energy Market Regulatory Authority EMRA (EPDK) dated regarding the license revision to MWm / MWe has been provided during the validation process (see former FAR# 1). The issue is closed. CR#3 (former FAR#2) For the first verification the permissions for the grid-connections should be provided. IRL17 IRL54 In the first verification, the required permissions for grid connections will be provided. The approval letter by EMRA dated regarding the connection to 31.5 kv Çarşamba TM station has been submitted during the validation process (see former FAR#2). Furthermore the provisional acceptance of the power plant dated and the first index reading protocol date of both main and backup meters are provided. The issue is closed. Clarifications and corrective action requests by validation team after first CB Review Ref. to table 1 Summary of project owner response Validation team conclusion Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-58

86 CAR#23: The PDD format is not consistent with the CDM PDD format. Please revise PDD. IRL32 The format of PDDver7 has been revised according to CDM PDD format. The PDD format is revised. The issue is closed. CAR#24: The title in the PDD version 06 differs from the original title in the GSP: Kumköy hydroelectric power plants, Samsun Province, Turkey. Please use the same title throughout the PDD presented in the GSP PDD and other related documents. IRL32 The title has been corrected as Kumköy hydroelectricpower plants, Samsun Province, Turkey and throughout the PDD ver7. The project title used in the GSP process has been reinstalled. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-59

87 CAR#25: It is mentioned in the PDD version 06, that: Total installed capacity is 17.5 MWe (corresponding for one turbine to MW) Total maximum capacity MW (corresponding for one turbine to MW) The Electricity Generation License indicates: Total installed capacity 17.5 MW Total maximum capacity MW Regarding the generator : Rated power of the generator MVA Generator Efficiency 0.9 Please submit the product specification on the turbine-generator power generation capacity, so that the installed capacity data of 17.5 MWe can be confirmed. IRL32 IRL24 The efficiencies of turbine, generator and transformator of the plant are 94%, 97% and 99% respectively. The total installed capacity which is 17.5 MWe is the electrical capacity supplied to the system at busbar. This capacity is the output including efficiencies of turbine, generator and transformator. The generator capacity of the plant is MW. This capacity is the output including efficiency of turbine and generator. The total maximum capacity which is MWm is the mechanical capacity of the turbine. This capacity is the output including efficiency of turbine. The mechanical, generator and electrical capacities of each unit are MW, MW and or MW, respectively. (5.833/0.99= MW, 5.892/0.97=6.074 MW) 90% which is given PDD is Power Factor of Generator. The generator efficiency is 97% as stated above. Therefore the power of generator in terms of MVA is calculated as MW / 0.90 = MVA The relation between the conversion factors and the power have been explained clearly: Accordingly, the indicated power MWe represents the amount that is available after the deduction of generator and transformer losses from the total installed power at the turbines. The issue is closed. The print screen of the Scada system which is presenting product specifications and confirming 17.5 MW is given in Appendix 8a, 8b, 8c. The Provisional Acceptance of the Project Activity has been finalized on February 23, The Acceptance Letter is given in Appendix 9. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-60

88 CAR#26: It is mentioned in the PDD, that the power plant is connected via Çarşamba 33 kv TM to the public grid. The electricity generation license refers to Çarşamba 31.5 kv TM station. Please correct. Please submit the updated single line diagramme as well for transparency. CAR#27: Please add the surface area A PJ in to the Monitoring Plan of the PDD. IRL28 Single line IRL32 As indicated in the Licence of the Project Activity, the power plant will be connected via Çarşamba 31,5 kv TM station to public grid. PDD ver7 has been revised accordingly. The Single Line Diagram of Project Activity is given as Appendix 10. Data/parameter of the A PJ related with surface area has been added into PDD ver7 A revised single line diagramme indicating the position of the meters and the 31.5 kv Carsamba TM has been provided. The issue is closed. The installed available power Cap PJ and surface area A PJ have been added in to the monitoring plan. The issue is closed. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-61

89 CAR#28: Please revise the section on Barrier Analysis according to the applied additionality Tool in PDD: -. Investment barriers. Technological barrier. Prevailing Practice. Other barriers IRL32 IRL48 IRL50 IRL51 The Barrier Analysis section has been revised according to the template of Methodological Tool (Version 6)- Tool for the demonstarion and assessment of additionality in PDD ver 7. Insufficient incentives for renewable energy investments, the uncertainty regarding the future national policy, currency risk, hydrological risk have been emphasized as the main investment barriers. The Project Activity will be the 4 th power plant which is using Bulb type turbines in Turkey. The Project Activity is distinguished to the other 3 power plants as the Project Activity is the only one which has been developed by private sector as per new Electricity Law no:4628. This specific characteristic of the turbines has been handled as technological barriers. Market liberalization, bureaucratic barriers and trend in hydroelectric potential are analized as the other barriers. However it shall be noted that the barier analysis is given as supportive information to the investment analysis which is identified and presented as the main appropriate analysis method for the additionality tool. Please note: The PP has with reference to CAR17 - included step 3, Barrier Analysis for the first time in version 06 of the PDD. Therefore the relevant issues referring to Barrier Analysis in section B to B.5.14., Table 1 were revised accordingly. All issues regarding Barrier Analysis will be comprehensively discussed in CAR28. Investment barriers: The risk of technical and financial feasibility of the renewable energy projects lies completely up on the investors. The investors of hydropower plants face rather unfavourable loan conditions in the capital market, as the flow regimes may vary due to climatic conditions and the ROI would be longer than the fossil fuel power plants. The tendering process is based on the best bidder principle and is a further financial hurdle for the investors. The feed-in tariff offers a purchase guarantee of Euro-Cent/kWh for the duration of 10 years, but this incentives alone is not sufficient to cover the overall investment risks. Technological Barriers: Only 3 hydro power plants with bulb type turbine-generator units are in operation up-to-date, they are owned by the state electriciy company EUAS. Previlailing and Other Barriers: Water management with priority on irrigation, fixed feed-in tariffs, grid and water usage fees, delays due to bureaucratic procedures can be regarded as barriers that would have an impact on the project implementation and profitability. In conclusion, these barriers can be seen as supporting evidence for the investment analysis. Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-62 The issue is closed.

90 CAR#29: Please revise the starting date of the operation in the PDD. IRL32 IRL55 Since the Provisional Acceptance of the Project Activity has been completed as of February 23, 2011, the starting date of the operation revised in the PDD ver7 accordingly. The provisional acceptance of the power plant has been completed on The starting date of the plant operation is expecte to be CAR#30: Please check the PDD for misspellings and syntax errors. IRL32 PDD ver7 has been checked for misspellings and syntax errors. The issue is closed. Th PDD has been revised against misspellings. The issue is closed. Clarifications and corrective action requests by validation team Ref. to table 1 Summary of project owner response Validation team conclusion - after the first CB Review Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-63

91 CR#4: Please submit details on the meters: -. Supplier - Technical Description - Calibration Procedures - Position of the meters (indicate at the single line diagramme) IRL32 IRL28 IRL54 IRL56 IRL57 The supplier of the main and secondary meters is ACTARIS SAS. In the Appendixes 11-12, you can find the technical description and calibration validty of the meters. It is important to note that the meters are installed and owned by the grid company (TEIAS) and therefore calibration of the meters is also the grid company's responsibility. The First Index Protocol signed with TEIAS of the meters which will be used for the invoice is given as Appendix 13 The single line diagramme which shows the position of the meters is given as Appendix 10. Following information has been provided: Precise information on the installed meters (name, calibration and first reading protocols) has been provided: -. ACTARIS electricity meter, type SL 7000 SL 761 A, 4 wire, bi-directional, accuracy class 0.2s (at transformer) - Calibration confirmation by supplier First Index Reading Protocol for main and backup meters CR#5: It is mentioned in the PDD section C.1.2., that the operational lifetime of the project activity is 38 years. In the electricity generation license, the operation is approved for a period of: 39 years 7 months 15 days. Please clarify. Forward action requests by validation team - after the first CB Review IRL17 IRL32 Ref. to table 1 The licence period of the Project Activity is 40 years. According to the licence, 2 years are given as construction period and 38 years are given as operation period by EMRA. Total license period is not changed. For any reason if it is applied for the licence amendment, the date is recalculated according to the rest of the period and inserted to the revised licence. Summary of project owner response The issue is closed. The issue is closed. Validation team conclusion Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-64

92 FAR#1 (former FAR#3) : The documentation for training and maintenance should be considered with priority by the project management. A training and maintenance program must be implemented. FAR#2 (former FAR#4) : According to TÜV SÜD VER+ standard, the project has to be reviewed latest together with verification of the year 2013, due to maybe changed status of Turkey regarding Kyoto-Protocol. IRL49 The project activity is planned to commence on May 2010, documents concerning the training and maintenance programs of the project will be presented closer or during the project onset. These documents will be presented during the first verification of the project. TÜV SÜD response: It is now 2011, Please provide the training and maintenance programs of the project. Related with operation and maintenance of the Project Activity, the training has been given to the operaton team by the supplier. The document of receiving training is given in Appendix 14. Table 3 Unresolved Corrective Action and Clarification Requests (in case of denials) The onsite trainings were managed by the technology supplier HARBIN. Complete training documents of the staff regarding the turbinegenerator units, tranformer, SCADA & PLC system, safety precautions were provided: The trainings were held between and , relevant participant lists are attached. The issue is closed. The issue has to be considered during te periodic verification for the crediting period Clarifications and / or corrective action requests by validation team Id. of CAR/CR Explanation of Conclusion for Denial Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-65

93 FAR#1 (former FA#3) : The documentation for training and maintenance should be considered with priority by the project management. A training and maintenance program must be implemented. The project activity is planned to commence on May 2010, documents concerning the training and maintenance programs of the project will be presented closer or during the project onset. These documents will be presented during the first verification of the project. TÜV SÜD response: It is now 2011, Please provide the training and maintenance programs of the project. FAR#2 (former FAR#4) : According to TÜV SÜD VER+ standard, the project has to be reviewed latest together with verification of the year 2013, due to maybe changed status of Turkey regarding Kyoto-Protocol. It is also in the interest of the project Owner that the first verification of the project be implemented before Table 3 Unresolved Corrective Action and Clarification Requests (in case of denials) Clarifications and / or corrective action requests by validation team Id. of CAR/CR Explanation of Conclusion for Denial Table 1 is applicable to ACM0002, version 12.2 with ex-ante determination of CM Page A-66

94 Validation of the VER+ Project: Kumköy 17.5 MW Hydroelectric Power Plant, Turkey Annex 2: Information Reference List

95 Validation of the project : Kumköy Hydroelectric Power Plant, Samsun Report Province, Turkey Page 1 of 6 Information Reference List Ref. No. 1. Issuance and/or submission date(dd/mm/yyyy) UNFCCC homepage : Title/Type of Document Author/Editor/ Issuer UNFCCC Additional Informati on (Relevan ce in CDM Context) ACM0002 Consolidated baseline methodology for grid connected electricity generation from renewable sources UNFCCC Tool for the demonstration and assessment of additionality UNFCCC Tool to calculate the emission factor for an electricity system UNFCCC IPCC National GHG Inventories : ipcc-v2_2_ch2_stationary_combustion UNFCCC Electricity Market Law No Law on Renewable Energy No Min. of Energy Turkey Ministry of Energy Turkey EB 44, Version 8 EB 39, version 05.2 EB 35, version Statistical_yearbook_Turkey 2007 TUIK 2007 data Preliminary Feasibility Study Report for the ilirmak River Basin including Kumköy HEPP (pre FSR) DSI, State Water Works Initial Layout Plan DSI Application to DSI (State Water Works) for the Water Usage Rights and the Operation AES IC License of Kumköy Hydroelectric Power Plant 12. November 2005 Revised Study on Energy Potential Estimates for Kumköy HEPP Hidro Dizayn Ltd. TÜV SÜD INDUSTRIE SERVICE GMBH

96 Validation of the project : Kumköy Hydroelectric Power Plant, Samsun Report Province, Turkey Page 2 of 6 Information Reference List Ref. No. Issuance and/or submission date(dd/mm/yyyy) Title/Type of Document Author/Editor/ Issuer Communication on the Project Finance with IFC on Carbon Credits İC İÇTAŞ Feasibility Study on GHG Mitigation Project for Hydro power plant projects of AES IC Energy & Commodity Services GmbH Final Contract on Water Usage Rights regarding Kumköy HEPP for MWm / DSI 15. MWe (initial contract dated with 15MWm/14.4MWe) Communication on the Timeline Extension of Construction Works for 14 months AES IC Revised Electricity Generation License issued by EMRA for Kumköy HEPP (Letter of EPDK (EMRA) 17. Approval by EMRA regarding the revised Feasibility Report with increased capacity from 14.4 MWe to 17.5 MWe for Kumköy HEPP (initial Electricity Generation License for 15MWm / 14.4MWe issued on ) EIA Report on Kumköy HEPP area PPT Ltd EIA Decision of the Ministry of Environment and Forestry MoEF Local Stakeholder Process : Public Meeting on the Project and the Carbon Management Çınar Mühendislik Ltd. Şti Communication on the Baseline Emission Factor Data regarding Carbon Management Ministry of Energy and Nat. Resources Contract on Turnkey Project (Engineering, Procurement, Construction) Implementation IC İÇTAŞ İnşaat EPC Contract Sanayi ve Ticaret A.Ş. March 2008 Report on Hydraulic Modeling at the Kumköy HEPP turbine outlet : Middle Eastern 23. Project No. : Technical University, Ankara IC İÇTAŞ İnşaat Contract on the Supply and Installation of EM-Equipment for Kumköy HEPP between IC 24. İÇTAŞ İnşaat and HARBIN Electric Corporation Delivery of the Advance Payment Guarantee Letter&Proforma Invoice and Advance Payment IC IÇTAŞ İnşaat Additional Informati on (Relevan ce in CDM Context) Applied for revision on Applied for revision on TÜV SÜD INDUSTRIE SERVICE GMBH

97 Validation of the project : Kumköy Hydroelectric Power Plant, Samsun Report Province, Turkey Page 3 of 6 Information Reference List Ref. No. Issuance and/or submission date(dd/mm/yyyy) to the Subcontractor of EMT equipment Title/Type of Document Author/Editor/ Issuer Revised Feasibility Report on Kumköy Hydroelectric Power Plant Project submitted to DSI: AES IC İçtaş Enerji ENSU Mühendislik Ltd. (FSR) Üretim ve Ticaret A.Ş. 27. July 2008 Organisation Chart AES IC 28. March 2011 Single Line Diagram indicating the meters positions and connections to the HV transmission AES IC line 29. July 2008 Prospectus with general information on the Project Participant AES IC Photos of Kumköy site visit TÜV SÜD VER+ PDD : Kumköy Hydroelectric Power Plant, Samsun Province, Turkey (in the following: 31. Kumköy HEPP) Version 1 VER+ PDD : Kumköy Hydroelectric Power Plant, Samsun Province, Turkey (Kumköy HEPP) Version 7 AES IC İçtaş Enerji Üretim ve Ticaret A.Ş AES IC İçtaş Enerji Üretim ve Ticaret A.Ş Validation Protocol Kumköy HEPP TÜV SÜD Annex 1 Annex July 2008 Power Density calculation sheet AES IC Excel calculation sheet of Baseline Emission Factor EFy for Turkish Public Grid (Annex 4) AES IC, Elysium 36. March 2011 IRR calculations / Benchmark Analysis : Turkey Historic Spreads.xls AES IC Annex March 2011 IRR calculations / Benchmark analysis : Beta Calculation v01.xls AES IC Annex March 2011 IRR calculations / Benchmark Analysis : Annex 9 AES IC Detailed Financial Analysis (Base Case + 4 Sensitivity Case Scenarios) Share Purchase Agreement (SPA) between AES Enerji Ltd. And IC İbrahim Çeçen Yatırım Holding A.Ş approved by shareholders (BoD), signed on : AES IC Additional Informati on (Relevan ce in CDM Context) TÜV SÜD INDUSTRIE SERVICE GMBH

98 Validation of the project : Kumköy Hydroelectric Power Plant, Samsun Report Province, Turkey Page 4 of 6 Information Reference List Ref. No. Issuance and/or submission date(dd/mm/yyyy) Title/Type of Document Additional Informati on Author/Editor/ Issuer (Relevan ce in CDM Context) AES IC Annex March 2011 Detailed Financial Analysis Further Appendices regarding Investment Analysis Participant List TÜV SÜD Fatma Adıgüzel AES IC, Project Manager Ufuk Akbulut AES IC Ohad Agranat Elysium Ltd. Barak Guzner Elysium Ltd. 41. Ofer Ben-Dov Elysium Ltd. Nuri Mol TÜV SÜD Birkan ÖZEN AES IC, Finance Ercüment YAŞAR AES IC, Finance Sertaç AKDEMİR AES IC EPC contracting Celal ÖZTOP AES IC, HV transmission systems IRL Kumkoy-YKB LOAN agreement Yapı Kredi Bankası 43. November 2005 Initial Feasibility Study Report Hidro Dizayn Ltd. updated Ministry of 44. Environment and Registry of VER Climate projects in Turkey Forsetry, Dept. Of Climate Change Consultancy Contract between AES IC and Elysium Consultancy AES IC Agreement on Transfer of the project site with all construction facilities to the project DSI participant AES IC Information on Levelized Generation Costs inturkey AES IC Information on the bulb-type turbine-generator plants in the grid EUAS (State Electricity Appendix 5 TÜV SÜD INDUSTRIE SERVICE GMBH

99 Validation of the project : Kumköy Hydroelectric Power Plant, Samsun Report Province, Turkey Page 5 of 6 Information Reference List Ref. No. Issuance and/or submission date(dd/mm/yyyy) Title/Type of Document Author/Editor/ Issuer Generation Company) to Complete training course of the staff managed by HARBIN experts AES IC HARBIN Fee for the License Revision EMRA Fee for the usage of water and construction facilities DSI Document on the transfer of the project site to the project participant AES IC DSI Information on the 26 HEPP incommissioned since 2003 EPDK AES IC First Index Protocol of main and the backup meters TEIAS Provisional Acceptance Letter regarding power plant operation DSI 56. Not specified Technical Description of meters ACTARIS Calibration Protocol of the meters ACTARIS Invoice following the bidding process to the Energy Market Regulatory Authority EMRA AES IC GSP announcement of the project activity TÜV SÜD Additional Informati on (Relevan ce in CDM Context) Appendix Order spread sheet for the validation services AES TÜV SÜD The Energy Market Regulatory Authority EPDK TÜV SÜD INDUSTRIE SERVICE GMBH

100 Report Validation of the project : Kumköy Hydroelectric Power Plant, Samsun Province, Turkey Information Reference List Page 6 of 6 Ref. No. 62. Issuance and/or submission date(dd/mm/yyyy) Title/Type of Document Directive on Environmental Impact Assessment (EIA) Author/Editor/ Issuer Ministry of Environment and Forestry Additional Informati on (Relevan ce in CDM Context) not specified SCADA system of the technology supplier HARBIN with data recording AES IC HARBIN VER + Standard of TÜV SÜD : GHG 30 version 2.0 December 2007 ILEX Report on Electricity Sale Prices, prepared for AES Pöyry Energy Consulting Information on 30Y US T-bills ( ) Bloomberg cross checked with Bloomberg It 67. Guidance on the Assessment of Investment Analysis VER+ PDD : Kumköy Hydroelectric Power Plant, Samsun Province, Turkey (Kumköy HEPP) Version 8 AES IC İçtaş Enerji Üretim ve Ticaret A.Ş Request for Registration /12/2011 The license has been granted to Kumköy Enerji Üretim Anonim Sirketi for operation at the Kumköy Hydroelectric Power Plant production facility in Samsun Province License No: EÜ/3519-1/2152 Energy Market Regulatory Authority Republic of Turkey TÜV SÜD INDUSTRIE SERVICE GMBH

101 Validation of the VER+ Project: Kumköy 17.5 MW Hydroelectric Power Plant, Turkey Annex 2: Appointment Certificates

102

103

104