CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) Version 03 - in effect as of: 22 December 2006 CONTENTS

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1 CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) Version 03 - in effect as of: 22 December 2006 CONTENTS A. General description of the small scale project activity B. Application of a baseline and monitoring methodology C. Duration of the project activity / crediting period D. Environmental impacts E. Stakeholders comments Annexes Annex 1: Contact information on participants in the proposed small scale project activity Annex 2: Information regarding public funding Annex 3: Baseline information Annex 4: Monitoring Information 1

2 Revision history of this document Version Number Date Description and reason of revision January 2003 Initial adoption 02 8 July 2005 The Board agreed to revise the CDM SSC PDD to reflect guidance and clarifications provided by the Board since version 01 of this document. As a consequence, the guidelines for completing CDM SSC PDD have been revised accordingly to version 2. The latest version can be found at < December 2006 The Board agreed to revise the CDM project design document for small-scale activities (CDM-SSC-PDD), taking into account CDM-PDD and CDM-NM. 2

3 SECTION A. General description of small-scale project activity A.1 Title of the small-scale project activity: Title: 5.3 MW Grid Connected Bundled wind power project in Rajasthan, India. Version: 01 Date: 05/02/2011 A.2. Description of the small-scale project activity: The Project activity is a electricity generation from Wind Turbine Generators (WTG) of a total capacity of 5.3 MW in the state of Rajasthan. The project activity is taken up by different promoters in bundle which consists of one WTG of 2.1 MW capacity, four WTGs of 0.6 MW (4*0.6 MW) and one WTG of 0.8 MW capacity.all WTGs are located in the District Jaiselmer of State Rajasthan in India. The Project activity is promoted by six individual promoters. The details of the bundled project activity and ownership are given below. S. No. Owner Location WTG Capacity 1 M/s Art & Craft Inc Jaisalmer (Rajasthan) 2.1 MW 2 M/s Western Drugs Limited Jaisalmer (Rajasthan) 0.6 MW 3 M/s Gangaur Exports Pvt. Ltd. Jaisalmer (Rajasthan) 0.6 MW 4 M/s Anamika Conductors Ltd. Jaiselmer (Rajasthan) 0.6 MW 5 M/s Sharma Industries Jaiselmer (Rajasthan) 0.6 MW 6 M/s. S. Kumar Jaiselmer (Rajasthan) 0.8 MW The Technology for the project activity is provided by M/s Suzlon Energy Limited and M/s Enercon India Ltd. Which generates electricity from renewable source of energy i.e. Wind. WTG transforms the kinetic energy of wind into mechanical energy which is further converted into electrical energy. There are no associated greenhouse gas emissions in the electricity generation process since it utilizes a clean energy source. The Indian power system has been divided into two independent grids viz. NEWNE and Southern grid. NEWNE grid is an integrated grid comprising regional grids of northern, eastern, western & north-eastern regions. The main purpose of the project activity is to generate the electricity though sustainable means, for sale to the NEWNE grid, using wind power recourses and contribute to climate change mitigation efforts. The project activity is expected to deliver approximately 3873 MWh annually to the NEWNE Grid. The power exported by the project will displace an equivalent amount of power at the grid end generated by the majority of fossil-fuel fired sources 1. In the absence of the project activity the same amount of electricity would have been produced from the fossil fuels leading to more emissions of GHG which are avoided by this project activity. The project activity will contribute to annual GHG reductions estimated at 8654 tco2e/yr. The project activity is also responsible for sustainable growth and conservation of environment through use of wind as a renewable source. 3

4 Project Contribution towards Sustainable Development Ministry of Environment and Forests, Govt. of India has stipulated the social well being, economic well being, environmental well being and technological well being as the four indicators for sustainable development for Clean Development Mechanism (CDM) projects. The proposed project activity contributes to these aspects in the following manner. Social well being Rural and infrastructural development in the areas around the project. The project activity has assisted in higher interaction amongst the local villagers thereby increasing the flow of information in the villages thereby increasing the levels of awareness and knowledge in the community. Contribution towards achievement of the objectives of Government of India's policy on wind power generation. Environmental well being Reduction in the consumption of fossil fuels in the grid for generating additional electricity equivalent to that generated by the wind turbine. Reduction of GHG emissions associated with fossil-fuel based electricity generation in the grid. Economic well being Assisting in economic development of remote villages in Rajasthan by making investment in that area. As a result of huge amount of investment, lot of ancillary and utility units may open up, which will provide employment opportunities to local people, thus bringing about economic well being. Technological well being The successful implementation of project activity encourages other entrepreneurs to adopt this technology and invest in wind energy A.3. Project participants: Name of Party involved (*)((host) indicates a host party) Private and/or Public entity (ies) Project Participants (*) as applicable Kindly indicate if the party involved wishes to be considered as a project participant (Yes / No) Government of India (Host Country) M/s Art & Craft Inc M/s Western Drugs Limited M/s Gangaur Exports Pvt. Ltd. M/s Anamika Conductors Ltd. M/s Sharma Industries M/s. S. Kumar No 4

5 A.4. Technical description of the small-scale project activity: A.4.1. Location of the small-scale project activity: India A A Host Party(ies): Region/State/Province etc.: State : Rajasthan A Company Name M/s Art & Craft Inc M/s Western Drugs Limited M/s Gangaur Exports Pvt. Ltd. M/s Anamika Conductors Ltd. M/s Sharma Industries M/s. S. Kumar City/Town/Community etc: WTG Capacity (MW) Village District State 2.1 Mokla Jaiselmer Rajasthan 0.6 Habur Jaiselmer Rajasthan 0.6 Habur Jaiselmer Rajasthan 0.6 Habur Jaiselmer Rajasthan 0.6 Habur Jaiselmer Rajasthan 0.8 Habur Jaiselmer Rajasthan A Details of physical location, including information allowing the unique identification of this small-scale project activity : Company Name M/s Art & Craft Inc M/s Western Drugs Limited M/s Gangaur Exports Pvt. Ltd. M/s Anamika Conductors Ltd. M/s Sharma Industries M/s. S. Kumar WTG Capacity (MW) District Latitude Longitude 2.1 Jaisalmer N 27 o 09' 37.7" E 70 o 49' 06.1" 0.6 Jaisalmer N 27 o 02' 53.3" E 70 o 43' 05.2" 0.6 Jaisalmer N 27 o 05' 26.1" E 70 o 44' 28.7" 0.6 Jaisalmer N 27 o 02' 56.3" E 70 o 02' 57.3" 0.6 Jaisalmer N 27 o 04' 13.9" E 70 o 44' 56.9" 0.8 Jaisalmer N 27 o 01' 13.9" E 70 o 22' 51.9" 5

6 State: Rajasthan District: Jaisalmer Nearest Airport: o Jaisalmer Airport o Distance: 36.6 km South Nearest Railway Station: o o Jaisalmer Railway Station Distance: 32.2 km South 6

7 A.4.2. Type and category(ies) and technology/measure of the small-scale project activity: Type: I - Renewable energy projects Project category: I.D. Electricity generation for a system The project is a renewable energy project with maximum output capacity of 5.3 MW and is well below the specified limits of 15 MW of maximum output capacity as per Appendix B of the simplified modalities and procedures for small-scale project activities. Hence it qualifies for the mentioned type and category. Technology to be employed by the project activity: Project activity includes operation of 3 different capacity of wind mills of 2.1 MW (1*2.1 MW), 0.6 MW ( 4*0.6 MW) and 0.8 MW (1*0.8 MW). Wind Turbine Generator (WTGs) are procured from M/S Suzlon Energy Limited and M/s Enercon India Ltd. The technology is a clean and safe technology since there are no GHG emissions associated with the electricity generation. The table below lists technical details of the project activity. There is no Technology Transfer associated with the project. Technical details of 2100 KW Suzlon make WTG: Suzlon Energy Ltd. Model: S-88, Capacity: 2.1 MW Parameters Details Operating Data Value Rated Power 2.1 MW Cut-in Wind Speed 4 m/s Rated Wind Speed 14 m/s Project Lifetime 20 years Wind Class IEC-IIA Rotational Speed 15 to 17.6 rpm Gear Box Type 3 Stages (One Planetary and Two Helical) Gear Ratio 1 : 98.8 / 1 : Nominal Load 2200 kw Generator Type Slip Ring Type Induction Generator (Asynchronous) Rated power 2100 kw Rated Voltage 690 / 600 V AC Frequency 50 / 60 Hz Cooling System Air cooled Insulation Class H Slip Control Unique Flexi-Slip providing slip up to 16.67% Tower Type Tubular Tower (4 Sections) Corrosion Protection Epoxy / PU Coated Hub Height 79 m (Foundation top equal to ground level) Rotor Pitch System Pitch Regulated, Electrical Diameter 88 m 7

8 Swept Area 6082 m 2 Blade Material Type Epoxy bounded Fibre Glass Brake System Aerodynamics Braking 3 Independent System with Blade Pitching Mechanical Braking Hydraulic Fail Safe Disc Brake System Yaw System Type Driven by 3 Electrical-driven Planetary Drives Bearings Polyamide Slide Certifications Design Standards GL 2003 Quality ISO 9001:2000, ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 Technical details of 600 KW Suzlon make WTG: Parameters Details Operating Data Value Rated power 600W Cut in wind speed 4 m/s Rated wind speed 13m/s Cut-off wind speed 25m/s Survival wind speed 59.5 m/s Gear Box Type 1 Planetary stage /2 Helical stages Nominal load 660 Kw Generator Type Single Speed Induction Generator Speed at rated power 1539 rpm Rated power 600 Kw Rated Voltage 690 V AC Frequency 50 Hz Cooling system Air cooled Tower Type Lattice Tower ( Hot Dip galvanized) Tower Height 73 m Hub height Approx 75 Rotor Type 3 Blade, Upwind horizontal axis Diameter 52m Swept Area 2124 m2 Rotational speed at Rated Power rpm Aerodynamics braking Brake System 3 independent system with blade pitching 8

9 Type Protection Yaw System Active electrical yaw system Cable twist sensor, Proximity sensor Pitch system Type 3 independent blade pitch control Operation range -5 to +90 Technical details of 800 KW Enercon make WTG: Parameter name E-53 Parameter Range/value Rated Power 800 Kw Rotor Diameter 52.9 m Turbine type Direct driven, horizontal axis wind turbine with variable speed Power regulation Independent pitch system for each blade Orientation Upwind No. Of blades 3 Blade material Fibre Glass Epoxy Reinforced Gear box type Gareless Generator type Synchronous generator Braking Aerodynamic Output Voltage 400 V Yaw system Active yawing with 4 electric yaw drives with brake motor A.4.3. Estimated amount of emission reductions over the chosen crediting period: Years Estimation of annual emission reductions in tonnes of CO 2 e Total estimated reductions (tonnes of CO 2 ) Total number of crediting years 10 Annual average of the estimated reductions over the crediting period (tco 2 )

10 A.4.4. Public funding of the small-scale project activity: No Public funding is flowing into the project activity. A.4.5. Confirmation that the small-scale project activity is not a debundled component of a large scale project activity: As per 'Guidelines on assessment of de-bundling for SSC project activities' Annex 13 to EB 54, para 2, 'A proposed small-scale project activity shall be deemed to be a debundled component of a large project activity if there is a registered small-scale CDM project activity or an application to register another small-scale CDM project activity : (a) With the same project participants; (b) In the same project category and technology/measure; (c) Registered within the previous 2 years; and (d) Whose project boundary is within 1 km of the project boundary of the proposed small- scale activity at the closest point. The project Participants have not registered any small scale CDM activity or applied to register another small scale CDM project activity within 1 km of the project boundary, in the same project category and technology/measure in previous 2 years. 10

11 SECTION B. Application of a baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the small-scale project activity: Title: Grid Connected Renewable Energy Generation 1, Version 16, EB 54, sectoral scope 01 Reference: Appendix B of the simplified modalities & procedures for small scale CDM project activities The methodology also refers to latest approved versions of Tool to calculate the emission factor for an electricity system, version 02 B.2 Justification of the choice of the project category: Choice of project category, 'D- Electricity generation for a system' is as per the Appendix B of the simplified baseline and monitoring methodologies for selected small-scale CDM project activity categories. Justification for the choice has been provided in table as per requirements set in para 1-8 in the methodology AMS ID. Version-16. Applicability criteria This category comprises renewable energy generation units, such as photovoltaic, hydro, tidal/wave, wind, geothermal and renewable biomass that supply electricity to a national or a regional grid. Project activities that displace electricity from an electricity distribution system that is or would have been supplied by at least one fossil fuel fired generating unit shall apply AMS-I.F. This methodology is applicable to project activities that (a) install a new power plant at a site where there was no renewable energy power plant operating prior to the implementation of the project activity (Greenfield plant); (b)involve a capacity addition; (c)involve a retrofit of (an) existing plant(s); or (d)involve a replacement of (an) existing plant(s). Project case The Project is wind based renewable energy source, zero emission power project connected to the NEWNE grid. The Project will displace equivalent amount of fossil fuel based electricity generation that would have otherwise been provided by the operation and expansion of the fossil fuel based power plants in NEWNE regional electricity grid The project is installation of a new wind based electricity generation plant at a site where no renewable energy power plant was in operation (Greenfield plant) by the PP

12 Hydro power plants with reservoirs that satisfy at least one of the following conditions are eligible to apply this methodology: The project activity is implemented in an existing reservoir with no change in the volume of reservoir. The project activity is implemented in an existing reservoir, where the volume of reservoir is increased and the power density of the project activity, as per definitions given in the Project Emissions section, is greater than 4 W/m2; The project activity results in new reservoirs and the power density of the power plant, as per definitions given in the Project Emissions section, is greater than 4 W/m2. In the case of biomass power plants, no other biomass types than renewable biomass are to be used in the project plant. If the unit added has both renewable and nonrenewable components (e.g., a wind/diesel unit), the eligibility limit of 15 MW for a small-scale CDM project activity applies only to the renewable component. If the unit added co-fires fossil fuel, the capacity of the entire unit shall not exceed the limit of 15 MW. Combined heat and power (co-generation) systems are not eligible under this category. In the case of project activities that involve the addition of renewable energy generation units at an existing renewable power generation facility, the added capacity of the units added by the project should be lower than 15 MW and should be physically distinct from the existing units. In the case of retrofit or replacement, to qualify as a small-scale project, the total output of the modified or retrofitted unit shall not exceed the limit of 15 MW The Project activity is power generation from wind energy source hence criteria is not applicable to the project activity. The project activity does not use any type of biomass. Hence this criteria is not applicable. The project activity is a 5.3 MW wind electricity generation. Unit does not co-fires fossil fuels since wind is the only source of power. Project activity is not a combined heat and power system. Project involves installation of wind mill of capacity of MW at project site. It does not involve capacity addition. Not applicable, the entire wind project is a Green field project activity and this project is not the enhancement or up gradation project. B.3. Description of the project boundary: Project boundary has been ascertained using para 9 of AMS I.D. ' The physical, geographical site of the renewable generation source delineates the project boundary. Hence all the WTG equipments, and the metering arrangements and connected sub-station consists of the project boundary as marked in the figure below. 12

13 The GHG emission sources considered for the project boundary and their explanations are as follows: Source Gas Included Justification / explanation (BASELINE) Electricity Generation of NEWNE grid (PROJECT ACTIVITY) Wind Electricity Generation CO 2 Yes Major emission sources CH 4 N 2 O CO2 CH 4 N 2 O No No No No No Excluded for simplification. This is conservative Excluded for simplification. This is conservative As renewable wind power project, hence not applicable The proposed project is wind power project, hence not applicable The proposed project is wind power project hence not applicable 13

14 B.4. Description of baseline and its development: The proposed project activity is a Greenfield activity as it involves installation of a new Wind turbine generator at the project site by the Project Participant. Therefore, as per guidelines for baseline in Para 10 of methodology, AMS I.D, If the project activity is the installation of a new grid-connected renewable power plant/unit, the baseline scenario is the electricity delivered to the grid by the project activity that otherwise would have been generated by the operation of grid-connected power plants and by the addition of new generation source. Thus, Baseline for the project activity is power generated from renewable energy source multiplied by the grid emission factor of the respective grid calculated in transparent and conservative manner. Further, as per Para 11 of AMS I.D, baseline emission is the product of electrical energy baseline EG BL, y expressed in MWh of electricity produced by the renewable generating unit multiplied by the grid emission factor. BE y = EG BL,y X EF CO2,grid,.y Where, BE y = Baseline Emissions in year y; t CO 2 EG BL, y = Quantity of net electricity supplied to the grid from project activity in year y (MWh) EF CO2, grid, y = CO 2 emission factor of the grid in year y; t CO 2 /MWh The methodology provides following approaches for emission factor calculations. (a) Combined margin (CM), consisting of the combination of operating margin (OM) and build margin (BM) according to the procedures prescribed in the approved methodology Tool to calculate the emission factor for an electricity system, version 2.0. OR b) The weighted average emissions (in t CO 2 /MWh) of the current generation mix. The data of the year in which project generation occurs must be used. Option (a) has been considered to calculate the grid emission factor as per the Tool to calculate the emission factor for an electricity system since data is available from an official source. CO 2 Baseline Database for the Indian Power Sector, Version 5, Nov , published by Central Electricity Authority (CEA), Government of India has been used for the calculation of emission reduction. As per the "Tool to calculate the emission factor for an electricity system" version 2, the following steps have been followed. STEP 1. Identify the relevant electricity power systems. STEP 2. Choose whether to include off-grid power plants in the project electricity system (optional)

15 STEP 3. Select a method to determine the operating margin (OM) method. STEP 4. Calculate the operating margin emission factor according to the selected method. STEP 5. Identify the cohort group of power units to be included in the build margin (BM). STEP 6. Calculate the build margin emission factor. STEP 7. Calculate the combined margin (CM) emissions factor. STEP 1. Identify the relevant electricity power systems. The tool defines the electric power system as the spatial extent of the power plants that are physically connected through transmission and distribution lines to the project activity and that can be dispatched without significant transmission constraints. Keeping this into consideration, the Central Electricity Authority (CEA), Government of India has divided the Indian Power Sector into five regional grids viz. Northern, Eastern, Western, North-eastern and Southern. However since as the four regional grids except the southern grid has been synchronized, they are now being considered as one and named as NEWNE grid. Since the project supplies electricity to the NEWNE grid, emissions generated due to the electricity generated by the NEWNE grid as per CM calculations will serve as the baseline for this project. STEP 2. Choose whether to include off-grid power plants in the project electricity system (optional). Project participants have the option of choosing between the following two options to calculate the operating margin and build margin emission factor: Option I: Only grid power plants are included in the calculation. Option II: Both grid power plants and off-grid power plants are included in the calculation. The Project Participant has chosen only grid power plants in the calculation. STEP 3. Select a method to determine the operating margin (OM) method. The calculation of the operating margin emission factor (EF OM,y ) is based on one of the following methods: (a) Simple OM, or (b) Simple adjusted OM, or (c) Dispatch data analysis OM, or (d) Average OM. The data required to calculate simple adjusted OM or Dispatch data analysis is not possible due to lack of availability of this activity data to the project developers. The choice of other two options for calculating the operating margin emission factor depend on the generation of electricity from low cost/must run sources. In the context of the methodology low cost/must run resources typically include hydro, geothermal, wind, low cost biomass, nuclear and solar generation. 15

16 Share of Must-Run (Hydro/Nuclear) (% of Net Generation) NEWNE NA* 18.0% 18.5% 19.0% 17.3% South 21.6% 27.0% 28.3% 27.1% 22.8% India 18.0% 20.1% 20.9% 21.0% 18.6% Data for NEWNE grid in the CEA database has been included from onwards The above data clearly shows that the percentage of total grid generation by low cost/must run plants (on the basis of average of three most recent years) for the NEWNE and southern grids are less than 50 % of the total generation. Thus the average emission rate method cannot be applied, as low cost/must run resources constitute less than 50% of total grid generation. The Simple operating margin has been calculated as per the weighted average emissions (in tco 2 /MWh) of all generating sources serving the system, excluding hydro, geo-thermal, wind, low-cost biomass, nuclear and solar generation; In the project activity, (ex-ante) the full generation-weighted average for the most recent 3 years for which data are available at the time of PDD submission has been considered. The data is published annually by the Central Electricity Authority. The CEA database is based on the methodology ACM0002 version 10. It is confirmed that ex-ante vintage is considered in the project activity and cannot be changed during the crediting period. STEP 4. Calculate the operating margin emission factor according to the selected method. The operating margin emission factor has been calculated using a 3 year data vintage: Net Generation in Operating Margin (GWh) Year MWh (NEWNE) , , ,803 Simple Operating Margin (tco 2 /MWh) (incl. Imports) Year tco 2 /MWh (NEWNE) Simple Operating Margin = Generation weighted average of the simple operating Margin = (tco 2 /MWh) 16

17 STEP 5. Identify the cohort group of power units to be included in the build margin (BM). The value of the data has been taken from the data published by CEA as referred in earlier step. The CEA Baseline Database has been calculated as per the methodology ACM0002 and the details of the key assumptions considered to calculate the figure can be found in the User Guide of the same. Project participants can choose between one of the following two options: Option 1 Calculate the Build Margin emission factor EF BM,y ex-ante based on the most recent information available on plants already built for sample group m at the time of PDD submission. The sample group m consists of either the five power plants that have been built most recently or the power plant capacity additions in the electricity system that comprise 20% of the system generation (in MWh) and that have been built most recently. Project participants should use from these two options that sample group that comprises the larger annual generation. Option 2 For the first crediting period, the Build Margin emission factor EF BM,y must be updated annually ex-post for the year in which actual project generation and associated emissions reductions occur. For subsequent crediting periods, EF BM,y should be calculated ex-ante, as described in option 1 above. The sample group m consists of either the five power plants that have been built most recently or the power plant capacity additions in the electricity system that comprise 20% of the system generation (in MWh) and that have been built most recently. Project participants should use from these two options that sample group that comprises the larger annual generation. STEP 6. Calculate the build margin emission factor (EF BM, y ) Option 1 as described above is chosen in the project activity. BM is calculated ex-ante based on the most recent information available at the time of submission of PDD. The EF BM, y is estimated as tco 2 /MWh (With sample group constituting most recent capacity additions to the grid comprising 20% of the system generation) STEP 7. Calculate the combined margin (CM) emissions factor Combined Margin The combined margin is the weighted average of the simple operating Margin and the build margin. In particular, for intermittent and non-dispatchable generation types such as wind and solar photovoltaic, the Tool to calculate the emission factor for an electricity system, version 2.0, allows to weigh the operating margin and Build margin at 75% and 25%, respectively. The baseline emission factor is calculated using the combined margin approach as described in the following steps: Calculation of Baseline Emission Factor EF y The baseline emission factor EF y is calculated as the weighted average of the Operating Margin emission factor (EF OM, y ) and the Build Margin emission factor (EF BM, y ): EF y = w OM * EF OM, y + w BM * EF BM, y Where the weights w OM and w BM, are 75% and 25% respectively for wind energy projects, and EF OM, y and EF BM, y are calculated as described in Steps 1 and 2 above and are expressed in tco 2 /MWh. 17

18 Baseline Emission factor(newne) = 0.75* * = tco 2 /MWh 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 small-scale CDM project activity: As the project activity is small scale project activity (bellow then 15 MW ) Hence the additionality of the project activity has been discussed according to Attachment A to Appendix B of the simplified modalities and procedures for small-scale CDM project activities. As per attachment A to Appendix B of the simplified modalities and procedures for small-scale CDM project activities, project participants need to demonstrate that the project activity would not have occurred anyway due to at least one of the following barriers: (a) Investment barrier (b) Technological barrier (c) Barrier due to prevailing practice (d) Other barriers Investment barrier has been considered to demonstrate the additionality of the project. The project activity is a voluntary initiative by the project participants. Each of the participant has evaluated the financial viability of the project proposal submitted by respective technology providers. and Board of directors have agreed to pursue the project keeping in mind CDM benefits accruable to the project. This has also been tabulated in the chronological actions taken by each project participant. Since the project activity does not mandates the project participants to invest as the baseline scenario is generation of electricity in the grid which is not in the purview of PPs. Hence, as per the Guidelines on the assessment of investment analysis benchmark analysis has been undertaken to assess the financial feasibility of the project. Internal rate of return (IRR) has been used as an indicator for showing the returns of the project which has been compared with the relevant benchmark. As per the Guidelines on the assessment of investment analysis 'Local commercial lending rates or weighted average costs of capital (WACC) are appropriate benchmarks for a project IRR. Required/expected returns on equity are appropriate benchmarks for an equity IRR' Being conservative for CDM additionality, the Benchmark for the Project IRRs are considered as Prime Landing Rate from RBI, which is publically available, appropriate and most reliable rate, available at the time of decision making. Investment Barrier: Assumptions and Parameters: i) Art and Crafts (2.1 MW) Parameters 18 Source Installed Capacity (MW) 2.1 Techno-Commercial Offer Plant Load Factor (PLF %) 21% Bank Letter Annual Generation (GWh) 3.86 Calculated Transmission Loss 4% Tariff Order/Invoices Net Exported (GWh) 3.71 Calculated

19 Electricity Price from Grid ( / kwh) 3.87 Rajasthan Wind Tariff Order O&M Cost ( Million / Year) For 1 st Year 0 From 2 nd year Onwards 2.3 Yearly Increase (%) on O &M Cost (After 2 nd Year) 5.0% Term Loan Details Interest on Term Loan 30 Loan Repayment Period (Years) 70 Moratorium Period (Months) 6 Other Details Book Depreciation ( Million) Techno-Commercial Offer Prior Loan Details Calculated Insurance ( Million) 2.0 Techno-Commercial Offer Income Tax Rate 33.99% tion/corporate_tax/index.html Emission Factor (tco 2 /GWh) Calculated CER Price (Euro / TonCO 2 ) 12 Exchange Rate (Euro = INR ) 60 Incentives Tax Holiday (Years) 10 MAT 16.99% ii) Gangaur Exports Pvt. Ltd. (0.6 MW) Parameters / EN/power-forrenewables.htm /corporate_tax/index.html Source Installed Capacity (MW) 0.6 Techno-Commercial Offer Plant Load Factor (PLF %) 21% Bank Letter Annual Generation (GWh) 1.10 Calculated Transmission Loss 4% Tariff Order Net Exported (GWh) 1.06 Calculated Electricity Price from Grid ( / kwh) 3.87 Rajasthan Wind Tariff Order O&M Cost ( Million / Year) For 2 Year 0 From 3 nd year Onwards Yearly Increase (%) on O &M Cost (After 2 nd Year) 5.0% Techno-Commercial Offer Other Details Income Tax Rate 33.99% tion/corporate_tax/index.html Emission Factor (tco 2 /GWh) Calculated 19

20 CER Price (Euro / TonCO 2 ) 12 Exchange Rate (Euro = INR ) 60 Incentives Tax Holiday (Years) 10 MAT 16.99% iii) Anamika Conductors Ltd. (0.6 MW) Parameters 20 Source Installed Capacity (MW) 0.6 Techno-Commercial Offer Plant Load Factor (PLF %) 21% Bank Letter Annual Generation (GWh) 1.10 Calculated Transmission Loss 4% Tariff Order Net Exported (GWh) 1.06 Calculated Electricity Price from Grid ( / kwh) 3.87 Rajasthan Wind Tariff Order O&M Cost ( Million / Year) For 1 st Year 0 From 3 nd year Onwards 0.60 Yearly Increase (%) on O &M Cost (After 2 nd Year) 5.0% Techno-Commercial Offer Other Details Income Tax Rate 33.99% tion/corporate_tax/index.html Emission Factor (tco 2 /GWh) Calculated CER Price (Euro / TonCO 2 ) 12 Exchange Rate (Euro = INR ) 60 Incentives Tax Holiday (Years) 10 MAT 16.99% iv) Western Drugs Limited (0.6 MW) Parameters / EN/power-forrenewables.htm /corporate_tax/index.html / EN/power-forrenewables.htm /corporate_tax/index.html Source Installed Capacity (MW) 0.6 MW Techno-Commercial Offer Plant Load Factor (PLF %) 21 % Third Party report Annual Generation (GWh) 1.10 Calculated Transmission Loss 4% Tariff Order Net Exported (GWh) 1.09 Calculated

21 Electricity Price from Grid ( / kwh) 3.87 Rajasthan Wind Tariff Order O&M Cost ( Million / Year) For 1 st Year 0 From 2 nd year Onwards 0.7 Yearly Increase (%) on O &M Cost (After 2 nd Year) 5.0% 21 Techno-Commercial Offer Other Details Income Tax Rate 33.99% tion/corporate_tax/index.html Emission Factor (tco 2 /GWh) Calculated CER Price (Euro / TonCO 2 ) 12 Exchange Rate (Euro = INR ) 60 Incentives Tax Holiday (Years) 10 MAT 16.99% v) Sharma Industries Parameters Source Installed Capacity (MW) 0.6 MW Techno-Commercial Offer Plant Load Factor (PLF %) 21 % Bank Report Annual Generation (GWh) 1.10 Calculated Transmission Loss 4% Tariff Order Net Exported (GWh) 1.06 Calculated Electricity Price from Grid ( / kwh) 3.87 Rajasthan Wind Tariff Order O&M Cost ( Million / Year) For 1 st Year 0 From 2 nd year Onwards 0.7 Yearly Increase (%) on O &M Cost (After 2 nd Year) 5.0% Techno-Commercial Offer Other Details Income Tax Rate 33.99% tion/corporate_tax/index.html Emission Factor (tco 2 /GWh) Calculated CER Price (Euro / TonCO 2 ) 12 Exchange Rate (Euro = INR ) 60 Incentives Tax Holiday (Years) 10 MAT 16.99% / EN/power-forrenewables.htm /corporate_tax/index.html / EN/power-forrenewables.htm /corporate_tax/index.html

22 Benchmark analysis: With reference to the Guidance 16 of Annex 58 of EB 51, " The benchmark approach is therefore suited to circumstances where the baseline does not require investment or is outside the direct control of the project developer, i.e. cases where the choice of the developer is to invest or not to invest." Also as per the Guidance 12 of Annex 58 of EB 51, "In cases where a benchmark approach is used the applied benchmark shall be appropriate to the type of IRR calculated. Local commercial lending rates or weighted average costs of capital (WACC) are appropriate benchmarks for a project IRR. In reference to both the guidance above, as the baseline scenario for the project activity is to supply the electricity from Northern grid, for which no investment is required by the Project Participant, hence benchmark approach is best suited approach for PP. As justified in the third para of this section, being conservative for CDM additionality, the Benchmark for the Project IRRs are considered as Prime Landing Rate from RBI, which is publically available, appropriate and most reliable rate, available at the time of decision making. Results: IRRs of the individual WTG (reference is the IRR Spreadsheets): Sl. No. Project Owner Project IRR (%) Benchmark (rate in %) 1 M/s Art & Craft Inc M/s Western Drugs Limited M/s Gangaur Exports Pvt. Ltd M/s Anamika Conductors Ltd M/s Sharma Industries M/s. S. Kumar The IRR for project activity as estimated is evidently lower than benchmark, which shows that the project faces financial risk. However, as described in the IRR spreadsheets, the IRR improves with consideration of CDM benefits. Hench the project activity satisfactorily satisfies the Additionality criteria in CDM. 22

23 Sensitivity analysis Following factors have been considered in the sensitivity analysis: 1. Gross generation 2. Project cost The variation in these parameters have been considered for a range of -10% to 10% and the impact of variation is shown in the table below: S.No. Project Owner Project IRR (%) Benchmark Project Cost Generation -10% 10% -10% 10% 1 M/s Art & Craft Inc M/s Western Drugs Limited M/s Gangaur Exports Pvt. Ltd M/s Anamika Conductors Ltd M/s Sharma Industries M/s. S. Kumar The results of sensitivity analysis show that even with a variation of +10% & -10% in project cost, O&M cost and gross generation by the wind turbine project IRR is significantly lower than the benchmark. 23

24 Demonstration of Parallel and continuing actions as per the ' guidelines on the demonstration and assessment of prior consideration of the CDM' annex 22 to EB 49. Art & Crafts INC Date Project Implementation CDM Implementation Proof of action 15/07/2010 Board Resolution Copy of Board Resolution Copy. 18/08/2010 Purchase order for the wind mill was raised Purchase orders 24/09/2010 Signing of Power Purchase Copy of Power Purchase Agreement Agreement 29/09/2010 Wind project got Commissioning commissioned. certificate 01/10/ Contract signed with CDM consult Copy of contract 16/11/2010 Got project listed on Details of project on UNFCCC website for UNFCCC website prior consideration of Snapshot CDM 07/01/2011 LSM Meeting LSM Documents Western Drugs Limited Date Project Implementation CDM Implementation Proof of action 12/07/2010 Board Resolution 19/08/ /09/ /09/ /11/ /09/ 2011 Purchase order for the wind mill was raised Wind project got commissioned. Signing of Power Purchase Agreement Got project listed on UNFCCC website for prior consideration of CDM Contract signed with CDM consult Copy of Board Resolution Copy. Purchase orders Commissioning certificate Copy of Power Purchase Agreement Details of project on UNFCCC website Snapshot Copy of contract 07/01/2011 LSM Meeting LSM Documents Gangaur Exports Pvt. Ltd. Date Project Implementation CDM Implementation Proof of action 22/09/2010 Board Resolution 18/10/2010 Purchase order for the wind mill was raised Wind project got 24 Copy of Board Resolution Copy. Purchase orders Commissioning

25 01/07/ /01/ 2011 commissioned. Signing of Power Purchase Agreement Got project listed on UNFCCC website for prior consideration of CDM Contract signed with CDM consult certificate Copy of Power Purchase Agreement Details of project on UNFCCC website Snapshot Copy of contract 07/01/2011 LSM Meeting LSM Documents Anamika Conductors Ltd. Date Project Implementation CDM Implementation Proof of action 03/08/2010 Board Resolution 03/09/ /12/ /12/ /12/ 2009 Purchase order for the wind mill was raised Wind project got commissioned. Signing of Power Purchase Agreement Got project listed on UNFCCC website for prior consideration of CDM Contract signed with CDM consult Copy of Board Resolution Copy. Purchase orders Commissioning certificate Copy of Power Purchase Agreement Details of project on UNFCCC website Snapshot Copy of contract 07/01/2011 LSM Meeting LSM Documents Sharma Industries Date Project Implementation CDM Implementation Proof of action 16/09/2010 Board Resolution 22/10/ /12/ /12/ /12/ /12/ Purchase order for the wind mill was raised Signing of Power Purchase Agreement Wind project got commissioned. Got project listed on UNFCCC website for prior consideration of CDM Contract signed with CDM consult Copy of Board Resolution Copy. Purchase orders Copy of Power Purchase Agreement Commissioning certificate Details of project on UNFCCC website Snapshot Copy of contract 07/01/2011 LSM Meeting LSM Documents 25

26 B.6. Emission reductions: B.6.1. Explanation of methodological choices: As per Paragraph 11 of methodology I.D. the ex-ante baseline emissions are calculated based on the net electricity provided to the grid by renewable generating unit multiplied by an emission factor for the displaced grid electricity (in tco 2 /MWh). Baseline emissions : The baseline emission calculation for the project activity is attributable to the CO 2 emissions that could have been produced at grid from fossil fuel based power plants in absence of the proposed project activity with Wind mill. Therefore the amount electricity supplied to the baseline grid will be multiplied by the Grid emission factor to calculate the baseline emission reduced by the Project. As per para 11of AMS ID BE y = EG BL,y X EF CO2,grid,.y Where, BEy = Baseline Emissions in year y; t CO 2 EG BL,y = Quantity of net electricity supplied to the grid as a result of the implementation of the CDM project activity in year y (MWh) EF CO2, grid, y = CO 2 emission factor of the grid in year y; t CO2/MWh Project Emissions: As per para 19 to AMS ID for renewable project activities Project Emission (PE y ) in tco 2 /year = 0 except geothermal and hydro power plants. Since project activity is a wind power plant. Therefore, PE y = 0...(1) Leakage Emissions: Since project does not involve transfer of an energy generating equipment from another activity, as per para 15 of AMS ID: LE y = 0... (2) Emission Reduction: As per para 21 of AMS ID, ER y = BE y -PE y -LE y Where, 26

27 ER y = Emission reductions in year y (t CO 2 /y) BE y = Baseline Emissions in year y (t CO 2 /y) PE y = Project emissions in year y (t CO 2 /y) LE y = Leakage emissions in year y (t CO 2 /y) Using equation 1 & 2 we get, ER y = BE y -0-0 or ER y = BE y B.6.2. Data and parameters that are available at validation: Data / Parameter: EF OM,y Data unit: tco 2 /MWh Description: Operating Margin Grid Emission factor Source of data used: Calculated from CEA database Value applied: Justification of the The value applied is taken from the CEA reviews of three years. The detailed choice of data or calculation is shown in the baseline section B.4 above. description of measurement methods and procedures actually applied : Any comment: This value is fixed ex-ante Data / Parameter: EF BM,y Data unit: tco 2 /MWh Description: Build Margin Grid Emission factor Source of data used: CEA database Value applied: Justification of the The value applied is taken from the CEA reviews of three years. The detailed choice of data or calculation is shown in the baseline section above B.4. description of measurement methods and procedures actually applied : Any comment: This value is fixed ex-ante Data / Parameter: EF CM,y Data unit: tco 2 /MWh Description: Combined Margin Grid Emission factor Source of data used: Calculated from operating and built margin, using 75%-25% weights Value applied: Justification of the The value applied is taken from the CEA reviews of three years. The detailed choice of data or calculation is shown in the baseline section above. description of measurement methods 27

28 and procedures actually applied : Any comment: This value is fixed ex-ante B.6.3 Ex-ante calculation of emission reductions: Calculation of Emission Reductions According to Paragraph 21 of AMS ID, Version 16, the emission reductions are calculated as follows: ER y = BE y PE y LE y Where, ER y Emission reductions in year y (tco 2 e/y) BE y Baseline Emissions in year y (tco 2 e/y) PE y Project emissions in year y (tco 2 e/y) LE y Leakage emissions in year y (tco 2 e/y) As per Paragraph 19, AMS ID, Version 16 For most renewable energy project activities, PE y = 0. Since, the project is a Wind Project, i.e., renewable, hence the Project Emission (PE y ) = 0. As per Paragraph 20, AMS ID, Version 16 If the energy generating equipment is transferred from another activity, leakage is to be considered. Since, the project is a Wind Project, the Leakage (L y ) = 0. Hence, the project, being a Wind Power Project, does not involve any emissions, therefore the Project Emission (PE y ) = 0 and Leakage (L y ) = 0 Emission Reduction (ER y ) = BE y PE y LE y = BE y = BE y tco 2 e In other words, the above equation can be simplified to: Emission Reduction (ER y ) = Baseline Emission (BE y ) Calculation of Baseline Emissions (BE y ) According to the Paragraph 11 of AMS ID, Version 16, The baseline emissions are the product of electrical energy baseline EG BL, y expressed in MWh of electricity produced by the renewable generating unit multiplied by the grid emission factor. BE y = EG BL,y * EF CO2,grid,y Where, BE y Baseline Emissions in year y; tco 2 EG BL,y Quantity of net electricity supplied to the grid as a result of the implementation of the CDM project activity in the year y (MWh) CO 2 Emission Factor of the grid in year y; tco 2 e/mwh EF CO2, grid, y 28

29 Calculations to determine EF CO2 and EG BL,y : EF CO2 (NEWNE Grid) = tco 2 e/mwh EG BL,y (MWh) = Rated Capacity (MW) * Plant Load Factor (%) * Operational Hours / Year (Hours) Transmission and Wheeling Charges (%) Emission Reduction Calculation: Project Owner Capacity PLF Operational Hours / Year Transmission Losses Net Generation Grid Emission Factor Baseline Emission (MW) (%) (Hours) (%) (MWh) (tco 2 e/mwh) tco 2 e Art & Craft Inc % 8,760 4% Western Drugs Limited % 8,760 4% Gangaur Exports Pvt. Ltd % 8,760 4% Anamika 0.6 Conductors Ltd. 21% 8,760 4% Sharma 0.6 Industries 21% 8,760 4% S. Kumar % % Total 8654 Since, Emission Reduction (ER y ) = Baseline Emission (BE y ) Thus, Emission Reduction (ER y ) = 8654 tco 2 e/mwh B.6.4 Summary of the ex-ante estimation of emission reductions: Year Estimation of Estimation of Estimation of Estimation of Project Activity Baseline Overall Emission Leakage (tonnes Emission (tonnes Emission (tonnes Reduction (tonnes of CO of CO 2 e) of CO 2 e) 2 e) of CO 2 e) Total (tco 2eq )

30 B.7 Application of a monitoring methodology and description of the monitoring plan: B.7.1 Data and parameters monitored: Data / Parameter: Data unit: Description: Source of data to be used: Value of data Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: EG KWh Monthly electricity supplied to the sub-station Meter reading by Rajasthan Electricity board The metering system will comprise of two sets of meters; meters on the generator cables recording gross electricity generation and meters in the substation recording net electricity generation. The net metered electricity generation data will be used to calculate and monitor the greenhouse gas emission reductions from the project. Joint Meter Reading would be done at the end of every month, by REB officials and PP representatives at the substation, hard copies of these are available with the PP. Calibration procedure: Electricity meter is calibrated by the RVPNL at least once in 12 months with a calibration report maintained by the project owner. Meter accuracy class is 0.2s. Data / Parameter: Data unit: Description: Source of data to be used: Value of data Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: ICR GWh Individual Generation at controller by WTG y Monthly generation report Monthly generation report is prepared by the Suzlon on the basis of controller reading at the WTG. Soft copy is preserved for entire period of the project 30

31 B.7.2 Description of the monitoring plan: The purpose of the monitoring plan is to ensure the completeness, consistency, accuracy of the monitoring of the net electricity generation and calculation of the emission reductions. The technology supplier is responsible for operating and maintaining the WTG as per the contract signed. The person appointed by the technology supplier will be in charge of the monitoring. 1. Monitoring objects: As the baseline emission factor has been ex-ante calculated, the main monitoring objects are the electricity delivered to the NEWNE grid. 2. Metering: Joint Metering Procedure: The joint reading at metering point is carried out once in a month in presence of authorized representative of project owner and respective DISCOMs. Joint meter reading will be furnished to Superintending Engineer for further processing. Wherever more than one project owners are delivering the energy through common power evacuation facility and through common metering equipment, there Joint meter reading is supported by the meter readings of individual meters installed at wind energy generator. Based on Joint Meter Reading and individual meter reading a break of electricity generated from individual wind energy generator is prepared and certified by the respective DISCOMs. Complete records are maintained by project owner as well as the DISCOMs. 3. Data Uncertainty: Main Meter installed at the sub-station is of 0.2 s accuracy class. It is maintained by the state electricity board, hence authenticity of its output is checked periodically. A Back-up meter of same accuracy supplements the main meter and are referred both for data certainty and in case of meter failure. LCS installed at WTG are maintained and operated by the WTG provider as accepted by State electricity board. 4. Data Archiving: Each WTG is equipped with an integrated electronic meter (Local controller system or LCS). These meters record hourly data of wind speed, WTG generation, rotor RPM, reactive and active electricity consumption by WTG. The hourly meter readings are recorded and compiled at the end of each day. These readings are also compiled on monthly basis. The Individual LCS are connected to the Central Monitoring Station (CMS) of the wind farm through a wireless radio frequency network (SCADA). The LCS data of individual machine can be monitored as a real-time entity at CMS which helps in efficient operation of individual WTG and reduces the risk of breakdown of WTG. CMS also keeps a record of the total generation by WTG from the time of its commissioning till present. The snapshot of generation on the last day of every calendar month will be kept as a record both in electronic as well as printed (paper) form. The electricity generated is transmitted to substation which has a back up meter on the incoming line of substation and main meter on the outgoing line. The reading of main meter is used for billing purpose and for apportioning of individual generation of a WTG. The data from main and back meter will also be kept as record of the net electricity supplied by the WTG. 5. QA-QC Procedure: The meters at substation will be calibrated and sealed annually by RVPNL personnel. If any meter is found to be faulty it will be replaced by RVPNL. Backup meter is also installed at the sub-station which act as a fail-safe mechanism in event of main meter failure. The billing of electricity is done against the main electricity meter at outgoing line of the sub-station. LCS of WTG 31