OPEN JOINT STOCK COMPANY KHABAROVSKENERGO. Investment project

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1 OPEN JOINT STOCK COMPANY KHABAROVSKENERGO Investment project Amursk CHP-1: Switch from Coal to Gas of Two Boilers with Implementation of Environmentally Advanced Equipment Project Design Document Baseline Study Prepared by: Energy Carbon Fund and Research Institute of Environmental Problems in the Power Sector Submitted by: Energy Carbon Fund Moscow, 2004

2 Abstract Project Design Document for JI Project Amursk CHP-1: Switch from Coal to Gas of Two Boilers with Implementation of Environmentally Advanced Equipment was prepared for ERUPT-4 in accordance with the Terms of Reference of the Tender. The document includes the baseline study, monitoring plan, evaluation of environmental effect caused by implementation of the project and stakeholders consultation activities. The work was executed by Energy Carbon Fund and Research Institute of Environmental Problems in the Power Sector. Acknowledgements Energy Carbon Fund would like to thank specialists from regional utility Khabarovskenergo for assistance and contribution to the study. Apropos of remarks and proposals one may refer to: Rogankov M.P., Varfolomeev A.V., Chastnov V.B. Energy Carbon Fund 19, Leninsky prospect, Moscow, , Russia, Tel.: (095) Fax: (095) Page 2

3 Table of contents 1 Project information... 5 A 1.1 Project characteristics... 5 A 1.2 Project Abstract... 5 A 1.3. General description of Khabarovsk Region, the town of Amursk, power utility Khabarovskenergo and Amursk CHP A Background of the project, its history and the problems that this project has to solve A 1.5. Intervention GHG sources and sinks and project boundaries Direct on-site GHG emissions (Amursk CHP-1) Direct off-site GHG emissions Indirect on-site GHG emissions Indirect off-site GHG emissions Flowchart of the project with its main components and their connections 16 3 Description of the current product delivery system The current flowchart of the facility and product delivery system with its main components and connections Characteristics of the main equipment of Amursk CHP Information about the operation modes of the current flowchart of Amursk CHP-1 and product delivery Key factors influencing the baseline and the project A 4.1 General notes A 4.2 Analysis of Key Factors A 4.3 Mitigation measures for a non perfect project performance A 5. Identification of the most likely baseline and the associated GHG emissions 34 A 5.1. Current situation at CHP A 5.2 Choice of Baseline Construction Methodology A 5.3 Choice of the Most Likely Baseline Scenario A 5.4 Potential uncertainties and errors of the defined baseline Estimations of GHG project emissions Crediting time A 7.1 Time schedule and crediting time A 7.2 Entities responsible Page 3

4 8 Estimation of GHG emission reduction Reference Annex I Annex II Annex III Annex IV Annex V Annex VI Annex VII Annex VIII Page 4

5 1 Project information A 1.1 Project characteristics Supplier s name and address Open Power and Electrification JSC «Khabarovskenergo», 49 Frunze Str., , Khabarovsk, Russia Company name Open Power and Electrification JSC «Khabarovskenergo» Legal address 49, Frunze str., Khabarovsk, , Russia Zip code + city address , Khabarovsk Postal address 49, Frunze str., Khabarovsk, , Russia Zip code+ city postal address , Khabarovsk Code Russian Federation Contact person Mr. Alexander B. Rozhkov Job title Science and Technology Deputy General Director Director of "Energonaladka" subsidiary Telephone number Fax number bvv@bvv.khv.ru Date of registration May 7, 1993 Bank account Far East Bank Savings Bank of Russia, 02 subsidiary Additional information: Local contact person Mr. Khlystov Alexander Director of Amursk CHP-1 Other parties involved in the project (co-investors, owner, JSC «Khabarovskenergo» subsidiaries, «Komsomolsk heat networks», «Energosbyt», Vneshtorgbank operator, users, etc.) A 1.2 Project Abstract Project Title Amursk CHP-1: Switch from Coal to Gas of Two Boilers with Implementation of Environmentally Advanced Equipment Abstract The essence of the project lies in modernization and switch from Coal to Gas of Boilers No 9, 10 with implementation of economy and environmentally efficient measures at CHP-1: Boilers Station 9, 10 and turbine No 5, operating presently at pressure of 90 kg/cm2 *, and low heat and electricity installed capability utilization will make up the individual power unit to be operated on the design nominal steam pressure of 130 kg/cm 2 ; Optimization of the dedicated boiler performance; Installation of low-no x burners; Implementation of boiler automatic process control and monitoring system; Installation of frequency-response motors for the feed pumps; Installation of flue gas recirculation induced-draft fans to maintain steam parameters in boiler operation on gas. Project location Amursk CHP Plant-1, Amursk, Khabarovsk Region Project starting date Construction starting date Construction finishing date * 1 kg/cm 2 = MPa Page 5

6 A 1.3. General description of Khabarovsk Region, the town of Amursk, power utility Khabarovskenergo and Amursk CHP-1 The Amursk CHP Plant-1 (further on - simply CHP-1) is a branch of the regional power utility Khabarovskenergo. The Khabarovsk Region and the town of Amursk are shown on Fig. 1. Moscow RUSSIA Khabarovsk Region The town of Amursk ( ) is right in the center of the yellow part Fig.1 Khabarovsk Region The Region is located in the Far East of Russia, the territory is thous. sq. km (4.4% of the country s territory) with population of approx. 1.5 mln. people. In 90s the population in the Region decreased by approx. 100 thous. and the GDP of the Region fell by 2 times. That caused the aggravation of the economic, social and political environment in the Region with the decrease of energy demand. In Page 6

7 the situation changed for the better, for instance, the population raised by 37 thous., there appeared some positive changes in industrial activity. (taken from the web-site of the Khabarovsk Region). Natural gas is supplied to the Region and the town of Amursk from the Okha gas field. Big gas deposits (Sakhalin Shelf Deposits 1 and 2) are under development by international consortium. Main pipeline from those deposits will go through Khabarovsk region. The Federal Program Gasification of Sakhalin, Khabarovsk and Primorsk Regions adopted by the Government of the Russian Federation on 4 July 1999 fixed the delivery of gas in needed quantities. At the same time the program does not force Khabarovskenergo to switch its power plants to gas (as it was cleared out by the Minister of Power and Fuel of Khabarovsk Region during his meeting with the project team). Development of Russian economy is envisaged with GDP annual growth rate from 5% to 7%, the most optimistic plans are to double GDP in the coming 10 years. At the same time the concept of leveling of disproportions between regions is adopted which should bring positive results for the Khabarovsk region with a comparatively low level of economic development. This will lead to higher energy demand and production. The town of Amursk The town of Amursk is located on the Amur river. The population in early 90 s was approx. 52 thous., by now it decreased to approx. 50 thous. (the latter figure was given by the Mayor of Amursk). There are industrial enterprises lumber mill/woodworking factory, cellulose/board works, instrument manufacturing works and some others. All of them were strongly affected by the economic crisis of 90s, cellulose/board works at the time being is decommissioned and can never be restored under the previous design. A revival program is needed for all of them. As it was mentioned by the Mayor of Amursk there are intentions from foreign and domestic business to invest in industrial enterprises of the town. Khabarovskenergo The regional utility Open JSC Khabarovskenergo (subsidiary of JSC Unified Energy System of Russia whose shares constitutes %) supplies with power and heat the consumers of the Khabarovsk Region and the Jewish Autonomous Region and is the largest Far East power producer. The Khabarovsk power system includes two energy areas integrated energy area and the Nikolaevsk energy area that is part of the Nikolaevsk CHP and 110 kv networks. The Nikolaevsk energy area operates independently. The power system is part of the United Far East Power System and its integrated energy area is connected with JSC «Amurenergo» via 220 and 550 kv transmission lines, and with JSC «Dalenergo» - via 110/220 kv transmission line. JSC Khabarovskenergo by its own generation fully meets the existing electricity demand of the consumers of the Khabarovsk region and the Jewish Autonomous Region. "Khabarovskenergo" incorporates 22 enterprises, including 9 TPPs, 4 enterprises of electrical grids, 3 large heating boiler plants (as parts of electrical grid companies), 2 enterprises of heat networks. Electricity generation and heat supply by Khabarovskenergo in are shown in Table 2 and Table 3 of A3.2. Page 7

8 In recent years, the JSC Khabarovskenergo is confronted with everaggravating problem of physical and absolute aging of equipment of its power stations and electric lines. In turn, all this is one of the causes of higher cost of energy production. So, the cost of electric energy production at Khabarovskenergo in 2002 was 0.91 ruble/kwh, while in neighboring power systems the same indicator was as follows: JSC Amurenergo 0.73 ruble/kwh, JSC Dalenergo 0.82 ruble/kwh. The high cost of electric energy production results in the necessity of establishing rather high energy tariffs. Meanwhile, the considerable share in the energy consumption structure of the Khabarovskenergo relates to the consumers financed and subsided by the region and local budgets. However, those budgets cannot now provide for duly and full energy payments on the existing tariffs. Such situation makes Khabarovskenergo deficient in money to renew and upgrade the existing equipment. The attraction of the carbon credits for the implementation of the project Amursk CHP-1: Switch from Coal to Gas of Two Boilers with Implementation of Environmentally Advanced Equipment will enable to overcome the investment barrier and considerably improve the performance characteristics of energy production at CHP-1. As it was declared by another potential investor of the project VneshTorgBank it will give credit to Khabarovskenergo for the project in case carbon investments are provided. Amursk CHP-1 (shown on the photo below) the building with the 3 stacks in the middle of the photo; further on is the cellulose /cardboard facility. Page 8

9 It is one of the 9 power plants belonging to JSC «Khabarovskenergo», it has installed electrical capacity of 285 MW and heat capacity of 1169 Gcal/h (1360 MW). CHP-1 supplies heat to Amursk, being the monopolist in this field in the town, and delivers electricity to the Khabarovskenergo power system. Electricity and heat generation in 2002 was mln. kwh and thous. Gcal. CHP-1 employs 9 utility boilers and 5 turbines, as well as 4 peak-load hot-water boilers, that are not in operation. The detailed information on the installed equipment is given in 3.2. CHP-1 was designed as a brown coal firing plant and is using coal as the main fuel at the time being. In late 90s the development of gas sector of the Region and larger access to gas made it reasonable to Khabarovskenergo to build a 43 km gas pipeline to CHP-1 and gas distribution substation at the plant. That made it possible to periodically fire gas at retrofitted boilers No 6 and 7 (mostly in summer time). The share of gas in the annual fuel balance of CHP-1 in 2002 was 17 % (in accordance with the Amursk CHP-1 state reporting forms No 3- E ). Nine utility boilers of CHP-1 supply steam to the stationwide header-steam line operating at a pressure of 90 kg/cm 2 and temperature Boilers No 9 and 10 and turbine No 5 had been initially designed at the pressure of 130 kg/cm 2, but for some technical reasons of the plant as a whole have to work with 90 kg/cm2 steam parameters thus having low efficiency. Because of the economic crisis and regression in production in the Region and the town electricity generation at CHP-1 in 2001 had reduced by 1.2 times and heat supply - by 4.2 times as compared to As a result, CHP-1 operates with low utilization capacity. The electric and heat installed capability coefficients of CHP in 2002 were 32.4% and 12%, respectively. The specific consumption of the standard fuel per the electricity supply for the generating equipment designed at 130 kg/cm 2 was in g of fuel eqv./kwh, and for the generating equipment designed at 90 kg/cm g of fuel eqv./kwh. As a whole, for CHP-1 the respective figure was g of fuel eqv./kwh, which is substantially lower as compared to Russian coal-fired TPPs 1. Boilers No 9 and 10 as well as turbine No 5 have a working reserve far over 2012: turbine No 5 at the fleet service time 270,000 hours has worked 56,268 hours; that means that it has a working resource for at least 24 years in assumption of its performance for 8,760 hours a year (i.e. the whole year through); boilers No 9 and 10 were commissioned in 1988 and 1991 and by the beginning of 2003 they have been in work for 62,120 hours and 40,059 hours respectively while the working resource of the boiler drums (the core element) according to the manufacturer s documentation is 300,000 hours; thus the resource left for the boilers is over 25 years. 1 Here and herein further the 7000 kcal or MJ coal equivalent adopted internationally and in the Russian Federation is used for 1 kg of coal eqv. [10] Page 9

10 Electricity generation and heat supply by CHP-1 in are shown in Table 2 and Table 3 of A 3.2. A Background of the project, its history and the problems that this project has to solve Development of the gas sector in the Far-East Region of Russia in 90s which is reflected in the Federal Program Gasification of Sakhalin, Khabarovsk and Primorsk Regions adopted by the Government of the Russian Federation on 4 July 1999 encouraged Khabarovskenergo to study the possibility of switching its power plants from coal to gas. The original plan of Khabarovskenergo was to construct a 210 MW combined cycle unit at Amursk CHP-1. That is why the 43 km gas pipeline to CHP-1 and the gas distribution substation at the plant were constructed. As soon as the plan happened to be unrealistic because of absence of investments (211mln. USD) Khabarovskenergo made up its mind to use excess gas from Komsomolsk CHP-1 at Amursk CHP-1. Approx. 2 mln. rubles (USD 100,000) were expended to extend gas pipeline from plant gas distribution substation to boilers No 6 and 7 and to slightly retrofit burners. Thus, there were practically no investment barrier for those works. Switch from coal to gas of boilers No 9 and 10 together with assembling together with turbine No 5 the "new" 130 kg/cm2 unit and other measures for CHP-1described in the project dose very much differ from switch to gas of boilers No 6 and 7. The investment barrier always existed and exists for the project under consideration. The project under consideration makes it possible to solve the following problems: to increase profits (while gas is cheaper than coal); to use part of the main equipment of the plant (boilers No 9 and 10 and turbine No 5 at higher steam parameters) and to increase production efficiency due to that; to increase production efficiency due to switch to gas (energy self consumption of the plant will decrease); to increase reliability of equipment; to mitigate environmental problems. The core business of the project partners (regional gas supplying company NK Rosneft-SakhalinMorNefteGas ) is distribution of gas in the region. For several years they are working with Khabarovskenergo under annual contracts of gas delivery to the power plants in the town of Komsomolsk and now to Amursk CHP-1. Related financial commitments are fixed in contracts signed every year. Page 10

11 A 1.5. Intervention Basic goals of the project: to refurbish boilers No 9 and 10 for gas firing using environmentally advanced and energy saving equipment (low NO x burners, variable speed motor drives, etc.); to assemble boilers No 9 and 10 and turbine No 5 in one unit with a switch from steam parameters of 90 kg/cm 2 to 130 kg/cm 2 ; to optimize performance of CHP-1 in a way that the newly assembled unit is working with a maximum load; to replace and adjust auxiliaries for the new plants performance mode; Basic purpose of the project: to enhance economical and ecological efficiency of Amursk CHP-1 operation, to obtain extra profits due to the cost reduction of the electricity and heat supply; to make the plant more compatible at the local market and to make it possible to increase electricity delivery to the regional power grid; to create preconditions for further development of the plant (with combined cycle technology after 2012). Implementation of the project will enable to obtain the following results: decrease specific consumption of fuel equivalent for electricity supplied from to g/kwh, and for heat from to kg/gcal; obtain annual saving of fuel equivalent of about 65.4 thous t/y.; reduce 2 emissions by thous t/y; reduce annual atmospheric emissions of NO x by 1.5 thous ton, SO 2 by 3,3 thous. ton, and fly ash by 3,6 thous. ton. To prevent formation of slag and ash wastes at the ashpond by 86.1 thous./ton per year. The results refer to the first year of emission reductions generation ( Early Credits traded as AAUs, traded as ERUs). To achieve the results of the project the following activities shall be realized: (1) Conduct feasibility study and prepare design documentation. (2) Make basic delivery contracts on: burners, furnace walls, water downcomers, fuel gas recirculation induced-draft fans with JSC «SibEnergoMash»; gas equipment, automatic lighting-up and combustion system with Close JSC «Amaks»; frequency-response drives with «Triol». Page 11

12 (3) Obtain permits to implement the project from the following government bodies: sanitary and epidemiological supervisory committee; environmental protection committee; city or regional administration; territorial architecture and town-building bodies; territorial agencies of Federal mining and industrial supervision of Russia. (4) Carry out construction and erection works, the main of which are: extension of local gas lines to boilers No 9 and 10; upgrading coal-fired boilers No 9 and 10 to fire natural gas by installing low-no x burners; integrating 130 kg/cm 2 equipment of boilers No 9, 10 and turbine No 5 to make the individual power unit, and switching it for natural gas to operate at design nominal steam parameters; optimization of the modes of operation of CHP-1 with maximum loading of turbine No 5 by heat and electric capacity; provision for boilers No 9 and 10 the automatic process control and monitoring system, devices for continuous commercial accounting of the consumed gas and produced electricity; replacement of boiler feed pumps and application of variable speed drives; installation of flue gas recirculation induced-draft fans to maintain steam parameters during boiler operation using gas; elimination of the causes limiting power delivery from CHP-1. (5) Finance operations for project implementation. JSC "Khabarovskenergo" and Investor will implement the project on the competent, efficient and professional basis to minimize the cost of heat and electricity supplied to consumers. 2 GHG sources and sinks and project boundaries The project under consideration takes place at a typical CHP power plant having no specific auxiliary facilities. Thus of 6 greenhouse gases fixed in Annex A of the Kyoto Protocol emissions of CO 2, CH 4, N 2 O and SF 6 will be considered expressed in t CO 2 -equiv.; the recalculations in t CO 2 -equiv. will be carried out using CO 2 equivalents 1; 21; 310 and respectively. Page 12

13 As recommended by ToR emission classification is as follows: On Site Off Site Direct Indirect (1) Emissions from fuel combustion Emissions from shift in demand for energy at CHP-1. services (rebound effect) (2) Emissions from auxiliary facilities at CHP-1 (evaporation from oil tanks, leaks from plant gas system, plant vehicles etc.). Though they are not directly connected with fuel firing, they are inevitable part of that system. Emissions as result of energy Shift in activity or demand in other places consumption of transportation of fuel caused by the project to CHP-1: coal gas Methane leaks from the gas pipeline, compressors station and gas distribution station. Inside project boundaries Outside project boundaries = leakage 2.1. Direct on-site GHG emissions (Amursk CHP-1) (1) They are GHG emissions that are directly associated with the project activity. The source of direct GHG emissions are utility steam boilers of Amursk CHP-1, that form 2 and N 2 O as a result of fuel combustion. To calculate GHG emissions in the baseline study and under the project emission factor for a certain type of fuel (per 1 ton c.e.) is multiplied by fuel consumption of that type; the results for different types of fuel are summarized. Fuel consumption is subject of the power and heat production of a power plant and its efficiency. Emissions factors for thermal power plants of Russia were developed as a prelude part of the Inventory of GHG emissions for [7]. Carbon contents in the fuel, lower heat values, amount of unburned carbon were used for calculations. Fuels from all appreciable deposits of Russia were examined. The methodology of the inventory was evaluated by an independent party Environmental Defense (USA) in 2001 (Independent Expert review is attached in Annex IV). The experts preliminarily estimated inventory uncertainty as about 4%. Page 13

14 Emission factors Fuel % % at CHP-1 in 2002 Emission factor, t CO 2 /ton c.e Remarks Kharanorsk coal Taken from [7] Azeisk coal Taken from [7] Far East coals Taken from [7] (including from Raichihinsk and Urgalsk deposits) Coal used at CHP-1 (average weighted) Recommended by [11]: 26.2 t C/TJ or 2.82 t CO 2 /ton c.e. Natural gas from the Okha deposit * from [7] Recommended by [11]: 15.6 t C/TJ or 1.65 t CO 2 /ton c.e. * This is the average emission factor for natural gas firing at TPPs of Russia as defined in [7]; the chemical content of gas from the Okha gas field is practically the same as for natural gases from the most Russian deposits. We made a choice of the more accurate number of 1.62 t CO 2 /ton c.e. than 1.65 t CO 2 /ton c.e. recommended by IPCC (which is an average weighted number for natural gas all over the world). Further on both for baseline study and project emissions emission factors for coal used at CHP-1 is accepted as 2.81 t CO 2 /ton c.e. and for gas 1.62 t CO 2 /ton c.e. According to IPCC emission factors the share of N 2 O expressed in 2 -eqv. is: CO 2 emission factor = t of 2 /TJ; N 2 O emission factor = t of N 2 O/TJ; Coefficient for recalculation of N 2 O to 2 -eqv.= 310. The share of N 2 O in the total amount of direct GHG emissions equals to: [0.0014*310/(0.0014* )]*100%=0.4% Being less than 1 % of the total emissions N 2 O emissions can be excluded from further consideration. (2) Auxiliary facilities at CHP-1 (that appears to be sources of GHG emissions at CHP-1) can be referred as subsystems of fuel firing systems and thus they are positioned as direct on-site emissions. Such emissions are escape of both the liquid fuel in transferring it at the CHP from the tanks to the fuel storage and the gaseous fuel at the gas distribution substation at the plant territory, as well as gas losses in carrying out various process operations such as blowdown and lighting up Page 14

15 of boilers, dusting as well as coal glowing at the TPP coal storage. Such emissions also include greenhouse gas emission from tracks and vehicles of the plant. Based on [22] those emissions in the power sector are approximately 0.44 % of the overall emission by TPPs. Amursk CHP-1 is a typical power plant having no specific auxiliary facilities that can produce additional GHG emissions to those estimated in [22]. Individual figure for Amursk CHP-1 auxiliaries and vehicles in 2001 taken from [22] is % of total GHG emissions by the plant. Table1 Estimation of project direct on-site emissions by auxiliaries taken from [22] Emissions 2 emissions resulting from vehicles of CHP-1; 2 emissions resulting from fuel combustion in fuel utilizing auxiliary and repair facilities; 4 escape from CHP gas facility as well as in boiler start-up; 4 emissions as the main hydrocarbon component in liquid fuel drain from railway car tanks and in evaporation from fuel oil storage tanks; SF 6 emissions from the so called elegas switchers filled in with SF 6 ; Share and amount of emissions below 0.03% [22] 187 t 2 eqv. /y below 0.01% [22] Estimation neglected in further calculations neglected in further calculations Zero (no such equipment is used at the plant) Conclusion: GHG emissions from fuel firing at CHP-1 should be taken into further consideration, direct on-site emission from other sources are negligible Direct off-site GHG emissions. These are GHG emissions directly associated with the technological decisions under the project but occurring outside Amursk CHP-1. (1) Emissions due to energy consumption for fuel transportation. The project implementation will cause reduction of coal delivery to the plant and at the same time increase of gas delivery. Both changes will cause the change of energy consumption for coal and gas transportation from deposits to CHP-1and correspondingly change in GHG emissions. There are too many uncertainties which accompany the evaluation of this component of emissions (what of 4 coals will dominate in the future at CHP-1, whether electrified parts of railroad will be possible to use, what are actual energy consumption for transporting gas from the Okha gas field to the site and how this will change in the future with inevitable drop of initial gas pressure at the gas field, whether gas from other gas pipelines will be available, suppose from Sakhalin deposits, etc.). The main parameters are difficult to monitor. Nevertheless, evaluation of these emissions was conducted. Though these emissions make approx. 3 % in the whole GHG emissions it is the opinion of the developers to ignore them Page 15

16 in further considerations. The main reason of the proposed decision is that it leads to a more conservative way of calculating project reductions refusing from some non apparent increment of reductions. The assumptions, initial data for calculations, calculation of those emissions are given in Annex I, the results in the Table below. Emissions 2008 baseline 2008 project 2008 baseline 2012 project from transportation of: coal, ton CO gas, ton CO , , Total (2) Gas escape at output and in transportation system Actual escape figures for the case were not available. Figures from [11] were used which for the former USSR are kg CH 4 /PJ.They correspond to a special study by RURGAS and JSC Gasprom [23] which figure approx. 1% of gas leaks for the whole gas system of Russia. Evaluation calculations for ton c.e. of gas shows that gas escape amounts to approx ton CO 2 -eq. which is more than 10% of what occur in the project. So this direct off-site emission will be taken into consideration further on. The maximum number of kg CH 4 /PJ will be used Indirect on-site GHG emissions. These are emissions from shift in demand for energy services (rebound effect). This effect doesn t take place due to the project Indirect off-site GHG emissions These are emissions due to shift in activity or demand in other places caused by the project. None such appear because of the project Flowchart of the project with its main components and their connections The project boundary is in fact facilities, objects, installations and processes that to any degree are associated with project implementation and affect the GHG emissions. Page 16

17 The project boundary shall include all GHG emissions that are controlled by the project designer, are of considerable amount and can reasonably be attributed to the project activity. Theoretically, the project boundaries relating to energy production at a TPP, can include enterprises associated with production, transportation, processing, distribution and combustion of fossil fuel and distribution of generated energy. However, for the project under consideration this approach of wide interpretation of project boundaries seems practically unreasonable due to the fact that all the above listed factors (with the exception of fuel combustion and transportation) will not introduce significant changes in GHG emissions under the project implementation. According to the project boilers No 9, 10 and turbine No 5 are to be assembled in one unit with a switch to 130 kg/cm 2 steam parameters. The mode of operation of this power unit is optimized by maximum possible loading of turbine No 5 by the installed capacity of its district heating extractions and optimal loading by electrical capacity. From the process extraction of turbine No 5, heat is supplied to industrial consumers, and from the district heating extractions is delivered as water supply. The electric energy from turbine-generator No 5 is supplied to consumers via CHP-1 common buses. With limited demand for heat and electricity in the Amursk CHP-1 location area at the level of 2002, project implementation will reduce heat and electricity delivery from CHP-1 90 kg/cm 2 equipment as compared to the baseline case by the value of increasing the delivery at the new power unit with the required total heat and electricity delivery from CHP-1. As the demand, heat and electricity load of the Amursk CHP-1 increase, in future the load of the new power unit will increase first, limited by technical capabilities by electricity and heat. Because of project implementation there will be no changes in the indicators of other facilities as regards production of heat, electricity, etc. Practically, the reasonable option is to establish the project boundaries including direct emissions associated only with energy generation and fuel transportation. Flowchart of the project with its main components and their connections is given in Fig. 2. The dashed line represents the project boundary which includes: Amursk CHP-1; Fuel fuel transportation Khabarovskenergo power Electricit Transport direct off-site emissions Amursk CHP-1 direct on-site emissions Fig. 2 Heat to consumer system to Amursk CHP-1. At the same time boundaries of analysis are wider than the project boundaries. They cover heat and power consumers, other Khabarovskenergo grid connected power stations. The analysis boundaries are shown by a firm line. The project initiator will have to Page 17

18 annually prepare protocol of monitoring and verification of parameters within of the project boundaries (as described in A9) and observe and periodically analyze changes that will take place within the boundaries of analysis. 3 Description of the current product delivery system 3.1 The current flowchart of the facility and product delivery system with its main components and connections The current and project flowcharts of the Amursk CHP-1 and the product delivery system with its main components and connections are shown in Figs. 3, 4. Page 18

19 Fig.3. The current flowchart of the Amursk CHP-1 and the product de

20 Fig. 4. The flowchart of the Amursk CHP-1 and the product delivery system with J

21 3.2. Characteristics of the main equipment of Amursk CHP-1 Electricity generation and heat delivery from TPPs of JSC «Khabarovskenergo», including Amursk CHP-1, in the period of , are given in Tables 2 and 3. Table 2 Electricity generation at TPP of JSC Khabarovskenergo, mln. kwh JSC Khabarovskenergo Amursk CHP JSC Khabarovskenergo Amursk CHP Table 3 Heat supply from TPP of JSC Khabarovskenergo, thous. Gcal JSC Khabarovskenergo Amursk CHP JSC Khabarovskenergo Amursk CHP The power system electric power capacity is deficient in peak hours and is surplus in nighttime hours and day time dip. As of , the installed electrical capability of Amursk CHP-1 amounted to 285 MW, and thermal power Gcal/h (1360 MW), including 745 Gcal/h of the turbine-generators. The available electrical and thermal power of the turbinegenerators is 223 MW and 715 Gcal/h, respectively. The characteristics of the main equipment of the Amursk CHP-1 are presented in Annex II. The power and heat generation technology of CHP-1 is typical for a CHP plant in Russia having no specific peculiarities, not speaking of the performance of boilers No 9 and 10 and turbine No 5 at lower steam pressure. The generated heat and electricity are supplied to the local power system. The heat is delivered to industrial enterprises and the population of the Amursk town via «Komsomolsk heat networks», which are the subsidiary of JSC «Khabarovskenergo» and specialized in distribution of heat among the end users. Electricity is supplied to industrial enterprises and the population of the Amursk town and to other towns of the Khabarovsk region via «Energosbyt» that is the subsidiary of JSC «Khabarovskenergo». 2 1 Gcal= GJ Page 21

22 3.3. Information about the operation modes of the current flowchart of Amursk CHP-1 and product delivery Amursk CHP-1 operates according to the electrical loads curves specified by the dispatch service of the JSC «Khabarovskenergo» to meet the demands of the power system. The electrical loads curves of CHP-1 in 2002 are shown in Fig. 5 Dynamics of loads and reserve of the Amursk CHP-1 Dynamics of maximum loads (MW) N planned N actual planned backlog actual backlog 120 MW N installed Nmax Fig. 5 Page 22

23 In 2002, the average level of equipment loading was as follows: 90 kg/cm 2 group MW, 130 kg/cm 2 group MW. As one can see from Tables 2 and 3, electricity production at the Amursk CHP-1 in 2001 in comparison to 1991 decreased from to MWh (by 1.21 time), and heat supplied - from to thous. Gcal (by 4.2 time). The reduction of equipment loading at the Amursk CHP-1 by electric power is due to lower electricity demand required by the enterprises of the Amursk town and Amursk region. The main process steam consumers in were: cellulosecardboard manufacturing facility, Amursk machine manufacturing plant, Production Association «Vympel», and the building-construction works. Lower heat supplied is closely associated with the termination of steam consumption from the turbine process extractions due to full shutdown of the Far East largest Amursk cellulosecardboard manufacturing facility, as well as no use of steam by some industrial enterprises. The planned connections of the Amursk CHP-1 load under the relevant contracts in 2002 are given in Table 4. Table 4 Connected loads of Amursk CHP-1 under 2002 contracts, Gcal/h Residential and municipal sector Industry Total Overall Heating and ventilation Hot water supply Overall Heating and ventilation Hot water supply Actually, in 2002 the consumption of the turbine process extractions steam by industrial consumer terminated completely and the overall connected load dropped to 160 Gcal/h. The process extractions steam is used now as auxiliary power. Possible use of turbine process extractions steam: for CHP auxiliary power, network water preheating in preheaters, and in network peaking preheaters. The district heating system is of the open design of water intake for hot water supply. In 2002 heating period, the average direct water flow (pumping) was 3700 t/h with the average heat network makeup (hot water supply) at 478 t/h. The average network makeup in the interheating period is 317 t/h. To prepare water for the heat network makeup (for hot water supply), use is made of the service water supplied from the Alexandrov water intake. The makeup water is preheated before the water treatment facility to Then, it is preheated to 80 in surface heaters. The heat source for said heaters is the turbine process extractions steam of 1.2 kg/cm 2. Further, the atmospheric deaerators of 1.2 kg/cm 2 the water is preheated to the saturated temperature. After the complete shutdown of the Amursk cellulose-cardboard manufacturing facility the electricity consumption in 6 kv lines decreased considerably causing limitation in electric power delivery at 62 MW in December Page 23

24 2002 due to insufficient capacity of the coupling transformers (the coupling transformers capacity is 200 MW, and the installed capability of the station is 285 MW). To eliminate the limitation the powerful coupling transformer shall be installed. Considerable reduction of heat delivery from the turbine process and district heating extractions resulted in the limitation of the electric power at Amursk CHP-1 to 93 MW in the hottest 2002 July, associated with operation of the directreturn service water supply system. The return system employs one cooling tower with the spray area of 2100 m 2, which is insufficient to load turbines in the condensing mode and at the same time it is quite sufficient to cope with the projected loads (mostly focused on heating). In 2002, Amursk CHP-1 fired mixtures (blends) of off-design coals, using fuel oil for boiler start-up and lighting-up purposes. The hot-water boiler plant is in dead storage due to sharp reduction in heat consumption and fuel oil deficiency and high cost. Until 2003, all boilers of the mursk CHP-1 operated for the station wide live steam line wherein pressure of 100 kg/cm 2 and temperature of were maintained. In this connection, boilers No 9, 10 and turbine No 5 operated on lower live steam parameters as compared to the design and, hence, with low thermal efficiency. Basic performance characteristics of Amursk CHP-1 in are given in Table 5. The performance characteristics of Amursk CHP-1 as a whole and for 130 and 90 kg/cm 2 groups of equipment in 2002, and those for 130 kg/cm 2 equipment in are presented in Annex III. The Table 5 and Annex III were compiled in accordance with the Amursk CHP-1 state reporting forms No 3- E and No. 6-TP. Page 24

25 Table 5 Basic performance characteristics of Amursk CHP operation in Parameter 1. Annual installed capacity: electrical, thous. kw turbine extraction heat, Gcal/h 2. Electricity generation, thous. kwh: total district heating cycle Value Heat supplied, thous. Gcal: total Coefficients of utilization of installed capability, %: electricity heat 5. Shares of heat supplied, %: turbine extraction used heat steam extraction heat extraction from turbine condensers 6. Annual consumption of fuel equivalent, including: for electricity, t for heat, t 7. Specific consumption of fuel equivalent for electricity supplied, g/kwh: actual nominal specified 8. Specific consumption of fuel equivalent for heat supplied, kg /Gcal: actual nominal specified 9. Electricity auxiliary power consumption related to electricity, %: actual nominal 10. Electricity auxiliary power consumption related to heat, kwh /Gcal: actual nominal 11. Specific gross heat consumption for turbine installation, Gcal /(kwh): actual nominal 12. Gross efficiency of boiler plant, %: actual by back balance nominal Page 25

26 As can see from Table 5 and Annex III, Amursk CHP-1 operates with low utilization of installed capacity. The coefficients of electricity and heat utilization of installed capability at CHP in 2002 were 32.4 and 12 %, respectively. For the 130 kg/cm 2 group of equipment said coefficients were even lower, viz., 21.5 and 6 %, respectively. The electricity is mostly generated in the condensed mode. The share of electricity generated in the district heating cycle for CHP as a whole was 37.7%, and for the 130 kg/cm 2 group of equipment 26.2 %. The heat supplied from the process extractions during the last three years was in the range of Gcal/h. Specific consumption of fuel equivalent for electricity supplied with reference for 130 kg/cm 2 equipment in 2002 was g/kwh, and that for 90 kg/cm 2 equipment g/kwh, and finally for CHP-1 as a whole g /kwh. The current coal and natural gas are supplied to CHP-1 respectively by coal and gas supplying companies under annual contracts (some details of the contracts are presented to the validating company TUV). Page 26

27 4. Key factors influencing the baseline and the project A 4.1 General notes Amursk CHP-1 is a typical power plant with local targets, it is dependent mostly of demand from population of the town and local industry. The plant is a monopoly deliverer of heat to the town consumers, it also produces electricity delivered to the Khabarovskenergo power grid to cover local needs. It will without any doubt stay as a core infrastructural enterprise for the town for at least 10 years to come. Main industrial consumers of the town were strongly affected by economic crisis of 90s which resulted in dramatic reduction of heat demand. Revival of local industry is on agenda. Plans to develop two woodworking facilities in Amursk are fixed in the Decree of the regional Government dated 15 December No 525 On Creation of the Main Woodworking Facilities on the Territory of the Khabarovsk Region in Gas pipeline to the Amursk CHP-1 and gas distribution sub-station have been already constructed. Natural gas is being delivered to the Region and the town of Amursk from the Okha gas field. Big gas deposits (Sakhalin Shelf Deposits 1 and 2) are under development by international consortium. Main pipeline form those deposits will go through Khabarovsk region. The Federal Program Gasification of Sakhalin, Khabarovsk and Primorsk Regions adopted by the Government of the Russian Federation on 4 July 1999 fixed the delivery of gas in needed quantities. Development of Russian economy is envisaged with GDP annual growth rate from 5 % to 7 %, the most optimistic plans are to double GDP in the coming 10 years. At the same time the concept of leveling of disproportions between regions is adopted which should bring positive results for the Khabarovsk region with a comparatively low level of economic development. This will lead to higher energy demand and production. The regional Program Main Directions of Development of the Fuel/Energy Complex of Khabarovsk Region for and further up to 2010 is under development by the regional Government. This and the above mentioned programs do not force Khabarovskenergo to switch its power plants to gas (as it was cleared out by the Minister of Power and Fuel of Khabarovsk Region during his meeting with the project team). Prices for fuel will inevitably rise with gas prices growth ahead of coal. The change of fuel prices in Russia in and forecast by 2010 are shown on Fig. 6 [18]. At the same time tariffs for power and heat will be put into accordance with the fuel prices growth as it is practiced now by Regional Energy Commissions in accordance with legal acts. In case gas prices reach those for coal the project will be profitable due to higher production efficiency at CHP-1. Page 27

28 Rubles/t Years Gas Heavy Oil Coal Fig. 6 Fuel Prices for Thermal Power Plants in Taking into account macroeconomic, regional and local tendencies the following general conclusions can be carried out: State and macro-level legal, political, economic and sociodemographic factors will influence the project and GHG emissions indirectly; all assumptions have been made conservative and the risk for the selected baseline and project scenarios to overstate the emission reduction is not given; mediated impact from sum-total of those factors will help along to realize the project (not speaking of the consequences caused by fail of ratifying the Kyoto protocol by the Russian Federation); regional and local legal, political, economic, environmental and socio-demographic factors are as well in favor of the project implementation (revival of industry, environmental and social demands); the baseline will be influenced by the main macro-level, regional and local factors as referred to some growth of heat and electricity production and aging of existing equipment; the environment and preconditions for project activities and GHG emissions reductions are favorable; there are some risks for the project and the main one deals with the situation when the Russian Federation does not ratify the Kyoto Protocol. Further on influence of some concrete factors are considered. Page 28

29 A 4.2 Analysis of Key Factors Factor description Federal Laws on the functioning of the power industry adopted by the Russian Parliament (Duma) in 2003 Regional laws: On taxes in the Khabarovsk Region On investment activities in the Khabarovsk Region Environmental laws Consequences Legal 1.Lebaralization processes in the power and gas sectors and easier access to various fuels 2. Creation of conditions for competition in the sector. 3. Limitation and reduction of tariffs for energy with reasonable regulation of tariffs by regional authorities. 1. Preference tax treatment regime is imposed in the Region for investors. The list of preference treatment cases is revised annually. 1.Environmental standards are becoming more tighten (limitations on specific emissions per unit of production are imposed; payments for emissions, water discharge and wastes disposal are resumed after a two year interval, etc.). 2. Environmental requirements have a tendency to meet European standards (for instance, ISO-14000) 1. Th Will facili supply, ra decrease i 2. Th em Will facili supply, ra decrease i 3. Th Will facili 1. Th Does not i 2. Th em Carbon 3. Th Directed a 1. Th Self energ grow toge 2. Th em The factor project 3. Th

30 Ratification/not ratification of the Kyoto Protocol (can as well be referred to a political factor) Elections of the President, Parliament and Regional authorities Ratification of the Kyoto Protocol Fail with ratification Political The political situation in Russia is comparatively stable and the main strategic and policy tendency in economy is unlikely to change. Regional authorities will seek for means of changing the local economic situation for the better Directed a 1. Th Will not in 2. Th em Will play project 3. Th Risks will 1. Th Will not in 2. The emissi Will play project 2. Th Risks will 1. Th Will facil supply, ra decrease i 2. Th em Will facil supply, ra decrease i 3. Th Slightly re National projections are to have annual GDP growth from 5 to 7 % with the Economic The growth of energy production by Amursk CHP- 1 can be assumed. 1. Th Absolute f

31 optimistic aim to double GDP in the coming 10 years. Inflation takes place but it s rather stable in the past 2 years with the tendency to slightly go down. The conservative inflation rate is taken into account for macro-economic evaluation of GDP. The concept of leveling the disproportions between regions is accepted. production 2. Th em Absolute f will decre 3. Th Will not in Energy tariffs and fuel cost. Internal Rate of Return (IRR) Without carbon credits the project IRR according to Business Plan (p. 6.3) is %, the payback period is 3.24 y. With carbon credits they are % and 2.41 y. Growth of the Amursk population Demands on additional employment and improvement of living standards Both will grow. Tariffs for power and heat are strongly dependent of the cost of fuel. Gas prices are now lower than for coal but will grow faster (approx. by 50% in the coming 5 years) and in 10 year term will be over the prices for coal. According to the study conducted by Khabarovskenergo even at the world prices for gas (up to 80 USD/1000 m 3 ) the project still will be more effective than coal fired option. Despite project s high efficiency even without carbon credits the problem with investments still stays because JSC Khabarovskenergo during the previous 3 years had losses under the accounting balances. One of the potential investors VneshTorgBank will give credit only in case carbon crediting will take place. Socio-demographic Will cause the growth of energy demand and supply (and will be accompanied by the efficiency improvement of the plant) (1) and (2 3. The The factor 1. Th The factor 2.The proj The factor the projec 2. Th The factor 1. The bas Absolute f production 2.The proj Absolute f production

32 Local environmental impact from Amursk CHP-1 Environmental Due to low loads at Amursk CHP-1 the impact at the time being is rather weak. With increase of energy production the impact for a coal firing option the factor may become considerable causing additional energy self consumption at the plant. Switch to gas will practically eliminate the factor. 3. The risk Will not in 1. Th The factor absolute a 2. Th em The factor emissions Technical concept of the project as described in PIN Technical Construction and replanting works at the plant. (This type of projects has been implemented in the power sector at more than 200 boilers, including 16 boilers at TPPs of Khabarovskenergo. Most of the work was done in 70 s - 80 s under the centralized plan economy). Performance of a gas firing equipment and its operation (will be easier than for the coal firing option) Aging of equipment (according to operational rules for power plants regular maintenance works are not to let efficiency decrease considerably). 3. The risk Will not in 1. Th The factor 2. The emissions The factor level 3. The risk Will not in 1. T The factor 2. Th em The factor level, but 3. Th The factor

33 Technology, know-how and experience Lifetime of equipment (as declared by Khabarovskenergo the lifetime of boilers No 9 and 10, turbine No 5 and generator will exceed at least 20 years) There is vast experience of coal-fired boilers retrofitting by switching to gas in the Russian Federation, Khabarovskenergo and at Amursk CHP-1 in particular. No know-how technology is envisaged in the project. 1. Th The factor 2. The emissions The factor level and t 3. Th The factor 1. Th The fa 2. The pro The factor and to ope 3.The risk The factor

34 A 4.3 Mitigation measures for a non perfect project performance As one of the measures under the project new operational mode of CHP-1 shall be established. In case of emergency stoppage of either boiler No 9 or No 10 the working boiler shall be loaded to a full extent; the lacking load shall be transferred to gas fired boilers No 6 and 7. In case of emergency stoppage of a newly assembled 130 kg/cm 2 unit (boilers No 9 and 10 and turbine No 5) gas fired boilers No 6 and 7 shall be loaded to a full extent. As soon as damages has been remedied the 130 kg/cm 2 unit shall be put in operation. An additional supervising shall be launched by Khabarovskenergo and Energonaladka on strict fulfillment of operational mode of the plant which is a kind of set of strict instructions to the operating managers. In case shortages of gas supply occur at the plant this fact shall be immediately reported to Khabarovskenergo top managers responsible for relations with gas supplying company, and appropriate problem shall be settled. Developers of this Project Design Document recommend Khabarovskenergo in future contracts with the gas supplying company to provide additional penalties in case it fails to deliver gas to the plant in needed quantities (since Khabarovskenergo carries an additional penalty risk of failing to generate the contracted amount of ERUs). In case damage (interruption) of the gas pipeline occurs. Main gas pipelines are referred to strategic objects in the Russian Federation. They are under strict control. In case of damage (interruption) the appropriate piece of a pipeline is automatically blocked and the repair works starts ASAP. If needed, special detachments of the Federal Ministry of Emergency Situations are involved. (Reliability of gas delivery for a non force majeure case is as follows. From the Okha gas field gas in big quantities is being delivered by the main pipeline to the town of Komsomolsk for at least 15 years where it is used by 3 big power plants, a number of enterprises and population. The future main gas pipelines from big Sakhalin shelf gas field will also go through the Komsomolsk district which will reduce the risk of gas supply failure in the district of Komsomolsk and Amursk). A 5. Identification of the most likely baseline and the associated GHG emissions A 5.1. Current situation at CHP-1 Now, two groups of equipment (designed at steam pressure of 90 and 130 kg/cm 2 ) are in operation at Amursk CHP-1 supplying single header 90 kg/cm 2. Page 34

35 Under such conditions, the 130 kg/cm 2 steam pressure equipment is operated at reduced parameters and, hence, with rather low efficiency. Five boilers and two turbines of the Amursk CHP-1 (including boilers No 9 and 10, turbine No 5) have been put into operation after 1980 and their operating hours will for sure exceed the 2012 level. Boilers No 6 and 7 designed at steam pressure of 90 kg/cm 2 were commissioned in 1972 and 1978 respectively. Recently they were retrofitted to burn natural gas. Gas is delivered to CHP-1 as an excess of gas balance of Komsomolsk CHP-1. In 2000 it was 3000 ton c.e., in ton c.e. and in ton c.e. The forecast for shows that the maximum amount of gas for boilers No 6 and 7 are not more than ton c.e. The full switch to gas of boilers No 6 and 7 is prevented by the following. Steam from boilers No 6 and 7 is used by turbines of 60 MW installed capacities. The electrical capacity of the whole plant in most of summer time is more than MW (see Fig 5 in A 3.3). So other boilers (coal-fired) should be kept in work; at least one in summer time and up to 5 in the heating period. Coal fired boilers of the kind installed at CHP-1 can t carry steam loads below 60 % from the nominal. Thus the reasonable mode of plant performance is to keep coal-fired boilers work with % loads (even in summer time) and at the same time to use excess gas from Komsomolsk CHP-1 by boilers No 6 and 7. The heat load demand of the station cannot be covered by other generating plants, because Amursk CHP-1 is the sole heat source in the town of Amursk. The energy generated in JSC «Khabarovskenergo» (including Amursk CHP- 1), is of high cost due to firing expensive coals from distant coal deposits and inefficient operation of the existing equipment. The high cost of the generated electricity and heat results in low profitability (5 % in 2002) of energy sales, with resultant lack of free money in JSC «Khabarovskenergo», required for capital investments and for retrofitting and repowering of the existing equipment. A 5.2 Choice of Baseline Construction Methodology he best methodology for this type of a project could be a combination of the past years data analysis with an extrapolation of the data for some 3-5 years + the prediction method for the further period. Because of the fall of the energy demand from the Amursk main industrial consumers and uncertainty with the period and speed of their economical recovery the retrospective data of CHP-1 performance cannot be used for extrapolation. Thus only the prediction method will be used in this very case. A 5.3 Choice of the Most Likely Baseline Scenario Options for the most likely baseline scenarios are as follows: Option MW Combined Cycle Unit Up to 2009 the plant is working in the same operational regime with coal as the main fuel; boilers No 6 and 7 will burn the excess gas from Komsomolsk CHP- Page 35

36 1at a maximum amount of 70,000 ton c.e. Plant installed electrical capacity is 285 MW, heat 2269 Gcal/h. After MW CHP combined cycle unit is commissioned at the plan; boilers No 9 and 10 and turbine No 5 are assembled in one unit and are using exclusively gas. The rest of the equipment is decommissioned and dismantled. Plant installed electricity capacity is 290 MW, heat capacity is 764 Gcal/h. The investment needed for the project amounts to 211 mln. USD. The concept was worked out by Mitsubishi Corp. (Japan) in The forecast of electricity production and heat output by Amursk CHP-1 is presented in Table 6. Table 6 Parameter Electricity production, mln kwh Heat output, thous. Gcal Option 2. Significant growth of heat consumption The plant is working in the same operational regime with coal as the main fuel; boilers No 6 and 7 will burn the excess gas from Komsomolsk CHP-1 at a present level of 70,000 ton c.e./year. Plant installed electrical capacity is 285 MW, heat 1169 Gcal/h. In there is a certain increase of electricity and heat consumption as shown in Table 9 below. The growth of energy consumption is due to the general industrial activity revival in the Amursk town, the jump in heat consumption after 2007 can be explained by new heat/steam consumers such as renewed Far-East Instrumental Works, new Cellulose/Cardboard Facility to be established on the site of existing enterprise Amurmash and others. The forecast of electricity production and heat output by Amursk CHP-1 is presented in Table 7. Table 7 Parameter Electricity Production, mln. kwh Heat output, thous. Gcal Option 3. Low Heat Consumption The plant is working in the same operational regime with coal as the main fuel; boilers No 6 and 7 will burn the excess gas from Komsomolsk CHP-1 at a present level of 70,000 ton c.e./year. Plant installed electrical capacity is 285 MW, heat 1169 Gcal/h. Page 36

37 In comparison with Option 2 in there is a considerably smaller increase of heat consumption as shown in Table 10 below, so that by 2012 the consumption is approx. 1.8 times less than in Option 2. The growth of energy consumption is due to a step-by-step revival of concrete industrial enterprises in the Amursk town in Since the plans of industrial development in the town after 2007 are uncertain the growth of heat consumption is not envisaged. According to conservative approach the level of electricity supply was initially chosen as 800 mln. kwh that corresponds to the level of After consultations with Khabarovskenergo we accepted the rate of electricity production increase at 1.5% a year. This is partly proved by the figures of the growth of power production in the Khabarovsk Region for 5 months of 2003 as compared to the same period of 2002 amounted to 4%. In 2002 year the heat consumption decreased to the level of 740 thous. Gcal which practically fully goes to population. Heat supply is provided by hot water of low parameters (inlet temperature 130 C instead of 150 C). Increase of heat supply from 800 thous. Gcal in 2003 to 890 thous. Gcal in 2007 (and further on as a constant figure) is explained by the following: The forecasted growth of heat supply by population (which can be partly proved by statistical figures of the growth of heat production for 6 months of 2003 in the Khabarovsk Region as compared to the same period of 2002 amounted to 5%). Switch to normative parameters of inlet hot water system heat supply (150 C); The forecasted growth of heat supply by reviving industry. The forecast of electricity production and heat output by Amursk CHP-1 is presented in Table 8. Table 8 Parameter Electricity production, mln kwh Heat output, thous. Gcal Choice of the most probable baseline scenario Based on the opinion of the Initiator and the Developer of the project the most probable and conservative scenario will be option No 3. The reasons are as follows. Option 1 is very unlikely because Khabarovskenergo has no its own funds and wouldn t be able to get credits to construct the new 210 MW unit at Amursk CHP-1 at the cost of 211 mln. USD. Even significantly lower funds and credits are Page 37

38 a problem for Khabarovskenergo at the time being. Besides, this option is not of a priority to Khabarovskenergo since there is an extreme need of a new plant in Khabarovsk instead of Khabarovsk CHP-1 and CHP-2 with worn out equipment. Theoretically this option is possible in case of extreme development of the Russian economy, improvement of the investment climate in Russia in general and in Khabarovsk region and Amursk town in particular. Option 2. This option takes into account the increase of heat demand for the industrial facilities that will develop in accordance with the draft Basic Development Strategy of Khabarovsk Fuel and Energy Complex for years and for the future until 2010 (Annex VIII). Besides the perspective development of existing Far-East Instrumental Works is taken into consideration. This facility installed its own source of heat. The terms of the realization of this Program seems very optimistic. For instance the former cellulose/cardboard facility can be restored at previous side. This option is possible in case of medium growth of the economy of Khabarovsk region and Amursk town. Investment climate is improved in the region so that it is attractive for domestic, Japanese and Chinese investors of medium size. Option 3. This option is based on minimal growth of heat demand of the town. Since the industrial perspective after 2008 is unclear the heat demand after 2008 is taken at a constant level. As compared with option 2, heat output in 2012 is 1.81 time less. This option reflects slow revival of local economy from the economic crisis of 90s. Thus, the most valid evolution of the «no project» events in the mutual opinion of JSC «Khabarovskenergo» and the designers of the present document is to continue operation of the existing equipment in the modes presently applied and use of coal at CHP-1 as the main fuel (excess of gas from Komsomolsk CHP will be used as well by boilers No 6 and 7). During the period of , all utility boilers of the Amursk CHP-1 operate on coal as the main fuel. Boilers No 9, 10 and turbine No 5 continue operation in the same mode as in previous years on steam pressure of 90 kg/cm 2 and distribution of electrical and heat demands of the CHP-1 between all boilers and turbines. In increased connected heat load and with higher electricity and heat supplied from the CHP-1, the nature of the distributed demands between the units is adopted in accordance with the distributed demands existing now. Assembling of coal-firing boilers No 9, 10 and turbine No 5 in one 130 kg/cm 2 unit is as well very unlikely because of the following: the above mentioned equipment was initially designed in prediction of further plant development by installing 130 kg/cm 2 new capacities; respective auxiliaries such as main net hot water pumps of large Page 38

39 capacities were implemented which do not fit the performance of the mentioned unit as a separate one; boilers 9,10 after their commissioning were initially connected to the main 90 kg/cm 2 steam collector of the plant on the reasons of higher reliability of energy supply; use of off-designed coals together with the plant s loads under 60 % will cause unstable performance of 130 kg/cm 2 equipment. Key factors influencing the baseline The greenhouse gas emissions from the utility plants are practically determined by the on-site electricity generation (amount and type of the fuel fired), which in turns depends on the consumer energy demands, auxiliary power requirements as well as on the factors that in any way limit energy generation. Legal, political and socio-demographic factors. Evidently, the policy conducted now by the executive and legislative powers in the Russian Federation and the subjects of Russian Federation (legal and political factors) is aimed at the speed up and evolution of the economy in the country and in the regions, including the Khabarovsk region. The evolution of the economy in the Khabarovsk region will increase the electricity and heat demand. Besides, the growth of the economy will influence the socio-demographic factor, and first of all, on the increase in population of the region with resultant increase in energy consumption. Thus, the legal factors (with the exception of the laws, regulating the environmental protection activity of the enterprises), as well as political and sociodemographic factors are of the single-direction action and cause increased electricity and heat demands. The influence of said factors on the baseline was taken into account in determining the long-term forecast of the energy consumption in the region. There are no any legal, political and socio-demographic factors limiting energy generation at the Amursk CHP-1. Economic factors. Economic factors include general growth of economy of the country, Khabarovsk region and town of Amursk, the cost of the energy supplied to the customers, fossil fuel, the country inflation level. Now, its established by government bodies that the electricity and heat tariffs are to by fixed on the cost-effective principle (power system expenses plus profits) and to be reviewed one time a year. This principle accounts for inflation and fossil fuel price dynamics in the power system expenses, but do not stimulate the reduction of the energy generation expenses. The level low inflation in the Russian Federation is now to a great extent determined by the dynamics of the prices established on the world oil market. The energy reform plans envisage the establishment of the competitive electric energy market: Page 39

40 transitional model for % of the total electric energy generation; and up to 100%, during In introducing the competitive electric energy market the energy prices will be established on the basis of the existing demands and sales. However, the above mentioned dates of introducing the competitive electric energy market relate to all power systems with the exception of the Far East power systems and isolated power systems for which the particular dates have not yet been determined. Today, the practice exists in the power systems to annually renew the contracts both on consumer power supply and with fuel suppliers. Now, quantitative estimation of the effect of the above listed factors on the baseline is a rather complex problem. However, considering the fact that the Amursk CHP-1 is the sole heat source in Amursk, with no planned provision of new alternative energy sources, as well as that the major share of the heat consumption (over 50 %) is attributed to the population and other social significant facilities, it may be proved that the Amursk CHP-1 due to economic and political consideration will be further operated to meet the existing consumer energy demand. Possible sanctions energy consumption limitation from the side of the Open JSC «Khabarovskenergo» to non-paying consumers are of short-term nature and are of no significant effect on the amount of the supplied energy and, hence, on the baseline. The influence of the economic factors had been taken into account in determining the long-term forecast of the region energy demand. There are no any economic factors limiting energy generation at the Amursk CHP-1. Ecological factors. Now, the so called ecological payments are not the underlying for the power systems (the payments of the Amursk CHP-1 in the first quarter of 2003 for the excess emissions and discharges amounted to only 9, 000 roubles) 1. At the same time, stemming from the statements of the Government of the Russian Federation, Russia will try to bring its environmental protection legislation in conformity with the legislation effective in the EEC countries. In implementing the new regulations, JSC Khabarovskenergo will have to carry out measures at its power stations to meet said regulations otherwise significant financial sanctions will be applied. 1 The so called ecological payments is a state system of charging industrial enterprises for emissions, contaminated water discharge and waste disposal. It fixes 3 rates of payments (with each other rate increasing substantially): when emissions are within the standardized minimum limits, when they are within the limits agreed with the local environmental authorities and when they are exceeding those limits (the latter case is considered to be the case of breaking the law and the penalty for the excess of emissions is 25 times higher than for emissions within the standardized limits). Page 40

41 In carrying out and implementing the above mentioned measures, the auxiliary power requirements at the power stations will increase and, hence, the baseline GHG emissions will also increase. Simultaneously, in the process of the project implementation all standards on the emissions and discharge of harmful substances will be fulfilled. However, today it is very difficult to forecast the dates and what particular standards will be introduced in Russia. There are no any ecological factors limiting energy generation at the Amursk CHP-1. Technical factors. Among the technical factors influencing the baseline are, aging of the main and auxiliary (larger auxiliary power expenses), as well as limitation of energy generation with due account for the installed capacity of the equipment. The preventive maintenance and repair operations conducted at the power station enable keeping operation of the equipment in accordance with the nameplate parameters. Therefore, the factor of aging of the equipment shall not practically influence the project baseline. Now, out of the generating capacity of the Amursk CHP-1 only 30% of electricity and 12% of heat are used. Taking into considerations the perspective energy demand level it may be assumed that the installed capacities of CHP-1 will not limit the project activity. Thus, the technical factors will be of no significant effect on the baseline. Resume. The analysis of the effect of key factors on the project baseline indicate that: the influence of legal, political and socio-demographic factors has been accounted for in determination of the long-term forecast of the energy consumption in the region; the influence of long-term ecological factors cannot be taken into account because of the ambiguity; as of the present time, the technical factors are of no effect on the project baseline. Determination of the amount of GHG emissions on the project baseline are given below. Actual consumer heat and electricity demands. The predicted connected heat load for heating together with the hot water heating load, according to the data of the Open JSC Khabarovskenergo as of , for the Amursk CHP-1 is 160 Gcal/h. The average total load of the turbine process extractions for the Amursk CHP-1 during 3 recent years have been within the range of Gcal/h. The electric load of the Amursk CHP-1 in 2002 (Fig. 5, refer to curves «Dynamics of loads and reserve») during the heating and the intermediate periods was within the range of and MWh, respectively. Page 41

42 The long-term prediction of electric and heat loads of the Amursk CHP-1 can be made based on the historical data of the operation of the station during and the long-term forecast. Electricity generation at the Amursk CHP-1 in 2001, as compared to 1991, reduced from to MWh (by %), and the heat supplied dropped from to thous. Gcal (as low as 4.2 time). The reduction of heat supplied is closely associated with termination of steam consumption from the turbine process extractions by the Production Association «Vympel», machinery building works, building construction works, as well as full shutdown (in 2002) of the Far East largest Amursk cellulose-cardboard manufacturing facility. Actually, in 2002, the steam consumption from the turbine process extractions by the industrial consumers terminated completely, and the total connected load drop to 160 Gcal/h. The reduced equipment loading at the Amursk CHP-1 by electricity is due to the lower electric energy consumption by the enterprises of Amursk and Amursk region, including the Amursk cellulose-cardboard manufacturing facility. Considerable reduction of heat supplied from the turbine process and district heating extractions also limited the Amursk CHP-1 electrical capacity due to operation of the direct-return system of the service water supply. The return system employs only one cooling tower with the spray area of 2100 m 2, which is insufficient for loading the turbines in the condensing mode. Prediction of the consumer heat and electricity demands in the period of Because of the reduced or complete termination of energy consumption by the industrial users in 2003: the values of head loads and heat generation in the heating and intermediate periods were determined using the heating load duration curves, calculated by the Rossander formula for the Amursk climatic conditions with the calculated connected heat load of 160 Gcal/h.; the values of electric power and electricity generation were determined based on the predicted electricity consumption considering limitation by power in operation of the equipment in the district heating cycle. In the process of recovery of the economic potential of the Amursk region and Amursk town (restoration of operation of the shutdown facilities and the appearance of new consumers), the connected heat and electrical loads at the Amursk CHP-1 can increase. Initial data for calculation of the selected baseline is given in Tables 8, 9. The results of the baseline calculation are given in Tables Page 42

43 Initial information for calculation GHG baseline emissions Parameters Annual power production, MWh Annual output: power, thous. kwh, incl. gas firing ( boilers No 6, 7) coal firing Heat, Gcal, Incl. gas firing coal firing Specific fuel equivalent consumption for: electricity supplied, g/kwh: 407,5 407,5 407,5 407,5 407,5 407,5 4 gas, 396,9 396,9 396,9 396,9 396,9 396,9 3 coal 409,8 409,8 409,8 409,8 409,8 409,8 4 heat supplied, kg/gcal: 157,1 157,1 157,1 157,1 157,1 157,1 1 gas, 153,0 153,0 153,0 153,0 153,0 153,0 1 Coal 158,0 158,0 158,0 158,0 158,0 158,0 1 Annual fuel consumption for heat and electricity, ton c.e.: For electricity totally gas firing, coal firing For heat totally: gas firing

44 coal firing Totally gas firing, Totally coal firing Gas heating value kcal/n m Fuel carbon content, % 39,4 39,4 39,4 39,4 39,4 39,4 Moisture content W, % 28,8 28,8 28,8 28,8 28,8 28,8 Ash content, % 19,1 19,1 19,1 19,1 19,1 19,1

45 Direct on-site GHG baseline emissions Parameters CO 2 emission for heat output while burning: - natural gas coal totally Specific CO 2 emissions for 1 Gcal output, g 2 /Gcal 411,2 412,1 412,8 413,3 414,3 414,5 414,5 CO 2 emission for electricity output while burning: - natural gas (boilers No 6 and 7) coal totally Specific CO 2 emissions for 1 kwh output, g 2 /kwh 1058,7 1060,0 1061,3 1062,7 1064,0 1065,2 1066,4 CO 2 emission from burning of: - natural gas coal Total direct on-site GHG emissions

46 Direct off-site GHG baseline emissions Parameters CO 2 emissions due to leakage CH 4 from gas extraction and transportation, ton Results of the calculations of GHG baseline emissions Parameters Total GHG baseline emissions, ton

47 A 5.4 Potential uncertainties and errors of the defined baseline The core elements used to calculate baseline emissions are: amount of heat and electricity supply; fuel by type and quantity; emission factors. The most uncertainty comes out of the perspective of heat and electricity demand from the town consumers. According to all the indicators of the Russian macroeconomy there is little chance of another national crisis that will once again heavily strike on the energy consumers of Amursk. At the same time very swift revival of industry in a small town with industrial production which is not unique or deficit in the country or in the region makes a jump of energy demand very unlikely. Slow climbing out of the crisis seams to be the most likely scenario. The issue under discussion is how slowly the process will go. We would classify the uncertainty in energy supply as a weak one. Supply of fuel by type and quantity of Amursk CHP-1 is something that has a long standing history, evolution and well determined future; relations between Khabarovskenergo and fuel suppliers are well developed. The uncertainty can be classified as weak one. In Annex IV one can find the evaluation of uncertainty of methodology of GHG Inventory in the power sector of Russia (including emission factors calculation) performed by independent expert Environmental Defense in 2001; the uncertainty is figured as 4%. As for errors, all other methodologies used for calculations are for years and years used in the power sector of Russia and can be defined as reliable. 6 Estimations of GHG project emissions The actual generation of electricity and heat in 2002 at the Amursk CHP-1 and the energy consumption forecast for enables integration of boilers No 9,10 and turbine No 5 in one two-boiler single-turbine unit and ensure energy supply to consumers by operation of the latter. The remaining equipment may be switched to reserve or dismantled. Reduction of 2 emissions is achieved by switching boilers to natural gas with increased boiler efficiency. The project boundaries are determined by the Amursk CHP- 1 boundaries. In project implementation, boilers No 9, 10 switched to natural gas with introduction of the energy efficient measures with the main of which being the following: upgrading and switching coal-fired boilers No 9 and 10 to fire natural gas complete with installation of the low NO x burners; introduction of boiler automated process monitoring and control system, provision of devices for continuous commercial accounting of consumed gas and generated energy; Page 47

48 fitting of feed pumps with variable speed motor drives; installation of flue gas recirculation induced-draft fans to maintain steam parameters in boiler operation on gas; energy saving measures to switch 130 kg/cm 2 equipment of boilers No 9, 10 and turbine No 5 to operate on live steam design nominal parameters and optimization of operation of the dedicated power unit. Let us consider, the possibilities and modes of operation of the dedicated twoboiler single-turbine unit to ensure the calculated energy consumption are described in Annex V. Operating conditions of other equipment of Amursk CHP-1. The obsolete and physically worn out 90 kg/cm 2 equipment is being decommissioned. The boilers No 1, 5-7 and turbines No 2, 3 with maximum operating hours can be dismantled. Other 90 kg/cm 2 equipment, as well as peak-load hot water -100 boilers is in standby. Initial data for calculation of the selected baseline is given in Tables 13. The results of the project calculation are given in Tables Page 48

49 Initial information for calculation GHG project emissions Table 13 Parameters Annual power production, thous. kwh Annual output: power, thous. kwh, incl. gas firing (boilers No 6, 7) coal firing incl. gas firing (boilers No 9, 10) coal firing Heat, Gcal, Incl. gas firing (boilers No 6, 7) coal firing incl. gas firing (boilers No 9, 10) coal firing Specific fuel equivalent consumption for: electricity supplied, g/kwh: 318,0 319,2 320,4 321,3 322,4 323,4 324,5 gas: - boilers No 6, 7 396,9 396,9 396,9 396,9 396,9 396,9 396,9 - boilers No 9, ,52 288,52 288,52 288,52 288,52 288,52 288,52 coal: 409,83 409,83 409,83 409,83 409,83 409,83 409,83 heat supplied, kg/gcal: 155,3 155,3 155,2 155,2 155,2 155,2 155,2 gas: - boilers No 6, boilers No 9, ,8 155,8 155,8 155,8 155,8 155,8 155,8 coal: Annual fuel consumption for heat and electricity, ton c.e.: For electricity totally, gas firing, coal firing For heat totally: gas firing coal firing Totally gas firing, Totally coal firing Gas heating value kcal/n m Page 49

50 Coal heating value kcal/n m 3 Coal heating value kcal/n m ,4 39,4 39,4 39,4 39,4 39,4 39,4 Moisture content W, % 28,8 28,8 28,8 28,8 28,8 28,8 28,8 Ash content, % 19,1 19,1 19,1 19,1 19,1 19,1 19,1 Direct on-site GHG project emissions Table 14 Parameters CO 2 emission for heat output while burning: - natural gas coal totally Specific CO 2 emissions for 1 Gcal 261,0 260,9 260,9 260,9 260,9 260,9 260,9 output, g 2 /Gcal CO 2 emission for electricity output while burning: - natural gas coal totally Specific CO 2 emissions for 1 kwh output, g 2 /kwh 539,6 541,5 543,5 544,9 546,7 548,3 550,0 CO 2 emission from burning of: - natural gas coal Total direct on-site GHG emission, ton Direct off-site GHG project emissions Table 15 Parameters CO 2 emissions due to leakage CH 4 from gas extraction and transportation, ton Results of the calculations of GHG project emissions Table 16 Parameters Total GHG project emissions, ton Page 50

51 Electricity and heat output from Amyrsk CHP Electricity output Heat output Gcal, thouus kwh Fig. 6 GHG emissions t. 2-eqv Baseline Project Fig. 7 Page 51

52 Specific GHG emission 1200 Baseline Project g. 2-eqv/kWh Baseline Fig. 8 Specific GHG emission Project kg. 2-egv/Gcal Fig. 9 Page 52

53 7 Crediting time A 7.1 Time schedule and crediting time The detailed implementation schedule (work plan) can be found in the Business Plan (paragraph 5.1). Start date of the JI project is according to ToR of ERUPT-4, construction works according to the work plan (proved by experience of similar works at different power plants of Russia). Lifetime of the project corresponds to the minimum lifetime of the main equipment. Start date of the JI project Construction works Start of ERUs generation Lifetime of the project Crediting time of the project (only relevant if the project crediting time will end before 2012) 20 years 5 years 1-st commitment period ( ) The project can provide early ERUs (before 2008) as well as emission reductions in the 2 nd commitment period. A 7.2 Entities responsible Khabarovskenergo full responsibilities of the project implementation, general management; Amursk CHP-1 performance of the plant under the projected mode; Energonaladka everyday control and project monitoring (for more detailed information see A9); UralVnipiEnergoprom, KhabarovskenergoProject project concept design and drawings; EnergoRemstroyComplex construction works. 8 Estimation of GHG emission reduction The project emission reductions given in Table 17 is a result of subtraction of project emissions from baseline emissions (Tables 12 and 16). Those reductions refer to the first commitment period As it is clear from A7 the project can provide emission reductions before 2008 and after Page 53

54 Table 17 Final results of estimation of GHG Emission Reduction Units by the project Parameters Total GHG baseline emissions, ton Total GHG project emissions, ton GHG Emission Reduction Units, ton Total ERUs for period Page 54

55 Reference 1. Steam turbine PT-80/ /13. Technical specifications TU Ministry of Heavy Engineering and Transport Industry. USSR, Moscow, 1973, page Typical energy characterization of Turbo unit PT-80/ /13 LMZ. TH SPO Souztehenergo, Moscow, 1985, page Addition to Typical energy characterization of Turbo unit PT-80/ /13 LMZ. TH SPO Souztehenergo, Moscow, 1989, page Methodical Instructions on Calculation of specified operating capacity of Power Plant. RD Moscow: SPO ORGRES, 1992, page Methodical Instructions on drawing up of report of Power Plant and Joint-Stock Company of power system and electrification of thermal effectively of equipment. RD Moscow: SPO ORGRES, 1995, page Change No 1 PD Moscow: SPO ORGRES, The Inventory of GHG Emissions by Thermal Power Plant and Boiler Houses of Power Industry of the Russian Federation for RAO UES of Russia, Moscow, Methodical Instructions on estimate of annual gross GHG Emission from boilers of Thermal Power Plant and Boiler Houses. PD SPO ORGRES, Moscow, Heat Engineering Reference Book, Moscow, Energy, Power Plant Fuel of USSR (fossil coal, shale oil, peat, mazut and fuel natural gas). Reference book/ Matveeva I.I., Novitsky n.v., Vdovchenko V.S. and others, Moscow: Energy. 1979, page Working Book of Inventory of GHG Emissions. Revised Guidelines of National Inventories of GHG Emissions. IPCC, volume 2, Methodical Instructions on Fuel Accounting at Thermal Power Plants, RD Independent Expert Review of the RAO UESR GHG Emission Inventory Methodology. Environmental Defense Center for Preparation and Implementation of International Projects on Technical Assistance, Moscow Washington New-York, 2001 (Annex VI). Page 55

56 14. Accounting rules of thermal energy and heating / P-683, Glavgosenergonadzor- M.: Publishing house of Moscow Energy Institute, C Natural Environmental Situation and Environmental activities at Khabarovsk region in Government Report of Department of Environmental Resources at Far Eastern Region. Khabarovsk Technical Operational Rules of Power Plants and grid of Russian Federation. RD The 15 th issue revised and supplemented. 17. Methodology of Accounting Gross Polluting Substances Emissions from boiler houses of TPP, RD Gas or Coal, Gritsevitch I.: CENEF, Moscow, Methodology of Calculating of Harmful Substances Concentration in the Atmospheric Air Caused by Emissions of Enterprises, OND Permissible Levels of Emissions of Amursk CHP-1 (Individual Enterprise Normative). 21. Series of Russian National Standards R ISO Methodology and GHG Emissions Inventory of Auxiliaries and Vehicles of regional utilities of JSC UES of Russia in , ECF, Untersuchung zum Kenntnisstand uber Methan-Emissionen beim Export von Erdgas aus Russland nach Deutschand, Marz 1997, W Zittel, Ludwig-Bolko- System-Technik, Ottobrunn. Page 56

57 Annex I The most significant direct off-site emissions to be estimated are the emissions due to energy use of coal railway supply and gas pumping via the gas pipeline to Amursk CHP-1. According to the information obtained from the railway company, specific diesel fuel consumption for railway transport of goods is kg per 10 thous. t km. To Amursk CHP-1, the Urgalsk coal is transported by diesel locomotive at a distance of 543 km, the Kharanorsk coal is supplied via the electrified railway area and by diesel locomotive at a distance of 2722 km. The share of the Urgalsk and Kharanorsk coals in the total fuel balance constitutes 0.5 and 0.5, respectively. CHP-1 as well consumes coals from Azeisk and Raichikhinsk deposits. But their share is less than 10%. To simplify calculations of direct off-site emissions those coal were not taken into consideration. According to the information obtained from Open JSC "Gasprom", specific energy consumption for pipeline pumping of natural gas is kg of fuel eqv./mln.m 3 km. Gas to the power station is supplied from the Okha gas field at a distance of about 700 km. In implementing the project, Amursk CHP-1 gas requirements will be of the order of 260 mln. m 3 /y. The methodology of defining GHG emissions is to calculate absolute consumption of fuel needed to transport appropriate fuel from a certain deposit to the plant using specific figures and then through emission factors to calculate absolute emissions. Calculations are given in table below. Page 57

58 Estimation of GHG emissions for fuel supply to Amursk CHP-1 under the baseline scenario and under project scenario (for ) No Parameters Unit Calculation Baseline Project Baseline Project Coal consumption 10 thous 1 ton c.e. - 36,9 2,2 38,6 2,3 2 Recalculation factor into natural fuel ton/ ton c.e. - 2,2 2,2 2,2 2,2 Coal consumed at CHP-1 10 thous. p.1*p.2 3 ton 80,5 4,8 84,2 5,0 4 Kharanorsk same 0.5*p.3 40,2 2,4 42,1 2,5 5 Urgalsk same 0.5*p.3 40,2 2,4 42,1 2,5 6 Distance from the deposit km - 7 Kharanorsk km Urgalsk km Specific diesel fuel consumption at the railway kg/10 thous. ton x km Diezel fuel consumption ton - Kharanorsk coal ton p.4*p.7*p.9 11 / Urgalsk coal ton p.5*p.8*p.9 12 / Total ton p.11 + p Recalculation factor of diesel fuel ton c.e./ton 14 into ton c.e. - 1,4 1,4 1,4 1,4 Consumption of diesel fuel at the ton c.e. p.13*p railway Diezel emission factor tco 2 /t c.e. - 2,17 2,17 2,17 2,17 Emissions due to coal t CO 2 p. 15*p transportation Gas consumption at CHP-1 thous. t c.e. 70,0 351,5 70,0 367 Recalculation factor into natural mln. m 3 /ton 19 fuel c.e. 0,86 0,86 0,86 0,86 20 Gas consumed at CHP-1 mln. m 3-60,5 303,7 60,5 317,4 21 Distance from the Okha gas field km Specific gas consumption for gas kg.e./ 22 transportation mln.m 3 x km Gas consumption for gas transportation ton c.e. p.20*p.21* p.22 / , ,7 7775,1 24 Gas emission factor ton CO 2 /ton c.e - 1,62 1,62 1,62 1,62 Emisions due to gas ton CO 2 p.23* p transportation 2400, , Total emission due to fuel ton CO 2 26 transportation p.17 + p Page 58

59 Annex II Characteristics of Amursk CHP-1 main equipment Steam boilers Station Type Manufacturer Year of manufacture Starting date Pressure, kg/cm BKZ F 1963 November BKZ F 1988 January BKZ Barnaul boiler manufacturing works 1989 February BKZ December BKZ F 1967 December BKZ January BKZ March BKZ January BKZ December Hot water boiler plant Station Type Manufacturer Year of manufacture Starting date Pressure, kg/cm VG -100 Dorogobuzh boiler manufacturing works 1980 November VG November VG November VG November Steam pa Steam pa

60 Station Steam turbine Type, Manufacturer 1 PT-25-90/10/1,2- KTZ 2 PT-60-90/13- LMZ 3 P /13- LMZ 4 P /13- LMZ 5 P - 80/ /13- LMZ Fleet service life, h Date of commissioning Operating hrs. for the beginning of 2003, hours December (22) March (35) December (34) October (28) December (15) Startups Installed electrical capability, kw Live steam parameters (years) Pressure, Temperature, kg/cm 2 0 Extracti proce Pressure, kg/cm / / / / /

61 Annex III Basic performance characteristics of Amursk CHP-1 in general and of individual groups of equipment for 2002 Value Parameter 1. Annual installed capacity: electrical, thous. kw turbine extraction heat, Gcal/h Total for CHP 130 kg/cm 2 equipment Boilers No 9, 10 Turbine No 5 90 kg/cm 2 equipment Boilers No 1-7 Turbine No Live steam actual pressure, kg/cm Live steam actual temperature, Electricity generation, thous. kwh: total district heating cycle: total process extraction heat district heating heat Heat supplied to external consumers, Gcal: Heat supplied from turbine extractions, Gcal total process extraction district heating extraction 7. Shares of heat supplied, %: turbine extraction used heat process extraction district heating extraction from turbine condensers 8. Coefficients of utilization of installed capability, %: electricity heat 9. Annual consumption of solid fuel, including: total for electricity, t of natural fuel. for heat, t of natural fuel. 10. Specific consumption of fuel equivalent for electricity supplied, g/kwh: actual nominal specified 11. Specific consumption of fuel equivalent for heat supplied, kg /Gcal: actual nominal specified 12. Electricity auxiliary power consumption, thous. kwh: total for electricity production for heat supplied 13. Electricity auxiliary power consumption: total,% for electricity production, % for heat production, kwh /Gcal Page 61

62 Parameter 14. Structure (Mix) of auxiliary electricity consumption, thous. kwh: for turbines for feed pumps for drafting for pulverized fuel preparation 15. Electricity consumption: for drafting, kwh/gcal for pulverized fuel preparation, kwh/ t of coal eqv. 16. Auxiliary heat consumption, Gcal: for turbines for boilers Total for CHP Value 130 kg/cm 2 equipment Boilers No 9, 10 Turbine No kg/cm 2 equipment Boilers No 1-7 Turbine No Specific gross heat consumption for turbine installation, Gcal /kwh: actual Gross efficiency of boiler plant, %: actual by back balance Off-gas temperature, Excess air coefficient Boiler heat losses, %: with flue gases due to carbon loss and incomplete combustion Feedwater temperature, Turbine condenser pressure, kg/cm Live steam consumption, t/h Feedwater consumption, thous. t t/h 26.Gross heat generated by steam boilers, Gcal Gcal/h 4492, Boiler operation time, h Turbine operating time, h Boilers start-ups: total planned 30. Turbine start-ups: total planned Page 62

63 Basic performance characteristics of Amursk CHP kg/cm 2 equipment in Value 130 kg/cm 2 equipment Boilers No 9, 10 Turbine No Parameter 1. Annual installed capacity: electrical, thous. kw turbine extraction heat, Gcal/h Live steam actual pressure, kg/cm Live steam actual temperature, Electricity generation, thous. kwh: total district heating cycle: total process extraction steam district heating heat Heat supplied to external consumers, Gcal: Heat supplied from turbine extractions, Gcal total process extraction district heating extraction 7. Shares of heat supplied, %: turbine extraction used heat steam extraction heat extraction from turbine condensers 8. Coefficients of utilization of installed capability, %: electricity heat 9. Annual consumption of fuel equivalent, t.: total electricity heat 10. Specific consumption of fuel equivalent for electricity supplied, g/kwh: actual nominal specified 11. Specific consumption of fuel equivalent for heat supplied, kg /Gcal: actual nominal specified 12. Electricity auxiliary power consumption, %: actual nominal specified 13. Electricity auxiliary power consumption: total, % for electricity production, % for heat production, kwh/gcal 14 Structure (Mix) of auxiliary electricity consumption, thous. kwh: for turbines for feed pumps for drafting for pulverized fuel preparation Page 63

64 15. Electricity consumption: for drafting, kwh/gcal for pulverized fuel preparation, kwh/ t of fuel eqv. 16. Auxiliary heat consumption, Gcal: for turbines for boilers 17. Specific gross heat consumption for turbine installation, Gcal /kwh: actual Gross efficiency of boiler plant, %: actual by back balance Off-gas temperature, Excess air coefficient Boiler heat losses, %: with flue gases due to carbon loss and incomplete combustion Feedwater temperature, Turbine condenser pressure, kg/cm Live steam consumption, t/h Feedwater consumption, thous. t t/h Boiler operation time, h Turbine operating time, h Boilers start-ups: total planned 29. Turbine start-ups: total planned Page 64

65 Annex IV Independent Expert Review of the Russian Joint Stock Company- Unified Energy System of Russia Greenhouse Gas Emissions Inventory Methodology Prepared by Environmental Defense And the Center for Preparation and Implementation of International Projects on Technical Assistance 10 July 2001 Page 65

66 Moscow - Washington - New York Independent Expert Review of the Russian Joint Stock Company Unified Energy System of Russia: Greenhouse Gas Emissions Inventory Methodology 2001 Environmental Defense and the Center for Preparation and Implementation of International Projects on Technical Assistance Environmental Defense, As a leading national, New York-based nonprofit organization, represents 300,000 members. Environmental Defense links science, economics, and law to create innovative, equitable and economically viable solutions to today's environmental problems. For more information, please refer to The Center for Preparation and Implementation of International Projects on Technical Assistance (CPPI) is multidisciplinary, not-for-profit environmental institution with headquarters in Moscow. CPPI is an independent legal entity established as the implementation unit for the World Bank's environmental management project. For more information, please refer to Page 66

67 Contents List of tables ii List of figures ii List of abbreviations ii Acknowledgments iii Foreword iv Executive summary Introduction Overview of RAO UESR's greenhouse gas emissions inventory RAO UESR's methodology Adaptation of the IPCC inventory methodology Assessment of fuel combustion quantity Assessment of CO 2 emission factors RAO UESR's fuel data management Fuel quantity data Fuel quality data Information collection and circulation Aggregation of information Inventory of non-co2 greenhouse gas emissions and minor fuels 5.1. Emissions of CH 4 andn 2 O Emissions of SF 6 (insulating gas) Minor fuels Uncertainty estimation Methodology of uncertainty estimation Estimation of inventory data uncertainty Conclusions Recommendations on further development of corporate inventory practice References Annex A. Table of energy unit conversion factors Annex B. RAO UESR reference tables for calculation of GHG emission factors Annex C. Case studies Page 67

68 List of tables Table 1 Fuel consumption by RAO UESR, in million tee Table 2 Example: Chemical characteristics of coal from the Kuznetsky basin Table 3 Comparison of RAO UESR and PCC default CO 2 emission factors Table 4 Example: CO 2 emission factors for coals from the Kuznetsky basin Table 5 CBUandNoO emission factor values used by RAO UESR Table 6 Preliminary estimation of uncertainty of RAO UESR's emission inventory data.. 31 Table A Energy unit conversion factors Table 1 CO 2 emission factors for coals from the Kuznetsky basin Table B2 CO 2 emission factors for coals from the Kansko-Achinsky basin Table B3 CO 2 emission factors for coals from the Ekibaztouzsky basin Table B4 CO 2 emission factors for coals from eastern Siberia Table B5 CO 2 emission factors for coals fromthe Far East Table B6 CO 2 emission factors for coals from the Donetsky basin Table B7 CO 2 emission factors for coals from the Pechorsky basin Table 8 CO 2 emission factors for coals from the Podmoskovny basin Table B9 Summary table for coals from different basins Table BIO CO 2 emission factors for natural gas Table 11 CO 2 emission factors for residual fuel (mazut) Table 12 Summary table: CO 2 emission factors by type offuel List of figures Figure 1 CO emissions as reported by RAO UESR and presented to the IER team Figure 2 emissions as reported by RAO UESR and presented to the IER team Figure 3 N 2 O emissions reported by RAO UESR and presented to the IER team Figure 4 Fuel accounting in Russian power plants Figure 5 Principal scheme of registration and reporting of coal data Figure 6 Principal scheme of registration and reporting'of residual fuel oil data Figure 7 Principal scheme of registration and reporting of gas data Figure 8 Aggregation of the inventory data by RAO UESR List of abbreviations CEM continuous emissions monitor CPPI Center for Preparation and Implementation of International Projects on Technical Assistance GHG greenhouse gases GWP global warming potential IER independent expert review of RAO UESR greenhouse gas emissions inventories IPCC Intergovernmental Panel on Climate Change ORGRES Whole-Russia Thermal Power Institute RAO UESR tee tons of coal equivalent TJ terajoules, measure of the calorific value of fuel Russian Joint Stock Company Unified Energy System of Russia TPP thermal power plant UNFCCC United Nations Framework Convention on Climate Change Page 68

69 Acknowledgments Organizations involved The Russian Company RAO UESR, a joint-stock company with headquarters in Moscow, is the largest electric power generation company in the Russian Federation. Environmental Defense (formerly Environmental Defense Fund) is an independent, 300,000-member, nongovernmental, nonprofit organization with headquarters in New York City. It specializes in the development and implementation of innovative, market-based approaches to solving environmental problems. Environmental Defense's climate team includes scientists, economists, and attorneys. The organization accepts no contributions from polluting corporations, and no portion of this independent review was funded by RAO UESR or any of its affiliates. The Center for Preparation and Implementation of International Projects on Technical Assistance (CPPI) is a multidisciplinary, not-for-profit environmental institution with headquarters in Moscow. Among other things, it conducts capacity-building activities under the United Nations Framework Convention on Climate Change (UNFCCC) in Russia. CPPI is an independent legal entity established as the implementation unit for the World Bank's environmental management project. It also does not have any administrative links with and is completely independent of RAO UESR. Expert reviewers and contributions by other experts The expert review team included from Environmental Defense: D. Dudek, senior economist; A. Golub, economist; A. Petsonk, international counsel; G. Safonov, consultant; D. Shaposhnikov, consultant; I. Gritsevich, consultant, Center for Energy Efficiency (CENEf); and from CPPI: A. Averchenkov, general director; V. Maximov, chief specialist; M. Saparov, consultant. The independent expert review team wishes to acknowledge A. Khanykov, adviser to the chairman of the board of RAO UESR; M. Rogankov, chair of RAO UESR's Department of Ecological Safety; V. Mikoushevich, senior specialist of RAO UESR's Department of Ecological Safety; M. Martynova, chief specialist, RAO UESR's Carbon Fund; A. Chugaeva, deputy chair of the Whole-Russia Thermal Power Institute's Department of Ecology; A. Kokorin, coauthor of RAO UESR's GHG inventory in 1998, WWF Russian Program Office, and coordinator of WWF's Russia Climate Change Program; A. Orlov, chair of the Environmental Protection Department, ORGRES; E. Gavrilov, deputy general director of Institute of Energy (ENIN). The expert review team expresses its deep gratitude to the Mosenergo and Chelyabenergo energy companies for their collaboration and, particularly, the management and personnel of Mosenergo power plants TEC-16 and TEC-22; Kashira GRES-4; and Chelyabenergo power plant TEC-1. The expert review team also wishes to thank D. Krueger and W. Irving of the United States Environmental Protection Agency for their technical review of this document. Financial support Each of the participating organizations contributed staff time and expertise to this review. In addition, a portion of Environmental Defense's participation in this review was supported by a grant from the United States Environmental Protection Agency (EPA Cooperative Agreement No. X , Independent Review and International Presentation of Greenhouse Gas Emission Inventories).

70 Foreword RAO UESR is one of the world's largest electricity companies, but the world's largest single corporate emitter of greenhouse gases (GHG). RAO UESR voluntarily developed an inventory of GHG emissions from thermal power plants and boilers for According to RAO UESR estimates, its GHG emissions in CO 2 equivalent terms declined from 710 million metric tons in 1990 to 493 million metric tons in RAO UESR's emissions level is globally significant and constitutes about 30% of total Russian CO 2 emissions. A team of experts has conducted an independent expert review (IER) of the methodologies used by RAO UESR in the development of its inventory. The IER concluded that RAO UESR's GHG emission inventory is a unique and pioneering study both in Russia and worldwide, that the methodology and its implementation are an example of the best practices in this area that can be recommended for use by power companies. Both RAO UESR and the IER team recognize the importance of international cooperation for the development of environmentally effective, economically sound approaches for the management of GHG emissions. The publication of the ffir of GHG Emission Inventory of RAO UESR is a step toward the creation of such a management system on both the national and international levels. RAO UESR has the elements to implement a high quality transparent monitoring system for GHG emissions, that, in our opinion, should encourage potential investors, attract funds for energy efficiency projects, and help RAO UESR realize its substantial potential for GHG emissions reductions. The open publication of the IER and its wide availability reflects the importance of greenhouse gas emissions management within the company. Current RAO UESR actions are focused on establishing transparent internal reporting and registry systems for GHG emissions and defining a comprehensive cap for overall GHG emissions. These steps are essential for the development of an effective internal system for the production and management of GHG emission reductions. These elements, in turn, will create a solid basis for national and international investment mechanisms for real GHG emissions reductions in RAO UESR. From the viewpoints of our respective organizations, we welcome these developments. June 2001, Moscow Page 70

71 Executive summary In 1998 and 1999, the Russian Joint Stock Company "Unified Energy System of Russia" (RAO UESR) prepared an inventory of its greenhouse gas (GHG) emissions from the entire operations of the company. The inventory covers emissions every year for the years 1990 to 1997,l inclusive. From August 2000 to January 2001, the non-profit, non-governmental organization Environmental Defense, with participation of the Center for Preparation and Implementation of International Projects on Technical Assistance (CPPI), conducted an independent expert review (IER) of the RAO UESR GHG emissions inventory. This report is the product of that independent review. The inventory is a unique and pioneering study in the thermal power industry both in Russia and worldwide. The inventory was prepared at the initiative of RAO UESR. RAO UESR provided its own resources to complete the work. What the independent expert review is The IER is an independent examination of the emissions inventories prepared by RAO UESR. In undertaking the IER, experts from Environmental Defense and CPPI (the reviewers) examined the estimates of the greenhouse gas emissions by RAO UESR. 2 The IER examined the inventory methodology, taking into account various methodologies or practices for GHG emissions inventory preparation in the electric power sector. In undertaking the review, the reviewers examined RAO UESR's methodology particularly in light of the Reference Approaches and "Good Practice" methodologies contained in the Revised 1996 Intergovernmental Panel on Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventories: Reference Manual (hereinafter "Revised 1996 IPCC Guidelines") 3 and the IPCC Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories (2000) (hereinafter "2000 IPCC Good Practice Guidance"). 4 RAO UESR's inventory of greenhouse gas emissions was estimated for the whole thermal power industry of Russia but not for each particular thermal power plant or boiler. In carrying out the inventory, RAO UESR calculated emissions factors for coal, and used published emissions factors for natural gas and heavy oil. Further, RAO UESR estimated the carbon oxidization factor for coal for the year 1990 and assumed this factor to be constant over the whole period of inventory. Data on fuel consumption was collected from the individual combustion sources, but was not evaluated as part of this review. The expert reviewers, taking into account the IPCC Reference Approach for greenhouse gas emissions from the electric power sector, and taking into account IPCC Good Practices with regard to calculating emissions and uncertainties, did the following: 1. Examined the inventory methodology utilized by RAO UESR. 2. Examined the systems that RAO UESR used to collect and process primary data on fuel consumption. 3. Examined, for a sampling of power stations, the practical implementation and enforcement of the data collection and processing systems. 4. Identified the critical factors that give rise to uncertainties in the inventory results. 5. Estimated uncertainties for CO 2 emission data for the three types of fuel. 6. Reached certain conclusions about the estimated uncertainty of the overall inventory. 7. Based on the above, formulated recommendations to RAO UESR on future steps for developing corporate inventory practice. 1 Currently, RAO UESR has completed greenhouse gas emissions inventories for 1998, 1999 and 2000, using the same methodology but these were not available for the IER. 2 According to RAO UESR, the inventory covered 357 energy enterprises, which include electric power and hear generating facilities, and electricity transmission and distribution facilities. 3 Published by the Intergovernmental Panel on Climate Change (EPCC), Available at < 4 Published by the Intergovernmental Panel on Climate Change (IPCC), Available at < Page 71

72 What the independent expert review is not In preparing the IEK, the reviewers did not seek to undertake an audit of the inventory, and the IER does not constitute an audit. It is not a certification of RAO UESR's baseline emissions for The IER did not review all requisite forms and data since such a review is beyond the scope of this effort. As there is no internationally agreed definition of 'best practice" for such inventories, and the reviewers did not attempt to determine whether the methodologies used by RAO UESR constitute "best practice" in the industry. What the independent expert review found The expert reviewers found that the greenhouse gas emissions inventory presented by RAO UESR is the first inventory of greenhouse gas emissions conducted by one of the world's largest national electric power and heat companies using a methodology consistent with the Revised 1996 IPCC Guidelines. RAO UESR is the largest GHG emitter in Russia, constituting around 30% of the national CO 2 emissions as reported in the First and Second National Communications of the Russian Federation to UNFCCC. Thus it is very important to establish a reliable GHG emission monitoring and management system in the company. The expert reviewers consider the inventory developed by RAO UESR as a building block for development of such a corporate emissions management system, which would satisfy the principle of "what you measure, you control and manage." The expert reviewers found that the inventory covers CO 2, H4 and N 2 O emissions only from combustion of solid, liquid and gaseous fuels for electric power and heat generation by the energy enterprises integrated within RAO UESR. Other sources of emissions from the inventoried utilities were considered negligible in comparison with fuel combustion for electric power and heat generation. In addition, RAO UESR conducted a special study of SF 6 emissions. The reviewers found that RAO UESR used a combined "bottom-up" and "top-down" approach for the inventory. The initial data on quantity of fuel consumption and carbon unoxidization were taken from the reports of each particular plant covered by the inventory (reporting forms 6-TP and 3-tech), while the data on carbon content of fuel, calorific value of fuel, and other data were taken from published reference books. Calculation of aggregate emissions was done at the level of RAO UESR as a whole. IER experts believe that such an approach provides rather precise estimation of the emissions at the corporate level. The distinguishing feature of the inventory is that RAO UESR calculated the national specific CO 2 emission factors for coal, residual fuel oil and natural gas combusted at the large thermal power plants of Russia. The review experts conclude that RAO UESR estimates of the emission factor values appear to be more precise than the default values provided in the Revised 1996 IPCC Guidelines. Under the IER, the expert reviewers applied the methodology consistent with 2000 IPCC Good Practice Guidance. We analyzed the system of data quality control in RAO UESR and made some preliminary estimates of the inventory uncertainty. Furthermore, the experts reviewed the methodology for data quality control and fuel consumption reporting. The field visits to several selected utilities showed that the enforcement system for data collection and processing is well established in RAO UESR. The IER experts preliminarily estimated RAO UESR inventory uncertainty as about 4%. However we realize that there are a number of uncertainties uncovered by the IER, which should be addressed in further inventories by RAO UESR and a full-scale inventory audit. On the basis of our expert review, it is our joint conclusion that the emissions inventory presented by RAO UESR and the methodology and means of its implementation are consistent with, the Revised 1996 IPCC Guidelines and could be considered as an example of Good Practice for calculating emissions from the electricity generation and heat sector. Recommendations of the independent expert review Page 72

73 The inventory prepared by RAO UESR could, with further development, provide a methodological basis for a high quality "top-down" system for internal emissions reporting, monitoring and management. For further development of the corporate inventory, the reviewers would recommend that RAO UESR address explicitly the uncertainty estimation, conduct analysis of variation of different factors affecting GHG emissions over time, and involve other relatively minor emission sources (such as corporate transport, waste handling, etc.) in the inventory. It would be advisable to RAO UESR to develop the disaggregated ("bottom-up") carbon emission accounting system, which would allow assessment of the effectiveness of the project-based GHG emission reduction efforts at the plant level, e.g., the effectiveness of switching from more carbonintensive to less carbon-intensive fuels in particular utility companies. Such a plant-by-plant inventory system would also be necessary for the GHG emission management system, including emissions trading among units of RAO UESR. In our view it would be worth to carry out a full-scale formal audit of the inventory, when the corporate emission monitoring system based on source-by-source emission inventories is established. The expert reviewers recommend that lessons learned from the methodology applied by RAO UESR can be used for inventories in other sectors of the Russian economy, such as the communal sector, energy blocks of industrial enterprises, and others. The expert reviewers also suggest that RAO UESR and electric power generators in other Newly Independent States of the former USSR which have similar reporting and regulation systems in the thermal power sector may wish to consider applying RAO UESR's experience for their own inventories. Page 73

74 Annex V Technical capabilities of turbine No 5. According to Technical Specifications [1] at live steam nominal parameters, 8000 m 3 /h cooling water flow, cooling water temperature of 20 0, complete switched on regeneration (using waste heat for feedwater heating), amount of water heated in high-pressure preheaters, equal to 100 % of live steam flow to turbine, and turbine unit operation with 6 kg/cm 2 deaerator with staged line water preheating using turbine full-flow capability and minimal steam flow to condenser, the following values can be used for the extractions: ) nominal values of extractions at 80 MW: process extraction of 185 t/h at absolute pressure of 13 kg/cm 2, total district heating extraction of 132 t/h at absolute pressures of: in upper extraction kg/cm 2 and in lower extraction kg/cm 2. ) maximum process extraction at absolute pressure in the extraction chamber of 13 kg/cm 2 is 300 t/h; with the same value of the process extraction and no district heating extraction the turbine capacity is about 70 MW; with nominal capacity of 80 MW and no district heating extraction, the maximum process extraction is about 245 t/h; ) the maximum total value of district heating extraction is 200 t/h. With this value of district heating extraction and with no process extraction, the turbine capacity is about 76 MW; with nominal capacity of 80 MW and no process extraction, the maximum district heating extraction makes some 150 t/h. At lower parameters of pressure and temperature of the extracted steam and with nominal capacity of 80 MW, the maximum district heating extraction of 200 t/h (116 Gcal/h) can be taken with the process extraction of 40 t/h (24,3 Gcal/h). The maximum turbine capacity with switched-off process and district heating extraction, and with cooling water flow of 8000 m 3 /h, 20 0 temperature, full-flow switched-on regeneration, will be 80 MW. The maximum turbine capacity of 100 MW, reached under certain combinations of process and district heating extractions, depends on the values of extractions and depends on the flow diagrams given in the turbine typical power performance [2, 3]. The possibility is envisaged of the turbine unit operation with the passage of the make-up (and) line water via the built-in bundle simultaneously. The passage of the line water via the built-in bundle and the circulation water via the main bundle are not allowed. Simultaneous cooling by the condenser of the make-up and circulation water is carried out with the their temperature difference of 20 0 max. The plant operating conditions of the dedicated power unit on 130 kg/cm 2 live steam pressure employing boilers No 9, 10 and turbine No 5. The maximum heat efficiency can be reached at maximum electricity generation in the district heating cycle. Because of no industrial consumers of steam from the Amursk CHP- Page 74

75 1 in 2003, turbine No 5 as first carries maximum load from district heating extraction with heat supplied for heating and hot water applications. The hot water load is taken on the 2002 data equal to 25 % of the total heat load. The share of the process extraction is adopted against the actual 2002 data. The calculations indicated that in this case the duration of utilization the nominal heat capacity of the district heating extractions of turbine No 5 Q t nom = 100 Gcal/h to cover the heating load and the hot water load may be 2300 hrs. The average load of the district heating extraction of turbine No 5 during heating period may be about 95.4 Gcal/h. During heating period, turbine No 5 operates with electrical load of 80 MW, with above mentioned heat load of district heating extraction and process extraction load, required to preheat the make-up water and provide for the auxiliary steam of the Amursk CHP-1. During the intermediate heating period, turbine No 5 operates to provide for the heat load of the hot water supplied from the district heating extraction with electric load of 70 MW. The average hot water load during summer period will be at the level of 33.9 Gcal/h. The required live steam flow and specific heat consumption for turbine depending on the turbine electrical load and the heat extraction loads are determined using the turbine typical energy characteristics [2, 3]. With possible loading of the turbine unit by electrical and heat power due to Amursk demand in 2003, and with variations of the hot water loads and the process extraction loads within the above mentioned range, the average turbine steam flow from boilers No 9 and 10 during heating and intermediate heating periods will be respectively and t/h, and the average turbine steam flow during the year will constitute 335 t/h. In this case, the number of hours of utilization of the turbine installed electrical capability with no dispatching (supervisory) constraints on the electrical load, as well as on fuel supplies and with reference to the equipment technical conditions can be 7560 hrs for electricity, and 3667 hrs for heat. In variation of the relation between the process extraction and district heating steam extraction and unchanged turbine steam flow, the total fuel consumption per power unit is not changed. For comparison, Table presents the performance characteristics of the Amursk CHP-1 in 2002 (actual) and of the dedicated power unit with boilers No 9,10 and turbine No 5 for the conditions of The calculations were performed in accordance with effective methodological instruction on preparing the report of the power station and the JSC of power and electrification for equipment thermal economic efficiency [5]. Page 75

76 Performance characteristics of the Amursk CHP-1operation in the current mode of operation and of the power unit at 130 kg/cm 2 using coal and natural gas Parameter 1. Capacity: electrical, thous. kw turbine extraction heat, Gcal/h peaking heat-water boiler, Gcal/h Options of operating modes Actual CHP operating mode at 90 kg/cm 2 on coal in 2002 Power unit operating mode at 130 kg/cm 2 On natural gas for 2006 conditions = = Duration of heating period, h Duration of turbine operation in, h: heating period intermediate heating period Average heat load of district heating extractions, Gcal/h: heating period intermediate heating period 5. Average heat load of process extraction, Gcal/h: heating period intermediate heating period 6. Turbine average electrical load, MW: heating period intermediate heating period 7. Turbine average live steam flow, t/h: heating period intermediate heating period Electric generation, thous. kw: Electricity supplied, thous. kwh Turbine exhaust steam supplied to external consumers, Gcal: Turbine unit installed capability utilization coefficient, %: electrical heat 12. Shares of heat supplied, %: total turbine exhaust steam extraction including: from process extraction from district heating extraction 13. Annual fuel consumption, t of fuel eqv., total: for electricity generation for heat generation Specific fuel consumption for electricity supplied, g/kwh Specific fuel consumption for heat supplied, kg/gcal: Page 76

77 16. Electricity auxiliary consumption related to electric generation, %: Electricity auxiliary consumption related to heat generation, kwh/gcal: Main equipment utilization period, hrs: Turbine unit capability utilization period, hrs: electricity heat Turbines 20. Turbine unit average electrical capacity, MW Turbine unit average heat load, total, Gcal/h including: from process extraction from district heating extraction Turbine unit specific heat consumption, gross, kcal/kwh: Boilers 23. Boiler plant gross efficiency by back balance, %: The efficiency of boilers No 9 and 10 when firing coal is adopted at 90.5 %. In modernization and switch to fire natural gas of boilers No 9 and 10 the efficiency will increase due to elimination of heat losses with carbon (by 1.93 %) and with slag (by 0.95 %), as well as due to installation of low-no x burners, introduction of boiler process monitoring and control system and installation of flue gas recirculation induced-draft fans to maintain the adequate steam parameters (1.1%). Considering said factors, the efficiency of boilers operating on natural gas is adopted at 94.5 %. This actual efficiency is characteristic of the natural gas fired boilers operating with -80/ /13 LMZ turbines on some Russian CHPs, for example, CHP-27 Mosenergo and Yoshkar-Ola CHP. At these CHPs, the actual specific consumption of fuel equivalent for electricity supplied is within g/kwh, and for heat supplied kg/gcal. The values given in Table of fuel specific consumption for heat and electricity generation can be considered as nominal values because these had been calculated for the conditions of designing typical turbine energy performance with no account for the corrections for possible deviations of the fixed external factors from those adopted in the energy performance (condenser pressure, live steam temperature, return network water, etc.), as well as possible reduction of gross efficiency of the boilers due to increased stack gas temperature, air inleakage, combustible losses, etc. With due account for the operational tolerance and actual equipment conditions the above figures can be by about 5 % larger. Therefore, in calculating project GHG emission, the values of fuel specific consumption for heat and electricity generation were increased by 5-6 % as compared to the calculated data. Page 77

78 Annex VI LICENCE D Registration number dated November 15, 2002 Ministry of Energy of the Russian Federation (the name of organization granted the licence) allows the realization OPERATION OF THE HEAT NETWORKS ACTIVITIES The licence was granted to Open Stock Joint Company KHABAROVSKENERGO INN , Frunze str., Khabarovsk, Khabarovsk Region , Russia Based of the Order of Ministry of Energy of the Russian Federation No 392 dated November 15, 2002 Licence term of validity November 14, 2007 S.A. Mikhailov (signature) (name) The data about registration licence at the territories of Administrative Area of the Russian Federation the registration is not to be needed The terms of realization of these activities: Transmission of heat energy. Distribution of heat energy: distribution of heat energy by heat networks among consumers (population, industrial consumers, etc.); activities on efficient-dispatch management of engineering process in heat networks. Engineering service, maintenance and adjustment of installed heat networks (including the complex of the actions for rehabilitation and keeping efficiency of heat networks and their components, when they are used under function). In case of changing the location of them and their geographically isolated subdivisions, which fulfilled the licence activities under licence, it s necessary to notify the licence body. Page 78

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81 Annex VII LICENCE D Registration number dated November 15, 2002 Ministry of Energy of the Russian Federation (the name of organization granted the licence) allows the realization OPERATION OF THE ELECTRICAL GRID ACTIVITIES The licence was granted to Open Stock Joint Company KHABAROVSKENERGO INN , Frunze str., Khabarovsk, Khabarovsk Region , Russia Based of the Order of Ministry of Energy of the Russian Federation No 392 dated November 15, 2002 Licence term of validity November 14, 2007 S.A. Mikhailov (signature) (name) The data about registration licence at the territories of Administrative Area of the Russian Federation the registration is not to be needed The terms of realization of these activities: Transmission of electrical energy Distribution of electrical energy: distribution of electrical energy by electrical grid amount consumers (population, industrial consumers, etc.); activities under efficient-dispatch management of engineering process in heat networks. Engineering service, maintenance and adjustment of installed electrical grid (including the complex of the actions for rehabilitation and keeping efficiency of electrical grid and their components, when they are used under function). In case of changing the location of them and their geographically isolated subdivisions, which fulfilled the licence activities under licence, it s necessary to notify the licence body. Page 81

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