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

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

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

3 SECTION A General description of small - scale project activity A.1 Title of the small - scale project activity: Lap Vo Rice Husk Biomass Power Plant Version of the document: 10 Date: 22/12/2009 A.2. Description of the small scale project activity: Lap Vo rice husk biomass power plant (hereafter is the Project) is the project involves construction a power plant, in which biomass is used as a renewable fuel. This plant has power-installed capacity of 10 MW, using rice husk from local husk milling activities in Dong Thap province to generate electricity. Annual electricity output of the Project is 80,000 MWh and in which 72,000 MWh (90% of total output) will be supplied to Grid of Electricity of Vietnam. Figure 1. Plant Model The objectives of Lap Vo rice husk biomass power plant are to generate electricity by utilizing rice husk from local husking process and sell the generated power to National grid of Vietnam. This is the first grid-connected rice husk power plant in Vietnam, which applies power-generated technology and it solves the environment problems from rice husk and brings many benefits for local government and people. The Project activity will reduce greenhouse gas (GHGs) emission by avoiding CO 2 emissions from the business-as-usual scenario electricity generation of fossil fuel-fired power plants connected to the National grid. Besides, the Project helps avoiding CH 4 emissions from biomass decay process when rice husk are unused and thrown out. Total expected CO 2 emission reductions from the Project have been estimated to a total of 39,506 tco 2 /year and 276,545 tco 2 during the crediting period of 7 years. 3

4 The Project s contributions to sustainable development of local area as well as the host country are: - The Project will generate renewable energy based electricity. It contributes simultaneously many benefits. Firstly large amount of husking wastes (rice husk) from local agriculture areas will be treated to clean the environment. The local husking mills will receive an income from rice husk selling; their life condition will be improved. On the other hand, it generates renewable energy based electricity and sells to Electricity of Vietnam, contributes significant benefits for Dong Thap Province. - This power plant will meet partly the increasing electricity demand in whole Dong Thap Province and Vietnam. There is a fact that now the investment in power generation is a great burden for the state budget and cannot meet the needs. In order to mobilize the investment resources the Government encourages all enterprises to invest into power generation and the Project is a good response to this need. - Dong Thap is a Province in the Southern of Vietnam, a largest granary of Vietnam. The project will reduce rice husk discharging to environment, improve local people living standards. It reduces GHGs and fossil fuel exploiting for electricity production. In addition, the Project will create a good output for rice husk for farmers; help them to have better conditions in agriculture production. When the Project is in operation period, it will create many jobs for local people to work for plant construction and operation. These will push forward economic development and improve living standard of people in the Province. - The Project will stimulate and accelerate the development of renewable energy technologies in order to reduce GHGs emissions, to protect the environment, to conserve the country energy resources meanwhile the increasing energy demand still can be afforded. Therefore, energy resource diversification is imperative and especially necessary for national sustainable economic growth. It is consistent with energy policies of Vietnam; as a result, it also satisfies the sustainable development criteria for CDM project, established by Designated National Authority (DNA) of Vietnam. A.3. Project participants: Participants in the Project activity are the following: Name of Party involved (host) indicates a host Party) Social Republic of Vietnam (Host) Social Republic of Vietnam (Host) Private and/or public entity (ies) project participants (as applicable) Duy Phat Electricity Joint Stock Company (Project owner) Investment and Trade Consultancy Company Limited (INTRACO Co., Ltd) Kindly indicate if the Party involved wishes to be considered as project No No Germany RWE Power AG (CERs buyer) No Information on Participants in the Project activity is provided in Annex 1 4

5 A.4. Technical description of the Project activity: A.4.1. Location of the Project activity: A Social Republic of Vietnam Host Party (ies): A Region/State/Province etc.: Southern of Vietnam, Dong Thap Province A City/Town/Community etc: Binh Thanh Trung Commune, Lap Vo District A Detail of physical location, including information allowing the unique identification of this project activity (maximum one page): The Project is located at Lap Vo District, Dong Thap Province in Southern of Vietnam. Having been reduced transportation cost of rice husk, position of plant is close to 2/9 canal, 250m far from Lap Vo canal. These canal has large wide, good condition for rice husk and other materials transportation by ferry. Distance from plant to electricity national grid is 500m. Geological co-ordinate of the Rice-husk power plant Project: North latitude East longitude This plant has power capacity of 10 MW, annual electricity output of the Project is 80,000 MWh and in which 72,000 MWh (90% of total output) will be supplied to the grid of Electricity of Vietnam. The Project location is shown below: 5

6 Project location Figure 2. Project location in Dong Thap Province, Vietnam Figure 3. Project location in Dong Thap Province, Vietnam A.4.2. Type and category (ies) and technology/measure of the small-scale project activity: a. Type and category of the Project activity: The Project type and category that based on the categorization of Appendix B of the Simplified Modalities and Procedures for Small-scale CDM Project Activities are defined as follows: AMS-I.D. : - Type I : Renewable energy projects - Category I.D : Grid connected renewable electricity generation - Reference : Version 15, Scope 1 Note: Appendix B may be revised over time and that most recent version will be available on the UNFCCC CDM web site: b. Technology of the Project activity: Steam-turbine technology is chosen for this plant. Main equipments include rice husk fired boiler, turbine and generator. The main technical parameters of Lap Vo rice husk biomass power plant are shown in the following table: Table A.1 The main technical parameters of the Project 1 1 Feasible Study of project Oct (page s 10 and 29) 6

7 TT Description Unit Value 1 Output steam pressure bar Output steam temperature 0 C Boiler power ton/hr Boiler output rate % > 80 % 6 Generator power MW 10 7 Operating hour h/yr 8,000 8 Installed power MW 10 9 Annually gross ouput MWh/yr 80, Auxiliary consumption % Net Power delivered to the grid MW 9 12 Net Gross delivered to the grid MWh/yr 72, Rice husk consumption rate tons/mwh Rice husk consumption tons/yr 117, Ash/rice husk rate % Ash production tons/yr 21,139 The equipment manufacturers are still not identified but the equipment will be designed and manufactured according to Euro, Japan and American standard and imported from leading and wellknown suppliers. There is technology transfer in the project activity. Training courses will be implemented during construction period and key workers will be recruited and participated in installation period in order to get experiences of experts. Some key engineers will be abroad sent to learn from operating of rice husk fired power plants. 2 A.4.3 Estimated amount of emission reductions over the chosen crediting period: It is expected that the Project activities will generate emission reductions of about 276,545 tco 2 e over the first crediting period of 7 years from 1 st January 2011 to 31 st December Table A.2 Emission reductions of the Project during the crediting period Years Annual estimation of emission reductions in tonnes of CO2e , , ,506 2 Feasibility study report Otc 2007 (page 23) 7

8 , , , ,506 Total estimated reductions (tonnes of CO2 e) 276,545 Total number of crediting years 07 Annual average over the crediting period of emissions reductions (tonnes of CO2 e) 39,506 A.4.4 Public funding of the Project activity: There is no public funding or ODA capital for the Project. A.4.5 Confirmation that the small-scale project activity is not a debundled component of a large scale project activity: The Project participants confirm that there is no registered small-scale CDM project activity or an application to register another small-scale CDM project activity with the same project participants and whose project boundary is within 1 km of the Project boundary of the proposed small-scale activity at the closest point. According to Appendix C of the Simplified Modalities and Procedures for Small-scale CDM project activities, the Project is not a debundled component of a large scale project activity. SECTION B. Application of a baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the small-scale project activity: The approved baseline and monitoring methodology applied to the Project is : AMS-I.D. : Grid connected renewable electricity generation - Version 15 - Type I : Renewable energy projects - Category D : Grid connected renewable electricity generation - Reference : Version 15, Scope 1 For more information regarding the methodology, please refer to the link: B.2 Justification of the choice of the Project category: The Project activity can be categorized under the following sectoral scope: Sectoral scope 1 : Energy industries (renewable-/non-renewable sources) In accordance with Appendix B of the Simplified Modalities and Procedures for Small-scale CDM project activities, the Project activity and in line with the applicability requirements stipulated in AMS- 8

9 I.D. AMS-I.D.: Grid connected renewable electricity generation The Project activity with biomass based electricity generation will effectively displace part of electricity generated by the National electricity Grid dominated by fossil fuel-based power plants. Methodology applicability criteria 1. This category comprises renewable energy generation units, such as photovoltaics, hydro, tidal/wave, wind, geothermal and renewable biomass, that supply electricity to and/or displace electricity from an electricity distribution system that is or would have been supplied by at least one fossil fuel fired generating unit. 2. Hydro power plants with reservoirs that satisfy at least one of the following conditions are eligible to apply this methodology: The project activity is implemented in an existing reservoir with no change in the volume of reservoir; Project activity in accordance with the applicability criteria The project activity generates electricity based on only rice husk source to supply to national grid. This output will displace electricity from grid, which have been supplied mainly by fossil fuel fired generating units. The project acitivity newly constructs a rice husk based power plant which is not a hydropower project. Thus, this criteria is not applicable to the project activity. The project activity is implemented in an existing reservoir, where the volume of reservoir is increased and the power density of the project activity, as per definitions given in the Project Emissions section, is greater than 4 W/m2; The project activity results in new reservoirs and the power density of the power plant, as per definitions given in the Project Emissions section, is greater than 4 W/m2. 3. If the unit added has both renewable and nonrenewable components (e.g.. a wind/diesel unit), the eligibility limit of 15MW for a small-scale CDM project activity applies only to the renewable component. If the unit added co-fires fossil fuel, the capacity of the entire unit shall not exceed the limit of 15MW. 4. Combined heat and power (co-generation) systems are not eligible under this category. 5. In the case of project activities that involve the addition of renewable energy generation units at an existing renewable power generation facility, the The project activity added only renewable component with capacity 10MW lower than 15MW. This project activity doesn t have any cogeneration system. The project activity is completely new and don t have any existing renewable power generation facility 9

10 Methodology applicability criteria added capacity of the units added by the project should be lower than 15 MW and should be physically distinct from the existing units. 6. Project activities that seek to retrofit or modify an existing facility for renewable energy generation are included in this category. To qualify as a small-scale project, the total output of the modified or retrofitted unit shall not exceed the limit of 15 MW. Project activity in accordance with the applicability criteria The project activity does not retrofit or modify an existing facility for renewable energy. Therefore, the methodology of AMS-I.D., Version 15 is applicable to the Project activity. B.3. Description of the project boundary: The project boundary is identified based on the definitions stated in Appendix B of the SSC M&P as below: Based on the AMS-I.D, Version 15 the Project site and rice-husk combusted power plant connected physically to the national electricity grid are included the Project boundary. Therefore, the boundary of project covers biomass storage and processing, boiler, steam turbine, generator and all others equipments. It is described as below: Rice husk storage Rice husk fired boiler Rice husk fired boiler Power Generator 10MW Auxiliary consumption Electricity to electricity grid of Vietnam B.4. >> Figure 4. Description of baseline and its development: Project Boundary 10

11 The baseline scenario for the project activity is the continuation of operation of grid connected electricity generation sources which has been dominated by fossil fuel fired power plants 3. The equal amount of energy generated by the project activity would have been produced by other grid connected sources. According to methodology AMS-I.D version 15, the baseline emisions are the product of electrical energy baseline expressed in kwh produced by the renewable generating unit multiplied by an emission factor calculated in a transparent and conservative manner as: a) A combined margin (CM), consisting of the combination of operating margin (OM) and build margin (BM) according to the procedures prescribed in the Tool to calculate the emission factor for an electricity system (Version 02, EB50) OR b) The weighted average emissions (in kg CO2e/kWh) of the current generation mix. The data of the year in which project generation occurs must be used. The Project will connect with Electricity Grid of Vietnam, so the baseline of the Project is electricity delivered to the one by the Project multiplied by the baseline emission coefficient of Grid. For the Project, option (a) is adopted to calculate the baseline emission factor of Grid. Detailed information about the baseline emission is described as follows: Table B.1 Key Information and Data Used to Determine the Baseline Variable Value Unit Source EF OM,y tco 2 /MWh Calculation EF BM,y tco 2 /MWh Calculation EF CM,y tco 2 /MWh Calculation Net electricity supplied by the Project to the Grid 72,000 MWh Feasibility Study Report The detailed calculations and data are listed in Annex 3. B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered small-scale CDM project activity: >> With the implementation of the project activity, the emissions of GHG by sources will be reduced below those that would have occurred in the absence of the registered CDM project activity. The project activity is additional and would have not occurred anyway due to the following barriers : According to the Attachment A to Appendix B of the Simplified Modalities and Procedures for Smallscale CDM Project Activities agreed by the CDM Executive Board the additional of the proposed project will be demonstrated and assessed, in which listed various barriers, at least one barrier listed shall be identified due to which the project would not have occurred any way. a) Investment barrier, i.e., a financially more viable alternative to the project activity would have led to higher emissions; b) Technological barrier, i.e., a less technologically advanced alternative to the project activity, though would involves lower risks due to the performance uncertainty or low market share of the new technology adopted by the project activity and so would have led to higher emissions; 3 Summary of National Electricity System Operation till 2007 (EVN) 11

12 c) Barrier due to prevailing practice, i.e., prevailing practice or existing regulatory or policy requirements would have led to the implementation of a technology with higher emissions; d) Other barriers, i.e., without the project activity, for another specific reason identified by the project participant, such as institutional barriers or limited information, managerial resources, organizational capacity, financial resources, or capacity to absorb new technologies, emissions would have been higher. a) Investment barrier, i.e., a financially more viable alternative to the project activity would have led to higher emissions According to table 2, page 24 of the report on Economic Potential of Renewable Energy in Vietnam s Power Sector implemented by Ph.D Nguyen Thanh Nhan shows that the factors constituting the cost of power generation of fossil fuel fired power plant are capital cost, efficiency, operation and maintenance cost are much lower than those of biomass based power plant. Thus, all fossil fuel options which the proposed project are replacing is cheaper. As the Government have no any policies to encourage or force the EVN who is only electricity buyer in Vietnam to purchase the electricity with higher price from the biomass based power plant, that is reason why the EVN purchases electricity from fossil fuel fired power plants as well biomass based power plant with no difference in price. To sum up, fossil fuel fired power plants are more beneficial or financially attractive to the proposed project activity but lead to higher emissions. b) Technological barrier, i.e., a less technologically advanced alternative to the project activity, though would involves lower risks due to the performance uncertainty or low market share of the new technology adopted by the project activity and so would have led to higher emissions: 1. The fossil fuel based electricity generation constitutes approximately 35.7% 4 while the biomass based electricity generation is only 0% 5 of total generation in Vietnam. Hence, the experience on operation of biomass based power plant is limited 6 when compared to fossil fuel fired power plants. This acts are technological barrier. 2. The less technological advanced alternative will be fossil fuel based power generation where this will exist as it is most widely used technology. The fossil fuel based electricity generation will be more attractive investment due to the familiarity with the technology, however fossil based electricity generation will lead to higher emissions. c) Barrier due to prevailing practice, i.e., prevailing practice or existing regulatory or policy requirements would have led to the implementation of a technology with higher emissions: 1. It is common practice that rice husk 7 is uncontrolled burnt for household usages such as cooking, lime or brick making or is left for decay. 2. Although Environment Protection Law is available but the situation of discharging 8 rice husk into river still is popular. 3. There has been not incentive policies 9 as subsidy or prior to buy the electricity with high price for accelerating the development of biomass based electricity generation. 4 Summarized Report on the Operation of Vietnam National Electricity System until 2007 (Annex 2) 5 A techno-economic assessment of rice husk-based power generation in the Me Kong River Delta of Vietnam and Summarized Report on the Operation of Vietnam National Electricity System until 2007 (Annex 2) 6 Present Status on Biomass Energy Research and Development in Vietnam (page 6) 7 A techno-economic assessment of rice husk-based power generation in the Me Kong River Delta of Vietnam (page 1138) 8 Ministry of Natural Resource and Environment 9 Present Status on Biomass Energy Research and Development in Vietnam (page 6) 12

13 The above prevailing practice and existing regulatory and policy have led to continuous implementation of fossil fuel technology that have higher emissions. Before the beginning of project construction, the project owner took the CDM into account seriously. CDM played a key role in the implementation of the Project. The CDM incentive information listed as below. Timeline of the Project activity Date Project Activity CDM Activity The Feasible Study was completed by Bach Khoa Sai Gon Consulting Company 15/10/ /10/ /11/ /11/2007 Communication with CDM consultant and be provided with the estimated CERs revenue Board meeting on project construction and CDM development The Board decided on project construction and CDM development 22/12/2007 Appointed a CDM consultant 18/01/ /06/ /07/ /08/ /10/ /11/ /12/2008 Validation Start 19/12/2008 Project Document Report Approved by obtaining of investment certificate Emissions Reduction Purchase Agreement (ERPA) Dong Thap Province Authority sent a document to Vietnam DNA to support CDM for the project acitivity The project activity acquired the land for the purpose of project activity (The real action of making a payment more than 10% project investment cost) The bank agreed to finance for the project activity CDM revenue has been considered as part of the revenue stream CDM pre-consideration All directors have determined to apply CDM for the construction of the Project and look for a carbon buyer. All directors have decided to apply CDM for the construction of the Project and look for a carbon buyer. Signed CDM consultant contract with INTRACO ERPA signature between the Project Owner and RWE Power CDM Activity approved by the province Starting date of the project activity CDM revenue has been considered as part of the revenue stream Project participants sent an notification on CDM seeking status of the Project activity to Viet Nam DNA. Start of validation stakeholder comments period Confirmation letter of VietNam DNA on the CDM seeking status of the Project activity B.6. Emission reductions: 13

14 B.6.1. Explanation of methodological choices: >> Baseline Emissions: (1) AMS-I.D.: Grid connected renewable electricity generation The Project with total installed capacity of 10 MW. According to the EB regulations for CDM Projects then the Project belongs to the small-scale (SSC) CDM Projects category. In the paragraph 10 and 11 of the small-scale CDM project activity: I.D. Grid connected renewable electricity generation Version 15: For all other systems, the baseline emissons are the product of electrical energy baseline expressed in KWh of electricity produced by the renewable generating unit multiplied by an emission factor (measured in tco 2 e/kwh) calculated in a transparent and conservative manner as: (a) A combined margin (CM), consisting of the combination of operating margin (OM) and build margin (BM) according to the procedures prescribed in the Tool to calculate the emission factor for an electricity system ( Version 02, EB50) OR (b) The weighted average emissions (in tco 2 e/mwh) of the current generation mix. The data of the year in which project generation occurs must be used. Calculations must be based on data from an official source (where available) and made publicly avainable. Amongst two options above, the option (a) is used for calculation of the emission factor. Detailed calculations of grid emisison factor is shown as below and the baseline information is made available in the Annex 3 of this PDD. Calculation of Combined margin CO 2 emission factor (EF grid,cm, y ), The combined margin CO 2 emission factors (EF grid,cm,y ) consists of the combination of operating margin CO 2 emission factors (EF grid,om,y ) and build margin CO 2 emission factors (EF grid,bm,y ). EF grid,cm,y is calculated using the latest Version of the Tool to calculate the emission factor for an electricity system (Version 02)( hereafter refered as Tool) in seven steps as follows: STEP 1. Identify the relevant electricity systems. SETP 2. Choose whether to include off-grid power plants in the project electricity system (optional). STEP 3. Select a method to determine the operating margin (OM). STEP 4. Calculate the OM emission factor according to the selected method. STEP 5. Identify the group of power units to be included in the build margin (BM). STEP 6. Calculate the BM emission factor. STEP 7. Calculate the combined margin (CM) emissions factor. STEP 1. Identify the relevant electricity systems The electricity generated by the Project activity will be delivered to the Vietnamese national grid, the only grid exist in the country. This national electricity grid is a unique transmission and distribution line, to which all power plants in Vietnam are physically connected. Hence the national electricity grid is the Project electricity system. 14

15 STEP 2. Choose whether to include off-grid power plants in the project electricity system (optional) This step offers two options to calculate the operating margin and build margin emisison factor: Option I: Option II: Only grid power plants are included in the calculation. Both grid power plants and off-grid power plants are included in the calculation. Amongst these two options, the Option I is selected for calculation of emisison factor and in the case of choosing the option I, the next procedures for calculation are the same with earlier versions of this Tool (e.g version 1.1). STEP 3. Select a method to determine the operating margin (OM). The calculation of the Operating Margin emission factor(s) (EF OM, y ) is calculated based on one of the four following methods: 1 Simple OM, or 2 Simple adjusted OM, or 3 Dispatch Data Analysis OM, or 4 Average OM. The Simple OM (1) method is applicable to project activity connected to the Project electricity system (grid) where the low-cost/must run resources constitute less than 50% of the total grid generation in (i) Average of the five most recent years, or (ii) Based on long-term normal for hydroelectricity production. The rate of low-cost/must run resources based on electricity generation in Vietnam is showed in the following table: Table B.2 Rate of low cost/must-run sources based on electricity generation 10 Year Average Rate of low cost/must-run sources generation, % 46.35% 38.50% 31.09% 33.12% 33.81% 36.57% Low-cost/must run resources based on electricity generation that is typically hydropower generation in Vietnam constitute less than 50% of total grid generation in average of the five most recent years; therefore, Simple OM (1) method is applicable to project activity. For the simple OM, ex-ante option is selected. The data vintage that is used to calculation the Simple OM emission factor is the Ex-ante option of a 3-year generation-weighted average (2005, 2006 and 2007) that is the most recent data available at the time of submission of the CDM-PDD to the DOE for validation, without requirement to monitor and recalculate the emissions factor during the crediting period. STEP 4. Calculate the operating margin emission factor according to the selected method (EF grid,om,y ) The simple OM emission factor is calculated as the generation-weighted average CO2 emissions per unit net electricity generation (tco2/mwh) of all generating power plants serving the system, not including low-cost/must-run power plants units. It may be calculated: Based on the net electricity generation and a CO 2 emisison factor of each power unit (Option A, or 10 Summary of National Electricity System Operation until 2007 (EVN) 15

16 Based on the total net electricity generation of all power plants serving the system and the fuel types and total fuel consumption of the project electricity system (option B) Option A: Calculation based on average efficiency and electricity generation of each plant. Because data on avaerage efficiency and electricity generation of each plant are available thus the Option A is adopted to determine the Operating Margin (OM). Option A is used and then the simple OM emission factor is calculated as follows EG m, y. EFEL,m,y m EFgrid,OMsimple,y = (equation 1 of Tool) EG m Where: EF grid,omsimple,y Simple operating margin CO2 emission factor in year y (tco 2 /MWh ) EG m,y Net electricity generated and delivered to the grid by power plant/unit m in year y (MWh) EF EL,m,y CO 2 emission factor of power unit m in year y (tco 2 /MWh) All power plants/units serving the grid in year y except low-cost/must-run power m plants/units y The relevant year as per the data vintage chosen in Step 3 m,y As only data on electricity generation and the fuel types used is available, the emisison factor should be determined based on the CO 2 emission factor of the fuel type used and the efficiency of the power unit, as follows: EF EL,m,y EF CO 2, m, iy *3.6 = (equation 3 of Tool) η m, y Where EF EL,m,y CO 2 emission factor of power unit m in year y (tco 2 /MWh) EF CO2,m,I,y Average CO 2 emission factor of fuel type i used in power unit m in year y (tco 2 /GJ) η m,y Average net energy conversion efficiency of power unit m in year y (%) m All power units serving the grid in year y except low-cost/must run power units y The relevant year as per the data vintage chosen in Step 3 Table B.3 Operating Margin emission factor of the most recent 3 years (2005, 2006 and 2007) 11 Year Total emission of the Vietnam national grid (tco 2 e) 22,717 24,498 27,200 EF grid, OM simple, y (tco 2 /MWh) Published baseline information qualified by EVN and approved by Vietnam DNA 16

17 Total electricity delivered to the grid by fossil power sources (GWh) So EF grid, OMsimple, y is : 36,418 39,525 43,934 EF grid,omsimple, y = tco 2 /MWh STEP 5. Identify the group of power units to be included in the build margin (BM). The sample group of power units m used to calculate the build margin consists of either: a) The set of five power units that have been built most recently, or b) The set of power capacity additions in the electricity system that comprise 20% of the system generation (in MWh) and that have been built most recently. The comparison carried out by the Project participants shows that the group of five power plants that have been built most recently has the larger annual generation (see Annex 3) than the group of plants that have been built most recently and comprise 20% of the system electricity generation in 2007 does (see Annex 3), and hence it is employed. In terms of vintage of data, Option 1 shall be chosen for the Project. Details are as follows: In the first crediting period, calculating the BM emission factor ex-ante shall be based on the most recent information available on units already built for sample group m at the time of CDM-PDD submission to the DOE for validation. In the second crediting period, the BM emission factor shall be updated based on the most recent information available on units already built at the time of submission of the request for renewal of the crediting period to the DOE. In the third crediting period, the BM emission factor calculated for the second crediting period shall be used. This option does not require monitoring the emission factor throughout the crediting period. STEP 6. Calculate the Build margin emission factor (EF grid,bm,y ) The BM emissions factor is the generation-weighted average emission factor (tco 2 /MWh) of all power units m during the most recent year y for which power generation data is available. It is calculated as follows: EF grid,bm,y EG m,y EF EL,m,y m y Where: EF grid, BM, y EGm, y EF m = EG m m,y EL,m,y Build margin CO 2 emission factor in year y ( tco 2 /MWh) (equation 13 of Tool) Net quantity of electricity generated and delivered to the grid by power unit m in year y (MWh) CO 2 emission factor of power unit m in year y ( tco 2 /MWh) Power units included in the build margin Most recent historical year for which power generation data is available The CO2 emission factor of each power unit m (EF EL,m,y ) shall be determined as per the guidance in step 4(a) for simple OM. As only data on electricity generation and the fuel types used is available, the emisison factor should be determined based on the CO 2 emission factor of the fuel type used and the 17

18 efficiency of the power unit, as follows: EF EL,m,y EF CO 2, m, iy *3.6 = (equation 3 of Tool) η Where EF EL,m,y CO 2 emission factor of power unit m in year y (tco 2 /MWh) EF CO2,m,I,y Average CO 2 emission factor of fuel type i used in power unit m in year y (tco 2 /GJ) η m,y Average net energy conversion efficiency of power unit m in year y (%) m y m, y Power units included in the build margin Most recent historical year for which power generation data is available As total generation of the 05 most recently power plants are less than that of 20% of electricity system in 2007 thus the set of power capacity additions in the electricity system that comprise 20% of the system generation (in MWh) and that have been built most recently is selected for calculation of Build Margin. Then, EFgrid, BM, y is derived as follows: EF grid, BM, y = tco 2 /MWh STEP 7. Calculate the combined margin emission factor EF grid,cm,y The combined margin emission factor EF grid, CM, y is calculated as follows EF grid, CM, y = EF grid, OM, y w OM + EF grid, BM, y w BM (equation 14 of Tool) Where: EF grid,bm,y EF grid,om,y Emission factor of the build margin. (tco 2 /MWh) Emission factor of the operating margin (tco 2 /MWh) w OM Weighting of the operating margin emission factor. (50%) w BM Weighting of the build margin emission factor. (50%) (Default weights of 50% for the first crediting period). So, the combined margin emission factor EF grid, CM, y is EF grid,cm, y = 0.5 x x = tco2/mwh Determination of Net electricity generation (EG y ) The project activity is a renewable energy based project. The project activity combusts the rice husk for electricity generation. No anthropogenic emissions would occur due to utilization of rice husk as it is considered a carbon neutral fuel. The project activity may co-fire diesel oil (DO) as supporting fuel for start up. Therefore, according to small scale methodology AMS I.D version 15, if the project activity combusts fossil fuel, the net electricity generation should be calculated by way of two approaches provided in paragraph 20 and 22 of the methodology and the lower of the two values should be considered as net electricity generation to calculate emission reductions. As the project activity only use rice husk for electricity generation other than fossil fuels (fossil fuel is only used for start up and it is considered as project emissions source). Hence, the approach of paragraph 22 is adopted to find out the Net electricity generation by the project activity by compassion between the 18

19 amount of electricity generation calculated using specific fuel consumption and amount of biomass fuel used and the amount of electricity generation measured actually. The lower of the two values should be considered as net electricity generation to calculate emission reductions. Approach 1 The amount of electricity generation calculated using specific fuel consumption and amount of biomass fuel used. EG b,y = EG BF,Gross,y EG BF,aux,y (MWh) Where, EG b,y = The electricity generation due to firing of biomass fuels during the year y (GWh) EG BF,Gross,y = The gross electricity generation from the combustion of biomass fuels during the year y (GWh) EG BF,aux,y = The corresponding amount of auxiliary electricity consumption for the electricity generated from the combustion of biomass fuels (GWh) EG BF,Gross,y =BF y /SFC y BF y =Quantity of biomass fuel combusted in the project activity during the year y (in tonnes) SFC y =Specific fuel consumption of the biomass fuel combusted in the project activity during the year y (in kg/kwh) EG BF,aux,y =EG BF,Gross,y * EG Aux,y (%) Where: EG BF,Gross,y = The gross electricity generation from the combustion of biomass fuels during the year y (GWh) EG Aux,y (%) = The percentage of auxiliary electricity consumption of the project activity during the year y (%) Approach 2 Net electricity generation measured actually (EG actual,y )(MWh) minus amount of electricity generated by firing fossil fuel as Diesel Oil (DO) (in MWh) As the Project does not co-fire fossil fuel (DO) as a source for electricity generation, DO is only used for start up where project emissions were accounted for. Thus, amount of electricity generated by firing foissil fuel (DO) is considered as zero. By this way, net electricity transmited into the gird is the same with net electricity generation measured acctually by electric metering (in MWh). Net electricity generation during the year y (EG,y) is the lower of the two values i.e. EG b,y and EG actual,y. Project emissions The project activity is a renewable energy based project. The project activity ignites the rice husk for energy generation. No anthropogenic emissions would occur due to utilization of rice husk as it is considered as a carbon neutral fuel. The possible project emissions for a biomass based power project would be based on the two basic sources of emissions as described below: Project emissions due to combustion of diesel oil for start up Project emisisons due to import the electricity from grid in cases of back up or maintenance The following equation is used to calculate the total project emissions of the project activity during the year y. 19

20 PE y = PE DO,y + PE Im,y (ton CO 2 /year) Project emissions due to the combustion of diesel oil (DO): The project may co-fire diesel oil (DO) as supporting fuel for start up. Hence, if the project activity uses coal, the corresponding emissions (project emissions) from coal will be deducted from the baseline emissions to arrive emission reductions. The formulae used to calculate the project emission is provided below: PE DO,y = EF DO,y *NCV DO * EF CO2,DO *OXID DO Where: PE DO,y : are the emissions from the project activity during the year y in tones of CO2 FF DO,y : is the quantity of fossil fuel type DO combusted to supplement the biomass residues in the Project activity during the year y in energy or mass units NCV DO : is the net calorific value of the fossil fuel type DO in TJ per unit of energy or mass units, Obtained from IPCC default factor. EF CO2,DO : is the CO2 emission factor per unit of energy or mass of the fuel type DO in tons of CO2 obtained from IPCC default factor. OXID DO : is the oxidation factor of the fuel (as per 2006 IPCC guidelines for default values) The fuel consumption of the project will be monitored during the crediting period. The corresponding DO emissions will be calculated every year during the crediting period. Project emissions due to import the electricity from grid For ex-ante estimate, the electricity imports to the power plant have been considered as zero as the emission reductions. However, emissions due to the actual imports would be monitored ex-post and emissions would be calculated based on the following equation. PE im,y =EC im,y * EF y (ton CO 2 /year) PE im,y CO 2 emisisons due to import of the electricity from gird during year y (t CO 2 ) EC im,y On-site electricity consumption attributable to the project activity during year y (MWh) EF y CO 2 emission factor for the electricity grid during year y (t CO 2 /MWh) Leakage: In the Attachment C to Appendix B General Guidance on leakage in Biomass project activities version 03, leakage identified in three types of emission sources: General Guidance on leakage in Biomass project activities A. Shifts of pre-project activities. Decreases of carbon stocks, for example as a result of deforestation, outside the land area where the biomass is grown, due to shifts of preproject activities. Project applicable Not applicable, this project does not involve these activities. This project activity is using residues biomass to combust. B. Emissions related to the production of the biomass. Not applicable, this project does not involve these activities. This project activity does not include the production of the biomass. C. Competing uses for the biomass. The biomass may in the absence of the project activity be used elsewhere, for the same or a different purpose. The project participant shall evaluate annually if there is a surplus of the biomass in the region of the The total quantity of surplus biomass in the region is 60% larger than the total biomass consumption in the region (detailed assessment is presented in the section 20

21 project activity, which is not utilized. If it is demonstrated (e.g. using published literature, official reports, surveys etc.) that the quantity of available biomass in the region (e.g. 50 km radius), is at least 25% larger than the quantity of biomass that is utilized including the project activity, then this source of leakage can be neglected otherwise this leakage shall be estimated and deducted from the emission reductions. B.6.3). Hence, the leakage emissions due to competing use of biomass is neglected. In line with AMS-I.D, leakage is not considered in the Project since there is no transfer of energy generating equipment from another activity, nor transfer of existing energy equipment to another activity. Leakage in AMS-I.D version 15 If the energy generating equipment is transferred from another activity, leakage is to be considered. Justification Conclusion, leakage is not considered in this project. Emissions reductions: Project emissions reductions will be combined calculated as below: ER y = BE y PE y -LE y Where: ER y Emissions reductions of the Project (ton CO 2 e in year y) BE y Baseline emissions (ton CO 2 e in year y) PE y Project emissions (ton CO 2 in year y) LE y Leakage of the Project (ton CO 2 e in year y) It is a new rice husk based power plant, no equipment transferred from another activity. Thus, the leakage emissions are not considered. B.6.2. Data and parameters that is available at validation: Data / Parameter: Data unit: Description: Source of data used: EF grid,cm,y tco 2 /MWh Emission factor of national grid of Vietnam Electricity of Vietnam Value applied: Justification of the choice of data or description of measurement methods and procedures actually applied : The factor is calculated based on the Tool to calculate the emission factor for an electricity system 21

22 Any comment: Data / Parameter: Specific Fuel Consumption (SFC) Data unit: tons/mwh Description: Specific fuel consumption of the rice husk consumed in the project activity Source of data used: Feasibility Study Report Value applied: Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: This parameter will be monitored yearly and be used to calculate the generation Electric. And compare it with the value from electric meters. The lower value will be applied. Data / Parameter: Data unit: Description: Source of data used: EF CO2,DO tco 2 /TJ Carbon dioxide emission factor of DO IPCC 2006 Guidelines for National Greenhouse Gas Inventories Value applied: 74.1 Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: Data / Parameter: Data unit: Description: Source of data used: NCV DO TJ/Gg Net calorific value of diesel IPCC 2006 Guidelines for National Greenhouse Gas Inventories Value applied: 43.0 Justification of the choice of data or description of measurement methods and procedures actually applied : 22

23 Any comment: Data / Parameter: OXID DO Data unit: tco 2 /TJ Description: Carbon dioxide emission factor of DO Source of data used: IPCC 2006 Guidelines for National Greenhouse Gas Inventories Value applied: 1 Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: Data / Parameter: BF surplus,y Data unit: % Description: Surplus quantity of available biomass used in the plant, upon the total quantity of consumption of respective biomass in the project region including the project activity, during the year y Source of data to be used: Value of data applied for the purpose of calculating expected emission reductions Statistical Yearbook of VietNam 2008-Agriculture, Forestry and Fishing And Development and Science Newspaper 2009 The percentage of surplus availability of biomass utilized in the project activity has been demonstrated in section B.6.3. Surplus availability of biomass residues used in the project activity is larger than 25% of the total consumption of the region Description of measurement methods and procedures to be applied: The parameter is a calculated value derived from the biomass assessment study carried out at the beginning of each crediting period. The project participants shall assess the surplus availability of biomass at the beginning of each crediting period, based on the public survey documentations available in the project region. If no such survey/assessment available, the project participants shall voluntarily appoint a third party to asses the surplus availability of biomass in the project region. QA/QC procedures to be applied: Any comment: 23

24 B.6.3 Ex-ante calculation of emission reductions: Baseline emissions: As mentioned in the above section B.6.1, the electricity generation for estimation of emission reductions will be lower value of two values EG b,y and EG actual,y. However, for ex-ante emission reduction calculation the value of EG b,y will is used. BF y (Quantity of biomass fuel combusted in the project activity during the year y =117,440 (in tonnes) SFC y (Specific fuel consumption of the biomass fuel combusted in the project activity during the year y =1.468 (in kg/kwh) EG BF,Gross,y =117,440*10 3 /1.468* 10 6 =80,000MWh EG BF,Aux,y =80,000* 10% =8,000MWh EG b,y = EG y =80,000-8,000 = 72,000MWh Baseline emissions: BE y = EG y * EF grid, CM, y Where: BE y Baseline emissions in year y, (tco 2 e/yr) EG y Electricity supplied by the Project activity to the grid, (MWh) EF grid, CM, y Combined margin CO 2 emission factor for grid connected power generation in year y calculated using the latest Version of the Tool to calculate the emission factor for an electricity system, tco 2 e/mwh, in which: EF grid, CM, y = tco 2 /MWh - Combined margin emission factor (calculated in B.6.1) Therefore: Baseline emissions: BE y, electric = EG y x EF grid, CM, y = tco 2 /MWh x 72,000 MWh = 39,506 tco2e/yr Project emission Project emissions are calculated mentioned in the section B.6.1, however for an-ante estimate, PE y is considered as zero. Leakage: In the Attachment C to Appendix B General Guidance on leakage in Biomass project activities version 03, leakage source applicable is Competing use of biomass. According to the Statistical Yearbook of Vietnam 2008-Agriculture, Forestry and Fishing, the total rice husk generation of rice husk within in the 50km radius from plant location (Cuu Long River Delta) is about million tonnes, in which the consumption of the region including the project activity is million tonnes. The surplus rice husk availble is million tonnes. The leakage calculation is demonstrrated in the below table 24

25 1 Rice husk available 3,735,600 (tonnes/year) 2 Rice husk consumed in the region 645,920 (tonnes/year) 3 Rice husk used for cooking, lime and brick buring in region (20%) 747,120 (tonnes/year) 4 Rice husk requirement for project activity 117,440 (tonnes/year) 5 Total rice husk consumption in the region (incl. Project activity) 1,510,480 (tonnes/year) 6 25% of total consumption 377,620 (tonnes/year) 7 Total rice husk required to be available in the region 1,888,100(tonnes/year) 8 Total surplus in the region after accounting for all types of consumption 1,845,500 (tonnes/year) 9 Percentage of surplus rice husk in the region over consumption 60% The total quantity of surplus biomass in the region is 60% larger than the total biomass consumption in the region. Hence, the leakage emissions due to competing use of biomass is neglected. The leakage effect due to competing uses of biomass will be monitored every year during the crediting period to ensure that the implementation of project activity does not lead to any increase in GHG emissions from fossil fuel combustion or other sources due to diversion of biomass residues from the other uses to the project as a result of project activity. A biomass availability survey will be carried out at the beginning of each crediting period to asses the surplus avail ability of biomass in the project region, if it is found that the project leads to leakage effect, the emissions due to leakage will be estimated and deducted from the emission reductions. Emissions reductions of the Project: ER y is calculated based on the formula at B.6.1, The amount of emission reduction of the Project is showed as table B.4 at B.6.4 B.6.4 Summary of the ex-ante estimation of emission reductions: >> The emission reductions of the electric generation activity are shown in below table: Year Table B.4 Emission reductions of the project activity Estimation of project activity emissions (tonnes CO2 e ) Estimation of baseline emissions (tonnes CO2 e ) Estimation of leakage tco2 e Estimation of overall emission reductions (tonnes CO2 e ) , , , , , , , ,506 25