VCS VALIDATION REPORT

Transcription

1 VCS VALIDATION REPORT VCS VALIDATION OF NEW ZEALAND HOUSEHOLD ENERGY EFFICIENT LIGHTING PROJECTS (HELP) REPORT NO REVISION NO. 01 DET NORSKE VERITAS

2 VCS VCS VALIDATION REPORT Date of first issue: Project No.: Approved by: Organisational unit: DNV Certification, International Climate Change Services Client: Energy Mad Pty Ltd Client ref.: Chris Mardon DET NORSKE VERITAS CERTIFICATION AS Veritasveien 1, 1322 HØVIK, Norway Tel: Fax: Org. No: NO MVA Summary: The proposed project consists of the installation of Compact Fluorescent Lamps as replacement for incandescent lamps in domestic households in the main urban areas of New Zealand. DNV Certification has made a validation of the New Zealand Household Energy Efficient Lighting Projects in New Zealand (hereafter called the project ). The validation was performed on the basis of the Voluntary Carbon Standard 2007 criteria for voluntary projects, as well as criteria given to provide for consistent project operations, monitoring and reporting. The validation consisted of the following three phases: i) desk review of the project design decument, the baseline study and the monitoring plan, ii) onsite audit and followup audit including interviews with project stakeholders and iii) the resolution of outstanding issues and the issuance of the final determination report and opinion. In summary, it is DNV Certification s opinion that the project meets all relevant VCS requirements for a Voluntary projects. The verification of reported emission reductions is based on the information made available to us and the engagement conditions detailed in this report. DNV can not guarantee the accuracy or correctness of this information. Hence, DNV cannot be held liable by any party for decisions made or not made based on this report. Report No.: Subject Group: Environment Indexing terms Report title: Key words Service Area Verification VCS Validation of New Zealand Household Energy Efficient Lighting Projects (HELP) Climate Change Kyoto Protocol Validation Clean Development Mechanism Market Sector Process Industry Work carried out by: Simon Dawes Work verified by: Kumaraswamy Chandrashekara Date of this revision: Rev. No.: Number of pages: No distribution without permission from the client or responsible organisational unit free distribution within DNV after 3 years Strictly confidential Unrestricted distribution 2002 Det Norske Veritas AS All rights reserved. This publication or parts thereof may not be reproduced or transmitted in any form or by any means, including photocopying or recording, without the prior written consent of Det Norske Veritas AS. Head Office: Veritasvn. 1, N-1322 HØVIK, Norway

3 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT Table of Content Page 1 INTRODUCTION Objective Scope GHG Project Description 2 2 METHODOLOGY Review of Documents Follow-up Interviews Resolution of Clarification and Corrective Action Requests 6 3 VERIFICATION FINDINGS Project design Baseline Additionality Monitoring Plan Calculation of GHG Emissions Environmental Impacts 10 4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS VALIDATION OPINION REFERENCES Appendix A JI Validation Protocol Page i

4 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT Abbreviations CAR CEF CFL CH 4 CL CO 2 CO 2e DNV EIA ERU(s) GHG IPCC JI MP MVP N 2 O NGO PDD UNFCCC GWP Corrective Action Request Carbon Emission Factor Compact Fluorescent Lamp Methane Clarification request Carbon dioxide Carbon dioxide equivalent Det Norske Veritas Environmental Impact Assessment Emission Reduction Unit(s) Greenhouse gas(es) Intergovernmental Panel on Climate Change Joint Implementation Monitoring Plan Monitoring and Verification Plan Nitrous oxide Non-governmental Organisation Project Design Document United Nations Framework Convention for Climate Change Global Warming Potential Page ii

5 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT 1 INTRODUCTION 1.1 Objective Energy Mad Pty Ltd has commissioned DNV Certification AS to undertake a validation of the New Zealand Household Energy Efficient Lighting Projects (HELP) against the requirements of AM0046, Distribution of efficient light bulbs to households and of the Tool for the demonstration and assessment of additionality (version 3) in accordance with the Voluntary Carbon Standard (Version 1). The purpose of the validation is to have an independent third party assess the project design. In particular, the project s baseline, monitoring plan and compliance with the methodology and relevant criteria of the VCS (version 1) are validated in order to confirm that the project design as documented is sound and meets the identified criteria. The validation was carried out in accordance with the requirements of the VCS (version 1). In accordance with the requirements of the Voluntary Carbon Standard (2007) Project Start Date, we confirm that the contract for validation of the New Zealand Household Energy Efficient Lighting Projects (HELP) was signed on 1 May As the contract was signed before 19 November 2007 and as this validation is completed before 19 May 2008 the project may be completed as a VCS (version 1) project under the grandfathering provisions. 1.2 Scope DNV Certification AS proposes to conduct the verification in accordance with the requirements of the VCS/1 and our Agreement with Energy Mad. We will conduct sufficient verification procedures to enable us to express an opinion on the following matter; that in all material respects the following project elements are fairly presented and in compliance with requirements of the VCS/1 and AM0046 (as amended): 1. Project additionality; 2. Project emission abatement study (including establishment of the baseline and with project emission profiles); and 3. Project monitoring plan. Conditions will be recommended where necessary to enable the applicant to meet the requirements of the VCS/1 for the issue of VERs. DNV Certification AS has, based on the recommendations in the Validation and Verification Manual, employed a risk-based approach in the validation process, focusing on the identification of significant risks for project implementation and the generation of ERUs. The validation is not meant to provide any consulting towards client and other project participants. However, stated request for clarifications and/or corrective actions may provide input for improvement of the project design. Page 1

6 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT 1.3 GHG Project Description The New Zealand Household Energy Efficient Lighting Projects ( HELP Project ) is designed to reduce greenhouse emissions through the replacement of less efficient incandescent lamps with more efficient compact fluorescent lamps. The lamps were sold through a voucher redemption process at numerous retail outlets across the major urban areas of New Zealand in a number of discrete campaigns with different project partners. The distribution projects were for the purpose of assessing uptake and utilisation of CFLs and the effect of their installation on electricity demand and consumption, and for the purpose of reducing greenhouse emissions. Lamps were distributed from 30 October 2004 to 6 September A number of surveys were conducted during the course of the distribution projects to assess consumer response to the CFLs. A round of monitoring and analysis was done at the commencement of the project to assess the baseline usage of incandescent lamps, and was followed up with an identical assessment of the utilisation of CFLs distributed as part of the project. A further round of monitoring and analysis was conducted of the hours of use of project CFLs in 97 households to determine lamp hours of use and household consumption patterns as a basis for validation of the overall energy reduction and thus greenhouse abatement of all lamps. The project sample group was located in the New Zealand region of Christchurch. Hours of daylight and overall patterns of energy consumption and household demographics vary widely across New Zealand, and so a single sample group located in one region does not provide sufficient data to calculate national emission abatement. BRANZ Ltd, an independent building assessment and testing agency, has conducted a ten year longitudinal study of household energy use patterns, including lighting usage, across five New Zealand regions. Results list the average household lighting consumption in each month in each of the regions. These results provide a set of ratios to adjust the one month, one region project sample results across New Zealand to all project lamps in all seasons. The PDD estimates a total emission abatement from as 1,078,000 tonnes CO 2 -e, with the abatement from as 180,000 tonnes CO 2 -e. Average abatement for each year through the crediting period is 107,800 tonnes CO 2 -e. 2 METHODOLOGY The validation consisted of the following three phases: 1. a desk review of the project design documentation 2. follow-up interviews onsite with project stakeholders 3. the resolution of outstanding issues and the issuance of the final validation report and opinion. We undertook the following procedures as part of the onsite and desktop verification: Verification of eligibility: i. Review of the legal arrangements; ii. Confirmation by review of documentation that all eligibility requirements have been met; and Page 2

7 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT iii. Confirmation that any necessary approvals have been gained, including review of any NZ Government decision relating to the project; Verification of Emission/Abatement Study: i. Verification of record keeping procedures, interviews with relevant managerial and operational personnel and review of the overall data management process to confirm that the record keeping procedures are effective and comply with good record-keeping practice. DNV will: 1. Review the data management practices for compliance with good practice; 2. Interview staff involved in data management to ensure there is understanding of the data management practices; 3. Conduct random checks of data transcription to ensure that data has not been entered in error and all data has been entered; and 4. Test the data management system to determine the strength of the system and as to whether it is capable of detecting errors. ii. Review the calculation methodology associated with the project. DNV will: 1. Confirm that the approved methodology has been effectively transferred to databases and spreadsheets and perform check calculations; and 2. Review the application of statistical uncertainty within the model. iii. Confirmation that the calculations to determine achieved avoided emissions are fairly presented, including independent check calculations and review of the overall process to ensure that the methodology is effective and robust; Verification of the Project Monitoring Plan: i. Review of the internal control procedures used to maintain the integrity of recordkeeping and various databases and processes; ii. Review of the individual requirements contained within the Greenhouse Friendly Guidelines to confirm that the project arrangements are implemented and effective; and iii. Observation and review of relevant documentation. Findings established during the validation can either be seen as a non-fulfilment of validation protocol criteria or where a risk to the fulfilment of project objectives is identified. Corrective Action Requests (CAR) are issued, where: 1. mistakes have been made with a direct influence on project results; 2. validation protocol requirements have not been met; or 3. there is a risk that the project would not be accepted as a JI project or that emission reductions will not be verified. Page 3

8 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT The term Clarification may be used where additional information is needed to fully clarify an issue. In order to ensure transparency, a validation protocol was customised for the project, according to the Validation and Verification Manual. The protocol shows, in a transparent manner, criteria (requirements), means of verification and the results from validating the identified criteria. The validation protocol serves the following purposes: 1. It organises, details and clarifies the requirements a VCS project is expected to meet; 2. It ensures a transparent validation process in that DNV documents how a particular requirement has been validated and the result of the validation. The validation protocol consists of three tables. The different columns in these tables are described in Figure 1. The completed validation protocol is enclosed in Appendix A to this report. Page 4

9 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT Validation Protocol Table 1: Mandatory Requirements for Voluntary Carbon Standard (Version 1) Project Activities Requirement Reference Conclusion Cross reference The requirements the project must meet. Gives reference to COP decision where the requirement is found. Validatin Protocol Table 2: Requirement Checklist This is either acceptable based on evidence provided (), a Corrective Action Request (CAR) of risk or non-compliance with stated requirements or a request for Clarification (CL) where further clarifications are needed. Used to refer to the relevant checklist questions in Table 2 to show how the specific requirement is validated. This is to ensure a transparent validation process. Checklist Question Reference Means of verification (MoV) The various requirements in Table 1 are linked to checklist questions the project shall meet. The checklist is organised in six different sections. Each section is then further sub-divided. The lowest level constitutes a checklist question. Gives reference to documents where the answer to the checklist question or item is found. Explains how conformance with the checklist question is investigated. Examples of means of verification are document review (DR) or interview (I). Comment The section is used to elaborate and discuss the checklist question and/or the conformance to the question. It is further used to explain the conclusions reached. and/or Conclusion This is either acceptable based on evidence provided (), or a Corrective Action Request (CAR) due to noncompliance with the checklist question (See below). A request for Clarification (CL) is used when the independent entity has identified a need for further clarification. N/A means not applicable. Validation Protocol Table 3: Resolution of Corrective Action Requests and Requests for Clarification report clarifications and corrective action requests Ref. to checklist question in table 2 Summary of project owner response Validation conclusion If the conclusions from the draft validation are either a Corrective Action Request or a Clarification Request, these should be listed in this section. Reference to the checklist question number in Table 2 where the Corrective Action Request or Clarification Request is explained. The responses given by the project proponent or other project participants during the communications with the independent entity should be summarised in this section. This section should summarise the independent entity s responses and final conclusions. The conclusions should also be included in Table 2, under Conclusion. Figure 1 Validation protocol tables Page 5

10 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT 2.1 Review of Documents The Project Design Document submitted by Energy Mad Pty Ltd and additional background documents related to the project design and baseline were reviewed. These documents included: Project Design Document Monitoring analysis spreadsheets Monitoring plan Survey reports CFL report and test data Summary of comments by local stakeholders 2.2 Follow-up Interviews In the period of 1 May 2007 to 30 August 2007, DNV Certification AS performed interviews with project stakeholders to confirm selected information and to resolve issues identified in the document review. Representatives of Energy Mad Pty Ltd were interviewed. The main topics of the interviews are summarised in Table 1. Table 1 Interview topics Interviewed organisation Chris Mardon, Energy Mad Pty Ltd Hamish Ewan Energy Mad Pty Ltd Interview topics Project design Data capture Calculation of abatement Public response to the program, including review of newspaper clippings Detailed review of calculation methodology 2.3 Resolution of Clarification and Corrective Action Requests The objective of this phase of the validation was to resolve the requests for corrective actions and clarification and any other outstanding issues which needed to be clarified for the DNV Certification s positive conclusion on the project design. The Corrective Action Requests and Clarification Requests raised by DNV Certification AS were resolved during communications between the Client and DNV Certification AS. To guarantee the transparency of the validation process, the concerns raised and responses given are summarised in chapter 3 below and documented in more detail in the validation protocol in Appendix A. Since modifications to the Project design were necessary to resolve DNV Certification AS s concerns, the Client decided to revise the documentation and resubmitted the final project design documentation on 30 August After reviewing the revised and resubmitted project documentation, DNV Certification AS issued this final validation report and opinion. Page 6

11 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT 3 VERIFICATION FINDINGS In the following sections the findings of the validation are stated. The validation findings for each validation subject are presented as follows: 1) The findings from the desk review of the original project design documents and the findings from interviews during the follow up visit are summarised. A more detailed record of these findings can be found in the validation protocol in Appendix A. 2) Where DNV Certification AS identified issues that needed clarification or that represented a risk to the fulfilment of the project objectives, a Clarification or Corrective Action Request, respectively, has been issued. The Clarification and Corrective Action Requests are stated, where applicable, in the following sections and are further documented in the validation protocol in Appendix A. The validation of the project resulted in three Corrective Action Requests and three Clarification Requests. 3) Where Clarification or Corrective Action Requests have been issued, the exchanges between the Client and DNV Certification AS to resolve these Clarification or Corrective Action Requests are summarised. 4) The conclusions of the validation are presented. The final validation findings relate to the project design as documented and described in the revised and resubmitted project design documentation. 3.1 Project design The project is replacement of existing incandescent lamps with compact fluorescent of generally equivalent lumen output in existing residential premises. The lamps were available for purchase at a discounted price by voucher redemption. Installation was by the householder which was asked to replace the incandescent lamps with the highest usage. The lamps were a new design with high power factor and low harmonic distortion to ensure that the quality of the grid supply was not adversely affected by the project. Individual distribution project were conducted with different retail and technical partners in different regions of New Zealand. The project had the support of the local electricity distributors and national transmission company as project partners. Distribution of lamps occurred between 30 October 2004 and 6 September The project was proposed as a New Zealand government project to reduce emissions (a New Zealand JI program) but was rejected after an adverse expert report. Review of the report findings and responsive comments made by Energy Mad satisfied the Verifier that the adverse conclusions of the expert report had either been satisfactorily rebutted or were not relevant to the VCS application. Distribution of lamps has been completed. Project crediting time is from 2006 to Baseline The baseline for the project is normal usage of incandescent lamps in residential households. The critical factors in determining energy consumption (and thus grid emissions) are: Page 7

12 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT Lamp rating Hours of use Supply voltage These three factors allow the energy used in a single lamp to be calculated with high accuracy. Lamp rating is nominated on the lamp and the New Zealand supply voltage is tightly regulated with a defined minimum level of 230v. Energy Mad developed an innovative method to determine the hours of use of each lamp. A thermal data logger was attached to the base of each lamp which tracked at 10 minute intervals (time and date stamped) the temperature of the lamp. At the completion of the monitoring period the data was downloaded and analysed. Suitable algorithms were developed to extract lamp usage data from the individual lamp temperature data points. Two sample groups were used in a preliminary assessment of the baseline. The first group was of households before the project with installed incandescent lamps, and the second group was after the project of installed CFLs. The difference between the two groups was tested (t-test, two samples, different variances, α = 0.05) and the hypothesis that the groups were from different populations was not proved. On this basis the project proceeded using a single post-project sample group using an energy saving calculation, being the difference in consumption between the original incandescent lamp and the new CFL lamp. BRANZ Ltd, an independent building assessment and testing agency, has a conducted a ten year longitudinal study of end user energy use across New Zealand. This research included household lighting. BRANZ provided the following data for each New Zealand region to Energy Mad: Average number of lamps per household Monthly average lighting loads per household in kwh/day This data is for all lamps in the household, whereas the project allows for replacement of up to the five highest usage lamps. Use of the BRANZ relationships for all lamps is a conservative estimate, as it will tend to overstate the total usage per household and understate the average lamp usage when compared with project data. A further, larger sample group of project households was monitored to determine energy savings and thus emission abatement. The lamp usage and lamp rating data from this sample was used to determine average lamps per household and average energy savings per household, as the BRANZ data was by household. The consumption in each New Zealand region and month from the BRANZ data was used to create a set of ratios to extrapolate the project energy saving to all project areas in New Zealand. 3.3 Additionality Installation of CFL s in New Zealand is not normal practice. Independent survey data documented in the PDD reveals usage across New Zealand has been around 5% for the last twenty years. There has been little observable market transformation to suggest that CFLs are becoming stronger in the market. The New Zealand government has not imposed any restrictions or requirements on the types of lamps able to be installed in New Zealand. The financial analysis in the PDD was a simple non-time weighted return on funds employed, and a hurdle rate of 10% was met by the project using the original forecast volume of VERs and Page 8

13 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT a price of NZD4 per tonne CO 2 -e. A further analysis as part of the validation showed that the assumptions made are conservative, and that a hurdle rate of 10% IRR is appropriate based on New Zealand cash rates at the time with a suitable risk premium. With the reduced rate of abatement from the completed abatement calculation spreadsheet, a VER price of NZD4 is required to achieve an IRR of 10%. 3.4 Monitoring Plan The plan calls for annual performance of monitoring of a project sample group and data analysis and GHG reduction calculations using the same process as for the baseline study as documented in the PDD. The monitoring technology is low cost and an innovative use of an existing technology. The data is of high accuracy and readily able to be transformed into hours of lamp use information. The process for validation of the overall energy saving and thus GHG reduction is the methodology described in AM0046, with the exception as noted that the baseline sample group and the project sample group are the same. All data collected during the monitoring process is archived on the Energy Mad data server. Responsibility for monitoring is allocated in the PDD. The process for identification of the sample group, installation and collection of the data loggers, downloading and manipulation of the data and entry of the data into the calculation spreadsheet is clearly described. 3.5 Calculation of GHG Emissions Lamp projects were conducted in the major urban centres of New Zealand. The individual installations themselves were in normal residential dwellings, and the impacts to grid power consumption were in effect across the North and South Island of New Zealand. This is an appropriate boundary for the project. As a project to reduce grid electricity consumption by retrofitting more energy efficient products, the primary emission effect is through the reduction of emissions from marginal generating plant, on an ex poste basis. In the case of New Zealand, renewable energy sources are must run and coal/gas/oil fired generating plant is on the margin. The emission factor for grid electricity was fairly calculated from data provided by the New Zealand government held in the public domain. The fundamental assumption in calculation of the emission reduction is that the emission reduction in the project sample group is truly representative of the emission reduction in the whole population of households and lamps included in the project. The risks associated with this assumption are mitigated by use of the AM0046 calculation methodology and a number of other conservative assumptions. The assumptions made are: Installation rate 90% of lamps distributed are installed. This was confirmed by postproject surveys conducted by an independent agency. Network losses 10% of generated energy are grid losses Lost heating effect 10%. Incandescent lamps emit waste heat which has a heating effect on the household. It is assumed that 10% of the reduction in waste heat from the original lamps is replaced by conventional heating. It is not assumed that the reduction in summer heating has the effect of reducing cooling loads. This is a conservative assumption. Page 9

14 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT Market transformation 0%. Post implementation surveys have not revealed an increase in CFL uptake. This is a conservative assumption, and represents an offsetting impact to the free rider effect. Free riders 0%. This factor represents those consumers who received a project CFL but would have acquired them in any case. The low uptake in the normal CFL market supports an assumption of 0%. Take back 0%. The pre- and post-implementation surveys showed that hours of use of incandescent lamps and CFLs were not statistically different. Fallout 2% (due to broken CFLs not being replaced) As with AM0046, the final assessment of emission abatement was completed to a 95% certainty. 3.6 Environmental Impacts As this project simply required the replacement of incandescent lamps with new compact fluorescent lamps an Environmental Impact Assessment was not required. The CFLs themselves meet the applicable international standards and are able to be freely imported into New Zealand. They are of a type approved for connection to the New Zealand electricity grid. There are no restrictions in place regarding disposal of failed CFLs by the New Zealand waste industry. A national collection and recycling program for project installed CFLs that fail at any time during the crediting period was launched in September Page 10

15 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT 4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS The VCS (version 1) does not require public posting for comment of the PDD. The project received considerable positive good publicity from local and regional newspapers in New Zealand during the distribution program. Press cuttings were sighted by the Verifier during the onsite follow up interviews. Page 11

16 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT 5 VALIDATION OPINION DNV Certification AS has performed a validation of the New Zealand Household Energy Efficient Lighting Projects (HELP). The validation was performed on the basis of the Voluntary Carbon Standard (Version 1), as well as criteria given to provide for consistent project operations, monitoring and reporting. The review of the project design documentation and the subsequent follow-up interviews have provided DNV Certification AS with sufficient evidence to determine the fulfilment of stated criteria. In our opinion, the project meets all relevant VCS (Version 1) requirements for projects and all relevant host country criteria. By reducing fossil fuel-based electricity consumption by replacement of high energy incandescent lamps with low energy compact fluorescent lamps, the project results in reductions of CO 2 -e emissions that are real, measurable and give long-term benefits to the mitigation of climate change. An analysis of the investment and technological barriers demonstrates that the proposed project activity is not a likely baseline scenario. Emission reductions attributable to the project are hence additional to any that would occur in the absence of the project activity. Given that the project is implemented as designed, the project is likely to achieve the estimated amount of emission reductions. The validation is based on the information made available to DNV Certification AS and the engagement conditions detailed in this report. DNV Certification AS can not guarantee the accuracy or correctness of this information. Hence, DNV Certification AS. can not be held liable by any party for decisions made or not made based on the validation opinion. Page 12

17 Report No: , rev. 01 VCS VALIDATION VCS VALIDATION REPORT 6 REFERENCES Category 1 Documents: List documents provided by the Project Participants that relate directly to the GHG components of the project, (i.e. the Project Design Document and written approval of voluntary participation from the national focal point). /1/ PDD: New Zealand Household Energy Efficient Lighting Projects (HELP), dated 30 August 2007 /2/ AM0046: Distribution of efficient light bulbs to households /3/ Additionality Tool: Tool for the demonstration and assessment of additionality (version 3) /4/ Parsons Brinckerhof report /5/ Ecobulb tech spec ( /6/ BRANZ data /7/ Monitoring Manual (data logger installation) Category 2 Documents: Background documents related to the design and/or methodologies employed in the design or other reference documents. /8/ South Canterbury pre-promotion survey Persons interviewed: Persons interviewed during the validation, or persons contributed with other information that are not included in the documents listed above. /9/ Chris Mardon Energy Mad /10/ Hamish Ewan Energy mad - o0o - Page 13

18 VALIDATION PROTOCOL APPENDIX A VCS VERIFICATION PROTOCOL DET NORSKE VERITAS

19 Table 1 Mandatory Requirements for Voluntary Carbon Standard (Ver 1) (VCS) Project Activities Requirement Reference Conclusion Cross Reference / Comment 1. The project shall be one of the approved project categories VCU Clause 1 Table 2 A.1. The project is a VCU approved project category 3 End-use efficiency. 2. The geographic location is clearly defined VCU Clause 2 Table 2 A.1. The project occurs within premise connected to the NZ electricity grid. 3. The project abates one or more of the recognised greenhouse gases currently included in the Kyoto Protocol VCU Clause 3 Table 2 E.1.1. The project abates full fuel cycle marginal production grid emissions. 4. The project start date is on or after January 1, 2000 VCU Clause 4 Table 2 C.1.1. The project start date is January 1, Emission reductions were generated on or after January 1, 2000 VCU Clause 5 Table 2 C.1.1. The proposed project installation period is for 2005, 2006 and 2007 with a ten year crediting period. 6. The project has not included public funding or ODA VCU Clause 6 Table 2 A.3.1 The project developer has not received any direct funding for this project. 7. The project boundary includes all anthropogenic emission sources under control of the project that are material and reasonably attributable to the project activity 8. The project methodology is an approved CDM methodology, a combination of approved methodologies or another methodology adopting accepted best practice. VCU Clause 7 Table 2 A.1.2 The boundary includes emissions from use of CFLs. VCU Clause 8 Table 2 B.1 AM0046 Distribution of efficient light bulbs to households with adaptations applicable to NZ has been employed. JI Validation Protocol - Report No , rev. 01 Page A-1

20 Requirement Reference Conclusion Cross Reference / Comment 9. Secondary effects are incorporated into the calculation methodology in accordance with the WBCSD GHG PP 10. The project shall be additional in accordance with the requirements of the latest CDM Additionality Tool 11. The project has not had an adverse impact on sustainable development in the local community 12. The project shall adopt the monitoring process included in the approved CDM methodology (where used) or as an alternate method adopt best practice VCU Clause 9 CAR 2 VCU Clause 10 CAR 1 Table 2 B.2.2. B.2.8. Secondary effects associated with the marginal grid emission factor and installation rates, network losses, heating, free riders, takeback and fallout have been included. Risks to the baseline have not been considered. Amended PDD risks to the baseline have been considered in Section B2.6. Table 2 B.2.7. Three alternate scenarios (to the project) of no carbon sales, no change to status quo and market based growth of CFL usage were considered. Additionality is discussed and demonstrated in Section B3 of the amended PDD. VCU Clause 11 Table 2 F.1, A.3.1 There is no discernible negative impact arising form the replacement of incandescent lamps with CFLs. VCU Clause 12 Table 2 D. The monitoring plan is in general accordance with AM0046 with appropriate adjustments for NZ conditions. JI Validation Protocol - Report No , rev. 01 Page A-2

21 Table 2 Requirements Checklist A. General Description of Project Activity The project design is assessed. A.1. Project Boundaries Project boundaries are the limits and borders defining the GHG emission reduction project. A.1.1. Are the project s spatial (geographical) boundaries clearly defined? A.1.2. Are the project s system (components and facilities used to mitigate GHGs) boundaries clearly defined? /1/ DR Ref /1/ sa2.6 The project is an end-use energy efficiency program based on the replacement of incandescent lamps with compact fluorescent lamps. The locations of the project activities are clearly defined. The project takes place across a number of New Zealand urban and rural centres. The locations (actual and proposed) are described in s A2.6 /1/ DR Ref /1/ sa4.3, sd2.1 The project component used to mitigate GHG emissions is the installed CFL. The nature and characteristics of the CFLs used in this project have been tested to comply with the relevant IEC standards. The project boundary includes all anthropogenic emission sources under control of the project. Project monitoring is of hours of use of the CFL. The baseline is determined against the capacity and hours of use of the original incandescent lamp. * MoV = Means of Verification, DR= Document Review, I= Interview Page A-3

22 * MoV = Means of Verification, DR= Document Review, I= Interview Page A-4 A.2. Technology to be employed Validation of project technology focuses on the project engineering, choice of technology and competence/ maintenance needs. The validator should ensure that environmentally safe and sound technology and knowhow is used. A.2.1. Does the project design engineering reflect current good practices? A.2.2. Does the project use state of the art technology or would the technology result in a significantly better performance than any commonly used technologies in the host country? A.2.3. Is the project technology likely to be substituted by other or more efficient technologies within the project period? A.2.4. Does the project require extensive initial training and maintenance efforts in order to work as presumed during the project period? /1/ /4/ /5/ /1/ /4/ /1/ /4/ DR DR DR Ref /1/ sa4.3, /4/ and /5/ The CFLs used in the project are high power factor (~0.9) and low Total Harmonic Distortion (~17%) units of the latest spiral tube design. Lamps are provided in 15w and 20w sizes with a tested lamp life of hours. The technical specifications for the CFLs can be viewed at (accessed on 1 June 2007). Ref /1/ sa4.3 and /4/ The technology is state of the art for residential lighting. Ref /1/ sa4.3 and /4/ The technology is state of the art for residential lighting. Abatement is calculated ex poste based on monitoring data, and thus will explicitly adjust for any improvements in technology. Improvements in CFL technology are likely to be of only a marginal nature in terms of energy efficiency. /1/ DR Ref /1/ The project is of a type such that any reasonably capable adult could install the technology. The process to be

23 A.3. * MoV = Means of Verification, DR= Document Review, I= Interview Page A-5 A.2.5. Does the project make provisions for meeting training and maintenance needs? Compliance with host country requirements The project s contribution to sustainable development is assessed. A.3.1. Is the project in line with relevant legislation and plans in the host country? employed at the residential property is to simply replace an existing incandescent lamp with a CFL in its pre-existing fitting. All CFLs have now been installed. The critical project requirement is that lamps which fail prematurely are replaced and that the project lamps are not replaced with incandescent lamps. Training is provided for personnel engaged in survey and monitoring work to ensure that accurate survey and monitoring data has been obtained. Analysis and calculations of achieved abatement has been performed by technical personnel associated with the project and peer reviewed by a competent independent New Zealand research organisation specialising in the field (BRANZ). /1/ DR Training is provided for survey and monitoring staff. Information on installation of CFLs is provided on the CFL packaging. /1/ /4/ DR Ref /1/ sa4 The project was replacement of incandescent lamps with CFLs. The CFLs offered in the replacement program met the requirements of IEC : 88 + A1 : 91 + A2 : 2000 and EN : 93 + A1 : 93 + A2 : 2000 "Self-ballasted lamps

24 * MoV = Means of Verification, DR= Document Review, I= Interview Page A-6 A.3.2. Is the project in line with host-country specific JI requirements? B. Project Baseline The validation of the project baseline establishes whether the selected baseline methodology is appropriate and whether the selected baseline represents a likely baseline scenario. B.1. Baseline Methodology It is assessed whether the project applies an appropriate baseline methodology. for general lighting - Performance Specifications Clause 10" and IEC :2000 Electromagnetic Compatibility (EMC) - Part 3-2: Limits - Limits for harmonic current emissions (equipment input current up to and including 16 A per phase). The pilot aspects of the project were co-sponsored by lines companies and the NZ Government electricity Regulator. No funds in support of the project were received by Energy Mad. /1/ DR The project applied for approval as a New Zealand Project to Reduce Emissions but did not receive approval in a competitive process. Approval was not on the basis of additionality but following an assessment by an independent reviewer. The review process was not completed in accordance with the now available AM0046. This review undertaken against AM0046 has reached a different conclusion. B.1.1. Is the discussion and selection of the baseline /1/ DR Ref /1/ sb1, /2/ The process described in

25 methodology transparent? B.1.2. Does the baseline methodology specify data sources and assumptions? /1/ /2/ /6/ DR AM0046 is the basis for the baseline. Deviations from the AM0046 process are described and justified. The primary deviation is the absence of an ongoing Baseline Sample Group. A Baseline Sample Group and Project Sample Group were established for an initial pilot distribution, and it was found that the difference in lamp usage was not statistically significant. The use of Baseline and Project Sample Groups corrects the abatement claim in countries where installation of a CFL could induce increased lamp usage due to lower cost of usage and where general improvements in electricity supply and economic development could encourage changes in lamp usage. New Zealand is a stable developed economy, and as the initial survey did not demonstrate any change in lamp usage following installation of the CFLs it is reasonable to exclude the Baseline Sample Group from the baseline and project monitoring process. Ref /1/ sd2.1, /2/ nominates the following data items for monitoring: Utilisation hours Distribution losses Grid emission factor Number of Ecobulbs distributed * MoV = Means of Verification, DR= Document Review, I= Interview Page A-7

26 B.1.3. Does the baseline methodology sufficiently describe the underlying rationale for the algorithm/formulae used to determine baseline emissions (e.g. marginal vs. average, etc.) /1/ /6/ DR Operating time of each sampled appliance Net power of each sampled appliance Number of sampled Ecobulbs Number of households in the Project Sample Group Ref /6/ defines relative average household monthly lamp usage data in five New Zealand regions. This data is used to extrapolate data from the Project Sample Group (located in Christchurch) to other project distribution areas. It is proposed to establish multiple Project Sample Groups (in each of the five New Zealand regions) for crediting periods during CP1. Ref /1/ sd2.1 The methodology utilises the Project Sample Group data and the ref /6/ distribution data to extrapolate baseline emissions data for all project distribution regions based on usage in the Project Sample Group region. It is noted that the Baseline emissions are based on Project lamp usage hours being the same as Baseline lamp usage hours. It has been shown that the two groups are not from different populations (level of significance α = 0.05). Electricity consumption is assumed to be * MoV = Means of Verification, DR= Document Review, I= Interview Page A-8

27 B.2. B.1.4. Does the baseline methodology specify types of variables used (e.g. fuels used, fuel consumption rates, etc)? B.1.5. Does the baseline methodology specify the spatial level of data (local, regional, national)? Baseline Validation The choice of baseline will be validated with focus on whether the baseline is a likely scenario, whether the project itself is not a likely baseline scenario, and whether the baseline is complete and transparent. B.2.1. Is the application of the methodology and the discussion and validation of the chosen baseline transparent? at the marginal emission factor of fossil fuel generation, with all renewable generation being must run. The grid factor is calculated from measured emissions and generation in the year of abatement. /1/ DR Ref /1/ sd2.1, /2/ clearly nominates the following data items used in calculation of the baseline: Hours of lamp use Wattage of incandescent lamp to be replaced Supply voltage Grid marginal emission factor /1/ DR Ref /1/ sd2.1 The data is local (hours of use, lamp size) and national (grid marginal emission factor, supply voltage) /1/ DR Ref /1/ sb The application of the AM0046 methodology in this situation is clearly described. The difference between AM0046 and the proposed Baseline methodology is that there is no Baseline Sample Group or Baseline Cross Check Group. The rationale for this decision is that as the electricity and lighting market in CL 1 * MoV = Means of Verification, DR= Document Review, I= Interview Page A-9

28 The baseline is determined from hours of use of CFLs within the Project Sample Group and from the wattage of lamps * MoV = Means of Verification, DR= Document Review, I= Interview Page A-10 New Zealand is mature, and since the results from one cross check between a Baseline Sample Group and a Project Sample Group demonstrated there was no statistically significant difference in lamp usage between the two groups, Baseline Sample and Cross Check Groups were unnecessary. Data from the Project Sample Group was valid for both Project and Baseline hours of use calculations. This is a reasonable assumption. Members of the original Project Sample Group are located in the Christchurch region. Project Sample Groups for CP1 abatement will be located in the following key NZ Regional towns and cities: Auckland Hamilton Wellington Christchurch Dunedin/Invercargill A second assumption is that the Regional and Monthly lighting power data sourced from BRANZ can be successfully used to extend the validity of a single sample group across wider areas of New Zealand.

29 B.2.2. Has the baseline been determined using conservative assumptions where possible? removed, determined from interviews with the householders in the Project Sample Group. CL 1 the analysis of the difference between the baseline and project groups used to justify use of a single project group for monitoring has not been included in the PDD. The amended PDD includes a statistical analysis demonstrating that the two groups (project and baseline) are from the same population (α = 0.05). /1/ DR Ref /1/ sd2.1 The main variables in the baseline calculation are hours of use and wattage of the installed incandescent lamps, and variability in hours of use throughout each year and between regional areas. As discussed, it has been demonstrated that the baseline and project sample groups come from the same population. On this basis, the hours of use of the CFLs and energy consumption of the original incandescent lamps of the Project Sample determine the baseline energy consumption for the sample group. A new Project Sample group of 97 households and 355 lamps was used to measure the household and lamp consumption patterns for the baseline and the project. This data is used to determine CAR 3 * MoV = Means of Verification, DR= Document Review, I= Interview Page A-11

30 * MoV = Means of Verification, DR= Document Review, I= Interview Page A-12 B.2.3. Has the baseline been established on a projectspecific basis? B.2.4. Does the baseline scenario sufficiently take into account relevant national and/or sectoral policies, macro-economic trends and political aspirations? B.2.5. Is the baseline validation compatible with the available data? average household and average lamp consumption patterns for the sample region,, which are then extrapolated to the other project regions on the basis of the BRANZ regional household lighting and lamp usage consumption data. CAR 3 the PDD, calculation spreadsheet and BRANZ do not apply the different factors in the energy reduction calculation consistently. The revised PDD and calculation spreadsheet consistently apply the per household energy factors from the BRANZ data and include scheduled monitoring of the project sample group[. It is proposed to use project sample groups in each of the project regions for future abatement calculation during Commitment Period 1. /1/ DR Ref /1/ sb The baseline has been established specifically for this project by monitoring of project sites. /1/ DR Ref /1/ sb The NZ Government has not established any formal policies to actively support increased use of CFLs. This is the first project in NZ promoting the use of CFLs. These factors are sufficiently taken into account. /1/ DR Ref /1/ sb The baseline is reasonable. The data for lamp hours of use has been measured through the use of specific

31 B.2.6. Does the selected baseline represent a likely scenario in the absence of the project? B.2.7. Is it demonstrated that the project activity itself is not a likely baseline scenario (e.g. through (a) a flow-chart or series of questions that lead to a narrowing of potential baseline options, (b) a qualitative or quantitative assessment of different potential options and an indication of why the non-project option is more likely, (c) a qualitative or quantitative assessment of one or more barriers facing the proposed project activity or (d) an indication that the project type is not common practice in the proposed area of implementation, and not required by a Party s legislation/regulations)? /1/ /8/ DR devices to monitor the use of individual lamps. The methodology has been reviewed and assessed and found to fairly state the baseline consumption data. Ref /1/ sa2.2, sb, /12/ Despite the evident benefits of CFL lamp use, survey data indicates that public acceptance of the lamps without an initial incentive is low. The baseline does represent a likely scenario in the absence of the project. /1/ DR Ref /1/ sb3 Additionality is demonstrated. The three alternatives to the project are: 1. The project is undertaken, but not as a carbon market project. 2. no change to the status quo 3. market based dissemination of high quality CFLs to the domestic NZ market. Investment analysis only costs are noted, not the income from lamp resellers or reference to the program as a giveaway program. Common practice analysis it is demonstrated that the sale or free distribution of CFLs is not common practice and is not required by legislation. The rate of CFL uptake between 1986 and 2003 was found to be unchanged, at less than 5% of installed lamps in domestic situations. CAR 1 * MoV = Means of Verification, DR= Document Review, I= Interview Page A-13