JOINT IMPLEMENTATION PROGRAMME ACTIVITY DESIGN DOCUMENT FORM (JPA-DD) Version 01 CONTENTS

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1 page 1 JOINT IMPLEMENTATION PROGRAMME ACTIVITY DESIGN DOCUMENT FORM (JPA-DD) Version 01 CONTENTS A. General description of the project B. Eligibility of small-scale JPA Estimation of Emission Reductions C. Environmental Analysis D. Stakeholders comments Annexes Annex 1: Contact information on entity/individual responsible for the small-scale JPA Annex 2: Specific participant information and emission reduction calculations Annex 3: Investment analysis/sensitivity analysis NOTE: (i) This form is for submission of JPAs in dependence on the form for CPA small scale projects using the provision of the proposed small scale CDM PoA. 1 1 The latest version of the template form CDM-CPA-DD is available on the UNFCCC CDM web site in the reference/document section.

2 page 2 SECTION A. General description of small scale JI programme activity (JPA) Terms clarification In the following text the subsequent terms can be defined: 1. The Joint Implementation Programme of Activities ( JPoA thereafter) is oriented at the PoA guidelines for CDM. This approach aims to combine many small, diverse system conversion and fuel switch activities in one programme with a uniform system of incentives, uniform monitoring and clearly defined framework for all participants. Furthermore, the term programme of activities is referring as well to the programme as a whole. 2. The individual programme activities are called thereafter JI project activity ( JPA ). Furthermore, the terms project, programme activity or project activity are referring specifically to the individual JPAs. 3. Project boundary is a commonly used term in the CDM and JI official documentation forms. In the JPA-DD at hand, this term is referring only to JPA level. 4. Project emissions is a commonly used term in the CDM and JI official documentation forms. In the JPA-DD at hand, this term is referring only to JPA level. 5. Project participants/applicant is a commonly used term in the CDM and JI official documentation forms. In the JPA-DD at hand, this term is referring only to JPA level. A.1. Title of the small-scale JPA: German Pellets Solutions Fuel-Switch Programme : JPA-1 Version: 04 Date: 09/09/2010 Table 1: Revision history of the PDD Version Date Comments Version 01 25/04/2009 Revised draft PDD; prepared for determination Version 02 10/11/2009 Revised PDD; revised according to the draft determinationprotocol from DFP Version 03 28/07/2010 Revised PDD; revised according to extra requirements from DFP Version 04 09/09/2010 Revised PDD according to extra requirements from DFP

3 page 3 A.2. Description of the small-scale JPA: The proposed JI project activity consists of a single boiler replacement activity (biomass) installed under the German Pellets Solutions Fuel-Switch Programme. By paying an eco bonus the project encourages commercial and industrial customers to replace existing heating systems. The aim of the project is to reduce GHG emissions by conversion to biomass 2 -fuelled boilers and direct heating systems, using as biomass fuel wood pellets. This leads to replacement of older, more emission intensive heating systems in favour of more environmental friendly heating systems with natural gas-fuelled boilers and direct heating systems. The proposed JPA is a voluntary initiative taken by the coordinating and managing entity of the PoA. The PDD is oriented at the JI guidelines for PDD format. However, JISC did not provide any guidelines regarding the JPAs at the beginning of the PDD development. Therefore, the CDM guidelines for JPA- DD formats are applied for the JPAs. A.3. Entity / individuals responsible for the small-scale JPA: As indicated in the JPoA PDD, the German Pellets is responsible for the organisation and implementation of those project activities and therefore the coordinating/managing entity. Furthermore, German Pellets is the project applicant and the responsible body for all administrative affairs of the involved parties in host and investor countries. 2 In the context of this programme the term Biomass is described in the Annex 2 of JPoA. The German Pellets and partner companies use officially accepted standardisation norms. The pellets definition as well as quality requirements comply with the German Institute for Standardisation (DIN) or the Austrian Standardisation Norm (ÖNORM) M 7135, while for wood chips the ÖNORM M 7133 is used. Alternative to the mentioned norms also the European (Pre-)Norm CEN/TS 14961:2005 can be applied. See Annex 7 for detailed information. In the case of wood chips only forest wood chips or green wood loppings shall be used. Proof in forms of invoices, contracts, internal documents (where the correct term with reference of the applied norm is given) of quality requirements shall be verified annually by sampling during verification.

4 page 4 A.4. Technical description of the small-scale JPA: The proposed SSC JPA employs state-of-art and recognised biomass boiler technologies, which convert biomass into thermal energy for heating purposes. German Pellets Solutions Fuel-Switch Programme considers the following programme activity Commercial or industrial customers of German Pellets or any Partner company of German Pellets: The JPA at hand consists of boiler replacement with fuel switch from natural gas to wood pellets. The installation size is 0.95 MW with maximum heat generation of 4,800 MWh/yr. Detailed information regarding the technical description of the JPA-real case is provided in Section B.5.1., Table 1, as well as in the Supplementary agreement in Annex 2. The main focus of the JPA-real case at hand is the switch from natural gas to wood pellets used for heat or steam generation in the new biomass boilers. Emission reductions are based on the use of renewable energy sources without CO 2 emissions. Furthermore, it is guaranteed by the JPA that there are no existing legal requirements such as for ex. 4. BlmSchV, under which such efficiency activities would be enforced to be implemented. Criteria for participation are listed in the table provided in the Annex in JPoA-DD and partly in the supplementary agreement (see Annex 2). A.4.1. Identification of the small-scale JPA: German Pellets Solutions Fuel-Switch Programme project by German Pellets: JPA 1 A Host Party: Host party is Germany. A Geographic reference of other means of identification allowing the unique identification of the small-scale JPA (maximum one page): The geographical boundary of the project is the national borders of Germany. The following information will be recorded in a database for each participant contact data: Name, address, telephone, (see Annex 2: Participant Agreement);

5 page 5 A.4.2. Duration of the small-scale JPA: A Starting date of the small-scale JPA: Starting date of the JPA is the date when the participant signs the participation agreement. A Expected operational lifetime of the small-scale JPA: The expected lifetime of the project activity is at least 20 years. (expected lifetime of boilers). A.4.3. Choice of the crediting period and related information: Fixed Crediting period A Starting date of the crediting period: The starting date of the crediting period is the installation date of JPA 1. A Length of the crediting period, first crediting period if the choice is renewable CP: Not applicable. A.4.4. Estimated amount of emission reductions over the chosen crediting period: Table 2: Estimated amount of emissions reductions by the JPA Boiler renewal with and without fuel switch over the chosen crediting period Year Estimate of annual emission reductions in tonnes of CO 2 equivalent 2008* ,019

6 page , , ,019 Total estimated emission reductions over the crediting period (tonnes of CO 2 equivalent) 4,416 Total number of crediting years 5 Annual average of estimated emission reductions over the crediting period (tonnes of CO 2 equivalent) 946 * Please note that the real case has not been operated the whole year 2008, therefore the emission reductions have been adapted accordingly A.4.5. Public funding of the small-scale JPA: The JPA does not benefit from any public funding. A.4.6. Information to confirm that the proposed small-scale JPA is not a de-bundled component The JPA is not a de-bundled component of another JI activity. Furthermore, there is a confirmation in the supplementary agreement that participants have to leave generated emission reductions from the project to the JPoA applicant German Pellets- and besides not to take into account the generated emission reductions within other projects. A.4.7. Confirmation that small-scale JPA is neither registered as an individual JI project or is part of another registered JPoA: The JPA is neither registered as an individual JI project nor is part of another registered PoA. Furthermore, there is a confirmation in the supplementary agreement that participants have to leave generated emission reductions from the project to the JPoA applicant German Pellets - and besides not to take into account the generated emission reductions within other projects.

7 page 7 SECTION B. Eligibility of JPA and Estimation of emissions reductions B.1. Title and reference of the Registered PoA to which small-scale JPA is added: German Pellets Solutions Fuel-Switch Programme Programme by German Pellets for preterm conversion of installations with fuel switch to biomass. Version: 04 Date: 09/09/2010 B.2. Justification why the small-scale JPA is eligible to be included in the Registered PoA: Detailed information regarding the project boundary, determination of the baseline and the demonstration of additionality are provided at JPoA level in section B. In order to clearly define the installations, which qualify for the project, the project coordinating/managing entity will control each JPA participant using a list of criteria. The proposed the SSC JPA meets all eligibility criteria for inclusion of a SSC JPA as listed in section A.2 of the JPoA PDD. A separate document Suplementary agreement is submitted (see Annex 2) along with this PDD. It will be an additional element of the supply contract between German Pellets and JPA participant. By signing the supplementary agreement each participant is responsible for the accuracy of statements in the agreement and German Pellets or Partner Company has to check whether the participant is in conformance with all participation criteria. The legal basis is constituted by the agreement between the JPA participant and the coordinating/managing entity. It includes: 1. JPA participation; 2. collection and transfer of the relevant installation data before and after the activities implementation and the actual consumption data, 3. disposability of the generated project emission reductions from the project to the coordinating/managing entity; 4. commitment not to sell the generated emission reductions to any other project or purpose. Furthermore, if an installation operator decides to take part in the project, the general framework, conditions and the monitoring requirements described in this PDD must be accepted, whereas the JPA participant and German Pellets or any partners company will enter into a contract. If the JPoA participant is already or will be a partner company aside from the JI activities, an additional specific agreement on the JI cooperation has to be concluded. Furthermore, participation shall be limited to those participants where the investment analysis shows the necessity of the JI Bonus. This means particularly that upper limits of installation sizes are defined, as the profitability is higher in general for larger installations with high full load hours.

8 page 8 Detailed information regarding investment analysis as well as sensitivity analysis of the JPA-real case is provided in the tables in Annex 3. Furthermore, information regarding the technical description of the JPA-real case is provided in Section B.5.1., Table 1, as well as in the Supplementary agreement in Annex 2. Further detailed information regarding investment analysis as well as sensitivity analysis, is provided on JPoA-DD level. B.3. Assessment and demonstration of additionality of the small-scale JPA, as per eligibility criteria listed in the Registered PoA: All installations under the SSC-JPA meet the key criteria and data-assessing additionality of the SSC JPA listed in section B.2 of the PoA DD. The real case at hand meets the key criteria and data assessing described in the JPoA. However, as each programme category should prove its financial additionality by exemplary calculations, Step 2: Investment analysis shall be fulfilled specifically by category described steps in section B.2. of the JPoA. For further detail information please see at the JPoA level, chapter B.2. B.4. Description of the sources and gases included in the project boundary and proof that the small-scale JPA is located within the geographical boundary of the registered PoA. The project boundary is defined by an individual steam and hot water generating installation. Only the already installed boilers can participate and new installations are excluded from the project. For the baseline calculation, the specific emissions of the previous system are taken into account. For calculation of JPoA emissions specific emissions of the new steam system are used. They both have the same aim, namely the calculation of the actual heat demand. Fuel Input: Biomass Project boundary Biomass Boiler Steam/hot water output Figure 1: Project Boundary

9 page 9 Similarly the generated GHG emissions, specially regarding the preliminary production chains and transformation are outside the project boundary, as they are beyond the influence of the JPA participants and the applicant.

10 page 10 B.5. Emission reductions: B.5.1. Data and parameters that are available at validation: Table 3: Data and parameters that are available at validation Data to be collected in order to monitor emissions from the project, and how these data will be archived: ID number (Please use numbers to ease crossreferencing to D.2.) Data variable 1 Name of the participant 2 Type of new installation (as listed in Annex 2) 3 Fuel source, new installation Source of data Ex-ante survey of individual participant in additional agreement Ex-ante survey of individual participant in additional agreement Ex-ante survey of individual participant in additional agreement Data unit Measured (m), calculated (c), estimated (e), recorded (r), Recording frequency Proportion of data to be monitored How will the data be archived? (electronic/ paper) - r Once, at registration 100% Electronic: - r Once, at registration 100% Electronic: - r Once, at registration 100% Electronic: Comment JPA-1 values Confidential Standard boiler with constant temperature Biomass Back-up boiler: natural gas

11 page 11 4 Commissioning date of the new installation Ex-ante survey of individual participant in additional agreement - r Once at registration 100% Electronic: 09/10/ Indication whether back up (old) boilers are installed and their type of technology Ex-ante survey of individual participant in additional agreement Yes/No r Once, at registration 100% Electronic: No Back-up boiler 6 Commissioning date of the old boiler (if not available: year of construction) Ex-ante survey of individual participant in additional agreement Date (DD/M M/YYY Y) r Once at registration 100% Electronic: The end of the expected life-time of hot water boiler or steam boiler with an installed capacity up to 400 kw is stated at the date 30 years after commissioning date. Derivation of the calculation is given in Annex 2, JPoA Installed capacity of the old system Ex-ante survey of individual participant in additional agreement kw r Once at registration 100% Electronic: Boiler 1: 2,600 kw Boiler 2: 1,600 kw

12 page 12 8 Installed capacity of the new system Ex-ante survey of individual participant in additional agreement kw r Once at registration 100% Electronic: The installed capacity of the new system must be less than 20MW. 950 kw 9 Old system type (as listed in Annex 2, JPoA) Ex-ante survey of individual participant in additional agreement - r Once at registration 100% Electronic: Standard boiler with constant temperature 10 Used fuel in old installation (as listed in Annex 2, JPoA) Ex-ante survey of individual participant in additional agreement - r Once at registration 100% Electronic: Natural gas 11 Compliance with emission limit values according to EnEV, 1. BImSchV, Ta Luft or TEHG (as listed in Annex 2, JPoA) Ex-ante survey of individual participant in additional agreement - r Once at registration 100% Electronic: Full compliance with emission limits according to regulations 12 Installation regarding 4. BImSchV for industry and manufacture participants Ex-ante survey of individual participant in additional agreement - r Once at registration Electronic: Not covered by 4. BImSchV

13 page Requirements regarding the notice of approval of the installation, which require a replacement of the installation Ex-ante survey of individual participant in additional agreement - r Once at registration 100% Electronic: No requirements regarding the notice of approval of the installation, which require a replacement of the installation 14 Use of any subsidies or funding for the implementation of the measure or receipt of remuneration in terms of EEG or KWKG Ex-ante survey of individual participant in additional agreement - r Once at registration 100% Electronic: No subsidies are applied 15 η BL, Standardannual utilisation ratio for steam or hot water generator for old system Fixed value, ex ante definition; Standard, see Annex 2, JPoA % c Fixed value, ex ante definition;automati cally given in database Electronic: Only Var.1 (boilers) 0.95

14 page η PJ, Standardannual utilisation ratio for steam or hot water generator for new system 17 EF CO2, fuelold, participanti Specific emission factor for the previous used fuel 18 Compliance with biomass requirements (see Annex 2) 19 Compliance with requirements on price calculation (in line with the market) Fixed value, ex ante definition; Standard, see Annex 2, JPoA Fixed value, ex ante definition; Standard, see Annex 2, JPoA German Pellets or Partner companies German Pellets % c Fixed value, ex ante definition; Automatically given in database tco 2 / GJ c Automatically given in database Electronic: Electronic: Yes/no r Once, at registration 100% Electronic Yes/no r Once, at registration 100% Electronic Only Var.1 (boilers) Natural gas t CO 2 / GJ Documents have to be stored and provided in case of spot check verification Documents have to be stored and provided in case of spot check verification Most data that are relevant for the calculation of the baseline emissions are queried in a Supplementary agreement for each JPA participant. These data will be collected in a central Excel-database. All standardized values can be found in this database too. Information is provided at the JPoA level, Annex 2.

15 page 15 B.5.2. Ex-ante calculation of emission reductions: Annual emissions savings in tonnes of CO 2 are equal to the difference between the baseline and the project emissions under consideration of leakage emissions: ERy = BEy PEy LEy ERy = n EF n m CO, fuelbl, participanti 2 HGparticipanti EFCO fuel j participanti FC 2,, fuel j, participanti η i = 1 BLparticipant i i = 1j = 1-0 Biomass is considered as CO 2 neutral fuel. Furthermore, there are no back-up boiler used for the project and therefore no extra project emissions are observed. Therefore, the project emissions for the real case at hand are considered to be zero. The pellets production in Wismar is the only location where some of the raw materials are imported. It is expected that the quantity of pellets exports will exceed the quantity of imported wood clearly. Nevertheless, order to avoid emission related to leakage, the import to export ratio is monitored yearly (see section B.6.1., table 5)and in case that the imports quota exceeds the export quota, installations receiving pellets from Wismar shall be excluded from project participation unless the imported amounts will decline below the export level again. B.5.3. Summary of the ex-ante estimation of emission reductions: Table 4: Summary of ex-ante estimation of emission reduction (t CO 2 ) Year Estimated project emissions (tonnes of C0 2 equivalent) Estimated leakage (tonnes of C0 2 equivalent) Estimated baseline emissions (tonnes of C0 2 equivalent) Estimated emission reductions (tonnes of C0 2 equivalent) ,019 1, ,019 1, ,019 1, ,019 1,019 Total 0 0 4,416 4,416

16 page 16 B.6. Application of the monitoring methodology and description of the monitoring plan: B.6.1. Description of the monitoring plan: Monitoring methodology and plan regarding fuel switch to biomass does exist. Paragraph 30 of Type AMS. I. C. Thermal energy for the user:(version 17) of Appendix B of the Simplified M&P for Small-Scale CDM Project Activities, give the option of choosing different approaches for monitoring (subheads (a) to (d), where the approach of subhead (a) will be followed for each industrial and commercial participant: 30. Monitoring shall consist of : a) Metering the energy produced by a sample of the systems where the simplified baseline is based on the energy produced multiplied by an emission coefficient, More detailed information regarding the monitoring plan is provided section D.1 at JPoA level. Table 5: Data to be collected in order monitor emissions from the project, and how these data will be archived Data to be collected in order to monitor emissions from the project, and how these data will be archived: ID number (Please use numbers to ease crossreferencing to D.2.) 20 FC fuel j,partiiipant i,annual fuel consumption relating to each fossil fuel source of the installation Data variable Source of data Data unit Measured (m), calculated (c), estimated (e), JPoA participant measurement GJ (based on net calorific value) recorded (r), Recording frequency Proportion of data to be monitored How will the data be archived? (electronic/ paper) m Annually Electronic:. Comment

17 page HG participant I, annual heat production of the new installation JPoA participant measurement GJ m Annually Electronic:. Only Var. 1b 22 Imports wood,y t m annually 100% electronic Only for production in Wismar 23 Exports wood,y t m annually 100% electronic Only for production in Wismar The pellets production in Wismar is the only location where some of the raw materials are imported. It is expected that the quantity of pellets exports will exceed the quantity of imported wood clearly. Nevertheless the import to export ratio shall be monitored yearly and in case that the imports quota exceeds the export quota, installations receiving pellets from Wismar shall be excluded from project participation unless the imported amounts will decline below the export level again. Most of the necessary data needed for the calculation of the project emissions will be once enquired from each JPoA participant through the Supplementary agreement. These data will be collected in a central excel-database. All standardized values will be documented in this database, too. In addition, the project coordinating/managing entity will also collect supplementary customer data for its own internal purposes. Further detailed information is provided at the JPoA level in section D.3.

18 page 18 SECTION C. Environmental analysis C.1. Please indicate the level at which environmental analysis as per requirements of the JI modalities and procedures is undertaken. Justify the choice of level at which the environmental analysis is undertaken: x Please tick if this information is provided at the JPoA level. In this case sections C.2. and C.3. need not be completed in this form. C.2. Documentation on the analysis of the environmental impacts, including transboundary impacts: C.3. Please state whether an environmental impact assessment is required for a typical JPA, included in the programme of activities (PoA), in accordance with the host Party laws/regulations:

19 page 19 SECTION D. Stakeholders comments D.1. Please indicate the level at which local stakeholder comments are invited. Justify the choice: x Please tick if this information is provided at the PoA level. In this case sections D.2. to D.4. need not be completed in this form. D.2. Brief description how comments by local stakeholders have been invited and compiled: D.3. Summary of the comments received: D.4. Report on how due account was taken of any comments received:

20 Annex 1 page 20 CONTACT INFORMATION ON ENTITY/INDIVIDUAL RESPONSIBLE FOR THE JPA Table 6: Contact information on entity/individual responsible for the JPA Organisation: German Pellets Solutions GmbH Street/P.O.Box: Alter Holzhafen Building: 15 City: Wismar State/Region: Mecklenburg-Vorpommern Postal code: Country: Germany Phone: Fax: peter.sucher@german-pellets.de URL: Represented by: Peter Sucher Title: Salutation: Mr. Last name: Sucher Middle name: First name: Peter Department: Phone (direct): Fax (direct): Mobile: Personal

21 Annex 2 page 21 SPECIFIC PARTICIPANT INFORMATION Supplementary Agreement to the Contract Information on the participant Organisation: Confidential Street: Postcode & Town: Represented by: First name, surname: Position: Fax: Tel:

22 Information on the old installation page 22 Fuel Input: see 2. Boiler: see 3-5 Steam/hot water output number of boilers In case of different boilers and/or different fuel sources in the baseline, information of each boiler and/or fuel source have to be submitted. 1. Location of the installation (if other address than within participant information above) Confidential (Street) (Postcode & Town) 2. Fuel (If coal, please also give the coal type from list of emission factor) Hard coal, (see list of emission factor) Lignite, (see list of emission factor) X natural gas fuel oil, heavy fuel oil, light liquid gas other 3. Boiler type: X Hot water boiler Steam generator

23 4. Commissioning date 1995 (year) page Installed capacity of the boiler Boiler 1: 2,600kW 6. Authorisation status: Boiler 2: 1,600 kw Installation under the 1.BImSchV (fuel oil EL, natural gas, liquid gas < 20MW): Are the emissions thresholds under the 1.BImSchV exceeded, according to the latest chimney sweep s report? X No Yes (Chimney sweep found the fault emission values) Are there any other legal requirements that might enforce boiler replacement? (ex. Safety regulations, regulation amendments) X No Yes Installation requiring authorisation under 4.BImSchV (coal, heavy fuel oil >1MW): X No Yes Are the emissions thresholds under the TA Luft exceeded, according to the latest measurement report? X No Yes Does the installation have to be replaced until 2012 according to the TA Luft (e.g. for heavy fuel oil)? X No Yes, replacement by (year) Does the installation have to be replaced or modernised until 2012 according to requirements, which result from the notice of approval of the installation X No Yes

24 Information on the new installation page 24 Fuel Input: Biomass Fuel Input: see 7. Biomass Boiler: see Back up Boiler: see 7. Steam/hot water output number of: Biomass boilers Back up boilers 7. Fuel type: natural gas X biomass 8. Boiler type: Hot water boiler: low temperature boiler condensing boiler only burner replacement X standard Steam generator: Large water tank boiler Rapid steam generator Thermo-oil heater What additional measures are there in the steam system to increase efficiency? Economiser continuous burner control O2-setting others 9. Installed capacity of the boiler 950 kw 10. Is the system subject to European emissions trading according to TEHG? X No Yes 11. Commissioning date 09/10/2008 (DD/MM/YYYY) 12. Does the JPoA participant receive any subsidies for the implementation of the measure or remuneration in terms of EEG or KWKG? 13. Usage of any public or other funding: X No Yes

25 page 25 X No Yes, please specify: The yearly payment of the eco bonus will be paid, if the criteria of participation can be fulfilled during the entire contract period. German Pellets will pay the eco bonus every following year.

26 I agree to report the data of the installation to German Pellets each year. page 26 to report information regarding current and future legal requirements or requirements which result from the notice of approval of the installation which are in conflict with the implemented JI programme of activities to German Pellets. to make the generated emission reductions from the programme available to German Pellets and not to take into account the generated emission reductions within other projects. not to use the replaced boiler in another activity and confirm that the replaced boiler is dismantled and if applicable, duly disposed 3 or to report all emissions, in case the replaced boiler is used as a back-up boiler that an on-site visit and a proof of my data can take place by an independent entity during my participation in this programme that the used biomass (if applicable) comply with common norms 4. In the case of the use of any subsidies for the investment in my new installation I will not receive an eco bonus from German Pellets. I confirm that: I am neither registered as a JPoA participant nor included in another registered Joint Programme of Activities (programmatic JI-Project); I am not registered in another Join Implementation Project; The duration of this contract starts with commissioning of my installation and ends by 31/12/2012. This Supplementary agreement will expire automatically in case of cancellation of the contract with the German Pellets and therefore the claim for payment of the eco bonus for the rest of the original contract duration. Signature of the JPoA participant 04/09/2009 Date 3 In case of on site visit from the auditor, a proof shall be available. 4 Regarding the biomass norms please see Annex 8 of JPoA.

27 Annex 3 page 27 INVESTMENT CALCULATIONS The investment calculation tables below are based on the following key input parameters: - The values for period of assessment, 20 years, is in accordance to the VDI Regulations; - The interest rate of 6% is in accordance to the exemplary calculations provided in the Marktanreizprogramm ; - Fuel prices shall be provided by the Federal Statistical office; - The biomass prices are taken from C.A.R.M.E.N. e.v.; - References to Investment costs are provided within each table - All costs are without V.A.T. - Technical data about plant dimension and characteristics (size, operating hours) are based on real installations that are existing or expected (for the real cases) customers of German Pellets - The calculations are presented in accordance to the exemplary calculations provided in the Marktanreizprogramm. FUEL SWITCH FROM GAS TO BIOMASS: (REAL CASE) Table 7: Investment calculations of the case- level- fuel switch from gas to biomass (real case) Basic data Biomass boiler with Peak load boiler with gas Period of assessment 5 a 20 Interest rate 6 %/a 6.0% Biomass costs 7 /MWh Old gas boiler Fuel costs for peak load boiler 8 /MWh specific average Maintenance costs %/a 3.00% Specific administrative costs %/a 0.40% Specific electricity costs /MWh Technical data Dust remover by electrofilter yes Installed heating capacity of the MW The values for period of assessment, 20 years, is in accordance to the VDI Regulations; 6 The interest rate of 6% is in accordance to the exemplary calculations provided in the Marktanreizprogramm ; 7 Wood pellets price is provided by C.A.R.M.E.N 1.HJ 2009 without V.A.T. 8 Natural gas price is provided by Eurostat 2.HJ 2008 without V.A.T

28 biomass boiler Utilisation ratio of the wood boiler % 85% page 28 Volume of the back up buffer m³ 0 Installed heating capacity of the peak load boiler MW 4,2 4,2 Utilisation ration of the peak load boiler % 95% 95% Way of thermal use Industry Total heat demand MWh/a 4,800 4,800 Length of pipeline m 0 Operating hours of the biomass boiler h/a 5,053 Annual heating generation from the biomass boiler MWh/a 4,800 Required biomass quantity MWh/a 5,647 Annual heating generation from the peak load boiler MWh/a 0 4,800 Required fuel for the peak load boiler MWh/a 0 5,053 Investment 9 Specific investment cost for Biomass boiler /kw 327 Total Investment Costs Capital costs 22,754 Biomass costs /a 226,616 Fuel costs for peak load boiler /a 0 222,760 Maintenance costs /a 9,000 3,200 Labour costs /a 4,200 Administration costs /a 1,200 Electricity costs /a 6,200 2,000 Total year costs /a 269, ,960 JI Bonus ( ) Emission reductions tco2/a 1,019 ERU Price /ERU 15 9 The investment costs are without V.A.T. and based on the Confirmation Installation Order from 24/04/2008, Beleg Nr: , Projekt Nr: P from the Heizung, Klima und Waermepumpentechnik GmbH. For more detail information please see the extra send documents provided with the JPoA.

29 page 29 Total JI Bonus /a 15,279 Heat generation costs Specific heat generation without JI Specific heat generation with JI /MW h /MW h 53.06

30 page 30 SENSISTIVITY ANALYSIS FUEL SWITCH TO BIOMASS CASE: LEVEL (REAL CASE) Table 8: Sensitivity analysis of level of heat generation fuel switch to biomass (real case) Gas price Gas price Biomass price Biomass price Investment Investment + 10 % - 10 % + 10 % - 10 % + 10 % - 10 % Biomass boiler with Peak load boiler with gas Old gas boiler Biomass boiler with peak load gas boiler Old gas boiler Biomass boiler with peak load gas boiler Old gas boiler Biomass boiler with peak load gas boiler Old gas boiler Biomass boiler with peak load gas boiler Old gas boiler Biomass boiler with peak load gas boiler Old gas boiler Biomass boiler with peak load gas boiler Specific heat generation without JI ( /MWh) Specific heat generation with JI ( /MWh) Old gas boiler

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