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

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

2 Revision history of this document Version 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: Wind Power Project by Priyadarshini Polysacks Ltd. in Maharashtra. Version: 03 Date: 31/08/2009 A.2. Description of the small-scale project activity: Priyadarshini Polysacks Ltd. (here onwards PPL) is a well known name in India in the manufacturing & supplying of woven poly sacks. PPL has set up this wind power project in the State of Maharashtra. The project activity is located at Panumbre & Mandur villages. It is part of Shirala Taluka of Sangli district. The project site is popularly known as Gudepachgani. This project activity has total installed capacity of 2.4 MW. It consists of four wind turbines of 0.6 MW capacities each. Suzlon Energy Ltd. has provided wind turbine technology for this project activity. The project activity will evacuate the generated electricity to the NEWNE grid of India, so the project boundary of this project may be considered as NEWNE grid. Carbon dioxide is the main green house gas due to operation of fossil dominated power stations in the NEWNE. With growing concern of increase in green house gases in the atmosphere, which consequently has resulted into disturbances in the environmental balance, the project promoter has taken initiative towards setting up of wind power plant. The electricity generated by a wind power plant is considered as clean unlike fossil fuel fired power plant as it does not emit any harmful green house gases in to the atmosphere. It also promotes sustainable development in local area. The main purpose of this wind project activity is to generate electricity by using a renewable technology i.e. wind turbine generators and feed it into the NEWNE grid. The project activity is environmental friendly as it does not emit any harmful gases or chemicals into the atmosphere. In absence of the project activity an equal amount of the electricity would have been taken from NEWNE grid which has a major share of thermal power plants running on fossil fuels. This in turn would have resulted into emission of CO 2 in to the atmosphere. Thus the project activity will result into abatement of tco 2 over entire crediting period of 10 years. A description of how the project will achieve GHG emission reductions and/or removal enhancements: The main purpose of this wind project activity is to generate electricity by using a renewable technology i.e. wind turbine generators and to feed it into the NEWNE grid. The project is environmental friendly as it does not emit any harmful GHGs or chemicals into the atmosphere. In absence of this wind power project, the consumers in the NEWNE grid would have consumed the electricity generated by the thermal power plants dominating the NEWNE grid and would have emitted equivalent amount of CO2 into the atmosphere. This would have resulted in warming of atmosphere. 3

4 Demonstration to confirm that the project was not implemented to create GHG emissions primarily for the purpose of its subsequent removal or destruction. The project has not created another form of environmental credits. This requirement is demonstrated by the declaration from the project promoter 1. Demonstration that the project has not created another form of environmental credit (for example renewable energy certificates). The project has not created another form of environmental credits. This requirement is demonstrated by the declaration from the project promoter. Project rejected under other GHG programs (if applicable): The project is not rejected under other GHG programs. This requirement is demonstrated by the declaration from the project promoter 1. Sustainable development: This project activity will achieve sustainable development 2 of the region in following ways. Social well being The project has resulted in better living conditions for the local community. There was growth in job opportunities in the region owing to erection and operation of the wind farm. The employment of local populace has brought about improvement in living standard and subsequently has led to the development of better basic amenities such as roads and medical facilities. Thus the project has contributed to the social well being of the region. Environmental well being The electricity generated from the wind power project is one of the cleanest forms of energy. It is an environmental friendly project activity, as this project will not be emitting any harmful pollutants in the atmosphere during its operations. Overall the project activity will be resulting into an environmental well being. Technological well being The power generation technology used in this project activity is provided by Suzlon Energy Ltd., which is well known in wind power technology. The products are technologically superior & safe. The wind turbines in this project activity are S-52 class. The implementation of this project activity will provide required impetus to promote commercialization of WTGs of small capacity. Economical well being 1 Refer section G of the PDD for copy of Declaration 2 Ministry of Environment and Forest web site: 4

5 The project activity will provide fillip to economic activity in the region by putting additional power in to the NEWNE grid, stimulating growth of commercial activities. The project activity will be resulting into direct & indirect employment generation in local area. The project activity will be resulting into generation of income in this part of Maharashtra. A.3. Project participants: Name of Party involved (*) ((host) indicates a host Party) Private and/or public entity(ies) project participants (*) (as applicable) Kindly indicate if the Party involved wishes to be considered as project participant (Yes/No) India (Host) Priyadarshini Polysacks Ltd. No A.4. Technical description of the small-scale project activity: A.4.1. Location of the small-scale project activity: India Maharashtra A A Host Party(ies): Region/State/Province etc.: A Taluka Shirala, District Sangli City/Town/Community etc: A Details of physical location, including information allowing the unique identification of this small-scale project activity : Unique identification of the project activity is given below: WTG Capacity (MW) Location No. Village Gut No 3. Northing 4 Easting 4 Commissioning Date 5 (dd.mm.yyyy) GP- 35 Panumbre 378 N E GP-37 Panumbre 377 N E GP- 107 Mandur 225 N E As per Infrastructure Clearance from MEDA dated (G35, G37) and Infrastructure Clearance from MEDA dated (GP107, GP108) 4 from O & M operator (Suzlon) 6 As per commissioning certificate dated As per commissioning certificate dated As per commissioning certificate dated

6 GP-108 Mandur 226 N E Taluka Shirala District Sangli State Maharashtra 9 As per commissioning certificate dated

7 Project activity Site Source: Mapsofindia Figure 01: Project Activity on Map A.4.2. Type and category(ies) and technology/measure of the small-scale project activity: The wind power project activity involves generation of electricity which will be fed to the NEWNE grid. As per categorization of Appendix B to the simplified modalities and procedures for small-scale CDM project activities type & category the project activity is given as Project Type : I Renewable energy projects Project Category : I.D. Grid connected renewable electricity generation (Version- 13, EB-36) Sectoral Scope : 1 (Energy Industries (renewable/ non-renewable sources) Reference: Appendix B of the simplified modalities and procedures for small-scale CDM project activities, Indicative simplified baseline & monitoring methodologies for selected small scale CDM project activity categories (Version - 12, Annexure 20, EB 41, dated- August 02, 2008). As per VCS guidelines, the wind power project is not a grouped activity as the project activity consists of only one renewable power generation element i.e. wind power generation by the single project proponent installed in the Sangli district, state Maharashtra, India. 7

8 Technology for project activity: Working of wind turbine: Turbines catch the wind's energy with their propeller-like blades. Usually, two or three blades are mounted on a shaft to form a rotor. When the wind blows, a pocket of low-pressure air forms on the downwind side of the blade. The low-pressure air pocket then pulls the blade toward it, causing the rotor to turn. This is called lift. The force of the lift is actually much stronger than the wind's force against the front side of the blade, which is called drag. The combination of lift and drag causes the rotor to spin like a propeller, and the turning shaft spins a generator to make electricity. The wind power technology is considered as one of the most environmental friendly technologies available. The operation of the wind turbine does not emit any harmful GHGs or any other harmful gases like conventional power plants during their operation. The power generation is the result of the utilization of kinetic energy in wind to drive the wind turbine blades to generate electricity. Thus the operation of the wind power project is considered as environmentally safe. The wind technology is supplied by Suzlon Energy Ltd.. The class of the wind turbine is S-52 which is technologically safe. This is attributed to Suzlon s efforts in Research & Development. Figure 02: Wind Turbine Schematic The S-52 WTGs are suitable in deployment in a different climates ranging from hot, dry deserts to humid coasts, to near-freezing plains. Suzlon Energy Ltd. has driven a focused effort to make wind turbines 8

9 more reliable, consistently delivering availability rates beating global standards, higher than 95% on an average. The S MW wind turbine is specially designed to deliver high-performance in the low-tomedium wind regime prevalent across most of India. The design incorporates Suzlon innovations starting from blades manufactured using state-of-the-art Vacuum Assisted Resin Infusion Molding technology, to a unique Micro Pitch system, advanced controls, and the highest hub-height in its class, all leading to a robust, reliable and efficient product which generates high-quality grid-friendly power with negligible harmonics. The S-52 stands apart not just from the engineering point of view; the size and capacity of the turbine have been carefully selected to open up the wind energy market to smaller investors, businesses and industries at an affordable price. Technical specification 10 for S-52 class WTG Rotor Diameter 52m No. of rotor blade 3 Orientation Upward/Horizontal axis Rotation direction Clockwise Rotor blade material GRP Swept area 2124 m 2 Hub height 75m Operational data Cut in wind speed Rated wind speed Cut off wind speed 3.5m/s 12m/s 25m/s Gear box Type Integrated 3 stage 1 planetary & 2 helical Gear ratio 1: Manufacturer Winergy Nominal load 660kW Generator Type Rotational speed Rated output Rated voltage Frequency Insulation Cooling system Yaw drive Method of operation Bearing type Asynchronous 4 poles 1500RPM 600kW 690V 50Hz Class H Air cooled 2 Active electrical yaw motors Polyamide slide bearing 10 Annexure 1, Suzlon WTG purchase order dated 25/07/

10 Safety systems Break system Tower Type Tower height Construction Erection Design Spring applied hydraulically released brakes Free standing, lattice tower, hot dip galvanized. To suit hub height Bolted With crane GL special class A.4.3 Estimated amount of emission reductions over the chosen crediting period: As per VCS Guidelines Micro project: Less than 5,000 tonnes CO2 equivalent emissions reductions per year. Mega Project: More than 1,000,000 tonnes CO2 equivalent emissions reductions per year The project activity is classified as Micro project as the estimated emission reductions achieved by this project activity will be 3497 tco 2 (average) per year, which is below the limits of 5000 tonnes of CO 2 equivalent emission reductions per year. The details of the same are given in the following table. Year Estimation of annual emission reductions in tonnes of CO 2 e Total estimated reductions (tonnes of CO2 e) Total number of crediting years 10 Annual average of the estimated 3497 reductions over the crediting period (tco2 e) A.4.4. Public funding of the small-scale project activity: The project activity is not availing any public funding. A.4.5. Confirmation that the small-scale project activity is not a debundled component of a large scale project activity: 10

11 As per Para 1 of Compendium of guidance on the de-bundling for SSC project activities (Annexure- 27, EB- 36): De-bundling is defined as the fragmentation of a large project activity into smaller parts. A small-scale project activity that is part of a large project activity is not eligible to use the simplified modalities and procedures for small-scale CDM project activities. The full project activity or any component of the full project activity shall follow the regular CDM modalities and procedures As per Para 2 of Compendium of guidance on the de-bundling for SSC project activities (Annexure- 27, EB- 36): Debundling criteria Project activity A proposed small-scale project activity shall be Applicable deemed to be a de-bundled component of a large project activity if there is a registered small-scale CDM project activity or an application to register another small-scale CDM project activity: With the same project participants; Applicable, the same Promoter has registered small-scale CDM project activity (Ref. No.: 1009) before this project activity. In the same project category and technology/measure; and Applicable, the registered project is having the same project category and technology/measure; Registered within the previous 2 years; and Not applicable, the project was registered on 12/03/2007; which is older than 2 year. (as on 31/07/2009) Whose project boundary is within 1 km of the project boundary of the proposed small-scale activity at the closest point. Not applicable, the project activity is located at Shirala in Sangli district which is more than 500 km away from Sakri & about 100 km away from Kavthemahakal. (Sakri & Kavthemahakal is the location of the registered CDM project activity) Thus as per Para 2 of Compendium of guidance on the de-bundling for SSC project activities (Annexure- 27, EB- 36) the project is not the debundled part of a large project activity. As per Para 3 of Compendium of guidance on the de-bundling for SSC project activities (Annexure- 27, EB- 36): If a proposed small-scale project activity is deemed to be a debundled component in accordance with paragraph 2 above, but total size of such an activity combined with the previous registered small-scale CDM project activity does not exceed the limits for small-scale CDM project activities as set in paragraph 6 (c) of the decision 17/CP.73, the project activity can qualify to use simplified modalities and procedures for small-scale CDM project activities. This is not applicable as Para 2 is not applicable to the project activity. Thus the project activity is not the de-bundled 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: 11

12 This wind power project activity involves generation of electricity which will be fed to the NEWNE grid and approved small scale methodology AMS- I. D. (Version- 13, EB- 36) is applicable for the project activity. The project activity title & reference is given as Title of methodology: I.D. Grid connected renewable electricity generation (Version- 13, EB-36) Reference: Appendix B of the simplified modalities and procedures for small-scale CDM project activities, Indicative simplified baseline & monitoring methodologies for selected small scale CDM project activity categories (Version - 12, Annexure 20, EB - 41, dated- August 02, 2008). Consolidated methodology for grid-connected electricity generation from renewable sources --- Version 9 (Version-9, EB- 45) B.2 Justification of the choice of the project category: Project Type : I Renewable energy projects Project Category : I.D. Grid connected renewable electricity generation (Version- 13, EB- 36) This project activity falls under category I.D. as the power generated from the project activity will be supplied to the NEWNE grid. The installed capacity of the project is 2.4 MW which is lower than the 15 MW, limit set for small scale project activity. Sr. No. Methodology Justification 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 If the unit added has both renewable and non-renewable components (e.g. a wind/diesel unit), the eligibility limit of 15 MW for a small-scale CDM project activity applies only to the renewable component. If the unit added co-fires fossil fuel, the capacity of the entire unit shall not exceed the limit of 15 MW. 3 Combined heat and power (co-generation) systems are not eligible under this category. 4 In the case of project activities that involve the addition of renewable energy generation The project activity under consideration is a grid connected wind power generation activity. The project activity only comprises of renewable component (i.e. wind). The installed capacity of the project is 2.4 MW which is lower than the 15 MW, limit set for small scale project activity. Not applicable as the project activity under consideration is a grid connected wind power generation activity. So not applicable. Not applicable as the project activity under consideration does not involve the addition of 12

13 units at an existing renewable power generation facility, the added capacity of the units added by the project should be lower than 15 MW and should be physically distinct from the existing units. 5 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. renewable energy generation units at an existing renewable power generation facility. Not applicable as the project activity under consideration is a new project activity & does not seek/involve retrofit & modification. Thus the project activity is complying with requisite criteria as per small scale methodology AMS-I.D. (Version-13, EB-36) B.3. Description of the project boundary: As per paragraph 6 of approved baseline methodology, AMS- I.D. for small scale project activity, the boundary is, The project boundary encompasses the physical, geographical site of the renewable generation source The project activity is installed in State of Maharashtra. The State of Maharashtra is part of NEWNE grid 11. The project activity is having installed capacity of 2.4 MW. It comprises four wind turbines. All the wind turbines are supplied by Suzlon Energy Ltd. The electricity generated by the project activity will be supplied to NEWNE grid. It will displace equal amount of electricity generated by the thermal power plants operating in NEWNE grid. Thus, in the absence of the project activity, the fossil fuel fired thermal power station in the NEWNE grid would have emitted CO 2 in the atmosphere. So the NEWNE grid is the project boundary of this project activity. The boundary of the project activity can be depicted as: Project Boundary Other WTGs (Not part of the project Activity) NEWNE Grid Suzlon CMS Meter ing Sub-Station 11 Please refer Geographical Scope of two regional grids table under B.6.1., Step 1 Wind Turbines of PPL (4 No. 0.6 MW) 13

14 Figure 03: Project Boundary Block Diagram B.4. Description of baseline and its development: Identifying GHG sources, sinks and reservoirs for the baseline scenario and for the project: The Project promoter has identified and assessed following GHG sources, sinks and reservoirs for determination of the baseline scenario: Source Gas Included? Justification / Explanation Baseline CO2 emissions from CO 2 Yes Main emission source. electricity generation in fossil CH 4 No Minor emission source. fuel fired power plants that N 2 O No Minor emission source. are displaced due to the project activity. Project Not applicable CO 2 No Not applicable as wind power generation is activity CH 4 No a renewable project activity the project N 2 O No emissions for proposed project activity are taken as zero ton of CO 2 (AMS I.D, version 13).. During the construction work, the project activity has caused project emission due to vehicular movement. But this can be neglected as the emissions are very less & were temporary. Leakages Not applicable CO 2 No The leakages are taken as zero tonnes of CH 4 No CO 2, as there is no transfer of energy N 2 O No generating equipments from another activity nor the existing equipments are transferred to another activity. Table: Emissions sources included in or excluded from the project boundary The baseline for the project activity is the scenario that reasonably represents the anthropogenic emissions by sources of greenhouse gases (GHG) that would occur in the absence of the project activity. A baseline shall cover emissions from all above GHGs within the project boundary. The project boundary for the project activity will be NEWNE grid of India. The PP has identified the baseline scenario as the continuation of the current situation i.e. scenario in absence of the project activity. In the absence of the project activity, anthropogenic emissions by sources discussed above will occur. The project activity will be evacuating GWh/annum of electricity to the NEWNE grid of India. The 14

15 estimated emission reduction by the total project activity will be tco 2 over the entire crediting period. Following information is used for baseline development: 1. Net energy delivered to the grid (EG y, MWh) by the project activity per annum is referred from the monthly Credit Notes. 2. The grid emission factor (tco 2 /MWh) from CEA Database 12, version 4.0 published by Central Electricity Authority (CEA), Government of India. Sr. No. Parameters Unit Value Reference 1 EF grid BM,y tco 2 /MWh CEA Database, version EF grid,om,y tco 2 /MWh Calculated from CEA Database, version EF grid,y tco 2 /MWh Calculated as per equation 13 of Methodological tool (Version- 01.1, Annex- 12, EB-35) Thus the combine margin grid emission factor for NEWNE grid is calculated as tco 2 /MWh. Thus in the absence of the project activity the electricity requirement of the NEWNE grid region would have been completed from the fossil fuel fired generating units in the NEWNE grid. This would have emitted an estimated emission of tco 2 over the crediting period. 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: The wind power project activity is a falling under Type I & Category I.D., as it is a renewable energy project which supply generated electricity to the NEWNE grid. The capacity of this project activity is 2.4 MW which is less than the small scale limit of 15 MW. In absence of this wind power project, the consumers in the NEWNE grid would have consumed the electricity generated by the thermal power plants dominating the NEWNE grid and would have emitted tco 2 over entire crediting period of 10 years. The project activity is not a baseline scenario & is additional, which is one of the imperative prerequisites of the VCS registration process. The additionality of this wind power project is in accordance with Test 1 - The project test, which can be justified as below: Test 1 - The project test: Step 1: Regulatory Surplus There is no mandatory law, statute or any other regulatory framework which enforced the project promoter to adopt the wind based electricity generation. The project activity is a voluntary initiative taken by the PP towards sustainable development of the local area

16 The project activity is installed in the State of Maharashtra where the government does not have any binding/compulsions in the state policy with regards to wind power projects. As per electricity act 2003 & further amendments to it in 2004, the installation of the wind power plant in India is not mandatory. Thus the project activity is regulatory surplus. Please refer below for the Compliance with relevant local laws and regulations related to the project Compliance with relevant local laws and regulations related to the project: The project activity is complying with all the local laws and regulations regarding the wind power projects. Following are the important compliances 1. Maharashtra Energy Development Authority (MEDA) infrastructure clearances for GP-35 (dated 27/12/2006), GP-37(dated 27/12/2006),GP-107 (dated 24/03/2008),GP-108 (dated 24/03/2008) 2. Maharashtra Energy Development Authority (MEDA)Commissioning clearances for GP-35 (37/02/2007), GP-37(30/12/2006),GP-107(28/05/2008),GP-108 (06/09/2008) 3. Land Lease Deeds for gut no. 377, 378, 225, and Power Purchase Agreements (PPAs) with MSEDCL for four WTGs Step 2: Implementation Barriers Identification of risks that may substantially affect the project s GHG emission reductions or removal enhancements: Project activity is complying with all the laws of the renewable project in the State of Maharashtra, so no risks are identified which will affect the operation & subsequent emission reduction potential of the said project activity. Investment Barrier: In order to promote environmental friendly technology, project promoter has taken an initiative to go ahead with wind power plant despite its comparatively higher cost & having a doubt on its financial returns due to its dependence on the unpredictable wind source. The investment analysis for this project activity is done as per the Methodological Tool Tool for the demonstration and assessment of additionality, (Version- 05.2, Annex- 10, EB- 39). As per this tool, it is to be determined that the project activity is not: 1. The most economically or financially attractive; or 2. Economically or financially feasible, without the revenue from the sale of certified emission reductions. Investment Analysis 16

17 The investment analysis is carried out by benchmark analysis as referred in additionality tool version 5 sub-step 2b option (iii). Additionality is substantiated by using Project IRR as financial indicator. Since the project is financed more than 70% by term loan from banks, project IRR is suitable financial indicator for demonstrating additionality of the project. Annex 45 of EB 41 states that local commercial lending rates or weighted average costs of Capital (WACC) is appropriate benchmarks for a project IRR. Weighted Average Cost of Capital (WACC) is calculated on the basis of the cost of financing and required return on capital was considered as a benchmark by pp for the project activity. The detail calculation approach for the WACC benchmark is as follows: 1) Cost of Equity: The cost of equity has been determined based upon the Capital Asset Pricing Model (CAPM) CAPM: The Capital Asset Pricing Model (CAPM) is used to determine a theoretically appropriate required rate of return of an asset. The model takes into account the asset's sensitivity to non-diversifiable risk (also known as market risk), often represented by the quantity beta (β) in the financial industry, as well as the expected return of the market and the expected return of a theoretical risk-free asset. The underlying algorithm of CAPM is as follows R e = R f + β (R m - R f ) Where, R e = Expected return from a security R f = Rate of a risk free investment R m = Expected market return β = Indicator towards measuring the volatility of the security, relative to the asset class. It is apparent from the above equation that the expected return from a security is the return of a risk- free investment plus Beta times the difference between the expected market return and the return from the risk-free investment (termed as market risk premium). Hence CAPM justifies that the expected return of an investor should be commensurate with the higher expected risk of the investment. In words, the algorithm says Expected Return from a security = Risk free return + Market risk Premium * Beta Thus, in order to apply CAPM, the following estimates are required: Risk Free rate Market Risk Premium Beta 17

18 1.1) Risk Free Rate (R f ): The risk free return on a security, that is free from default risk and is uncorrelated with returns from anything else in the economy. PP has used the weighted average yield on security having a maturity over 10 years published by RBI ) Market Return (R m ): PP has calculated Market Return on the basis of return of BSE-500. Suitability of BSE- 500: BSE-500 index consist 500 scripts. The changing pattern of the economy and that of the market were kept in mind while constructing this index. BSE-500 index represents nearly 93% of the total market capitalization on BSE. BSE-500 covers all 20 major industries of the economy. 1.3) Beta (β): Equity Beta is the measure of the expected volatility of a particular stock relative to a well-diversified market portfolio. It measures the systematic risk of a stock, i.e. the risk that cannot be eliminated in a well-balanced, diversified portfolio. The beta of equity is calculated as the covariance between its return and the return on a well-diversified market portfolio, divided by the variance of the return on a welldiversified market portfolio. Equity Beta (β e ) = Covariance (r, Rm) / Variance (Rm) Where: R is the return from the portfolio created by the PP Rm is the return from the equity investment in the well-diversified market portfolio On the basis of above following Beta s are calculated: Companies Beta Guj Ind 1.02 Tata Power 1.49 Rel Infra 0.86 CESC 1.10 NLC 1.28 BF Utilities 2.99 Average Beta 1.46 Average Beta excluding BF Utility 1.15 Minimum of above all 0.86 The minimum beta of above all i.e is considered for calculation of cost of equity of the project. Based on above the values, cost of equity as on 26/05/2006 is calculated as under: R f : 6.11% (Wt. Average yield of Govt. Securities ) R m : 22.56% (calculation sheet is attached for reference) β : 0.86 (calculation sheet is attached for reference) Hence, cost of equity comes to

19 R e = 6.11% *(28.67% 6.11%) R e = 25.58% 2) Cost of Debt: Cost of debt for the project is considered on the basis of primary lending rate declared by Reserve Bank of India (RBI) at the time of decision. The average BPLR of 5 major nationalised bank for that period was in range of 10.75% to 11.25% (Ref.: hence average BPLR i.e. 11% is considered for calculation of benchmark. 3) Calculation of Weighted Average Cost of Capital: on the basis of above data the WACC as on 26/05/2006 comes to 14.51%. detail calculation is attached for reference. Based on the assumptions given in the worksheet, the project IRR works out to 10.56%, which is lower than the benchmark of 14.51%. Sensitivity Analysis The robustness of the conclusion was tested by subjective critical parameters to reasonable variation of 10% on either side. Two main variables were identified as critical, namely, generation and project cost. The results of the sensitivity analysis are as follows: Variation -10% 0% +10% PLF 8.15% 10.56% 12.73% O&M cost 11.08% 10.56% 10.14% It could be seen from the above, even with the increase in generation by 10% or decrease in O & M by 10% project remains additional. From the foregoing it is evident that the project is additional and will continue to remain additional even when the critical parameters are subjected to reasonable variation. Only with VCS benefit, the project will become financially attractive. Step 3: Common Practice The wind power was not a common practice in Maharashtra during the start of the project activity. This can be demonstrated by comparing the installed capacity of the wind power sector in the State of Maharashtra & Tamil Nadu. If we compare the share of State of Tamil Nadu with State of Maharashtra during 2002 to 2005, we will find that the wind power plants were not common as compared to State of Tamil Nadu. State Maharashtra Tamil Nadu India Year Installed Capacity (MW) Source: Wind Power India 19

20 Figure 04: Wind Power Comparison The penetration of wind power sector in Maharashtra was just 0.82%, 1.02% & 4.3%, respectively. On the other hand, the State of Tamil Nadu was having a share of 55%, 60% & 61% respectively. So during the start of the project activity, the wind power industry was still in embryonic stage. The State of Maharashtra was mostly relying on power generated from the GHG emitting fossil fired thermal power plants. As per Baseline Candidates and Common Practice of the GHG Project Protocol - the common practice refers to the predominant technologies or practices in a given market, as determined by the degree to which those technologies or practices have penetrated the market (defined by a specified geographic area). As per above definition of common practice, the installed capacity of the power plants for the State of Maharashtra as on is as below. Sr. Sources Installed Capacity, MW Percentage, % Power Generation Routes, % No. 1 Gas Coal Diesel Hydro Nuclear Wind Total Source: 20

21 Figure 05: Power Generation Routes It can be inferred from the above statistics that the power generation in the Maharashtra was totally dominated by the thermal route of generation (Gas + Coal). Thermal route has a share of 73%. The wind is at meagre 4 % As on August 2005, the electricity shortage for the Maharashtra was about -7.6% 14. To meet this electricity shortage, additional capacity needs to be installed. As per above data, the investment in power sector in Maharashtra is coming mostly from the thermal power as compared to the renewable energy sector. The electricity deficit is more likely to be filled by the higher plant load factor sources. The share of the wind power (4 %) in Maharashtra does not indicate the prevailing practice of wind power sector in the region. The total share of above activities is 73%. The share of the wind power sector is only 4%. Thus the project activity is not a common practice Wind power projects seeking carbon finance: Following table 15 shows the wind power projects that are located in Maharashtra state & have applied for CDM till 2006 at UNFCCC. ID Ref. Title Status Type Start MW comment CDM MW Small Scale Grid Connected Registered Wind 08-Nov Demonstration Wind Farm Project at Chalkewadi, District Satara, State Mahararashtra CDM MW wind power project in Dhule, Registered Wind 01-Mar Maharashtra CDM Generation of electricity from 4 MW capacity Registered Wind 26-Oct wind mills by Sun-n-Sand Hotel group at Supa, Maharashtra CDM Generation of electricity from 1.2 MW Registered Wind 26-Oct capacity wind mills by Sun-n-Sand Hotels Pvt. Ltd at Satara, Maharashtra CDM MW wind farm at Satara District, Registered Wind 15-Nov table for Actual Power Supply Position (Revised) as on August Referred from CDM Pipeline. 21

22 Maharashtra CDM Bundled wind power projects in Satara & Supa (Maharashtra in India) managed by TATA Motors Ltd. Registered Wind 12-Mar CDM "14.65 MW Wind Power Project" in Registered Wind 21-Oct Maharashtra by BF Utilities Ltd. CDM MW Wind power project in Maharashtra, by Bharat Forge Limited Registered Wind 21-Oct CDM MW Bundled Wind Power Project in Registered Wind 12-Oct Vankuswade, Maharashtra CDM MW Bundled Wind Power Project at Registered Wind 26-Oct Priyadarshini Polysacks Ltd. Dhulia District Maharashtra CDM MW wind power project in Maharashtra by Registered Wind 07-Nov Essel Mining Industries Limited 16 CDM MW wind farm project, Maharashtra At Wind 12-Mar CDM Generation of electricity from MW capacity wind mills by Navalakha group and their associates in the windfarms at Satara, Maharashtra CDM MW Grid connected wind electricity generation project at Dhule, Maharashtra CDM MW grid connected wind electricity generation project by Maharashtra Seamless Limited Grid-connected electricity generation from renewable sources at Supa, Taluka Parner, Dist. Ahmednagar by M/s Bajaj Auto Ltd. (BAL) using wind Power Grid-connected electricity generation from renewable sources at Satara by M/s Bajaj Auto Ltd. (BAL) using wind Power. Validation At validation At validation At Validation Wind 02-Jun Wind 13-Sep Wind 07-Oct rejected Wind 27-Oct rejected Wind 27-Oct BF Utilities Wind Energy Project, - Wind 21 Oct Maharashtra, India Total capacity that seeks carbon finance before the start of the project activity, MW It is clear from above table that the total MW wind power capacity seeks carbon finance through UNFCCC. As per MNES, Government of India, the State-wise Grid-interactive Wind Power Installed Capacity (as on ) is given in the following table: 16 All WTG s installed before decision making date of project activity

23 State-wise Grid-interactive Wind Power Installed Capacity (as on ) State Cumulative Installed Capacity (MW) Andhra Pradesh Gujarat Karnataka Kerala 2.00 Madhya Pradesh 35.1 Maharashtra Rajasthan Tamil Nadu West Bengal 1.10 Others 1.6 Total The installed capacity of wind power projects in Maharashtra before the start of the project activity was MW. Thus around 55% of the installed capacity seeks carbon finance. B.6. Emission reductions: B.6.1. Explanation of methodological choices: The project activity involves a total installed capacity of 2.4 MW. The project is producing electricity and supplying it to NEWNE grid. The project activity is classified as a small scale project activity as the installed capacity is below 15 MW limit. Small scale baseline methodology AMS-I.D. (Version- 13, EB- 36) is applicable to the project activity. Baseline methodology for project category I.D has been detailed in paragraphs 7-11 of the approved small scale methodology AMS-I.D. (Version- 13, EB- 36) Paragraph- 9 of the approved methodology applies to this project activity, which states that:.the baseline is the kwh produced by the renewable generating unit multiplied by an emission coefficient (measured in kg CO 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. (b) The weighted average emissions (in kg CO 2 e/kwh) of the current generation mix. OR The project promoter has chosen combine margin (CM) approach for determination of the baseline emission of the project activity. Quantifying GHG emissions and/or removals for the baseline scenario: Baseline emissions (BE y ) The calculation of baseline emissions involves two parameters A. Grid emission factor (EF grid, CM, y, tco 2 /MWh) 23

24 B. Net electricity delivered to the grid (EG y, MWh) by the project activity per annum It is given by the following formula: Baseline emissions (tco 2 ) = Grid emission coefficient (EF grid, CM, y, tco 2 /MWh) Net electricity delivered to the grid (EG y, MWh) by the project activity per annum A. Calculation of Grid emission factor (EF grid, CM, y, tco 2 /MWh) The project promoter has chosen option (a) A combined margin (CM), consisting of the combination of operating margin (OM) and build margin (BM) to calculate the grid emission coefficient from Tool to calculate the emission factor for an electricity system (Annex- 12, Version-01.1, EB- 35). Step 1: Identification of the relevant electric power system: The project activity is connected to the NEWNE grid of India. Since August 2006, all regional grids except Southern grid have been integrated and are operating in synchronous mode, i.e. at same frequency. Consequently, the Northern, Eastern, Western and North-Eastern grids will be treated as a single grid and is being named as NEWNE grid. Power generation and supply within the regional grid is managed by Regional Load Dispatch Centre (RLDC). The Regional Power Committees (RPCs) provide a common platform for discussion and solution to the regional problems relating to the grid. Each state meets its demand with their own generation facilities and also with allocation from power plants owned by the central sector such as NTPC and NHPC etc. Specific quotas are allocated to each state from the central sector power plants. Depending on the demand and generation, there are electricity exports and imports between states in the regional grid. Moreover, there are also electricity transfers between regional grids, and small exchanges in the form of cross border imports and exports (e.g. from Bhutan). Geographical Scope of two regional grids: NEWNE grid Southern grid Northern Western Eastern North-Eastern Chandigarh Chhattisgarh Bihar Arunachal Pradesh Andhra Pradesh Delhi Gujarat Jharkhand Assam Karnataka Haryana Daman & Diu Orissa Manipur Kerala Himachal Pradesh Dadar & Nagar West Bengal Meghalaya Tamil Nadu Haveli Jammu & Kashmir Madhya Sikkim Mizoram Pondicherry Pradesh Punjab Maharashtra Andaman- Nagaland Lakshadweep Nicobar Rajasthan Goa - Tripura - Utter Pradesh Uttaranchal Table 04: Geographical Scope of two regional grids 24

25 Step 2: Select an operating margin (OM) method For calculation of operating margin four options are available: 1. Simple operating margin; 2. Simple adjusted operating margin; 3. Dispatch data analysis operating margin; 4. Average operating margin CO 2 Baseline Database (Version- 4.0, September 2008), published by Central Electricity Authority (CEA), Government of India has been referred for the values of OM. Simple operating margin has been used. Also the low-cost/must run resources constitute less than 50% (as per CEA database only 18.5% of the total grid generation of NEWNE grid in average of the three most recent years). Step 3. Calculate the operating margin emission factor according to the selected method The values of OM have been calculated by using the data provided by CEA. The calculation of OM has been done ex ante based on the most recent 3 years data available at the time of VCS PD submission. The OM is calculated by taking the ratio of sums of products of Simple Operating Margin (tco 2 /MWh) (incl. Imports) per year for the last 3 years and Net Generation in Operating Margin (GWh). Simple Operating Margin (tco 2 /MWh) (incl. Imports) NEWNE South India Net Generation in Operating Margin (GWh) NEWNE 359, , ,642 South 100, , ,702 India 460, , ,343 Operating Margin (tco 2 /MWh) NEWNE Step 4. Identify the cohort of power units to be included in the build margin BM calculation is based on 20% most recent capacity additions in the grid based on net generation. Power plant registered as CDM project activities have been excluded from the sample group m. Capacity additions from retrofits of power plants have not been included in the calculation of the build margin emission factor. Note: In line with the Tool to calculate the emission factor for an electricity system (Version 01.1, EB 35), power plant registered as CDM project activities should be excluded from the sample group m. However, If group of power units, not registered as CDM project activity, identified for estimating the build margin emission factor includes power units that are built more than 10 years ago then: (i) power units that are built more than 10 years ago from the group must be excluded; and (ii) grid connected 25

26 power projects registered as CDM project activities, which are dispatched by dispatching authority to the electricity system should be included. However, in Southern Region group of power units, not registered as CDM project activity, identified for estimating the build margin emission factor are not older than 10 years. Hence grid connected power projects registered as CDM project activities have not been included in the sample group m. 20% of Net Generation (GWh) NEWNE 87,575 93,072 99,224 South 27,666 30,441 31,463 India 115, , ,687 Net Generation in Build Margin (GWh) NEWNE 87,764 93, ,707 South 28,228 30,442 31,613 India 115, , ,320 Vintage of data is based on option 1 of step 4. (Refer Tool to calculate the emission factor for an electricity system ). BM calculation has been done ex-ante and hence BM value will remain fixed and need not be monitored during the crediting period. Step 5. Calculate the build margin emission factor The values of BM have been taken from CEA Database which is calculated by approved methodology ACM0002. The calculation of BM has been done ex-ante. The value of the BM is tco 2 /MWh. Build Margin (tco 2 /MWh) (excl. imports) NEWNE grid Table reference- CEA Baseline Database, Version 4.0 Step 6. Calculate the combined margin emissions factor The grid emission factor is calculated as the weighted average of the operating margin emission factor (EF grid, OM, y ) and the build margin emission factor (EF grid, BM, y ), where the weights W OM and W BM for wind projects, by default, are W OM = 0.75 & W BM = 0.25). 26

27 NEWNE grid: EF grid, CM, y, tco 2 /MWh = EF grid, OM, y EF grid, BM, y 0.25 = = tco 2 /MWh 18 B. Net electricity delivered to the grid by the project activity per annum(eg y, MWh) Project site = Sangli Installed capacity of wind turbine = 0.6 MW Total no. of turbines = 04 Total installed capacity = 2.4 MW Plant load factor 19 = 20% Net electricity delivered to the grid = 4205 MWh Thus, the estimated Net electricity delivered to the grid by 2.4 MW installed wind power project activity will be GWh per year after installation of all the WTG s. Total baseline emission reductions in tco 2 Baseline emissions (tco 2 ) = Grid emission coefficient (EF grid, CM, y, tco 2 /MWh) Net electricity delivered to the grid (EG y, MWh) by the project activity per annum BE electricity, y = = 3809 tco 2 Sr. No. Net electricity delivered to the grid, MWh/annum after installation all the WTG s Estimated CO 2 mitigation/annum Thus, the total estimated baseline emission reductions (BE y ) by the wind power project activity for are tonnes of carbon dioxide per over entire crediting period. B.6.2. Data and parameters that are available at validation: Data / Parameter: Data unit: Description: Source of data used: Value applied: Operating Margin emission factor, EF grid,om,y tco 2 / MWh CO 2 Operating Margin emission factor for NEWNE grid (Three years average , , ) CO 2 Baseline Database for the Indian Power Sector, User Guide (Version 4, Date: September 2008) tons of CO 2 / MWh 18 Please refer Baseline emission excel worksheet 19 As per MERC order, dated November 24,

28 Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: The Central Electricity Authority (CEA), Government of India prepares the data. This database is an official publication of Government of India for the purpose of CDM baselines. It is based on most recent data available to the Central Electricity Authority and hence considered authentic. As the calculation of baseline emission has been done ex ante its value will remain fixed for the entire crediting period. Data / Parameter: Build Margin emission factor, EF grid BM,y Data unit: tco 2 / MWh Description: CO 2 Build Margin emission factor for NEWNE grid & Southern grid Source of data used: CO 2 Baseline Database for the Indian Power Sector, User Guide (Version 4, Date: September 2008) Value applied: tons of CO 2 / MWh Justification of the choice The Central Electricity Authority, Government of India prepares the data. of data or description of measurement methods and procedures actually applied : Any comment: This database is an official publication of Government of India for the purpose of CDM baselines. It is based on most recent data available to the Central Electricity Authority and hence considered authentic. As the calculation of baseline emission has been done ex ante its value will remain fixed for the entire crediting period. Data / Parameter: Data unit: Description: Source of data used: Grid emission factor, EF grid,cm,y tco 2 / MWh EF grid,om,y is the grid emission factor calculated in a transparent and conservative manner as Combined Margin (CM) which is the combination of Operation Margin (OM) and Build Margin (BM) (OM & BM have been calculated ex-ante) Grid emission factor calculation for NEWNE grid: EF grid, CM, y, tco 2 /MWh = EF grid, OM, y EF grid, BM, y 0.25 = = tco 2 /MWh Value applied: Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: Values of OM and BM are taken from CEA User Guide, CO 2 Baseline Database for the Indian Power Sector, Version tco 2 / MWh The EF grid, CM, y, tco 2 /MWh is calculated as per Tool to calculate the emission factor for an electricity system (Annex- 12, Version-01.1, EB- 35). The calculation is done as ex ante. B.6.3 Ex-ante calculation of emission reductions: Calculation of emission reductions (ER y ): 28

29 The emission reductions (ER y ) are calculated as per equation 12 of ACM0002 (Version-9, EB- 45). As for wind power project activity the leakages & project emissions are considered as zero. So emission reductions will be the same as the baseline emissions by the project activity. Thus emission reductions may be taken as ER y = BE y Thus, the total estimated emission reductions by the wind power project will be tonnes of carbon dioxide over entire crediting period. B.6.4 Year Summary of the ex-ante estimation of emission reductions: Estimation of Project Activity Emission Reduction (tco 2 e /yr.) Total Baseline Emissions (tco 2 e /yr.) Estimation of Leakage (tco 2 e / yr.) Total Estimation of Emission Reduction (tco 2 e /yr.) B.7 Application of a monitoring methodology and description of the monitoring plan: B.7.1 Data and parameters monitored: Data / Parameter: EG y Data unit: MWh Description: EG y is the Net electricity delivered to the grid by the project activity per annum. EG y is obtained by summing of monthly net electricity delivered to the grid by the project activity for the given monitoring year. 29

30 Source of data to be used: Value of data applied for the purpose of calculating expected emission reductions Description of measurement methods and procedures to be applied: Monthly Credit Notes - Monitoring: tri-vector meter will be used for monitoring Data Type: Electricity (measured & calculated) Frequency: continuous Recording: Monthly Credit Notes/JMR Reports Archiving Policy: Paper & Electronic Responsibility: Project Head would be responsible for regular calibration of the meter. Calibration Frequency: The electricity meters will be calibrated annually or as per the UNFCCC guidelines (at least once in three year, paragraph 12.c., EB 41 Report Annex 20) Accuracy: 0.2 class The Bulk meter, installed at the sub-station, contains both main meter and check meter. The metering is done on continuous basis. The meter reading will be jointly taken by the MSEDCL & the representative of the PP as per the power purchase agreement. The monthly reading of the parameters like import, export etc is taken. The difference between current & previous reading is taken. This difference is multiplied with the M. F. The obtained value is the units recorded by the bulk meter as import, export for the project activity for a given month. The net units delivered by the project activity is obtained by the following formula: Net units delivered to grid for given month = Import Export The net units delivered to grid for each month in given monitoring year is summed to get EG y i.e. Net electricity delivered to the grid by the project activity per annum. QA/QC procedures to be applied: Any comment: The archiving of the data will be done on Paper as well as in Electronic format. The electricity monitoring meters are sealed and are in the custody of MSEDCL. The accuracy of main meter can be verified by comparing it with the check meter. The calibration of the meters will be carried out by MSEDCL annually/or at least once in three years, as per UNFCCC guidelines. Other than periodic calibration of the meters, the reading of both meters will be matched every month. The accuracy of the monitoring meters shall be as per the PPA. Data will be archived for two years after the end of crediting period or of the last issuance of VCUs for this project activity, whichever occurs later. B.7.2 Description of the monitoring plan: The electricity is monitored by apportioning procedure adopted by SEB which is as follows: Procedure for apportioning of electricity The apportioning of the electricity is done as per the following method at the wind farm. Suppose X numbers of wind turbines are connected to a substation through a particular feeder. The generation reading is collectively displayed by the substation meter. The net generation of each of the wind turbine is then calculated in the following manner: 30

31 G 1 W1 W2 G 2 W3 G3 W4 G 4 Substation GN W X G X 31

32 GN = Total net generation by X number of wind turbines in the wind farm connected through a particular feeder which is recorded by main meter/check meter at the substation. GG = Total generation by X number of wind turbines i.e. (G1+G2+G3+ +GX) = GG GG > GN as some transmission loss takes place on the way to the substation. Thus, GG - GN = GL This total transmission loss (GL) is distributed amongst the X wind turbines in proportion to their generation. G1 /GG = Y1 Similarly G2/GG = Y2 and so on... Transmission losses for particular wind turbine are calculated as: Transmission losses for the 1 st wind turbine: [Y1 / (Y1+Y2+Y3. +YX)] * GL = L1 Therefore, net generation from wind turbine W1 is calculated as G1-L1 = GN1 Transmission losses for the 2 nd wind turbine: [Y2 / (Y1+Y2+Y3. +YX)] * GL = L2 Therefore, net generation from wind turbine W2 is calculated as G2-L2 = GN2 and so on The monitoring of project activity will be done as per approved small scale methodology AMS- I.D. (Version- 13, EB- 36). As per paragraph 13 of the approved methodology Monitoring shall consist of metering the electricity generated by the renewable technology. Monitoring, including estimation, modelling, measurement or calculation approaches: Purpose of monitoring: The monitoring of the project activity involves accurate measurement & recording of the Net electricity delivered to the grid by the project activity (EG y ) per annum so as to calculate the correct GHG emissions reduced by the project activity. Types of data and information to be reported, including units of measurement The data to be reported is energy. It involves following parameter: 32

33 1. Total Net electricity delivered to the grid by two WTGs (GP-35, GP-37) 2. Total Net electricity delivered to the grid by two WTGs (GP-107, GP-108) Origin of the data: The electricity data will be referred from the monthly Credit notes issued by the State electricity utility i.e. MSEDCL to the project promoter. The data is recorded by the bulk meter (both main & check meters) at sub-station. The data required for calculating the grid emission factor is referred from Central Electricity Authority (CEA) Carbon dioxide database, (Version- 4, dated September 2008) Monitoring, including estimation, modelling, measurement or calculation approaches For detailed procedure for recording/monitoring and monitoring plan, refer Section B.7.2. Monitoring times and periods, considering the needs of intended users Monitoring will be done on a continuous basis by the O & M team at the project site. The project activity is equipped with necessary monitoring equipments at the project site which can record required data to arrive at the yearly emission reduction in a conservative manner. Monitoring roles and responsibilities Project proponent and wind turbine supplier together will be involved for collecting the monitoring information and the regular operation & maintenance of the project activity. The monitoring roles & responsibilities are tabulated below: Designation Responsibilities Project Head Overall performance monitoring Project execution Project Coordinator Operation Verification of data Site visit to check authenticity of data and take corrective action, wherever necessary Storage of data O & M Contractor Operation and maintenance Data recording Storage of data All the relevant data & reports for maintaining accuracy in future monitoring and reporting of GHGs emission reduction is with project developer. The joint measurement will be carried out as per the procedures mentioned in PPA in presence of both parties (the developer s representative and officials of the state power utility). Project management chart: 33

34 Project Head Project Coordinator O & M Contractor Managing data quality All meters and equipment which measures data will be calibrated on regular basis (generally yearly basis). The monitoring for the project activity is given as below: The electricity generation measurements are required by the MSEDCL and the PP to assess electricity sales revenue. The project activity has therefore envisaged two independent monitoring/measurements of generated electricity from the wind turbines. The primary monitoring will be done at the individual WTGs. Each WTG is equipped with an integrated electronic controller, which displays generated electricity on its screen. This controller will be connected to the Central Monitoring Station (CMS) of Suzlon Energy Ltd. through SCADA. The generation data of individual machine can be monitored as a real-time parameter at CMS. Furthermore, the WTG controller is a micro-processor based intelligent controller which has been specially designed for control of wind turbines & which is self calibrated. It uses a Woodward multi function relay that has three current inputs from CT and three direct voltage inputs (690 Volts). The analog values of current / voltage is converted into digital signal internally using A/D Converters at very high sampling rate. A software program reads these values and displays instantaneous parameters such as voltage, current, power factor, kvarh, and kwh. These instantaneous values are then time integrated and displayed / stored. Woodward relay is having no display and needs special protocol to view energy readings as this relay is communicating digital signal through special communication protocol hence, it is not possible to calibrate. In case of malfunctioning of the controller, the WTG is programmed for automatic shutdown. The probability of error in controller panel meter is negligible. The secondary recording of the electricity delivered to the state utility grid will be carried out jointly at the sub-station bulk meter. The joint measurement will be carried out once in a month in presence of both parties (the developer s representative and officials of MSEDCL) as per the PPA. Suzlon Energy Ltd. is providing O & M services to the project promoter. The O & M management structure is as follows: 34

35 Routine maintenance services: Routine maintenance labour work involves making available suitable manpower for operation and maintenance of the equipment and covers periodic preventive maintenance, cleaning and upkeep of the equipment including Tower torquing Blade cleaning Nacelle torquing and cleaning Transformer oil filtration Control panel & LT panel maintenance Site and transformer yard maintenance Security services: This service includes watch and ward and security of the wind turbines and the equipment. Management services: Data logging for power generation, grid availability, machine availability. Preparation and submission of monthly performance report in agreed format. Taking monthly meter reading jointly with utility of power generated at promoter s wind turbines and supplied to grid from the meter/s maintained by utility for the purpose and co-ordinate to obtain necessary power credit report/ certificate. Technical services: Visual inspection of the WTGs and all parts thereof. Technical assistance including checking of various technical, safety and operational parameters of the equipment, trouble shooting and relevant technical services Training needs: PP has appointed Suzlon Energy Ltd. as the Operation & Maintenance contractor for this project activity. Suzlon Energy Ltd. is well known for its well managed wind project operations in wind power industry through out the world. It is an ISO certified company. The training activity to the employees is an integral part of the ISO system. It has trained man power to carry it day to-day activity at the project site. It provides regular training to its employees. The training to the employees working at the project site involves following areas. Operation & maintenance Trouble shootings Preventive maintenance Safety techniques The O & M contractor is well equipped with standard equipments to carry out necessary O & M operations. 35

36 B.8 Date of completion of the application of the baseline and monitoring methodology and the name of the responsible person(s)/entity(ies) Date of completion of the application of the baseline & monitoring methodology: 12/08/2009 Name of person/entity determining the baseline: PPL and their consultant, MITCON Consultancy Services Ltd. 20. SECTION C. Duration of the project activity / crediting period C.1 Duration of the project activity: C.1.1. Starting date of the project activity: 30/12/2006 (Commissioning of 1 st WTG, GP-35) C.1.2. Expected operational lifetime of the project activity: 20 years and 0 months C.2 Choice of the crediting period and related information: C.2.1. Renewable crediting period C Starting date of the first crediting period: 30/12/2006 (Commissioning of 1 st WTG, GP-35) C Length of the first crediting period: 10 years and 0 months and renewable once C.2.2. Fixed crediting period: Not applicable Not applicable C C Starting date: Length: 20 MITCON Consultancy Services Ltd. is not the project participant in this project activity. 36

37 SECTION D. Environmental impacts D.1. If required by the host Party, documentation on the analysis of the environmental impacts of the project activity: Wind energy projects are considered environmentally safe and as per Host party- India, no EIA is required. The project activity does not fall under the purview of Environmental Impact Assessment notification 14 th September, 2006 of the Ministry of Environment and Forests (MoEF), Government of India (GOI) and the project activity is exempted from environmental clearances. The project activity has no significant impact on the environment. D.2. If environmental impacts are considered significant by the project participants or the host Party, please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party: There are no negative environmental effects envisaged for the project. There are no negative environmental effects envisaged for the project. Wind turbine will be situated on plane terrain and during construction no trees were uprooted; also there are no effects on any endangered species in the region. Wind projects are considered as zero GHG emitting projects, so there is no pollution caused by this project. However during construction phase some pollution may have been caused by transportation of vehicle during erection and commissioning of the project activity. But as the project is operational now there are no major effects on the environment post start-up. SECTION E. Stakeholders comments E.1. Brief description how comments by local stakeholders have been invited and compiled: The stakeholders meeting was conducted by the PP along with the wind farm developer Suzlon Energy Ltd. Mr. P.R. Chile represented PPL. Mr. Abhijit Mahadik represented Suzlon Energy Ltd.. The stake holder meeting was conducted on March 8, 2007 at Gudepachgani. It was attended by local people, who were directly or indirectly impacted by the project activity. The project activity is carried out at an arid location which is economically less attractive to locals. No agricultural activity or any other activity such as tourism or mineral excavation carried out at the project site. The project activity has not resulted in any sort of migration of local people. Project promoter strongly feels that, this project activity will prove out to be very conducive to the sustainable development of this region. In order to assess the impact of the wind power project activity on its locality, the project promoter undertook stake holder consultation at the project site. The purpose was to assess the impact & address the negative impact if any? These stake holders were identified based on the environmental, socio-economic and health impact of project activity on people living in & around the project activity. Stake holders were mostly farmers. The stake holders were invited from the neighbouring locations, as the project activity area is far away from the residential area. Project Promoter sent invitation letters to all the respective stakeholders, requesting them to attend the stakeholder meeting and share their views on the project activity. 37

38 Mr. Chile of PPL introduced all the stakeholders with the project activity & made the locals aware about the role of wind power project in India. The stakeholders were also informed about wind project-installed capacity, unit generation, O & M arrangements, environmental benefits and need of such renewable energy projects. The stake holders were requested to ask their queries/experience about this project activity. Most of the people have heard about wind power project. They call this as Pawan chakki in native Marathi. The meeting was conducted in a very amicable atmosphere. Project Promoter thanked all the stake holders for making themselves available despite their busy schedule for the meeting & sharing their precious views on the project activity. E.2. Summary of the comments received: The stakeholders took keen interest in the discussion and asked information about overall capacity of the wind park, benefits available in adjoining area and environmental effect of the project. They asked many questions particularly: (a) Job potential for local people (b) Any adverse effect on underground water level (c) Any adverse effect of wind power machine on rain (d) Any adverse effect of wind power machine on wind direction/pattern The representatives of PPL and Suzlon involved in commissioning and O and M arrangement of the project shared relevant information and provided clarifications on the issues and concerns of the stakeholders. The stakeholders were informed that the project has significant job potential for which the required persons would be from the adjoining areas only and not the outsiders. They were also informed that the project would have requirement both for skilled as well as unskilled work force and the residents of the area should take keen interest also for education of their children so that they can be offered skilled jobs also. Further they also informed that the wind project will not affect the ground water lever or raining pattern and wind direction. The project will help in achieve the sustainable development of the local region. E.3. Report on how due account was taken of any comments received: The stakeholders encourage the project activity and thanked both PPL & Suzlon for their efforts in promoting the sustainable development of the local area through this wind power project activity. No adverse comment received on the project activity. SECTION F. Schedule The Chronological plan for this wind power project is given below. Sr. Activity Date Details No. (dd.mm.yyyy) 1 Investment Decision Investment decision for this project activity was taken by PP management. 38

39 2 Purchase orders PP placed purchase order for 600 kw (4 Nos ) to M/s Suzlon Energy Ltd. 3 Appointment of VCS consultant PP appointed M/s MITCON Consultancy Services Ltd. as VCS consultant. 4 Infrastructure clearances from MEDA Gut No. 377 Gut No. 378 Gut No Clearances for Commissioning from MEDA 6 VCS project start date 7 Commissioning of the project activity 8 Stake holder consultation 9 Appointment of the DoE 10 Date of termination of the project 11 Frequency of monitoring and reporting Gut No. 226 Gut No. 377 Gut No. 378 Gut No. 225 Gut No Commissioning of the 1 st WTG (i.e.gp 35) GP 35 GP 37 GP 107 GP PPL along with M/s Suzlon Energy Ltd. conducted the stake holder consultation meeting at Gudepachgani PP has appointed TUV Nord as the validator The project life is considered as 20 years. Thus the date of termination of the project activity is considered as Annual The DoE will verify the project activity operation once in a year for the entire crediting period. 12 Project period 20 years The project life is considered as 20 years. The project crediting period is 10 years plus renewable once SECTION G. Ownership & Information regarding participation in emissions trading program (if applicable) Proof of Title: PP has substantiated the Proof of Title for this project activity through WTG Purchase Order Commissioning certificates Power Purchase Agreements Projects that reduce GHG emissions from activities that participate in an emissions trading program (if applicable): Not applicable. Please refer below attachment. 39

40 40