CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-PDD) Version 03 - in effect as of: 28 July 2006 CONTENTS

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1 page 1 CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-PDD) Version 03 - in effect as of: 28 July 2006 CONTENTS A. General description of project activity B. Application of a baseline and monitoring methodology C. Duration of the project activity / crediting period D. Environmental impacts E. Stakeholders comments Annexes Annex 1: Contact information on participants in the project activity Annex 2: Information regarding public funding Annex 3: Baseline information Annex 4: Monitoring plan

2 page 2 SECTION A. General description of project activity A.1 Title of the project activity: Cerro Patacón Landfill Gas Utilization Project Version: Document Version Number 1. Date: 15/06/2008. A.2. Description of the project activity: The objective of Cerro Patacón Landfill Gas Utilization Project is to capture and use landfill gas (LFG) generated through the decomposition of the organic waste disposed at Cerro Patacón landfill site in the municipality of Panama. This will involve investing in a landfill gas collection system and flare station, and could include a electricity generation plant. The principal components of landfill gas are methane (CH4) and carbon dioxide (CO2), both of which are greenhouse gases (GHG) covered by the Kyoto Protocol. Flaring or burning landfill gas for energy involves methane destruction leading to GHG emissions reductions. If the landfill gas is put to energy generation at the landfill site, would generate additional GHG emissions reductions, as CO2 that would be emitted if the energy were generated from fossil fuels in the National Interconnected System (SIN, a system that integrates all generating plants in the country, as well as all transmission and distribution networks). The Cerro Patacón Landfill is the biggest in the country and serving the Panama City and nearby municipalities such as San Miguelito. It started operations in 1985 and currently holds approximately 2.5 million tonnes of waste. The landfill is receiving an average of 1,200 tonnes of municipal solid waste per day. The site comprises a total of about 132 hectares (ha), of which about 27,2 ha have been used for waste disposal. The landfill has and expected lifetime of 20 years. Assuming an increase in current filling rates of about 1,5 percent per year, the landfill is expected to reach full capacity in The area used for landfilling is 80 ha approximately. The landfill is currently venting the landfill gas though a passive system in some areas mainly for safety purposes, meanwhile in other areas the landfill does not have venting system. The objective of the project is to replace the existing ineffective passive venting system by an active gas collection and flaring system. The purpose of LFG flaring is to dispose of the flammable constituents, particularly methane, safely and to control odour nuisance, health risks and adverse environmental impacts. Hence this will involve investing in a highly efficient gas collection system, flaring equipment and eventually in a modular electricity generation plant. The generation plant could initially combust the methane content in the LFG to produce electricity at a small scale (e.g., for self-consumption of the project and localized uses), and in a later stage, once the project secures LFG conditions and has resolved all issues regarding connection to the grid, the generation capacity could be increased to export electricity to the grid. If the energy component is implemented, theoretically the project would reach the maximum installed capacity of 6.3 MW. The project activity is expected to be initiated on October Emission reductions are estimated at an average of tonnes of CO 2 e/year over the first 7 years of life of the project, that is, the first crediting period, and more than tonnes of CO 2 e over the 21 years of project lifetime.

3 page 3 The landfill site is managed by the Dirección Municipal de Aseo Urbano Domiciliario (DIMAUD) which belongs to the municipality. The municipality of Panama signed on February 14, 2008 signed with the Asociacion Accidental Urbaser Plotosa S.A. the landfill operation including the biogas project implementation. The project is helping the country to fulfill the principles and requirements established by the National Authorities of Panama, promoting sustainable development and will have several positive social and environmental impacts, such as: - The installation of the landfill gas collection and flaring system will prevent potentially explosive situations associated with the subsurface gas migration, as it represents an effective control system which minimizes migration off-site. - The project will serve as a demonstration project for other municipalities that are interested in implementing similar systems for capturing LFG at their landfill sites. This is particularly interesting since Panama landfills currently receive only part of the Municipal Solid Waste generated because exists several open dump operating (is a common practice in some regions). - - The Project optimizes the use of natural resources and will act as a clean technology demonstration project, encouraging less dependency on grid-supplied electricity if the energy component is implemented. It promotes and diversifies sustainable energy systems. - The project represents opportunities in the area where is located. It will provide for both short- and longterm employment opportunities for local people. Local contractors and laborers will be required for construction, and long-term staff will be used to operate and maintain the system. - The Project guarantees sustainability in the environmental sector by minimizing deterioration on the environment and reduce the emissions of methane globally. - The proposed project activity promotes the integration of adequate environmental infrastructure, such as appropriate waste management and storage, as well as aftercare for landfill sites. The project brings to local scavengers the possibility to organize the recycling activity given them safety and professional conditions. A.3. Project participants: Name of Party involved (*) (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) Panama (Host) Municipio de Panamá (public entity) No The Netherlands Corporación Andina de Fomento CAF (acting as administrator of the CAF-Netherlands CDM facility for the government of The Netherlands represented by its Ministry of Housing, Spatial Planning and the Environment) Yes (*) In accordance with the CDM modalities and procedures, at the time of making the CDM-PDD public at the stage of validation, a Party involved may or may not have provided its approval. At the time of requesting registration, the approval by the Party(ies) involved is required.

4 page 4 A.4. Technical description of the project activity: A.4.1. Location of the project activity: A Host Party(ies): Republic of Panama A Region/State/Province etc.: District of Panama A City/Town/Community etc: Community of Ancon A Detail of physical location, including information allowing the unique identification of this project activity (maximum one page): The Cerro Patacón Landfill is a Municipal Solid Waste (MSW) Landfill located at kilometer 6 from the City s downtown by the avenue Ricardo Alfaro. The area around the landfill is considered tropical with an annual precipitation of around mm/year and temperatures over 20 C. The location is shown in the map below: Figure 1: Location of the Project. Source: The study on solid waste management plan for municipality of Panama

5 page 5 A.4.2. Category(ies) of project activity: According to Annex A of the Kyoto Protocol, the project falls under UNFCCC sectoral scope 13 Waste Handling and Disposal and sectoral scope 1 Energy Industries (Renewable- /nonrenewable sources). A.4.3. Technology to be employed by the project activity: Landfill site adequation The construction of the landfill consisted in the adaptation of the existing grade and the preparation of a lowpermeability clay liner at subgrade, over which is placed a minimum 30-mils geomembrane layer. The sides of the landfill are sloped at approximately a 2H:1V ratio. Currently, Municipal Solid Waste (MSW) has been deposited in terraces in the Etapa II, phases I, II. Current landfill depth in specific zones is about 50 meters. Currently, the landfill does not have a LFG collection and control system. The existing venting wells are not constructed in a manner that allows for their use in an active collection system. Therefore, an active LFG collection system will be the technology used in the project activity. Figure 2: Existing site conditions. Source: SCS Engineers, prefeasibility study To maximize landfill gas recovery rates, the collection system will be comprehensive and therefore will be installed over all closed landfill areas and all inactive areas of the landfill at intermediate grade. The landfill will grow vertically as waste continues to be deposited, but no lateral expansion will occur in other areas. The

6 page 6 initial collection system design will include the full complement of wells expected to be needed throughout the project. Figure 3: Conceptual design gas collection system. Source: SCS Engineers, prefeasibility study Landfill Gas Collection System Under the scope of the project activity a gas extraction and combustion system will be installed consisting of: - Vertical extraction wells. In general, the extraction wells will only be installed in areas at final or intermediate grade and to which the pipes will have a minimal impact on current filling operations. Extraction wells will be raised as waste disposal progresses, rather than re-drilling wells once the final level has been reached. In the closed areas vertical gas wells will be drilled into the waste to extract the LFG. The gas wells cover the area of the landfill available for gas extraction and are spaced on a sitespecific grid to maximize LFG collection. - A gas collection system that connects the extraction wells to the flaring station and LFG control plant. This system consists of pipes that connect groups of gas wells to the manifolds. This system includes the main gas header piping designed to accommodate greater gas flow rates, and smaller lateral gas piping designed to connect the main header piping to the extraction wells. The system is modular, so it is relatively easy to extend it on parts of the landfill available for gas extraction in the future. - Condensate management system. Condensate, which forms in the LFG piping network as the warm gas cools, can cause significant operational problems if not managed properly. The gas collecting system will

7 page 7 be designed with dewatering points at low parts of the piping to allow an effective condensate management by returning the condensate back to landfill. - Leachate pumps in selected extraction wells. Leachate levels in extraction wells will be measured and recorded prior to connecting the wells to the blower and flaring system. Those wells with elevated leachate levels will be equipped with leachate dewatering pumps. - Blower equipment. The blower creates a lower pressure inside the wells than is found in the landfill, thereby creating a driving force that directs the gas towards the gas wells. - Covered material. An impermeable cover material (high density polyethylene membrane or mineral material). For efficient operation of the gas collection system, each landfill cell, where the gas is collected from, must be covered with an appropriate capping material to provide sufficient containment and prevent air ingress into the landfill body. Flare Technology The project developer will install a flare designed for a maximum capacity of 5,000 m 3 /h, to ensure that all landfill gas captured at the site, but not combusted through the power generation units if these are installed, will be destroyed. The flaring system will be an enclosed-type flare which provides conditions for high temperature combustion to effectively destruct methane and other landfill gas components; so that the exhaust gases and GHG emissions reductions can be tested and quantified (exhaust testing is not possible on candlestick-type open flares). This capacity is enough to handle the maximum projected landfill gas recovery rate. Electricity Generation Technology The project developer anticipates to invest in electricity generation units for self-supply of the project s electricity consumption needs and other small-scale power applications (e.g., electricity consumption inside the landfill), but once the generation of landfill gas proves to be steady (both in terms of volume and quality) and the conditions that will enable the larger scale generation of electricity in order to exporting to the local grid are favorable, the installation of a power generation facilities could be made. The electricity generation project component would involve the construction of a suitable sized compound in a level surface with concrete bases to support the engine units. There would be an electrical sub-station constructed to contain all suitable switching gear and metering equipment to facilitate a connection to the national/local grid network. The new packaged generation system consists of an outdoor acoustic containerized generating set comprising an engine/alternator set. The engine units are comprised of fully containerized turbo charged gas engine, with a separate control room and housing for its own transformer and switch. These units are designed to be fully mobile. The containers are fully sealed (no floor penetrations) to ensure no leaks of oil to ground, therefore environmentally friendly. As the gas production increases or decreases (gas production curve) then containerized engine units can be easily added or taken away to match the gas production. All engine units are fitted with remote monitoring technology which is internet based and allows engines to be started and stopped remotely, as well as monitored for engine performance, output and characteristics. A generation facility of this type uses full time staff for operation, routine servicing and repairs.

8 page 8 Project instrumentation The LFG collection and utilization system will include sophisticated instrumentation that will allow for the accurate measurement of landfill gas captured and destroyed. Specifically, the system will have: Pressure, vacuum and temperature gauges and transmitters fitted onto the pipe works that monitor the parameters of the landfill gas; Flow meter to measure accurately the flow of the landfill gas through the system; In line gas analyzer (methane, carbon dioxide, oxygen) that measure the quality of the gas delivered to the equipment, as well as gas flow rates and pressure (and other selected parameters); Sampling points for taking gas samples with portable instrumentation and for laboratory analysis; Data logging system that transmits the information via telemetry / satellite to the control centre managed by the operator and, On the flare, ultraviolet cameras to monitor the presence of the flame and thermocouples to monitor accurately both the temperature of the flame and temperature of the exhaust gas in the stack, which send signals to the automated air louver in order to maintain the temperature within the stack at desired level to ensure optimal combustion conditions. Instruments to monitoring the operating hours of the flare and generation units. In order to maintain a high level of efficiency and thus maximize landfill gas recovery rates and GHG emission reductions, a regular program of operation and maintenance of the gas collection system equipment will be implemented. It may also be necessary to eventually expand the landfill gas collection system. In particular, ongoing vertical well extensions will need to be installed as waste disposal continues to increase the depth of the landfill. At the same time, a recycling facility will be implemented in conjunction with the landfill gas project, what enables the recovery of several kinds of materials from the Municipal Solid Waste flow, such as plastic, metal and glass. A.4.4 Estimated amount of emission reductions over the chosen crediting period: A renewable crediting period of 7 years (renewable twice) is chosen. The following table summarizes the estimated emissions reductions from the project over the first crediting period: Year Estimation of annual emission reductions in tonnes of CO Total estimated reductions (tonnes of CO2) Total number of crediting years 7 (x3)

9 page 9 Annual average of the estimated reductions over the crediting period (tonnes of CO2) Table 1: Annual estimation of emissions reduction for Cerro Patacón landfill A.4.5. Public funding of the project activity: The project activity does not involve public funding. SECTION B. Application of a baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the project activity: The following approved baseline and monitoring methodologies are applicable to the project activity: For the landfill gas component, the baseline methodology applied to the project is ACM0001 Consolidated baseline and monitoring methodology for landfill gas project activities - Version 08.1, May 16, 2008 Paragraph 22, CDM Executive Board 39 meeting This methodology refers to the following tools: For additionality assessment, it was used the tool recommended by the CDM Executive Board (as Annex 10 of their 39 Meeting Report) Tool for the demonstration and assessment of additionality - Version 05. In order to determine the flare efficiency and/or to monitor the flare exhaust gases, it was used the tool recommended by the CDM Executive Board (as Annex 13 of their 28 Meeting Report) Tool to determine project emissions from flaring gases containing methane. For calculation of emissions by electricity consumption, it was used the tool recommended by the CDM Executive Board (as Annex 7 of their 39 Meeting Report) Tool to calculate baseline, project and/or leakage emissions from electricity consumption For methane emissions calculation, it was used the tool recommended by the CDM Executive Board (as Annex 09 of their 39 Meeting Report) Tool to determine methane emissions avoided from dumping waste at a solid waste disposal site - Version 03. For the grid emission factor, it was used the tool recommended by the CDM Executive Board (as Annex 12 of their 35 Meeting Report) Tool to calculate the emission factor for an electricity system - Version 01. B.2 Justification of the choice of the methodology and why it is applicable to the project activity: Methodology ACM0001 is applicable to landfill gas capture project activities where the baseline scenario is the partial or total atmospheric release of the gas, and the project activity includes situations such as:

10 page 10 a) The captured gas is flared; or b) The captured gas is used to produce energy (e.g. electricity/thermal energy); or c) The captured gas is used to supply consumers through natural gas distribution network. If emissions reductions are claimed for displacing natural gas, project activities may use approved methodology AM0053. The project fulfils condition a (i.e., the captured LFG will be conducted to the enclosed flare) and b (i.e., the captured LFG could be used to produce electricity and reductions would be claimed for displacing electricity generation from other sources), thus ACM0001 was considered the most appropriate methodology for the project. B.3. Description of the sources and gases included in the project boundary According to methodology ACM0001, the project boundary is the site of the project activity where the gas will be captured and destroyed/used and if the electricity for project activity is sourced from grid or the electricity eventually generated by the LFG captured would have been generated by power generation sources connected to the grid, the project boundary shall include all the power generation sources connected to the grid to which the project activity is connected. The following project activities and emission sources are considered within the project boundary: Baseline Project Activity Source Gas Included Justification / explanation CO 2 NO CO2 emissions from the decomposition of organic matter is not accounted (carbon neutral) CH 4 YES The major source of emission in the baseline Emissions from decomposition of waste at the landfill site Emissions from electricity consumption Emissions from thermal energy generation N 2 O NO Excluded for simplification. This is conservative CO 2 NO No electricity is consumed in the baseline CH 4 NO Excluded for simplification. This is conservative N 2 O NO Excluded for simplification. This is conservative CO 2 NO No thermal energy is generated in the baseline CH 4 NO Excluded for simplification. This is conservative N 2 O NO Excluded for simplification. This is conservative CO 2 NO No fossil fuel is used as part of the project activity On-site fossil fuel consumption due to the project The source of emission in the project activity CH 4 NO activity other than for electricity generation N 2 O NO Not applicable Emissions from on-site electricity use CO 2 YES CO2 emissions from the eventual use of energy from the grid CH 4 NO Excluded for simplification. This is conservative N 2 O NO Excluded for simplification. This is conservative Table 2: Sources of emissions at the project boundary The spatial extent of the project boundary is defined as the project site and the plants connected to the grid system to which the project would be connected to.

11 page 11 Figure 4: Flow chart of project boundaries The baseline scenario is identified by reference to the approved feasibility study (which describe how the landfill was designed and managed) and the existing regulations and guidelines. Current practices and scenarios were also re-confirmed upon visiting the site to check no gas extraction or utilisation besides venting. A copy of the feasibility study is available to the DOE. B.4. Description of how the baseline scenario is identified and description of the identified baseline scenario: The methodology ACM0001, establishes procedures for the selection of the most plausible baseline scenario. According to them, there are two steps to be followed: STEP 1. Identification of alternatives to the project activity consistent with current laws and regulations. The methodology states: Project participants should use step 1 of the latest version of the Tool for the demonstration and assessment of additionality, to identify all realistic and credible baseline alternatives. In doing so, relevant policies and regulations related to the management of landfill sites should be taken into account. Such policies or regulations may include mandatory landfill gas capture or destruction requirements because of safety issues or local environmental regulations. Other policies could include local policies promoting productive use of landfill gas such as those for the production of renewable energy, or those that promote the processing of organic waste. In addition, the assessment of alternative scenarios should take into account local economic and technological circumstances. Step 1 of the tool (Identification of alternatives to the project activity consistent with current laws and regulations) comprises a number of sub-steps:

12 page 12 Sub-step 1a. Define alternatives to the project activity. The methodology indicates the separate determination of applicable baselines for landfill capture, for electricity generation and for thermal use of landfill gas. The possible alternatives for each part are considered below; using the codes defined in ACM0001 which states: Alternatives for the disposal/treatment of the waste in the absence of the project activity, i.e. the scenario relevant for estimating baseline methane emissions, to be analysed should include, inter alia: - LFG1. The project activity (i.e. capture of landfill gas and its flaring and/or its use) undertaken without being registered as a CDM project activity; - LFG2. Atmospheric release of the landfill gas or partial capture of landfill gas and destruction to comply with regulations or contractual requirements or to address safety and odour concerns. In principle, solid waste could be disposed off in other ways besides landfills, e.g. incineration, composting, conversion to Refuse-derived fuel (RDF), thermochemical gasification, and biomethanation. None of these are realistic alternatives for the project proponents because exists an obligation to the government (General Environmental Law of the Republic of Panama Law Nº 41, July 1 of 1998) to dispose the solid waste in the most efficient way, being landfilling the most attractive for its low cost and the existence of many landfills with enough space and capacity to receive waste for many years in the future. However, these alternatives involve advanced processes for treatment of solid waste; they all require very large investments and high operating costs compared to landfilling 1. Finally, there is only limited experience with these alternative processes in Annex 1 countries, and almost none in non-annex 1 countries, except for a handful of projects being submitted through the CDM. Therefore, measures covered by options LFG1 and LFG2 are the only realistic alternatives. The project considers the possibility to generate a certain amount of electricity. ACM0001 states: If LFG is used for generation of electric or heat energy for export to a grid and/or to a nearby industry, or used on-site, realistic and credible alternatives should also be separately determined for power generation in the absence of the project activity. For power generation, the realistic and credible alternative(s) may include, inter alia: P1. Power generated from landfill gas undertaken without being registered as CDM project activity; P2. Existing or Construction of a new on-site or off-site fossil fuel fired cogeneration plant; P3. Existing or Construction of a new on-site or off-site renewable based cogeneration plant; P4. Existing or Construction of a new on-site or off-site fossil fuel fired captive power plant; P5. Existing or Construction of a new on-site or off-site renewable based captive power plant; P6. Existing and/or new grid-connected power plants. 1 For instance, even the least expensive of these alternatives, composting, to be economically viable, the waste management company must receive USD per tonne of waste. Source: International Source Book on Environmentally Sound Technologies (ESTs) for Municipal Solid Waste Management (MSWM), Report of the United Nations Environment Programme, Division of Technology, Industry, and Economics.

13 page 13 Other renewable sources are not applicable and available at the project site, so that options P3 and P5 may be discarded. Similarly fossil-fuel based captive power plants or cogeneration plants would not be economically competitive with purchasing power from the grid, so that P2 and P4 may also be discarded. The only remaining option for plausible baseline is P6 - Power plants connected to the grid. The baseline and the project activity do not consider generation of thermal energy. Thus the options listed above (LFG1 and LFG2; P6) are the only realistic alternatives to be considered as possible alternative baselines. These alternatives will be considered below and further analyzed, in Section B.5. ACM0001, states how national and sectoral policies must be taken into account using Sub-step 1b of the additionality tool and the adjustment factor AF. Sub-step 1b. Consistency with mandatory laws and regulations. This sub-step requires that The alternative(s) shall be in compliance with all mandatory applicable legal and regulatory requirements, even if these laws and regulations have objectives other than GHG reductions, e.g. to mitigate local air pollution.. Considering the national laws and regulation of the Republic of Panama, the only documents with legal force in the country related with the landfill gas management are the Executive Decree No. 275, July , and the Executive Decree No. 156, May , both from the Ministry of Health (MINSA). These regulations establish how to design and operate a landfill. There are no legal and regulatory requirements that would require capture or use of landfill gas different to avoid risks in the site then options such as venting or flaring are permitted. Therefore all possible scenarios described above would comply with national and local regulations. The Law 45, August 4 of 2004 promotes the renewable energy generation considering the incentives given by the Clean Development Mechanism such as power generation with biogas. The current situation at Cerro Patacón landfill corresponds to LFG2 scenario above (the landfill gas is released to the atmosphere without any control) and P6 scenario (the only source of electricity available is the grid). These situations meet all applicable legal requirements and have all its necessary permits up to date or in process with the relevant authorities. Then the most plausible scenario is the continuation of the current practice in the landfill. ACM0001further declares: STEP 2: Identify the fuel for the baseline choice of energy source taking into account the national and/or sectoral policies as applicable. For power generation we have considered as plausible baseline the option P6. Power plants connected to the grid. There is no specific fuel choice to be made. The only source of fuel in the area is the methane released for the landfill. The fuels in the power plants connected to the grid consider different alternatives such as Diesel and Bunker C. Their emissions are determined by the tool to estimate the corresponding emission factor.

14 page 14 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 CDM project activity (assessment and demonstration of additionality): The methodologies selected requires the use of the Tool for demonstration and assessment of additionality version 05, to demonstrate that the project is not the baseline scenario. This tool is applied as follows: The project activity was conceived as a CDM activity and considered carbon revenues since its conception. In 2002, USAID funded a study to identify potential environmental improvement activities finding that Cerro Patacon landfill had great potential to reduce methane emissions to the atmosphere through the CDM, so it was included in the CDM projects portfolio of Panama 2. For several years the project was presented as a potential CDM project, and in 2005 was included by the environmental authority (ANAM) in its management report as a strategic CDM project for the country 3. Since these years the municipality through DIMAUD designs the strategy to implement the project and evaluate the better options for its development. In 2005 and 2006 the municipality opened a public tender to identify potential landfill operators 4. In April of 2006 was developed a prefeasibility assessment to determinate the possibility to implement a landfill gas project in Cerro Patacón. The study analyzed two different project options; the first was the combustion of the landfill gas using an enclosed flare and the second one was the use of the landfill gas to fuel a power plant using internal combustion engine generators 5. In both cases the CDM was consider as a method to finance the projects. After this, the municipality began the process of evaluating offers from different landfill operators and technology providers, and in November of 2007 after receive the No Objection Letter 6 from the Environmental Authority (ANAM), the Municipality of Panama opens a public tender to contract a company to operates the landfill, including the development of the landfill gas combustion project under the CDM rules 7. Furthermore, CDM revenue was seriously considered in the decision to proceed with the project activity upon contract 8 signature between the Project Developer and Asociacion Accidental Urbaser Plotosa S.A. On March 2008 the contract entered into force. In the contract No the municipality gives to Urbaser - Plotosa S.A. the operation of the Cerro Patacón Landfill for fifteen years including the development of a landfill gas project under the CDM. This component only considers the landfill gas capture to be flaring under controlled conditions without different incomes to the carbon credits. In the same contract the municipality establish the energy generation with the landfill gas to operator s discretion, giving to him the property of all possible incomes by sales of energy and carbon credits in case that the consortium decides to develop this activity. The previous situation is due to the fact that the municipality of Panama not considers inside its main activity the energy generation or the management of this kind of activities, turning the development of the energy component in a problem for the municipality. Considering the information presented above, the additionality must be evaluated considering the possibility for the municipality to develop the landfill gas project. 2 Initial CDM project portfolio of Panama, National environmental authority ANAM, management report Document LP , Cerro Patacon Prefeasibility Report, No Objetion Letter from ANAM, Document LP , Resolution No.C-003, Contract 489 between the municipality and Urbaser Plotosa S.A., 2008

15 page 15 Step 1. Identification of alternatives to the project activity consistent with current laws and regulations Sub-step 1a. Define alternatives to the project activity: According to the tool and considering the first approach presented in section B.4, the possible alternatives to the project activity are: - Alternative 1: The landfill operator would continue the current business as usual practice of not collecting and flaring of landfill gas from waste management operations. The business as usual scenario is direct venting into the atmosphere. - Alternative 2: The municipality would invest in the landfill gas collection system as well as a flaring system but not develop the project as CDM. - Alternative 3: The landfill operator would invest in the landfill gas collection system as well as an energy production system to produce electricity but not develop the project as CDM. - Alternative 4: Construction of a new on site or off site fossil or renewable fuel fired captive power plant. These alternatives are consistent with the scenarios identified in the section B.4. Urbaser Plotosa S.A. has a contractual requirement to develop a CDM project in order to finance the collection and treatment of landfill gas. The investment depends on the success of the CDM project registration. Without CDM revenues, the project would not be developed and the Urbaser Plotosa S.A. only would have the responsibility for the landfill site operations. The alternative 4 is not a feasible scenario because the energy generation is not the core business of the consortium (waste management operator) neither the municipality. Sub-step 1b. Enforcement of applicable laws and regulations: As shown in section B.4 the only regulations of the Republic of Panama related with the landfill gas are the Executive Decree No. 275, July and Executive Decree No. 156, May The laws in Panama do not impose to change the actual on-site practice: venting landfill gas to the atmosphere. In relation with the energy component the Law 45, August , establish the possibility to implement systems to generate renewable energy, and the Law 6, February defines the national strategy to the energy sector. In all cases the proposed alternatives are in compliance with existing regulation and would face no legal restrictions for implementation. However, conclusion is that the implementation of the alternative 3 and 4 is highly unlikely because these not depends of the municipality. The alternative 2 faces financial barriers that makes impossible to develop the project without the CDM revenues. Step2. Investment analysis The additionality of the project is going to be established by conducting step 2 (investment analysis). The purpose is to determine whether the proposed project activity is economically or financially less attractive than other alternatives without the revenues from the sale of certified emission reductions (CERs). To conduct the investment analysis, the following sub-steps are followed: Sub-step 2a. Determine appropriate analysis method:

16 page 16 The Tool for the demonstration and assessment of additionality recommends three analysis methods, including simple cost analysis (option I), investment comparison analysis (option II) and benchmark analysis (option III). The proposed project activity will be developed as a CDM project by the municipality by means of the binding relation with Urbaser Plotosa S.A. through the operation contract. Given that the project activity only generates incomes for the municipality by sale of carbon credits, the option I- the simple cost analysis can be used. Sub-step 2b. - Option I. Simple cost analysis: The Cerro Patacón landfill has currently no LFG flaring system installed. The installation of a LFG capture and flaring system, even an undeveloped one, would require costs for the municipality with no sort of financial compensation. On tables below, the costs associated with the CDM project activity are specified in concordance with the estimation presented in the prefeasibility study for the project. The investment costs for the LFG collection system are proportional to the landfill surface, cell dimensions, waste volume and the landfill topography. LANDFILL GAS COLLECTION AND FLARING SYSTEM - INSTALLATION COST Item Total estimated cost (US $) Mobilization and project management Main gas header collection piping (assume about 2,000 meters of 350 mm diameter) Lateral piping (assume 110 mm diameter) Condensate and leachate management Vertical extraction wells (75 wells including wellheads, wellbore seals, flow control valves and disposal of drilling waste) Blower and flaring equipment (enclosed flare) Engineering/contingency Total cost estimated And the operation and maintenance depends of the technology installed. LANDFILL GAS COLLECTION AND FLARING SYSTEM ANNUAL OPERATION AND MAINTENANCE Item Total estimated cost (US $) Labor Monitoring equipment costs Parts and materials Collection system expansion/replacement Vertical extraction wells (including wellheads and accessories. Assumes 2 new per year) Header and lateral piping (Assumes 100 m/year for expansion) Engineering/contingency Total cost estimated Table 3: Project cost defined by prefeasibility report scenario 1 Under this scenario (investment with no financial returns) the project activity produces no economic benefits and therefore is not financially attractive without the CDM revenue stream (as defined on Sub-step 2b).

17 page 17 Step 3. Barrier Analysis. Sub-step 3a. Identify barriers that would prevent the implementation of the proposed CDM project activity. Investment barriers In most developing countries waste management sector is not given priority within the economy, so that project developers often face difficulties in obtaining investments funds for solid waste management projects. In Cerro Patacón the municipality does not have the resources necessaries to invest in a landfill gas project, because DIMAUD needs the money to attend other specific requirements related with the public services. Given that the revenues may not be enough to cover expenses for the proper operation and maintenance of the CDM project activity, the only alternative for the municipality was put together the development of the CDM project with the contract for the landfill operation, looking to leverage financially the project. Technological barriers Skilled and/or properly trained labour to operate and maintain the technologies mentioned in this project, more precisely, landfill gas capture and use systems. Skilled and trained people are scarce in Panama and no education/training institution in the country provides the needed skill, leading to equipment disrepair and malfunctioning. There is also a lack of infrastructure for implementation of electricity generation from LFG. Cerro Patacon will be the first landfill gas recovery project in Panama, financed through the CDM structure, reason for why not exists local provider of equipment and services for work related with electricity generation with landfill gas. If the proposed project is registered under the CDM, it is likely that it will be a company outside the country that would have to provide technical expertise in order to conduct detailed engineering studies and support project implementation. Barriers due to prevailing practice The proposed project activity (landfill gas capture and use) will be the first of its kind in Panama. Although, in recent months, other projects to capture landfill gas in the country have been identified (all within the CDM context), but they are in design stage yet. Sub-step 3 b. Show that the identified barriers would not prevent the implementation of at least one of the alternatives (except the proposed project activity). The barriers identified above apply to alternative 2 considered early in this document. This scenario is a variant to the proposed project activity, and faces barriers too. The barriers identified do not prevent the continuation of the current situation at the landfill (alternative 1), which does not require additional investments neither additional training nor skilled workers. Step 4. Common practice analysis

18 page 18 Sub-step 4a. Analyze other activities similar to the proposed project activity: The Regional assessment of the final disposal of solid waste in Central America admits that other options different to lanfilling to dispose the solid waste such as open dumps and water bodies are in use in the host country, reason for why the gas utilisation is not widespread practice in Panama. This project is the first landfill gas recovery project in the Republic of Panama. Sub-step 4b. Discuss any similar options that are occurring There have been no other similar activities implemented previously to the Cerro Patacón project. In addition, no landfills in the Republic of Panama have implemented active gas collection, flaring systems or landfill gas utilization facilities yet. Thus, the common practice in the country is, at best, the passive venting of landfill gas. Without public support and specific regulations there is no incentive to develop landfill gas capture systems in Panama, other than the ones established by the CDM. B.6. Emission reductions: B.6.1. Explanation of methodological choices: Baseline Emissions Calculation: For the ACM001, the methane generation is determined by: Where: BEy Baseline emissions in year y (tco2e) MDproject,y The amount of methane that would have been destroyed/combusted during the year, in tonnes of methane (tch4) in project scenario MDBL,y The amount of methane that would have been destroyed/combusted during the year in the absence of the project due to regulatory and/or contractual requirement, in tones of methane (tch4) GWPCH4 Global Warming Potential value for methane for the first commitment period is 21 tco2e/tch4 ELLFG,y Net quantity of electricity produced using LFG, which in the absence of the project activity would have been produced by power plants connected to the grid or by an onsite/ off-site fossil fuel based captive power generation, during year y, in megawatt hours (MWh). CEFelecy,BL,y CO2 emissions intensity of the baseline source of electricity displaced, in tco2e/mwh. This is estimated as per equation below. ETLFG,y The quantity of thermal energy produced utilizing the landfill gas, which in the absence of the project activity would have been produced from onsite/offsite fossil fuel fired boiler, during the year y in TJ.

19 page 19 CEFther,BL,y CO2 emissions intensity of the fuel used by boiler to generate thermal energy which is displaced by LFG based thermal energy generation, in tco2e/tj. This is estimated as per equation below. The project not consider thermal energy generation, thus ETLFG,y is neglected. In the case where the MDBL,y is given/defined in the regulation and/or contract as a quantity that quantity will be used. In situations where in the baseline LFG captured and destroyed, for reasons other than regulation and/or contract, historic data on actual amount captured shall be used as MDBL,y. In cases where regulatory or contractual requirements do not specify MDBL,y or no historic data exists for LFG captured and destroyed an Adjustment Factor (AF) shall be used and justified, taking into account the project context. For the Cerro Patacón landfill is not mandated by regulatory or contractual requirements the installation of specific system for collection and destruction of methane is not undertaken for other reasons such as is mentioned in the ITS Consultant audit report 10 made on November In order to calculate MDproject,y, the methodology states that will be determined ex post by metering the actual quantity of methane captured and destroyed once the project activity is operational. The methane destroyed by the project activity (MDproject,y) during a year is determined by monitoring the quantity of methane actually flared and gas used to generate electricity and the total quantity of methane captured., and, The sum of the quantities fed to the flare(s), to the power plant(s), to the boiler(s) and to the natural gas distribution network, estimated using equation (above), must be compared annually with the total quantity of methane captured. The lowest value of the two must be adopted as MDproject,y. This is meant to be conservative, claiming the lower amount of methane destroyed. In case the total methane collection is the highest, MDproject,y is given by: Where: MDflared,y MDelectricity,y MDthermal,y Quantity of methane destroyed by flaring (tch4) Quantity of methane destroyed by generation of electricity (tch4) Quantity of methane destroyed for the generation of thermal energy (tch4) 10 The audit to the operation of the Cerro Patacón landfill was made by the consultant company ITS Panama S.A. on behalf of the Health Ministry (MINSA) on November 15, The final report certifies that landfill gas is released at the atmosphere without any control.

20 page 20 MDPL,y Quantity of methane sent to the pipeline for feeding to the natural gas distribution network (tch4) Thus we need to determine methane destroyed by flaring and electricity. The project does not consider send landfill gas to the natural gas pipeline. The calculation of MDflared, y: Where: LFGflare,y wch4,y DCH4 PEflare,y Quantity of landfill gas fed to the flare(s) during the year measured in cubic meters (m3) Average methane fraction of the landfill gas as measured 11 during the year and expressed as a fraction (in m³ CH4 / m³ LFG) Methane density expressed in tonnes of methane per cubic meter of methane (tch4/m3ch4) 12 Project emissions from flaring of the residual gas stream in year y (tco2e) determined following the procedure described in the Tool to determine project emissions from flaring gases containing Methane. If methane is flared through more than one flare, the PEflare,y shall be determined for each flare using the tool. In order to determine the amount of methane sent to the flare in a year, we need to sum the mass of methane over the year. Since the methane fraction of landfill gas and gas density are, in general, changing with time, a more precise formula for methane destroyed by flaring is: Here the mass of methane sent to the flare is determined hourly, with hourly values added over the year. The gas density depends on temperature and pressure, and flow meter likely to be used for monitoring in LFG capture projects automatically compensate for gas density in flow measurement, so that LFGflare,h is already expressed in terms of standard temperature and pressure, so that DCH4,h (methane density) is in fact a constant, tonnes/m³, at standard temperature and pressure conditions (0 C, bar). Thus, in practice, there is no difference between equations. Not all the methane that reaches the flare is destroyed, and the Tool to determine project emissions from flaring gases containing methane is meant to take this into account. The tool differentiates between open and enclosed flares. The project proposed here will use enclosed flares, since these are more effective in destroying methane. For enclosed flares, the Tool proposes two options to determine the flare efficiency: 11 Methane fraction of the landfill gas to be measured on wet basis 12 At standard temperature and pressure (0 degree Celsius and 1,013 bar) the density of methane is tch4/m3ch4.

21 page 21 For enclosed flares, either of the following two options can be used to determine the flare efficiency: (a) To use a 90% default value. Continuous monitoring of compliance with manufacturer s specification of flare (temperature, flow rate of residual gas at the inlet of the flare) must be performed. If in a specific hour any of the parameters are out of the limit of manufacturer s specifications, a 50% default value for the flare efficiency should be used for the calculations for this specific hour. (b) Continuous monitoring of the methane destruction efficiency of the flare (flare efficiency). The Tool further requires that the temperature in the exhaust gas of the flare to be measured in order to determine whether the flare is operating or not. In both cases, if there is no record of the temperature of the exhaust gas of the flare or if the recorded temperature is less than 500 C for any particular hour, it shall be assumed that during that hour the flare efficiency is zero. The project is likely to use the 90% default value. However, if project operator decides to monitor emissions continuously, then the Tool procedures for continuous monitoring will be applied. When continuous monitoring is not in place, the default value will be applied. In case of using the 90% default value (enclosed flares), Steps 3 and 4 of the Tool should not be included here. For enclosed flares, the Tool proposes two options to determine the flare efficiency: For enclosed flares, either of the following two options can be used to determine the flare efficiency: (a) To use a 90% default value. Continuous monitoring of compliance with manufacturer s specification of flare (temperature, flow rate of residual gas at the inlet of the flare) must be performed. If in a specific hour any of the parameters are out of the limit of manufacturer s specifications, a 50% default value for the flare efficiency should be used for the calculations for this specific hour. (b) Continuous monitoring of the methane destruction efficiency of the flare (flare efficiency). The Tool further requires that the temperature in the exhaust gas of the flare to be measured in order to determine whether the flare is operating or not. In both cases, if there is no record of the temperature of the exhaust gas of the flare or if the recorded temperature is less than 500 C for any particular hour, it shall be assumed that during that hour the flare efficiency is zero. The project is likely to use the 90% default value. However, if project operator decides to monitor emissions continuously, then the Tool procedures for continuous monitoring will be applied. When continuous monitoring is not in place, the default value will be applied. In case of using the 90% default value (enclosed flares), Steps 3 and 4 of the Tool should not be included here. Step 1: Determination of the mass flow rate of the residual gas that is flared This step calculates the residual gas mass flow rate in each hour h, based on the volumetric flow rate and the density of the residual gas. The density of the residual gas is determined based on the volumetric fraction of all components in the gas.

22 page 22 Where: FMRG,h kg/h Mass flow rate of the residual gas in hour h ρrg,n,h kg/m3 Density of the residual gas at normal conditions in hour h FVRG,h m3/h Volumetric flow rate of the residual gas in dry basis at normal conditions in hour h And: Where: ρrg,n,h kg/m3 Density of the residual gas at normal conditions in hour h Pn Pa Atmospheric pressure at normal conditions (101,325) Ru Pa.m3/kmol.K Universal ideal gas constant (8,314) MMRG,h kg/kmol Molecular mass of the residual gas in hour h Tn K Temperature at normal conditions (273.15) And: Where: MMRG,h kg/kmol Molecular mass of the residual gas in hour h fvi,h - Volumetric fraction of component i in the residual gas in the hour h MMi kg/kmol Molecular mass of residual gas component i I The components CH4, CO, CO2, O2, H2, N2 The Tool states that As a simplified approach, project participants may only measure the volumetric fraction of methane and consider the difference to 100% as being nitrogen (N2). Note that the Tool is applicable to a wide variety of residual gases to be flared, while landfill gas is the product of anaerobic decomposition, which does not produce hydrogen or carbon monoxide, so these two gases can be eliminated from the calculations, without any assumptions. The simplification proposed in the tool involves considering CO2 and O2 as N2. While this leads to minor errors, we use this simplified approach, since it greatly simplifies measurements, and does not significantly affect the estimate of flare efficiency. With this simplification:

23 page 23 Where: MMRG,h kg/kmol Molecular mass of the residual gas in hour h fvi,h - Volumetric fraction of component i in the residual gas in the hour h MMi kg/kmol Molecular mass of residual gas component i I The components CH4, N2 (Note that only CH4 would be measured and N2 determined as the balance) Note that elemental hydrogen is a part of methane and therefore the hydrogen content of the residual gas affects its stoichiometry. Step 2: Determination of the mass fraction of carbon, hydrogen, oxygen and nitrogen in the residual gas. Step 2 states: Determine the mass fractions of carbon, hydrogen, oxygen and nitrogen in the residual gas, calculated from the volumetric fraction of each component i in the residual gas, as follows: Where: fmi,h - Mass fraction of element j in the residual gas in hour h fvi,h - Volumetric fraction of component i in the residual gas in the hour h AMj kg/kmol Atomic mass of element j NAj,i - Number of atoms of element j in component i MMRG,h kg/kmol Molecular mass of the residual gas in hour h J The elements carbon, hydrogen, oxygen and nitrogen. Note that the simplified approach, involving measurement of methane and assuming the balance to be nitrogen, implies that there is no elemental oxygen in the gas, and that all the carbon is in the form of methane. The only hydrogen is also in methane, but this does not involve any simplification, since there is no H2 in the other components that might be present in landfill gas: CO2 and O2. I The components CH4 and N2 (Note that with the simplified approach, the concentrations of other gases would not be determined)

24 page 24 Step 3: Determination of the volumetric flow rate of the exhaust gas on a dry basis Since the methane combustion efficiency is to be continuously measured in the proposed project, this step is applicable. Determine the average volumetric flow rate of the exhaust gas in each hour h based on a stoichiometric calculation of the combustion process, which depends on the chemical composition of the residual gas, the amount of air supplied to combust it and the composition of the exhaust gas, as follows: Where: TVn,FG,h m3/h Volumetric flow rate of the exhaust gas in dry basis at normal conditions in hour h Vn,FG,h m3/kg residual gas Volume of the exhaust gas of the flare in dry basis at normal conditions per kg of residual gas in hour h FMRG,h kg residual gas/h Mass flow rate of the residual gas in hour h Where: Vn,FG,h m3/kg residual gas Volume of the exhaust gas of the flare in dry basis at normal conditions per kg of residual gas in the hour h Vn,CO2,h m3/kg residual gas Quantity of CO2 volume free in the exhaust gas of the flare at normal conditions per kg of residual gas in the hour h Vn,N2,h m3/kg residual gas Quantity of N2 volume free in the exhaust gas of the flare at normal conditions per kg of residual gas in the hour h Vn,O2,h m3/kg residual gas Quantity of O2 volume free in the exhaust gas of the flare at normal conditions per kg of residual gas in the hour h Where: Vn, O2, h m3/kg residual gas Quantity of O2 volume free in the exhaust gas of the flare at normal conditions per kg of residual gas in hour h no2, h kmol/kg residual gas Quantity of moles O2 in the exhaust gas of the flare per kg residual gas flared in hour h MVn m3/kmol Volume of one mole of any ideal gas at normal temperature and pressure (22.4 litres/mol)

25 page 25 The Tool states: Where: Vn, N2, h m3/kg residual gas Quantity of N2 volume free in the exhaust gas of the flare at normal conditions per kg of residual gas in hour h fmn, h - Mass fraction of nitrogen in the residual gas in the hour h AMN kg/kmol Atomic mass of nitrogen MFO2 - O2 volumetric fraction of air (0.21) Fh kmol/kg residual gas Stoichiometric quantity of moles of O2 required for a complete oxidation of one kg residual gas in hour h Note that if the mass fraction is expressed as a fraction, as the definition above implies, and not as a %, the number in the first denominator should be 2 and not 200, so that the correct equation would be: Next we have: Where: Vn, CO2, h m3/kg residual gas Quantity of CO2 volume free in the flare exhaust gas at normal conditions per kg of residual gas in the hour h fmc, h - Mass fraction of carbon in the residual gas in the hour h AMC kg/kmol Atomic mass of carbon

26 page 26 Where: to2, h - Volumetric fraction of O2 in the exhaust gas in hour h 13 Where: Fh kmol O2 / kg residual gas Stoichiometric quantity of moles of O2 required for a complete oxidation of one kg residual gas in hour h fmh, h - Mass fraction of hydrogen in the residual gas in hour h fmo, h - Mass fraction of oxygen in the residual gas in hour h AMH kg/kmol Atomic mass of hydrogen AMO kg/kmol Atomic mass of oxygen Step 4: Determination of methane mass flow rate in the exhaust gas on a dry basis The mass flow of methane in the exhaust gas is based on the volumetric flow of the exhaust gas and the measured concentration of methane in the exhaust gas, as follows: Where: TMFG,h kg/h Mass flow rate of methane in the exhaust gas of the flare in dry basis at normal conditions in hour h TVn,FG,h m3/h exhaust gas Volumetric flow rate of the exhaust gas in dry basis at normal conditions in hour h fvch4,fg,h mg/m3 Concentration of methane in the exhaust gas of the flare in dry basis at normal conditions in hour h Step 5: Determination of methane mass flow rate in the residual gas on a dry basis The quantity of methane in the residual gas flowing into the flare is the product of the volumetric flow rate of the residual gas (FVRG,h), the volumetric fraction of methane in the residual gas (fvch4,rg,h) and the density of methane (ρch4,n,h) in the same reference conditions (normal conditions and dry or wet basis). The Tool further elaborates: 13 Note that the second term in the large brackets [..] is with 2 in the denominator, not 200, confirming our observation above.

27 page 27 It is necessary to refer both measurements (flow rate of the residual gas and volumetric fraction of methane in the residual gas) to the same reference condition that may be dry or wet basis. If the residual gas moisture is significant (temperature greater than 60ºC), the measured flow rate of the residual gas that is usually referred to wet basis should be corrected to dry basis due to the fact that the measurement of methane is usually undertaken on a dry basis (i.e. water is removed before sample analysis). Where: TMRG,h kg/h Mass flow rate of methane in the residual gas in the hour h FVRG,h m3/h Volumetric flow rate of the residual gas in dry basis at normal conditions in hour h fvch4,rg,h - Volumetric fraction of methane in the residual gas on dry basis in hour h (NB: this corresponds to fvi,rg,h where i refers to methane). ρ CH4,n kg/m3 Density of methane at normal conditions (0.716) Step 6: Determination of the hourly flare efficiency The determination of the hourly flare efficiency depends on the operation of flare (e.g. temperature), the type of flare used (open or enclosed) and, in case of enclosed flares, the approach selected by project participants to determine the flare efficiency (default value or continuous monitoring). In case of enclosed flares and continuous monitoring of the flare efficiency, the flare efficiency in the hour h (η flare,h) is: 0% if the temperature of the exhaust gas of the flare (Tflare) is below 500 C during more than 20 minutes during the hour h. determined as follows in cases where the temperature of the exhaust gas of the flare (Tflare) is above 500 C for more than 40 minutes during the hour h : Where: η flare,h - Flare efficiency in hour h TMFG,h kg/h Methane mass flow rate in exhaust gas averaged in hour h Note that the first version of the Tool (EB28 Annex 13) defines TMFG, h as Methane mass flow rate in exhaust gas averaged over a period of time t (hour, two months or year). We believe this is a misprint. For hourly flare efficiency to be meaningfully determined, the definition should be as stated here in the PDD.

28 TMRG,h kg/h Mass flow rate of methane in the residual gas in the hour h STEP 7. Calculation of annual project emissions from flaring page 28 Project emissions from flaring are calculated as the sum of emissions from each hour h, based on the methane flow rate in the residual gas (TMRG,h) and the flare efficiency during each hour h (η flare,h), as follows: Where: PEflare y tco2e Project emissions from flaring of the residual gas stream in year TMRG, h kg/h Mass flow rate of methane in the residual gas in the hour h η flare, h - Flare efficiency in hour h GWPCH4 tco2e/tch4 Global Warming Potential of methane In case of use of the default value for the methane destruction efficiency, the manufacturer s specifications for the operation of the flare and the required data and procedures to monitor these specifications should be documented in the CDM PDD. Once project emissions PEflare,y has been calculated, the next formula from the methodology ACM0001is for calculation of MDelectricity,y: Where: MDelectricity,y = Quantity of methane destroyed by generation of electricity LFGelectricity,y = Quantity of landfill gas fed into electricity generator. Considering hourly variations in methane density and methane concentration in LFG, a more precise form is: The ex-ante estimation of the amount of methane that would have been destroyed/combusted during the year, in tonnes of methane (MDproject,y) will be done with the latest version of the approved Tool to determine methane emissions avoided from dumping waste at a solid waste disposal site, considering the following additional equation:

29 page 29 Where: BECH4,SWDS,y Methane generation from the landfill in the absence of the project activity at year y (tco2e), calculated as per the Tool to determine methane emissions avoided from dumping waste at a solid waste disposal site. The tool estimates methane generation adjusted for, using adjustment factor (f) any landfill gas in the baseline that would have been captured and destroyed to comply with relevant regulations or contractual requirements, or to address safety and odor concerns. As this is already accounted for in equation 2, f in the tool shall be assigned a value 0. Note: In the tool x will refer to the year since the landfill started receiving wastes [x runs from the first year of landfill operation (x=1) to the year for which emissions are calculated (x=y)]; Sampling to determine the different waste types is not necessary the waste composition can be obtained from previous studies. The efficiency of the degassing system which will be installed in the project activity should be taken into account while estimating the ex-ante estimation. To calculate the methane generation potential, the following formula from Tool to determine methane emissions avoided from dumping waste at a solid waste disposal site should be used: Where: BE,CH4, SWDS,y Methane emissions avoided during the year y from preventing waste disposal at the solid waste disposal site (SWDS) during the period from the start of the project activity to the end of the year y (tco2e) Φ Model correction factor to account for uncertainties (0.9) f Fraction of methane captured at the SWDS and flared, combusted or used in another manner. GWPCH4 Global Warming Power for CH4 (value of 21 is used for the first commitment period) OX Oxidation factor (reflecting the amount of methane from SWDS that is oxidized in the soil or other material covering the waste). F Fraction of methane in the SWDS gas (volume fraction) (0.5). DOCf Fraction of degradable organic carbon (DOC) that can decompose. MCF Methane Correction Factor Wj,x Amount of organic waste type j prevented from disposal in the SWDS in the year x (tonnes). DOCj Fraction of degradable organic carbon (by weight) in the waste type j

30 page 30 Kj j x y Decay rate for the waste type j Waste type category (index) Year during the crediting period: x runs from the first year of the first crediting period (x=1) to the year y for which avoided emissions are calculated (x=y). Is year for which methane emission are calculated. The ex-ante calculation of methane destroyed by the project activity during year y, is calculated as recommended by the methodology, by integrating the efficiency of the gas collection and flaring system onsite CE,y. For the energy component, the emission factor CEFelec,BL,y is a measure of the amount of greenhouse gas emissions that would be displaced with the operation of the project activity in case of energy generation. As the baseline is the electricity generated by plants connected to the grid, the emission factor should be calculated according to Tool to calculate the emission factor for an electricity system. This emission factor is calculated as the weighted average of the Operating Margin (OM) and the Build Margin (BM) emission factors according to the procedures described in the Tool. The value and source of information for CEFelec,BL,y are given in section B.6.2. For the selection of operating margin, the tool provides four alternative methods for calculating the operating margin emission factor: (a) Simple OM, (b) Adjusted Simple OM, (c) Dispatch analysis or (d) Average OM. The Operating Margin will be calculated using the simple method. This calculation is based on the weighted average of the energy production in the last 3 years (ex-ante calculation). Regarding to the typology of the data used, the tool provides three alternatives: Based on fuel consumption and net electricity production data at each generating plant (option A). Based on net electricity production data, average efficiency per plant and type of fuel used at each plant (option B). Based on net electricity production data of the group of power stations that serve the system and the fuel types and consumption of the entire electrical system (option C). Since the overall fuel consumption of the plants that comprise the system is available data, option C was chosen. The operating margin emission factor (EFOMsimple) is therefore calculated using the weighted sum of emissions, per unit of electrical power (tco2/mwh), of all of the plants that supply electricity to the system, excluding the low cost/efficient power stations (hydroelectric, geothermal, wind-powered, low cost biomass, nuclear and solar), and is derived from the following formula: Where: EFred,OMsimple,y FCi,y NCVi,y Simple operating margin emission factor in year y (tco2/mwh). Amount of type i fuel consumed by the electrical system in one year y (unit of mass or volume). Net calorific value (energy content) of the type i fuel in one year y (GJ/unit of mass or volume).

31 page 31 EFCO2,i,y CO2 emission factor of type i fuel in one year y (tco2/gj). EGy Electricity supplied to the grid by the system s group of power stations, excluding low cost/efficient ones, in the year y (MWh). I Each of the fuels consumed by the power stations in the year y. y Each one of the three most recent years with available data at the time of presenting the CDM PPD to the DOE for validation. The system consumes fossil fuels such as Diesel and Bunker C. The calculation of the CO2 emission factor by unit and type of fuel consumed at the generating plants in the system is made by the relation: Once the emission coefficients are obtained for each of the fuels used in the baseline power stations, they are multiplied by the quantities of each fuel consumed in the last three years (FCi,y), the result of which is divided by the energy production (EGy) of entire distribution network in Panama, with the aforementioned exceptions. The information needed to calculate the operating margin emission factor was provided by the Energy Policy Commission and National Dispatch Center of Panama. The data used correspond to the period and are reflected in Annex 3. To date, the fuel consumption data for 2007 have not been published. Therefore, this last year could not be included in the calculation. For the build margin calculation two alternatives for selecting the group of generating plants are available: The five most recently built power stations (including plants under construction). The most recent additions represent 20% of generation. The option that corresponds to the highest annual generation will be chosen from the two alternatives. The energy produced by the 5 most modern power stations in Panama makes up 28% (1,633,747.4 MWh) of the total national grid production, more than 20% of the electricity generated, which rules out this second calculation alternative set down in the methodology. The build margin emission factor was therefore calculated based on the energy production of the 5 most modern power stations (including plants under construction). The following formula was used to calculate the build margin emission factor: Where: EFred,BM,y EGm,y EFEL,m y m y Build margin emission factor in year y (tco2/mwh). Electricity supplied to the grid by each plant m in the year y (MWh). CO2 emission factor for each plant m in the year y (tco2/ MWh). Each of the 5 power stations selected for calculating the build margin. Most recent year with data available at the time of presenting the PDD to the DOE.

32 page 32 The emission factor for each of the power stations selected for calculating the Build Margin EFEL,m y is produced the same way as the operating margin emission factor was obtained; by the simple method. As fuel consumption per plant is necessary, option B1 described in the tool is used on this occasion, where the emission factor per plant is calculated with the following formula: Where: Plant m emission factor in one year y (tco2/mwh). Amount of type i fuel consumed by plant m in one year y (unit of mass or volume). Net calorific value (energy content) of type i fuel in one year y (GJ/unit of mass or volume). EFCO2,i,y CO2 emission factor of type i fuel in one year y (tco2/gj). EGm,y Electricity supplied to the grid by each source m in the year y (MWh). i Each of the fuels consumed by the generating plants in the system in the year y. m Each of the 5 power stations selected for calculating the build margin. y Most recent year with data available at the time of presenting the PDD to the DOE. EFEL,m,y FCi,m,y NCVi,y According to the tool the Combined Margin emission factor is calculated as a weighted average of the Operating Margin (EFOM) and Build Margin (EFBM) emission factors. Where: EFred,BM,y EFred,OM,y ωom ωbm Build margin emission factor in one year y (tco2/mwh) Simple operating margin emission factor in one year y ( tco2/mwh) Operating margin weighted coefficient. 0.5 by default. Build margin weighted coefficient. 0.5 by default. Generally a weighted coefficient of 50% is considered for both Margins (ωom y ωbm) for the first crediting period. By applying this ratio, the baseline emission factor is reduced to: In a second and third crediting period, a ωom= 0.25 and ωbm= 0.75 would be considered, as mentioned in the Tool to calculate the emission factor for an electricity system. The methodology ACM001 states that CO2 emissions from fossil fuels should be accounted for as project emissions. Since no other fossil fuels are used within the project boundary, no such emissions have been taken into account.

33 page 33 Project Emissions Calculation: Only project emissions associated with the electricity imported from the grid are taken into account. Since an on-site landfill gas generator will be installed, only a small amount of electricity will be imported corresponding to electricity needs during the landfill gas to energy facility down time. The associated emissions will be calculated as follows: Where: PEEC,y PEFC,j,y Emissions from consumption of electricity in the project case. The project emissions from electricity consumption (PEEC,y) will be calculated following the latest version of Tool to calculate baseline, project and/or leakage emissions from electricity consumption. If in the baseline a part of LFG was captured then the electricity quantity used in calculation is electricity used in project activity net of that consumed in the baseline. Emissions from consumption of heat in the project case. The project emissions from fossil fuel combustion (PEFC,j,y ) will be calculated following the latest version of Tool to calculate project or leakage CO2 emissions from fossil fuel combustion. For this purpose, the processes j in the tool corresponds to all fossil fuel combustion in the landfill, as well as any other on-site fuel combustion for the purposes of the project activity. If in the baseline part of a LFG was captured then the heat quantity used in calculation is fossil fuel used in project activity net of that consumed in the baseline. The project does not consider the consumption of heat, then the PEFC,j,y value is neglected. Then: PEy = PEEC,y For the fraction of electricity consumed in the project scenario, which could be purchased from the national grid then scenario A is applicable. The PEEC,y is to be determined as follows: Where: PEEC,y ECPJ,j,y EFEL,j,y TDLj,y Project emissions from electricity consumption in year y (tco2/yr) Quantity of electricity consumed by the project electricity consumption source j in year y (MWh/yr) Emission factor for electricity generation for source j in year y (tco2/mwh) Average technical transmission and distribution losses for providing electricity to source j in year y

34 page 34 The EFEL,j,y correspond to the value for CEFelec,BL,y given in section B.6.2. The TDLj,y are calculated for the grid in year y for the voltage level at which electricity is obtained from the grid at the project site. TDLy can be obtained by recent, accurate and reliable data available within the host country or a 20% default value can be used. For the project activity the latest option has been selected. Leakage: No leakage effects need to be accounted under this methodology. Emission Reduction Calculations: Emission reductions are calculated as follows: Where: ERy BEy PEy Emission reductions in year y (tco2e/yr) Baseline emissions in year y (tco2e/yr) Project emissions in year y (tco2/yr) B.6.2. Data and parameters that are available at validation: Data / Parameter: AF Data unit: Dimensionless Description: Adjustment factor (for methane destruction in the baseline) Source of data used: Based on local information Value applied: 0% Justification of the In the absence of the proposed project, almost all the landfill gas will be choice of data or released to the atmosphere. As explained in B.4, the current configuration of description of passive venting is limited to some areas in the landfill (other areas does not measurement methods have venting system) and the requirements and common practices do not and procedures actually consider the capture and burning of landfill gas. applied: Any comment: No comments Data / Parameter: GWP CH4 Data unit: tco 2 /tch 4 Description: Measure of how much a given mass of methane is estimated to contribute to global warming, comparing it to that of the same mass of carbon dioxide Source of data used: IPCC standard value Value applied: 21 tco 2 /tch 4 Justification of the choice of data or Default value

35 page 35 description of measurement methods and procedures actually applied: Any comment: Global warming potential in a 100 years horizon. Data / Parameter: F Data unit: - Description: Fraction of methane in the SWDS gas (volume fraction). Source of data used: Value applied: 0.5 Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: EB 39, Meeting report, Annex 9: Tool to determine methane emissions avoided from dumping waste at a solid waste disposal site. The value used is the default value recommended by IPCC. This factor reflects the fact that some degradable organic carbon does not degrade, or degrades very slowly, under anaerobic conditions in the SWDS. A default value of 0.5 is recommended by IPCC. Data / Parameter: DOCj Data unit: % Description: Fraction of degradable organic carbon (by weight) in the waste type j Source of data used: EB 39, Meeting report, Annex 9: Tool to determine methane emissions avoided from dumping waste at a solid waste disposal site. Value applied: - Justification of the The waste disposed contains several types of products. Apply specific value for choice of data or each product. description of measurement methods and procedures actually applied : Any comment: No comments Data / Parameter: DOCf Data unit: - Description: Fraction of degradable organic carbon (DOC) that can decompose. Source of data used: EB 39, Meeting report, Annex 9: Tool to determine methane emissions

36 page 36 avoided from dumping waste at a solid waste disposal site. Value applied: 0.5 Justification of the choice of data or description of The value is stated in the tools. measurement methods and procedures actually applied : Any comment: No comments Data / Parameter: MCF Data unit: - Description: Methane correction factor. Source of data used: Value applied: 1.0 Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: EB 39, Meeting report, Annex 9: Tool to determine methane emissions avoided from dumping waste at a solid waste disposal site. The site where the waste is disposed is an anaerobic managed solid waste disposal, with controlled placement of waste. No comments Data / Parameter: kj Data unit: - Description: Decay rate for the waste type j. Source of data used: Value applied: - Justification of the choice of data or description of measurement methods and procedures actually applied : EB 39, Meeting report, Annex 9: Tool to determine methane emissions avoided from dumping waste at a solid waste disposal site. Reviewing meteorological data for the municipality in Panama, the climatic conditions that best reflect are: MAT>20 C and MAP>1000mm per annum.

37 page 37 Any comment: Source: Data / Parameter: φ Data unit: - Description: Model correction factor to account for model uncertainties. Source of data used: Value applied: 0.9 Justification of the choice of data or description of measurement methods and procedures actually applied : EB 39, Meeting report, Annex 9: Tool to determine methane emissions avoided from dumping waste at a solid waste disposal site. Default value Any comment: Oonk et el. (1994) have validated several landfill gas models based on 17 realized landfill gas projects. The mean relative error of multi-phase models was assessed to be 18%. Given the uncertainties associated with the model and in order to estimate emission reductions in a conservative manner, a discount of 10% is applied to the model results. Data / Parameter: OX Data unit: - Description: Oxidation factor (reflecting the amount of methane from SWDS that is oxidized in the soil or other material covering the waste). Source of data used: EB 39, Meeting report, Annex 9: Tool to determine methane emissions avoided from dumping waste at a solid waste disposal site. Value applied: 0.1 Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: The place used by the project is currently dumped and is considered as unmanaged waste disposal site. No comments Data / Parameter: CEy Data unit: - Description: Efficiency of landfill gas collection and flaring system Source of data used: Compilation of air pollutant emission factors, AP-42, volume 1: Stationary point and area sources, 5 th ed., Chapter 2.4. EPA Office of air quality planning and standards. U.S. Environmental Protection Agency 15. Mexico 15 AP-42, Compilation of air pollutant emission factors, EPA 1998

38 Value applied: 0.65 Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: page 38 Landfill Gas Model. SEDESOL Secretaría de Desarrollo Social, Mexico 16. According the methodology, the efficiency of the landfill gas collection system shall be taken into account. The documents used as reference considers valid criteria for the selection of landfill gas capture efficiency value. The general efficiency of the system will be dependent on the phasing of operations. The above efficiency rate takes into account the following: - Flare and blower availability - Flare efficiency - Efficiency of the landfill gas collection system of a completed cell. - Efficiency of the landfill gas collection system during cell operation The coefficients have only been set for the ex-ante estimation of emission reductions based on the contributing disposal areas during each year. Data / Parameter: FCi,y Data unit: Tons or m 3. Description: Amount of type i fuel consumed by the electrical system in one year y (unit of mass or volume). Source of data used: Energy Policy Commission and National Dispatch Center of Panama Value applied: Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied: EB 35, Meeting report, Annex 12 Tool to calculate the emission factor for an electricity system. Official data published by the Government of Panama Any comment: More calculation details are provided in Annex 3. Data / Parameter: FCi,m,y Data unit: Tons or m 3. Description: Amount of type i fuel consumed by each of the m plants selected to calculate the build margin in the year y (unit of mass or volume). Source of data used: Energy Policy Commission and National Dispatch Center of Panama Value applied: Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied: EB 35, Meeting report, Annex 12 Tool to calculate the emission factor for an electricity system. Official data published by the Government of Panama Any comment: More calculation details are provided in Annex Landfill Gas Model, SEDESOL

39 page 39 Data / Parameter: EGy Data unit: MWh. Description: Electricity supplied to the grid by the entire system in the year y. Source of data used: Energy Policy Commission and National Dispatch Center of Panama Value applied: Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied: EB 35, Meeting report, Annex 12 Tool to calculate the emission factor for an electricity system. Official data published by the Government of Panama Any comment: More calculation details are provided in Annex 3. Data / Parameter: EGm,y Data unit: MWh. Description: Electricity supplied to the grid by each source m in the year y. Source of data used: Energy Policy Commission and National Dispatch Center of Panama Value applied: Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied: EB 35, Meeting report, Annex 12 Tool to calculate the emission factor for an electricity system. Official data published by the Government of Panama Any comment: More calculation details are provided in Annex 3. Data / Parameter: NCVi,y Data unit: GJ/t. Description: Net calorific value of fuel type i, per unit of mass or volume, in year y. Source of data used: IPCC Guidelines for National Greenhouse Gas Inventories (Revised 2006) Vol. 2, Chapter 1, Table 1.2. Value applied: 43.3 (Diesel); 40.2 (Bunker C). Justification of the choice of data or description of EB 35, Meeting report, Annex 12 Tool to calculate the emission factor for an measurement methods electricity system. and procedures actually applied: Any comment: The application details are provided in Annex 3. Data / Parameter: EFCO2,i,y Data unit: tco2/gj. Description: CO2 emission factor per fuel type i unit of energy in year y. Source of data used: IPCC Guidelines for National Greenhouse Gas Inventories (Revised 2006) Vol. 2, Chapter 1, Table 1.4.

40 page 40 Value applied: (Diesel); (Bunker C). Justification of the choice of data or description of EB 35, Meeting report, Annex 12 Tool to calculate the emission factor for an measurement methods electricity system. and procedures actually applied: Any comment: The application details are provided in Annex 3. Data / Parameter: OXIDi Data unit: tco2/tc Description: Oxidation factor of fuel type i. Source of data used: IPCC Guidelines for National Greenhouse Gas Inventories (Revised 2006). Value applied: 44/12 (Diesel); 44/12 (Bunker C) Justification of the choice of data or description of measurement methods and procedures actually applied: EB 35, Meeting report, Annex 12 Tool to calculate the emission factor for an electricity system. Any comment: The application details are provided in Annex 3. Data / Parameter: Data unit: Description: Source of data used: Value applied: Justification of the choice of data or description of measurement methods and procedures actually applied: Any comment: CEFelec,BL,y tco2e/mwh Carbon emission factor of national grid. Energy Policy Commission and National Dispatch Center of Panama. 0,606 (Combined margin) The emission factor is calculated as the weighted average of the Operating Margin (OM) and the Build Margin (BM) emissions factors according to the procedures described in EB 35, Meeting report, Annex 12 Tool to calculate the emission factor for an electricity system. A single, fixed value is used for each crediting period. More calculation details are provided in Annex 3. Data / Parameter: TDLl,y Data unit: % Description: Average technical transmission and distribution losses for providing electricity to source j, in year y Source of data used: EB 39, Meeting report, Annex 7: Tool to calculate baseline, project and/or leakage emissions from electricity consumption. Value applied: 20

41 page 41 Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: The project electricity consumption by all project sources is larger than the electricity consumption of all baseline electricity consumption sources. Applies only to electricity imported from the grid. In order to be conservative the project applies default value. Some of the parameters and data used in equations that are not monitored are constants, as listed in the table below. Most of the table is taken directly from the Flaring Tool. The remaining parameters and data that are available at the time of validation, and are not monitored are listed in individual data tables further below. Parameter SI Unit Description Value MMCH4 kg/kmol Molecular mass of methane MMCO kg/kmol Molecular mass of carbón monoxide MMCO2 kg/kmol Molecular mass of carbón dioxide MMO2 kg/kmol Molecular mass of oxygen MMH2 kg/kmol Molecular mass of hydrogen 2.02 MMN2 kg/kmol Molecular mass of nitrogen AMc kg/kmol Atomic mass of carbon (g/mol) AMh kg/kmol Atomic mass of hydrogen 1.01 (g/mol) AMo kg/kmol Atomic mass of oxygen AMn (g/mol) kg/kmol (g/mol) Atomic mass of nitrogen Pn Pa Atmospheric pressure at normal conditions Ru Pa.m3/kmol.K Universal ideal gas constant 8, Tn K Temperature at normal conditions MFO2 Dimensionless O2 volumetric fraction of air 0.21 GWPCH4 tco2/tch4 Global warming potential of methane 21 MVn m3/kmol Volume of one mole of any ideal gas at normal ρ CH4, n /D CH4, n kg/m3 Density of methane gas at normal conditions NAi,j Dimensionless Number of atoms of element j in component i, depending on molecular structure B.6.3 Ex-ante calculation of emission reductions: The methodology ACM0001 requires that the project proponents should provide an ex ante estimate of the methane generation from the landfill. This estimation is made using the Tool to determine methane emissions avoided from dumping waste at a solid waste disposal site.

42 page 42 In the tool the amount of methane produced by the landfill in the absence of the project activity in the year y (BECH4,SWDS,y) is calculated using a multiphase first order decay model. Then the methane destroyed in the baseline is MDproject,y = BECH4,SWDS,y * CE,y, where CE,y is the efficiency of the system to capture the LFG. The LFG collection efficiency for ex-ante estimations is assumed to be 50% for the first year and 65% onward, which is a conservative value compared to typical values considered in other landfills. As discussed in section B.4, in the absence of the proposed project activity, the configuration of passive venting at Cerro Patacón landfill would not destroy LFG. Thus an appropriate value of MDBL, is 0. MD project,y BE, CH4, y CE,y MD project,y = BE, CH4, y * CE y Amount of methane that would have been destroyed/combusted during the year y (tch 4 ) Amount of methane that would have been destroyed/combusted during the year y in the absence of the project (tch 4 ) Efficiency of the system to LFG capture during year y (%) ,50 0,65 0,65 0,65 0,65 0,65 0,65 The landfill operator also could generate electricity, hence, once the electricity generator becomes operational, part of the landfill gas collected would be sent to electricity generation unit. This decision will be taken during the first year or operation of the project. The maximum electricity generation potential (MW) can be estimated from the flow rate of landfill gas collected (m3/h). The technical advisor estimated that a dedicated LFG engine-generator will need a flow of 604 m3/h of landfill gas (@50% methane) to generate 1 MWe (one electric megawatt) 17. This assumption was based on the prefeasibility study developed in the landfill. This allows us to calculate the maximum power generation potential if all the LFG were converted to electricity. While LFG generation may vary continuously over time, power generation equipment is only available at specific power output capacities. Based on the amount of landfill gas available, and considering the prefeasibility report, the initial power generation could be in 2009 almost 5.3 MW, reaching up to 6.36 MW in The emissions reductions would be determined by the sum of the amount of electricity exported from the project site to the grid and the amount of electricity used on-site unrelated to the project activity as it would have been imported in the absence of the project activity. Based on the prefeasibility report, for the exante estimations the power plant would operate 7,884 h/yr (90 % of the year). Emissions from this power consumption from the grid in the project activity will also depend on the emissions factor for electricity generation, CEFelec,PR,y, which is estimated in Annex 3. A value of tco2/mwh (combined margin) was used in this project for the electricity component. This CO2 emissions factor for power generation was determined using a procedure indicated in the tool to calculate the emission factor for an electricity system that allows for CEFelec,BL,y remain fixed for each crediting period. The baseline emissions for the project are: 17 SCS Engineers, Cerro Patacon prefeasibility report 2006

43 page 43 BE y = (MD project,y - MD reg,y ) * GWP CH4 + EL LFG,y * CEF elec,bl,y + ET LFG,y * CEF ther,bl,y ER y Emissions reduction (tco 2 e) MD project,y MD reg,y GWP CH4 EL LFG,y CEF elec,bl ET LFG,y CEF ther,bl Amount of methane that would have been destroyed/combusted during the year y (tch 4 ) Amount of methane that would have been destroyed/combusted during the year y in the absence of the project (tch 4 ) Global Warming Potential value for methane for the first commitment period (tco 2 e/tch 4 ) Net quantity of electricity produced using LFG, which in the absence of the project activity would have been produced by power plants connected to the grid or by an onsite/off-site fossil fuel based captive power generation, during year y (MWh) CO 2 emissions intensity of the baseline source of electricity displaced (tco 2 e/mwh) Quantity of thermal energy produced utilizing LFG, which in the absence of the project activity would have been produced from onsite/off-site fossil fuel fired boiler, during the year y (TJ) CO 2 emissions intensity of the fuel used by boiler to generate thermal energy, which is displaced by LFG based thermal energy generation (tco 2 e/tj) ,606 0,606 0,606 0,606 0,606 0,606 0,606 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,0 0,0 0,0 0,0 0,0 0,0 0,0 According to the methodology the only project emissions are related with the consumption of energy in the project scenario. The project emissions from electricity consumption PEEC,y will be calculated following the latest version of Tool to calculate baseline, project and/or leakage emissions from electricity consumption. Considering the information presented in the prefeasibility study the project activity involves LFG recovery, which requires a blower for gas pumping, and electricity is needed for this purpose, then this electricity will be purchased from the grid (based on manufacturer s information it is assumed that a blower will use 75 HP or about 56 kw to pump 5,000 m3/h of LFG (@ 50% methane), and does not consider the consumption of heat, then the PEFC,j,y value is neglected. Thus the project emissions PEy = PEEC,y. The EFEL,j,y correspond to the value for CEFelec,BL,y given in section B.6.2. TDLy can be obtained by recent, accurate and reliable data available within the host country or a 20% default value can be used. For the project the latest option has been selected. PE y ECPJ,j,y EF EL,j,y TDL j,y PEy = ECPJ,j,y * EF EL,j,y * (1+TDLj,y) Project emissions from electricity consumption in year y (tco2/yr) Quantity of electricity consumed by the project electricity consumption source j in year y (MWh/yr) Emission factor for electricity generation for source j in year y (tco2/mwh) 0,606 0,606 0,606 0,606 0,606 0,606 0,606 Average technical transmission and distribution losses for providing electricity to source j in year y 0,20 0,20 0,20 0,20 0,20 0,20 0,20

44 page 44 B.6.4 Summary of the ex-ante estimation of emission reductions: Year Estimation of baseline emissions (tco2e) Estimation of project emissions (tco2e) Estimation of leakage (tco2 e) Estimation of overall emission reductions (tco2e) Total (Tonnes of CO2e) B.7 Application of the monitoring methodology and description of the monitoring plan: B.7.1 Data and parameters monitored: Data / Parameter: LFGtotal,y Data unit: m 3 Description: Total amount of landfill gas captured. Source of data to be Measured by a flow meter used: Value of data applied for the purpose of calculating expected emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: Details of assumptions, calculations and resulting data are presented in sections B.6.3 and B.6.4. Continuous mass flow meters will be used to measure flow rates. Data will be measured and recorded electronically, and data will be kept during the crediting period and two years after. Data will also be aggregated monthly/yearly. An independent company, accredited by local authorities, will conduct contrasting and data checking in accordance with manufacturer specifications, to ensure accuracy. Flow meter will adjust volume flow for temperature and pressure. Data / Parameter: LFGflare,y Data unit: m 3 Description: Amount of landfill gas flared (fed to flare(s)) Source of data to be used: Measured by a flow meter Value of data applied Details of assumptions, calculations and resulting data are presented in sections

45 page 45 for the purpose of calculating expected emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: B.6.3 and B.6.4. Data will be measured for each flare and recorded electronically, and data will be kept during the crediting period and two years after. Data will also be aggregated monthly/yearly. Continuous mass flow meters will be used to measure flow rates. An independent company, accredited by local authorities, will conduct contrasting and data checking in accordance with manufacturer specifications, to ensure accuracy. Flow meter will adjust volume flow for temperature and pressure. Data / Parameter: LFGelectricity,y Data unit: m 3 Description: Amount of landfill gas combusted in power plant (fed into electricity generator(s)) Source of data to be Measured by a flow meter used: Value of data applied for the purpose of Details of assumptions, calculations and resulting data are presented in sections calculating expected B.6.3 and B.6.4. emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: Continuous mass flow meters will be used to measure flow rates. Data will be measured for each power plant at least once per hour, recorded electronically, and data will be kept during the crediting period and two years after. Data will also be aggregated monthly/yearly. Continuous mass flow meters will be used to measure flow rates. An independent company, accredited by local authorities, will conduct contrasting and data checking in accordance with manufacturer specifications, to ensure accuracy. Flow meter will adjust volume flow for temperature and pressure. Only applicable if the landfill operator decides to implement the energy generation component. Data / Parameter: Data unit: Description: Source of data to be used: Value of data applied for the purpose of calculating expected emission reductions in PEflare,y tco2e Emission caused by methane not being destroyed in the course of flaring in year y On-site measurements / calculations -

46 page 46 section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: Data / Parameter: Data unit: Description: Source of data to be used: Value of data applied for the purpose of calculating expected emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: Data / Parameter: Data unit: Description: Source of data to be used: Value of data applied for the purpose of calculating expected emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: The parameters used for determining the project emissions from flaring of the residual gas stream in year y (PEflare,y) will be monitored as per the Tool to determine project emissions from flaring gases containing methane Regular maintenance will ensure optimal operation of the flare. Analyzers will be calibrated annually according to manufacturer s recommendations. Note: A determination of PEflare,y using the flaring tool requires the measurements of a number of additional parameters. These are listed and described following the variables specifically mentioned in ACM0001. WCH4,y m3 CH4 / m3 LFG Methane fraction in the landfill gas Measured by a gas analyzer (dry basis or wet basis corrected to a dry basis) 50% Methane content will be measured using a continuous gas analyzer. Data will be measured and recorded electronically, and data will be kept during the crediting period and two years after. Data will also be aggregated monthly/yearly. An independent company will contrast instruments with reference instruments, in accordance with manufacturer specifications. No comments ELLFG MWh Net amount of electricity generated using LFG. Measured. Required to estimate the emission reductions from electricity generation from LFG, if credits are claimed. Details of assumptions, calculations and resulting data are presented in sections B.6.3 and B.6.4 The quantities will be measured with electricity meters installed on the generators units. The readings will be made at least once per hour and electronically stored in a spreadsheet. Data will be recorded during crediting period and two years after. Electric meters are quite accurate. Moreover, the meter will be calibrated periodically according to manufacturer s specification.

47 page 47 Any comment: Data / Parameter: Data unit: Description: Source of data to be used: Value of data applied for the purpose of calculating expected emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: Only applicable if the landfill operator decides to implement the energy generation component. ECPJ,j,y MWh Total amount of electricity required/consumed to meet project requirement during year y Measured. Required to determine CO2 emissions from use of electricity to operate the project activity. Details of assumptions, calculations and resulting data are presented in sections B.6.3 and B.6.4 The records of any electricity imported in the baseline too, should be recorded at the start of project. Electric meters will be installed at the entrance of project installations and measurements will be taken at least hourly and values will be stored at a spreadsheet. Data will be recorded during crediting period and two years after. Electric meters are quite accurate. Moreover, the meter will be calibrated periodically, according to manufacturer s specifications. No comments Data / Parameter: Regulatory requirements relating to landfill gas projects Data unit: - Description: Regulatory requirements relating to landfill gas projects may affect the value of AF or MDreg,y (see above). Source of data to be National legislation and mandatory regulations. used: Value of data applied for the purpose of calculating expected 0% emission reductions in section B.6.3 Description of Although the methodology only requires recording at the renewal of the crediting measurement methods period, the information related to all relevant policies and circumstances will be and procedures to be collected and recorded annually. Information will be kept during crediting period applied: and two years after. QA/QC procedures to Legal documents. be applied: Any comment: No comments Data / Parameter: Data unit: Operation of the power plant hours

48 page 48 Description: Source of data to be used: Value of data applied for the purpose of calculating expected emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: Data / Parameter: Data unit: Description: Source of data to be used: Value of data applied for the purpose of calculating expected emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: Effective time of power plant operating Measured with run meter connected to the power plant Details of assumptions, calculations and resulting data are presented in sections B.6.3 and B.6.4 Records will be kept during the crediting period and two years after. Meters are quite accurate. But it will be calibrated according to manufacturer specifications. This is monitored to ensure methane destruction is claimed for methane used in electricity plant when it is operational. Only applicable if the landfill operator decides to implement the energy generation component. Operation of the flare station hours Effective time of flare station operating Measured with run meter connected to the blower Details of assumptions, calculations and resulting data are presented in sections B.6.3 and B.6.4 Records will be kept during the crediting period and two years after. Meters are quite accurate. But it will be calibrated according to manufacturer specifications. It was assumed that the flare station will operate only when the power plant will shutdown. The following variables are required to determine flare efficiency using the Tool. For ex-ante estimates fixed flare efficiency is assumed, so estimates of these data are not needed. Data / Parameter: Data unit: Description: Source of data to be FVRG,h m3/h Volumetric flow rate of the residual gas in dry basis at normal conditions in the hour h. On-site measurements.

49 page 49 used: Value of data applied for the purpose of calculating expected emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: Not used in ex-ante estimates. Measured at least one per hour and electronically using a flow meter, and will be kept during the crediting period and two years after. Flow meters will be periodically calibrated according to the manufacturer s recommendation. The same basis (dry or wet corrected to a dry basis) is considered for this measurement when the residual gas temperature exceeds 60ºC. Data / Parameter: fvi,h Data unit: - Description: Volumetric fraction of component i in the residual gas in the hour h Source of data to be On-site measurements using a continuous gas analyser. used: Value of data applied for the purpose of calculating expected Not used in ex-ante estimates. emission reductions in section B.6.3 Description of As a simplified approach (see Eq. 3a), only methane content of the residual gas measurement methods will be measured and the remaining part will be considered as N2. Methane and procedures to be concentration would be measured at least once per hour using a continuous gas applied: analyzer, and data records will be kept during the crediting period and two years QA/QC procedures to be applied: Any comment: after. Analyzers will be periodically calibrated according to the manufacturer s recommendation. A zero check and typical value check to be performed by comparison with a standard certified gas. The same basis (dry or wet corrected to a dry basis) is considered for this measurement when the residual gas temperature exceeds 60ºC. If project operator decides to monitor emissions continuously, the following two variables should be monitored: Data / Parameter: to2,h Data unit: - Description: Volumetric fraction of O2 in the exhaust has of the flare in the hour h. Source of data to be On-site measurements using a continuous gas analyser. used:

50 page 50 Value of data applied for the purpose of calculating expected emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: Data / Parameter: Data unit: Description: Source of data to be used: Value of data applied for the purpose of calculating expected emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: Not used in ex-ante estimates. Measured at least once per hour and electronically using a continuous gas analyzer, and will be kept during the crediting period and two years after. Extractive sampling analyzers with water and particulates removal devices or in situ analyzers for wet basis determination. The point of measurement (sampling point) will be in the upper section of the flare (80% of total flare height). Sampling will be conducted with appropriate sampling probes adequate to high temperatures level (e.g. inconel probes). Analyzers will be periodically calibrated according to the manufacturer s recommendation. A zero check and typical value check to be performed by comparison with a standard certified gas. The wet basis will be corrected to a dry basis for consistency in the results. fvch4,fg,h mg/m3 Concentration of methane in the exhaust gas of the flare in dry basis at normal conditions in the hour h On-site measurements using a continuous gas analyzer. Not used in ex-ante estimates. Extractive sampling analysers with water and particulates removal devices or in situ analyser for wet basis determination. The point of measurement (sampling point) shall be in the upper section of the flare (80% of total flare height). Sampling shall be conducted with appropriate sampling probes adequate to high temperatures level (e.g. inconel probes). An excessively high temperature at the sampling point (above 700 ºC) may be an indication that the flare is not being adequately operated or that its capacity is not adequate to the actual flow. Monitoring frequency: Continuously. Values to be averaged hourly or at a shorter time interval. Analysers will be periodically calibrated according to manufacturer s recommendation. A zero check and a typical value check will be performed by comparison with a standard gas. Monitoring of this parameter is only applicable in case of enclosed flares and continuous monitoring of the flare efficiency. Measurement instruments may read ppmv or % values. To convert from ppmv to mg/m3 simply multiply by % equals ppmv. The wet basis will be corrected to a dry basis for consistency in the results.

51 page 51 If project proponent decides to use the 90% default value, the following two variables should be monitored: Data / Parameter: Tflare Data unit: ºC Description: Temperature in the exhaust gas of the flare. Source of data to be On-site measurements using a thermocouple. used: Value of data applied for the purpose of calculating expected Not used in ex-ante estimates. emission reductions in section B.6.3 Description of Continuous measurement of the temperature of the exhaust gas stream in the flare measurement methods by a thermocouple. A temperature above 500 ºC indicates that a significant and procedures to be amount of gases are still being burnt and that the flare is operating. applied: QA/QC procedures to Thermocouples will be replaced or calibrated every year. be applied: Any comment: Data / Parameter: Data unit: Description: Source of data to be used: Value of data applied for the purpose of calculating expected emission reductions in section B.6.3 Description of measurement methods and procedures to be applied: QA/QC procedures to - An excessively high temperature at the sampling point (above 700 ºC) may be an indication that the flare is not being adequately operated or that its capacity is not adequate to the actual flow. ηflare,h Dimensionless Flare efficiency in hour h Values specified in Methane Flaring Tool. 0.9 Calculated as specified in Methane Flaring Tool as follows: 0%, if the temperature in the exhaust gas of the flare (Tflare) is below 500 C for more than 20 minutes during the hour h. 50%, if the temperature in the exhaust gas of the flare (Tflare) is above 500 C for more than 40 minutes during the hour h, but the manufacturer s specifications on proper operation of the flare are not met at any point in time during the hour h. 90%, if the temperature in the exhaust gas of the flare (Tflare) is above 500 C for more than 40 minutes during the hour h and the manufacturer s specifications on proper operation of the flare are met continuously during the hour h.

52 page 52 be applied: Any comment: No comments All monitored data will be stored / archived in the power plant site office by both manual and electronic modes and can be recovered at any point of time through the entire crediting period. Also a separate monitoring system will be in place to take care of emission reductions. B.7.2 Description of the monitoring plan: A monitoring plan will be implemented to ensure that the approved monitoring methodologies ACM0001 and AMS.I.D are correctly implemented in order to enable the accurate and transparent determination of avoided emissions. The plan will incorporate the QA/QC procedures described in 7.1 above. Since the proposed project activity involves the methane capture, flaring and energy generation, the schematic is shown in Figure 2 below, according to methodologies applied. Figure 5: Monitoring points in the project. The variables to be monitored were all listed and described in Section B.7.1. The overall management structure responsible for project monitoring is as follows.