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

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

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

3 SECTION A. General description of small-scale project activity A.1 Title of the small-scale project activity: Project Title: Bah Jambi Palm Oil Mill Effluent Treatment and Biogas Utilization Project PDD Version: 3.0 Date: 17/10/2010 A.2. Description of the small-scale project activity: Bah Jambi Palm Oil Mill (hereafter, Bah Jambi or the mill ) owned by PT Perkebunan Nusantara IV (Persero) is located at Huta Bayu Raya, Simalungun, North Sumatera, Indonesia. The Bah Jambi Palm Oil Mill Effluent Treatment and Biogas Utilization Project (the Project ) is developed by PT Melati Energi Sumatera ( Project Developer ) and consists of the design, construction, and operation of biogas digesters, collection equipment, and grid connected biogas powered generation. Bah Jambi is an existing palm oil mill which has been in operation since The mill has a capacity to process 60 metric tonnes of Fresh Fruit Bunches (FFB) per hour 1. The palm oil milling and extraction process will generate palm oil mill effluent (POME). The ratio of the POME generated per tonne of FFB has been measured to be 78% 2. The mill processed 290,000t FFB (Fresh Fruit Bunch) in calendar year The production is expected to increase to 342,250t-FFB per annum from 2013 onwards due to the maturing of new oil palm plantation resulting for a shift in some land use at PTPN IV from tea to oil palm. The corresponding palm oil mill effluent (POME) generated from the processing of FFB is approximately 236,000m 3 and this is expected to increase to approximately 267,000m 3 per annum from 2013 onwards. In order to reduce impact on the environment, the Indonesia government has set a catchment discharge limit of 350 mg/l COD for treated POME in Sumatra 3. The standard industry practice in Sumatra for meeting this discharge limit is the treatment of POME through conventional open lagoons system. This is the most economical option available and is the method used at Bah Jambi. This system is made up of a series of acidification, anaerobic, facultative and aerobic lagoons. Mill (Raw POME) Cooling pond Acidification pond Anaerobic ponds Facultative ponds 2 Algal ponds River discharge 1 Mill business license which has indicated the approval of the capacity by the local Bupati 2 Testing procedures and results are provided as supporting documents 3 MenLH Decree 51/10/1995, Attachment IVB (Palm Industry) on Effluent Discharge Standard for Palm Industry of Indonesia 3

4 Figure A.1: Effluent treatment (Baseline Scenario) The natural anaerobic decay of the organic matter 4 in the POME significantly reduces Chemical Oxygen Demand (COD) concentration by transforming the more complex carbon chains into carbon s simplest organic form which is methane (CH4). Methane is a potent greenhouse gas (GHG) and through the anaerobic process occurring in open lagoon systems is released into the atmosphere in an uncontrolled manner. The power sector in both developed and developing countries is generally the largest contributor to anthropogenic GHG emissions. The mixed generation of State owned electricity grid in Sumatra 5 (Grid) relies heavily on fossil fuel sources and therefore continues to be a source of GHG emissions. The proposed project activity is a combination of two components (Type I and Type III). As, according to EB 28 paragraph 56, the proposed project activity does not exceed the limits of the small-scale CDM project activity as stated in paragraph 28 of the decision - /CMP.2. The average annual emission reduction of the project activity over the fixed (10 years) crediting period is 51,780 tco 2e. Purpose of the project activity: Type I Component: The proposed project activity is to construct and operate a small scale biogas power plant which will sell electricity directly into the Grid. The total installed capacity of the project activity is 1.67MW and the total expected annual electricity generated is expected to be on average 11,574MWh/annum against the baseline scenario. Type III component: The proposed project activity involves the installation of a closed continuous-flow stirred tank reactor (CSTR) contact process anaerobic digester system to replace the existing open anaerobic and facultative lagoons for the treatment of the POME generated before discharging to the river. The effluent after sludge removal will be channeled to the existing aerobic lagoons for further treatment. Biogas generated will contain 65% methane per manufacturer s specifications and will be captured in the enclosed anaerobic digester tanks. Methane recovered will be used for the generation of electrical energy for sale to the Grid. Any balance amount of biogas will be flared in an enclosed flare system. Methane recovery and utilization or destruction through the implementation of the project activity will contribute to significant greenhouse gases (GHGs) emission reductions. In addition to GHG emission reductions, the project activity will also contribute toward sustainable development, in line with the National Energy Policy (NEP) 6 and Green Energy Policy (GEP) 7 of 4 POME has one of the highest COD concentrations of any waste fluid. 5 Grid emission factor calculation sheet this provides the generation mix in the island of Sumatera, Indonesia. 6 NEP seeks to improve primary energy mix by 2025 by reduce the share of oil to 20% or less and increasing the contribution of biofuels, geothermal energy and other new and renewable energy. 7 GEP s goal is to build a system of sustainable energy supply and utilization to support achieving national sustainable development through increased utilization of renewable energy, the use of energy efficient technologies and energy conservation. 4

5 Indonesia. The contributions towards sustainable development and other benefits of the proposed project activity include the followings: Environmental sustainability Upon implementation of the project activity, the localized air quality will be improved by the removal of hydrogen sulfide (H2S), a toxic and foul odor residual gas originating from the natural sulfur in the oil palm fruit, via the capture of the biogas now generated by the POME treatment in open ponds; The implantation of the proposed project activity is expected to have the same results with the baseline scenario of achieving the discharge limit permitted by the local authorities, if not better. The efficiency of the biogas recovery plant is approximate 85% as compare to the baseline scenario which the efficiency of the whole series of open (from anaerobic lagoon till final discharge) is 85-90%. The proposed project activity is a high risk project which could cause possible explosion or fire. Therefore the project activity will be implemented with European safety standards. Furthermore the project participant plans to employ a fulltime health and safety officer to monitor the safety and health issue of the power plant. Economy sustainability The project activity would create work opportunities both short term (during construction period) and long term (more workers are required to run the biogas plant); Local economics would be improved in view of the need of local supplies and frequent visit of consultants during project construction, implementation and ongoing monitoring; By using the methane captured (renewable sources) for energy generation, it helps to reduce Indonesia s dependency on fossil fuel import and thereby strengthens the economic growth of the country. Social sustainability The project, which is located adjacent to the Bah Jambi mill, would have no adverse impacts on the social environment of the surrounding area. In view of its positive environmental and economy contributions, the project would promote social harmony with the local society. Stakeholders consultation meeting has been held on 02/04/2009. The response of the local community to the project was highly positive. Due considerations to the viewpoints expressed by the stakeholders during the dialogue has been incorporated into the development of the project. Technology transfer The technology used in the project activity is a well proven technology for POME treatment developed in Malaysia, where key features are based on world-wide experience and advancement in CSTR technology and principles from Annex I countries. Advanced equipment and instruments required for the project will be sourced from Annex I countries; The biogas recovery technology which will be implemented by the project activity had been established in Malaysia since The first project was installed in Keck Seng Palm Oil Mill. Workers will be trained by the technology supplier of this advanced technology, as well as gain experience from constructing, installing and operating the project. The results of this capacity building will contribute towards the development of biogas as a significant renewable energy source in Indonesia. The gas engines use for power (electricity) generation will be procured from Europe 5

6 The outcome of implementing the proposed project activity can contribute to the sustainability development criteria as according to the requirements of the DNA of Republic of Indonesia 8. A.3. Project participants: Name of Party involved (*) ((host) indicates a host Party) Private and/or public entity(ies) project participants (*) (as applicable) Indonesia (Host) PT Melati Energi Sumatera No Kindly indicate if the Party involved wishes to be considered as project participant (Yes/No) The Netherlands E.ON Carbon Sourcing GmbH No (*) In accordance with the CDM modalities and procedures, at the time of making the CDMPDD 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. A.4. Technical description of the small-scale project activity: A.4.1. Location of the small-scale project activity: A Host Party(ies): The Host Party for this project is Republic of Indonesia (here after Indonesia ). A Region/State/Province etc.: The project is located within the province of North Sumatera. A City/Town/Community etc: Huta Bayu Raya A Details of physical location, including information allowing the unique identification of this small-scale project activity : The proposed project activity will be implemented at Bah Jambi Palm Oil Mill owned by PT. Perkebunan Nusantara IV (Persero). The mill is located at Huta Bayu Raya, Simalungun, North Sumatera, Indonesia, as shown in the Figure 1 below. The geographic coordinate of the project location is at: Latitude N Longitude E 8 6

7 Figure 1a Palm Oil Mill layout Figure 1b: Bah Jambi Project Location A.4.2. Type and category(ies) and technology/measure of the small-scale project activity: 7

8 Type and category: According to Appendix B to the Simplified Modalities and Procedures for Small-Scale CDM Project Activities, the Project type and category are defined as follows: Methane avoidance component: Type III: Other project activities Category III.H: Methane Recovery in Wastewater Treatment Sectoral Scope 13: Waste handling and disposal Version: 15 Electricity generation component: Type I: Renewable energy projects Category I.D: Grid connected renewable electricity generation Sectoral Scope 1: Energy industries (renewable /non-renewable sources) Version: 16 The existing POME treatment system at Bah Jambi is an opened lagoon system. The proposed project activity will implement the technology for methane recovery which involves the application of the Continuous Flow-Stirred Tank Reactor (CSTR) Contact Process anaerobic digester design for POME treatment. The biogas recovered from the application of this technology will be used for electricity generation which will be sold to PT PLN (Persero), the local State-owned electricity company. During circumstances where it is not possible to store or consume all available biogas through generation, the biogas will be flared via a properly monitored and maintain enclose flare system. Process and technology description Anaerobic Digester with Methane recovery Under the project activity, the raw effluent from the mill will be taken from the mill de-oiling pond and will undergo cooling and acidification. After this process, the effluent will be pumped to the CSTR system for anaerobic digestion and methane recovery. The tank system will provide an adequate hydraulic retention time of approximately 18 days for the anaerobic digestion. For the present project, three fixedroof tanks with capacity of 3,700 m 3 each and one floating-roof tank with capacity of 3,000 m 3 have been designed for a palm oil mill effluent (POME) flow of 815m 3 /day. A dual function mixing system, consisting of two effluent circulation pumps and a gas-lifting mixing system will be incorporated in each digester tank. The floating roof digester tanks will provide a small buffer-storage and pressure regulation for the biogas generated. The complete-mixed enclosed digester tank system will facilitate long term continuous operations without the need of interruption for sludge removal. The treated effluent with the residual sludge from the anaerobic digester tanks will be led to a holding tank with aeration in order to terminate the anaerobic process. The subsequent treatment step involves a sludge separation and dewatering system. The dewatered sludge will be subject to aerobic composting with EFB at the mill. The effluent will be directed to the existing aerobic lagoons before being discharged to the watercourse. 8

9 The outgoing effluent will comply with the effluent discharge standards under the MenLH Decree 51/10/1995, Attachment IV (Palm Industry) on Effluent Discharge Standard for Palm Industry of Indonesia before discharging to the catchment. The CSTR digester system is capable of achieving 85% treatment efficiency or better in terms of anaerobic conversion and removal of COD input to the system. The balance 15% of COD is mostly in the form of wasted anaerobic bacteria sludge and non-digestible fibers. The sludge separation and sludge dewatering step applied to the aerated effluent from the anaerobic digester will further reduce the COD to approximately 5% of the total COD input before discharging to the aerobic lagoons for further treatment. The design and construction of the anaerobic digester plant will comply with Indonesian Technical Specifications and Standards. Pressure tests and hand monitoring during commissioning and operation will ensure that the anaerobic digester tanks and biogas pipeline will be free from biogas leaks. The following measures will ensure proper construction, commission, and operation of digester system and associated pipework: Fabrication and installation in compliance with Technical Specifications and Standards. Inspections and corrections to all welds before and during commissioning and operations. Hydrostatic tests and gas-leakage test on the completed tanks including gauges Pressure testing of tanks and pipework Documentation and reporting systems The project incorporates best practices features for CSTR technology and principles. This technology design is proven with the successful implementation of similar systems in Indonesia and Malaysia. Improvements over common industry practice for POME treatment include: Reduced emissions of greenhouse gases Increased effectiveness of sludge treatment; Reduced civil maintenance; Improved monitoring for better management of environmental compliance; Elimination of odor from of hydrogen sulfide; Access to renewable energy in the form of CH 4. Operations and maintenance training will be provided to staff by the CSTR supplier and training in relation to activities required under the monitoring program and for best safety practices will be provided by the Project Developer. Methane combustion for electricity generation The biogas will be used in a grid connected power generator (genset) consisting of two biogas fired engines and alternators, with a combined installed capacity of 1.67 MWe. The sulfur content of the biogas will be reduced to comply with engine specifications with a biological H 2 S scrubber. Flaring The proposed project activity will install an enclose flare system to burn any unused biogas recovered. The flare system will also serve as a safety device in cases where generation is not possible and available gas storage has reached capacity. The capacity of the enclose flare system is 1,500 Nm 3 /h. 9

10 Table A.1 Technical specification of the project activity Equipment under Project activity Specification Methane Recovery System Tank Size (combined) 14,100 m3 Reactor type Enclose tank CSTR Recover system efficiency 85% Electricity Generation Installed Capacity 1.67 MW Voltage 400 V Units 2 Flare Type Enclosed Capacity 1,500 Nm 3 /h Unit 1 Efficiency 90% The overall design of the proposed system reflects the current best practice in the treatment of POME in situations where the utilization of biogas can create value as a renewable fuel source. The system used in the project activity will prevent the baseline lagoon emissions through the methane recovery system and will partially displace the grid s fossil fuel based electricity. The proposed project activity will provide a more effective system in treating the POME as compare to the defined baseline scenario 910 as the tank design allows for more effective real-time monitoring of the process. The odor created by H 2 S in the open lagoon will be eliminated and the methane created will be converted to CO 2 either through combustion in the biogas engine for electricity generation or the enclosed flare. The resulting CO 2 released captures carbon in the same form as when it was originally absorbed by the oil palm trees before being deposited in the oil palm fruit and then making its way into the POME. In this way carbon is returned to its natural and sustainable cycle. The recovered biogas will be utilized to generate electricity which will be exported to the Sumatera National Grid. By doing so, the project activity will displace the same amount of electricity that is expected to be generated by the project activity which are currently generated by the mixed fuel power generators (mainly fossil fuel) that are connected to the Sumatera National Grid 11. The displacement will reduce carbon emissions. There will be a transfer in both technology and experience to the locals within the project location. The biogas recovery system deployed is a technology designed in Malaysia. The engineering company has more than 25 years of experience in POME treatment in the palm oil mill sector in Malaysia and Indonesia. In order to efficiently generate electricity, the project participant will procure and deploy new gas engines from Europe. Training will be provided to the local team to execute and manage the project activity, thus increasing the knowledge and technical level of local workers. Additionally, transfer of technology will be achieved 9 Protect the environment and make profit from the waste in palm oil industry; Frank Schuchardt 10 Pedoman Pengelolaan Limbah Industri Kelapa Sawit; Department of Agriculture, Indonesia 11 Calculation excel sheet of Grid Emission factor. 10

11 through working with quality sub-contractors and mill partners to increase the efficiency of the project implementation process. The engineering design especially the equipment of the project activity will be designed to meet European safety standards for operation in proximity to combustible gas. In order to ensure the project is implemented and operated at a minimum risk to personal safety, the project operator will continuously review for improvements of the standard operating procedures in accordance with European style Occupational Health and Hazard Standards. The project activity will be both environmentally sound and will provide a safe environment for individuals involved in its implementation and operation. A.4.3 Estimated amount of emission reductions over the chosen crediting period: The estimated amount of annual emission reductions over the fixed crediting period of 10 years is summarized in the Table A.2 below. Table A.2: Estimated amount of emissions reductions Years , , , , , , , , , , ,424 Total emission reductions (tonnes of CO 2 e) 517,809 Total number of crediting years 10 Annual average over the crediting period of estimated reductions (tonnes of CO 2 e) 51,780 Annual estimation of emission reductions in tonnes of CO 2 e A.4.4. Public funding of the small-scale project activity: No public funding is involved in the project. 11

12 A.4.5. Confirmation that the small-scale project activity is not a debundled component of a large scale project activity: The project participants can confirm that there is no registered small scale project activity or an application to register another small scale CDM project activity whose project boundary is within 1km of the project boundary of the proposed small-scale activity at the closest point. Given this, and confirmation that the project is not part of a larger project activity, the project satisfies the requirements of Appendix C of the Simplified Modalities and Procedures for Small Scale CDM project activities and is not considered a debundled component of a large scale project activity. SECTION B. Application of a baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the small-scale project activity: The project will be using the following approved baseline and monitoring methodology available at the UNFCCC website: Methane avoidance component (Type III): Title Reference Version Methane Recovery in Wastewater Treatment AMS III.H Version 15, EB 55 Tool to determine project emissions from flaring gases containing methane Tool to calculate baseline, project and/or leakage emissions from electricity consumption Electricity generation component (Type I): Annex 13 EB 28 Annex 7 Version 01, EB 39 Title Reference Version Grid connected renewable electricity generation AMS I.D Version 16, EB 54 Tool to calculate the emission factor for an electricity system Annex 14 Version 02, EB50 General tools and guidelines: Title Reference Version Indicative Simplified Baseline and Monitoring Methodologies for Selected Small-Scale CDM Project Activity Categories Annex 20 Version 12, EB 41 Guidance on the Assessment of Investment Analysis Annex 45 Version 02, EB 41 Attachment A to Appendix B of the simplified modalities and procedures for small-scale CDM project activities will apply to this project 12

13 For more information on both methodologies, please refer to the link: B.2 Justification of the choice of the project category: Methane avoidance component (Type III): Criteria to qualify as SSC Project activity Reference Introduction of a sequential stage of wastewater treatment with biogas recovery and combustion, with or without sludge treatment, to an existing anaerobic wastewater treatment system without biogas recovery (e.g., introduction of treatment in an anaerobic reactor with biogas recovery as a sequential treatment step for the wastewater that is presently being treated in an anaerobic lagoon without methane recovery) The lagoons are ponds with a depth greater than two meters without aeration. The value for dept is obtained from engineering design documents, or through direct measurement or by dividing the surface area by total volume. If the lagoon filling level varies seasonally, the average of the highest and lowest levels may be taken. Ambient temperature above 15 C, at least during part of the year, on a monthly average basis; The minimum interval between two consecutive sludge removal events shall be 30 days. The recovered methane measured may also be utilized for thermal or electrical generation directly instead of combustion/flaring Applicable: The project activity consists of the introduction of sequential stage of wastewater treatment with biogas recovery and electricity generation and export to the electricity grid of Sumatra, Indonesia. Discharge to an existing anaerobic wastewater treatment system without biogas recovery. Applicable: The depth of the lagoon is 5.5 meters which has been obtain from the engineering design of the palm oil mill. The level of the open anaerobic lagoons are not expected to have varies level. This is due to the palm oil milling continues throughout the year. Applicable: Indonesia is located in the tropics. The average temperature of the country is o C. Applicable: The normal practice of de-sludging by the palm oil mill on the anaerobic lagoons are every 3 months once 13. According to the local regulation 14, the de-sludge of the ponds are upon needed. Applicable: The biogas generated will be combusted for electricity generation and exported to the electricity grid of Sumatra, AMS III.H, point 1(f) 12 AMS III.H point 2 (a) AMS III.H point 2 (b) AMS III.H point 2 (c) AMS III.H, point 3(a) 12 The existing anaerobic ponds are deeper than 2 meters, without aeration and the ambient temperature is above 15 C throughout the year (tropical area). The volumetric loading rate of COD > 0.1 kg COD/m 3 /day; the residence time is > 30 days (refer to section B.4 for details) 13 Mill operation records 14 MenLH Decree 51/10/1995, Attachment IVB (Palm Industry) on Effluent Discharge Standard for Palm Industry of Indonesia 13

14 If the recovered biogas is used for project activities covered under paragraph 2 (a), that component of the project activity can use a corresponding methodology under Type I. If the recovered biogas is utilized for production of hydrogen (project activities covered under paragraph 2 (d)), that component of project activity shall use corresponding category AMS-III.O. In case of project activities covered under paragraph 2 (b) if bottles with upgraded biogas are sold outside the project boundary the end-use of the biogas shall be ensured via a contract between the bottled biogas vendor and the end-user. No emission reductions may be claimed from the displacement of fuels from the end use of bottled biogas in such situations. If however the end use of the bottled biogas is included in the project boundary and is monitored during the crediting period CO 2 emissions avoided by the displacement of the fuels is eligible under a corresponding Type I methodology, e.g., AMS-I.C. In case of project activities covered under paragraph 2 (c i) emission reductions from the displacement of the use of natural gas is eligible under this methodology, provided the geographical extent of the natural gas distribution grid is within the host country boundaries. In case of project activities covered under paragraph 2 (c ii) emission reductions for the displacement of the use of fuels can be claimed following the provision in the corresponding Type I methodology, e.g., AMS-I.C. In case of project activities covered under paragraph 2 (b) and (c), this methodology is applicable if upgrade is done by one of the following technologies such that the methane content of the upgraded biogas is in accordance with relevant national regulations (where these exist) or, in the absence of national regulations, a minimum of 96% (by volume). These conditions are necessary to ensure that the recovered biogas is completely destroyed through combustion in an end use. New facilities (Greenfield projects) and project activities involving a change of equipment resulting in a capacity addition of the wastewater or Indonesia. Applicable: Since the project activity will export the generated electricity to the electricity grid of Sumatra, Indonesia, correspondent methodology AMS-I.D has been considered. Not applicable to the project activity Not applicable to the project activity. Not applicable to the project activity. Not applicable to the project activity. Not applicable to the project activity. Not applicable. The project activity is not a Greenfield project and does not involve a change of equipment AMS III.H. Point 4 AMS-III.H., points 5 AMS-III.H., points 6 AMS-III.H., points 7 AMS-III.H., points 8 AMS-III.H., points 8 AMS-III.H., points 10 14

15 sludge treatment system compared to the designed capacity of the baseline treatment system are only eligible to apply this methodology if they comply with the requirements in the General Guidance for SSC methodologies concerning these topics. In addition the requirements for demonstration of the remaining lifetime of the equipment replaced as described in the general guidance shall be followed. For project activities covered under paragraph 2 (b) and (c) additional guidance provided in annex 1 shall be followed for the calculations in addition to the procedures in the relevant sections below. The location of the wastewater treatment plant shall be uniquely defined as well as the source generating the wastewater and described in the PDD. Measures are limited to those that result in aggregate emission reductions of less than or equal to 60 kt CO 2 equivalent annually from all Type III components of the project activity. Table B.1: Applicability of SSC AMS III.H (version 15) resulting in a capacity addition to the wastewater compared to the designed capacity of the baseline treatment system Not applicable to the project activity Applicable: The mill is the only source generating the wastewater sent to the well defined treatment plant 15. Please refer to section A.2 and A.4.1 for details. Applicable: The emission reductions for the type III component remain below 60,000 tco 2e per year throughout the entire crediting period. See section B.6.4 for details. AMS III.H, point 11 AMS III.H, point 12 AMS III.H, point 13 Electricity generation component (Type I): Applicability Criteria Project Activity Reference This category comprises renewable energy generation units, such as photovoltaic, hydro, tidal/wave, wind, geothermal and renewable biomass, that supply electricity to and/or displace electricity from an electricity distribution system that is or would have been supplied by at least one fossil fuel fired generating unit. This methodology is applicable to project activities that (a) install a new power plant at a site where there was no renewable energy power plant Applicable: The proposed project is based on biogas (recovered from POME), a renewable energy generation source. The proposed project shall party displace electricity from the national electricity distribution system that is supplied by at least one fossil fuel fired generating unit. Applicable: The proposed project activity is a new installation of a biogas renewable electricity AMS-I.D Point 1 AMS-I.D Point 2 15 The engineering design of the biogas recovery plant has been designed according to the palm oil mill capacity (e.g. flow rate of the POME and the COD loading). Hence it is impossible to cater of any other POME from other surrounding palm oil mill. Information will be provided to the validation team on the calculation of the biogas recovery plant capacity. This has been further demonstrated in Figure B.1 Project Boundary of the proposed project activity. 15

16 CDM Executive Board operating prior to the implementation of the project activity (Greenfield plant); (b) involve a capacity addition1; (c) involve a retrofit2 of (an) existing plant(s); or (d) involve a replacement3 of (an) existing plant(s). Hydro power plants with reservoirs that satisfy at least one of the following conditions are eligible to apply this methodology: The project activity is implemented in an existing reservoir with no change in the volume of reservoir; The project activity is implemented in an existing reservoir, where the volume of reservoir is increased and the power density of the project activity, as per definitions given in the Project Emissions section, is greater than 4 W/m2; The project activity results in new reservoirs and the power density of the power plant, as per definitions given in the Project Emissions section, is greater than 4 W/m2. In the case of biomass power plants, no other biomass types than renewable biomass is to be used in the project plant. If the unit added has both renewable and nonrenewable components (e.g. a wind/diesel unit), the eligibility limit of 15MW for a small-scale CDM project activity applies only to the renewable component. If the unit added co-fires fossil fuel, the capacity of the entire unit shall not exceed the limit of 15MW. Combined heat and power (co-generation) systems are not eligible under this category. In the case of project activities that involve the addition of renewable energy generation units at an existing renewable power generation facility, the added capacity of the units added by the project should be lower than 15 MW and should be physically distinct from the existing units. In case of retrofit or replacement, to qualify as a small-scale project, the total output of the retrofitted or replacement unit shall not exceed the limit of 15 MW. Table B.2: Applicability of SSC AMS I.D (version 16) generation project. The biogas is recovered from the POME. Not applicable: The project activity is not a Hydropower project. Not Applicable: The proposed project activity is not a biomass (solid) project. Not applicable: The project does not incorporate a mix of renewable and non-renewable components. Applicable: There is no combined heat and power component in the project activity. Not applicable: The project activity does not involve the addition of renewable energy generation units at an existing facility. Not applicable: The project activity does not seek to retrofit or modify an existing facility. AMS-I.D Point 3 AMS-I.D Point 4 AMS-I.D Point 5 AMS-I.D Point 6 AMS-I.D Point 7 AMS-I.D Point 8 16

17 B.3. Description of the project boundary: Methane avoidance component (Type III): Under AMS-III.H version 15, the project boundary is defined as the physical, geographical site where the wastewater and sludge treatment takes place in baseline and project situation. It covers all facilities affected by the project activity including sites where the processing, transportation and application or disposal of waste products as well as biogas takes place. The implementation of the project activity will affect certain sections of the treatment systems while others will remain unaffected. Electricity generation component (Type I): Under AMS-I.D version 16, the project boundary is defined as the physical, geographical site of the renewable generation source delineates the project boundary. The electricity generated by the project activity will be delivered to the PT Perusahaan Listrik Negara (Persero) - Sumatera Grid system. Please see Figure B.1. The project boundary is illustrated in Figure B.1. The mill effluent is fed to the CSTR system. The treated effluent is directed to the existing open lagoon system for removal of the residual COD load. The effluent is then being discharged to the river system. Biogas captured is used in gas engines for the generation of electricity that will be supplied to the local grid. Sludge is removed from the CSTR system for land application. Land Application Sludge Bah Jambi Palm Oil Mill POME Acidification and Cooling pond CSTR digester System with methane capturing Biogas Biogas temporary storage Electricity Electricity Grid Treated Wastewater Aerobic Lagoons Enclose flare system Waterway PROJECT BOUNDARY Figure B.1. Project Boundary of the Proposed Activity 17

18 The emission sources and type of GHG which are included or excluded within the project boundary are shown in the following table: Baseline Project Activity Source Gas Included Justification / Explanation Direct emissions from the wastewater treatment processes CO 2 emissions from electricity generation in fossil fuel fired power plants that are displaced due to the project activity. Bio-digester System (CSTR) Existing wastewater treatment lagoons Emissions associated with the operation of the power plant. Flaring system CO 2 No Neutral CO 2 emissions from biomass decaying CH 4 Yes Methane emissions from anaerobic treatment process N 2 O No Not significant. Excluded for simplification and conservativeness CO 2 Yes Main emission source. Methodology AMS-ID and Tool to calculate the CH 4 No emission factor for an electricity system, methane do not require methane emissions to be considered in determining baseline emissions. Methodology AMS-ID and Tool to calculate the N 2 O No emission factor for an electricity system, methane do not require nitrous oxide emissions to be considered in determining baseline emissions. CO 2 No Neutral CO 2 emissions from biomass decaying CH 4 Yes Methane emissions from anaerobic treatment process N 2 O No Not significant. Excluded for simplification and conservativeness CO 2 No Neutral CO 2 emissions from biomass decaying CH 4 Yes Methane emissions from aerobic treatment process (after the CSTR) N 2 O No Not significant. Excluded for simplification and conservativeness Methodology AMS-ID and Tool to calculate the emission factor for an electricity system, CO 2 No methane do not require carbon dioxide emissions to be considered in determining baseline emissions. Methodology AMS-ID and Tool to calculate the emission factor for an electricity system, methane CH 4 No do not require methane emissions to be considered in determining project activity emissions. Methodology AMS-ID and Tool to calculate the emission factor for an electricity system, N 2 O No methane do not require nitrous oxide emissions to be considered in determining project activity emissions. CO 2 No Neutral CO 2 emissions from biogas combustion CH 4 Yes CH 4 emissions due to incomplete combustion in 18

19 Emission associated with the power usage from the national grid N 2 O CO 2 CH 4 N 2 O No Yes No No Table B.3: Emission Sources and Type of GHG enclosed flare Not significant. Excluded for simplification and conservativeness The proposed project activity will use the electricity from the National Grid during the shutdown of the power plant for periodic maintenance. Any usage of electricity will be recorded and calculated as project emissions or compensated by the bi-directional electricity meter. Not significant. Excluded for simplification and conservativeness Not significant. Excluded for simplification and conservativeness B.4. Description of baseline and its development: Methane avoidance component (Type III): The baseline emissions for the system affected by the project activity consist of methane emissions from the baseline wastewater treatment systems 16. Methane is produced and released into the atmosphere in an uncontrolled manner. The anaerobic conditions are fulfilled based on the following characteristics: The anaerobic lagoons are open type, with the depth of at least 2 m (lay-out available). The ambient temperature is > 15 C (tropical area) 17 The volumetric loading rate of COD > 0.1 kg/m 3 /day The residence time of the non-soluble part of the organic matter in anaerobic lagoons is > 30 days The baseline for the project activity is the continuation of POME treatment in the existing lagoon system. This system is show in Figure B.2 below 4.4m Deep Acidification Pond m km Concrete Channel from Mill Primary Anaerobic Pond 1 20,264 m 3 Primary Anaerobic Pond 2 20,264 m 3 5.5m Deep Secondary Anaerobic Pond 2 12,096 m 3 Secondary Anaerobic Pond 2 12,096 m 3 5.5m Deep Facultative Pond 18,015 m 3 2.5m Deep Algal Pond 1 6,919 m 3 2.0m Deep 500m Concrete Channel to River Algal Pond 2 6,919 m 3 2.0m Deep AMS-III.H, Point 16 (ii) Average Monthly Temperature from the metrological department of Medan. 19

20 Figure B.2 Existing (baseline) Lagoon System In the baseline, the existing wastewater treatment system includes cooling and anaerobic treatment condition. A measurement campaign over a period of 10 days has been done to determine the key parameters (e.g. COD and quantity if POME) of the baseline as one year historical data not available 18. As the operation of a mill is stable throughout the year, 10 days is considered as representative for the typical operations conditions of the system and ambient conditions of the site. The key parameters for baseline emissions are given below in a tabular format. The average values from the measurement campaign (COD) have been used and the result multiplied by 0.89 in equation 3 to account for the uncertainty range associated with this method (AMS-III.H 18a). Key data for the baseline Q y,ww Description Value Units Source Quantity of wastewater in baseline treatment system 266,271 m 3 / year Measured Ratio 19 T mill Operating hours 6,400 hour/year Average COD removed by COD removed, anaerobic, y baseline anaerobic treatment condition in the system Average COD removal COD removal efficiency efficiency of the baseline system (anaerobic ponds) Methane correction factor for MCF ww,treatment, baseline anaerobic treatment anaerobic condition in the system B o,ww Methane generation capacity of treated wastewater GWP_CH 4 Global warming potential of methane Model correction factor to UF BL account for model uncertainties Table B.4: Key Parameters for Baseline Emissions 56,828 mg/l 98% % kgch 4 /kg COD Historical Mill data (average ) 10 days measurement campaign days measurement campaign Table III.H.1 (anaerobic deep lagoons deeper than 2 m) 21 AMS-III.H (ver 15), point 20 AMS-III.H (ver 15), point 20 AMS-III.H (ver 15), point AMS - III.H, Point 17, days flow measuring campaign SD# days COD campaign test certified by Laboratorium Nusantara Water Centre SD#11 21 AMS - III.H, Point 21 20

21 Electricity generation component (Type I): The baseline scenario is the continued generation of electricity in the Sumatera Grid system which is partly composed of greenhouse gas intensive fossil fuel based power stations. Following is a description of how the project's baseline emissions have been derived. Electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources, as reflected in the combined margin (CM) calculations described in Section B.6.1 in accordance to the latest Tool to calculate the emission factor for an electricity system. As the project activity is the installation of a new grid-connected renewable power plant/unit, the baseline scenario is the following: Key data for the Description baseline Value Units Source EF CO2 Combined Margin tco 2 /MW DNA of Indonesia Emissions Factor h 13/02/09 EG BL,y Primary generation of the 11,574 MWh Calculation Please see project in year y excel sheet Table B.5: Information and Data Used to Determine the Baseline Scenario The emission factor has been fixed ex-ante for the crediting period. The Sumatera Grid emission factor was calculated and provided by the Department of Energy and Natural Resources of the Republic of Indonesia 22. Conclusion: In the absence of the project activity, the POME will be continue to be treated with the current permitted yet economical series of open lagoons. The reason of no initiative of recovery the biogas for power generation is due power generation is not a core business of the palm oil mill. Furthermore in the palm oil mill there are plenty of excess biomass fuels for energy generation. Traditionally, palm oil mill generates its own power using the biomass residues (e.g. palm kernel shell, mesocarp fiber and EFB) by combusting the biomass fuel in a biomass boiler to generate heat and hence drive the steam turbine. In the absence of the project activity the equivalent amount of electricity that will be generated by the project activity will be continue to be generated by those mixed fuel power generators which are connected to the Sumatera National Grid. B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered small-scale CDM project activity: The project activity was originally proposed as a CDM project. Prior to discussion with the Host, the Project Developer had performed preliminary modeling on the capture of methane for generation and at 22 Letter issued by the General Director of Electricity and Energy Utilization to the DNA of Indonesia (National Committee on Clean Development Mechanism) dated 13/02/

22 that time believed that the proposed project would not be economic without the additional review provided from the sale of CERs. The carbon credit incomes were therefore taken into account well before the project initiation. Prior Consideration of the CDM According to EB 49, Annex 22, Guidance on the Demonstration and Assessment of Prior Consideration of the CDM, if the project activity with a start date after 2 August 2008, the project participant must inform the Host Party DNA and the UNFCCC secretariat in writing of the commencement of the project activity and of their intention to seek CDM status. The start date of the project activity is only deemed to have started when the project participant commit to expenditure which is related to the project activity as stated in EB41 paragraph 67. Hence, as accordance to the definition, the project activity does not yet have a start date. However, as per the guidelines, the project participant has notified both the UNFCCC and the DNA of the intent to implement the project activity as a CDM project activity on 24/09/2010. Although there is no start date to the project activity, the project participant can demonstrate the awareness of the CDM (with documented evidence) and that the benefits of the CDM was the decisive factor in the decision to proceed with the project. The continual CDM consideration is also been demonstrated in the following table which gives a timeline of milestones in the the implementation of the project activity thus far. Date Event Comment/reference 11/09/2008 Cadmius Pty Ltd (Australia) was incorporated. Cadmius Australia has been incorporated to venture into the development of CDM projects in the South East Asia Region. Through the market knowledge of the Board of Directors, Cadmius Australia had aimed to develop renewable energy projects from the potential renewable source of biogas produces by the traditional treatment of palm oil mill effluent (POME). The projects aim to recover the biogas produces by the POME and to be utilized for electricity generation. The generated electricity will be exported to the National Grid to partly displace the fossil fuel mix Grid. Cadmius Australia had decided to progress the development by penetrating into Indonesia. 26/11/2008 First meeting between Cadmius Australia and PTPN IV. Pak Ahmad Haslan Saragih Cadmius Australia had introduced the development of PTPN IV Planning and CDM project activity to PTPN IV by providing them the Business Development business plan of the development at the palm oil mills of PTPN IV. Director. Charles Allen & David Moretto Cadmius 27/11/2008 Site visit at Bah Jambi Palm Oil Mill to confirm the baseline scenario of the palm oil mill effluent treatment for the feasibility estimation for CDM development. 27/11/2008 Expression of interest to PTPN IV to jointly pursue in the CDM development. Cadmius Australia had further David Moretto, Indra Rizaldi, Nick Hudson 22

23 requested for palm oil mill operation data to determine economic viability of the projects. 25/02/2009 Negotiation on the Memorandum of Understanding with PTPN IV for CDM projects development at the palm oil mills owned by PTPN IV. 26/03/2009 Newspaper advertisement to invite stakeholders for the SD# 2 local stakeholders consultation as required by the UNFCCC. 01/04/2009 PTPN IV and Cadmius sign MOU for development of SD# 1 biogas plants at PTPN mills 02/04/2009 Stakeholder s Meeting held at Bah Jambi Mill SD# 4 30/04/2009 Receive of quotation for equipments and biogas recovery SD# 3 technology. 21/07/2009 The uptakes of the CDM projects are on the Build Owned and Transfer (BOT) basis. In doing so, Cadmius Pty Ltd would require secure investment funds. Cadmius Pty Ltd had approached E.ON Climate & Renewables GmbH as the partner in implementing the projects. A Non-Disclosure Agreement had agreed by Cadmius Pty Ltd and E.ON Climate & Renewables GmbH in exchanging information for further evaluation of the program concept. SD#7 15/04/2010 Investment decision Cadmius Pty Ltd and E.ON Climate & Resources Carbon Sourcing Pte. Ltd. had entered into an agreement of Development for the Identification and Development of Biogas Plants in Indonesia (subject to conditions). 20/08/2010 Opening tendering for Biogas recovery and electricity generation equipments. 24/08/2010 PT Melati Energi Sumatera was established for the purpose of developing the program with CDM as the motivating driving force. PT Melati Energi Sumatera is the project participant from the Host Country. 24/09/2010 Submission of prior CDM consideration notification to the UNFCCC and DNA 29/09/2010 Confirmation of prior CDM consideration notification from the DNA of Indonesia SD#8 SD#6 Table B.6: The schedule and the main events for project 23