Validation Report. Gansu Jieyuan Wind Power Co., Ltd. 2008, August 12

Transcription

1 Validation Report Gansu Jieyuan Wind Power Co., Ltd VALIDATION OF THE CDM-PROJECT: GANSU YUMEN SANSHILIJINGZI WIND POWER PROJECT REPORT NO , August 12 TÜV SÜD Industrie Service GmbH Carbon Management Service Westendstr Munich GERMANY

2 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 2 of 15 Report No. Date of first issue Revision No. Date of this revision Certificate No Subject: Validation of a CDM Project Accredited TÜV SÜD Unit: TÜV SÜD Industrie Service GmbH Certification Body climate and energy Westendstr Munich Germany TÜV SÜD Contract Partner: Jiangsu TUV Product Service Ltd., Beijing Branch Unit 0918, Landmark Tower Beijing China Client: Gansu Jieyuan Wind Power Co., Ltd. Jinyu Building, No.3 Gongxi Street, Qilihe District, Lanzhou Gansu Province, China Project Title: Gansu Yumen Sanshilijingzi Wind Power Project Project Site(s): The project is located in Yumen Town with 13km to its southeast, Gansu Province of China. The site of the proposed project is trapezium. Its altitude is about 1560m Applied Methodology / Version: ACM0002 / Version 06 Scope(s): 1 First Version: Date of issuance: Version No.: 01 Starting Date of GSP Estimated Annual Emission Reduction: Assessment Team Leader: Dr. Sven Kolmetz Summary of the Validation Opinion: Final version: Date of issuance: Version No.: ,556 tco 2 e Further Assessment Team Members: Liu Fang Sebastian Randig Khalid Mahmood The review of the project design documentation and the subsequent follow-up interviews have provided TÜV SÜD with sufficient evidence to determine the fulfilment of all stated criteria. In our opinion, the project meets all relevant UNFCCC requirements for the CDM. Hence TÜV SÜD will recommend the project for registration by the CDM Executive Board in case letters of approval of all Parties involved will be available before the expiring date of the applied methodology(ies) or the applied methodology version respectively. The review of the project design documentation and the subsequent follow-up interviews have not provided TÜV SÜD with sufficient evidence to determine the fulfilment of all stated criteria. Hence TÜV SÜD will not recommend the project for registration by the CDM Executive Board and will inform the project participants and the CDM Executive Board on this decision.

3 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 3 of 15 Abbreviations ACM AM BM CAR CDM CER CM CR DNA DOE EB EF EIA / EA ER FSR GHG IRL IRR KP MP NDRC NGO OM PP TÜV SÜD UNFCCC VVM Approved Consolidated Methodology Approved Methodology Build Margin Corrective Action Request Clean Development Mechanism Certified Emission Reduction Combined Margin Clarification Request Designated National Authority Designated Operational Entity Executive Board Emission Factor Environmental Impact Assessment / Environmental Assessment Emission reduction Feasibility Study Report Greenhouse gas(es) Information Reference List Internal Rate of Return Kyoto Protocol Monitoring Plan National Development and Reform Commission Non Governmental Organisation Operational Margin Project Design Document Project Participant TÜV SÜD Industrie Service GmbH United Nations Framework Convention on Climate Change Validation and Verification Manual

4 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 4 of 15 Table of Contents Page 1 INTRODUCTION Objective Scope METHODOLOGY Appointment of the Assessment Team Review of Documents Follow-up Interviews Resolution of Clarification and Corrective Action Requests Internal Quality Control SUMMARY OF FINDINGS COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS VALIDATION OPINION Annex 1: Validation Protocol Annex 2: Information Reference List

5 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 5 of 15 1 INTRODUCTION 1.1 Objective The validation objective is an independent assessment by a Third Party (Designated Operational Entity = DOE) of a proposed project activity against all defined criteria set for the registration under the Clean Development Mechanism (CDM). Validation is part of the CDM project cycle and will finally result in a conclusion by the executing DOE whether a project activity is valid and should be submitted for registration to the CDM-EB. The ultimate decision on the registration of a proposed project activity rests at the CDM Executive Board and the Parties involved. The project activity discussed by this validation report has been submitted under the project title: Gansu Yumen Sanshilijingzi Wind Power Project 1.2 Scope The scope of any assessment is defined by the underlying legislation, regulation and guidance given by relevant entities or authorities. In the case of CDM project activities the scope is set by: The Kyoto Protocol, in particular 12 Decision 2/CMP1 and Decision 3/CMP.1 (Marrakech Accords) Further COP/MOP decisions with reference to the CDM (e.g. decisions 4 8/CMP.1) Decisions by the EB published under Specific guidance by the EB published under Guidelines for Completing the Project Design Document (CDM-), and the Proposed New Baseline and Monitoring Methodology (CDM-NM) The applied approved methodology The technical environment of the project (technical scope) Internal and national standards on monitoring and QA/QC Technical guideline and information on best practice The validation is not meant to provide any consulting towards the client. However, stated requests for clarifications and/or corrective actions may provide input for improvement of the project design. Once TÜV SÜD receives a first version, it is made publicly available on the internet at TÜV SÜD s webpage as well as on the UNFCCC CDM-webpages for starting a 30 day global stakeholder consultation process (GSP). In case of any request a might be revised (under certain conditions the GSP will be repeated) and the final will form the basis for the final evaluation as presented by this report. Information on the first and on the final version is presented at page 1. The only purpose of a validation is its use during the registration process as part of the CDM project cycle. Hence, TÜV SÜD can not be held liable by any party for decisions made or not made based on the validation opinion, which will go beyond that purpose.

6 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 6 of 15 2 METHODOLOGY The project assessment aims at being a risk based approach and is based on the methodology developed in the Validation and Verification Manual, an initiative of Designated and Applicant Entities, which aims to harmonize the approach and quality of all such assessments. In order to ensure transparency, a validation protocol was customised for the project. TÜV SÜD developed a cook-book for methodology-specific checklists and protocol based on the templates presented by the Validation and Verification Manual. The protocol shows, in a transparent manner, criteria (requirements), the discussion of each criterion by the assessment team and the results from validating the identified criteria. The validation protocol serves the following purposes: It organises, details and clarifies the requirements a CDM project is expected to meet; It ensures a transparent validation process where the validator will document how a particular requirement has been validated and the result of the validation. The validation protocol consists of three tables. The different columns in these tables are described in the figure below. The completed validation protocol is enclosed in Annex 1 to this report. Validation Protocol Table 1: Conformity of Project activity and Checklist Topic / Question Reference Comments in GSP Final The checklist is organised in sections following the arrangement of the applied version. Each section is then further subdivided. The lowest level constitutes a checklist question / criterion. Gives reference to documents where the answer to the checklist question or item is found in case the comment refers to documents other than the. The section is used to elaborate and discuss the checklist question and/or the conformance to the question. It is further used to explain the conclusions reached. In some cases sub-checklist are applied indicating yes/no decisions on the compliance with the stated criterion. Any Request has to be substantiated within this column Conclusions are presented based on the assessment of the first version. This is either acceptable based on evidence provided (), or a Corrective Action Request (CAR) due to noncompliance with the checklist question (See below). Clarification Request (CR) is used when the validation team has identified a need for further clarification. Conclusions are presented in the same manner based on the assessment of the final version.

7 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 7 of 15 Validation Protocol Table 2: Resolution of Corrective Action and Clarification Requests Clarifications and corrective action requests Ref. to table 1 Summary of project owner response Validation team conclusion If the conclusions from table 1 are either a Corrective Action Request or a Clarification Request, these should be listed in this section. Reference to the checklist question number in Table 1 where the Corrective Action Request or Clarification Request is explained. The responses given by the client or other project participants during the communications with the validation team should be summarised in this section. This section should summarise the validation team s responses and final conclusions. The conclusions should also be included in Table 1, under Final. In case of a denial of the project activity more detailed information on this decision will be presented in table 3. Validation Protocol Table 3: Unresolved Corrective Action and Clarification Requests Clarifications and corrective action requests If the final conclusions from table 2 results in a denial the referenced request should be listed in this section. Id. of CAR/CR 1 Identifier of the Request. Explanation of the Conclusion for Denial This section should present a detail explanation, why the project is finally considered not to be in compliance with a criterion.

8 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 8 of Appointment of the Assessment Team According to the technical scopes and experiences in the sectoral or national business environment TÜV SÜD has composed a project team in accordance with the appointment rules of the TÜV SÜD certification body climate and energy. The composition of an assessment team has to be approved by the Certification Body ensuring that the required skills are covered by the team. The Certification Body TÜV SÜD operates four qualification levels for team members that are assigned by formal appointment rules: Assessment Team Leader (ATL) Greenhouse Gas Auditor (GHG-A) Greenhouse Gas Auditor Trainee (T) Experts (E) It is required that the sectoral scope linked to the methodology has to be covered by the assessment team. The validation team was consisting of the following experts (the responsible Assessment Team Leader in written in bold letters): Name Qualification Coverage of technical scope Coverage of sectoral expertise Host country experience Dr. Sven Kolmetz ATL Fang Liu GHG-A Sebastian Randig GHG-A Khalid Mahmood T Dr. Sven Kolmetz is physicist and head at the department TÜV Carbon Management Service located in the head office of TÜV SÜD Industrie Service GmbH in Munich, Germany. Furthermore he is officially authorized expert in the verification of GHG emissions in the framework of the European Emission Trading Scheme. Before entering TÜV SÜD he worked as energy consultant for industrial companies and as consultant for the German Federal Government on instruments for the reduction of GHG emissions. Fang Liu is an auditor for environmental management systems (according to ISO 14001) at Jiangsu TUV Product Service Ltd. She is based in Beijing. In her position she is responsible for the implementation of validation, verification and certifications audits for management systems. She has received training in the CDM validation process and participated already in several CDM project assessments as an auditor. Sebastian Randig is a GHG auditor for environmental management systems at the Carbon Management Service in the head office of TÜV Industrie Service GmbH, Germany. He holds a M.Sc. degree in Renewable Energy and has gathered experience in planning and installing renewable energy installations before joining TÜV SÜD. He has received training in the CDM validation process and participated in several CDM project assessments.

9 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 9 of 15 Khalid Mahmood is a GHG Auditor (Trainee) in TÜV Carbon Management Service located in the head office of TÜV SÜD Industrie Service GmbH in Munich, Germany. He is environmental scientist and responsible for the carbon market of TÜV SÜD in Middle East. He recently entered in CDM and JI market. He has got extensive training on all aspects of the flexible mechanism. 2.2 Review of Documents The first version submitted by the client and additional background documents related to the project design and baseline were reviewed as initial step of the validation process. A complete list of all documents and proofs reviewed is attached as annex 2 to this report. 2.3 Follow-up Interviews On October 9 th, 2007 TÜV SÜD performed interviews on-site with project stakeholders to confirm selected information and to resolve issues identified in the first document review. The table below provides a list of all persons interviewed in the context of this on-site visit. Name Mr. Zhou Jide Mr. Zhu Shenggang Organisation Gansu Jieyuan Wind Power Co., Ltd. China Longyuan Electric Power Group Corp.cdm project office 2.4 Resolution of Clarification and Corrective Action Requests The objective of this phase of the validation is to resolve the requests for corrective actions and clarifications and any other outstanding issues which needed to be clarified for TÜV SÜD`s positive conclusion on the project design. The Corrective Action Requests and Clarification Requests raised by TÜV SÜD were resolved during communication between the client and TÜV SÜD. To guarantee the transparency of the validation process, the concerns raised and responses that have been given are summarised in chapter 3 below and documented in more detail in the validation protocol in annex Internal Quality Control As final step of a validation the validation report and the protocol have to undergo and internal quality control procedure by the Certification Body climate and energy, i.e. each report has to be approved either by the head of the certification body or his deputy. In case one of these two persons is part of the assessment team approval can only be given by the other one. It rests at the decision of TÜV SÜD s Certification Body whether a project will be submitted for requesting registration by the EB or not.

10 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 10 of 15 3 SUMMARY OF FINDINGS As informed above all findings are summarized in table 2 of the attached validation protocol. History of the validation process A first version of the was submitted to the DOE in May Based on this documentation, a document review and a fact finding mission in form of an on-site audit was performed in September Afterwards, the client revised the according to the requests indicated during the assessment work. The final version that was submitted in April 2008 serves as the basis for the final assessment presented herewith. Changes are not considered to be significant with respect to the qualification of the project as a CDM project based on the two main objectives of the CDM, i.e. to achieve a reduction of anthropogenic GHG emissions and to contribute to a sustainable development. Project description Gansu Yumen Sanshilijingzi Wind Power Project is located in Yumen Town, Yumen City, Gansu Province, and Northwest China. The proposed project has the installed capacity of 49.3 MW with an average annual generation of 107,872 MWh. There are fossil fuel power plants in Gansu province which supply electricity to Northwest China. The proposed project will reduce the CO2 emissions by replacing power from fossil fuel power plant. As wind power is a priority development of Chinese Government, The proposed project is estimated to deliver 106,556 tonnes CO2 emission reduction annually. The proposed project will contribute the sustainable development in the area by reducing the air pollution from coal-fired power plant and by creating the employment in Gansu province. Findings In total the assessment team expressed 24 Corrective Action Requests. The required documents (English version of the IRR calculation excel sheet, benchmark) have been submitted to the DOE and other formal aspects of the proposed project (project location, emission reduction etc.) have been verified according to the. The CAR1, CAR2 and CAR3 were asked for the revision history of the, information of Annex 1 of the and about the geographical coordination of the wind farm project. The CAR4, CAR5 and CAR6 were related to evidence of EIA, Evidence for the operational lifetime of the wind turbines and training contract. The CAR7, CAR8 and CAR9 were concerning the time schedule for the implementation of the project, correction of grid to which the generated electricity will supply and information about decision of CDM consideration. The CAR10, CAR11 and CAR12 were asked for related laws and regulation, information about the installed capacity, total investment, annual output, income tax, about the source of the main parameters for the calculations of the IRR in the and about the common practice analysis. The CAR13, CAR14 and CAR15 were concerning the description that how the project activity helps to overcome the economic and financial hurdles evidences of the share of the low-cost and about the Operation Margin emission factor. The CAR16, CAR17 and CAR 18 were related to parameters used in, power sources and starting date of the project. The CAR 19, CAR20 and CAR21 were concerning the start of the crediting period, accuracy of the parameters and how the net electricity will be measured. The CAR22, CAR23 and CAR24 were related to revision of the date in appropriate form, EIA approval date and about the media used for the invitation of stakeholders. All the CARs and CRs have been solved by updating the. The new version of the is in compliance with the CDM guidelines

11 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 11 of 15 Baseline calculation The calculation of the baseline emissions followed the procedures described in the methodology ACM0002 Version 06. The North West China Power Grid is considered to be the project boundary. The operating margin emission factor (EF OM ) was determined based on the simple OM method. The ex-ante option was chosen for this calculation. The calculation of the build margin emission factor (EF BM ) was based on modified methods agreed by the EB, because plant specific data are not available in China. The emission factor of the thermal power plants was calculated by the proportion of the emissions of coal, gas and oil times the emission factor of the best available coal, gas and oil power plant as defined and published by the Chinese DNA. The new thermal capacity installation that exceeded 20% in the last years, for which data was available, was finally assessed with this factor. The baseline calculation was based on the published OM/BM calculation process issued by the NDRC (China DNA). The values for the EF OM and EF BM were similar compared to the values published by the Chinese DNA and are therefore accepted for the calculation of the baseline emissions and the emission reductions. The value for the combined margin emission factor (EF CM ) was determined using the weighted average of the EF BM and EF OM using the default values for the factors as described in the methodology 0.25 and 0.75 for wind plants. As per the methodology, the project does not need to consider leakage or project emissions. As a result, the annual emission reductions equal the annual baseline emissions. In summary, the calculation of the baseline emissions and the emission reductions, respectively, can be considered as correct. Additionality The additionality of this project as well as the timeline with respect to the early CDM consideration was checked thoroughly by the assessment team. The chronological listing of the major events associated with the proposed project activity clearly indicated that CDM was seriously considered before the starting date. The project started with the equipment purchasing on April 2007 (IRL 16). Prior to that date, CDM was seriously taken into account consideration which was demonstrated by several events and actions: September Initial feasibility study indicated that the project is not financially attractive (IRL 6) and suggested to consider CDM as a potential solution. December 2006 The Approval by National Development and Reform Commission on Tariff of Wind Power Projects, NDRC Price No [2006] 2908, was issued (IRL12). According to this document the actual power tariffs will be lower than the tariffs that were assumed in the feasibility study. This confirms the conclusion that the project is financially not attractive. The approval document states that the approved tariff of the Gansu Yumen Sanshilijingzi Wind Power Project is Yuan/kWh (Including VAT) in the first operating hours and the local average tariff applies to the remaining operating hours. As it could be evidenced, out of the options the conservative choice was taken for the average tariff. The thermal power tariff is Yuan/kWh (IRL13) and hydropower is Yuan/kWh (IRL32). Thus in CDM context the adoption of the Yuan/kWh as the average tariff in the local grid for the IRR calculation is conservative. February Directorate resolution of Gansu Jieyuan Wind Power Co., Ltd for CDM consideration ( IRL 23)

12 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 12 of 15 April Turbine and Generation Electricity Unit Technology Agreement signed with Gamesa wind Co.,Ltd (IRL 16) July Start Construction Report, issued by Gansu Huamao Construciton and Install Engineering Co.,Ltd (IRL 22) July 2007 CDM consulting contract signed (IRL 29) September 2007 ordered signed with TÜV SÜD as DOE, September 2008 GSP start In summary, TÜV SÜD can confirm that CDM was seriously taken into consideration in order to proceed and implement the proposed wind farm project. In step one of applying the tool for the demonstration and assessment of additionality (hereafter: Additionality tool) it is concluded that there exist alternatives to the proposed project activity. Step two of the additionality tool, investment analysis through bench mark analysis, described in detail that the proposed project is not financially attractive without CER revenues. The assessment team has checked all sources of the IRR calculation, as presented in Sub-step 2c in the (IRL 25). Furthermore the calculation spreadsheet and the source of the benchmark (8%) as checked (IRL 24). The benchmark applied, Interim rules on Economic Assessment of Electrical Engineering Retrofit Projects (project IRR, post tax) is frequently used in the wind sector and found to be appropriate. The values from the Feasibility Study Report (FSR), approved by the National Authority have been the basis of the decision to proceed with the investment in the project. The IRR calculations as provided by the show a value of 5.89 % which is below the benchmark. The period of time between the finalization of the FSR and the investment decision is sufficiently short for the DOE to confirm that it is unlikely in the context of the underlying project activity that the input values would have materially changed. It has been verified that the values used in the and associated annexes are fully consistent with the Feasibility Study Report. The total investment cost and the operating cost have been considered acceptable because within the range of other similar plants. The grid price of Tariff Approval ( in the first operating hours, for the rest) Yuan RMB/ kwh (without VAT) has been verified as the most reasonable and conservative to be used (please refer to the discussion on tariff above). Thus TÜV SÜD can confirm, by local and sectoral expertise that the values applied in the in the financial analysis are appropriately reflecting the projects situation at the time of investment decision. A sensitivity analysis is performed, by taking into account 10% variations in grid price, total investment costs, O&M costs and electricity supplied to grid. It deems reasonable to use the applied of +10% and -10% of the key parameters, as, they present well realistic variations of these key parameters. Electricity variation is not explicitly mentioned in the, though it is assumed that the variation shall have the same, low, impact on the IRR. To conclude the sensitivity analysis it can be stated that under none of the assumed variation of variables the benchmark of 8% is met. We thus conclude the project is financially unattractive without CER revenues and according to the results of the sensitivity analysis this conclusion is robust to reasonable variations in the critical assumptions. In step 4, common practice analysis, similar projects have been discussed and the differences explained. There are some grid-connected wind farms in Gansu province, including wind farms with a similar scale as the proposed project activity. These similar projects are listed in Step 4 (Common practice analysis) of. There are only a few wind farms to be considered in Step 4 (Common practice analysis) of. The first two wind farms are small-scale project which use turbines smaller in per unit capacity than the proposed project. In addition, these early wind farms benefited from favourable power prices of

13 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 13 of RMB/kWh6. The other wind farms with comparable capacity to the proposed project activity that are currently being developed are all developed under the CDM. Moreover, the Gansu Datang Yumen 49MW Wind Power Project has been successfully registered on 16 Jul 07 as a CDM project. Thus, it may be clear that wind power is not a power generation technology that is not a common practice. This is also indicated that wind farms are not commercially attractive without special incentives, such as could be provided by CDM. All the information could be evidenced by the assessment team. To conclude the additionality assessment we can state that, according to all the information and documents we have reviewed, the additionality of the project based on the available information is fulfilled.

14 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 14 of 15 4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS TÜV SÜD published the project documents on UNFCCC website by installing a link to TÜV SÜD s own website and invited comments by Parties, stakeholders and non-governmental organisations during a period of 30 days. The following table presents all key information on this process: webpage: Starting date of the global stakeholder consultation process: Comment submitted by: Issues raised: None - Response by TÜV SÜD: -

15 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Page 15 of 15 5 VALIDATION OPINION TÜV SÜD has performed a validation of the following proposed CDM project activity: Gansu Yumen Sanshilijingzi Wind Power Project The review of the project design documentation and the subsequent follow-up interviews have provided TÜV SÜD with sufficient evidence to determine the fulfilment of stated criteria. In our opinion, the project meets all relevant UNFCCC requirements for the CDM. Hence TÜV SÜD will recommend the project for registration by the CDM Executive Board. An analysis as provided by the applied methodology demonstrates that the proposed project activity is not a likely baseline scenario. Emission reductions attributable to the project are hence additional to any that would occur in the absence of the project activity. Given that the project is implemented as designed, the project is likely to achieve the estimated amount of emission reductions as specified within the final version. The validation is based on the information made available to us and the engagement conditions detailed in this report. The validation has been performed using a risk based approach as described above. The only purpose of this report is its use during the registration process as part of the CDM project cycle. Hence, TÜV SÜD can not be held liable by any party for decisions made or not made based on the validation opinion, which will go beyond that purpose. Munich, Munich, Certification Body climate and energy TÜV SÜD Industrie Service GmbH Assessment Team Leader

16 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Annex 1: Validation Protocol

17 Table 1 Conformity of Project Activity and A. General description of project activity A.1. Title of the project activity A.1.1. A.1.2. Does the used project title clearly enable to identify the unique CDM activity? Are there any indication concerning the revision number and the date of the revision? The project is titled with the name and its project location, and the energy source of the project. Hence, it can be clearly identified. The available is indicated as version 02 dated 26/ 08/2007. Corrective Action Request No. 1: A revision history of the should be included. in GSP CAR1 Final A.1.3. Is this consistent with the time line of the project s history? A.2. Description of the project activity A.2.1. Is the description delivering a transparent overview of the project activities?. The GSP was started with this version The project is described transparently and the project activities described have been proven during the on-site audit. A.2.2. What proofs are available demonstrating that the project description is in compliance with the actual situation or planning? 6-14 The project activity is the displacement of electricity generated by coal fired power plants through electricity generated by wind power. The following documents deliver evidences for the project activity: - EIA and EIA Approval - Feasibility Study and Approval - Project Application Report and Project Approval from NDRC This documents have been evidenced during the audit. Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-1

18 A.2.3. A.2.4. Is the information provided by these proofs consistent with the information provided by the? Is all information presented consistent with details provided by further chapters of the? A.3. Project participants A.3.1. Is the form required for the indication of project participants correctly applied? There is no contradiction between the information provided by these proofs and the. in GSP, there is no inconsistency in the. The form is correctly applied. Gansu Jieyuan Wind Power Co., Ltd. and EDF Trading Limited are considered as the project participants. However, there is missing the following information: (*) In accordance with CDM modalities and procedures, at the time of making the CDM- public at the stage of validation, a party involved may not have provided its approval. At the time of requesting registration, the approval by the party(ies) involved is required and For further details please refer to Annex 1 of the. Corrective Action Request No. 2: Please include the following information in A.3. of the : 1. (*) In accordance with CDM modalities and procedures, at the time of making the CDM- public at the stage of validation, a party involved may not have provided its approval. At the time of requesting registration, the approval by the party(ies) involved is required. 2. For further details please refer to Annex 1 of the. CAR 2 Final A.3.2. Is the participation of the listed entities or Parties confirmed by each one of them? Open Issue The LoA of United Kingdom and of China have not been presented to the DOE yet. The MoC has not been provided to the DOE yet. Please submit the respective documents if available. Open issue Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-2

19 A.3.3. in Final GSP, it is. Is all information on participants / Parties provided in consistency with details provided by further chapters of the (in particular annex 1)? A.4. Technical description of the project activity A.4.1. A A A.4.2. A A.4.3. Location of the project activity Does the information provided on the location of the project activity allow for a clear identification of the site(s)? How is it ensured and/or demonstrated, that the project proponents can implement the project at this site (ownership, licenses, contracts etc.)? Category(ies) of project activity To which category(ies) does the project activity belonging to? Is the category correctly identified and indicated? The project location could be clearly identified according to the. The project activity is located in Yumen Town, Yumen City, Gansu Province of China.Two geographical coordinates are given. Corrective Action Request No. 3: The proposed project activity consists of a windfarm with a certain geographical area. Please mention at least 4 geographical coordinates (4 corner points) to limit the area. It should be clear from where those GSP coordinates were taken. Please submit the respective evidence Technology to be employed by the project activity The EIA of the proposed project was approved by Gansu Province Environmental Protection Bureau..The Project got the approval from NDRC on April 09, Corrective Action Request No. 4: Please deliver the evidence of the EIA and its approval to the DOE. CAR 3 CAR 4, the project falls under scope 1. Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-3

20 A A A A Does the technical design of the project activity reflect current good practices? Does the description of the technology to be applied provide sufficient and transparent input/ information to evaluate its impact on the greenhouse gas balance? Does the implementation of the project activity require any technology transfer from annex-i-countries to the host country(ies)? Is the technology implemented by the project activity environmentally safe?, the project design reflects the current good practices. The project will employ totally 58 wind turbines with a nominal capacity of 850 kw will be installed, providing a total capacity of 49.3MW, the project activity comprises the use of wind power for the substitution of grid supplied electricity mainly from coal fired plants. There is no doubt that this technology will reduce the GHG emissions significantly. 17 8, 10, 11 The wind turbines finally adopted by the proposed project are of type Gamesa kW and imported from Spain.. The main possible environmental problem produced by the technology implemented is noise. Based on the formula of declining of sound emitted from a non-directional source, it is estimated that the maximum noise effective distance of the project is 50m in daytime and 300m at night. The closest residential area to the site of the project is over 5km away. Therefore, the noise of the project will not have impact on nearby residents. in GSP Final A A A Is the information provided in compliance with actual situation or planning? Does the project use state of the art technology and / or does the technology result in a significantly better performance than any commonly used technologies in the host country? Is the project technology likely to be substituted by other or more efficient technologies within the project period? 8, 8, 8. The common practice for electricity generation is still coal-fired power plant. Hence, the project definitely would result in a better performance than the common practice. It is not expected that there will be a substitution even though the equipments have not been installed during on-site audit yet. The Project Fesibility Report clearly shows that this technology is the most suitable to be employed at the site. The life cycle of a wind CAR 5 Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-4

21 A A Does the project require extensive initial training and maintenance efforts in order to be carried out as scheduled during the project period? Is information available on the demand and requirements for training and maintenance? A Is a schedule available for the implementation of the project and are there any risks for delays? A.4.4. A A turbine is under normal circumstances longer than the project period. Corrective Action Request No. 5: Please submit an evidence for the operational lifetime of the wind turbines., because of the use of a 850 kw turbine there will be additional training needs to guarantee safe operation during the life time of the project. 20, 6,7,8 Estimated amount of emission reductions over the chosen crediting period Is the form required for the indication of projected emission reductions correctly applied? Are the figures provided consistent with other data presented in the? The training plan will be established at the stage of equipment installment. Corrective Action Request No. 6: Please deliver the training contracts and training materials to the DOE. The time schedule of the implementation of the project was clearly described by Mr. Zhou Jide from Gansu Jieyuan Wind Power Co., Ltd., the host of the proposed project. The main power units purchasing contract has been signed. The risks for delays are small. Corrective Action Request No. 7: The time schedule for the implementation of the project should be included into the.. The form is correctly applied according to the version of the template.. The figures provided are consistent with other data presented in. The calculation of emission reductions is not based on the most recent emissions factor data, but on data from How- in GSP CAR 6 CAR 7 Final Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-5

22 A.4.5. A A Public funding of the project activity Is the information provided on public funding provided in compliance with the actual situation or planning as available by the project participants? Is all information provided consistent with the details given in remaining chapters of the (in particular annex 2)? B. Application of a baseline and monitoring methodology ever, the applied emissions factor in the ( tco2/mwh) may be accepted as it is more conservative as the emissions factor applying the most recent NDRC data ( tco2/mwh) and considering TUEV s findings ( tco2/mwh). in GSP. There is no public funding necessary. The statements are consistent within the. Final B.1. Title and reference of the approved baseline and monitoring methodology B.1.1. B.1.2. Are reference number, version number, and title of the baseline and monitoring methodology clearly indicated? Is the applied version the most recent one and / or is this version still applicable?, ACM0002 (version 6) has been applied. Title, reference number and version number are clearly indicated. Version 6 has been the most recent one at the time of GSP uploading. B.2. Justification of the choice of the methodology and why it is applicable to the project activity B.2.1. Is the applied methodology considered the most appropriate one? B.2.2. Criterion 1: Type of capacity addition by renewable energy. The approved methodology ACM0002 is exactly applicable to the wind farm project. Applicability checklist Criterion discussed in the? Compliance provable? / No Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-6

23 Evidences provided in the? Compliance verified? in GSP Final B.2.3. Criterion 2: Exclusion of fuel switching activities Applicability checklist Criterion discussed in the? Compliance provable? Evidences provided in the? Compliance verified? / No B.2.4. Criterion 3: Defined electricity grid boundaries Applicability checklist Criterion discussed in the? Compliance provable? Evidences provided in the? Compliance verified? / No B.2.5. Criterion 4: Approved inclusion in other methodologies (if applied only) Not applicable B.3. Description of the sources and gases included in the project boundary B.3.1. Source: Fugitive Emissions from non-condensable gases (geothermal activities only) Gas(es): CO 2, CH 4 Type: Project Emissions Boundary checklist Source and gas(es) discussed by the? Inclusion / exclusion justified? Explanation / Justification sufficient? Consistency with monitoring plan? / No Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-7

24 in GSP Final B.3.2. Source: Emissions from combustion of fossil fuels (geothermal activities only) Gas(es): CO 2 Type: Project Emissions Boundary checklist Source and gas(es) discussed by the? Inclusion / exclusion justified? Explanation / Justification sufficient? Consistency with monitoring plan? / No B.3.3. Source: Emissions from the reservoir (new hydroelectric activities only) Gas(es): CO 2, CH 4 Type: Project Emissions Boundary checklist Source and gas(es) discussed by the? Inclusion / exclusion justified? Explanation / Justification sufficient? Consistency with monitoring plan? / No B.3.4. Source: Emissions from electricity generation in fossil fuel fired power plants of the project electricity system Gas(es): CO 2 Type: Baseline Emissions Boundary checklist Source and gas(es) discussed by the? Inclusion / exclusion justified? Explanation / Justification sufficient? Consistency with monitoring plan? / No B.3.5. Source: Emissions from electricity generation in fossil fuel fired power plants of any connected electricity system Gas(es): CO 2 Boundary checklist Source and gas(es) discussed by the? Inclusion / exclusion justified? Explanation / Justification sufficient? / No Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-8

25 Type: Baseline Emissions Consistency with monitoring plan? in GSP Final B.3.6. Source: Emissions from electricity generation in fossil fuel fired power plants of imported electricity Gas(es): CO 2 Type: Baseline Emissions Boundary checklist Source and gas(es) discussed by the? Inclusion / exclusion justified? Explanation / Justification sufficient? Consistency with monitoring plan? / No According to the information given in the, the net imports from North China Power Grid were all negative for the recent years (China Electric Power Yearbook 2003, 2004, and 2005), thus the value was defined to be zero as requested by the baseline methodology (ACM0002). B.3.7. Do the spatial and technological boundaries as verified on-site comply with the discussion provided by the?, the boundary of the proposed project is Northwest China Power Grid, including Qinghai Province Grid, Gansu Province Grid, Liaoning Province Grid, Ningxia Hui Autonomous Region Grid and Xinjiang Uygur Autonomous Region Grid which is consistent with the guideline published on December.15, 2006 by NDRC. Corrective Action Request No. 8: B.3.informs that the proposed project delivers its electricity generated to Northeast china power grid this is not correct, as the relevant grid is the Northwest china power grid. Please correct. B.4. Description of how the baseline scenario is identified and description of the identified baseline scenario CAR 8 B.4.1. Is it clearly described that the baseline is represented by the combined margin of the grid the activity will be connected to?, it is clearly described in chapter B.6.1 that the baseline emission factor is calculated as the weighted average of the Operating Margin emission factor (EF OM,y ) and the Build Margin emission Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-9

26 B.4.2. B.4.3. In case of any modification or retrofit of existing facilities: Is data available to determine the historic production level? In case of any modification or retrofit of existing facilities: Have conservative assumptions been applied in order to estimate the point in time when the existing equipment needs to be replaced? factor (EF BM,y ): in GSP Not applicable. Not applicable. 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): B.5.1. B.5.2. Is evidence provided, that CDM has been considered seriously in the decision to proceed with the project activity? Have realistic and credible alternatives been identified providing comparable outputs or services? (step 1a) 3, 23 3 Corrective Action Request No. 9: Please deliver the evidence that CDM has been considered seriously in the decision to proceed with the project activity. Please include the information about CDM consideration into the. The following baseline scenarios are discussed: - The proposed project not undertaken as a CDM project activity. - The thermal power plant with the same annual electricity supply as the proposed project. - Other renewable energy projects with the same annual electricity supply as the proposed project. - No construction of the proposed project, and the Northwest China Power Grid as the provider for the same electricity supply. CAR 9 Final Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-10

27 B.5.3. B.5.4. B.5.5. B.5.6. B.5.7. B.5.8. Is the project activity without CDM included in these alternatives? (step 1a) Is a discussion provided for all identified alternatives concerning the compliance with applicable laws and regulations? (step 1b) In case the argues that specific laws are not enforced in the country or region: Is evidence available concerning that statement? (step 1b) In case of applying step 2 / investment analysis of the additionality tool: Is the analysis method identified appropriately (step 2a)? In case of Option I (simple cost analysis): Is it demonstrated that the activity produces no economic benefits other than CDM income? In case of Option II (investment comparison analysis): Is the most suitable financial indicator clearly identified (IRR, NPV, cost benefit ratio, or (levelized) unit cost)? in GSP., the national policy about strictly prohibiting the installation of coal-fired generators with the capacity of 135MW or below is identified in the. Corrective Action Request No. 10: 1. The related laws and regulations should be quoted but not linked to the website, because web pages can change. 2. Sub-step 1b) mentions that According to the applicable laws and regulations, the alternative a) should be eliminated from the following consideration. This is not correct, it should refer to alternative 2. Please correct. 3. Outcome of step 1b) should not refer to alternative d) but to alternative 4, as mentioned earlier in the. CAR 10 Not applicable., the benchmark analysis is applied. The simple cost analysis is not applicable for the proposed project because the project activity will produce economic benefit (from electricity sale) other than CDM related income. The investment comparison analysis is also not applicable for the proposed project because the baseline scenario, providing the same capacity or electricity output by the Northwest China Power Grid, is not an investment project. Final Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-11

28 in GSP Final B.5.9. In case of Option III (benchmark analysis): Is the most suitable financial indicator clearly identified (IRR, NPV, cost benefit ratio, or (levelized) unit cost)? 3, the IRR indicator is selected. The benchmark analysis will be used to identify whether the financial indicator (in this case IRR) of the proposed project is better or worse than the relevant benchmark value. B B In case of Option II or Option III: Is the calculation of financial figures for this indicator correctly done for all alternatives and the project activity? In case of Option II or Option III: Is the analysis presented in a transparent manner including publicly available proofs for the utilized data? 3 6, The calculation of financial figures for the IRR is done for the project activity without the revenues from the sale of CERs and with the revenues from the sale of CERs. The input data of IRR calculation are from Invest Estimation & Economic Assessment of Feasibility Study was verified during the on-site audit. Corrective Action Request No. 11: a) Information about installed capacity, total investment, annual output, total operating cost, electricity tariff, value added tax,income tax, expected CER price, operational lifetime is not consistent between Table 1 of the and the excel calculation sheet. Please correct. Regarding the electricity tariff, it should be considered that RMB/kWh is for the first operating hours, for the remaining operating hours. Please revise IRR calculation if necessary. b) Please inform about the source of the main parameters for the calculation of the IRR in the. Please submit the evidence to the validation team if this has not occurred yet. Otherwise it is not possible for the validation team to assess whether the source and the parameters are appropriate and are conforming the time line of the proposed project activity. c) Please submit the evidence for the applied benchmark of CAR 11 Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-12

29 8 %. in GSP Final B B B In case of applying step 3 (barrier analysis) of the additionality tool: Is a complete list of barriers developed that prevent the different alternatives to occur? In case of applying step 3 (barrier analysis): Is transparent and documented evidence provided on the existence and significance of these barriers? In case of applying step 3 (barrier analysis): Is it transparently shown that the execution of at least one of the alternatives is not prevented by the identified barriers? B Have other activities in the host country / region similar to the project activity been identified and are these activities appropriately analyzed by the (step 4a)? B If similar activities are occurring: Is it demonstrated that in spite of these similarities the project activity would not be implemented without the CDM component ,17 18 Not applicable. Not applicable. Not applicable. The common practice analysis in the is incomplete. During the on-site audit, more wind farms than listed in the were detected. Corrective Action Request No. 12: Please present the common practice analysis in a complete manner in the and consider all wind farms in a reasonable margin (e.g. between 30 and 70 MW installed capacity). Please describe in detail why the mentioned plants are economically feasible without CDM revenue, and what is the difference between the project activity and the existing projects. The current status of those similar project activities should be described in the.. See B CAR 12 See CAR 12 Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-13

30 B (step 4b)? Is it appropriately explained how the approval of the project activity will help to overcome the economic and financial hurdles or other identified barriers? B.6. Emissions reductions 3 Corrective Action Request No. 13: Please describe in the how the project activity helps to overcome the economic and financial hurdles. in GSP CAR 13 Final B.6.1. Explanation of methodological choices B Is it explained how the procedures provided in the methodology are applied by the proposed project activity? The calculation of the emission reduction is applied according to the steps described in ACM0002: - Simple OM, or - Simple adjusted OM, or - Dispatch Data Analysis OM, or - Average OM. These steps are described in a transparent manner. Corrective Action Request No. 14: Please provide the evidence of the share of the low-cost/must run resources in the North West China Power Grid mentioned in the. CAR 14 B Is every selection of options offered by the methodology correctly justified and is this justification in line with the situation verified on-site?, the selection of options offered by ACM0002 is correctly justified which has been verified during on-site audit. However, step 1 in B.6.1. refers to the Middle China Power Grid which is not correct in the opinion of the validation team. Corrective Action Request No. 15: CAR 15 a) Step 1 in B.6.1. mentions..the Operation Margin emission factor ( EF OM, y ) of Middle China Power Grid is tco2/mwh. This is not correct as the proposed project Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-14

31 B B B Are the formulae required for the determination of project emissions correctly presented, enabling a complete identification of parameter to be used and / or monitored? Is the choice of options to determine the emissions factor (OM, BM) justified in a suitable and transparent manner? In case of alternative weighing factors for the Combined Margin: Is the quantification of the alternative weighing factor justified in a suitable and transparent manner? activity belongs to the North West China Power grid. Please correct. b) Step 2 in B.6.1. mentions The Operation Margin emission EF BM y in GSP factor (, ) of which the proposed project will use is tco 2 /MWh.. Please revise as EF BM,y does not refer to the operation margin, but to the build margin. Not applicable as there are no project emissions. No leakages have to be considered according to the methodology. Therefore the question is not applicable. Not applicable. The default weights for wind power projects in the 6 th version of ACM0002 (OM 0.75 and BM 0.25 respectively) are used. B In case of alternative weighing factors for See B the Combined Margin: Is the guidance for the concerning the acceptability of alternative weights considered in the discussion? B Are the formulae required for the determination No leakage is considered according to the methodology. of leakage emissions correctly pre- sented, enabling a complete identification of parameter to be used and / or monitored? B Are formulae required for the determina-. The formula is correctly presented in chapter B.6.1 and Final Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-15

32 tion of emission reductions correctly presented? B.6.3. B.6.2. Data and parameters that are available at validation B B B Is the list of parameters presented in chapter B.6.2 considered to be complete with regard to the requirements of the applied methodology? Is the choice of ex-ante or ex-post vintage of OM and BM factors clearly specified in the? Parameter Title: Annual electricity supplied to the grid prior to retrofit (applicable only for retrofit and modification activities) Corrective Action Request No. 16: 1. The following parameters have to be added in the. - Internal power consumption rate of power plants - Efficiency of advanced thermal power plant additions - Capacity by power generation source - 2. For those parameters whose source of data is China Energy Statistical Yearbook should be included the years of the yearbooks. in GSP CAR 16 The ex-ante calculation of OM and BM factors is chosen. Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? / No Final B Parameter Title: Emission factor of the grid (CM) Data Checklist / No Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-16

33 Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? CM factor is calculated. in GSP Final B Parameter Title: Operating margin (OM) emission factor of the grid Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? OM factor is calculated. / No B Parameter Title: Build margin (BM) emission factor of the grid Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? / No Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-17

34 Choice of data correctly justified? Measurement method correctly described? in GSP Final BM factor is calculated. B B Parameter Title: fuel consumption of each power source Parameter Title: emission coefficient of each fuel Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? See B Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? / No No / No CAR 16 Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-18

35 B Parameter Title: electricity generation of each power source Data Checklist / No Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? No Source clearly referenced? No Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? See B Corrective Action Request No. 17: The description should refer to power sources i. in GSP CAR 16 CAR 17 Final B Parameter Title: surface area of full reservoir level (for new hydroelectric activities only) Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? / No B Parameter Title: fraction of time with low costs /must run plant at the margin (for simple adjusted OM only) Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? / No Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-19

36 Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? in GSP Final B Parameter Title: electricity imports Data Checklist / No Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? Has this value been verified? Choice of data correctly justified? Measurement method correctly described? According to information provided in the, net imports from North China Power Grid were all negative for the recent years (China Electric Power Yearbook 2003, 2004, and 2005), thus the value was defined to be zero as requested by the baseline methodology (ACM0002). B Parameter Title: CO 2 emission coefficient of fuels used in connected grids Data Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided? / No Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-20

37 Has this value been verified? Choice of data correctly justified? Measurement method correctly described? in GSP Final B.6.3. Ex-ante calculation of emission reductions B B Is the projection based on the same procedures as used for future monitoring? Are the GHG calculations documented in a complete and transparent manner?, the procedures are the same.. The GHG calculations are documented in a complete and transparent manner.the calculation of emission reductions is not based on the most recent emissions factor data, but on data from However, the applied emissions factor in the ( tco2/mwh) may be accepted as it is more conservative as the emissions factor applying the most recent NDRC data ( tco2/mwh) and considering TUEV s findings ( tco2/mwh). B Is the data provided in this section consistent with data as presented in other chapters of the? B.6.4. Summary of the ex-ante estimation of emission reductions B B B Will the project result in fewer GHG emissions than the baseline scenario? Is the form/table required for the indication of projected emission reductions correctly applied? Is the projection in line with the envisioned time schedule for the project s., the project will result in fewer GHG emissions than the baseline scenario., the form is correctly applied according to the template. Corrective Action Request No. 18: Please choose as project s starting date the date of the purchase contract (agreement) of the main equipment. Please submit the CAR 18 Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-21

38 B implementation and the indicated crediting period? Is the data provided in this section in consistency with data as presented in other chapters of the? in GSP CAR 19 purchase agreement to the validation team. Corrective Action Request No. 19: The indicated start of the crediting period (01/01/2008) in the is not possible. Please correct the start of the crediting period to a realistic date. The period between the date of submission for registration and the starting date of the crediting period has to be at least 8 weeks. It is not necessary to revise the emission reductions calculation if the approach year 1 to year 7 is chosen., no contradiction. B.7. Application of the monitoring methodology and description of the monitoring plan Final B.7.1. Data and parameters monitored B B Is the list of parameters presented by chapter B.7.1 considered to be complete with regard to the requirements of the applied methodology? Parameter Title: Electricity supplied to the grid The list of parameters presented by chapter B.7.1. is considered to be complete. - Corrective Action Request No. 20: Referring to the parameter electricity supplied to the grid : Accuracy of the power meters should be indicated in the as well as reference to calibration standards. Monitoring Checklist / No Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided for estimation? Has this value been verified? Measurement method correctly described? CAR 20 Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-22

39 Correct reference to standards? Indication of accuracy provided? QA/QC procedures described? QA/QC procedures appropriate? No No in GSP Final B Parameter Title: Quantity of steam produced (for geothermal projects only) Monitoring Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided for estimation? Has this value been verified? Measurement method correctly described? Correct reference to standards? Indication of accuracy provided? QA/QC procedures described? QA/QC procedures appropriate? / No B Parameter Title: Fraction of CO 2 in steam produced (for geothermal projects only) Monitoring Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided for estimation? Has this value been verified? Measurement method correctly described? Correct reference to standards? / No Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-23

40 Indication of accuracy provided? QA/QC procedures described? QA/QC procedures appropriate? in GSP Final B Parameter Title: Fraction of CH 4 in steam produced (for geothermal projects only) Monitoring Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided for estimation? Has this value been verified? Measurement method correctly described? Correct reference to standards? Indication of accuracy provided? QA/QC procedures described? QA/QC procedures appropriate? / No B Parameter Title: Quantity of steam generated during well testing (for geothermal projects only) Monitoring Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided for estimation? Has this value been verified? Measurement method correctly described? Correct reference to standards? Indication of accuracy provided? / No Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-24

41 QA/QC procedures described? QA/QC procedures appropriate? in GSP Final B Parameter Title: Fraction of CO 2 in steam during well testing (for geothermal projects only) Monitoring Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided for estimation? Has this value been verified? Measurement method correctly described? Correct reference to standards? Indication of accuracy provided? QA/QC procedures described? QA/QC procedures appropriate? / No B Parameter Title: Fraction of CH 4 in steam during well testing (for geothermal projects only) Monitoring Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided for estimation? Has this value been verified? Measurement method correctly described? Correct reference to standards? Indication of accuracy provided? QA/QC procedures described? / No Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-25

42 QA/QC procedures appropriate? in GSP Final B Parameter Title: CO 2 emission coefficient of fuel used by the geothermal plant (for geothermal projects only) Monitoring Checklist Title in line with methodology? Data unit correctly expressed? Appropriate description of parameter? Source clearly referenced? Correct value provided for estimation? Has this value been verified? Measurement method correctly described? Correct reference to standards? Indication of accuracy provided? QA/QC procedures described? QA/QC procedures appropriate? / No B.7.2. Description of the monitoring plan B B Is the operational and management structure clearly described and in compliance with the envisoned situation? Are responsibilities and institutional arrangements for data collection and archiving clearly provided?. The operational and management structure is presented in the chapter B According to the monitoring plan in the, a manager of monitor and check is responsible for supervising and checking data and whole data record process. Meanwhile, a site engineer will collect data, calculate emission reduction and prepare the monitor report. Records are based on monthly meter reading and electricity sale receipts. B Does the monitoring plan provide current According to the project owner, net supplied electricity can not be directly measured. It is the difference between the supplied power CAR 21 Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-26

43 good monitoring practice? and the imported power. Corrective Action Request No. 21: 1, Please explain in B.7.2. of the how the net electricity will be measured. Does the key meter (as well as the check-meter), mentioned in the, measure bi-directional, i.e. electricity supplied to the grid and electricity purchased from the grid by the project activity? 2, How the wind farm will be supplied with electricity if the grid fails? Is there a back up line? How is it guaranteed that only the net electricity will be used for the calculation of the emission reductions? 3. Please provide a diagram in B.7.2. about the location of the power meters. in GSP Final B If applicable: Does annex 4 provide useful information enabling a better understanding of the envisoned monitoring provisions? No additional information is available in Annex 4. B.8. Date of completion of the application of the baseline study and monitoring methodology an the name of the responsible person(s)/entity(ies) B.8.1. B.8.2. B.8.3. Is there any indication of a date when the baseline was determined? Is this consistent with the time line of the history? Is the information on the person(s) / entity(ies) responsible for the application of the baseline and monitoring methodology provided consistent with the actual situa-, 10/05/2007. CAR Corrective Action Request No. 22: 22 Please revise the date to the appropriate form DD/MM/YYYY, it is consistent. Mr.Shenggang ZHU and Mr.Bingzhi SUN from China Fulin Windpower Development Corporation determined the baseline study and monitoring methodology Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-27

44 B.8.4. tion? Is information provided whether this person / entity is also considered a project participant? C. Duration of the project activity / crediting period C.1. Duration of the project activity in GSP. The mentioned entity is not a project participant. Final C.1.1. Are the project s starting date and operational lifetime clearly defined and reasonable? 22 According to the, the project start is defined on Apr.19 th, The expected operational lifetime of the project activity is 20 years. C.2. Choice of the crediting period and related information C.2.1. Is the assumed crediting time clearly defined and reasonable (renewable crediting period of max 7 years with potential for 2 renewals or fixed crediting period of max. 10 years)? 7 years with potential for 2 renewals is chosen as the crediting period. However, the starting date of the crediting period should be redefined. See B CAR 19 D. Environmental impacts D.1. Documentation on the analysis of the environmental impacts, including transboundary impacts D.1.1. D.1.2. Has the analysis of the environmental impacts of the project activity been sufficiently described? Are there any Host Party requirements for an Environmental Impact Assessment (EIA), and if yes, has an EIA been ap- 8,9 8,9, the environmental impacts of the project activity during the construction period and operation period are analyzed in the., EIA is a must in P. R. China for new wind farm projects. The EIA of the proposed project was approved by Gansu EPB, dated 11st. Nov, The documents have been reviewed by the DOE. However, the does not inform about the date of EIA CAR 23 Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-28

45 proved? approval. Corrective Action Request No. 23: The (D.1.) should inform about the EIA s approval date. in GSP Final D.1.3. D.1.4. Will the project create any adverse environmental effects? Were transboundary environmental impacts identified in the analysis? 8,9 8,9 Referred to the EIA and the approval of EIA, the project will create no negative environmental impacts. There is no trans-boundary impact described in EIA report or approval of EIA. D.2. If environmental impacts are considered significant by the project participants or the host Party, please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party D.2.1. D.2.2. Have the identified environmental impacts been addressed in the project design sufficiently? Does the project comply with environmental legislation in the host country? E. Stakeholders comments 8,9 8,9 Referring to the EIA and the approval of EIA, there are no adverse environmental impacts from the project activity., the project is in conformity with the environmental legislation of P. R. China and the EIA has been approved by an authorized organization. E.1. Brief description how comments by local stakeholders have been invited and compiled E.1.1. E.1.2. Have relevant stakeholders been consulted? Have appropriate media been used to invite comments by local stakeholders? 15 15, questionnaires were used to consult the relevant stakeholders. The local stakeholders were invited by verbal notice or telephone notice by project owners, Questionnaire of stakeholders comments was used, Dated 1 st,july Corrective Action Request No. 24: CAR 24 Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-29

46 E.1.3. E.1.4. If a stakeholder consultation process is required by regulations/laws in the host country, has the stakeholder consultation process been carried out in accordance with such regulations/laws? Is the undertaken stakeholder process that was carried out described in a complete and transparent manner? Please provide information in the about the media used for the invitation of stakeholders and the date when those invitations were sent to the stakeholders. There are no regulations/laws in China for carrying out the stakeholder consultation process for this project activity.. Confirmed with the detailed documents, the process is described in a complete and transparent manner. in GSP Final E.2. Summary of the comments received E.2.1. Is a summary of the stakeholder comments received provided? 15, see E.2. of the. E.3. Report on how due account was taken of any comments received E.3.1. Has due account been taken of any stakeholder comments received? 15 All stakeholder comments are positive, no action has been taken. F. Annexes 1 4 Annex 1: Contact Information F.1.1. F.1.2. Is the information provided consistent with the one given under section A.3? Is the information on all private participants and directly involved Parties presented?. The information about Gansu Jieyuan Wind Power Co., Ltd. and EDF Trading Limited is presented. Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-30

47 Annex 2: Information regarding public funding F.1.3. F.1.4. Is the information provided on the inclusion of public funding (if any) in consistency with the actual situation presented by the project participants? If necessary: Is an affirmation available that any such funding from Annex-Icountries does not result in a diversion of ODA?. There is no public funding taking place; all costs are covered by bank loans and private equity. in GSP See F.1.3 Final Annex 3: Baseline information F.1.5. F.1.6. F.1.7. If additional background information on baseline data is provided: Is this information consistent with data presented by other sections of the? Is the data provided verifiable? Has sufficient evidence been provided to the validation team? Does the additional information substantiate / support statements given in other sections of the?. The input data to calculate OM and BM are provided in Annex 3.. The data are consistent with the NDRC issued data from 2002 to 2004 and have been verified by the audit team. See A See F.1.5. Annex 5: Monitoring information F.1.8. If additional background information on monitoring is provided: Is this information consistent with data presented in other sections of the? No additional information is available in Annex 4. F.1.9. Is the information provided verifiable? Has See F.1.8. Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-31

48 F sufficient evidence been provided to the validation team? Do the additional information and / or documented procedures substantiate / support statements given in other sections of the? in GSP See F.1.8. Final Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-32

49 Table 2 Resolution of Corrective Action and Clarification Requests Clarifications and corrective action requests by validation team Corrective Action Request No. 1: A revision history of the should be included. Corrective Action Request No. 2: Please include the following information in A.3. of the : a) (*) In accordance with CDM modalities and procedures, at the time of making the CDM- public at the stage of validation, a party involved may not have provided its approval. At the time of requesting registration, the approval by the party(ies) involved is required. b) For further details please refer to Annex 1 of the. Ref. to table 1 A.1.2 Summary of project owner response A revision history of the has been included in the page 2 of the. Validation team conclusion The history revision of has been revised correctly. A.3.1 The information has been included in A.3 of the. The related information has been added in A3. Corrective Action Request No. 3: The proposed project activity consists of a windfarm with a certain geographical area. Please mention at least 4 geographical coordinates (4 corner points) to limit the area. It should be clear from where those GSP coordinates were taken. Please submit the respective evidence. A4.1.1 The geographical coordinates of the corner points has been included in the page 3 of the. The figure of turbine location has been submitted to the validation team. DOE: It should be clear from where those GPS coordinates were taken. PP: The has been revised accordingly. The GPS coordinates describe the whole area of wind farm. Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-33

50 Corrective Action Request No. 4: Please deliver the evidence of the EIA and its approval to the DOE. Corrective Action Request No. 5: Please submit an evidence for the operational lifetime of the wind turbines. A4.1.2 A4.3.7 The EIA and its approval have been delivered to the DOE. The general specification of the wind turbines has been submitted to the validation team as an evidence for the operational lifetime of the wind turbines. DOE: The manufacturer and its operational lifetime should be described in EIA of Gansu Yumen Sanshilijingzi Wind Power Project, issued by national environmental protection bureau, dated Dec Approval of EIA of Gansu Yumen Sanshilijingzi Wind Power Project, issued by Gansu EPB, dated11th. Jan The manufacturer operational lifetime is 20 years. Corrective Action Request No. 6: Please deliver the training contracts and training materials to the DOE. A4.3.9 PP: The manufacturer and its operational lifetime have been added in. The technical training contract and training materials have been delivered to the DOE. DOE: The training schedule and result should be described in. The training description has been added in page 5. PP: The training schedule and result have been added in (Page 7). Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-34

51 Corrective Action Request No. 7: The time schedule for the implementation of the project should be included into the. A The time schedule for the implementation of the project has been included into the page 6 of the. DOE: The time schedule is key events schedule, which should comprise starting date of construction and operation, the date of the feasibility study and the date when CDM was the first time considered and so on. PP: The time schedule has been revised accordingly in the (Page6). The key events schedule is described in Page 6. Corrective Action Request No. 8: B.3.informs that the proposed project delivers its electricity generated to Northeast china power grid this is not correct, as the relevant grid is the Northwest china power grid. Please correct. B.3.7 The has been corrected accordingly. Please see page 8 of the. The related paragraph has been revised correctly. Corrective Action Request No. 9: Please deliver the evidence that CDM has been considered seriously in the decision to proceed with the project activity. Please include the information about CDM consideration into the. B.5.1 The decision of the corporation directorate has been delivered to the DOE. The information has been included in the page 9 of the. The CDM consideration evidence has been delivered to DOE. Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-35

52 Corrective Action Request No. 10: 1. The related laws and regulations should be quoted but not linked to the website, because web pages can change. 2. Sub-step 1b) mentions that According to the applicable laws and regulations, the alternative a) should be eliminated from the following consideration. This is not correct, it should refer to alternative 2. Please correct. 3. Outcome of step 1b) should not refer to alternative d) but to alternative 4, as mentioned earlier in the. B.5.4 The has been revised accordingly. The revision could be found in the page 10 of the. The laws have been delivered to DOE. The paragraph has been revised and evidence has been delivered to DOE. Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-36

53 Corrective Action Request No. 11: a) Information about installed capacity, total investment, annual output, total operating cost, electricity tariff, value added tax,income tax, expected CER price, operational lifetime is not consistent between Table 1 of the and the excel calculation sheet. Please correct. Regarding the electricity tariff, it should be considered that RMB/kWh is for the first operating hours, for the remaining operating hours. Please revise IRR calculation if necessary. b) Please inform about the source of the main parameters for the calculation of the IRR in the. Please submit the evidence to the validation team if this has not occurred yet. Otherwise it is not possible for the validation team to assess whether the source and the parameters are appropriate and are conforming the time line of the proposed project activity. c) Please submit the evidence for the applied benchmark of 8 %. B.5.11 The has been corrected accordingly and the source of the parameters has been added in the. The revision could be found in the page 12 of the. The IRR calculation has been revised accordingly and been delivered to the DOE. The reference of benchmark has been submitted to the DOE. DOE: Please provide the full copy of IRR source(s) including partial translation of the following main parameters: o Cover page, date of completion o All IRR input parameters taken from the source o Benchmark value o IRR result o Overall result/outcome, such as weather the project is feasible according to the study or not PP: All the documents requested have been provided to the DOE. The required documents have been provided to DOE. Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-37

54 Corrective Action Request No. 12: Please present the common practice analysis in a complete manner in the and consider all wind farms in a reasonable margin (e.g. between 30 and 70 MW installed capacity). Please describe in detail why the mentioned plants are economically feasible without CDM revenue, and what is the difference between the project activity and the existing projects. The current status of those similar project activities should be described in the. B.5.15 The has been revised accordingly. The common practice analysis has been presented in a complete manner in the which could be found in the page 14 of the. DOE: Please provide the evidence of common practice including partial translation. PP: The evidence of common practice has been provided. The evidence of common practice has been delivered to DOE. Corrective Action Request No. 13: Please describe in the how the project activity helps to overcome the economic and financial hurdles. Corrective Action Request No. 14: Please provide the evidence of the share of the low-cost/must run resources in the North West China Power Grid mentioned in the. B B6.1.1 The IRR of the project would be 9.11% with the income from CERs. Therefore, CDM could help the project overcome the economic and financial hundles. DOE: See CAR11 PP: All the documents requested have been provided to the DOE. The evidence has been added as the footnote 13 in the page 15 of the. Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-38

55 Corrective Action Request No. 15: a) Step 1 in B.6.1. mentions..the Operation Margin emission factor EF ) of Middle China Power Grid ( OM, y is tco2/mwh. This is not correct as the proposed project activity belongs to the North West China Power grid. Please correct. B6.1.2 The has been corrected accordingly. The revisions were shown in the page 17 and 19 of the. DOE: According to enacted OM and BM of NDRC in Aug.9 th 2007, the OM should be and BM should be , please revise them. PP: The has been revised (Page 18 and 20). OM&BM have been revised according to enacted values of NDRC in Aug.9 th b) Step 2 in B.6.1. mentions The Opera- EF BM y, tion Margin emission factor ( ) of which the proposed project will use is tco 2 /MWh.. Please revise as EF BM,y does not refer to the operation margin, but to the build margin. Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-39

56 Corrective Action Request No. 16: 1. The following parameters have to be added in the. - Internal power consumption rate of power plants B6.2.1 The parameters have been added in the page of the. The years of the yearbooks have been included. There is no corresponding information in page 21 to 23 in - Efficiency of advanced thermal power plant additions - Capacity by power generation source - 2. For those parameters whose source of data is China Energy Statistical Yearbook should be included the years of the yearbooks. Corrective Action Request No. 17: The description should refer to power sources i. B6.2.9 The description has been revised accordingly. The revision was shown in the page of the. The information has been described in. Corrective Action Request No. 18: Please choose as project s starting date the date of the purchase contract (agreement) of the main equipment. Please submit the purchase agreement to the validation team. B The purchase agreement has been submitted to the validation team. The purchase contract has signed with Gamesa wind Co.,Ltd. Dated Apr Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-40

57 Corrective Action Request No. 19: The indicated start of the crediting period (01/01/2008) in the is not possible. Please correct the start of the crediting period to a realistic date. The period between the date of submission for registration and the starting date of the crediting period has to be at least 8 weeks. It is not necessary to revise the emission reductions calculation if the approach year 1 to year 7 is chosen. Corrective Action Request No. 20: Referring to the parameter electricity supplied to the grid : Accuracy of the power meters should be indicated in the as well as reference to calibration standards. B B The start of the crediting period has been corrected to 01/01/2009. The accuracy of the meters and the calibration standards have been indicated in the which were shown in the page 24 of the. The start of the crediting period has been corrected to 01/01/2009. The information has been described in. Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-41

58 Corrective Action Request No. 21: 1, Please explain in B.7.2. of the how the net electricity will be measured. Does the key meter (as well as the check-meter), mentioned in the, measure bi-directional, i.e. electricity supplied to the grid and electricity purchased from the grid by the project activity? 2, How the wind farm will be supplied with electricity if the grid fails? Is there a back up line? How is it guaranteed that only the net electricity will be used for the calculation of the emission reductions? 3. Please provide a diagram in B.7.2. about the location of the power meters. B7.2.3 The has explained how the net electricity will be measured. The diagram about the location of the power meters has been added in the. The information was shown in the page 26 of the. DOE: The back up line should be explained detailed. PP: There is no backup line. The meters measure bidirectionally. The net electricity delivered to the grid is the positive electricity delivered to the grid from which negative electricity is deducted. The information was shown in the page 27 of the. The information has been listed in the Corrective Action Request No. 22: Please revise the date to the appropriate form DD/MM/YYYY Corrective Action Request No. 23: The (D.1.) should inform about the EIA s approval date. Corrective Action Request No. 24: Please provide information in the about the media used for the invitation of stakeholders and the date when those invitations were sent to the stakeholders. B8.1 The has been revised accordingly.(page 28) D1.2 The approval date has been informed in the. (Page 32) E1.2 The information has been provided in the.(page 34) EIA approval date is Jan.11 th 2007 Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-42

59 Open Issue The LoA of United Kingdom and of China have not been presented to the DOE yet. The MoC has not been provided to the DOE yet. Please submit the respective documents if available A3.2 The PP s LoAs and MoC have been delivered to DOE Table 1 is applicable to ACM0002, version 06 with ex-ante determination of CM Page A-43

60 Validation of the CDM Project: Gansu Yumen Sanshilijingzi Wind Power Project Annex 2: Information Reference List