CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-PDD) Version 02 - in effect as of: 1 July 2004) CONTENTS

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1 CDM Executive Bord pge 1 CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-PDD) Version 02 - in effect s of: 1 July 2004) CONTENTS A. Generl description of project ctivity B. Appliction of bseline methodology C. Durtion of the project ctivity / Crediting period D. Appliction of monitoring methodology nd pln E. Estimtion of GHG emissions by sources F. Environmentl impcts G. Stkeholders comments Annexes Annex 1: Contct informtion on prticipnts in the project ctivity Annex 2: Informtion regrding public funding Annex 3: Bseline informtion Annex 4: Monitoring pln

2 CDM Executive Bord pge 2 SECTION A. Generl description of project ctivity A.1 Title of the project ctivity: Power genertion from wste het t NSIL Version: 01 Dte: 09/05/2006 A.2. Description of the project ctivity: Purpose Nlw Sponge Iron Limited (NSIL) hs implemented Wste Het Recovery (WHR) bsed Power Project t their sponge iron plnt. The NSIL sponge iron plnt hs 6 rotry kilns of 100 tonnes per dy (tpd) cpcity ech for sponge iron production t Rigrh in Chhttisgrh stte. Opertion of these rotry kiln releses round 20,000 22,000 Nm 3 /hr of gses per kiln t high temperture of round C. The wste gs does not contin ny voltile gses nd the only green house gs (GHG) present in it is CO 2. The composition of the wste gses remins unltered due to the project ctivity. As per norml prctice, these wste gses re relesed in the tmosphere fter ir scrubbing. In this wy, the sensible het of the wste gses goes unutilised. This is loss in terms of energy s the escping gses hve the potentil of producing lrge mount of stem through het exchnger, which cn either be used for power genertion or for some process. The purpose of the project ctivity is to recover the sensible het vilble from wste hot gses emnting from the kiln nd to generte power out of it for cptive purposes. The project ctivity results in chieving energy efficiency through wste het recovery nd significntly reducing the effect of therml pollution to tmosphere. The project ctivity consists of 6 numbers of wste het recovery boilers connected to the 6 rotry kilns. The sensible het from the gs is extrcted in the boilers nd the exhust gs is therefter let out to the tmosphere through tll stcks t round C. The stem produced in the boilers is used to run the stem turbine genertor to generte 2x8 MW electricity. In the bsence of the project, NSIL would hve purchsed similr quntum of electricity from Jindl Steel & Power Limited or the grid. Project Activity s contribution to Sustinble Development The sustinble development indictors stipulted by the Government of Indi (host country) in the interim pprovl guidelines for CDM projects re s follows 1,2 : Socil well being Economic well being Environmentl well being Technologicl well being The NSIL project ctivity ssists in chieving the bove components of sustinble development s follows:

3 CDM Executive Bord pge 3 Socil well being The project ctivity results in genertion of direct nd indirect employment 3. This employment genertion ws during the stge of construction of the wste het recovery bsed power genertion units t the project site nd t the equipment supplier s end. Also humn resource would be required continuously to operte the power plnt. In the bsence of the project ctivity, no such employment genertion would hve occurred either during the construction phse or during the opertionl phse. Economic well being The project ctivity would help in reducing the energy requirements by effectively utilizing the wste gses. Indirectly this would result in displcement of col for energy purpose (s col is the predominnt fuel used for power genertion in the region). Mssive power genertion cpcity is expected in the country during the tenth nd eleventh five yer pln predominntly bsed on col s fuel. The domestic col production hs not been ble to keep pce with the growing demnd of col for power production leding to poor plnt lod fctor nd/or import of col, thereby reduced grid relibility. The displcement of grid through wste het bsed power genertion would prtilly reduce the dependency on col nd improve the grid relibility nd stbility thus ttrcting further investments in the region, consequently enhncing trde. Environmentl well being The project ctivity helps positively in direction of globl climte chnge by voiding the genertion of greenhouse gses which would hve been generted if equivlent mount of power would hve been imported from the grid. It would lso result in voidnce of therml pollution in the vicinity tht would hve occurred due to wste gs emissions t high temperture. Technologicl well being High pressure boilers nd turbines hve been used for the power genertion purpose from the wste gses thereby mximizing the power output. The best vilble technology hs been used in the project ctivity. Thus it is ensured tht the project ctivity is in-line with the sustinble development criteri given by the Indin Government. It hs positive contribution towrds the stipulted indictors. A.3. Project prticipnts: Nme of Prty involved* ((host) indictes host Prty) Indi (host) Privte nd/or public entity(ies) project prticipnts (s pplicble) Nlw Sponge Iron Limited (NSIL) The Prty involved wishes to be considered s project prticipnt (Yes/No) No 3

4 CDM Executive Bord pge 4 A.4. Technicl description of the project ctivity: A.4.1. Loction of the project ctivity: The project ctivity is locted djcent to existing rotry kiln module. The P.H. No. of the project ctivity is 36, Khsr No Indi Chhttisgrh A A Host Prty(ies): Region/Stte/Province etc.: A City/Town/Community etc: Villge Triml, Tehsil Ghrghod, District Rigrh A Detil of physicl loction, including informtion llowing the unique identifiction of this project ctivity (mximum one pge): The project ctivity is bout km North of Rigrh town in the stte of Chhttisgrh, by the side of Rigrh Chrchod highwy. The plnt fcilities re locted more thn 500 meter wy from the rod. Kelo river flows bout 1-2 km est side of the plnt. The site is surrounded by Triml villge (0.5 1 km in NE direction) nd Gerwni villge (1-2 km SSE direction). The Mumbi Howrh rilwy line is locted bout 16 km south of the plnt. The nerest rilwy sttion is Rigrh.

5 CDM Executive Bord pge 5 Loction of Project Activity (mp not to scle)

6 CDM Executive Bord pge 6 A.4.2. Ctegory(ies) of project ctivity: The project ctivity is lrge scle potentil CDM project relted to energy genertion from wste gses thus fits under the Ctegory 1: Energy Industries (renewble / non-renewble sources) s per List of Sectorl Scopes.. A.4.3. Technology to be employed by the project ctivity: The project ctivity consists of the following min units: 6 numbers of wste het recovery boilers 2 numbers number of stem turbines Electricl genertor Approprite power evcution system nd the relted instrumenttion nd controls. The technicl specifictions of the key units re s follows: Wste het recovery boiler The WHRB re semi outdoor type, wste gses bsed, nturl circultion, rdint, non-rehet, wet bottom type. The stem generting unit comprises of boiler drum, wter cooled furnce wll system, economiser, super heters, ir heter, ID fns etc. Stem output : 12 tonnes per hour Stem pressure : 66 kg/cm 2 Stem temperture : C Stem turbine The turbine re single cylinder, multistge, tndem compound, non-rehet, condensing regenertive feed heting type unit. Cpcity : 8 MW Stem pressure : 64 kg/cm 2 Stem temperture : C Rted speed : 7000 RPM Electricl genertor Type : Two pole,3 phse Air cooled, Brushless excittion with digitl utomtic voltge regultion system Speed : 1500 RPM Frequency : 50 Hz Power fctor : 0.8 (lgging) Voltge : 11 kv The high pressure boiler nd turbine would ensure tht mximum power output is obtined from the wste gs. The power getting generted in the power plnt t 11 kv is stepped up to 132 kv nd connected to the existing 132 kv switchyrd of NSIL. The high voltge trnsmission nd the proximity of the switchyrd would ensure tht the trnsmission nd distribution losses re miniml. The technology for the boilers nd turbines is well estblished nd vilble in Indi nd the project ctivity does not involve ny trnsfer of technology.

7 CDM Executive Bord pge 7 A.4.4. Brief explntion of how the nthropogenic emissions of nthropogenic greenhouse gs (GHGs) by sources re to be reduced by the proposed CDM project ctivity, including why the emission reductions would not occur in the bsence of the proposed project ctivity, tking into ccount ntionl nd/or sectorl policies nd circumstnces: The project ctivity would be generting electricity through the recovery of sensible het from the wste gs emnting from the smller sized kilns. In the bsence of the project ctivity, the gs would hve been relesed through the stck without het recovery. Thus, due to the project ctivity, electricity will be generted without ny GHG emissions. This electricity will be displcing/voiding the fossil fuel bsed power genertion (primrily col bsed) in the Western Grid (genertion mix: therml (col nd gs) 90.86%, nucler nd other renewble sources 9.14%: refer to Tble B3). The project ctivity would be generting round million units of electricity over period of 10 yers nd hence would result in CO 2 emission reduction of 374,270 tonnes. Currently no ntionl or sectorl policy is existent in Indi tht promotes wste het recovery in the sponge iron industry 4 or stted in the drft ntionl steel policy 5. Although Chhttisgrh government hs policy of llowing industries (with investments on fixed ssets in excess of INR 1000 millions) to hve cptive power plnt, to generte power from wste het recovery 6 nd exemption from electricity duty for period of 15 yers; these policies do not essentilly mndte the industry to set up wste het recovery unit. Still, s sustinble development mesure, NSIL hs gone forwrd for wste het recovery power genertion

8 CDM Executive Bord pge 8 A crediting period: Yers Estimted mount of emission reductions over the chosen Annul estimtion of emission reductions in tonnes of CO 2 e , , , , , , , , , ,427 Totl estimted reductions (tonnes of CO 2 e) 374,270 Totl number of crediting yers 10 Annul verge over the crediting period of estimted reductions (tonnes of CO 2 e) 37,427 A.4.5. Public funding of the project ctivity: No public funding from prties included in Annex I is involved in the project ctivity

9 CDM Executive Bord pge 9 SECTION B. Appliction of bseline methodology B.1. Title nd reference of the pproved bseline methodology pplied to the project ctivity: Title: Consolidted bseline methodology for wste gs nd/or het nd/or pressure for power genertion Reference: UNFCCC Approved consolidted bseline methodology ACM0004 / Version 02, Sectorl Scope: 01, 03 Mrch B.1.1. Justifiction of the choice of the methodology nd why it is pplicble to the project ctivity: The methodology ACM0004 is pplicble to project ctivities tht generte electricity from wste het or the combustion of wste gs in industril fcilities. The methodology pplies to electricity genertion project ctivities: tht displce electricity genertion with fossil fuels in the electricity grid or displce cptive electricity genertion from fossil fuels; where no fuel switch is done in the process where the wste het or pressure or the wste gs is produced fter the implementtion of the project ctivity The methodology covers both new nd existing fcilities. For existing fcilities, the methodology pplies to existing cpcity, s well s to plnned increses in cpcity during the crediting period. The project ctivity utilizes the wste gs emnting from the kilns t NSIL to produce electricity. NSIL imports electricity from JSPL which lso supplies electricity to the regionl grid. So due to the project ctivity JSPL would be exporting similr quntum of electricity (s supplied to NSIL) to the regionl grid. Thus due to the cscding effect the NSIL project ctivity would essentilly displce the regionl grid. The generted electricity will prtilly fulfil the electricity demnd t the NSIL plnt nd thereby helps in displcing the grid power. Effectively the project ctivity would be displcing the electricity genertion with fossil fuels in the electricity grid, thereby stisfying the first pplicbility criteri of the methodology. Moreover, in the project ctivity, no fuel switch is being done in the process where the wste het is produced. The wste gses remin the sme before nd fter the project ctivity (the composition remins unltered) except tht the temperture of the exit gses gets lowered. Thus the project ctivity stisfies ll the pplicbility conditions s specified in the methodology ACM0004, thence the sid methodology is pplicble for the project ctivity. B.2. Description of how the methodology is pplied in the context of the project ctivity: The methodology s pplied to the project ctivity hs the following steps: 1. Identifiction of lterntive bseline scenrios consistent with current lws nd regultions; 2. Additionlity ssessment of the project; 3. Determintion of project emissions; 4. Determintion of bseline emission; 5. Estimtion of emission reduction.

10 CDM Executive Bord pge 10 Step 1: Identifiction of lterntive bseline scenrios consistent with current lws nd regultions: The methodology s pplied to the project ctivity involves the identifiction of lterntive bseline scenrios tht provide or produce electricity for in-house consumption excluding options tht: do not comply with legl nd regultory requirements; or depend on key resources such s fuels, mterils or technology tht re not vilble t the project site. The possible lterntive bseline scenrios re s follows: Alterntive 1: The project ctivity not undertken s CDM project ctivity NSIL my set up the wste het recovery bsed electricity genertion t its fcility for meeting in-house requirements. This lterntive is in complince with ll pplicble legl nd regultory requirements. However, this lterntive fces number of brriers (s detiled in Section B3 below) mking it predictbly prohibitive. Hence this option is not prt of bseline scenrio. Alterntive 2: Import of electricity from the grid In this lterntive net electricity being produced by the project ctivity gets generted by the regionl grid. Thus n equivlent mount of CO 2 emissions would tke plce t the therml power plnts supplying power to Western region electricity grid. This lterntive is in complince with ll pplicble legl nd regultory requirements nd cn be bseline scenrio. Alterntive 3: Col bsed cptive power genertion A col bsed cptive power plnt put up t NSIL. This lterntive is in complince with ll pplicble legl nd regultory requirements. But this lterntive would require dditionl investments for putting up the col bsed power plnt. Alterntive 4: Diesel bsed cptive power genertion A diesel bsed cptive power plnt put up t NSIL. Although, this lterntive is in complince with ll pplicble legl nd regultory requirements, it is economiclly prohibitive given the rising crude prices nd thereby higher cost of genertion. Thus it cn be excluded from the bseline scenrio. Alterntive 5: Gs bsed cptive power genertion NSIL my generte its own power using nturl gs bsed cptive power plnt. Although this lterntive is in complince with ll regultory nd legl requirements, it is not relistic lterntive due to nonvilbility of nturl gs distribution network in Chttisgrh 7. Therefore, lterntive 5 my be excluded from bseline scenrio. Among ll these lterntives, the lterntive tht does not fce ny prohibitive brriers nd is the most economiclly ttrctive should be considered s the bseline scenrio. Thus from the bove identified lterntives, it cn be found tht lterntives 2 nd 3 re the most likely lterntives for the bseline scenrio. Tking conservtive pproch, Alterntive 2: Import of electricity from the grid would be the most likely bseline scenrio, s it fces no prohibitive brrier nd is lso economiclly ttrctive. It my be noted tht the bseline emission fctor of the grid is more conservtive thn tht of the col bsed cptive power genertion, s the grid mix consists of col, gs, hydro, nucler nd other renewble energy sources. 7 Stte wise/sector wise Alloction of Nturl Gs -

11 CDM Executive Bord pge 11 Step 2: Additionlity ssessment of the project: Plese refer to section B.3. for the dditionlity of the project ctivity. Step 3: Determintion of project emissions: The wste gs emnting from the kilns is not hving ny clorific vlue nd hence cnnot be fired in furnce. Also there is no provision of uxiliry fuel firing in the project ctivity, thus there would not be ny emissions in the project ctivity. Step 4: Determintion of bseline emission: Tking conservtive pproch the bseline scenrio pplicble to the project ctivity is import of electricity from the grid, ccordingly the bseline emission fctor for displced electricity hs been clculted in ccordnce with ACM0002/Version 05 (3 rd Mrch 2006). The combined mrgin hs been clculted s described in the methodology tking the relevnt grid definitions nd emission fctors. Plese refer nnex 3 for the detils in determining the bseline emissions. Step 5: Estimtion of emission reduction: As per the methodology the emission reductions by the project ctivity re clculted s the difference between bseline emissions nd project emissions. Since there re no project emissions in the project ctivity so the emission reductions re equivlent to the bseline emissions. B.3. Description of how the nthropogenic emissions of GHG by sources re reduced below those tht would hve occurred in the bsence of the registered CDM project ctivity: As per the decision 17/cp.7, prgrph 43, CDM project ctivity is dditionl if nthropogenic emissions of green house gses by sources re reduced below those tht would hve occurred in bsence of registered CDM project ctivity. The methodology requires the project proponent to determine the dditionlity bsed on Tool for the demonstrtion nd ssessment of dditionlity, Version 02, dted 28 November The flowchrt in the figure below provides step-wise pproch to estblish dditionlity of the project ctivity.

12 CDM Executive Bord pge 12 Step 0: Preliminry screening bsed on the strting dte of the project ctivity Pss Step 1: Identifiction of lterntives to the project ctivity consistent with current lws nd regultions Pss Step 2: Investment Anlysis Step 3: Brrier Anlysis Pss Step 4: Common Prctice Pss Step 5: Impct of CDM registrtion Pss Project ctivity is dditionl Flowchrt for demonstrting dditionlity of the project Step 0: Preliminry screening bsed on the strting dte of the project ctivity If project prticipnts wish to hve the crediting period strting prior to the registrtion of their project ctivity, they shll: () Provide evidence tht the strting dte of the CDM project ctivity flls between 1 Jnury 2000 nd the dte of the registrtion of first CDM project ctivity, bering in mind tht only CDM project ctivities submitted for registrtion before 31 December 2005 my clim for crediting period strting before the dte of registrtion; (b) Provide evidence tht the incentive from the CDM ws seriously considered in the decision to proceed with the project ctivity. This evidence shll be bsed on (preferbly officil, legl nd/or other corporte) documenttion tht ws vilble to third prties t, or prior to, the strt of the project ctivity.

13 CDM Executive Bord pge 13 NSIL intends to hve the crediting period strting fter the project ctivity gets registered; hence this step is not pplicble. Step 1: Identifiction of lterntives to the project ctivity consistent with current lws nd regultions Sub-step 1. Define lterntives to the project ctivity; Sub-step 1b. Enforcement of pplicble lws nd regultions. Referring to section B.2. the lterntives vilble to NSIL re: Import of electricity from the grid Col bsed cptive power genertion on site Both these lterntives re in line with the pplicble lws nd regultions nd thus cn be prt of the bseline scenrio. To be on the conservtive side, import of elctricity from the grid hs been tken s the bseline scenrio, s this hs lower emission fctor. Step 2: Investment nlysis Or Step 3: Brrier nlysis NSIL proceeds to estblish project dditionlity by conducting the Step 3: Brrier Anlysis. The project proponent is required to determine whether the proposed project ctivity fces brriers tht: () Prevent the implementtion of this type of proposed project ctivity; nd (b) Do not prevent the implementtion of t lest one of the lterntives through the following sub-steps: Sub-step 3. Identify brriers tht would prevent the implementtion of type of the proposed project ctivity The project ctivity hd its ssocited brriers to successful implementtion. These brriers re detiled below: Technologicl brriers: Dirty wste gs: the gs leving the kiln hs very high prticulte lod tht cn crete erosion nd fouling problems on the gs side of the boiler tubes. The wste gses emnting from the kilns hve high levels of SO 2 nd SO 3 in them. The wste gs must therefore be kept t temperture greter thn 150 C to prevent the condenstion of these gses s sulphuric cid. Sulphuric cid is highly corrosive nd would severely dmge downstrem equipment such s the electrosttic precipittor, fns, dmpers nd the exhust stck. Also there is nitrte stress corrosion crcking likely in wste het recovery boilers 8. Input het vritions: The gs generted by the DRI kiln vries widely in both flow nd het over short periods of time. Thereby the power output my vry. Thus incorportion of n ttempertor (n over-sized stem drum) ws required so tht the effects of such wide vritions re effectively blnced out. Mximising electricity production: To mximise the electricity production from the wste gses high pressure nd high temperture configurtion is being utilised in the project ctivity. A fully 8 Nitrte Stress Corrosion Crcking in Wste Het Recovery Boilers, R.G.I. Leferink, W.M.M. Huijbregts. C, Anti-Corrosion Methods nd Mterils, Vol 49 (2002), No 2, p

14 CDM Executive Bord pge 14 condensing turbine which gives the mximum power output is being used in the project ctivity. Also the flue gs exit in the project ctivity is being kept to the lowest possible mximising the het recovery from the wste gses. An economiser design ws dopted to prevent corrosion while mximising electricl output. The economiser ensures tht the gs temperture remins bove the cid dew point before the exhust stck. The het extrcted from the gs in the condenste heter is used to prehet the condenste entering the deertor of the boiler, eliminting the use of stem for preheting nd thus providing the cpcity to generte dditionl power. Another spect of the design tht promotes mximum electricity output is the boiler clening system. Soot blowers re instlled to clen the boiler nd economiser tubes. The soot blowers will shke the dust from the tubes thereby mintining the het trnsfer re for het recovery. Priority of kiln output: As the core business of NSIL is to produce steel, it is importnt tht the Wste Het Recovery Plnt not dictte kiln opertions. A wste gs bypss system ws instlled to llow kiln opertion during mintennce shutdowns of the boiler. During bypss opertion, wter sprys re used to cool the wste gs from 900 C (exit temperture form the kiln) to bout 160 C in order to protect the electrosttic precipittor, ducts nd fns. Such cooling nd the resulting therml shock, if performed in trditionl ducting lined refrctory, would result in crcking nd dislodging of the lining. The lterntive dopted for the quench tower ws n internlly insulted structure consisting of n internl single plte construction mde from high temperture steel pltes. Sfe nd relible connection to the electricity grid: Digitl High Voltge protection relys re required for the connection of the system to the grid. This includes distnce protection, genertor protection, trnsformer protection nd protection ginst pole slipping on the genertor. The relys re linked bck to the min DCS for the plnt, providing extensive monitoring nd sttus informtion, nd llowing disconnection nd reconnection with grid s required. Other Opertionl brrier(s) The project ctivity fces opertionl risks relted to the wste gs genertion nd its het content, which effect the successful implementtion of the project ctivity. The non-vilbility of wste gses due to ny technicl fult in the kiln will prevent power genertion in the project ctivity. If the het content of the wste gs is not sufficient, the project ctivity will directly be ffected since there re no inbuilt provisions to increse wste gs tempertures through uxiliry fuel firing. Cumultive effect of sustined vrible frequency opertion due to fluctutions in wste gs supply (flow rte & temperture) my hve substntil bering in sfe nd sustined opertion of ssets like the power plnt equipments. Non-vilbility of wste gs t the required temperture cn lso result in complete closure of the project ctivity. Also resumption of production process tkes long time. Hence the power interruption even for short spell cn destbilize the mnufcturing process, besides cusing production loss nd dmge to the sophisticted equipments due to therml shock. Brriers due to previling prctice The low cpcity DRI kilns 9 with WHRB for sponge iron production nd power genertion respectively is not prevlent prctice being followed in the region. 20 sponge iron units with DRI kilns with cpcity of 100 tonnes per dy (tpd) nd lower exist in the region. Out of these 20 units only one unit hs wste het 9 DRI kilns with cpcity of 100 tonnes per dy (tpd) nd lower

15 CDM Executive Bord pge 15 recovery system. However this unit hs only two kilns in comprison to 6 kiln operted by NSIL. Hence, the NSIL project ctivity is the first of its kind in the region. Sub-step 3b. Show tht the identified brriers would not prevent the implementtion of t lest one of the lterntives (except the proposed project ctivity) The brriers to the project ctivity re not pplicble to the other identified lterntives s they re the previling prctices nd business s usul scenrio. Step 4: Common Prctice nlysis: Bsed on the informtion bout ctivities similr to the proposed project ctivity, the project proponent is supposed to crry out common prctice nlysis to complement nd reinforce the brrier nlysis. The project proponent is required to identify nd discuss the existing common prctice through the following sub-steps: Step 4: Anlyze other ctivities similr to the proposed project ctivity As per vilble sttistics, there re round 20 sponge iron units with kiln cpcity of 100 tonnes per dy (tpd) nd lower operting in the region. Wste het bsed power genertion ctivity is being crried out t only 1 unit. Step 4b: Discuss ny similr options tht re occurring Still, the sponge iron units with (only) lower kiln cpcity (100 tpd or less only) in the region hve not opted for implementtion of WHRB for power genertion from the wste gses emnting from the kiln. Only one ctivity of similr type to the NSIL project ctivity is existent in the region. Essentil distinctions between the project implemented t NSIL nd other unit re s follows: In comprison to two kilns operted by other unit, NSIL is operting 6 units, which mkes it difficult to operte the wste het recovery project becuse of its scle of opertion. Plnt lod fctor (PLF) for the wste het recovery project implemented by NSIL is very low compred to ny other project, which mkes it economiclly unttrctive to implement the project. Step 5: Impct of CDM registrtion The registrtion of the project ctivity s CDM project nd finncil benefits ccrued thereby would encourge other sponge iron units with lower cpcity kiln size to pursue such kind of inititives. Also it might trigger industries in other sectors to look into their processes nd identify opportunities wherein wste het recovery would be mterilised. Thus CDM registrtion would result in reducing GHG emissions nd promoting new nd clener technology. Bsed on the bove steps, it my be stisfctorily concluded tht the NSIL project ctivity is not bseline scenrio nd hence is clerly dditionl. The likely non-project options re col bsed power genertion nd/or import of electricity from the grid. Tking conservtive pproch, import of electricity from the grid hs been tken s the bseline scenrio The emission fctor of col bsed power genertion is round 1.1 kg of CO 2 /kwh, wheres the grid emission fctor is kg of CO 2 /kwh

16 CDM Executive Bord pge 16 B.4. Description of how the definition of the project boundry relted to the bseline methodology selected is pplied to the project ctivity: The definition of project boundry sttes tht the project boundry shll encompss ll nthropogenic emissions by sources of greenhouse gses (GHG) under the control of the project prticipnts tht re significnt nd resonbly ttributble to the CDM project ctivity. As per ACM0004, for the purpose of determining GHG emissions of the project ctivity, project prticipnts need to include: CO 2 emissions from combustion from uxiliry fossil fuels As discussed erlier tht there is no provision of uxiliry fossil fuel firing in the project ctivity so there re no project ctivity relted emissions. The project boundry relted to ACM0004 s pplied to the project ctivity comprises of the WHRBs, turbines nd the uxiliries s shown in the following figure: Project boundry To Chimney Wste het recovery boilers (6No.s) ID Fn Stem to common heder Turbine (2 No.s) Electricity to grid Feed wter Pump Condenser Flue gses from kilns The project boundry strts from supply of wste gses t the boiler inlet to the point of electricity generted by the project ctivity. Further, for the purpose of clcultion of bseline emissions Western Regionl Electricity Grid (WREB) hs been considered within the system boundry. Estimtion of bseline emissions hs been done bsed on dt nd informtion vilble from WREB sources nd Centrl Electricity Authority (CEA) sources s pplicble.

17 CDM Executive Bord pge 17 B.5. Detils of bseline informtion, including the dte of completion of the bseline study nd the nme of person (s)/entity (ies) determining the bseline: As required by ACM0004 methodology, bseline is clculted s per ACM0002 nd the net bseline emission fctor ws found to be kg CO 2 / kwh. Plese refer to detils in Annex 3 of the PDD. Dte of completing the finl drft of this bseline section (DD/MM/YYYY): 09/05/2006 Nme of person/entity determining the bseline: Nlw Sponge Iron Limited nd its ssocited consultnts

18 CDM Executive Bord pge 18 SECTION C. Durtion of the project ctivity / Crediting period C.1 Durtion of the project ctivity: C.1.1. Strting dte of the project ctivity: June 2003 C.1.2. Expected opertionl lifetime of the project ctivity: 15 yers C.2 Choice of the crediting period nd relted informtion: The project ctivity will be using fixed crediting period. C.2.1. Renewble crediting period Not selected Not selected C C Strting dte of the first crediting period: Length of the first crediting period: C.2.2. Fixed crediting period: 01/09/ yers C C Strting dte: Length:

19 CDM Executive Bord pge 19 SECTION D. Appliction of monitoring methodology nd pln D.1. Nme nd reference of pproved monitoring methodology pplied to the project ctivity: Title: Consolidted monitoring methodology for wste gs nd/or het nd/or pressure for power genertion Reference: UNFCCC Approved consolidted monitoring methodology ACM0004 / Version 02, Sectorl Scope: 01, 03 Mrch D.2. Justifiction of the choice of the methodology nd why it is pplicble to the project ctivity: The monitoring methodology is used in conjunction with the pproved bseline methodology ACM0004 Consolidted bseline methodology for wste gs nd/or het nd/or pressure for power genertion. The pplicbility criteri for the pproved bseline methodology ACM0004 nd pproved monitoring methodology ACM0004 re identicl nd hve been justified in section B.1.1. Thus the sid methodology is pplicble to the project ctivity. The methodology requires the project prticipnt to monitor the following: Net electricity genertion from the proposed project ctivity; Dt needed to clculte crbon dioxide emissions from fossil fuel consumption due to the project ctivity; Dt needed to reclculte the operting mrgin emission fctor, if needed, bsed on the choice of the method to determine the operting mrgin (OM), consistent with Consolidted bseline methodology for grid-connected electricity genertion from renewble sources (ACM0002); Dt needed to reclculte the build mrgin emission fctor, if needed, consistent with Consolidted bseline methodology for grid-connected electricity genertion from renewble sources (ACM0002); Dt needed to clculte the emissions fctor of cptive power genertion. The project ctivity will hve the monitoring of the genertion of the totl electricity generted nd the uxiliry electricity thereby enbling the clcultion of the net electricity supplied to the fcility. As there will be no fossil fuel consumption in the project ctivity so monitoring of the sme would not be required.

20 CDM Executive Bord pge 20 D Option 1: Monitoring of the emissions in the project scenrio nd the bseline scenrio D Dt to be collected in order to monitor emissions from the project ctivity, nd how this dt will be rchived: ID number (Plese use numbers to ese crossreferencing to D.3) Dt vrible Source of dt Dt unit Mesured (m), clculted (c) or estimted (e) Recording frequency Proportion of dt to be monitored How will the dt be rchived? (electronic/ pper) Comment Not pplicble. As per the methodology ACM0004 project emissions re pplicble only if uxiliry fuels re fired for genertion strt-up, in emergencies, or to provide dditionl het gin before entering the wste het recovery boiler. Since in the project ctivity there will be no uxiliry fossil fuel firing / consumption involved, thence no project emissions. equ.) Not pplicble D Description of formule used to estimte project emissions (for ech gs, source, formule/lgorithm, emissions units of CO 2

21 CDM Executive Bord pge 21 D Relevnt dt necessry for determining the bseline of nthropogenic emissions by sources of GHGs within the project boundry nd how such dt will be collected nd rchived : ID number (Plese use numbers to ese crossreferencing to tble D.3) Dt vrible 1. EG GEN Totl Electricity Generted 2. EG AUX Auxiliry Electricity 3. EG y Net Electricity supplied 4. EF y CO 2 Emission fctor of the grid 5. EF OM,y CO 2 Operting Mrgin emission fctor of the grid Source of dt Dt unit Mesured (m), clculted (c), estimted (e), On-site instrumenttio n On-site instrumenttio n On-site instrumenttio n Grid reports nd CEA reports Grid reports nd CEA reports Recording frequency Proportion of dt to be monitored How will the dt be rchived? (electronic/ pper) Comment MWh/yr m Continuously 100% Electronic/pper Monitoring loction: meters t plnt nd DCS will mesure the dt. Mnger In-chrge would be responsible for regulr clibrtion of the meter, which would be crried out nnully. MWh/yr m Continuously 100% Electronic/pper Monitoring loction: meters t plnt nd DCS will mesure the dt. Mnger In-chrge would be responsible for regulr clibrtion of the meter, which would be crried out MWh/yr tco 2 /MW h tco 2 /MW h c (EG GEN - EG AUX ) c c nnully. Continuously 100% Electronic/pper Clculted from the bove mesured prmeters. Once t the strt of the crediting period Once t the strt of the crediting period 100% Electronic/pper Clculted s weighted sum of the OM nd BM emission fctors 100% Electronic/pper Clculted s per Step 1 of ACM0002

22 CDM Executive Bord pge EF BM,y CO 2 Build Mrgin emission fctor of the grid 7. F i,j,y Amount of ech fossil fuel consumed by ech power source / plnt 8. COEF i,j CO 2 emission coefficient of ech fuel type nd ech power source / plnt 9. GEN j,y Electricity genertio n of ech power source / plnt Grid reports nd CEA reports Grid reports nd CEA reports Grid reports nd CEA reports, IPCC guidelines tco 2 /MW h c Once t the strt of the crediting period t or m 3 /yr c Once t the strt of the crediting period tco 2 / t or m 3 m Once t the strt of the crediting period Grid reports MWh/yr m Once t the strt of the crediting period 100% Electronic/pper Clculted s per Step 2 of ACM % Electronic/pper Since dt of fossil fuel consumption for ll the power plnts is not vilble so conservtive estimtion of the sme hs been crried out bsed on the highest efficiency chieved by the power plnt operting in the region. 100% Electronic/pper Plnt or country specific vlues to clculte COEF re preferred to IPCC defult vlues 100% Electronic/pper Obtined from the power producers, disptch centers or ltest locl sttistics. All the dt mentioned bove would be rchived for two yers fter the crediting period.

23 CDM Executive Bord pge 23 D Description of formule used to estimte bseline emissions (for ech gs, source, formule/lgorithm, emissions units of CO 2 equ.) Emission Fctor of the Grid (EF Grid ) Electricity bseline emission fctor of Western Regionl Grid (EF y ) is clculted s combined mrgin (CM), consisting of the combintion of operting mrgin (OM) nd build mrgin (BM) fctors ccording to the following three steps. Clcultions for combined mrgin re bsed on dt from officil sources (where vilble) which is publicly vilble. STEP 1. Clcultion of the Operting Mrgin emission fctor The Simple OM emission fctor (EF OM,simple,y ) is clculted s the weighted verge emissions (in t CO 2 equ/mwh) of ll generting sources serving the system, excluding hydro, geotherml, wind, low-cost biomss, nucler nd solr genertion. EF OM, simple, y = i, j F i, j, y j COEF GEN j, y i, j where COEF i,j is the CO 2 emission coefficient of fuel i (t CO 2 / mss or volume unit of the fuel), clculted s given below nd GEN j,y is the electricity (MWh) delivered to the grid by source j F i,j, y is the mount of fuel i (in mss or volume unit) consumed by relevnt power sources j in yer(s) y, tken s ctul vlue or clculted s given below j refers to the power sources delivering electricity to the grid, not including low-operting cost nd must-run power plnts, nd including imports from other grid The Fuel Consumption F i,j, y is obtined s GEN j, y 860 j Fi, j, y = NCVi Ei, j i where GEN j,y is the electricity (MWh) delivered to the grid by source j NCV i is the net clorific vlue (energy content) per mss or volume unit of fuel i

24 CDM Executive Bord pge 24 E i,j is the efficiency (%) of the power plnts by source j The CO 2 emission coefficient COEF i is obtined s COEF i = NCV i EF CO 2, i OXID where NCV i is the net clorific vlue (energy content) per mss or volume unit of fuel i EF CO2,i is the CO 2 emission fctor per unit of energy of the fuel i OXID i is the oxidtion fctor of the fuel i The Simple OM emission fctor (EF OM,simple,y ) is clculted seprtely for the most recent three yers nd n verge vlue hs been considered s the OM emission fctor for the bseline (EF OM,y ). EF = EF / 3 OM, y OM, simple, y y where y represents the yers. STEP 2. Clcultion of the Build Mrgin emission fctor The Build Mrgin emission fctor (EF BM,y ) hs been clculted s the genertion-weighted verge emission fctor (t CO 2 /MWh) of smple of power plnts m of WREB. The smple group m consists of either the five power plnts tht hve been built most recently, or the power plnts cpcity dditions in the electricity system tht comprise 20% of the system genertion (in MWh) nd tht hve been built most recently. Project proponent should use from these two options tht smple group tht comprises the lrger nnul genertion. The clcultion for Build Mrgin emission fctor is furnished below: EF = i, m F i, m, y COEF i, m BM, y GEN m, y m where F i,m,y, COEF i,m nd GEN m,y - Are nlogous to the vribles described for the simple OM method bove for plnts m.

25 CDM Executive Bord pge 25 Clcultions for the Build Mrgin emission fctor EF BM, y hs been done s ex nte bsed on the most recent informtion vilble on plnts lredy built for smple group m of Northern region grid t the time of PDD submission. The smple group m consists of the 20 % of power plnts supplying electricity to grid tht hve been built most recently, since it comprises of lrger nnul power genertion. (Refer Annex 3) Further, none of the power plnt cpcity dditions in the smple group hve been registered s CDM project ctivities. STEP 3. Clcultion of the Emission Fctor of the Grid (EF Grid ) The electricity bseline emission fctor of Western Regonl Grid, EF y is clculted s the weighted verge of the Operting Mrgin emission fctor (EF OM,y ) nd the Build Mrgin emission fctor (EF BM,y ): EF y = WOM EFOM, y W BM EF BM, y where the weights w OM nd w BM, by defult, re 50% (i.e., w OM = w BM = 0.5), nd EF OM,y nd EF BM,y re clculted s described in Steps 1 nd 2 bove nd re expressed in t CO 2 /MWh. (Plese refer to Annex 3: Bseline Informtion for further detils on grid nlysis) Bseline Emission Clcultions Net units of electricity substituted due to wste het recovery bsed power in the grid (EG y ) = (Electricity generted -Auxiliry Consumption) = ( EG GEN EG AUX Therefore the Bseline Emission is clculted s, BE y = EG y where, BE y = Bseline Emissions due to displcement of electricity during the yer y (in tons of CO 2 ) EG y = Net units of electricity due to WHR substituted in the grid during the yer y (in MWh) EF y = Emission Fctor of the grid (in tco 2 / MWh) nd y is ny yer within the crediting period of the project ctivity EF ) y

26 CDM Executive Bord pge 26 D Option 2: Direct monitoring of emission reductions from the project ctivity (vlues should be consistent with those in section E). Not pplicble D Dt to be collected in order to monitor emissions from the project ctivity, nd how this dt will be rchived: ID number (Plese use numbers to ese crossreferencing to tble D.3) Dt vrible Source of dt Dt unit Mesured (m), clculted (c), estimted (e), Recording frequency Proportion of dt to be monitored How will the dt be rchived? (electronic/ pper) Comment Not pplicble equ.): Not pplicble D Description of formule used to clculte project emissions (for ech gs, source, formule/lgorithm, emissions units of CO 2

27 CDM Executive Bord pge 27 D.2.3. Tretment of lekge in the monitoring pln ctivity ID number (Plese use numbers to ese crossreferencin g to tble D.3) D If pplicble, plese describe the dt nd informtion tht will be collected in order to monitor lekge effects of the project Dt vrible Source of dt Dt unit Mesured (m), clculted (c) or estimted (e) Recording frequency Proportion of dt to be monitored How will the dt be rchived? (electronic/ pper) Comment Not pplicble D Description of formule used to estimte lekge (for ech gs, source, formule/lgorithm, emissions units of CO 2 equ.) Not pplicble D.2.4. Description of formule used to estimte emission reductions for the project ctivity (for ech gs, source, formule/lgorithm, emissions units of CO 2 equ.) The emission reduction ER y by the project ctivity during given yer y is the difference between the bseline emissions through substitution of electricity genertion with fossil fuels (BE y ) nd project emissions (PE y ), s follows: ER y = BE y PE y Where: ER y re the emission reductions of the project ctivity during the yer y in tonnes of CO 2 BE y re the bseline emissions due to the displcement of electricity during the yer y in tonnes of CO 2 PE y re the project emissions during the yer y in tonnes of CO 2

28 CDM Executive Bord pge 28 Now, since the project emissions re non-existent in the project ctivity so the emission reductions (ER y ) equl the substitution of electricity genertion with fossil fuels (BE y ) ER y = BE y D.3. Qulity control (QC) nd qulity ssurnce (QA) procedures re being undertken for dt monitored Dt (Indicte tble nd ID number e.g ; 3.2.) Uncertinty level of dt (High/Medium/Low) Explin QA/QC procedures plnned for these dt, or why such procedures re not necessry. D Low This will be cross-checked with the mount of stem generted in the WHRBs. The clibrted equipments cn be checked by the verifier. The clibrtion of the equipments for mesurement of power nd stem will be done once yer. D Low The uxiliry consumptions re usully fixed but still the clibrted meters cn be checked by the verifier D Low This is clculted vlue D Low Ltest dt from locl sttistics, Grid reports, CEA reports. IPCC dt will be checked ginst recent IPCC publictions. D.4 Plese describe the opertionl nd mngement structure tht the project opertor will implement in order to monitor emission reductions nd ny lekge effects, generted by the project ctivity The hed (Power Plnt) is responsible for monitoring nd rchiving of dt required for estimting emission reductions. He would be supported by the shift inchrge who would continuously monitor the dt logging nd would generte dily, monthly reports D.5 Nme of person/entity determining the monitoring methodology: Nlw Sponge Iron Limited nd its ssocited consultnts

29 CDM Executive Bord pge 29 SECTION E. Estimtion of GHG emissions by sources E.1. Estimte of GHG emissions by sources: Not pplicble. The wste het recovery boilers of the project ctivity re unfired type, thus there will be no uxiliry fossil fuel consumption. Thence there will be no greenhouse gs emissions occurring due to the project ctivity. E.2. Estimted lekge: Not pplicble s per the methodology ACM0004. E.3. The sum of E.1 nd E.2 representing the project ctivity emissions: There re no project ctivity emissions. E.4. Estimted nthropogenic emissions by sources of greenhouse gses of the bseline: Bseline emissions (BE y ) re clculted using the formul: BE y = EF y x EG y Where, EG y Net electricity generted EF y Bseline emission fctor Yer Estimtion of Net Electricity generted, EG y (million kwh/nnum) Estimtion of Emission fctor, (tonnes of CO 2 per million kwh) Estimtion of bseline emissions (tonnes of CO 2 e) , , , , , , , , , ,427 Totl (tonnes of CO 2 e) ,270

30 CDM Executive Bord pge 30 E.5. Difference between E.4 nd E.3 representing the emission reductions of the project ctivity: Emissions reductions (ER y ) re clculted using formul: ER y = BE y - PE y Since project emissions (PE y ) re zero, the emission reductions re equl to bseline emissions s given in tble below. E.6. Yer Tble providing vlues obtined when pplying formule bove: Estimtion of project ctivity emissions (tonnes of CO 2 e) Estimtion of bseline emissions (tonnes of CO 2 e) Estimtion of lekge (tonnes of CO 2 e) Estimtion of emission reductions (tonnes of CO 2 e) , , , , , , , , , , , , , , , , , , , ,427 Totl (tonnes of CO 2 e) 0 374, ,270

31 CDM Executive Bord pge 31 SECTION F. Environmentl impcts F.1. Documenttion on the nlysis of the environmentl impcts, including trnsboundry impcts: As the project investment ws less thn INR 500 million so crrying out n Environmentl Impct Assessment (EIA) is not mndtory for the project ctivity 11 s per Indin legisltion. Still s responsible orgniztion NSIL hs crried out n EIA study for the project ctivity nd n Environmentl Mngement Pln (EMP) hs been mde ccordingly. The project ctivity complies with ll environmentl legisltions nd meets ll the consent requirements given by the Stte Pollution Control Bord. The impcts tht re evident due to the project ctivity re s follows: Construction Phse Impcts The impcts rising due to the construction phse were short term, mrginl nd reversible in nture. The identified key issues relted to physicl nd socil environment during this phse re: Genertion of dust due to movement of vehicles nd construction ctivity Genertion of solid wste due to debris nd discrded mterils Opertion Phse Impcts During opertion phse of the project ctivity the identified environmentl impcts re: Air Pollution: The wste gs emnting from the kilns fter pssing through the wste het recovery boilers re let into the tmosphere through the stcks. The temperture of these gses t the stck exit is round 160 o C. Noise Pollution: During the opertion stge, noise is generted from turbines nd other moving mchines. Wter Pollution: About 30 m 3 /hr of de-minerlized wter (DM wter) nd clrified wter is required for stem genertion in WHRB, condenser cooling nd cooling of mechnicl equipment. The condenser cooling wter is re-circulted through cooling towers. Mke-up clrified wter is dded to the cooling tower. Chlorine/bleching powder is dded s biocide in the cooling tower wter. Trisodium phosphte/hexmine is dded s nti-scling chemicl in boiler, 6 m 3 /hr of wstewter in the form of boiler blow-down nd cooling tower blow-down is generted. The boiler blow-down is t 100 o C nd contins phosphte (<1 ppm). The cooling tower blow-down is 5-6 o C higher thn mbient temperture nd contins free chlorine (< 0.1 ppm). There re no other pollutnts in the blow-down. Solid Wste: No solid wste is generted due to the project ctivity nd thus there is no dverse impct on the soil qulity. Lnd Use Pttern: The lnd cquired for the project site hs not resulted in ny displcement or resettlement of people. The lnd is not forest lnd. Hence there is no significnt impct on the lnd use pttern of the re. Also, the lnd llocted for the project ctivity is within the existing premises of NSIL. 11

32 CDM Executive Bord pge 32 Ecology: No wild life snctury or ntionl prk or biosphere reserve is locted within 25 km of the project site. Socio-economics: Estblishment of ny project leds to socio-economic chnges. Influx of popultion leds to chnge in economic sttus of the community. People from the surrounding villges hve been recruited in the project ctivity. In order to prevent the degrdtion of physicl nd esthetic environment, proper snittion fcility nd other bsic fcilities like drinking wter supply nd sewerge hs been provided. Thus there hs been positive impct on the socio-economic conditions due to genertion of direct nd indirect employment during construction nd opertion phse. F.2. If environmentl impcts re considered significnt by the project prticipnts or the host Prty, plese provide conclusions nd ll references to support documenttion of n environmentl impct ssessment undertken in ccordnce with the procedures s required by the host Prty: No significnt environmentl impcts re rising due to the project ctivity (In fct the considertion of usge of wste gses from the kilns for production of power hs been tken due to its positive environmentl contribution). Still n Environmentl Mngement Pln (EMP) hs been mde to mitigte the possible dverse impct of the project ctivity. Thereby it is ensured tht the existing environmentl qulity of the re is mintined/improved. The impcts on the environment ssocited with the coming up of the project ctivity during construction phse nd opertion phse nd the ssocited mitigtion plns re s follows: Construction Phse The following mesures were considered during the construction stge to minimize the impct on environment: Approprite disposl of discrded mterils generted during construction All discrded or surplus mterils, litter nd other debris were removed from the construction site nd other working res in proper mnner. The rods used during construction stge were sprinkled with wter on regulr bsis to minimize the fugitive dust emission. The workers were given drinking wter nd snittion fcility t the construction site. Adequte dringe fcilities including ctchment pits nd sedimenttion bsin were mde to drin the construction wter in proper mnner. Opertion Phse During opertion phse of the project ctivity the identified key issues relted to physicl nd socio-culturl environment nd the ssocited mngement pln to mitigte the negtive impcts re s follows: Air Pollution: The wste gs emnting from the kilns fter pssing through the wste het recovery boilers re let into the tmosphere through the stcks. The temperture of these gses t the stck exit is round 160 o C. In fct the project ctivity is not leding to ny (further) contribution to the tmospheric emissions, becuse these emissions would hve occurred in the bsence of the power plnt lso. Hd the project ctivity not been in plce, or the wste het recovery boilers re bypssed, then the tmospheric emissions would hve been much more significnt s the temperture of the gses coming out of the kilns is