(12) ZafaranaWindProject Georgy

7/28/2019 (12) ZafaranaWindProject Georgy

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Clean Development

Mechanism CDMEng. Rafik Georgy

120


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UNFCCC

1992

UNFCCC

United Nations Framework Convention On Climate Change3861994

531995


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Conference of Parties COP

COP31997Kyoto Protocol

1531999

Annex 1 Countries

Non Annex 1 Countries


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56%1990,2008-2012

()

55%

55%

,(16):


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*CO2-(GWP*)

*CH4-20

*N2O-*HFCs

*PFCs-

*SF6

*100

Global Worming Potential (GWP)


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Emissions TradeET

J oint Implementation J I

Clean Development MechanismCDM

()

():

o

o


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(Additional)

Business As UsualBaseline Scenario

()()


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2002

Designated National AuthorityDNA

-

CDM-DNA

:

o

o


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()

Certified Emission ReductionsCERs

0


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CDM - KYOTO CRITERIA Contributes to the sustainable development of the

host country.

Results in emission reductions that would nothave happened otherwise.

Generates real, measurable and long-term climatechange mitigation benefits.

Approved by parties involved.

Credits potentially earned from 2000 onward(through 2008-2012).


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Zafarana Wind Power Plant as aCDM Project

Zafrana project is an 120 MW wind power plant.

More than 440 GWh of electricity per year.(based oncapacity factor 42 %)

Around 90,000 TOE Saved yearly.

About 230,000 t of Certified Emission Reductions

annually (CERs) if designated as CDM. Expected life time 2025 years

A cooperation project between NREA of Egypt andJ BIC of J apan who Supports project financing.


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CDM Procedures

PDD Production

Pubic & Expert Opinions.

Host country confirmation.

Methodology Panel Approval.

Validation.

CDM Executive Board Approval.

Registration.

Monitoring.

Verification.

Certification.

CER issuance and registration.


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PROJ ECT DESIGN DOCUMENT(PDD)

General description of project activity.

Baseline methodology. Duration of the project activity / Crediting period.

Monitoring methodology and plan.

Calculation of GHG emissions by sources.

Environmental Impacts. Stakeholders comments.


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What is a BASELINE

It is The Business as usual that is what wouldotherwise happen if CDM project will not beimplemented.

It is the reference value to estimate thereduction of CO2 ( or GHG ) emissions.


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Baselines and Additionality

A baseline is the emissions that would have occurredIn the absence of the project or without projectscenario

Covers gas emissions from all sectors and sourceswithin the project boundary.

It is the key to the GHG reduction projectused to

determine the emission reductions (ERs) from the

project activity.

Additionalitymust demonstrate that without the

project, the GHG emissions would not have been

reduced.


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Approaches to Baselines

COP7 held in Marrakech in 2001 formulated CDM

Modalities & procedures

The Marrakech Accords lay out three approaches

from which proponents should select as the basis fortheir baseline methodology :

A) actual current or historical emissions, or

B) emissions from a cost-effective technology taking

into account barriers to investment, or C) the averaged emissions of similar projects in the

past 5 years in similar socio-economic, environmental

and technical conditions and whose performance is in

the top 20 percent.


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General Baseline Requirements

Baseline Must be project-specific. In describing the chosen methodology, an

explanation must be given as to : Why the method was chosen How it will be applied How it was established in a transparent and

conservative manner

How it takes into account any relevant national orsectoral polices.


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Additionality

Probably, the most important issue for CDM-projectbaseline methodology approval is whether the

project satisfies the additionality criterion.

Two interpretations turning the condition intofulfillment of two criteria :


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Additionality ( cont. )

Soft interpretation ; Environmental Additionality : theproject must show, through the baseline scenario,that CDM project, compared to alternative production

methods, reduces CO2emissions during its life timeproduction process.

i.e the project will accomplish both:

o Measurable and certified GHG emission reductions

o Long term climate change mitigation benefits

Or


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Additionality ( cont. )

Hard interpretation; insists on proving that theproject, being more expensive without counting CERrevenues compared to the alternative base line,

would not be implemented if the CDM project did notexist

Zafarana Project Satisfies BOTH !!


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BaseIine Methodology for theWind Project

Presently, no approved CDM methodology to beapplied for Grid Connected Wind Power Generation.

New methodology is proposed in accordance withCDM modalities and Procedures.


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Baseline Methodology Steps

The project is additional because: There is no incentive program to promote wind power

projects currently in Egypt.

The cost for a wind power plant is higher than forconventional thermal power plants, in terms oflevelised cost of KWh produced.

The economic growth in Egypt has led to stricter

terms and conditions for foreign financial assistance. Naturally, the project will result in CERs.


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Investment Barriers for windPlants

No incentives for wind power generation.

Wind is more capital intensive.

Low price for natural gas.

Result:

Currently wind generated KWh cost cannot competewith thermal generated KWh cost.

Wind cannot be viewed as BAU leading to :

WIND NEED for CDM SUPPORT TO BE IMPLEMENTED.


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Base Line MethodologyMargins Considered

Operating Margin :

Average of all generation types excluding low cost /must run plants. Those excluded were hydro facilitieswhile existing wind plant is a debatable issue.

Build margin :

Average of the most recent 5 plants built, or mostrecent 20% ; under implementation projects should beconsidered.


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Steps to determine Baseline

Is the project additional?

Will the project affectthe operating margin?

Project cannotqualify as CDM

Will the project alsoaffect the build margin?

Build marginapproach

Combinedmargin

approach

Operatingmargin

approach

Determine:Operating marginBuild margin

Combined margin

Methodologynot

applicable

Yes

Yes

Yes No

No

No


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Determining Operating Margin.

Less than 20% generation comes from hydro.

More than 80% from thermal Power Plants. Wind will replace thermal generation mix of

Combined Cycle, Steam Turbines and Gas Turbines.

A conservative approach.


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Determining Build Margin

Emission rate of :

Most recent 20% plants built, or

Most recent (5) plants built gives same result.

( two approaches give same result for Zafarana )

Cairo North (2),750MW, CC, 5.3%.

Cairo North (1),750MW, CC, 5.256%.

Zafarana, 77MW, wind, 0.3%.

Suez Gulf (1,2) BOOT,682MW, ST 4.8%.

Port Said East (1,2), 682MW, ST 4.6%.

Conservative Approach to Consider Wind Plant.


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Electric load curve

800

900

1000

1100

1200

1300

1400

1500

1600

1700

1800

1900

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

MW

Pick period

(2 hours)

Day period (12 hours)

Marginal

generators

Basegenerators

Wind Energy farm

contribution

Power Generators Selection For Baseline Calculation


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To determine Operating Margin

Notes:

For the Egypts grid excluding Low-cost / must-run(around 33 power plants)

Total Capacity (MW) = 12,933

Net Power (GWh) = 62,353

Fuel Consumption (103 toe) = 14,378


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Egypt's grid excluding low-cost/must-run

Power Plant Type of

Generation

Capacity

(MW)

Net Power

(GWh)

Fuel

Consumption

(103

toe)ShoubraEl Khima ST 1260 7141 1686

Cairo West ST 350 1563 426

Cairo West ext. ST 660 3521 791

Cairo South I CC(hybrid) 570 3236 711

Cairo South II CC 165 1018 186

Wadi Hof GT 100 20 8

Tebbin GT 46 103 43

Tebbin ST 45 7 3

Damietta CC 1125 6736 1294

Talkha(CC) CC 283.6 1410 346

Talkha(ST) ST 90 1 0.2Talkha 210 ST 420 1912 487

Ataka ST 900 4634 1053

Abu Sultan ST 600 2879 824

Shabab GT 100 73 25

Port Said GT 64 24 9


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Arish ST 66 356 108

Oyoun Mousa ST 640 3655 823

Kafr El Dawar ST 440 1411 376Mahmoudia (G) GT 180 51 19Mahmoudia (CC) CC 308 1898 386

Damanhour 300 ST 300 945 211

Damanhour Ext ST 195 742 195

Damanhour (CC) CC 152.8 923 177Seiuf (G) GT 200 38 14

Seiuf (ST) ST 113 355 131Karmouz GT 25 1 0.1

Abu Kir ST 900 3896 925Sidi Krir 1.2 ST 640 3662 765

Matrouh ST 60 149 41Walidid ST 600 2819 674

Kuriemat ST 1245 6713 1489Assiut ST 90 461 152

ToTal 12.933 62.353 14.378

Source: Annual Report 20012002 , Egyptian Electricity Holding Company


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To determine build Margin

To obtain the CO2 emission factor for the build

margin, we have to calculate the emission factorfor the resent 5 plants.

o Total Net Power (GWh) = 19,754o Fuel consumption ( 103 toe ) = 3,994


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Plant Plant Type NetPower(GWh)

(% of total3 )

Fuel Consumptions(103 toe) Commissioning

Date

Cairo North ( 2 ) CC

750 MW

5256

(5.3%)

988

)based onNREA

estimate of fuel

consumption)

05/06

06/07

Cairo North (1 ) CC

750MW

5256

(5.3%)

988

(as above)

03/04

04/05

Zafarana Wind

77 MW

280

(0.3%)

0 03/04

Suez Gulf 1.2

BOOT

ST

682 MW

4481

(4.6%)

1009

(based on OyounMsousa)

02/03

Port Said East 1.2BOOT

ST

682 MW

4481

(4.6%)

1009

(as above)

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TOTAL 19754 3994

The 5 Recent Plants


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Baseline Methodology steps(continued)

The project will affect Operating margin and build

margin. Combined margin =

{Operating margin + [Build margin x n]}/n+1

n has been chosen to be 1 instead of 0.6 which

would have been in favor of wind. Again complying with the conservative approach

CDM criterion


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Monitoring Methodology

Presently there is no monitoring methodologyapplicable to the project.

Base Line source of emission is grid electricity whichcan be reasonably monitored as an indication forPotential fuel consumption (to be saved) henceavoided emissions of CO2mainly.

Duration of the project is yet to be chosen with

preference to 7 years at least for the timebeing.


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Environmental Impacts

Noise Pollution

Negligible, Being an arid area.

Visual Pollution

Same, no community nearby.

Land Use

Same, however, during construction fences willbe erected around.


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Environmental Impacts (CONT.)

Potential Impact on Migrating Birds. Relatively of more concern.

Zafarana is close but not in a major Pathway ofbirds.

No green areas, fresh water nor food scraps ofhuman activity exist as it is a remote arid area.

Result:Danger is minimum and almost

negligible.


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CDM Procedures

PDD Production

Pubic & Expert Opinions.

Host country confirmation.

Meth Panel Approval.

Validation.

CDM Executive Board Approval.

Registration.

Monitoring.

Verification.

Certification.

CER issuance and registration.

P j C l f h CDM


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Project Cycle for the CDM

DNA

1- Project Design

& Formulation

2- NationalApproval

3- Validation-Registration

4- ProjectFinancing

Project DesignDocument (PDD)

Operational

Entity A

DOE (A)

Investor

5- Monitoring ProjectParticipants

MP &EB

P j t C l f th CDM


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Project Cycle for the CDM

6- VerificationCertification

7- Issuance ofCERs

Monitoring Report

OperationalEntity B

DOE (B)

Verification ReportCertification Report

Request for CERs

EB - Registry

Legends

Activity Report Institution

h fi 36 d


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Meth. No. Type 1.Mark 2.Mark GHG reduction/yr Country Investor yr.

1 Bagasse power B A 143 ktCO2 Brazil Unilateral 72+29 Fuel switch from coke to charcoal in steel works C EB14 ca. 1000 ktCO2 Brazil IFC-Netherlands & Japan 7

3 CO2 from NH3 production used in methanol prod. C 229 ktCO2 Trinidada & Tobago Germany 10

4 Landfill gas flaring AM2 ca. 800 ktCO2 Brazil Unilateral 7

5 Landfill gas electricity B AM3 ca. 300 ktCO2 Brazil WB NCDF 7

6 Hydro Power C 144 ktCO2 Guatamala PCF 7

7 Burning HFC23 from HCFC22 production AM1 1400 ktCO2 South Korea Japan 7

8 Hydro Power C 100 ktCO2 Costa Rica CERUPT 10

9+14+15+19 Rice husk power plant (el + steam + cement) C AM4 400 ktCO2 Thailand Rolls-Royce Power + 7

10 Landfill gas electricity B A 400 ktCO2 South Africa PCF 7

11 Bagasse Power C 100 ktCO2 India Unilateral 712 Wind farm B 53 ktCO2 Jamaica CERUPT 10

13 Biogas from palm oil waste water 27 ktCO2 Malaysia Japan 10

16 Fuel switch from coal to natural gas B A 18 ktCO2 Chile Nestle Chile 7

17 Efficiency improvement of steam use at refinery Meth9 100 ktCO2 China Unilateral 10

18 New cogeneration plant using natural gas Deskr. 115 ktCO2 Chile Japan (J-Power) 10

20 Hydro Power Meth9 70 ktCO2 Colombia Japan (J-Power) 7

21 Landfill gas power for on site usage A 70 ktCO2 Brazil CERUPT 10

22 Biogas power from swine manure 90 ktCO2 Chile Canada 7

23 Hydro power A 70 ktCO2 Mexico PCF 7

24 Wind farm 45 ktCO2 Colombia PCF 725 Biomass residues power plant 85 ktCO2 India Swedish Energy Agency 10

26 Recovering associated gas in stead of flaring 670 ktCO2 Vietnam Japan 10

27 Bagasse power expansion 23 ktCO2 Brazil CERUPT 10

28+35 Switch from coal/lignite to agro-biomass power Meth9 600 ktCO2 India PCF 10

30 Bagasse power and steam 95 ktCO2 India Local 10

31 Power from waste heat in iron kiln 37 ktCO2 India Unilateral 10

32 Biogas power from municipal waste 100 ktCO2 India PCF 10

33 Energy efficient expansion of cement factory 80 ktCO2 Costa Rica CERUPT 7

34 CH4 & N2O reductions from manure management 20 ktCO2 Brazil Canada 7

36 120 MW wind farm in Zafarana 227 ktCO2 Egypt Japan (JBIC) 7

The first 36 proposed newmethodologies sent to the EB


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Conclusion:

At 5 US$ per ton CO2 & around 0.56kg CO2 avoidedemissions per KWh produced from thermal powerstations -Wind produced KWh will have a bonus of

around 2 piaster which cannot close the gap betweenwind and thermal generation.

CDM cannot solely make uncompetitive projectseconomically attractive.

Rather, CDM can make near economic projects

feasible or more attractive.


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(12) ZafaranaWindProject Georgy