25 MW Biomass Plant China_CDM

8/13/2019 25 MW Biomass Plant China_CDM

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PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1.

CDM Executive Board

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CLEAN DEVELOPMENT MECHANISM

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

CONTENTS

A. General description of project activity

B. Application of a baseline and monitoring methodology

C. Duration of the project activity / crediting period

D. Environmental impacts

E. Stakeholders comments

Annexes

Annex 1: Contact information on participants in the project activity

Annex 2: Information regarding public funding

Annex 3: Baselineinformation

Annex 4: Monitoring plan


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Figure 1 Shanxian 1*25MW Biomass Direct Burning Power Plant Overview

The electricity produced by the project activity is supplied to the public Shandong provincial power grid

which is part of the North China grid system. The electricity from the project will be a must-run

electricity source of the Shandong Grid. The project will replace the power generated by coal-fired power

plants. Therefore, the electricity supply from the proposed biomass power plant is an alternative to the

construction of a power plant based on coal with the same capacity. The heat generated in this biomass

power plant may in the future be utilized as well, after the local heating system has been established. Notethat no emission reductions from the heating component, if any, of the project will be claimed in this

PDD.

The proposed project will reduce the greenhouse gas emissions from biomass caused by natural decay and

uncontrolled burning, and also will reduce greenhouse gas emissions related to the burning of fossil fuel

for power production.

Currently about 700 million tonnes straw are produced in China as residues of agricultural production, but

only a very small percentage of this is properly utilized. The common method of direct burning for

heating and cooking by the local farmers results in heavy air pollution and very low level of heating

efficiency. The remainder of the biomass resource is normally dumped in an uncontrolled manner andoccasionally burned in the open air. Shanxian is one the richest biomass resource towns in China and

most of the agricultural resources are just dumped and not utilized in a proper way.

The Shanxian Biomass Power Plant is the first demonstration project involving power generation using

biomass in the P.R. of China. The Chinese new Renewable Energy Law encourages the development of

power plants using to compensate shortages in energy supply and in order to reduce the severe

environmental pollution. Especially the constructions of biomass power plants in regions that are rich in

biomass are encouraged. The local farmers can benefit by supplying straw as fuel for the biomass power

plants. This will assist the domestic economic development, contribute to reducing poverty, and

simultaneously decrease the air pollution, by reducing emissions of local pollutants resulting from the

uncontrolled burning of cotton as well as the burning of coal in coal-fired based power plants.


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This project is a national pilot project for renewable resource utilization and new Danish technology forthe core boiler system will be introduced to the PRC. The project developer will introduce the new

Danish boiler technology and is able to benefit from the Danish engineering expertise that will be used in

this biomass power plant project. Hence, this sustainable energy project will serve as an example and

could possibly lead to other similar projects in the PRC and will contribute to China's sustainable

development.

The project contributes to China's goal of a 15% share of renewable energy in total power generation by

2020. More specifically, this project:

Reduces the power generation burden based on coal fired plants which often result in heavy airpollution

Promotes the national Chinese sustainable development policy

Creates direct and indirect income-generating and employment opportunities in the area where thisproject is located

Is constructed as the pilot project of renewable resource utilization and will be a demonstrationproject for any others project developers working on biomass utilization in a sustainable manner

Ensures that clean and highly efficient technology will be transferred and applied in Chinese localplant

Avoids an uncontrolled management of biomass resources and optimizes the usage of naturalresources

A.3. Project participants:

Please listproject participants and Party(ies) involved and provide contact information in Annex 1.Information shall be in indicated using the following tabular format.

Name of Party involved (*)

((host) indicates a host

Party)

Private and/or public

entity(ies)

project participants (*)

(as applicable)

Kindly indicate if

the Party involved

wishes to be

considered as

project participant

(Yes/No)

China (host) National Bio Energy Co.,Ltd No

DenmarkDanish Ministry of Foreign

AffairsYes

(*) In accordance with the CDM modalities and procedures, at the time of making the CDM-PDD public

at the stage of validation, a Party involved may or may not have provided its approval. At the time ofrequesting registration, the approval by the Party(ies) involved is required.

Note: When the PDD is filled in support of a proposed new methodology (form CDM-NM), at least

the host Party(ies) and any known project participant (e.g. those proposing a new methodology) shall

be identified.

>>

Host Country:

People's Republic of China, which has ratified the Kyoto Protocol to the United Nations Framework

Convention on Climate Change in September 2002.


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Project Participants:

National Bio Energy Co.,Ltd(NBE), was established in 2005 with a registered capital of 500 million

RMB. It is a shareholding company. The main shareholders are Shenzhen State Power Science &

Technology Development Co., Ltd (55% of registered capital) and Dragon Power Co., Ltd. (45%). The

biggest investor in the majority shareholder is the State Grid Corporation of China. NBE is one of the

most pilot biomass power companies in China and has started the planning and implementation of the first

few biomass power plants in China since 2004.

Danish Ministry of Foreign Affairs(DANIDA). DANIDA is one of the public entities in Denmark

involved in the procurement of CERs through CDM projects and ERUs through JI projects to help

Denmark, as an Annex 1 Country, to achieve its targets under the Kyoto Protocol. DANIDA has also

made available a facility to assist the preparation of CDM documentation in China through the Danish

CDM Project Development Facility in China (www.cdmasia.org/danida.html)

CDM consultants

COWI Consulting (Beijing) Co., Ltdis a daughter company of COWI A/S with the headquarters

located in Denmark. COWI has been helping Chinese clients to develop CDM projects. COWI A/S has

worked with carbon trading since 1995 and has contributed actively to emission reduction through

industrial energy efficiency improvement and renewable energy utilization.

A.4. Technical description of the project activity:

A.4.1. Location of the project activity:

>>

A.4.1.1. Host Party(ies):

>>

People's .Republic of.China

A.4.1.2. Region/State/Province etc.:

>>

Shandong Province

A.4.1.3. City/Town/Community etc:

>>

Shanxian

A.4.1.4. Detail of physical location, including information allowing the unique

identification of this project activity (maximum one page):

>>

The project is located in the economical developing region which is 3km to the east of the Shanxian

downtown area, and the postal code of this plant is 274300 and the longitude is 11636 and the latitude is

344912. The total area for the power plant is approximately 100mu (Around 6667 m2). The project is


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located in a flat area nearby the main roads; therefore the transportation is very convenient. The main

transportation of the straw from the field to the collection stations is by carriage. The straw originatesfrom the local Shanxian farmers. Shanxian is a designated poverty county at the provincial level. The

intermediate-trader agency has not been established yet. At this stage, farmers have to deliver the biomass

residues directly to the collection points by themselves.

The project location was chosen considering the main local wind direction in Shanxian, the future

enlargement of workshops, and the need to comply with the EIA (Environmental Impact Assessment)

requirements. There is no large enterprise or natural scenic site located in the near area. On the opposite

side of the power plant, an area of 50 mu (33333 m2) has been allocated for the ashes from the plant. It is

estimated that approximately 3 to 5 percentage of the biomass amount will turn into ashes depending on

the different types of biomass. Consequently, the annual production of ashes from this power plant will be

around 4000 tonnes to 6600 tonnes. The power plant staff will pack the ash from the incineration and

deliver it back to the farmers who will use it as fertilizer.The project is located in Southwest of Shandong province, which is located in Northern China. The

climate in Shanxian is mild and the area is situated in the warm temperate zone, with a semi-humid

continental climate. The annual precipitation is around 650mm and the annual average temperature is

13.9oC. There is no possibility of natural disasters such as flooding, earthquake etc happening in the

project site area according to the long term analysis.

A.4.2. Category(ies) of project activity:

>>

Sectoral Scope: Energy Industries (renewable / non-renewable sources)

Category: Renewable electricity in grid connected applications

A.4.3. Technology to be employed by the project activity:

>>

This project was approved by National Development and Reformation Commission on 20/09/2004 and

put into trial operation on 02/10/2006. At the moment of the writing of this version of the PDD, the

project is in full operation.

The project entails the establishment of a biomass fired power plant with a rated capacity of 25MWe and

a maximum capacity of 30MWe. The estimated annual electricity generation is 150Gwh. Approximately

15% of the power generated will be utilized on the site itself (10% for boiler operation and 5% for

others). Supply to the power grid therefore equals 127.5Gwh annually.

The system consists of single extraction steam turbine, with a 1*130t/h vibrating chain type high-temperature, high-pressure boiler, and steam circulation by forced-air cooling. As soon as the heating

network is established in the town, the heating supply will also be prepared, however the heating supply

component is not considered part of this project activity.

The biomass power plant will be connected to the public electric transmission grid, and electricity will be

used as a must-run resource. The power price for the purchases by the local power company has not

finally been agreed yet.


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The main fuel supply is cotton straw, paddy hull, and peanut shell (it is anticipated that paddy hull andpeanut hull will only account for a small percentage of total fuel supply) which are bought from local

farmers directly. In the project region cotton straw is considered to be abundant resources. The biomass

resources are only utilized to a very limited degree at the present time. Most of the farmers utilize cotton

straw as fuel for cooking. The percentage of biomass that is already utilized is approximately 10% from

the total available biomass resources, according to the project developer's investigations. The majority of

the biomass amount is left on the field to decay naturally.

The plant is designed to handle wood chips as well as corn straw, paddy hull and peanut shell, mainly

including bark, branch, and firewood residue. The biofuel will be cut into pieces of a maximum length of

3.937in and transported to the plant from the individual collection points. There are eight collection

points constructed for supplying the biofuel to the plant according to the biomass resources in Shanxian.

Inside of each individual collection point, there are three major components: the primary storage cabin,the cutting facility plant and secondary storage cabin from where the cut biomass will be transported to

the power plant.

The transportation of the biofuel would be sub-contracted with a local logistics firm by the project entity.

All the trucks utilized for the biofuel transportation are dedicated vehicles belonging to the power plant.

Different types of biofuel would be transported separately when delivering from collection points to the

plant site. The total storage capacity of all the 8 collection points is 80,000 tonnes.

Even though the plant has been put in operational in November, 2006, the cotton collection by the power

plant staff and storage was already initiated in April, 2006. This is due to the fact that the cotton

collection season starts late November. The total storage amount was approximately 50,000 tonnes before

the first firing of the power plant.

At the plant the fuel is unloaded in a receiver bunker and from there the handling is automatically

controlled. First, the fuel is stored in a large storage building which can accommodate approximately a

biomass amount for 5-7 days of burning, and from there it is automatically reclaimed and transported to

two small buffer silos in the boiler building. The buffer silos will control the feeding of the boiler. The

burning system will be a vibrating water-cooled grate. The boiler is a three-pass steam boiler designed to

generate steam at 540oC and 92 Bar. The air pre-heating will be done with hot feed water which will be

reheated in a flue gas cooler and returned to the feed water tank. By doing this an outlet temperature of

130oC and a boiler efficiency around 90% will be achievable under optimal operation condition. The flue

gas cleaning will be by a fabric filter for particles. Due to low content of sulphur in the flue gas, no

scrubber is needed in this project.

The boiler is designed in Denmark according to EN rules. This design has then been adjusted to follow

the Chinese GB rules meaning certain materials have been changed and the strength and thickness of

some pipes have been changed. Also the set-up regarding safety valves has been changed. All these

changes are only related to safety requirements from the authorities. All functional design is as designed

and earlier installed in Europe.

Using straw as fuel mainly causes massive problems with fouling (build up of slag in the boiler). Based

on the Danish experience there is no way to avoid this and therefore the design of the boiler has taken this

into consideration. As the specific measures are part of the patent and expertise the supplier do not wish

to detail this explanation but as the Danish technology partner has build several straw fired power plants


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in Europe (Ely in UK, Sanguesa in Spain, Maribo, Masnedoe and Rudkoebing in Denmark) following the

same principles they do not expect problems with fouling.

Chlorine can also cause heavy corrosion in the outlet of the boiler (where the flue gas is cold). This

problem has also been severe on some of the references in Europe. In the newest designs the problem has

however been solved by the combination of the flue gas cooler and air preheater.

The fuel handling system is based on handling systems for wood chips as have been installed on

numerous Scandinavian power plants. The boiler system is based on design from the Danish company

BWE and is similar to what has been installed on a number of straw fired and wood fired power plants in

Europe. The turbine and generator will be supplied by Chinese suppliers and so will all the auxiliary

equipment.

A.4.4.Estimated amount of emission reductions over the chosen crediting period:

Please indicate the chosen crediting period and provide the total estimation of emission

reductions as well as annual estimates for the chosen crediting period. Information on theemission reductions shall be indicated using the following tabular format.

Years Annual estimation of emission reductions

in tonnes of CO2e

15/05/2007 79,439

2008 127,102

2009 127,102

2010 127,102

2011 127,102

2012 127,102

2013 127,102

15/05/2014 47,663

Total estimated reductions

(tonnes of CO2e) 889,716

Total number of crediting years 7

Annual average over the crediting period of

estimated reductions (tonnes of CO2e)

127,102

A.4.5. Public funding of the project activity:

>>

There is no public funding from Annex I countries for the construction of the Shanxian biomass powerplant project. The only public funding from the Annex I countries is for the preparation of the PDD,

which is financed by the Danish Ministry of Foreign Affairs.No existing official development assistance (ODA) from Annex I countries is involved in the proposed project.


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SECTION B. Application of a baseline and monitoring methodology:

B.1. Title and reference of the approved baseline and monitoring methodology applied to the

project activity:

>>

ACM0006" Consolidated Baseline Methodology for grid-connected electricity generation from biomass

residues" (Version 04, EB27), in conjunction with "Consolidated monitoring methodology for grid-

connected electricity generation from biomass residues".

ACM0006 refers to the ACM 0002 "Consolidated baseline methodology for grid-connected electricity

generation from renewable sources"(Version 06, 19/05/2006) and the latest version of the "Tool for the

demonstration and assessment of additionality". More information about the methodology can be found onthe website: http://cdm.unfccc.int/methodologies/approved.

B.2. Justification of the choice of the methodology and why it is applicable to the project

activity:

>>

There are generally four project activities included in this methodology application area which are

followings:

The installation of a new biomass power plant at a site where currently no power generation

occurs (Greenfield power projects);

The installation of a new biomass power generation unit, which is operated next to existing power

generation capacity fired with either fossil fuels or the same type of biomass residue as in theproject plant (Power capacity expansion projects);

The improvement of energy efficiency of an existing power generation plant (Energy efficiency

improvement projects);

The replacement of fossil fuels by biomass in an existing power plant (Fuel switch projects).

As previously described, the Project is mainly based on two complementary activities as following:

The collection and acted as biomass resources for power generation

The generation and supplying of electricity to the regional grid system, thus displacing a certainamount of fossil fuels used for electricity generation.

Therefore, this Shanxian Biomass power plant project obviously belongs to the Greenfield PowerProjects which listed in the first of the four activities.

The methodology ACM0006 allows for development of projects falling under 4 conditions:

Condition 1: No other biomass types than biomass residues (Defined as biomass that is a by-product, residue or waste stream from agriculture, forestry and related industries), as defined

above, are used in the project plant and these biomass residues are the predominant fuel used in

the project plant;

Condition 2: For projects that use biomass residues from a production process, theimplementation of the project should not result in an increase of the processing capacity of raw

input or in other substantial changes in process;

Condition 3: The biomass used by project facility should not be stored for more than one year;


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Condition 4: No significant energy quantities, except from transportation of the biomass, are

required to prepare the biomass residues for fuel combustion.

The situations of proposed Shanxian biomass direct burning power plant are as following:

The biomass which will be utilized in the proposed power plant are mostly from the dumped oruncontrolled burning in the field, and the biomass straws are utilized as the predominant fuel

supplying for the power plant. Therefore, this is fulfilling the condition 1;

The biomass residues of bark, branch, and firewood residue are waste from wood processing, theimplementation of the proposed project would not result an increase of the processing capacity of

raw input or in other substantial changes in wood processing. Other biomass residues (cotton straw,

paddy hull, peanut shell) are directly from the agriculture, not from production process. Therefore it

fulfils the condition 2;

Since there would be a professional logistics company responsible for the biomass transportation,and mainly based on the requirements of moisture and ash contents, the storage time of the biomass

residues will not be over 1 year, therefore , it fulfils the condition 3;

There is not significant energy quantities, except from transportation of the biomass are required toprepare the biomass residues for fuel combustion, which also fulfils the condition 4.

Based on the above analysis, it can be conclude that the project therefore fulfils all the conditions as

defined above, hence ACM0006 was thought to be the most appropriate methodology for this project.

In this case a baseline methodology for electricity and or thermal energy displaced shall be an approved

one used which is ACM 0006 as explained before, including the ACM 0002 "Consolidated Methodology

for Grid-Connected Power Generation from Renewable Sources".

The proposed project can meet the applicability criteria of the baseline methodology (ACM0002),

therefore, the methodology is applicable to the proposed project.

The proposed project is a grid-connected zero-emission renewable power generation activity frombiomass source;

The proposed project is not an activity that involves switching from fossil fuels to renewableenergy at the proposed project site.

The power grid (the North China Power Grid) which the proposed project is to be connected to isclearly identified and information on the characteristics of this grid is publicly available.

The additionality of the proposed project can be verified using Tools for the demonstration andassessment of additionality requested by the baseline methodology (ACM0002).

B.3. Description of how the sources and gases included in the project boundary:


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Overview on emissions sources included in or excluded from the project boundarySource Gas Justification / Explanation

CO2 Included Main emission source

CH4 Excluded Excluded for simplification as per the methodology applied.

This is conservative.

Grid electricity

generation

N2O Excluded Excluded for simplification as per the methodology applied.

This is conservative.

CO2 Excluded It is assumed that CO2 emissions from surplus biomass

residues do not lead to changes of carbon pools in the

LULUCF sector.

CH4 Included Project participants decide to include this emission source,since the case B1 has been identified as the most likely

baseline scenario.

Baseline Uncontrolled

burning or decay of

surplus biomass


This is conservative. Note also that emissions from natural

decay of biomass are not included in GHG inventories as

anthropogenic sources.

CO2 Included An important emission source.


This emission source is assumed to be very small.

On-site fossil fuel

consumption due to

the project activity

(stationary or

mobile)

N2O Excluded Excluded for simplification as per the methodology applied.This emission source is assumed to be very small.

CO2 Included An important emission source.



Off-site

transportation of

biomass



CO2 Excluded It is assumed that CO2 emissions from surplus biomass do not

lead to changes of carbon pools in the LULUCF sector.

CH4 Included This emission source must be included because CH4 emissions

from uncontrolled burning or decay of biomass in the baselinescenario are included.

Combustion of

biomass for

electricity and / or

heat generation



CO2 Excluded It is assumed that CO2 emissions from surplus biomass do not

lead to changes of carbon pools in the LULUCF sector.

CH4 Excluded Excluded for simplification. Since biomass is stored for not

longer than one year, this emission source is assumed to be

small.

ProjectActivity

Biomass storage

N2O Excluded Excluded for simplification. This emission source is assumed

to be very small.


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B.4. Description of how thebaseline scenariois identified and description of the identified baseline

scenario:>>

The methodology will be applied using Green Field Power Projectactivity and all the four conditions

listed under the ACM 0006 are fulfilled.

Based on the ACM0006, realistic and credible alternatives should be separately determined regarding:

How Power would be generated in the absence of the CDM project activity;

What would happen to the Biomass in the absence of the project activity;

In case of cogeneration projects: how the Heat would be generated in the absence of the projectactivity.

Baseline Scenario

P1 The proposed project activity not undertaken as a CDM project activity;

P2 The proposed project activity (installation of a power plant), fired with the same type of biomass but

with a lower efficiency of electrical generation (e.g. an efficiency that is common practice in the relevant

industry sector);

P3 The generation of power in an existing plant, on-site or nearby the project site, using only fossil fuels;

P4 The generation of power in existing and/or new grid-connected power plants;

P5 The continuation of power generation in an existing power plant, fired with the same type of biomass

as (co-)fired in the project activity, and implementation of the project activity, not undertaken as a CDM

project activity, at the end of the lifetime of the existing plant;

P6 The continuation of power generation in an existing power plant, fired with the same type of biomass

as (co-)fired in the project activity and, at the end of the lifetime of the existing plant, replacement of thatplant by a similar new plant.

It can be found that in proposed Shanxian biomass direct burning project:

P2 The proposed project is the first biomass direct burning power plant in Shandong province, therefore

there is no other power plant fired with the same type of biomass but with a lower efficiency of electrical

generation, so P2 is not suitable alternative;

P3 There is no existing plant onsite or nearby the project site only using fossil fuels generating power

currently, so P3 is not suitable alternative;

P5 There is no continuation of power generation in an existing power plant, fired with same type of

biomass as in the project activity, and implementation of the project activity not undertaken as a CDM

project activity at the end of the lifetime of the exiting plant, so P5 is not suitable alternative;P6 There is no replacement of the existing power plant at the end of the lifetime, by a similar new plant,

the existing power plant would continue generate power, fired with the same type of biomass as fired in

the project activity, so P6 is not suitable alternative.

First, during the identification of the baseline scenario for power generation, the realistic and credible

alternative was chosen as P1: The proposed project activity not undertaken as a CDM project

activity; andP4: The generation of power in a new grid connected power plant.

For the use of biomass, the realistic and credible alternative(s) may include, inter alia:


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B1 The biomass residues are dumped or left to decay under mainly aerobic conditions. This applies, for

example, to dumping and decay of biomass residues on fields.B2 The biomass residues are dumped or left to decay under clearly anaerobic conditions. This applies, for

example, to deep landfills with more than 5 meters. This does not apply to biomass residues that are

stock-piled or left to decay on fields.

B3 The biomass residues are burnt in an uncontrolled manner without utilizing it for energy purposes.

B4 The biomass residues are used for heat and/or electricity generation at the project site;

B5 The biomass residues are used for power generation, including cogeneration, in other existing or new

gird-connected power plants;

B6 The biomass residues are used for heat generation in other existing or new boilers at other sites

B7 The biomass residues are used for other energy purposes, such as the generation of biofuels

B8 The biomass residues are used for non-energy purposes, e.g. as fertilizer or as feedstock in processes.

According to the Biomass Supply / Demand Investigation Report in Shanxian County carried out byShandong Electric Power Engineering Consulting Institute in March 2007, the proposed project utilizes

biomass residues from agriculture, mainly including cotton straw, paddy hull, and peanut hull; and also

by-product from wood processing, including bark, branch, and firewood residue. Similar analysis would

be done for the biomass alternatives as power generation for the proposed Shanxian project:

B1 This is the scenario that happens around the site of the proposed project, a certain number of surplus

biomass residues would be dumped or left to decay Thus B1 is the suitable alternative;

B2 There is no landfill around the site of the proposed project, hence, the unused biomass residues are

impossible dumped or left to decay under clearly anaerobic conditions. So B2 is not suitable alternative;

B3 This is the scenario that happens around the site of the proposed project, a certain number of surplus

biomass residues would be burned uncontrolled outside without utilization it for energy purpose,

therefore B3 is the suitable alternative;

B4 The proposed project is the first biomass generation project in China 2. Therefore biomass is not usedfor heat or power generation currently, so B4 is not suitable alternative;

B5 The proposed project is the first biomass generation project in China. So B5 is not suitable alternative;

B6 There is no biomass boiler using biomass residues as fuel close to proposed project. Considering the

cost of biomass transpiration, other existing or new boilers at other places will not use these surplus

biomass residues. So B6 is not suitable alternative;

B7 There is no other energy generation project that has needs to the surplus biomass residues consumed

by the proposed project., so B7 is not suitable alternative;

B8 There is only a little amount of biomass residue that has been used as fertilizer around the project site,

however, biomass residues used by the proposed project will not impropriate the biomass as fertilizer,

since the biomass consumption of the proposed project is from the local surplus biomass residues of the

area., so B8 is not suitable alternative.

In conclusion, for the use of biomass, the realistic and credible was chosen as B1 and B3: The biomass

residues are dumped or left to decay under mainly aerobic conditions and burnt in an uncontrolled

manner without utilizing it for energy purposes. According to the biomass resource investigation study

done by National Bio Energy Co.,Ltd. and local authority, the current biomass utilization structure will

not change after the proposed project operation.

2http://www.most.gov.cn/dfkjgznew/200510/t20051018_25472.htm


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If the proposed project activity is the cogeneration of power and heat, project participants shall define the

most plausible baseline scenario for the generation of heat. For heat generation, realistic and crediblealternative(s) may include, inter alia:

H1 The proposed project activity not undertaken as a CDM project activity

H2 The proposed project activity (installation of a cogeneration power plant), fired with the same type of

biomass but with a different efficiency of heat generation (e.g. an efficiency that is common practice in

the relevant industry sector)

H3 The generation of heat in an existing cogeneration plant, on-site or nearby the project site, using only

fossil fuels

H4 The generation of heat in boilers using the same type of biomass residues

H5 The continuation of heat generation in an existing cogeneration plant, fired with the same type of

biomass as in the project activity, and implementation of the project activity, not undertaken as a CDM

project activity, at the end of the lifetime of the existing plant

H6 The generation of heat in boilers using fossil fuelsH7 The use of heat from external sources, such as district heat

H8 Other heat generation technologies (e.g. heat pumps or solar energy)

The heating part in the proposed project is not considered in the emission reduction calculation based on

the conservative principle.

Therefore, we could find that Scenario 2 which is listed in ACM 0006 Table 1: Combinations of project

types and baseline scenarios applicable to this methodology, is the right scenario for this project. It

is described like following:

The project activity involves the installation of a new power plant at a site where currently nopower generation occurs;

The power generated by the project plant is fed into grid and would in the absence of the projectactivity be purchased from the grid;

The biomass would be in the absence of the project activity be dumped or left decay or burned inan uncontrolled manner without utilizing for energy purposes;

Baseline ScenarioScenario Project Type

Power Generation Use of biomass Heat Generation

2 Power Greenfield

Project

P4 B1, B3 No Heat now

Table 1 Identification of Scenario combined with Power, use of biomass and heat generation method for

Shanxian 1*25MW biomass power plant

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 CDMproject activity (assessment and

demonstration of additionality):

>>

Approved Tool for the Demonstration and Assessment of Additionality applied in ACM0002 is used to

demonstrate and assess the additionality of the proposed project in the following steps:

Step 0 Preliminary screening based on the starting date of the project activity

The crediting period of the proposed project will not start before the registration of the project activity

because the starting date of project does not fall between 01/01/2000 and the date of registration as CDM

project.


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Step 1 Identification of alternatives to the project activity consistent with current laws andregulations

Four alternatives are selected as the power generation options in the following table, and the analysis of

these alternatives whether consistent with current laws and regulations are shown as well.

Sub Step 1a. Define alternatives to the project activity

Alternatives to power generation:

1. Construction of a coal

firing plant with the same

power generation capacityequivalent to the proposed

project activity

Based on this scenario assumed, the dominating newly installed

power generation is coming from the thermal firing plants which

are the normal project behaviour at present time in North ChinaPower Grid system. From the new addition power capacity from

2002 to 2004 which are the most present statistics, the new

addition power generation is over 90% from thermal plants.

Furthermore, it is not possible to build the power plant with the

same scale under the current Chinese existing new power

addition regulatory framework. Since it is not allowed to build

the coal firing power plant smaller than 135MW under the

current Chinese legislations.

Therefore, the alternative fossil fuel power plant building with

the same power generation capacity is not possible to happen

under the current Chinese laws and legislations for power plants.

2. Supply of equivalent

annual power output by the

Grid where the proposed

project is connected to

There is power addition annually from 2002 to 2004 in North

China Grid Network; therefore it is mostly from the thermal

generation. The alternative is a feasible scenario to be selected as

the baseline for the proposed project.

3. The proposed project

activity not undertaken as a

CDM project activity

The IRR of project is too low if there is no income from CERs.

So this alternative is not applicable.

Alternatives to biomass usage:

The proposed project utilizes the current dumped biomass straws for power generation. According to the

identified baseline scenario will the biomass utilized in the proposed power plant alternatively be used inan uncontrolled way such as dumped and left to decay or burned in open air.

Sub Step 1b. Enforcement of applicable laws and regulations:

For the scenario 1, it will not occur under the current applicable laws and regulations in force. Detailed

reference is the China Power Yearbook 2003, 2004 and 2005 and relative rules for the new establishing

power plants.

Scenario 2 is clearly consistent with the prevailing laws and regulations, since there in the North China

Grid is a demand for new power addition to ensure the growing industrial and commercial purposes in

this area.


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Step 2 Investment analysis

According to the identified Additionality Assessment Tool for the proposed project, this step has todetermine whether it is financially less attractive than other alternatives without the revenues deriving

from CERs payment.

Sub Step 2a Determine appropriate analysis method

The three analysis methods suggested by Tool for the demonstration and assessment of additionality are:

Option I simple cost

analysis

Since there are both revenues of power price and CERs

payment, this option is not appropriate to calculate.

Option II investment

comparison analysis

This option is only applicable to the case where the

alternative baseline scenario is similar to the proposed

project, so that the comparative analysis can be

conducted. However, the proposed baseline scenario is theNorth China Grid which is not similar to the suggested

project.

Option III benchmark

analysis

When both benchmark IRR and total investment IRR of

proposed project are available, this method can be used.

Sub Step 2b Apply benchmark analysis

Chinese power industry very commonly use 8% as the financial benchmark rate of return (after tax) of the

total investment and this is also used in the feasibility study report. This threshold value of project

financial assessment is based on the Interim Rules on Economic Assessment of Electric Engineering

Retrofit Projects.

Sub Step 2c Calculation and comparison of financial indicators

Power generation capacity 25MW

Annual power net output 127.5GWh

Project lifetime Total 22 years including 1 year

construction time

Total project investment 294,184,100 RMB

Tariff RMB 0.66 Yuan/KWh (excluding VAT)

Biomass purchasing price 300 RMB/tonne

Annual Operating hours 6000 hours/year

Tax 33% income taxEmission reduction crediting period 21 Years

Expected CERs price 8 Euro/tCO2eqor above

NPV (Total investment, discount

factor = 8%) million RMB

IRR (Total investment,

benchmark = 8% )

With CERs revenue 58.5 mill RMB 11.0

Without CER revenues -41.3 mill. RMB 5.6


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Data input for financial sensitivity analysis:

Capacity 25 MW

Operation hours 6,000 hours/year

Own consumption 15%

Total production 127,500 MWh/year

Tariff 0.410 RMB/kWh

Tariff Subsidy 0.250 RMB/kWhIncome from power sale 84,150,000 RMB/year

CERs from power 125,275 CERs

Unused biomass basel. 4,939 CERs

Total project emissions 3,111 CERs

CER per year 127,102 CERs

Price per CER 8.00 Euro/tons

Exchange rate 10.00 RMB/Euro

Income from CERs 10,168,186 RMB/year

Biomass demand 132,000 tons/year Dry Biomass Residue 119,315 tons/year

Biomass price 300 RMB/tons

Expense from purchase 39,600,000 RMB/year

Staff and maintenance 5% of investment

Other O&M 14,709,205

Total Investment 294,184,100 RMB/year

Biomass Consumption 22 tonnes/hour

Emission Factor 0.983 tons CO2/MWh

The above table shows the critical financial benchmark indicators and compares the situations with and

without CER revenues. It is clear that the proposed project faces great financial barriers. Therefore, CDM

revenues are necessary to make the proposed project financially viable for investors.

Sub Step 2d Sensitivity analysis

The sensitivity analysis is conducted in order to measure the influence on the IRR and NPV due to the

changes of key financial parameters such as biomass purchasing price, power generation connected to


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On the other hand then the above figure shows clearly that CER revenues will make the proposed project

attractive compare with the usual rate of return (8%).

Step 3 Barrier analysis

Sub Step 3a Identify barriers that would prevent the implementation of type of the proposed

project activity

Investment barriers:

Cost disadvantages compared to coal-fired power plants

China is an enormous country with an abundant amount of biomass resources. However, until recently

there has been no development of biomass power plants in China. In comparison with coal-fired power

plants in China, the costs of building a biomass plant with same power generation capacity are muchhigher.

Uncertainties in the green electric price policy in China.

The kWhe price is the most important and critical parameter if biomass technology in the scale of 5 to 30

MWe has to be made viable. Although currently, the Chinese central government is encouraging the

renewable energy utilization, the price list and transparent supervising system/mechanisms for any

renewable energy laws or regulations for this green power generated from biomass power plants are not

clear at the moment. The price for power wheeled into local or regional grid network is largely

determined by the local commodities office.

Risk of a new technology

Furthermore, the high risks associated with this brand new technology implementation in China would in

large scale influence the investment return payment. Especially for the first demonstration project in a

national scope, there are even higher financial risks for the project developers. With reference to the same

unit investment cost for coal firing power plants the investment return over time for the build of a

biomass power plant of the same scale has a much longer investment return time.

Technology barriers:

To decide whether a biomass power plant is successful or not mainly depends on the availability ofbiomass materials. For the main reason that biomass source availability is highly subject to seasonal

fluctuations due to the vagaries of the natural environment. Although, the project developer National

Bio Energy Co., Ltd estimated the amount of the available bio fuel to be sufficient, in the long term

continuous supply of sufficient quantities of biomass fuels is not assured over the life time of theplant. It is obvious that the viability of the biomass power plant is much less certain than that of fossil

fuel plants, which could enjoy an assured and regulated supply of fuels;

Biomass resources are widely dispersed in small quantities at the project site. Therefore, thecollection and transportation of large amounts of biomass materials to the project site or the closest

collection point becomes a constraint. Apart from this, then it is also expected that the expenses for

collection and transportation will increase due to increased labour and transportation costs;

Another major problem is the storage of biomass. Unlike the normal thermal power plant, a biomassfiring plant has to consume much larger quantities of fuel, which is rather difficult to ensure during

the operation period of the plants lifetime. The characteristics of biomass fuels change quickly

within a short period of time. The most critical parameter is the calorific value decrease due to the

volatility and deterioration of biomass, which affects the performance of the power plant equipment.


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For this reason, biomass material can not be stored for long periods. Fuels that enter the plants

premises must be consumed on a first-come first-burn basis. It is not possible to stock biomassmaterials seasonally. In addition, the low bulk density (weight per unit volume) makes it difficult to

handle and store biomass materials;

The biomass price in the local market will continuously fluctuate because of seasonable variations,which results in very unstable expenditures for operation and power generation The biomass

purchasing price is crucial for a sustainable operation process since approximately 70% to 80% of the

estimated total operation cost come from purchasing bio fuel;

Biomass power generation is a relatively new technology compared to the common technology forfossil fuel power plants, and at this stage no biomass power plants have been in operation in China.

Therefore, the effects from combusting biomass during the plant life cycle is not known;

The biomass power conversion efficiency is low compared to the efficiency of fossil fuel energyconversion;

Due to the relatively small capacity of the plant, any change in the electricity tariff structure willgreatly affect the plant's financial performance.

Barrier of the first of its kind type

When the project was initiated, no other biomass power plant of this size had been constructed in China.

Therefore, the project experienced a first of its kind barrier. This barrier contains some overlap with the

technological barrier and commercial and financial barrier mentioned above.

Sub Step 3b Show that the identified barriers would not prevent the implementation of at least one

of the alternatives except the proposed

The coal fired power technology is well developed, fully commercialised, is a mature technology, and is

in fact the dominant technology. China is one of the countries with very rich coal resources, hence the

previous technology and investment barriers of the proposed project activity will not be applicable to the

coal fired power plants. Therefore, the identified barriers do not apply to at least one of the alternatives to

the project scenario.

Step 4 Common practice analyses

The main purpose of this analysis is to compare the proposed project activity with the current common

practice and to analyze whether the proposed project is not common practice in China.

Sub Step 4a Analyze other activities similar to the proposed project

There is no other biomass power plant or biomass cogeneration power plant built in China. The Shanxianproject will function as a full scale test project for biomass generation in China. The technology used in

the proposed project has not been used in China before, thus the project would introduce new technology

to China and thereby promote the utilisation of renewable resources.

It can be concluded that the proposed project is not common practice in China but a "first of its kind"

project.

Sub Step 4b Discuss any similar options that are occurring

As already described in the statement above, currently there are no similar projects or proposed projects

in China.

Step 5 Impact of CDM registration


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Biomass power generation and cogeneration technology is a new energy utilization method in China. The

successful implementation of this new project activity will depend on overcoming financial andtechnological challenges. The new technology will be introduced in cooperation with the Danish

company BWE and other experienced Scandinavian companies. As for the CDM registration, it will be

submitted in cooperation with the Danish Consulting Company COWI who will also monitor the

technical and financial performance of this proposed project.

Danish experts of the biomass boiler from BWE and other experienced Scandinavian companies would

help to transfer the advanced biomass technology into the Chinese market, and speed-up transfer of

technology to the local market. This involves necessary training in project development, plant operation,

maintenance and biomass resource supplying chain. The CDM revenues will contribute to overcome the

barriers mentioned above through reducing the financial and commercial risks of, and increasing the

financial and commercial return to the project.

B.6. Emission reductions:

>>

B.6.1. Explanation of methodological choices:

Emission Reduction

As described in the accompanying baseline methodology, the emission from grid electricity generation is

considered for the baseline.

yER =ERelectricity,y+ BE biomass,y- PEy- Ly

where:

ERelectricity,y are the emission reductions due to displacement of electricity of heat during the year y in tons

of CO2;BE biomass,y are the baseline emissions due to natural decay of biomass during the year y in tons of CO2equivalents;

PEy are the project emissions during the year y in tons of CO 2

Ly are the leakage emissions during the year y in tons of CO 2

Project emissions

It includes:

CO2 emissions from transportation of biomass to the project site (PETy),

CO2emissions from on-site consumption of fossil fuels due to the project activity (PEFF y) and,where this emission source is included in the project boundary and relevant,

CH4emissions from the combustion of biomass (PEBiomass,CH4,y)


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ygirdyPJyEC EFECPE ,,, = PEEC,yare the CO2emissions during the year ydue to electricity consumption at project site that

is attributable to project activity

ECPJ,y:Onsite electricity consumption attributable

to project activity during the year y,

EFgrid,y: CO2emission factor for grid electricity

during the year y.

=

i

iyi

CHCHBiomass

NCVBF

EFPE

,

44,

PEBiomass,CH4: Project emissions from the power

plant(tCO2/year)

EFCH4:Biomass methane emission factor(tCH4/TJ)

BFi,y:Biomass type I utilized in power plant

(tonnes/year)

NCVi:Net Calorific Value of type I biomass

(TJ/tonnes)

Emission reductions due to displacement of electricity

yyelectricityyyelectricit EFEGER ,, =

Where:

ERelectricity,y are the emission reductions due to displacement of electricity during the year y in tons ofCO2,

EGy is the net quantity of increased electricity generation as a result of the project activity (incremental to

baseline generation) during the year y in MWh,

EFelectricity,y is the CO2emission factor for the electricity displaced due to the project activity during

the year y in tonsCO2/MWh.

Step 1: Determination of EFelectricity,y

The project activity displaces electricity from other grid-connected sources (P4). Apart from co-firing

fossil fuels in the project plant, where relevant, electricity is not generated with fossil fuels at the project

site. The emission factor for the displacement of electricity should correspond to the grid emission factor

(EFelectricity,y = EFgrid,y) and EFgrid,y shall be calculated as a combined margin (CM) consisting of

operating margin (OM) and building margin (BM) factors, following the guidance in the sectionBaselines in the Consolidated baseline methodology for grid-connected electricity generation from

renewable sources (ACM0002), because the power generation capacity of this proposed biomass power

plant is of more than 15 MW.

Sub step1a Calculation of Operating Margin Emission factor EFOM,yCalculation of OM emission factor should be based on one of the following four methods:

(a) Simple OM, or

(b) Simple adjusted OM, or

(c) Dispatch Data Analysis OM, or

(d) Average OM.


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The method (c) If the dispatch data is available, method (c) should be the first methodological choice.This method requires the dispatch order of each power plant and the dispatched electricity generation of

all the power plants in the power grid during every operation hour period. And it truly depicts the

substitution relation between proposed CDM project activity and the operation of baseline grid, and also

the corresponding emission reduction. This method requires the detailed operation and dispatch data of

power plants in the grid. Because of the institutional reform of separating the plant operation from the

grid operation in China, there is no publicly available information for the grids and power plants at all

levels. As the North China Grid is a very large regional grid covering several provinces, it would

certainly be difficult and costly to obtain the hourly dispatch data. Therefore, the method (c) is not

applicable.

The method (b), simple adjusted OM, requires the annual load duration curve of the power grid and the

load data of every hour data during the whole year on the basis of the time order. Based on the samereason stated in the above paragraph, the necessary data for the method (b) are difficult to obtain, so the

method (b) is not applicable.

The method (d), average OM, is used when low-cost/must run resources constitute more than 50% of total

amount of power generation in the grid. According to the data from NDRC, the total installed capacity of

the North China Grid in 2004 is 96983.3MW, in which coal-fired installed capacity is 93594.9MW,

accounting for 96.5%. Therefore, the North China Grid generation system is dominated by coal-fired

power, and this fact will not change for the next many years. So the method (d) is not applicable.

Installed capacity and electricity supply on North China Grid, 2000-2004

Year Installed capacity (%) Electricity supplied (%)

Thermal Hydro Nuclear Others Total Thermal Hydro Nuclear Others Total

2000 95 5 0 0 100 99 1 0 0 100

2001 95 5 0 0 100 99 1 0 0 100

2002 96 4 0 0 100 99 1 0 0 100

2003 96 4 0 0 100 99 1 0 0 100

2004 97 3 0 0 100 99 1 0 0 100

Source: Calculated on basis of data in China Electric Power Yearbook, several years.

The Simple OM method (a) is used when low-cost/must run resources constitute less than 50% of total

amount of power generation in:(1) Average of the five most recent years, or

(2) Based on long-term normal for hydroelectricity production.

Low operating cost and must run resources typically include hydro, geothermal, wind, low-cost biomass,

nuclear and solar generation. If coal is obviously used as must-run, it should also be included in this list,

i.e. excluded from the set of plants. From the description of method (d), the share of the low cost/must run

resources in the North China Grid from 2001, 2002 and 2004 are 4.55%, 4.24%, and 3.49% from the data

of NDRC, which meets the requirements of method(a). Therefore, it is reasonable to select the method (a)

to calculate the OM emission factor.

Therefore, method (a) is applicable for the proposed project.


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=

=

j

yj

ji

iCOiyji

j

yj

ji

jiyji

ysimpleOM

GEN

OXIDEFNCVF

GEN

COEFFEF

,

,

,2,,

,

,

,,,

,,

Fi,j,y: is the amount of fuel I consumed by relevantpower sources j in year y. The index j runs over all

power sources including imports, but excludes low

and must run power plants in the connected grid

system selected in the proposed project activity.

COEFi,j,y: is the CO2 emission coefficient of fuel I,

taking into account the carbon content of fuels used

by relevant power sources j and the percentage

osidation of the fuel I in year y

GENj,y: is the electricity delivered to the grid by

source j in year y

NCVi:Net Calorific Value of type I of fuel utilized

(TJ per mass)OXIDi: IPCC 2006 default values of oxidation factor

of type I fuel utilized

EFCO2,i: CO2 emission factor per unit of energy of the

fuel i(tCO2/TJ)

For the reason that project monitoring is using ex ante method, power data from the past recent three

years are necessary to obtain from the China electric yearbook 2003, 2004 and 2005 which are statistics

for power situation from 2002 to 2004. From the fuel consumption from relevant sources in North China

Grid and the electricity generation by these sources, the average emissions from 2002 to 2004 could be

obtained. These are divided by the total amount of energy generated, to give the emission rate per MWh.

Based on the China National Development and Reformation Commission Climate Change Office Notice

of Chinese Regional Grid Emission Factor, the simple OM emission factor of North China Grid is

calculated as 1.0585 tCO2/MWh, to see Annex 3 for details.

Sub Step 1b Calculation of Building Margin Emission Factor EFBM,yAccording to ACM0002, the BM calculation is defined as generation weighted average emissions factor

of a sample of power plants. However, the data of individual power plant generation and fuel

consumption is not available in China at present time.

ACM0002 provides two options for sample group m:

(1) The five power plants that have been built most recently, or(2) The power plants capacity additions in the electricity system that comprise 20% of the system

generation (in MWh) and that have been built most recently.

The one with larger annual generation should be used.

Due to the reason that the information of the North China Grid on the five power plants built most

recently is not available. Therefore, the most recently built 20% of the system generation of the new

power plants capacity addition will be chosen as the sample group m to calculate BM.Based on the DNV


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%20,

,

j yj

j nyj

CAP

CAP

yThermalEF , is the emission factor of fuel-fired power with Best Practiced Commercialized Technology

(BPCT). It can be calculated as following equation:

AdvGASGASAdvOILOILAdvCOALCOALThermal EFEFEFEF ,,, *** ++=

=

ji

jiyji

jCOALi

jiyji

COALCOEFF

COEFF

,

,,,

,

,,,

*

=

ji

jiyji

jOILi

jiyji

OilCOEFF

COEFF

,

,,,

,,,,

*

=

ji

jiyji

jGASi

jiyji

GASCOEFF

COEFF

,

,,,

,

,,,

*

Fi,j,yis the amount of fuel I consumed by relevant power sources j province in year ytce;

COEFi,j,yis the CO2 emission coefficient of fuel I, taking into account the carbon content of fuels used by

relevant power sources j province and the percentage oxidation of the fuel I in year y.

EFCOAL,AdvEFOIL,Advand EFGAS,Advis the emission factor of COAL, OIL, GAS-fired power with BestPracticed Commercialized Technology. These variables can be calculated as following table:

Variables Power

Supplying

Efficiency

Fuel

combustion

factortc/TjOxidation

Rate

Emission

Factor

A B C D=3.6/A/100

0*B*C*44/1

2

Coal-fire

power plant

EFCOAL,Adv 36.53% 25.8 0.98 0.9136

Gas-fire

power plant

EFGAS,Adv 45.87% 15.3 0.995 0.4381

Oil-fire

power plant

EFOIL,Adv 45.87% 21.1 0.99 0.6011

In addition, there is an assumption in this substitute calculation method: the average annual operational

hours of non fuel-fired power plants are same as those of fuel-fired power plants. But the fact in China is,

except nuclear power, the former is much less than the latter. Therefore, this substitute calculation method

is conservative.


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Based on the China National Development and Reformation Commission Climate Change Office Noticeof Chinese Regional Grid Emission Factor, the average BM emission factor of North China Grid is

calculated as 0.9066 tCO2/MWh, see Annex 3 for details.

Sub Step 1c Calculation of Baseline Emission Factor EFyThe baseline emission factor is calculated as a Combined Margin, using a weighted average of the

Operating Margin and Building Margin.

( )MWhtCO

EFEFEFEFEFyBMyOMyBMBMyOMOMy

2

,,,,

983.02

9066.01.0585

5.05.0

=+

=

+=

The detailed calculation is in Annex 3.

It is noticed that the data used for calculation of combined margin is shown in Annex 3 and section D.

The main source of data is from NDRC. The default values utilized for the calculations of calorific values

of fuel types and fuel oxidation rate are from the IPCC GHG Gas Inventory Reference Manual 2006.

The baseline scenario for the proposed project is that electricity would have been generated, and the

electricity demand met, by the operation of grid connected thermal power plants and by the addition of

new fossil fuel based power generating. In the proposed project scenario the same power demand is met

with the project power generation. Because the project uses a renewable source to produce electricity, and

there are no additional emissions from the proposed project activity.

Step 2: Determination of EGy

According to the scenario identified for this proposed project as showed before, EGy corresponds to the

net quantity of electricity generation in the project plant (EGy= EGproject plant,y), which is the same amount

as the power fed into the grid by the proposed project activity. The plant own consumption and electricity

imported from grid are already taken into the calculation of this parameter.

Baseline emissions

This methodology assumes that the biomass would have been burned in an uncontrolled manner for both

baseline scenarios, natural decay or uncontrolled burning. The baseline emissions are calculated by

multiplying the quantity of biomass that would not be used in the absence of the project activity with the

net calorific value and an appropriate emission factor as following:

BEBiomass,y= iCHburningiyiCH iEFNCVBFGWP ,44 ,,

There is no evident indication that large portion of the biomass resource would be reduced in the

foreseeable future, the selected methodology uses the baseline emission as unused biomass open air

burning which equals to the amount of biomass consumed in the proposed power plant. The baseline

emission calculation is considered to be conservative because the methane emission from the natural

decay processing of those equivalent biomass residues would cause greater GHG effect than CO2

emissions GHG effect from open air burning process.

The more detailed calculation of baseline emission of unused biomass residues is in Annex 3.

Leakage Estimation


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Based on the ACM0006, the following two alternatives are shown to estimate the leakage of the proposed

project: L1:Showing the current natural

decay or open air burning

biomass will continue to be

uncontrolled dumping without

proposed project performance

L2:Demonstrate the amount ofbiomass surplus is far more than

the project biomass demand

amount

Alternative 1:

Demonstrate

that the

biomass

consumption

of power

plant will not

result in

increased

fossil fuel

consumption

elsewhere.

L3:Showing the biomasssuppliers can not sell all their

biomass to the project plant

Ly=0

Alternative 2: If it is not possible to demonstrate that the

biomass consumption in the proposed project will not

result in an increased usage of more carbon intensive

fuels then the leakage emissions must be measured and

deducted from the net project emission reductions.

k

iykPJLECOy

NCVBFEFL = ,,,2 (tCO2)

The leakage emissions during the year y

equals to the CO2emission coefficient per

energy unit of the most carbon intensive fuel

utilized in the county multiply by the amount

of type k biomass used as fuel in the project

plant during the year y and multiply by the

Net Calorific Value of biomass type k( per

volume or mass).

Based on the ACM0006, L2: Demonstrate the amount of biomass surplus is far more than the project

biomass demand amount, is chosen in the proposed project for demonstration that the quantity of

available biomass residue of type k in the region is at least 25% larger than the quantity of available

residues of type k that are utilized.

Surplus of biomass in the region

Type of

biomass

residue

Biomass that

can be

supplied

(tonne)

Biomass

used by the

plant

(tonne)

Biomass used

for fertilizing,

forage and

cooking etc.

(tonne)

Biomass

surplus

(tonne)

Surplus

percentage (%)

A B C D=A-B-C E=D/(B+C)*100%

Bark 241,000 76,434 10,000 154,566 179%

Cotton stalk 780,000 19,964 188,000 572,036 275%

Paddy hull 82,000 16,170 20,000 45,830 127%

Peanut shell 135,000 11,905 32,000 91,095 207%

Branch 143,000 2,890 56,000 84,110 143%

Firewood

residue156,000 52,988 20,700 82,312 112%

The quantity of biomass that can be supplied, and biomass that is used for fertilizing, forage and cooking

etc. are from the Biomass Supply / Demand Investigation Report in Shanxian County. As is listed in the


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above table, the quantities of available biomass of type k (k = cotton straw, paddy hull, peanut shell, bark,

branch, firewood residue) in the region were all over 100% larger than the quantity of available residuesof type k that were utilized.

The conclusion is that the proposed power plant will not influence the present biomass utilisation and

therefore not create any leakage

It is at the same time anticipated that the current utilisation of residues will drop over the power plants life

time due to increase income level for the local farmers and inhabitants around the plant.

Project emission reduction estimation

Total baseline emissions

(+)

Total project

emissions (-)

Project Emission

Reduction( =)

Unused biomass baselineemission

GHG emission frombiomass combustion in

the power plant

GHG emission from

fossil fuel combustion

in the boiler

Electricity generation

baseline emission

GHG emission from

biomass transportation

Total baselineemissions - Total

project emissions

The detailed calculations of combined emission factor, project emissions, baseline emissions, leakages are

showed in Annex 3.

B.6.2. Data and parameters that are available at validation:

Data / Parameter: GWPCH4

Data unit: tCO2e/tCH4Description: Global Warming Potential for CH4

Source of data used: IPCC 2006 default value

Value applied: 21 for the first commitment period.

Justification of the

choice of data or

description of

measurement methods

and procedures actually

applied :

Any comment: Shall be updated according to any future COP/MOP decisions.

Data / Parameter: EFOM

Data unit: tCO2/MWh

Description: Operating Margin Emission factor

Source of data used: China National Development and Reformation Commission Climate Change

Office Notice of Chinese Regional Grid Emission Factor.

Value applied: 1.0585



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choice of data or

description ofmeasurement methods


applied :

Any comment: Shall be updated according to DNA's official data updating.

Data / Parameter: EFBM

Data unit: tCO2/MWh

Description: Building Margin Emission Factor

Source of data used: China National Development and Reformation Commission Climate Change

Office Notice of Chinese Regional Grid Emission Factor.


Justification of thechoice of data or

description of

measurement methods


applied :

Any comment: Shall be updated according to DNA's official data updating.

Data / Parameter: NCVcotton

Data unit: GJ/tonne

Description: Net Calorific Value of type i biomass utilized in power plant

Source of data used: China Energy Statistical Yearbook 2005 p. 366Value applied: 15.89


choice of data or

description of

measurement methods


applied :

Value for cotton is used. Because cotton will constitute the majority of bio-fuel

delivered to the plant based on feasibility study report.

Any comment: Shall be updated according to China Energy Statistical Yearbook new version.

Data / Parameter: NCVwheat

Data unit: GJ/tonne


Source of data used: China Energy Statistical Yearbook 2005 p. 366



choice of data or

description of

measurement methods


applied :

The Value for wheat straw is utilized from the China Energy Statistical

Yearbook 2005. Since wheat straw could be utilized in the plant operation.



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Data / Parameter: NCVpaddy,rice

Data unit: GJ/tonneDescription: Net Calorific Value of type i biomass utilized in power plant




choice of data or

description of

measurement methods


applied :

The Value for paddy rice straw is utilized from the China Energy Statistical

Yearbook 2005. Since paddy rice could be utilized in the plant operation

according to feasibility study report.


Data / Parameter: NCVmaize,

Data unit: GJ/tonne





choice of data or

description of

measurement methods


applied :

Maize straw might be utilized in the proposed project activity according to

feasibility study report.


Data / Parameter: EFCH4,i

Data unit: KgCH4/TJ

Description: Methane emission from biomass combusted in power plant




choice of data or

description of

measurement methods


applied :

Any comment: IPCC value from the latest version published will be utilized

Data / Parameter: EFburning,CH4,k,y

Data unit: KgCH4/TJ

Description: CH4emission factor for uncontrolled burning of the biomass residue type k

during the year y




choice of data or


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description of

measurement methodsand procedures actually

applied :


Data / Parameter: EFkm,co2

Data unit: kg CO2/km

Description: Average CO2emission factor for transportation of biomass with trucks

Source of data used: IPCC 2006 default value from the Moderate Control index for the US heavy

Duty Diesel Vehicle

Value applied: 1.011 for the first commitment period.


description of

measurement methods


applied :


Data / Parameter: EFco2,FF,i

Data unit: tCO2/tonne

Description: CO2emission factor for the fossil fuel type i combusted in plant

Source of data used: Latest version of China Energy StatisticsValue applied:


choice of data or

description of

measurement methods


applied :

Any comment: This parameter is not taken into consideration. Because for the onsite fuel

consumption calculation the Net Calorific Value and carbon content are utilized

instead, furthermore for biomass transportation emission calculation the

Emission Factor per kilometre is utilized instead. Detailed calculation in Annex

3.

Data / Parameter: EFco2,LE

Data unit: tCO2/tonne

Description: CO2emission factor of the most carbon intensive fuel J in the calculation of CM

with the ACM0002

Source of data used: Latest version of China Energy Statistics

Value applied:


choice of data or

description of

Local or national data should be preferred. Default values from the China

Energy Statistics or IPCC 2006 will be used alternatively and should be chosen

in a most conservative manner. Otherwise, this parameter is not taken into the


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measurement methods

and procedures actuallyapplied :

leakage calculation.

Any comment: Minimal of two years after last issuance of CERs whenever the leakage exist.

Data / Parameter: Net Calorific Value (NCVi) of fossil fuel combusted in plant

Data unit: TJ/tonne

Description: Net Calorific Value (NCVi) of fossil fuel combusted in plant

Source of data used: Feasibility Study page 16



choice of data or

description of

measurement methodsand procedures actually

applied :

The value for Diesel is used. But other values will be applied if other fuels are

used.

Any comment: The project entity appointed a third party laboratory under the supervision of

Shandong Power Design Institution for the power plant.

Data / Parameter: Fossil fuel carbon content (diesel)

Data unit: tC/TJ

Description: Fossil fuel carbon content (diesel)




description of

measurement methods


applied :


Data / Parameter: Oxidation Rate

Data unit:

Description: Oxidation Rate




choice of data or

description of

measurement methods


applied :

Any comment:

Data / Parameter: Moisture Content

Data unit:


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Description: Biomass moisture content

Source of data used: Project feasibility study report P15Value applied: 0.0961 for the first commitment period.


choice of data or

description of

measurement methods


applied :

Any comment: The moisture content of the biomass residues are taken into consideration in all

the calculations of Proposed Project emission reduction.

Data / Parameter: CO2/C Factor

Data unit:Description: CO2/C Factor


Value applied: 3.67


choice of data or

description of

measurement methods


applied :

44/12=3.67

based on molecule and atom weight of carbon and carbon dioxide.

Any comment:

Data / Parameter: Quantity of cotton residues that are utilized in the defined geographical region

Data unit: Tonnes

Description: Quantity of cotton residues that are utilized (eg for energy generation or as

feedstock and all kinds of losts, etc) in the defined geographical region

(1,346,000 tonnes in section B.6)

Source of data used: Surveys or statistics and project feasibility study report

Measurement

procedures (if any):

Monitoring frequency: Annually

QA/QC procedures:

Any comment: This parameter is applicable since approach L2 is utilized to rule out leakage.

Data / Parameter: Quantity of cotton biomass residues in the region

Data unit: Tonnes

Description: Quantity of cotton residues in the region (2,236,000 tonnes in section B.6)

Source of data used: Surveys or statistics and project feasibility study report

Measurement

procedures (if any):

Monitoring frequency: Annually

QA/QC procedures:

Any comment: This parameter is applicable since approach L2 is utilized to rule out leakage.


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B.6.3. Ex-ante calculation of emission reductions:

>>

As described in the baseline information in Annex 3, the following greenhouse gas emissions are

considered for the project activity:

1) Methane emissions from biomass utilized in the power plant2) Biomass transportation emissions from collection points to power plant site3) Carbon dioxide emissions from electricity consumption at the power plant4) Emission from start-up/auxiliary fuel combustion in the boiler of the power plant onsite

The above project emissions are calculated using the algorithms provided in the baseline methodology.

An illustration of calculation methods is given in the following context.

yBiomassCHCHyECycoyy PEGWPPEPEFFPETPE ,44,,2 +++= (tCO2/year)

The total Project emissionsPEyare sum of project emissions from biomass combustion, transportationemissions, power consumption onsite and auxiliary fuel utilization in boiler as listed in the above

equation. The detailed calculation explanation is demonstrated individually in the following sector.

Project emission from biomass combustion

It is estimated that approximately 22tonnes biomass residues will be combusted in the boiler per hour, and

annual combustion amount reaches around 132,000 tonnes with 9.61% moisture content. Therefore the

annual dry biomass combustion amount is 119,315 tonnes with a Net Calorific Value of 15.89 GJ/tonne

for the mix fuel. Therefore, the assumed biomass combustion in the proposed power plant will result in

the methane emissions of 1636 tCO2annually.

Methane emission factor is chosen same of wood/wood waste as biomass residues combustion in

industrial stoker boiler is 30 Kg/TJ as IPCC 2006 default value. Moreover, the proposed technology ismuch more efficient than stoker boiler, the correction of the methane emission factor was set at 1.37,

which is the lowest from the ones proposed by the baseline methodology.

Project emission from transportation process

There is around 5-7 days storage capacity for biomass in the power plant, and 8 collection points surround

the power plant. The collection sites are chosen based on a balance between distance and resource

availability. The distance from the collection points to the power plant varies from 6 km to 35km. The

transportation of biomass from collection point to power plant ended up in the direct emission from the

combustion of fuel in trucks.

In order to calculate the CO2-emissions from the transportation of bio-fuel the longest return trip is

chosen as the simplest and most conservative estimation. Thus 2*35 km is used as the averagetransportation distance. The truck load will roughly be 5 to 8 tonnes. The smallest truck load is selected

since it takes more

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25 MW Biomass Plant China_CDM