CDM - PDD- Thu duc Plant Sep., 11, 2003 Preliminary findings of PDD– CDM model project for Thuduc fuel switching plant Master Nguyen Thi Kim Lien International

CDM - PDD- Thu duc Plant Sep., 11, 2003

Preliminary findings of PDD– CDM model project for

Thuduc fuel switching plant

Master Nguyen Thi Kim Lien

International Cooperation Department

Ministry of Industry


Content

1. Background

2. Thuduc CDM project and its fact-finding

3. Evaluation by NEDO

4. Conclusion


Project background: Energy demands

Energy consumption have stably increased at the rate of 13-14%/y

Additional increase 800MW/y Power source configuration by capacity :

- From oil: in 2001: 6.9%;in 2020: 0%- From gas: in 2001 : 28.2% In 2020: Gas & Diesel: 36.6%


Project background Thu Duc Power Plant

- Is an important power source to supply electricity for Hochiminh City

The power plant consists of: - 03 heavy-oil-fired generator for base-load power (No. Unit: 33 MW; No.2 and 3 Unit: 66 MW) - 04 diesel oil fired gas turbines for peak load power (No.1 unit: 28 MW, No. 3: 22 MW; No, 4 and 5 units: 42 MW)

Project: Model project for fuel switch of the heavy-oil-fired boiler


Thu Duc Power Plant eligible for CDM project

Meet SDI criteria : GHG reduction Additionality: without project activity,

possibility of stopping of Unit 3 is extremely remote uncertain, most likely to be continued at leas for 10 other years.

On march, 2003, DNA has established at MONRE eligible for CDM project


Thu Duc Power Plant Preparation for CDM project

• Baseline study: •8 scenarios have been selected based on number of assumptions • Project scenario: project implementation at time when the gaspipline be accessible. • Project major features:

• Total investment: 8 Mil. USD• Credit period: CER from April, 2006 to April, 2016

•Total CO2 reduction: 825 000 T• Availability: 67%• Equivalent emission factor: 0.86 T-CO2/MWh


Thu Duc Power Plant Scenario analysis

• Scenario were evaluated on: • Legislation and institutions

• Technological experiences

• Economic efficiency

• Market barriers

• Environmental impacts

• Fuel procurement

• Comparison between scenario


Monitoring and verification Plan

•Monitoring plan: • Monitoring method for CO2 reduction

calculation and control of monitoring devices• Monitoring SDI • Monitoring baseline adequacy • Calculation method for CO2 emission reduction • Make GHG Report



Verification plan: Internal audit: 1/y Confirm if monitoring is conducted in keeping with monitoring plan

Verification Plan: Carried out by operational entity (third party): 1/y Purpose: Verification of monitoring results and activities to be comply with the requirements Kyoto protocol and host country Project operator should prepare material required by the verifier


Potential benefits

• GHG emission reduction on CO2 basis: • Annually: 68 300T/y• Total: 825 000 in 10 years

• Emission reduction of other gases: • SOx: from 1600 ppm to 2 ppm• NOx: from 240 ppm to 200 ppm• Particle: from 150 mg/m3N to 0 mg/m3N


Uncertainties

Technical risk and uncertainties: – change in yearly availability – change in fuel heat power– change in generation efficiency

Financial risk: – EVN vµ NEDO are both government agencies

with sound financial states



Economic risk and uncertainties:

• change in activity level

• change in gas price

– Social risk and uncertainty Environmental risk


Validation Report done by third party (operational entity)

• Validation proposal by Tohoku: 5/2003• Third party selected: DNV •DNV studied a proposal made by Tohoku

• Interview with Tohoku

• Interview with stakeholders •Issued validation Report


Project milestones

• Feb., 2003: Tohoku started to work with MOI and EVN on PIN•Feb., 2003: EVN submitted PIN to MOI•March 2003: MOI send PIN to MONRE•April 2003: EVN submitted PDD to MOI •May 2003: MOI hold public review on PDD•Aug., 2003: the project is not adopted by NEDO


NEDO selection criteria for model project

•High economic efficiency •Effectiveness of technology(the first instance of technology being applied in host country)• Potential Project Dissemination effect of the Potential to be implemented as a CDM project Activity


NEDO evaluation

• The project is not adopted by NEDO in 2003 financial year with the given reason: Low Economic EfficiencyCritical issues:

• Uncertainty of natural gas supply timing• Uncertainty of natural gas supply and

profitability • (IRR = minus

• No profit


Conclusion

Project is eligible for CDM project Pursuit of standard procedures for CDM Unfortunately:

– - Condition in Vietnam is pre-mature to implement this project

– Vietnam should settle all concerns aforementioned e.g gas supply timing and has price


Thank you for your attention !

Documents

CDM - PDD- Thu duc Plant Sep., 11, 2003 Preliminary findings of PDD– CDM model project for Thuduc fuel switching plant Master Nguyen Thi Kim Lien International