Feasibility Report on From Rice Husk

CDM-SSC-PDD (version 02) CDM – Executive Board page 1

CLEAN DEVELOPMENT MECHANISM

SIMPLIFIED PROJECT DESIGN DOCUMENT FOR SMALL-SCALE PROJECT ACTIVITIES (SSC-CDM-PDD)

Version 02

CONTENTS

A. General description of the small-scale project activity B. Baseline methodology C. Duration of the project activity / Crediting period D. Monitoring methodology and plan E. Calculation of GHG emission reductions by sources F. Environmental impacts G. Stakeholders comments Annexes Annex 1: Information on participants in the project activity Annex 2: Information regarding public funding


Revision history of this document

Version Number

Date Description and reason of revision

01 21 January 2003

Initial adoption

02 8 July 2005 • The Board agreed to revise the CDM SSC PDD to reflect guidance and clarifications provided by the Board since version 01 of this document.

• As a consequence, the guidelines for completing CDM SSC PDD have been revised accordingly to version 2. The latest version can be found at <http://cdm.unfccc.int/Reference/Documents>.

CDM-SSC-PDD (version 02) CDM – Executive Board page 3 SECTION A. General description of the small-scale project activity A.1. Title of the small-scale project activity: Biomass based power plant at Siltara, Raipur, Chhattisgarh, India. Version No. – 02 Date: 24/01/2007 A.2. Description of the small-scale project activity: Background

Maa Usha Urja Limited (MUUL) belongs to the NECO Group of companies which is mainly into the business of manufacturing steel products. MUUL proposes to set up a 7.5 MW biomass based power generation unit at Siltara located in Raipur district of Chhattisgarh, India.

Purpose

MUUL has entered into an understanding with Jayaswals Neco Limited (JNL), another group company of MUUL, which has its steel plant division at Siltara Growth Centre, Raipur. MUUL will arrange to supply power from its biomass based power generation plant to cater to a part of the power requirement of JNL.

Steel plants are extensively power intensive. Chattisgarh is a state with a prevailing gap between demand and supply of electricity. In view of the same, in absence of the project activity it was likely for the project proponent to generate thermal power using coal to cater to the power requirement of energy intensive steel industry of JNL owning abundant coal reserves near Raipur (See Section B.2 for selection of appropriate baseline scenario). But, to abate Greenhouse Gas (GHG) emission, the project proponent has decided to effectively utilize locally available rice mill generated rice husk, which is an un-utilized biomass resource, as the main fuel for generation of steam and therefrom electricity.

Salient features of the project

The 7.5 MW biomass based power plant of MUUL, after meeting the auxiliary power requirement for operation of the power plant, will sell electricity to JNL for in-house consumption of the JNL’s steel plant. JNL has proposed direct drawal of power without using the transmission lines of the state electricity grid. As per the Power Purchase Agreement (PPA) with JNL1, in case JNL is not in a position to take supplies of power generated by MUUL due to any reason, the shortfall in consumption by JNL will be sold to Chhattisgarh State Electricity Board (CSEB) at prices fixed by CSEB from time to time.

With the idea of using primarily rice husk as a fuel for the biomass based power plant, an annual requirement of around 70000 tonnes of rice husk is envisaged for the proposed power plant. The rice husk requirement for the project is proposed to be met from the rice mills in the near vicinity of the proposed

1 Refer to PPA between JNL and MUUL, dated 22/06/2005

CDM-SSC-PDD (version 02) CDM – Executive Board page 4 power plant. At present the project developer has entered into fuel supply agreements with more than one party in order to ensure assured supply of rice husk. However, avenue has been kept in the system to fire different types of biomass into the Atmospheric Fluidised Combustion Boiler (AFBC) as per availability. In case rice husk is not adequately available in the nearby locality, the project proponent proposes to procure the same from the adjacent areas where rice yield is substantial. MUUL has also planned for energy plantation exclusively for the purpose of ensuring the sustained supply of biomass for the project activity2. Provision will be also be kept for co-firing of coal to take care of any exigency arising from shortage of supply of biomass. With the excess rice husk availability in and around Chhattisgarh, the possibility of such exigencies are low3.

Biomass being a carbon-neutral fuel the project activity will directly reduce Greenhouse Gas (GHG) emissions related with equivalent electricity generation using fossil fuel in absence of the project activity4. The project will also help to partially reduce the increasing demand and supply gap of electricity for the steel plant division of JNL and indirectly of the entire region.

Project’s contribution to sustainable development The contribution to sustainable development has been described under the following indicators:

Social-economic well being - Necessity of skilled and semi-skilled jobs during construction and for operation and maintenance of the equipments of the power plant will generate both direct and indirect employment in the rurally backward area surrounding the plant. Utilization of such an un-utilized waste biomass for power generation will add value to rice husk and is expected to have a positive impact on the economics of the rice millers in the region. The project will also help to partially reduce the gap between electricity demand and supply at local and national level.

Environmental well being - The project activity is a renewable energy power project, which will use rice husk generated from the rice mills in the locality as a fuel for power generation. Rice husk is a carbon-neutral fuel. Thus the project activity will supply clean power to JNL. This electricity will displace the power generation using fossil fuel coal. Thus it will reduce the related GHG (CO2) emissions from the combustion of coal and save an equivalent amount of conventional fuel which is a non-renewable resource.

Technological well being - The plant will use efficient and environment friendly technology of renewable energy sector. The technology includes a modern Fluidised Bed Combustion (FBC) boiler designed to operate with co-firing of two fuels – coal and rice husk and also different grades of biomass if need be so.

2 Refer to Deed of undertaking for permission to cultivate julie flora/other sources of biomass by JNL to MUUL, dated 22/11/2005 3 Refer to Biomass Assessment Study in Siltara Growth Centre at 150 km range for Biomass Combustion based Power Generating Unit of MUUL, prepared by M.C. Jain and Associates

CDM-SSC-PDD (version 02) CDM – Executive Board page 5 A.3. Project participants: Name of the 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)

Government of India Maa Usha Urja Limited No A.4. Technical description of the small-scale project activity: >> A.4.1. Location of the small-scale project activity: >> A.4.1.1. Host Party(ies): India A.4.1.2. Region/State/Province etc.: Chhattisgarh A.4.1.3. City/Town/Community etc: Siltara, Raipur A.4.1.4. Detail of physical location, including information allowing the unique identification of this small-scale project activity(ies): The proposed power plant will be located in the premises of MUUL at Siltara, in Raipur District, Chhattisgarh, India. The site is located on State Highway No. 5 which passes by the western side of the plant. The location is selected considering various aspects like availability of rice husk in adequate quantity throughout the year, availability of water and grid connectivity. The location also has the abundant availability of skilled and semi-skilled labour and well connected with road, rail and air communication.

The nearest railway station is at Raipur at a distance of about 8 km. Airport is also nearby and is located at Raipur.


A.4.2. Type and category(ies) and technology of the small-scale project activity: The 7.5 MW biomass based power plant of MUUL will evacuate power into JNL’s substation situated within a distance of 1 kilometre (km) from the project activity site. The different power generating sources evacuating into the JNL’s substation and the different end users drawing power from the same substation are shown in the block diagram below.

Fig 1: Location of project activity

(Maps not to scale)


As can be seen in the diagram above, JNL’s substation can be considered to be an isolated distribution system, having multiple feeders and end users. MUUL’s biomass based power plant will supply electricity to JNL through this isolated distribution system. In case JNL is not in a position to take supplies of power generated by MUUL due to any reason, the shortfall in consumption by JNL will be sold to CSEB at prices fixed by CSEB from time to time. The project falls under the UNFCCC small-scale CDM project activity categories under Type-I with project activity being renewable electricity generation for a grid. Main Category: Type I - Renewable Energy Power project

Sub Category: D – ‘Grid connected renewable electricity generation’

As per paragraph 2 under Category I.D of Appendix B of the UNFCCC-defined simplified modalities and procedures (M&P) for small-scale CDM project activities (Version 09: 28 July 2006), in case of a unit which co-fires renewable biomass [rice husk] and non-renewable fossil fuel [coal] the capacity of the entire unit shall not exceed the limit of 15 MW, for the project to qualify as a small-scale CDM project. Evidently, the project qualifies as a small scale one under Category I.D.

JNL’S SUBSTATION

CHHATTISGARH STATE

ELECTRICITY GRID

12 MW

7.5 MW BIOMASS BASED POWER

PLANT OF MUUL

7.5 MW

15.5 MW BLAST FURNACE GAS BASED POWER PLANT OF JNL

11.5 MW

BLAST FURNACE OF JNL

4 MW

STEEL MELT SHOP OF JNL

23.5 MW

OXYGEN PLANT OF JNL

2.5 MW

SINTER PLANT OF JNL

2.5 MW

COKE OVEN PLANT OF JNL

2.5 MW

CDM-SSC-PDD (version 02) CDM – Executive Board page 8 A brief on the technology employed The power plant will be based on Rankine Cycle. Primary biomass fuel considered for the boiler is rice husk, to be supplemented by other biomass materials and coal in case of exigencies. Suitable boiler design will be available for use of rice husk and other biomass as fuels for steam generation along with the provision kept for co-firing of coal if need be so. The salient features of a fluidized bed combustion (FBC) type boiler include super heater, economizer, drum and air preheater. It also has the advantages of high thermal and combustion efficiency reducing quantity of husk needed, to a minimum, automatic operation for consistent high efficiencies and reduced need for manpower. The boiler will be multi-pass, natural circulation type, sized to produce a maximum of 33 tonnes per hour of steam at 66 kg/cm2, 4950C. The steam generated from the boiler will drive a steam turbine of 7500 kilo-watt (kW) (steam inlet configuration 64 kg/cm2 and 495oC) capacity coupled to an electric generator of 7.5 mega-watt (MW) maximum continuous rating [terminal voltage being 11kilo-volt (kV)]. The turbine will be of single cylinder, straight condensing type, designed for high operating efficiencies and maximum reliability.

Power Evacuation The JNL sub-station of 33 kV is located at about 500 metres from the plant site. Power generated at the plant at 11 kV will be stepped upto 33 kV through a 10/12.5 MVA, 11/33 kV outdoor transformer. Transmission and Distribution losses can be assumed to be low owing to proximity of the sub-station. For evacuating the power to JNL’s substation, MUUL paid for constructing 33 kV transmission line from the location of its power project upto JNL’s substation.

A.4.3. Brief explanation of how the anthropogenic emissions of anthropogenic greenhouse gas (GHGs) by sources are to be reduced by the proposed small-scale project activity, including why the emission reductions would not occur in the absence of the proposed small-scale project activity, taking into account national and/or sectoral policies and circumstances: The power plant proposes to use biomass (rice husk) as fuel for generation of electricity and in case of exigencies has the provision of using coal as fuel. Biomass is a carbon-neutral fuel and hence there are no net CO2 emissions from combustion of biomass. Since the biomass contains only negligible quantities of other elements like Nitrogen, Sulphur etc. release of other GHGs like SOx, NOx are considered as negligible.

The MUUL project will generate 7.5 MW power. Auxiliary consumption for the project activity has been estimated at around 10% and the rest of the electricity generated will be sold to Group company JNL for its captive consumption. In case JNL is not in a position to take supplies of power generated by MUUL due to any reason, the shortfall in consumption by JNL will be sold to Chhattisgarh State Electricity Board (CSEB). The Plant Load Factor (PLF) for the first year of operation has been estimated to be 70%, in the second year of operation, the PLF has been estimated to be 80% and for the years ahead, the PLF has been estimated to be 90%.

The plant will be commissioned in December 2006 and is expected to generate net amount of 3.449 GWh per month of electric energy units in the first year (at 70% PLF), 3.942 GWh per month in the second year (at 80% PLF) and 4.435 GWh per month for the subsequent years (at 90% PLF) in the crediting period. In case generation is stabilized early, the maximum units i.e. 4.435 GWh per month will be supplied from stabilization period onwards.

CDM-SSC-PDD (version 02) CDM – Executive Board page 9 In absence of the project activity, MUUL would have generated equivalent power in a coal based power plant and would have supplied the generated power to JNL (See Section B.2 for justification of the baseline scenario). Under the project activity, net electricity generated from the 7.5 MW biomass based power plant, after meeting the auxiliary consumption of the plant, will amount to 37.422 GWh in the first year, 42.768 GWh in the second year and 48.114 GWh for the remaining years of the entire crediting period. Cumulatively coal based electrical energy equivalent of 465.102 GWh for a period of 10 years would be replaced by the renewable electricity generated from the 7.5 MW non-conventional renewable resource (rice husk) based power plant with CO2 emission reduction of 445192 tonnes in 10 years. Without project activity, the same energy load would have been taken up by a fossil fuel (coal) based power plant and corresponding emission of CO2 would have occurred due to combustion of coal.

A.4.3.1 Estimated amount of emission reductions over the chosen crediting period:

Operating Years

CO2 Emission Reductions (tones of CO2)

April 2007- March 2008 28176.61 April 2008- March 2009 32912.57 April 2009- March 2010 37648.53 April 2010- March 2011 37648.53 April 2011- March 2012 37648.53 April 2012- March 2013 37648.53 April 2013- March 2014 37648.53 April 2014- March 2015 37648.53 April 2015- March 2016 37648.53 April 2016- March 2017 37648.53

Total estimated reductions (tonnes of CO2 e) 362277.40

Total number of crediting years 10 Annual average over the crediting period of

estimated reductions (tonnes of CO2 e) 36227.740

A.4.4. Public funding of the small-scale project activity: No public funding from parties included in Annex I to the UNFCCC, is available to the project.

A.4.5. Confirmation that the small-scale project activity is not a debundled component of a larger project activity: According to Appendix C of Simplified Modalities & Procedures for small scale CDM project activities, ‘Debundling’ is defined as the fragmentation of a large project activity into smaller parts. A small-scale project activity that is part of a large project activity is not eligible to use the simplified modalities and procedures for small-scale CDM project activities.

CDM-SSC-PDD (version 02) CDM – Executive Board page 10 A proposed small-scale project activity shall be deemed to be a debundled component of a large project activity if there is a registered small-scale CDM project activity or an application to register another small-scale CDM project activity:

With the same project participants;

In the same project category and technology/measure;

Registered within the previous 2 years; and

Whose project boundary is within 1 km of the project boundary of the proposed small-scale activity at the closest point.

None of the above mentioned criteria holds for the small scale project activity. So it can be concluded to be not a debundled component of a larger project activity.

CDM-SSC-PDD (version 02) CDM – Executive Board page 11 SECTION B. Application of a baseline methodology: B.1. Title and reference of the approved baseline methodology applied to the small-scale project activity: Title: Grid connected renewable electricity generation

Reference: Category I.D of Appendix B of the simplified M&P for small-scale CDM project activities of the UNFCCC CDM website

This is a rice husk based power project and falls under the category of Renewable Energy Projects as per Appendix B of the simplified M&P for small-scale CDM project activities of the UNFCCC CDM website.

Details of approved methodology for baseline calculations for small scale CDM projects of Category I.D [Version 09 : July 28, 2006] is specified in Appendix B of the simplified M&P for small-scale CDM project activities of the UNFCCC CDM website.

B.2 Project category applicable to the small-scale project activity: The project activity’s fit to category I.D of small scale CDM project activities has been explained in section A.4.2. It meets the applicability criteria for the same and can use a baseline methodology provided for the specific kind of project under the category I.D in the Appendix B of the simplified modalities and procedures for small-scale CDM project activities Appendix B of the simplified M&P for small-scale CDM project activities of the UNFCCC CDM website, provides guidelines for preparation of Project Design Document (PDD) including baseline calculations. The same is available for Category I.D projects.

As per paragraph 9 under Category I.D. in Appendix B of the Simplified M&P for small scale CDM project activities (Version 09 : July 28, 2006), the baseline is the kWh produced by the renewable generating unit multiplied by an emission coefficient (measured in kg CO2equ/kWh) calculated in a transparent and conservative manner as: (a) A combined margin (CM), consisting of the combination of operating margin (OM) and build margin (BM) according to the procedures prescribed in the approved methodology ACM0002. Any of the four procedures to calculate the operating margin can be chosen, but the restrictions to use the Simple OM and the Average OM calculations must be considered

OR (b) The weighted average emissions (in kg CO2equ/kWh) of the current generation mix. The data of the year in which project generation occurs must be used.

In the project activity scenario, electricity will be generated by a biomass based power plant. Moreover, electricity so generated, will be fed to an isolated distribution system (mini-grid) owned by JNL to meet the electricity demand of JNL’s steel plant division at Siltara. The management of MUUL considered most of the risk aspects associated with the implementation of the project activity, which have been

CDM-SSC-PDD (version 02) CDM – Executive Board page 12 elucidated in Section B.3. They have also considered the following alternative means to cater to the power demands of the power intensive steel plant division of JNL:

Alternative 1: Import of power from the Chhattisgarh state electricity grid Alternative 2: 100% Coal based power plant of MUUL Alternative 3: 100% Diesel based power plant of MUUL. Alternative 4: Project activity without CDM benefits.

Alternative 1: Import of power from the Chhattisgarh state electricity grid In absence of the project activity, the power requirement of JNL could have been met through importing power from Chhattisgarh state electricity grid. This alternative is in compliance with all applicable legal and regulatory requirements and does not need any significant additional investment. Although imported power from the grid was used to meet part of the electricity requirement of the existing facility of JNL before the expansion activities, imported power from grid cannot be solely relied upon for catering to the electricity requirement of the power intensive integrated steel plant like JNL especially after the expansion of its operations. Inspite of that, since imported power from the grid would require minimum investment, it would have been a financially more attractive option for meeting the power requirement of JNL. Therefore the Alternative 1 is considered further for arriving at the baseline scenario. Alternative 2: 100% Coal based power plant of MUUL In absence of the project activity, the power requirement of JNL could have been met through an 18 MW coal based power plant. This alternative is in compliance with all applicable legal and regulatory requirements. JNL has its own huge reserves of coal in Raigarh near Raipur, coal from where is proposed to be sold to MUUL for use in its biomass based power plant in case of exigencies. The same coal could be used for generating power in a coal based power plant. Moreover, most of the integrated steel plants of India like plants of Steel Authority of India Limited, Jindal Steel and Power Limited, Tata Iron and Steel Company Limited, cater to the majority of their power demand from coal based power plants. For an energy intensive industry like a steel plant, a coal based captive power plant is the most reliable source of power. Therefore, this alternative may be a part of the baseline. Therefore the Alternative 2 is considered further for arriving at the baseline scenario.

Alternative 3: 100% Diesel based power plant of MUUL. This is not a realistic and credible alternative to be adopted because of the higher generation cost of diesel based power (around Rs. 3.5-4.6 per kWh). Diesel generators are mainly used as a back up system during starting up of power plants. Therefore in absence of project activity, it was unlikely for MUUL to implement Alternative 3 and so alternative 3 is excluded from further consideration for arriving at the baseline scenario.

Alternative 4: Project activity without CDM benefits. This alternative is in compliance with all applicable legal and regulatory requirements. However, this alternative has associated barriers to its implementation which prevented MUUL to implement the project activity (Please refer to Barrier Analysis in Section B.3 below for details). The consideration of the CDM benefits (GHG abatement and financial benefits) played a key role in MUUL’s decision to proceed with the project activity. Therefore alternative 5 would not be a credible and realistic alternative option for MUUL to implement and can be excluded from further consideration as a possible baseline scenario.

CDM-SSC-PDD (version 02) CDM – Executive Board page 13 It is evident from the above discussion that either of “Alternative 1: Import of power from the Chhattisgarh state electricity grid” and “Alternative 2: 100% Coal based power plant of MUUL” can be a plausible baseline option. However, “Alternative 1: Import of power from the Chhattisgarh state electricity grid” requires the minimum investment. On the other hand, unit cost of electricity generation for “Alternative 2: 100% Coal based power plant of MUUL” would be much lower compared to imported electricity from the CSEB grid which would cost JNL INR 3.15/ kWh. However as grid based power has lower emission factor compared to that from coal based power generation, in order to arrive at a conservative estimate of the baseline emissions, Alternative 1: Import of power from the Chhattisgarh state electricity grid” has been considered as the baseline scenario for the project activity under consideration. The MUUL project activity will displace an equivalent amount of electricity that would have been drawn from the CSEB grid which falls under the Western Regional electricity grid. In the project case, the proposed rice husk based power plant will generate electricity at 7.5 MW. In view of the predicted power deficit status of the state in future, a delay effect in future power plants may creep in due to the occurrence of this project although to a limited extent. Since the displaced electricity generation is the element that is likely to affect both the operating margin in the short run and the built margin in the long run, electricity baselines should reflect a combination of these effects. Therefore an ideal baseline approach is envisaged as the one that combines both Operating and Build Margin as prescribed in first alternative given in paragraph 9 under Category I. D of the UNFCCC M&P for small scale projects. In case of the project activity, a combined margin (CM) emission factor, calculated according to the procedures prescribed in the approved methodology ACM0002 and publicly available in the official website of Central Electricity Authority (CEA), has been used for arriving at the baseline.

Key information and data used to determine the baseline scenario

Serial number

Variable Parameters Data sources

01 Enet, y Electricity evacuated to JNL substation in a year y

MUUL maintained data

02 EFGRID Combined margin emission factor (in tCO2/MWh) of the Southern Regional Electricity grid (calculated ex-ante and kept constant for the entire crediting period)

CEA published CDM – Carbon dioxide baseline database5

B.3. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered small-scale CDM project activity:

5 Source: http://www.cea.nic.in/planning/c%20and%20e/Government%20of%20India%20website.htm

CDM-SSC-PDD (version 02) CDM – Executive Board page 14 That the project activity qualifies to use simplified methodologies has been justified in Section A.4.2 where it has been shown to qualify as a small scale CDM project of Category I.D.

As per the decision 17/cp.7 paragraph 43, a CDM project activity is additional if anthropogenic emissions of greenhouse gases by sources are reduced below those that would have occurred in the absence of the registered CDM project activity. This project activity involves electricity generation from renewable energy source rice husk with net zero CO2 emission from rice husk combustion since rice husk is carbon- neutral. An analysis of the coal co-fired with biomass (in case of exigency) under the project activity gives the baseline emission factor in kgCO2/kWh for the crediting period, and the GHG (CO2) emission reductions that the project activity will achieve will be through substitution of an equivalent supply from a coal based power plant, and which would not happen in absence of the project activity. Since, the biomass contains only negligible quantities of other elements like Nitrogen, Sulphur etc. release of other GHGs are considered as negligible. The project activity is not mandated by the law either from the Centre or the State. Although the MNES and the state government are promoting such renewable energy endeavours, there is no legal binding on either the state or the promoter to come up with such biomass based power plant.

Barriers and Additionality

Attachment A to Appendix B of the simplified M&P for small-scale CDM project activities of the UNFCCC CDM website asks for an explanation to show that the project activity would not have occurred anyway due to at least one of the following barriers:

(a) Investment barrier

(b) Technological barrier

(c) Barrier due to prevailing practice

(d) Other barriers

Investment Barriers

1) Increase in cost of power generation: The cost of rice husk during the project conception stage was around INR 360/ton. The then prevailing statistics of biomass based power generation in Chhattisgarh signified that two biomass based power plants had been commissioned, permission from Government had been granted to seven parties (inclusive of MUUL) and applications for obtaining permission for setting up biomass based power plants were under consideration for seven proponents. Such a trend indicated that there would be a significant rise in the biomass demand for power generation over the years. MUUL anticipated that since mainly rice husk is available as a waste biomass in Chhattisgarh (called the ‘rice bowl of India’), rise in waste biomass demand for power generation would signify a consequent increase in the rice husk demand, thereby resulting in a parallel rise in the rice husk price. This was further substantiated by the increasing rice husk price trend in Chhattisgarh. The cost of rice husk increased to around INR 550/ton in the second half of 2003. At present, the price of rice husk is in the range of INR 1100/ton. This escalation in the biomass prices is because of increase in demand of rice husk as a fuel and also increase in its transportation cost. Apart from that, with the successful operation of biomass based power generation, the supply of biomass has become an organized business for the suppliers who are bent upon increasing their profit margins through rice husk sale.

CDM-SSC-PDD (version 02) CDM – Executive Board page 15 Considering 100% rice husk based power generation, annual requirement of rice-husk for 7.5 MW of power generation would be 68400 ton.

• Annual expenditure on rice-husk (@ INR 360/ton) = INR 24624000 • Annual expenditure on rice-husk due to increased cost (@ INR 550/ton) = INR 37620000 • Annual expenditure on rice-husk due to increased cost (@ INR 1100/ton) = INR 75240000 • Increase in expenditure due to increased cost of biomass from 2001 to 2003 = INR 37620000 –

INR 24624000 = INR 12996000 • Increase in expenditure due to increased cost of biomass from 2003 to 2005 = INR 75240000 –

INR 37620000 = INR 37620000 which implies rice husk price has almost doubled in a period of two years.

The above data signify that there has been a substantial rise in the rice husk price as well as a substantial increase in the rate of increment over a period of 4 years.

Due to increase in rice husk price, the estimated cost of power generation has also increased. With rice husk priced at INR 625/MT as was the case in 2004, the cost of biomass based power generation would have been INR 1.22/kWh. Based on present day price of rice husk at INR 1100/MT, the cost of biomass based power generation would be INR 1.78/kWh.

Instead of a biomass based power plant, if the project proponent had gone ahead with a 7.5 MW coal based power plant, the cost of generation of electricity would have been INR 1.34/ kWh based on cost of coal at INR 750/ MT. So, setting up of a coal based power plant would have been a financially more viable option for the project proponent.

This increase in cost of biomass and the consequent increase in cost of power generation, will be significantly compensated by the proposed carbon financing and will help to improve the sustainability of the project which will otherwise be rendered financially unstable.

2) Possible increase in transportation cost of biomass: MUUL apprehended that with the patronization of the Government and with the potential CDM revenue from biomass based power generation projects in view, more similar projects may be coming up in Chhattisgarh in the future since Chhattisgarh is well-known as the ‘rice bowl of India’. In view of the same there is a possibility of inadequacy of rice husk supply from the vicinity and hence MUUL has provisioned for the same by keeping open the option of transporting rice husk from distant locations and through energy plantation. This apprehension of MUUL was further substantiated by the statistics of biomass based power plants in Chhattisgarh, that had been accorded Government approval by 2002. In a scenario of higher demand in comparison to the availability in Chhattisgarh, MUUL will have to procure the biomass for sustained operation of its power plant from distant locations, thereby incurring additional expenses in transportation of the biomass from distant locations.

Institutional Barrier(s)

CREDA had accorded permission for installation of the 7.5 MW biomass based power plant of MUUL in March 2002 and in relation to that, had advised MUUL to acquire all permission/clearances/amenities from other relevant departments of the Government and to execute Power Purchase Agreement (PPA) with CSEB. But MUUL could not obtain all the necessary clearances in an appropriate time, one of them being the Consent to Establish from Chhattisgarh Energy Conservation Board (CECB). In 2003, CREDA notified MUUL that even after a long period, the progress of MUUL on installation of the biomass power plant was quite unsatisfactory. CREDA also advised MUUL to expedite their efforts for installation of the project and furnish monthly progress report regularly to CREDA office latest by 5th of every month,

CDM-SSC-PDD (version 02) CDM – Executive Board page 16 mentioning the targeted date for commissioning of the plant failing which the permission from CREDA may be treated as cancelled. Cancellation of the permission by CREDA, would necessitate re-submission for approval for the same project activity to CREDA, thereby getting into the risk of undefined delay for the institutional procedures involved. MUUL was forced to progress with installation in view of the above, even before the financial closure for the project activity was achieved. In case MUUL had proposed to set up a coal based power plant, MUUL would not require to obtain clearances from any association or regulatory body like CREDA where a time-schedule for project implementation would be stipulated, failing which the clearance could be cancelled. Therefore, there would have been no risk involved in obtaining approval from any regulatory authority due to delay in commissioning of the project as was faced by MUUL in case of establishing the biomass based power plant. Other barrier(s)

Apart from the above mentioned barriers, there are certain technological difficulties in using biomass as a fuel:

• Uncertainties related to achievement of higher steam temperature and pressure parameters by using rice husk as primary fuel because it tends to stick to the boiler tube surface.

• High moisture content of biomass in the monsoon posing serious problems in fuel efficiency and also increasing the net cost in power generation.

• Need to charge additional bed materials (i.e. refractory materials) in order to maintain the required bed height since the ash percentage in rice husk is low. Such usage of costly bed materials has created an additional financial burden on MUUL.

• Transportation of rice husk needs special protective measure in order to avoid undue losses. Running hours for the equipment for rice husk transfer inside the plant will be more because of low specific gravity of rice husk. This will increase the auxiliary consumption of electrical energy of the rice husk based power plant of MUUL.

Compared to project activity a coal based power plant would have been a less technologically advanced alternative with lower risks associated with performance uncertainty, but would have led to higher GHG emissions.

The project proponent plans to bring in the expertise of people in the field of power generation to further develop the technology for effective utilisation of rice husk as fuel in boilers.

Barriers due to prevailing practice:

Rice husk based power plants are not a prevailing practice in the Chhattisgarh scenario. This is one of the first few of such projects in the state. Most of the other projects have been taken up as potential CDM projects; the one of Vandana Vidhyut Limited at Bilaspur, Chhattisgarh has also got registered as a CDM project activity.

85-90% of the power generation in Chhattisgarh is from coal based thermal power plants. There are huge coal reserves in the vicinity, offering cheap pithead power generation opportunities. 84% of India's coal is in Chhattisgarh and two other States. South Eastern Coalfields Ltd, Bilaspur is in the process of doubling

CDM-SSC-PDD (version 02) CDM – Executive Board page 17 its production from 35 million tonnes to 70 million tonnes per annum.6 The business as usual (BAU) scenario in Chhattisgarh may be considered as thermal power generation using coal as 85-90% of the power generation comes from such sources. In the similar project sector, socio-economic environment, geographic conditions and technological circumstances, the project activity uses a technology, which shows very limited penetration.

It has been clearly established from the above discussion that the project activity faces hindrances in its implementation and successful operation. Some of these barriers have the potential to even disrupt the operation of the biomass based power plant thereby damaging the commercial viability of the project activity.

However with objective of setting up a renewable energy power plant and thereby availing the credits from GHG emission reduction, the management of MUUL has decided on going ahead with the project option. The corporate decision to invest

• in overcoming the barriers encountered in the project activity implementation • in the CDM project activity

has been guided by the anthropogenic greenhouse gas emission reductions the project activity would result in and the associated carbon financing the project activity would receive through sale of Certified Emission Reductions under the Clean Development Mechanism.

Based on the baseline calculation methodology, it is calculated that (see section E for the calculation) the project activity will avoid 362277.40 tonnes of CO2 equivalent emissions in a 10 year credit period, by displacing electricity generated from fossil fuel coal. Hence, the project activity is not a baseline scenario and without the project activity there will be emission as per the carbon content of the coal that would have been used as the fuel for the 7.5 MW power plant in absence of the project activity.

6 Source: http://www.Chhattisgarh.nic.in/power


B.4. Description of how the definition of the project boundary related to the baseline methodology selected is applied to the small-scale project activity:

The project boundary as specified under Category I.D of small scale CDM project activities in Appendix B of the simplified M&P for the same shall encompass the physical, geographical site of the renewable energy generating unit and the equipment that uses the electricity produced.

For the project activity the project boundary is from the point of fuel supply to the point of power export to the substation where the project proponent has a full control. Thus, boundary covers fuel storage and processing, boiler, steam turbine generator and all other accessory equipments, the point in JNL substation to which the generated electricity will be evacuated, the land over which energy plantation would be done (if required).

Since, the project would not have any impact on transmission and distribution losses it is not included in the project boundary. Using part of the available biomass, being wasted earlier, in the project, will not affect current needs for other fuels and therefore the emissions from any other fuel-use are not included in the system boundary.

CDM-SSC-PDD (version 02) CDM – Executive Board page 19 Flow chart and project boundary is illustrated in the following diagram [the blue line demarcates the boundary]:

BIOMASS STORAGE

BOILER STEAM TURBINE GENERATOR

ELECTRICITY ELECTRICITY

TO JNL SUBSTATION

ASH BRICK

MANUFACTURING PLANT OF JNL.

CO 2 SEQUESTRATED

CO2 GENERATED DUE TO COMBUSTION

OF BIOMASS

AUXILLIARY CONSUMPTION

Coal

GREEN PLANTS

PROJECT BOUNDARY

CDM-SSC-PDD (version 02) CDM – Executive Board page 20 B.5. Details of the baseline and its development: B.5.1 Specify the baseline for the proposed project activity using a methodology specified in the applicable project category for small-scale CDM project activities contained in Appendix B of the simplified M&P for small-scale CDM project activities:

In absence of the project activity, coal based power generation is the most viable option to cater to the power requirement of JNL, which has been already established in Section B.3. However as grid based power has lower emission factor compared to that from coal based power generation, to be conservative “Alternative 1: Import of power from the Chhattisgarh state electricity grid” has been considered as the baseline scenario in this project activity. Considering the multilayered dispatch system in India, the Western Regional Grid has been selected as the reference grid system where an equivalent amount of electrical energy will be replaced by the implementation of the project activity to maintain transparency and conservativeness. Since the displaced electricity generation is the element that is likely to affect both the operating margin in the short run and the build margin in the long run, electricity baselines should reflect a combination of these effects. Therefore an ideal baseline approach is envisaged as the one that combines both Operating and Build Margin as prescribed in first alternative given in paragraph 9 under Category I. D of the UNFCCC M&P for small scale projects. In case of the project activity, a combined margin (CM) emission factor, consisting of the combination of operating margin emission factor and build margin emission factor, calculated according to the procedures prescribed in the approved methodology ACM0002 and publicly available in the official website of CEA, has been used for arriving at the baseline. The simple operating margin emission factors from 2000 to 2005 (inclusive of imports) and the build margin emission factor (not adjusted for imports) for the Western Regional Electricity grid, as per CEA published data, has been provided below.

Simple Operating Margin (tCO2/MWh) (incl. Imports) 2000-01 2001-02 2002-03 2003-04 2004-05

West 0.98 1.01 0.98 0.99 1.01 Using approach (c) on p. 4 of

ACM0002 / Ver 06 Average simple operating margin emission factor for the Western Regional electricity grid = (0.98 + 0.99 + 1.01)/3 t CO2/MWh= 0.99 t CO2/MWh.

Build Margin (tCO2/MWh) (not adjusted for imports) 2000-01 2001-02 2002-03 2003-04 2004-05 West 0.78

Calculation of combined margin

As per ACM 0002 (Version 06, Sectoral Scope: 01, 19 May 2006), the combined margin emission factor should be calculated as the weighted average of the Operating Margin emission factor (EFOM,y) and the Build Margin emission factor (EFBM,y):

yBMBMyOMOM EFwEFwEFy ,, ⋅+⋅= where the weights wOM and wBM, by default, are 50% (i.e., wOM = wBM = 0.5)


Therefore, combined margin emission factor (EFy) for the Western Regional Electricity grid = 0.5×0.99 + 0.5×0.78 = 0.89 t CO2/MWh

For the project activity under consideration, the combined margin emission factor for Western Regional Electricity grid has been calculated ex-ante and will be kept constant for the entire crediting period.

Since there is a gap in demand and supply scenario in Western Regional electricity grid, the export of power to Western Regional grid will replace or get absorbed to partially fulfil the grid power requirement. If the same amount of electricity is generated by a mix of coal and gas based power project, it will add to the emissions that is getting reduced by the project activity. Hence, the baseline calculated using above methods/ scenarios would represent the anthropogenic emissions by sources (coal and gas power plants) that would occur in absence of the project activity.

B.5.2 Date of completing the final draft of this baseline section (DD/MM/YYYY):

09/02/2007

B.5.3 Name of person/entity determining the baseline:

Experts and consultants of MUUL


SECTION C. Duration of the project activity / Crediting period: C.1. Duration of the small-scale project activity: >> C.1.1. Starting date of the small-scale project activity: 21/12/2004 C.1.2. Expected operational lifetime of the small-scale project activity: 20 years C.2. Choice of crediting period and related information: >> C.2.1. Renewable crediting period: >> C.2.1.1. Starting date of the first crediting period: >> C.2.1.2. Length of the first crediting period: >> C.2.2. Fixed crediting period: C.2.2.1. Starting date: 01/04/2007 C.2.2.2. Length: 10 years

CDM-SSC-PDD (version 02) CDM – Executive Board page 23 SECTION D. Application of a monitoring methodology and plan: >> D.1. Name and reference of approved monitoring methodology applied to the small-scale project activity: According to Appendix B of the simplified M&P for small-scale CDM project activities of the UNFCCC CDM website, the project has been identified to belong to Category I.D [renewable electricity generation for a grid]. Paragraph 9 under Category I.D of the same document specifies that for the said category of CDM project, ‘Monitoring shall consist of metering the electricity generated by the renewable technology. In the case of co-fired plants, the amount of biomass and fossil fuel input shall be monitored’.

D.2. Justification of the choice of the methodology and why it is applicable to the small-scale project activity: Generation of electricity using biomass as fuel leads to mitigation of GHG emissions from coal-based power generation in the baseline scenario. In order to monitor the mitigation of GHG emission due to project activity of MUUL, the total electricity generated and the net electricity evacuated to JNL substation (a mini-grid) will be measured. The net electricity supplied to JNL by the project activity multiplied by the CO2 emission factor of the Western Regional electricity grid will form the baseline for the project activity. The project may co-fire coal along with biomass (in case of exigencies) and hence there will be monitoring of the amount of coal input as well as emission factor for the same. Thus the monitoring methodology under Category I.D of the Appendix B of the simplified M&P for small-scale CDM project activities of the UNFCCC CDM website is aptly applicable to the project activity.

Description of the Monitoring Plan

The Monitoring and Verification (M&V) procedures define a project-specific standard against which the project's performance (i.e. GHG reductions) and conformance with all relevant criteria will be monitored and verified. It includes developing suitable data collection methods and data interpretation techniques for monitoring and verification of GHG emissions with specific focus on technical / efficiency / performance parameters. It also allows scope for review, scrutiny and benchmarking of all these information against reports pertaining to M & V protocols.

The M&V Protocol provides a range of data measurement, estimation and collection options/techniques in each case indicating preferred options consistent with good practices to allow project managers and operational staff, auditors, and verifiers to apply the most practical and cost-effective measurement approaches to the project. The aim is to enable this project have a clear, credible, and accurate set of monitoring, evaluation and verification procedures. The purpose of these procedures would be to direct and support continuous monitoring of project performance/key project indicators to determine project outcomes, greenhouse gas (GHG) emission reductions.

CDM-SSC-PDD (version 02) CDM – Executive Board page 24 GHG SOURCES

Direct On-Site Emissions

Direct on-site emissions after implementation of the project arise from the burning of rice husk in the boiler. These emissions mainly include CO2. However, the CO2 released equals the amount of CO2 taken up by the equivalent paddy plantation / green biomass during their growth, therefore no net CO2 emissions occur. However, the biomass availability varies seasonally. Adequate storage is required for months to ensure sustained supply of biomass. Methane emissions may only occur under anaerobic conditions in such storage. This is not expected to contribute significantly to GHG emissions even under anaerobic conditions.

In principle nitrous oxide (N2O) emissions could also arise from storage. However, no data on emission from storage is available. We assume the amount of CH4 and nitrous oxide emissions formed due to biomass storage to be comparable to the amount of CH4 and N2O emissions arising from biomass when left on the field. As a consequence, the CH4 and N2O emissions will not be influenced by the project and will therefore not be taken into account for monitoring.

Since the rice husk is co-fired with coal in case of exigencies, the maximum usage of coal being restricted to 25% by mass, the other direct on-site emission due to combustion of coal in the boiler should be considered as project activity emission and should be subtracted from the baseline emissions. Algorithm has been provided below in Section E.1.2.1 for accounting for the project activity emissions arising from combustion of co-fired coal in case of exigencies.

Direct Off-Site Emissions

Although the project proponent proposes to use waste biomass mainly, the project proponent has also kept the avenue for energy plantation for the exclusive purpose of ensuring sustained supply of biomass for the project activity. Energy cultivation will result in an additional uptake of CO2 thereby acting as a carbon sink. For arriving at a conservative estimate of the emission reductions, CO2 uptake by the energy plantation has not been added to the baseline emissions. But N2O emission due to possible use of synthetic fertilizers for the energy cultivation and the corresponding CO2 equivalent emissions have been accounted for as direct off-site emission arising out of the project activity.

Indirect On-Site Emissions

The indirect on site GHG source is the consumption of energy and the emission of GHGs involved in the construction of rice husk based power plant.

Considering the life cycle assessment of the total power generated and the emissions to be avoided in the life span of 15 –20 years, emissions from the above-mentioned source are too small and hence neglected.

No other indirect on-site emissions are anticipated from the project activity.

Indirect Off-Site Emissions

For the project activity under consideration, indirect off-site emissions may arise due to the indirect N2O emissions that may take place in case of use of any nitrogenous synthetic fertiliser for the possible energy plantation of MUUL. Indirect off-site GHG may also arise from the process of construction and erection of the transmission lines from the nearest sub station, up to the point from where the project wheels the power.

CDM-SSC-PDD (version 02) CDM – Executive Board page 25 Considering the life cycle assessment of the total power generated and the emissions to be avoided in the life span of 20 years, emissions from this source are also too small and hence neglected.

Leakage According to Appendix B of the simplified modalities and procedures for small-scale CDM project activities, if the energy efficiency technology is equipment transferred from another activity or if the existing equipment is transferred to another activity, leakage is to be considered.

Leakage in the project activity arises from the biomass transport. However, in the baseline, fossil fuel (coal) transport can also be taken into account. Coal, in the baseline as well as in the project activity scenario, would be procured from the coal reserves of JNL in Raigarh which is at a distance of around 180 km. Although biomass is proposed to be procured mainly from the nearby rice mills, but avenue has also been kept to procure biomass from adjacent states as and when required, such that the maximum distance over which biomass is required to be transported to the project activity site is around 300 km. On an average, the distance over which coal has to be transported from the coal reserves of JNL to the project site is much less than the average distance over which the biomass needs to be transported. It can be rightly considered that carbon dioxide emission due to coal transport from the mines is much lower than that due to biomass transport because, the distance of transportation is less and also lesser amount of coal will be necessary to generate the same amount of energy and also specific gravity of coal is higher than that of biomass enabling greater amount of coal than biomass transport in a truck in a single trip. In order to arrive at a conservative estimate of emission reductions, emissions due to coal transport have not been considered in the baseline and those due to biomass transport have been taken into account as project emissions.

GHG performance parameter and the emission reductions achieved through the project activity will be determined based on the following parameters:

• Quantum of electricity sold to JNL as measured by the main power meter at the 6.6/11 kV substation of JNL

• Amount of coal co-fired with biomass in the project activity

• Quality i.e. net calorific value (NCVcoal) and total carbon content (Ccoal) of coal co-fired with biomass under the project activity

• Emissions involved in transportation of biomass from different sources to the project activity site.

GHG performance parameter and the emission reductions achieved through the project activity will be verified based on the following parameter(s):

• Invoices raised to JNL, based on meter readings that will also be covered in the regular finance audit.

The instrumentation and control system for the fluidized bed combustion boiler and the turbogenerator units will be of electronic instruments with pneumatic final control elements using the latest state of the art technology namely microprocessor based single loop controllers and programmable logic controller system along with computer based automation system for monitoring and control of the power plant from the control room. All monitoring and control functions will be done as per the internally accepted standards and norms of MUUL.

CDM-SSC-PDD (version 02) CDM – Executive Board page 26 The instrumentation system for the project will mostly comprise microprocessor-based instruments of reputed make with desired level of accuracy. All instruments will be calibrated and marked at regular intervals so that the accuracy of measurement can be ensured all the time.

CDM-SSC-PDD (version 02) CDM – Executive Board page 27 D.3 Data to be monitored: a) Parameters required to be monitored to calculate the baseline emission

ID Number

Data type Data variable Data unit Measured (m),

calculated (c) or estimated

(e)

Recording frequency

Proportion of data to

be monitored

How will the data be archived?

(electronic/paper)

For how long is

archived data to

be kept?

Comment

1. Enet Energy Electricity evacuated to JNL substation

kWh m Hourly Total Electronic/Paper 2 years after end

of crediting period (CP)

Measured by the main power meter at JNL substation

2. Enet,y Energy Electricity evacuated to JNL substation in a year y

kWh c Annually Total Electronic/Paper 2 years after end


Enet, y will be calculated as the sum of the hourly values electricity

evacuated by MUUL biomass

based power plant to JNL substation,

for all the operating hours in

the year y

CDM-SSC-PDD (version 02) CDM – Executive Board page 28 b) Parameters required to be monitored to calculate the project emission

ID

Number Data type Data variable Data

unit Measured

(m), calculated

(c) or estimated

(e)

Recording frequency

Proportion of data to be monitored


(electronic/paper)

For how long is

archived data to be

kept?

Comment

Parameters required to be monitored for estimation of GHG emissions due to co-firing of fossil fuel coal along with the biomass in case of exigencies under the project activity 1. Acoal Fuel

Quantity Amount of coal co-fired with biomass into the boiler of the project activity

MT m Daily Total Electronic/Paper 2 years after end

of CP

To be monitored at purchase and use

2.NCVcoal Fuel Quality

Net Calorific Value of coal that will be co-fired with biomass under the project activity

kCal/kg m Monthly Grab sample Electronic/Paper 2 years after end

of CP

MUUL has a coal supply agreement with JNL. Sample analysis of coal will be done at the coal supplier end ie. JNL

3. Ccoal Fuel Quality

Carbon content of coal that will be co-fired with biomass under the project activity

% Actual sample testing

Monthly Grab sample Electronic/Paper 2 years after end

of CP

MUUL has a coal supply agreement with JNL. Sample analysis of coal will be done at the coal supplier end ie. JNL

Parameters that are required to be monitored to account for project activity emissions due to any synthetic fertilizer utilization only in case of energy plantation (if any)

CDM-SSC-PDD (version 02) CDM – Executive Board page 29 4. NFERT Quantity Synthetic fertilzer

application rate to energy cultivation area per annum

kg m Annually 100% Electronic/Paper 2 years after end

of CP

To be monitored in case the project proponent goes for any kind of energy plantation and uses any synthetic fertilizer.

c) Parameters required to be monitored to calculate the leakage associated with transportation of biomass

ID

Number Data type Data variable Data unit Measured (m),

calculated (c) or estimated

(e)

Recording frequency

Proportion of data to be monitored


(electronic/paper)

For how long is

archived data to be

kept?

Comment

1. N Quantitative Number of trucks supplying biomass to MUUL in a particular year

c Annually Total Electronic/Paper 2 years after end


2. Source of

biomass

Qualitative The source/location from which the biomass is being procured for each truck-load

NA NA With every truckload of

biomass transported

into the project

activity site

NA Electronic/Paper 2 years after end

of CP

This data is meant for verifying whether the biomass is being procured from a sustainable source without any leakage involved

3. DTruck,i Quantitative Distance from which biomass is being procured for each truck-load

km e With every truck of biomass

entering into the premises of MUUL

Total Electronic/Paper 2 years after end


Will be measured by the biomass supplier and will be verified by MUUL against the challan for respective truckload, mentioning the


source of the biomass

4. D Quantitative Average distance over which biomass is transported in a particular year

km c Annually Total Electronic/Paper 2 years after end


Calculated as:

N

DD

N

iiTruck∑

== 1,

5. LTruck,i Quantitative Load of biomass in each truck

MT m With every truck of biomass

entering into the premises of MUUL

Total Electronic/Paper 2 years after end


Will be measured by the biomass supplier and will be verified by MUUL against the challan for respective truckload, mentioning the source of the biomass

6. LTruck Quantitative Average load of biomass in a truck in a particular year

MT c Annually Total Electronic/Paper 2 years after end


Calculated as:

N

LL

N

iiTruck

Truck

∑== 1

,

D.4. Qualitative explanation of how quality control (QC) and quality assurance (QA) procedures are undertaken:

Data

Uncertainty level of data

(High/Medium/Low)

Are QA/QC procedures planned for

these data?

I. Outline explanation why QA/QC procedures are or are not being planned.

D.3.(a)1, 2 Low Yes This data will be used as supporting information to calculate baseline emissions.

D.3.(b)1 to 6 4

Low Yes This data will be used for calculation of project activity emissions

D.3.(c)1 to 6 Low Yes This data will be used as supporting information to calculate baseline emissions.

CDM-SSC-PDD (version 02) CDM – Executive Board page 31 D.5. Please describe briefly the operational and management structure that the project participant(s) will implement in order to monitor emission reductions and any leakage effects generated by the project activity: The Plant Manager is responsible for monitoring and archiving of data required for estimating emission reductions. He would be supported by the shift in-charge who would continuously monitor the data logging and would generate daily, monthly reports. D.6. Name of person/entity determining the monitoring methodology: Experts and consultants of MUUL.

CDM-SSC-PDD (version 02) CDM – Executive Board page 32 SECTION E.: Estimation of GHG emissions by sources: The applicable project category from Appendix B i.e. Category I.D. does not indicate specific formulae for calculation of the GHG emission reductions by sources. E.1. Formulae used: Not applicable E.1.1 Selected formulae as provided in appendix B: Formulae not provided in Appendix B. E.1.2 Description of formulae when not provided in appendix B: E.1.2.1 Describe the formulae used to estimate anthropogenic emissions by sources of GHGs due to the project activity within the project boundary: Formula used to calculate GHG emissions co-firing of fossil fuel coal along with the biomass in case of exigencies under the project activity Coal will be co-fired with the rice husk into the FBC boiler only in case of exigencies within the permissible limit of 25% by mass of total fuel fired into the boiler. Considering the regular stable availability of biomass in the vicinity of the project activity, instances of exigency is expected to be rare. CO2 emissions due to combustion of coal co-fired only in case of exigencies can be considered as project emission and subtracted from the baseline emission as and when required. In case of exigency the emissions from coal co-firing can be estimated using the following formula: PEcoal = Project emission from coal co-fired with biomass in case of exigencies = Acoal × Ccoal × Oxidation Factor × (44/12) Where, Acoal - amount of coal co-fired with biomass in tonnes/annum Ccoal – total carbon content of coal in % Oxidation factor – IPCC oxidation factor for combustion of solid fuels = 98% (as per Reference Manual of Revised 1996 IPCC guidelines) For projecting the emission reductions, however project emissions due to coal co-firing in case of exigencies has been considered to be zero, assuming the instances of exigency to be negligible. Formula for estimation of GHG emissions due to any synthetic fertilizer utilization only in case of energy plantation (if any)

N2ODirect -N = [(FSN + FAM + FBN + FCR) × EF1] + (FOS×EF2) Where, N2ODirect -N = Emission of N2O in units of Nitrogen FSN = Annual amount of synthetic fertiliser nitrogen applied to soils adjusted to account for the amount that volatilises as NH3 and NOx

CDM-SSC-PDD (version 02) CDM – Executive Board page 33 FAM = Annual amount of animal manure nitrogen intentionally applied to soils adjusted to account for the amount that volatilises as NH3 and NOx. This is not applicable for MUUL’s energy plantation plan. FBN = Amount of nitrogen fixed by N-fixing crops cultivated annually. This is not applicable for MUUL’s energy plantation plan. FCR = Amount of nitrogen in crop residues returned to soils annually. This is not applicable for MUUL’s energy plantation plan. FOS = Area of organic soils cultivated annually. This is not applicable for MUUL’s energy plantation plan. EF1 = Emission factor for emissions from N inputs (kg N2O-N/kg N input) = IPCC Default Value of EF1 (in kg N2O-N/kg N) = 1.25% = 0.0125 EF2 = Emission factor for emissions from organic soil cultivation (kg N2O-N/ha-yr). This is not relevant to MUUL’s energy plantation plan. Conversion of N2O-N emissions to N2O emissions for reporting purposes is performed by using the following equation: N2O = N2ODirect -N × 44/28 As per relevance to the energy plantation plan of MUUL, the above equation can be modified as follows:

N2ODirect -N = FSN × EF1

FSN can be calculated as FSN = NFERT × (1 – FracGASF) NFERT = Total amount of synthetic fertiliser consumed annually. FracGASF = Fraction that volatilises as NH3 and NOx = 10%

Therefore, direct soil emissions due to utilization of synthetic fertilizer for energy plantation will be given by:

EN2O_Direct = NFERT × (1 – FracGASF) × EF1 × (44/28) × GWPN2O

Where,

GWPN2O is the global warming potential of N2O in t CO2 e / t N2O = 310 t CO2 e / t N2O The following algorithm7 will be used for estimation of the indirect N2O emissions from possible synthetic fertiliser application for the energy plantation of MUUL and the equivalent CO2 emissions:

N2Oindirect-N = N2O(G) + N2O(L) + N2O(S) Where,

7 Reference: Chapter 4 of IPCC Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories

CDM-SSC-PDD (version 02) CDM – Executive Board page 34 N2Oindirect-N = Emissions of N2O in units of nitrogen N2O(G) = N2O produced from volatilisation of applied synthetic fertiliser and animal manure N, and its subsequent atmospheric deposition as NOx and NH4 (kg N/yr) N2O(L) = N2O produced from leaching and runoff of applied fertiliser and animal manure N (kg N/yr). This emission is not applicable for the possible energy plantation plan of MUUL since there are no aquatic systems around the project activity site which may lead to the leaching and runoff of applied N. N2O(S) = N2O produced from discharge of human sewage N into rivers or estuaries (kg N/yr). This emission is not applicable for the possible energy plantation plan of MUUL Conversion of N2O-N emissions to N2O emissions for reporting purposes is performed by using the following equation: N2O = N2OIndirect -N × 44/28

N2O(G) -N = 4)()( )()( EFFracNexNFracN GASMT

TTGASFFERT ×⎥⎦

⎤⎢⎣

⎡××+× ∑

Where, N2O(G) = N2O produced from atmospheric deposition of N, kg N/yr NFERT = total amount of synthetic nitrogen fertiliser applied to soils, kg N/yr FracGASF = fraction of synthetic N fertiliser that volatilises as NH3 and NOx, kg NH3-N and NOx-N/kg of N input = 0.01 (Default Value as per IPCC Guidelines)

∑ ×T

TT NexN )( )()( = total amount of animal manure nitrogen excreted in a country, kg N/yr. This is not

applicable for the energy plantation plan of MUUL. FracGASM = fraction of animal manure N that volatilises as NH3 and NOx, kg NH3-N and NOx-N/kg of N excreted EF4 = emission factor for N2O emissions from atmospheric deposition of N on soils and water surfaces, kg N2O-N/kg NH3-N and NOx-N emitted = 0.01 kg N2O-N/kg NH3-N and NOx-N emitted (IPCC Default value) Therefore, indirect N2O emissions from possible synthetic fertiliser application for the energy plantation of MUUL and the equivalent CO2 emissions can be calculated as: EN2O_Indirect = NFERT × FracGASF × EF4 × (44/28) × GWPN2O E.1.2.2 Describe the formulae used to estimate leakage due to the project activity, where required, for the applicable project category in appendix B of the simplified modalities and procedures for small-scale CDM project activities Formula to estimate GHG emissions due to transportation of biomass from different sources to the biomass based power plant of MUUL Project activity emissions due to biomass transportation can be calculated considering that:

• biomass is transported from the sources to the project activity site in trucks running on diesel as fuel

• mileage of trucks running on diesel is 4 km/litre


NT = mbiomass / LTruck

Where,

NT - number of return trips of a truck involved in transportation of biomass fired to the boiler

mbiomass – mass of biomass annually fired into the boiler in the project activity, in tonnes which has

been considered to be 68400 tonnes

LTruck – average load of biomass per truck, in tonnes which has been considered to be 5.5 tonnes for

estimation of leakage

Therefore,

NT = 68400/5.5 ≈ 12436

Now, ADiesel = 2 × D/ Mileage

Where,

ADiesel – consumption of diesel by a truck in one trip, in litres

D – Average distance over which biomass is transported in a particular year, in km. In order to arrive

at a conservative estimate of emission reductions, maximum distance covered in transportation of

biomass from the sources to the site is considered to be 300 km.

Mileage – mileage of the truck, in km/litre = 4 km/ litre

Therefore,

ADiesel = 2 × 300/4 = 150 litres

TDiesel = ADiesel × NT × ρDiesel / 1000

Where,

TDiesel – total diesel consumption per annum in transportation of biomass fired annually to the boiler,

in kg

ρDiesel - density of diesel, in kg/m3 = 850 kg/m3

Therefore,

TDiesel =150 × 12436 × 850 / 1000 = 1585636.364 kg

So, CO2 emission (in tonnes) per annum due to transport of biomass to the project activity site =

IPCC Default emission factor for diesel (kgCO2/kg) × TDiesel / 1000

Therefore,

Leakage (in tonnes of CO2) = CO2 emission due to transportation of biomass from different sources, in tonnes = 3.13759 × 1585636.364 / 1000 = 4975.08

CDM-SSC-PDD (version 02) CDM – Executive Board page 36 E.1.2.3 The sum of E.1.2.1 and E.1.2.2 represents the small-scale project activity emissions:

Sl. No.

Operating Years

Project Activity Emissions(tonnes of CO2 e)

1. April 2007- March 2008 4975.08

2. April 2008- March 2009 4975.08

3. April 2009- March 2010 4975.08

4. April 2010- March 2011 4975.08

5. April 2011- March 2012 4975.08

6. April 2012- March 2013 4975.08

7. April 2013- March 2014 4975.08

8. April 2014- March 2015 4975.08

9. April 2015- March 2016 4975.08

10. April 2016- March 2017 4975.08

CDM-SSC-PDD (version 02) CDM – Executive Board page 37 E.1.2.4 Describe the formulae used to estimate the anthropogenic emissions by sources of GHGs in the baseline using the baseline methodology for the applicable project category in appendix B of the simplified modalities and procedures for small-scale CDM project activities: Coal based CPP is considered for baseline analysis and calculation of anthropogenic emissions by fossil fuel (coal) during power generation. The baseline emission is calculated as below: Formulae for estimation of baseline emission: Net units of electricity generated by the biomass-based power plant (Enet, y) in MkWh= (Total electricity generated by the power plant in the year y- Auxiliary Consumption of the power plant in the year y) = EGEN, y - EAUX, y Where, EGEN, y - gross electricity generated by the power plant in year y, in MkWh EAUX, y - auxiliary consumption of the power plant in year y, in MkWh and y is any year within the crediting period of the project activity. Therefore, Baseline Emission (BEy) (in tonnes of CO2) = Enet, y × EFGRID / 1000 where, BEy = Baseline Emissions due to displacement of electricity during the year y (in tons of CO2) EFGRID = Emission Factor of the grid (in t CO2/ MWh) E.2 Table providing values obtained when applying formulae above:

Sl. No.

Operating Years

Baseline Emissions(tonnes of

CO2 e)

Project Emissions

(tonnes of CO2 e)

Emission Reductions

during the year y ERy (tonnes

of CO2 e) 1. April 2007- March 2008

33151.69

4975.08. 28176.61

2. April 2008- March 2009 37887.65 4975.08. 32912.57

3. April 2009- March 2010 42623.61 4975.08. 37648.53

4. April 2010- March 2011 42623.61 4975.08. 37648.53

5. April 2011- March 2012 42623.61 4975.08. 37648.53

6. April 2012- March 2013 42623.61 4975.08. 37648.53

7. April 2013- March 2014 42623.61 4975.08. 37648.53

8. April 2014- March 2015 42623.61 4975.08. 37648.53

9. April 2015- March 2016 42623.61 4975.08. 37648.53

10. April 2016- March 2017 42623.61 4975.08. 37648.53


CDM-SSC-PDD (version 02) CDM – Executive Board page 39 SECTION F.: Environmental impacts: F.1. If required by the host Party, documentation on the analysis of the environmental impacts of the project activity: The assessment of Environmental Impact for the project activity has been carried out as required under Environmental (Protection) Act 1986, Government of India, mandatory for expansion or modernization of any activity or for setting up new projects listed in Schedule I of the notification.

As the project would utilize the rice husk for power generation and burn the same in a controlled manner, this thereby eliminates the environmental consequences of fugitive emissions that arise due to the usual methods of rice husk disposal i.e., open air burning or dumping.

The SOx, and NOx, emissions from rice husk combustion will be much lower compared to the conventional fossil fuel, coal, and is well within the limits as prescribed by the different state and national environmental statutes.

The disposal of fly ash is properly done in order to prevent it from escaping to the atmosphere or entering the local waterways via run off.

In addition to the above, monitoring of the following are done on a regular basis:

Air emission from stack

Ambient air quality

Noise level monitoring

Water quality

Occupation health and safety

Records of accidents

CDM-SSC-PDD (version 02) CDM – Executive Board page 40 Summary of Environmental Impact

Evaluation of environmental impacts: The possible impacts of the project on the various environmental parameters have been appraised in an EIA study conducted by MUUL. It reveals that the project will not have any adverse environmental impacts. The impacts due to the project are positive after implementation of the Environment Management Plan (EMP).

Effect on Biological Environment

The project operation will neither affect the biological environment in the study area nor in adjoining areas. Under EMP, MUUL will develop a 15 to 30 m wide green belt around their factory premises which will act as a buffer zone and will attenuate most of the noise pollution and fugitive emission from the proposed project activity, besides acting as a sink for CO2 and other pollutants.

Effect on Water Quality

The existing quality of aquatic environment is satisfactory and the same has been observed from data obtained for ground water in the vicinity. Project would not affect water quality of the nearby area in any situation. The plant washings containing ash/lignite dust and floor washing will be discharged to ash channels.

The heat cycle make up requirement for the power plant would be met from dimineralized water, generating acidic and basic effluents, which would be neutralized in neutralization tank and finally would be recycled in process or green belt development.

Boiler blowdown with high temperature will be cooled by mixing with powerhouse and service water drains.

Waste water from dust extraction and suppression system along with surface drain settling ponds where solid would separate and overflow, would be recycled.

Effect on Air Quality

The major sources of pollution from the proposed power plant will be boiler ash, boiler flue gases containing suspended particulate matter (SPM), oxides of sulphur (SOx) and nitrogen (NOx).

The SPM as ash will be controlled by high efficiency Electro-Static Precipitator (ESP) that will be installed at the exit of boilers to limit the SPM in the flue gas to less than 100 mg/Nm3. Apart from that, the technology employed should be so selected that it is based on low NOx burners and low furnace temperature which suppress NOx production considerably. The SOx and NOx emissions are also less due to presence of meagre amount of sulphur and nitrogen in the biomass fired into the boiler. A stack of adequate height will be provided which further helps in fast dispersion of pollutants into the atmosphere, thus, reducing their impact in the vicinity of the project area. The flue gases will be passed through ESP before discharging into the atmosphere through the stack.

The EMP envisages periodical monitoring of the emissions from the stack, ambient air, work zone air quality. All the emissions from the plant shall be controlled to meet the relevant standard set by Chhattisgarh Environment Conservation Board (CECB). Any deviations from the original levels shall indicate inefficient functioning of the ESP or higher sulphur content levels of the fuel. Remedial action shall be taken immediately and efficacy ascertained. Thus with pollution abatement devices and proper

CDM-SSC-PDD (version 02) CDM – Executive Board page 41 conduction of EMP, air pollution impacts due to running of power plant does not remain a matter for concern.

Another source of air pollution is heat if it is above acceptable limits. Therefore, to minimize thermal pollution, plant building will be designed for adequate air circulation through natural ventilation. In addition, air conditioning systems will be provided for specific areas. Coolers will be installed at hot work spots.

Effect on land environment/ soil

The evaluation of the impacts on the land environment indicates no detrimental effect due to project’s activity. The ash removal system will be adequately sized to collect fly ash in the collectors. Use of covered conveyers, wetting sprays at transfer points, sprinkling of haulways, treatment of storage pits with polymeric compounds and enclosure of live piles will be provided singly or in combination to control fugitive dusts from fly ash handling operations.

Effect of Noise pollution

Noise level rise due to operation of various equipments and transportation has minor impact on the employees from the point of view of occupational hazard. A routine check up of noise contour in and around the plant with Sound Pressures Level Meter will be done on regular basis to ensure that the noise level is well under control around 85 dBA. Regular health check-up of workers will also be undertaken.

Solid Waste Management

The main problem of solid waste is the fly ash that will be generated in the process of power generation. However the company will sell it to suitable vendors for commercial uses like building blocks, road embankment, land filling etc.

Aesthetic environment

There will not be any detrimental effect on the aesthetic environment. The project is located in an industrial area. The development of green belt by the industry would rather enhance the same in the vicinity.

Overall impact

An overall positive impact is assessed for the project. The net effect on biological environment would be positive with the company’s vegetation and plantation scheme as outlined in the EMP. The net impact on environmental pollution would be positive. The negative effects due to emission of particulate matter, gases and increased noise levels are controlled and will be prevented by pollution control measures in the form of air pollution control devices of adequate capacity and employee health & safety norms in practice. The aesthetic environment would have a positive value addition with the vegetation and plantation schemes of the company. Moreover, the human-interest parameters show encouraging positive impacts due to increased job opportunities, transportation, medical facilities, housing etc. These have long-term socio-economic benefits.

CDM-SSC-PDD (version 02) CDM – Executive Board page 42 SECTION G. Stakeholders’ comments: G.1. Brief description of how comments by local stakeholders have been invited and compiled: Identification of Stakeholders

Maa Usha Urja Limited at Siltara, Raipur has proposed to implement the 7.5 MW non-conventional renewable energy source rice husk based power plant. The project proponent proposes to use mainly rice husk generated by the nearby rice mills of Chhattisgarh as the fuel. For the purpose, MUUL first had to obtain an approval from Chhattisgarh State Renewable Energy Development Agency (CREDA). Subsequently, ‘Consent to Establish’ was obtained from Chhattisgarh Environment Conservation Board (CECB), the state nodal agency equivalent to state pollution control board.

Some of the major stakeholders identified for the project activity are local authority, local community, Chhattisgarh State Electricity Board (CSEB), Chhattisgarh Electricity Regulatory Commission (CERC), CREDA, CECB, Environment Department, Govt. of Chhattisgarh, Ministry of Environment and Forest (MoEF), Govt. of India, Ministry of Non-conventional Energy Sources (MNES), equipment suppliers, rice millers, rice-husk suppliers and the employees of MUUL.

Some of the above stakeholders were involved in the project at various stages of obtaining clearances. MUUL put up a general notice intimating its employees about the biomass based power generation project during the project conception stage. The local people also came to know about the project activity when MUUL initiated the process of entering into fuel supply agreements with the rice husk suppliers.

G.2. Summary of the comments received: As per the comments of a local village authority, the biomass based power plant will not only help in bridging the ever-increasing gap between demand and supply fronts of electricity through clean power generation, but will also help in improving the economic condition of the locality. Business prospect of rice millers and rice husk suppliers will be benefited due to the biomass based power plant. Moreover, the project activity will also generate employment for the local people directly or indirectly. Comments have also been received from the employees of MUUL appreciating such an initiative on part of MUUL in using waste biomass as resource for power generation. The project has also been commended for its contribution to socio-economic development of the locality through generation of employment, savings in fossil fuel combustion and generation of clean power. G.3. Report on how due account was taken of any comments received: During the project conception stage, MUUL intimated the local village authority about the biomass based power generation project activity through a notice and also invited their comments on the same. The employees of MUUL were also notified and were asked to comment on MUUL’s venture on renewable energy generation.

The relevant comments and important clauses mentioned in the project documents / clearances like Detailed Project Report (DPR), EIA Report, PPA with JNL, local clearances etc. were considered while preparing the CDM Project Design Document.

As per UNFCCC requirement this Project Design Document (PDD) was published at the validator’s web site for public comments and has not received any comments.


Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY Organization: Maa Usha Urja Limited Street/P.O.Box: Siltara Growth Centre, Siltara Building: City: Raipur State/Region: Chhattisgarh Postcode/ZIP: 492001 Country: India Telephone: 07721 – 403323/24 FAX: 07721 – 264279/264240 E-Mail: S.K.Moitra [[email protected]] URL: Represented by: S.K.Moitra Title: Senior General Manager (Finance) Salutation: Mr. Last Name: Moitra Middle Name: K First Name: S Department: Finance Mobile: +91 93002 07114 Direct FAX: Direct tel: Personal E-Mail:

Annex 2

INFORMATION REGARDING PUBLIC FUNDING

Till now funding from any Annex I party is not available.

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