Initial Verification Report - netinform Final verification... · IVC Initial Verification Checklist ... It is based on the Initial Verification Report Template ... - introduce the

Initial Verification Report

Initial Verification of the Paide Bioenergy JI Project

Estonia

Report No. 563049c

December 21, 2004

CMS Standard

GHG 025

VerifiedJI-Project

Climate

and

Energy

CMS Standard

GHG 025

VerifiedJI-Project

Climate

and

Energy

Page 2 / 22 BB-IS-MUC/Kl / 21.12.2004 _FINAL_IVR Paide.doc

Report No. Date of first

issue Rev. No. Date of this

revision Certificate No.

563049c 16th Dec. 2004 2 21st Dec. 2004 - Subject: Initial Verification of a JI Project Executing Operational Unit: TÜV Industrie Service GmbH TÜV SÜD Group

Carbon Management Service Westendstr. 199 - 80686 Munich, GERMANY

Client: Finnish Ministry of the Environment Fabianinkatu 6 A FIN-00130 Helsinki, FINLAND

Contract approved by: Werner Betzenbichler Report Title: Initial Verification of Paide Bioenergy JI Project in Estonia Number of pages 21 (excluding annexes) Summary: The certification body “Climate and Energy” of TÜV Industrie Service GmbH TÜV SÜD Group (TÜV) has been ordered by the Finnish Environment Institute (SYKE) and the Min-istry of Environment to carry out the initial verification of the Paide Bioenergy JI Project, Estonia. As fundamental cognition the verification team of TÜV Süd can confirm, that all installa-tions have been carried out as desribed in the PDD, that the project is already in operation and that all neccessary procedures for operating and monitoring have been implemented. Thus, the verification team can confirm that the project is ready to earn Assigned Amount Units (AAUs) before 2008 and Emission Reduction Units (ERUs) in accordance with article 6 in the Kyoto Protocol (KP) in the crediting period 2008 to 2012. Additional to the initial verification the TÜV Süd assessed the available preliminary monitoring report of Paide. The underlying emission reduction report covers the monitored period from 01.10.2003 to 31.12.2003, based on special agreements on transfers of emission reduction prior to the JI budget period. The verification team indicatevely confirms that the preliminary monitoring report is correct and valid and that the project has generated emissions reductions in an amount of 3.427 t CO2e during the reporting period specified above if the updated protocol and report are officially countersigned. It is considered to integrate that already verified amount into a coming monitoring report, which will cover a longer period starting also on 01.10.2003. The verification team also determined some areas of risks for the project in the context of the metering system, the data acquisition and transmission. Issues indicated as “Forward Action Request” should be submitted as indispensable information to the verification of team of the next periodic verification. All such issues should receive a special focus during the following verification. Work carried out by:

Thomas kleiser (project manager) Werner Betzenbichler (GHG lead auditor) Ranno Mellis (auditor)

Internal Quality Control by: Michael Rumberg

No distribution without

permission from the Client or responsible organizational unit

Limited distribution Unlimited distribution


Abbreviations Abbreviations that have been used in the report here:

AAU Assigned Amount Unit

BLS Baseline Study

CAR Corrective Action Request

CDM Clean Development Mechanism

CDM-EB CDM Executive Board

CO2 Carbon Dioxide

CO2e Carbon Dioxide equivalent

DNA Designated National Authority

ERU Emission Reduction Unit

FAR Forward Action Request

GHG Greenhouse Gas

IETA International Emission Trading Association

IVC Initial Verification Checklist

JI Joint Implementation

KP Kyoto Protocol

MOSH Management and Operational System Handbook

MVP Monitoring and Verification Protocol

PDD Project Design Document

PVC Periodical Verification Checklist

TÜV TÜV Industrie Service GmbH TÜV SÜD Group

UNFCCC UN Framework Convention on Climate Change

VVM Validation and Verification Manual



Table of Contents 1 INTRODUCTION .......................................................................................................... 6

1.1 Objective .............................................................................................................. 7 1.2 Scope................................................................................................................... 8

1.3 GHG Project Description .......................................................................................... 9 2 METHODOLOGY ....................................................................................................... 10

2.1 Review of Documentation and Site Visits ........................................................... 13 2.2 Assessment........................................................................................................ 13

3 INITIAL VERIFICATION FINDINGS............................................................................ 14 3.1 Remaining issues, CARs, FARs from initial validation ....................................... 14 3.2 Project Implementation....................................................................................... 14

3.2.1 Discussion ...................................................................................................... 14 3.2.2 Findings.......................................................................................................... 14 3.2.3 Conclusion...................................................................................................... 15

3.3 Internal and External data................................................................................... 15 3.3.1 Discussion ...................................................................................................... 15 3.3.2 Findings.......................................................................................................... 16 3.3.3 Conclusion...................................................................................................... 17

3.4 Environmental and Social Indicators................................................................... 17 3.5 Management and Operational System................................................................ 17

3.5.1 Discussion ...................................................................................................... 17 3.5.2 Findings.......................................................................................................... 17 3.5.3 Conclusion...................................................................................................... 19

4. Project Scorecard ....................................................................................................... 20 5 INITIAL VERIFICATION STATEMENT ....................................................................... 21 6 REFERENCES ........................................................................................................... 21 Annex 1: Initial Verification Checklist


1 INTRODUCTION The main steps in successful project verification are shown in this flow diagram below. The different layers may be seen as representing the verification preparations, the verification itself and at last the results of the verification process. The box colour represents the party responsible for the activity (Green for the project proponent, yellow for the validator, red for other parties).

The Finnish Ministry of the Environment along with the Finnish Environment Institute, re-sponsible for the Finnish CDM/JI Pilot Programme, has commissioned the cerification body “Climate and Energy” of TÜV Industrie Service GmbH TÜV SÜD Group (TÜV) to verify three Joint Implementation (JI) projects in Estonia, which are part of the CDM/JI-projects accepted by the Finnish CDM/JI Pilot Programme. The orde r includes the initial and first periodic verification of two projects and the initial verification of one project. This report summarizes the findings of the initial verification of the Paide Bioenergy JI Pro-ject in Estonia. It is based on the Initial Verification Report Template Version 3.0, December 2003 of the Validation and Verification Manual (VVM) published by International Emission Trading Association (IETA). The initial verification has been performed as a desk review of the project documents including baseline study, monitoring plan, determination (validation) report, emission reduction report and further documentations. The results of the final determination were documented by KPMG Wideri Oy Ab in the final Report No. 2002-3, Revision No. 2. Th is draft final Validation report indicates no remaining issues.


The verification team consists of the following personnel:

Thomas Kleiser TÜV SÜD, Munich Project Manager, Team Leader, GHG Auditor

Werner Betzenbichler

TÜV SÜD, Munich GHG Lead Auditor

Ranno Mellis Oü, Projektkeskus, Tallinn

Local expert, GHG Trainee

The verification team was expected to

- familiarize themselves with the project and project circumstances,

- introduce the project staff to the audit and verification process,

- check whether the project has been implemented and works out as planned,

- check whether assumptions that have an impact on the monitoring and verification processes and its outcomes are still reasonable, in particular baseline assumptions,

- confirm system readiness: that the MVP has been implemented in the project's management and operational procedures and that all necessary monitoring elements are in place and work to ensure generation of verifiable emission re-ductions; and

- propose a draft initial verification protocol based on the experience of the initial verification exercise

- confirm reported data regarding correctness, consistency and in compliance with validated monitoring plan,

- check whether assumptions that have an impact on the monitoring and verification processes and its outcomes are still reasonable, in particular baseline assumptions,

- review and audit relevant monitoring records and reports, The Paide Bioenergy JI Project is part of the Finnish CDM/JI Pilot Programme. The main feature of the project is the heat production by biomass substituting former heat production by shale oil.

1.1 Objective The Finnish Ministry of Environment has commissioned an independent initial and (next year) first periodic verification of the Paide Bioenergy JI Project by TÜV SÜD. The Ministry requires that the Paide Bioenergy JI Project successfully completes an initial verification process to ensure that all installations have been implemented at the starting date of the project and that the monitoring can operate correctly thenceforward. While initial verification is not a CDM/JI requirement, the client regards it as an essential and the final step in the client project preparation and implementation cycle.


The purpose of the initial verification process is to:

- ensure that the project has been implemented as planned, that the monitoring system is in place and that the project is ready to generate and record GHG emission reductions;

- approve adjustments and amendments to the MP that may have become necessary during the detailed design and construction of the project.

1.2 Scope The initial verification scope is defined as an independent and objective check of the real project implementation against the validated project design document, the project’s baseline study, the monitoring plan and other relevant documents. As far as applicable the informa-tion in these documents is reviewed against Kyoto Protocol requirements, UN Framework Convention on Climate Change (UNFCCC) rules and associated interpretations. The team has employed a risk-based approach in the initial verification, focusing on the identification of significant risks of the project implementation and the generation of verifiable Assigned amount units (AAUs) until 2008, Emission Reduction Units (ERUs) in 2008 and the proxi-mate years. Although the transfer of AAUs prior to 2008 is considered, this report is based on the JI rules as no rules are defined for transactions prior to 2008, but this is up to the Project Part-ners. The relevant criteria for this project are given by Article 6 of the Kyoto Protocol as well as UNFCCC decisions in the Marrakech accords on the Kyoto mechanisms and the validated PDD including the Monitoring Plan. Ascertained findings indicated as corrective action requests (CAR) or forward action re-quests (FAR) in this report are the result of the initial verification process. Resultant im-provements are not understood as consulting services. The verification is based on the common accepted Validation and Verification Manual, version 3.0.


1.3 GHG Project Description The project is located in 72712 Paide, Estonia. Paide is a town in the Järva County with about 10,500 inhabitants. The project proposed to install a new 8 MW biomass boiler from Wärtsilä Oy to supply heat for the local district heating network. The new biomass boiler should substitute in part the heat produced with the old shale oil fueled boilers. At the time of the initial verification the project was realized as foreseen in the PDD. The emission reduction is generated by the new biomass boiler. They are calculated against the heat produced with 2 (in peak loads 3) old shale oil boilers, which are placed in the central boiler house. New connected customers and the improvement of the DH system have no influences the emission reduction. Involved project participants are: Mr. Rein Rebas Mr Juri Tamm Mr. Andres Alusalu

OÜ POGI General Manager Technical Manager Financial Manager

Mr. Kari Hämekoski Finnish Environment Institute (SYKE)

Programme Manager – Finnish CDM/JI Pilot Pro-gramme

Mr. Ülo Mets Enprima Estivo Ltd. Project assistance Furthermore Elektrowatt-Ekono Oy (PDD author) and Wärtsilä Oy as distributor of the tech-nical equipment, both based in Finland, and OÜ Energiaekspert as consulting company have been involved in the project.


2 METHODOLOGY Starting the initial verification the verifier’s first task has been to familiarize with the project. Based on the received documents (see Annex 1) a checklist, called initial verification check-list (IVC) has been prepared according to the VVM. IVC serve the following purposes:

- it organizes details of the audit procedure and clarifies the requirements the project is expected to meet; and

- it documents how a particular requirement has been validated and the result of the verification.

During the initial verification a special focus was given to: - the correct implementation of the project

(installations, monitoring equipment and procedures, quality assurance procedures) - the correctness of assumptions with impacts on the monitoring and verification proc-

ess (e.g. baseline assumptions)

- sustainable development and environmental performance parameters relevant for the construction phase

- training programs - allocation of responsibilities - the readiness of the system

After the document review the audit team conducted

- on-site inspections, - interviews with operational and personnel in Paide, mentioned in chapter 2.3 and - with the responsible persons from the Finnish CDM/JI Pilot Programme

The findings are the essential part of this verification report, which is based on the verifica-tion Protocols of the VVM (Annex 2).


The IVC consists of the following columns:

Item Indicator of task or objective to be assessed during the verification; each new topic is starting with a line indi-cating time of audits and persons interviewed

Objective Worded objective to be scrutinized Comments / Forward Action Re-quest / Corrective Actions Re-quest

Description of identified situation concerning the objec-tive, Conclusions of the assessment process

Reference Reference to the source setting the requirement Conclusion Result of the evaluation giving a symbol for

þ: in compliance with requirement or task resolved to item x: further discussion shifted to item x FAR: Forward action request, i.e. this issue has to be integrated into the next consecutive verification CAR: Corrective Action Request

The verification team distinguishes between two different types of findings identified during the verification process. A "Corrective Action Request" (CAR) in the initial verification context would be where:

- There are clear deviations concerning the implementation of the project as de-fined by the PDD

- Requirements set by the objectives of the VPs have not been met; or - There is a risk that the project would not be able to deliver high quality AAUs and

accordingly ERUs Before awarding a positive verification opinion it is necessary to resolve all findings indi-cated with a CAR.

The verification team has also used the term “Forward Action Request” (FAR), whenever - the current status requires a special focus on this item for the next consecutive

verification, or - an adjustment of the MVP is recommended.


Monitoring Report

1. Process An alysis System boundaries - Relevance - Completeness - Implementation

2. System Analysis MVP & Baseline

Management Procedures

- Eligibility - Application

- Validity - Quality Assurance

- Sensitivity

3. Data Analysis

Indicators - Materiality

- Reproducibility - Consistency

4. Result Analysis

Emission Reductions Performance Parameter

Verification

Tasks Criteria Objective

Criteria Catalogue

- Accuracy - Sources of Error

- Materiality

© TÜV Süddeutschlan d Bau und Betrieb GmbH

Initial Verification

subsequent Verifications

In the context of FARs no risks have been identified, which may endanger the delivery of high quality AAUs/ERUs, but it is a hint that there could be deviations from standard proce-dures as defined by the MVP. As a consequence such aspects should receive a special focus during the next consecutive verification. All FARs have to be reported to the verification team of the next Periodic Verification, which have to take into account all such findings. The graph to the right indicates the different main criteria relevant at each step of verifi-cation.

Duration of the initial verification Preparations: From 18-11-2004 to 16-12-2004 On-site verification: At OÜ POGI on 29-11-2004 and

with Syke and Mr. Mets at 25-11-2004 in Tal linn Indicative Emission Reduction Reporting Period: From 01-10-2003 to 31-12-2003


2.1 Review of Documentation and Site Visits The initialverification was performed as a desk review of the project documents including baseline study, monitoring plan, determination (validation) report, existing emission reduction report and further documentations. The results of the validation were documented by KPMG Wideri Oy Ab in the report from January 2003. The validation report indicates no remaining issues. Site visits included an audit in Tallinn with persons in charge from the Finnish Environment Institute, an audit with Mr. Rebas, Mr. Tamm and Mr. Alusalu at OÜ POGI office.

2.2 Assessment The assessment is based on information and documents that are listed in chapter 6. For a scrutinized verification the team additionally used information from interviewed person as well as liable evidences.


3 INITIAL VERIFICATION FINDINGS

3.1 Remaining issues, CARs, FARs from initial validation A main task of Initial Verification is to check the remaining issues from the previous valida-tion or issues which are clearly defined for assessment in the PDD. The validation report, prepared by KPMG Wideri Oy Ab in January 2003 notes no open issues.

3.2 Project Implementation

3.2.1 Discussion The scrutiny of a proper implementation of a project is a key issue of a Initial Verification, in order to have a climate change project ready for successful operation. Physical components are installed and already in operation. Measurement equipments are in place and cali-brated. The size and type of the installed biomass boilers agree with the description by the PDD. There is one 1 shale-oil fueled steam boiler DE-25 with a capacity of 16 MW, which is not in operation at present. This fact however has no influence to the project success. It is rec-ommended to monitor also the heat production of this boiler at the date of first periodic veri-fication. The verification team has been informed that this boiler was not in operation last month. The project boundaries have not been changed in the course of the last two years. The veri-fication team was informed that 4 km of the pipelines have been renewed in the last years, but this does not influence the baseline. Identified findings regarding project implementation are addressed in detail below.

3.2.2 Findings The verifier identified following findings related to the Initial Verification Checklist V.3.0 of the VVM, see annex “Initial Verification” objectives C.8., C.9. and C.10..

OBJECTIVE COMMENTS Concl.

Documented instructions

The personnel have been trained by a qualified person (con-sultant). There are three persons in charge and trained staffs for redundancy purpose. Although the verification team confides in the competency of the introduced persons, it is however necessary that missing instructions have to be documented in the operation and management system.

FAR#2



Qualification and training

Training and qualification have been proved by a thorough auditing of the single work steps. Although the verification team confides in the competency of introduced persons, it is however necessary that missing do-cumentation about qualification and training has to be sup-plemented by the operation and management system. The written documentation should include information about date of training, trained person, content of training, and a signature of the trained person.

FAR#3

Responsibili-ties

The responsibilities are clearly defined, but not documented in writing. The allocation of responsibilities and the appointment of func-tions have to be documented and incorporated in the opera-tion and management system.

FAR#4

3.2.3 Conclusion The identified findings have to be seen in the context of missing documentation of the man-agement and operational system. The operator should bear care that documentation of concrete instruction, qualification and training of involved employees and responsibilities are implemented. Its fulfilment shall be part of the next periodic verification. Nevertheless, as far as involved employees will not change in future the verification team sees no significant risk for generating emission reduction through the missing documenta-tion.

3.3 Internal and External data

3.3.1 Discussion External data is not required for that project. The heat meter is calibrated so it can be ex-pected that the data from this meter is monitored without significant risk. Identified findings regarding project implementation are addressed in detail below.


3.3.2 Findings The verifier identified following findings related to the Initial Verification Checklist V.3.0 of the VVM, see annex “Initial and First Periodic Verification” objectives C.6.


Data acquisition and data process-ing systems

The data registered by the computer could not be repro-duced at the heat meter of the biomass boiler, but shows the same values as documented in the computer (ac-cording to vocal information). There is only another start-ing date of the computer program. The responsible persons at Paide work (calculate the reductions) with the data in the computer. The computer data have been checked (crosschecks with sold heat and bought biomass) and appear to be plausible. Parallel data are written down manually from the heat meter. The meter at the biomass boiler has not been re-calibrated in Paide since the date of installation in 2003 and should be re-calibrated in 2006. Considering the problems in Kadrina it seems to be nec-essary to find a way to show the conformity between the data at the heat meter and the data in the computer. Data Archiving: In Paide it is planned to archive the data for 5 years. An archiving of project specific data till the end of the project (crediting period) would be better. Annotation: Written work instructions should be installed how to deal with the available data and which data should be used for calculating the emissions reductions (and how this data should be checked). Final conclusion: The procedure and the system for calculating the emis-sion reductions in Paide are appropriate for the intended purpose. The calculations are plausible.

FAR#1


3.3.3 Conclusion The identified findings have to be seen in the context of missing work instructions and miss-ing documentation of management and operational system. The management should take care that a concrete work instruction will be established and documented until the date of the next periodic verification.

3.4 Environmental and Social Indicators Negative environmental and social indicators were not identified.

3.5 Management and Operational System

3.5.1 Discussion In order to ensure a successful operation of a project and the credibility and verifiability of the emission reductions achieved, the project must have a well defined management and operational system. It shall include the management system for monitoring and reporting, i.e. organisational structure, responsibilities, competencies, non-conformance handling, internal audits and management review. Such a system is not yet implemented; details are described in following chapter.

3.5.2 Findings The verifier identified the following findings related to the Initial Verification Checklist V.3.0 of the VVM, see annex.


Management and Operational System

A management and operational system is not in place. It shall include the management system for monitoring and reporting, i.e. organisational structure, responsibilities, competencies, non-conformance handling, internal audits and management review.

The management of OI POGI has to take care that its im-plementation is completed until the next periodic verifica-tion in 2005.

FAR#5

Documentation

The necessary procedures have been installed but not yet documented.

A written documentation referring to all procedures and routines has to be produced and regularly updated at Paide biomass plant in the frame of a well defined man-agement and operational system.

The management of OÜ POGI has to take care that its implementation is completed until the next periodic verifi-

FAR#5-1



cation.

Qualification and training

A written documentation on the requirements on qualifica-tion and the need of training programs has to be produced. Performed training programs should be archived in this system.

The management of OÜ POGI has to take care that its implementation is completed until the next periodic verifi-cation.

FAR#5-2

Allocation of responsibilities

The allocation of responsibilities should be documented in a written form.

The management of OÜ POGI has to take care that its implementation is completed until the next periodic verifi-cation..

FAR#5-3

Emergency pro-cedures

Emergency procedures should be defined and docu-mented.


FAR#5-4

Data archiving

Routines for the archiving of data should be defined and documented.


FAR#5-5

Internal audits and manage-ment review

There have been no internal audits and management re-views so far. The management system should define in-ternal audit and review procedures. Its accomplishment shall be documented.


FAR#5-6


3.5.3 Conclusion A management and operational system shall ensure successful operation of the project for the whole projected time. A proper system raises the credibility and verifiability of the AAUs/ERUs generated. It reduces risks of data determination by clear instructions and allo-cation of responsibility. Especially when employees or project circumstances will change or later verifications need information about passed verifications, such system will provide in-formation. The management of OÜ POGI, in particular the responsible project officer shall take care about implementation of a proper and reliable management and operational system. Its im-plementation shall be on key subject of the next periodic verification.

Seite 20 / 22 BB-IS-MUC/Kl / 21.12.2004 _FINAL_IVR Paide.doc

4. Project Scorecard

Conclusions

Risk Areas Baseline

Emissions Project

Emissions

Calculated Emission

Reductions

Summary of findings and comments Error/Discounted

Uncertainty

Tonnes

Completeness • Source coverage/ boundary defini-tion

ü ü ü All relevant sources are covered by the monitor-ing plan and the boundaries of the project are defined correctly and transparently.

---------------

Accuracy • Physical Measure-ment and Analysis ü ü ü

The key parameter is measured by a calibrated meter. Crosschecks can be carried out with the amount of the consumed biomass and with the amount of heat sold to the consumers.

---------------

• Data calculations ü ü ü

Emission reductions are calculated correctly.

---------------

• Data management & reporting

? ? ?

A written data management system has to be implemented but that does not influence the correctness oft the calculated emission reduc-tions.

---------------

Consistency • Changes in the project

ü ü ü There are no changes in the project to date!

----------------

Seite 22 / 22 BB-IS-MUC/Kl / 21.12.2004 _FINAL_IVR Paide.doc

6 REFERENCES Category 1 Documents: List documents provided by the Client that relate directly to the GHG components of the project. These have been used as direct sources of evidence for the initial verification conclusions.

1. JI Project Design document “Paide Bioenergy Project, Estonia”, final version, 13th January 2003 with Baseline Study and Monitoring and Verifcation Plan

2. Paide Ühisrakendusprojekti Seireraport, .13th September 2004 3. Monitoring Protocol Paide Bioenergy Project, Estonia”, concerning the period of 1st Octo-

ber 2003 to 31st December 2003 4. Final Validation Report (Draft): “Validation of Paide Bioenergy Project in Estonia”, report-#

2002-3, rev. 02, performed by Wideri Oy on January 10th , 2003 5. Calibration Protocol of the heat meter from the National Institute of Standards and Tech-

nology, 6th May 2003 6. Välisohu Saasteluba (pollution permits), 27th February 2004 7. Excel Sheet with monthly heat production (with source) and consumption in Paide since

2001 8. Paide Boilerhouse Bioenergy 8,0 Mw Boiler House, Performance Tests, published

22.10.2003 by Tallinn Technical University, Thermal Engineering Department . Persons interviewed: List persons interviewed during the initial periodic verification, or persons contributed with other information that are not included in the documents listed above.

9. Ms. Fagerholm Finnish Environment Institute (Syke) 10. Mr. Hämekoski Finnish Environment Institute (Syke) 11. Mr. Mets Enprima Estivo Ltd. 12. Mr. Rein Rebas OÜ POGI 13. Mr. Juri Tamm OÜ POGI 14. Mr. Andres Alusalu OÜ POGI 15. Mr. Valdo Kaasik OÜ POGI 16. Mrs Irmgard Mikson OÜ POGI

Annex 1

Initial Verification Checklist

Paide Bioenergy JI Project

Author: Thomas Kleiser Werner Betzenbichler Ranno Mellis

2004-12-21

Initial verification of Paide Bioenergy JI Project Page

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Page A-1 Report No. 563049c, rev. 01

INITIAL VERIFICATION CHECKLIST

a. Initial Verification Checklist

OBJECTIVE Ref. COMMENTS Conclusion

(incl FARs/CARs)

A. Opening Session

A.1. Introduction to audits

The intention and the target of the audit were illustrated to the participants of the audit. Participants at the audit.

• on the part of OÜ POGI: Mr. Rein Rebas Mr. Juri Tamm Mr. Andres Alusalu Mr. Valdo Kaasik Mrs. Irmgard Mikson

• on the part of TÜV SÜD (auditing team): Mr. Thomas Kleiser Mr. Ranno Mellis


2004-12-21


2 of 14



(incl FARs/CARs)

chives, records, plans, drawings etc.

14, 15, 16

drawings and to all relevant facilities.

A.3. Contractors for equipment and installation works

Who has installed the equipment? Who was con-tracted for planning etc.?

13,, 14

Currently there are no consecutive contracts for equipment and installation works. Wärtsilä Finland Oy/Wärtsilä Biopower Oy(former Sermet Oy) has planned and installed the equipment (a biomass boiler, a commercial heat meter and the belonging computer software). Simpler maintenance tasks are carried out by OÜ POGI itself.

ü

A.4. Actual status of installation works Project installation should be finished at time of initial verification in so far as the project should be ready to generate emission reductions afterwards.

13, 14, 15

All the projected installations are completed as they have been planned. The project is running successfully since the starting date in October 2003.

ü

B. Open issues indicated in validation re-port Especially in projects which are not yet registered at CDM-EB or JI-SB, there might be some out-standing issues which should have been indicated by the validation report.

B.1. Missing steps to final approval

4 Based on the validation report the verification team identified no missing steps. In consideration of the circumstance that an international registry for JI-

ü


2004-12-21


3 of 14



(incl FARs/CARs)

projects and the JI-Supervisory Board has not been installed yet, no missing steps can be identified at present.

C. Implementation of the project This part is covering the essential checks during the on-site inspection at the project’s site, which is indispensably for an initial verification

C.1. Physical components Check the installation of all required facilities and equipment as described by the PDD.

1, 4, 9, 10, 11, 12, 13, 14, 15, 16

The new boiler and the required heat meter were installed according to plan. The new boiler installed is a 8 MW boiler from Wärtsilä. There is a report available concerning performance tests of the new biomass boiler from “Tallinn Technical University”, dated November 13th 2003. There are also four old boilers:

• 2 steam boilers DE-25, total capacity 32 MW(2 x 16 MW), working • 1 steam boiler DE-25, capacity 16 MW, not in operation • 1 boiler 3W-4000 with a capacity of 4 MW for peak load

This is a small deviation against the description in the PDD where the total capacity of the steam boilers is mentioned with 51 MW.

But this has no relevance for the project baseline.

ü

C.2. Project boundaries Check whether the project boundaries are still in compliance with the ones indicated by the PDD.

1, 4, 10. 13

The project boundaries are still in compliance with the ones indicated in the PDD. New pipelines (4 km at a grid of 40,5 km all together) ) have been installed in last two years, and it is planned to renew some more pipelines in the next

ü


2004-12-21


4 of 14



(incl FARs/CARs)

years. But this is not relevant for the baseline, because this would influence any heat produced by shale oil in the same way. The number of consumers (> 9.000 people, some bigger companies and some municipal building) did not change in a bigger scale in the last years.

C.3. Monitoring and metering systems Check whether the required metering systems have been installed. The meters have to comply with ap-propriate quality standards applicable for the used technology.

1, 4, 13, 14, 15

The heat meter has been installed and complies with appropriate standards. ü

C.4. Data uncertainty How will data uncertainty be determined for later calculations of emission reductions? Is this in compliance with monitoring and metering equip-ment?

1, 13, 14, 15

All data is supplied by calibrated measurement equipment. The calibration is done against national regulations. The relevant equipment is sealed by the calibration company. There are no additional data uncertainties.

ü

C.5. Calibration and quality assurance Check how monitoring and metering systems are subject to calibration and quality assurance rou-tines a) with installation b) during future operation

1, 4, 5, 8, 13, 14, 15

The monitored key parameter is measured with a calibrated meters. a) A calibrated heat meter was installed at the end of 2003 (calibration of the meter at 6th May 2003 in Mexico) b.) A re-calibration (by Tepso or Metrosert, accredited company for calibra-tion in Estonia) has not been carried out till now, but is foreseen in 2005 or 2006. c) It is required to calibrate the meter periodically every three years (accord-ing to national regulations). The old boiler have calibrated heat meter, too. Data can be used for cross-

ü


2004-12-21


5 of 14



(incl FARs/CARs)

checks .The calibration should be checked at the first periodic verification (or by Mr. Ülo Mets before). There are also calibrated meters for the amount of consumed heat at the con-sumer side.

C.6. Data acquisition and data proc-essing systems

Check the eligibility of used systems.

1, 4, 13

The data measured by the heat meter is transmitted to the computer. The data also is also daily written down manually, checked for plausibility by the operator and summarized monthly. Data from the heat meter at the boiler: The responsible persons at Paide calculate the reductions with the data in the computer. The data measured directly at the heat meter at the biomass boiler could not be reproduced at the computer. The reason therefore is (according to the information given from the manager) a different starting date of the computer software (should be checked by Mr. Mets). The computer data have been checked (crosschecks with sold heat and bought biomass) and appear to be plausible. In parallel data are written down manually. Considering the problems reported in Kadrina it seems to be necessary to find a way to have a conformity between the data directly measured at the heat me-ter and the data in the computer. Data from the oil he heat meter at the boiler:

FAR#1


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(incl FARs/CARs)

There are proprietary heat meters at the old boilers so that the heat produced by shade-oil is measured and can be used for crosschecks (heat sold to the consumers and utilized shade-oil and biomass). Data Archiving: It is also planned in Paide to archive the data (according to the national re-quirements) for 5 years. It would be superior to archive the data for the whole crediting period. Further annotations for Paide: The calculations are plausible, calibration is done, monitoring procedures are installed and reporting works, but until now no written (documented) instruc-tions are available how to deal with failure in data archiving, no written emergency procedures are given and it is not written documented what hap-pens in case of absence/illness) of the responsible person(s), although there are appointed substitute persons (so this shouldn´t be a bigger problem). These written instructions should be installed until the date of the first verifica-tion (better would be an earlier date).

C.7. Reporting procedures 1, 4, 13,

The monitoring plan provides a MS-Excel workbook. The staff, responsible for data controlling as above mentioned, fulfils the workbook monthly. The result

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Check how reports with relevance for the later de-termination of emission reductions will be gener-ated

14, 15, 16

is transferred to the annual compilation sheet.

C.8. Documented instructions Check whether the personnel performing tasks with sensitivity for the monitoring of emission reduc-tions have access and knowledge of documented instructions, forming a part of the project’s man-agement system.

13, 14

The personnel have been instructed by a qualified person (consultant). There are three persons in charge and trained staffs for redundancy purpose (Mr.Rebas, Mr. Tamm and Mrs. Mikson). Although the verification team feels confident about the competency of the in-troduced persons, it is however necessary that missing instructions have to be documented in the operation and management system.

FAR#2

C.9. Qualification and training Check whether the personnel performing tasks with sensitivity for the monitoring of emission reduc-tions has the appropriate competences, capabilities and qualifications to ensure the required data quality.

13, 14

The training and qualification has been proved by a thorough auditing of the single work steps. Although the verification team feels confident about the competency of the in-troduced persons, it is however necessary that missing documentation about qualification and training has to be supplemented in the operation and man-agement system. The written documentation should include information about date of training, trained person, content of training, and a signature of the trained person.

FAR#3

C.10. Responsibilities Check whether all tasks required to gather data

13, 14

The responsibilities are clearly defined, but not documented in writing. The allocation of responsibilities has to be documented and incorporated in

FAR#4


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(incl FARs/CARs)

and prepare a monitoring report with the neces-sary quality have been allocated to responsible employees.

the operation and management system.

C.11. Troubleshooting procedures Check whether there are possibilities of redundant data monitoring in case of having problems with the used monitoring equipment. Such procedures may reduce risks for the buyers of emission reduc-tions (e.g. the Client)

13, 14

The data in the work sheets are stored electronically in the computer and as printout at OÜ POGI office in the city of Paide. In case of malfunctioning of the measuring equipment the data can be recalcu-lated via comparison of heat sold to the consumers having regard to the grid loses and via calculation on basis of the consumed biomass.

ü

D. Internal Data Identifying the internal GHG data sources and ways in which the data have been collected, calcu-lated, processed, aggregated and stored should be part of initial verification to assess accuracy and reliability of the internal GHG data.

D.1. Type and sources of internal data Acquire information on type and source of internal GHG data, which is used in calculations of emis-sion reductions. E.g..” continuous direct measure-ments”, “site-specific correlations”, “periodic di-rect measurements”, “use of models” and/or “use of default emissions factors”.

1, 2, 3, 4, 5, 7, 13

According to the monitoring plan following data are relevant: Heat production by biomass (measured average capacity and operating

hours) • biomasss consumption • possible peat consumption this did not happen in the last years) The heat production by biomass is measured; the consumption of biomass can be calculated on basis of the invoices about the delivered biomass (bark, saw dust, wood chips).

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(incl FARs/CARs)

There is no storage for peat at Paide (at present), no peat has been used for heat production in the last years.

D.2. Data collection How is data collected and processed? What are the means of quantifying emissions from the different data sources?

13, 14

See point C.6 including FAR.. FAR#1

D.3. Quality assurance Does internal data collection underlie sufficient quality assurance routines?

13, 14

See point C.7 to C.10 including FARs. FAR#1 - 4

D.4. Significance and reporting risks

13, 14

The measuring equipment is calibrated and the data are secured as a matter of routinely. The different measurements records are connected by some physical relationship which can be used to reproduce missing or faulty data. The audit did not identify a need for recalculation of the calculated emission reductions. Nevertheless the problem of acquiring data at the heat meter and the possible failure in the transmission to the computer should be kept in view because this could be a source of reporting risks in case of missing written instructions. .

ü

E. External Data

n/a


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E.1. Type and sources of external data Acquire information on type and source of external data, which is used in calculations of emission re-ductions

1, 4, 9, 10, 13

n/a

E.2. Access to external data How is data transferred? How can reproducibility of data set be ensured?

1, 4, 13

n/a

E.3. Quality assurance Does external data underlie any quality assurance routines?

1, 4, 13

n/a

E.4. Data uncertainty Is it possible to assess the data uncertainty of ex-ternal data? Are such routines included in report-ing procedures?

1, 4, 13

n/a

E.5. Emergency procedures Are there any procedures which will be applicable if there is no access to relevant external data?

1, 4, 13

n/a

F. Environmental and Social Indicators A Monitoring Plan may comprise environ-mental and/or social indicators which could be necessary to monitor for the success of the project activity.

n/a

F.1. Implementation of measures 1, 4, OÜ POGI have been allocated pollution permits (according to national regu- ü


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(incl FARs/CARs)

A project activity may demand for the installation of measures (e.g. filtering systems or compensation areas), which are exceeding the local legal re-quirements. A check of the implementation or reali-zation of such measures should be part of the ini-tial verification.

6, 9, 10

lations) for several pollutions (particles, NO2, SO2, CO, volatile organic com-pounds, Plumb, Chrom, Nickel, CO2 ) by the County Environmental Depart-ment. Beginning with 2005 one test annually is required during the heating season to detect that the permits are not exceeded. The results of these tests should be provided at the following verifications.

F.2. Monitoring equipment Check where necessary whether the required me-tering systems have been installed. The meters have to comply with appropriate quality standards ap-plicable for the used technology.

1, 13 n/a

F.3. Quality assurance procedures What quality assurance procedures will be applied for such data?

1, 13 n/a

F.4. External data Check the quality, reproducibility and uncertainty of external data.

1, 13 n/a

G. Management and Operational System In order to ensure a successful operation of a Client project and the credibility and verifi-ability of the ERs achieved, the project must have a well defined management and opera-tional system.

A written management and operational system is not in place. It shall include the management system for monitoring and reporting, i.e. organisational structure, responsibilities, competencies, non-conformance handling, internal audits and management review. The operator has to arrange that its implementation is completed until the first periodic verification in 2005.

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(incl FARs/CARs)

G.1. Documentation The system should be documented by manuals and instructions for all procedures and routines with relevance to the quality of emission reductions. The accessibility of such documentations to persons working on the project has to be secured.

1, 13, 14, 16

The necessary procedures have been installed but not yet documented in writ-ing. A written documentation referring to all procedures and routines has to be produced and regularly updated at OÜ POGI in the frame of a well defined management and operational system. The management r of OÜ POGI has to take care that its implementation is completed until the first periodic verification in 2005.

FAR#5-1

G.2. Qualification and training The system should describe the requirements on qualification and the need of training programs for all persons working on the emission reduction pro-ject. Performed training programs and certificates should be archived by the system.

1, 13 A written documentation on the requirements on qualification and the need of training programs has to be produced. Performed training programs should be archived in this system. The management r of OÜ POGI has to take care that its implementation is completed until the first periodic verification in2005. .

FAR#5-2

G.3. Allocation of responsibilities The allocation of responsibilities should be docu-mented in written manner.

1, 13 The allocation of responsibilities should be documented in a written form. The management of OÜ POGI has to take care that its implementation is com-pleted until the first periodic verification in 2005.

FAR#5-3

G.4. Emergency procedures 1, 13 Emergency procedures should be defined and documented. FAR#5-4


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(incl FARs/CARs)

The system should contain procedures which pro-vide emergency concepts in case of unexpected problems with data access and/or data quality.

The management of OÜ POGI has to take care that its implementation is com-pleted until the first periodic verification in 2005.

G.5. Data archiving The system should provide routines for the archiv-ing of all data which is required for verifying the project’s performance in the context of consecutive verifications.

1, 13 Written routines for the archiving of data should be defined and documented . At present it is intended to archive data for seven years according to national regulations. It would be more appropriate to archive the data for the whole crediting period until 2012. The management of OÜ POGI has to take care that its implementation is com-pleted until the first periodic verification in 2005.

FAR#5-5

G.6. Monitoring report The system includes procedures for the calculation of emission reductions and the preparation of the monitoring report.

1, 13 A documented written procedure for reporting of emission reduction is not implemented. Calculations are laid down in electronic form (EXCEL Worksheet) in the workbook

ü

G.7. Internal audits and management 1, 4, There have been no internal audits and management reviews so far. FAR#5-6


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(incl FARs/CARs)

review The system includes internal control procedures, which allow the identification and solution of prob-lems at an early stage.

9, 10, 13, 14, 15, 16

The management system of OÜ POGI should define internal audit and review procedures. Its accomplishment shall be documented. The management of OÜ POGI has to take care that its implementation is com-pleted until the first periodic verification in 2005.