Resurge II PDD PJR.V(buyers) get attracted to buy emission reductions from the project. - Reduce the due diligence cost/upfront investment towards project development and validation

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 1

CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-PDD)

Version 03 - in effect as of: 28 July 2006

CONTENTS A. General description of project activity B. Application of a baseline and monitoring methodology C. Duration of the project activity / crediting period D. Environmental impacts E. Stakeholders’ comments

Annexes Annex 1: Contact information on participants in the project activity Annex 2: Information regarding public funding Annex 3: Baseline information

Annex 4: Monitoring plan

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 2 SECTION A. General description of project activity A.1 Title of the project activity: >>

“Generation of Electricity in Maharashtra from Bundled Wind Energy Project Activity” Version: 01 Date of completion of PDD: 19/11/2008 A.2. Description of the project activity: >>

Purpose of the Project Activity

The objective of this candidate CDM project activity is the development of 38.75 MW electricity generation capacity using wind power, one of the most viable renewable electricity generation technologies, from installations located across Nandurbar, Dhule, and Sangli districts in the Indian state of Maharashtra. The project activity provides a source of reliable and renewable power to the Maharashtra state electricity grid, which is part of the NEWNE regional electricity grid of India. The generated electricity has been fed into the grid through the locally available evacuation facility provided by the state utility, Maharashtra State Electricity Distribution Company Limited (MSEDCL).

This project activity is being developed as a bundled project activity and comprises of 17 individual investors sponsoring the installation of one to six wind turbine generators (WTG) each. The development of this project activity as a bundled activity reduces the investment requirements for individual investors.

There are no gaseous emissions (e.g. CO2, CH4, N2O) from the project activity since it uses wind energy as the source of power (a zero emission source). However, in the baseline scenario (as per ACM 0002, version 7), CO2 emissions occur since the power generated from the project activity displaces an equivalent amount of fossil fuel based power generation.

Scenario Existing Prior to the Implementation of the Project Activity There was no power generation project existing prior to the development of this project activity.

Project Scenario

The WTGs were supplied, operated, and maintained by Suzlon Energy Limited (SEL) and Suzlon Infrastructure Services Limited (SIL). The complete project activity has been connected to the grid through the locally available sub-stations owned and maintained either by the EPC contractor (Suzlon) or by the state electricity utility.

The electricity generated from the WTGs is supplied to the MSEDCL under long-term power purchase agreements (PPA). The PPA has been entered into with the state utility at INR 3.50 /kWh with INR 0.15/kWh as annual escalation. The duration of the PPA is 13 years from the date of implementation of WTG.

Details of individual investors and WTG generation capacities that comprise the project activity and the respective locations are shown in the table below:

Table 1: WTG Location and Capacity


WTG Name of Investor (As per Purchase Order)

Existing Name of Investor

Size (MW)

Date of Commissioning Village Taluka District

K411 C. Dinesh & Co. C. Dinesh & Co. Pvt. Ltd. 1.25 31/3/2006 Akhatwade (Chakla) Nandurbar Nandurbar

G227 Dharmanandan Diamonds

Dharmanandan Diamonds Pvt. Ltd.

1.25 25/3/2006 Dongersoni (Dhalgaon) Kwathemahakal Sangli

G228 Dharmanandan Diamonds


1.25 25/3/2006 Dongersoni (Dhalgaon) Kwathemahakal Sangli

K115 Dharmanandan Diamonds


1.25 01/09/2005 Titane (Brahmanwel) Sakri Dhule

K422 J.B. Diamonds J.B. Diamonds Ltd. 1.25 06/3/2006 Tilalli (Chakla) Nandurbar Nandurbar



K399 J.B. Diamonds J.B. Diamonds Ltd. 1.25 27/3/2006 Akhatwade (Chakla) Sakri Nandurbar

K62 Kiran Exports Kiran Gems Pvt. Ltd. 1.25 30/6/2005 Khori (Brahmanwel) Sakri Dhule

K76 Kiran Exports Kiran Gems Pvt. Ltd. 1.25 20/9/2005 Jamde Sakri Dhule

J31 R.T. Diamond Pvt. Ltd.

Goldstar Jewellery Ltd. 1.25 31/3/2006 Phophade(Brahmanwel) Sakri Dhule

G51 R.T. Diamond Pvt. Ltd.

Goldstar Jewellery Ltd. 1.25 31/12/2005 Ghatnandre Kwathemahaka

l Sangli

K251 Syntex Corporation Pvt. Ltd.

Syntex Corporation Pvt. Ltd.

1.25 31/3/2006 Amkhel (Brahmanwel) Sakri Dhule

K348 Gautamkumar & Company

Tanaaya Gems & Jewellery Exports Ltd.

1.25 31/3/2006 Mandal (Chakla) Nandurbar Nandurbar

K481 Sahastra Properties Pvt. Ltd.

Sahastra Properties Pvt. Ltd. 1.25 6/3/2006 Dhandane (Chakla) Nandurbar Nandurbar

K482 Sahastra Properties Pvt. Ltd.

Sahastra Properties Pvt. Ltd. 1.25 6/3/2006 Dhandane (Chakla) Nandurbar Nandurbar

K150 Abhishek Export Abhishek Exports Pvt. Ltd. 1.25 30/9/2005 Panhalipada

(Brahmanwel) Sakri Dhule

K200 Abhishek Export Abhishek Exports Pvt. Ltd. 1.25 30/9/2006 Chhadwel


G44 Abhishek Export Abhishek Exports Pvt. Ltd. 1.25 20/2/2006 Ghatnandre Kwathemahaka

l Sangli

K430 Abhishek Export Abhishek Exports Pvt. Ltd. 1.25 6/3/2006 Tilalli (Chakla) Nandurbar Nandurbar

G312 Abhishek Export Abhishek Exports Pvt. Ltd. 1.25 25/3/2006 Jarandi (Dhalgaon) Tasgaon Sangli

K275 Abhishek Export Abhishek Exports Pvt. Ltd. 1.25 29/3/2006 Chhadwel


G306 Famy Care Ltd. Famy Care Ltd. 1.25 31/3/2006 Dehalwadi Talgaon Sangli

G64 Khanna Industrial Khanna Industrial 1.25 28/3/2006 Jarandi (Dhalgaon) Kwathemahaka Sangli


WTG Name of Investor (As per Purchase Order)

Existing Name of Investor

Size (MW)

Date of Commissioning Village Taluka District

Pipes Pvt. Ltd. Pipes Pvt. Ltd. l

G16 Gandhi Special Tubes Ltd.

Gandhi Special Tubes Ltd. 1.25 31/12/2005 Ghatnandre (Dhalgaon) Kwathemahaka

l Sangli

G7 Jewelex India Pvt. Ltd.

Jewelex India Pvt. Ltd. 1.25 25/3/06 Nagaj Kwathemahaka

l Sangli

G305 Jewelex Bombay Pvt. Ltd.

Jewelex India Pvt. Ltd. 1.25 31/3/06 Dahiwadi Tasgaon Sangli

K145 Fariyas Hotels Pvt. Ltd.

Fariyas Hotels Ltd. 1.25 11/7/2005 Titane (Brahmanwel) Sakri Dhule

K397 Associated Aluminium Industries Pvt. Ltd

Associated Aluminium Industries Pvt. Ltd.

1.25 26/3/06 Akhatwade (Chakla) Nandurbar Nandurbar

K396 Hind Aluminium Industries

Hind Aluminium Industries Ltd. 1.25 26/3/06 Akhatwade (Chakla) Nandurbar Nandurbar

G11 BDK Marketing Services Pvt. Ltd.

BDK Marketing Services Pvt. Ltd. 1.25 31/12/05 Nagaj (Dhalgaon) Kwathemahaka

l Sangli

Total Capacity 38.75

The CDM due diligence cost for the individual investors was high, given the investment required in obtaining the necessary advisory services for project development (PDD preparation) followed by validation by UNFCCC accredited Designated Operational Entity (DOE) and monitoring and verifications (post registration) before the Certified Emission Reductions (CERs) are issued to the project/investor which can be traded in the international market.

It is believed that buyers with good credit rating would not be interested in procuring small volumes of CERs generated from individual WTG installations (WTG of 1.25 MW will generate about 2000 to 2400 CERs in a year) due to the higher due diligence cost associated with carrying out sellers credibility to supply CERs, large number of ERPAs and requirement of buyer to obtain buyer country approval for individual purchase.

The investors have therefore decided to use a credible third party for bundling the project and complete the registration of all the investments as a single large scale bundled project to meet the following requirements:

- Increase the total green house gas (GHG) emission reduction volume so that major players (buyers) get attracted to buy emission reductions from the project.

- Reduce the due diligence cost/upfront investment towards project development and validation and other associated costs until the CERs are issued.

Carrying out all these activities has resulted in a delay in undertaking this bundled initiative as a candidate CDM project activity.

Baseline Scenario The approved consolidated baseline and monitoring methodology ACM 0002 Version 7.0 has been used for this project activity. The project activity is the installation of renewable resource wind power plant with zero emissions, connected to Maharashtra state grid, which is a part of the NEWNE regional electricity grid of India.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 5 Thus, the baseline scenario is the following:

Electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources, as reflected in the combined margin (CM) calculations described in the “Tool to calculate the emission factor for an electricity system”.

Contribution to GHG emissions reduction

The project activity harnesses wind energy to generate and supply electricity to the NEWNE regional electricity grid of India. The generated electricity is fed into the regional grid (NEWNE grid) which is dominated by thermal generating sources. The details of NEWNE grid and various generating sources are furnished separately in this PDD.

In the absence of this project activity, an equivalent amount of traditional mix based electricity generation would have been required, which includes the use of thermal sources for energy generation that are ordinarily used for electricity generation in the NEWNE regional electricity grid. The reduced consumption of traditional mix based energy results in a reduction in GHG emission associated with thermal sources based energy generation.

The GHG emission reduction has been carried out in line with Approved Consolidated Methodology (ACM) 0002 (Version 7) using the ex-ante values published by Central Electricity Authority, Government of India (CEA) based on the annual operating and build margin values of the state load dispatch center for the NEWNE grid of India.

Contribution to Sustainable Development

The project activity contributes towards sustainable development of the country and the state of Maharashtra by reducing the dependence on fossil fuel based electricity generation, which ultimately leads to reduction in GHG emissions. In addition, the WTGs were installed based on the wind energy potential of the selected locations, and thus could not be located adjacent to load centers. This results in dispersed electricity generation and strengthens the local feeders and local grids. Hence, this project activity leads to reduction in GHG emissions, as well as fulfilling several other sustainable development objectives as discussed below:

• Contribution towards the objectives of incremental capacity from renewable sources;

• Contribution towards meeting the electricity deficit in Maharashtra;

• Carbon Dioxide (CO2) abatement and reduction of GHG emissions through development of renewable technology;

• Reduction in the average emission intensity (SOx, NOx, PM, etc.), average effluent intensity and average solid waste intensity of power generation in the system;

• Conservation of natural resources including land, forests, minerals, water and ecosystems; and

• Development of the local economy and creation of jobs and employment, particularly in rural areas, which is a priority concern for the Government of India;

A.3. Project participants: >>

Name of party involved (*) ((host) indicates a host Party)

Private and/ or public entity(ies) project participants

Kindly indicate if the Party involved wishes to be


(*)(as applicable) considered as project participant (Yes/ No)

India (Host Party)

Resurge Energy Private Limited (Private Entity) No

The consortium of investors has authorized Resurge Energy Private Limited (Resurge) to undertake CDM project development and due diligence. Resurge will be responsible for all communications with CDM-EB and Secretariat. The relevant contact information is provided in Annex-I. A.4. Technical description of the project activity: A.4.1. Location of the project activity: >> The project activity comprises of 31 WTGs located across three districts – Dhule, Sangli, and Nandurbar, in the state of Maharashtra. A.4.1.1. Host Party(ies): >>The host party (host) to the project activity is India. A.4.1.2. Region/State/Province etc.: >> The project activity is located in the state of Maharashtra, which is part of the NEWNE regional electricity grid of India. A.4.1.3. City/Town/Community etc: >> The sub projects are located in the districts of Dhule, Sangli, and Nandurbar in the state of Maharashtra. A.4.1.4. Detail of physical location, including information allowing the unique identification of this project activity (maximum one page):

>> The project spreads across three districts – Dhule, Sangli, and Nandurbar districts in the state of Maharashtra. The locations of individual WTGs are presented in the table in Section A.2.

The projects are distributed throughout the three districts at the following locations (identified in the figure below):

District Latitude Longitude

Dhule 20° 58' N 74° 47' E

Sangli 16° 52' N 74° 36' E

Nandurbar 21° 23' N 74° 19' E


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

The type and category of project activity as per modalities and procedures for large-scale CDM project activities is as under:

Sectoral Scope: 1, Energy industries (renewable/ non-renewable sources)

Project Category: ACM0002, Version-7, “Consolidated methodology for grid-connected electricity generation from renewable sources”. A.4.3. Technology to be employed by the project activity: >> The scenario existing prior to the start of the implementation of the project activity

There was no power generation prior to the installation of this project activity.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 8 Project Scenario:

The project activity involves 31 WTGs manufactured by Suzlon Energy Limited, each with a generation capacity of 1.25 MW. 27 WTGs are of make Suzlon S70 and four WTGs of make Suzlon S66. The post implementation operation and maintenance is taken care of by Suzlon Infrastructure Services Limited (SISL), a subsidiary of Suzlon Energy Limited, which ensures professional site management and allied services.

The operational specifications and rated outputs for both models, S70 and S66, are included in the tables below:

Technical Specification of Suzlon S-70

Operating Data Models S.70/1250

Rotor diameter 69.1 m

Hub height 74 m

Installed elec. Output 1250 kW

Cut-in wind speed 3 m/s

Rated wind speed m/s 12 m/s

Cut-out wind speed m/s 20 m/s

Rotor Swept Area 3750 m2

Rotational Speed 13.2 / 19.8 rpm

Rotor Material GRP

Regulation Pitch

Generator Asynchronous Generator 4/6 poles

Rated output 250 / 1250 kW

Rotational speed 1010/1515 rpm

Frequency 50 Hz

Protection IP 56

Insulation Class H

Cooling System Air cooled

Gear Box 3-stage gear box, 1 planetary & 2 helical

Manufacturer Winenergy

Gear Ratio 77.848

Nominal Load 1390 kW

Type of Cooling Oil cooling system

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 9 Yaw System Drive 4 active electrical yaw motors

Bearings Polyamide slide bearings

Safety System

Aerodynamic brake 3 times independent pitch regulation

Mechanical brake Spring power disc brake, hydraulically released, fail safe

Control Unit Microprocessor controlled indicating actual operating conditions, UPS backup system

Tower Tubular

Design Standards GL/IEC

Technical Specification of Suzlon S-66

ROTOR

Rotor diameter 66 m

Hub height 74 m

Swept Area 3421.9 m2

Rotational Speed 20.7/13.8 rpm

Rotor Material GRP

Regulation Pitch Controlled

OPERATIONAL DATA

Cut-in Wind Speed 3 m/s

Rated wind speed 14 m/s

Cut-out wind speed 22 m/s

Survival Wind Speed 67 m/s

GENERATOR

Type Asynchronous generator

Rated output 250 / 1250 kW

Rotational speed 1006/1506 rpm

Frequency 50 Hz

Protection IP 56

Insulation Class H

Cooling System Air cooled

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 10 GEARBOX

Type 3-stage gear box 1 planetary and 2 helical

Gear Ratio 74.917:1 (50 Hz)

Nominal Load 1390 kW

Type of Cooling Oil cooling system

Yaw Drive

Yaw System Drive 4 active electrical yaw motors

Bearings Polyamide slide bearings

TOWER

Type Tubular tower

Erection With crane

Design Standards GL Special Class Tower Height To suit hub height

Construction Bolted

CONTROL UNIT

Control Unit Microprocessor controlled indicating actual operating conditions, UPS backup system

SAFETY SYSTEM

Brake system Automatic application of synchronous hydraulic control of blade pitching; spring applied hydraulically released disc brake

Details on the monitoring equipment and their locations in the system are presented in the monitoring plan presented in Annex 4. The spatial extent of the project boundary includes the project power plant and all power plants connected physically to the electricity system that the CDM project power plant is connected to. The production of electricity through the installation of WTGs does not produce any GHG emissions.

Baseline Scenario:

The project activity is the installation of a new grid-connected renewable power plant/unit. Accordingly, the baseline scenario will be the following:

“Electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources, as reflected in the combined margin (CM) calculations described in the “Tool to calculate the emission factor for an electricity system”.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 11 As the Project does not modify or retrofit an existing generation facility, the baseline scenario is the emissions generated by the operation of grid-connected power plants and by the addition of new generation sources. The primary GHG emissions in the baseline scenario required to be evaluated in this methodology is CO2.

A.4.4 Estimated amount of emission reductions over the chosen crediting period: >> The total emissions reduction achieved during the 10-year crediting period amounts to 611,730 tonnes of CO2e, as shown in the table below:

Years Annual estimation of emission reduction in tonnes of CO2e

01/05/2009 – 30/04/2010 61,520 01/05/2010 – 30/04/2011 61,520 01/05/2011 – 30/04/2012 61,520 01/05/2012 – 30/04/2013 61,520 01/05/2013 – 30/04/2014 61,520 01/05/2014 – 30/04/2015 61,520 01/05/2015 – 30/04/2016 61,520 01/05/2016 – 30/04/2017 61,520 01/05/2017 – 30/04/2018 61,520 01/05/2018 – 30/04/2019 61,520

Total estimated reductions (tonnes of CO2e) 615,200

Total number of crediting years 10 Annual average over the crediting period of estimated reductions (tonnes of CO2 e) 61,520

A.4.5. Public funding of the project activity: >> Complete set of installations have been carried out using commercial landing / internal accruals of the investors and no Overseas Development Assistance (ODA) has been used at any stage. SECTION B. Application of a baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the project activity: The approved consolidated baseline and monitoring methodology ACM 0002 Version 7.0 has been used for this project activity. The titles of the baseline and monitoring methodologies are “Consolidated methodology for grid-connected electricity generation from renewable sources” and “Consolidated monitoring methodology for grid-connected electricity generation from renewable sources”. The following tools are referenced in this methodology:

• Tool for the demonstration and assessment of additionality (Version 05.2)


• Tool to calculate project or leakage CO2 emissions from fossil fuel combustion (Version 02) • Tool to calculate the emission factor for an electricity system (Version 01.1)

B.2 Justification of the choice of the methodology and why it is applicable to the project activity: >> The project activity is the installation of renewable resource wind power plant with zero emissions, connected to Maharashtra state grid, which is a part of the NEWNE regional electricity grid of India. Thus, the baseline scenario is the following:

Electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources, as reflected in the combined margin (CM) calculations described in the “Tool to calculate the emission factor for an electricity system”.

The approved consolidated baseline and monitoring methodology ACM0002 Version 7 is the applicable methodology due to the following reasons: S. No. Applicability conditions of ACM-0002 Project Under Consideration

1.

Methodology is applicable to electricity capacity additions from:

1. Run-of-river hydro power plants; hydro power projects with existing reservoirs where volume of the reservoir is not increased

2. Wind Sources 3. Geothermal Sources 4. Solar Sources 5. Wave and tidal sources

Electricity capacity additions are from wind sources

2.

Methodology is not applicable to project activities that involve switching from fossil fuels to renewable energy at the site of the project activity, since in this case the baseline may be the continued use of fossil fuels at the site

There is no switching from fossil fuels to renewable energy at the site of project activity

3.

The Methodology is applicable when the geographic and system boundaries for the relevant electricity grid can be clearly identified and information on the characteristics of the grid is available

In the project under consideration the geographic and system boundaries for the relevant electricity grid (NEWNE) can be clearly identified and the information on the characteristics of the grid are available

The details above justify the applicability of ACM 0002 for this project.

B.3. Description of the sources and gases included in the project boundary >> Per ACM0002, for calculation of the baseline emission factor, the spatial extent of the project boundary includes the project power plant and all power plants physically connected to the electricity grid system that the CDM project power plant is connected to.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 13 The Indian electricity system is divided into two regional grids: NEWNE and southern, with each grid providing electricity to several Indian states. Since the regional grids are interconnected, there is an inherent exchange of electricity between the different states and regions within India. A limited amount of power exchange is also undertaken with the neighbouring countries of India such as Bhutan and Nepal. Power generation and supply within the regional grid is managed by Regional Load Dispatch Centre (RLDC). The Regional Power Committees (RPCs) provide a common platform for discussion and solution to the regional problems relating to the grid. Each state in a regional grid meets its power demands with its own generation facilities and also with allocation from power plants owned by the central sector such as National Thermal Power Corporation (NTPC) and National Hydroelectric Power Corporation (NHPC) etc. Specific quotas are allocated to each state from the Central Sector power plants. Depending on the demand and generation, there are electricity exports and imports between states in the regional grid. The regional grid thus represents the largest electricity grid where power plants can be dispatched without significant constraints and thus, represents the “project electricity system” for the project activity. Since the project activity is connected to the NEWNE regional electricity grid, the NEWNE grid is the “project electricity system”. Accordingly, the project boundary encompasses the physical extent of the NEWNE regional electricity grid, which includes the project site and all power plants connected physically to the electricity system.

Source Gas Included? Justification/ Explanation

Bas

elin

e Electricity generation from power plants connected to the NEWNE regional electricity grid

CO2 Included Main emission source

CH4 Excluded This source is not required to be estimated for wind energy projects under ACM0002

N2O Excluded This source is not required to be estimated for wind energy projects under ACM0002

Proj

ect

Act

ivity

Electricity generation from the project activity

CO2 Excluded Wind energy generation does not have any direct GHG emissions.

CH4 Excluded

N2O Excluded

Flow Diagram of the project boundary


Represents project Activity Represents 1 unit of WTG Represents project boundary B.4. Description of how the baseline scenario is identified and description of the identified baseline scenario: >> Per ACM 0002, for project activities that do not modify or retrofit an existing electricity generation facility, the baseline scenario is as follows:

Electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources, as reflected in the combined margin (CM) calculations described in the “Tool to calculate the emission factor for an electricity system.

Since the project activity does not modify or retrofit an existing generation facility, the baseline scenario is the emissions generated by the operation of grid-connected power plants and by the addition of new generation sources. This is estimated by multiplying the calculated combined margin (CM) with the amount of electricity delivered to the grid by the project activity. Baseline emission rate calculation The baseline methodology approach 48(a) called “existing actual or historical emissions, as applicable” has been applied in the context of the project activity. The approach selected in the baseline methodology

Wind Mill (1.25 MW WTG)

Transformer Common Feeder for all WTGs

Substation

NEWNE regional electricity grid

WTG

Project Activity

Emission source in the baseline scenario (emits CO2)

Electricity import/export from/to the project activity to be monitored.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 15 checks the additionality of the project activity and determines the baseline emission factor for selected baseline scenario. B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered CDM project activity (assessment and demonstration of additionality): >> The bundled project activity is generating electricity from wind, which is a renewable source resulting in no additional GHG emissions into the atmosphere. The emission reduction from this project will be calculated based on the net electricity generated by the project, and the difference between the emission factors (in t CO2/MWh) of the baseline and the project activity. The baseline emission factor reflects the carbon intensity of the displaced amount of grid electricity. The starting date of the project activity is prior to the start date of the validation process, however, revenue resulting from registration as a CDM project activity was a serious consideration in the decision to undertake the project activity by the investors. The additional CDM revenue was considered by the project investors before undertaking the project during communication with Suzlon prior to purchasing the WTGs and during board discussions. The table below demonstrates the date when the additional CDM incentive was first considered by the project proponents prior to undertaking this project, and the corresponding dates of the purchase orders placed after the impact of the CDM revenue on the financial feasibility of the project activity was evaluated. CDM incentive was discussed between the project investors and Suzlon through the exchange of letters, and the table below provides either the dates when the letters were sent to the project investors by Suzlon discussing the additional revenue stream that could be generated through CDM, or the date of the board resolution for the investor companies. CDM consideration documentation would be provided during validation as required.

Reference No. Name of Sponsor Purchase Order

Date CDM Consideration

Date

1 C. Dinesh & Co. Pvt. Ltd. 14-Nov-05 4-Nov-05 2 Dharmanandan Diamonds Pvt. Ltd. 26-Apr-05 8-Apr-05 3 Dharmanandan Diamonds Pvt. Ltd. 29-Aug-05 8-Apr-05 4 J.B. Diamonds Ltd. 25-Aug-05 6-Aug-05 5 Kiran Gems Pvt. Ltd. 18-Mar-05 2-Mar-05 6 Goldstar Jewellery Ltd. 23-Sep-05 2-Aug-05 7 Syntex Corporation Pvt. Ltd. 2-Jul-05 26-May-05 8 Tanaaya Gems & Jewellery Exports Ltd. 9-Nov-05 13-Oct-05 9 Sahastra Properties Pvt. Ltd. 3-Oct-05 31-Aug-05

10 Abhishek Exports Pvt. Ltd. 12-Aug-05 1-Aug-05 11 Abhishek Exports Pvt. Ltd. 3-Oct-05 1-Aug-05 12 Famy Care Ltd. 27-Dec-05 23-Nov-05 13 Khanna Industrial Pipes Pvt. Ltd. 28-Feb-06 24-Jan-06 14 Gandhi Special Tubes Ltd. 21-Jun-05 29-Apr-2003 15 Jewelex India Pvt. Ltd. 14-Jul-05 3-Jun-05 16 Fariyas Hotels Ltd. 9-Apr-05 4-Apr-05 17 Associated Aluminium Industries Pvt. 13-Jan-06 22-Dec-05


Reference No. Name of Sponsor Purchase Order

Date CDM Consideration

Date

Ltd. 18 Hind Aluminium Industries Ltd. 13-Jan-06 22-Dec-05 19 BDK Marketing Services Pvt. Ltd. 16-Sep-05 25-Aug-05

Additionality Check:

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 and that either the project is facing barriers or is not viable / profitable for the investor. As per the selected approved consolidated methodology ACM0002, the project proponent is required to establish that the GHG reductions due to project activity are additional to those that would have occurred in absence of the project activity as per the ‘Tool for the demonstration and assessment of additionality’ Version 5.2, as published in Annex-10 of the Executive Board (EB-39). The flowchart provides a step-by-step approach to establish additionality of the project activity as per the tool.


PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 18 Step 1: Identification of alternatives to the project activity consistent with current laws and regulations Sub-step 1a. Define alternatives to the project activity: 1. Identify realistic and credible alternative(s) available to the project participants or similar project

developers that provide outputs or services comparable to the proposed CDM project activity. These alternatives are to include:

• The proposed project activity not undertaken as a CDM project activity. • All other plausible and credible alternatives to the project activity that deliver outputs and on

services (e.g. electricity, heat, or cement) with comparable quality, properties, and application areas.

• If applicable, continuation of the current situation (no project activity or other alternatives undertaken).

The different alternatives available to the project developers are discussed below: Alternative 1- Implementation of WTGs undertaken without CDM revenue The project activity is not viable enough with possibility of additional revenue stream through trading of GHG emission reductions in international market. This argument has been discussed at length in step 2 of the Additionality. Although, this alternative is in compliance with all the regulatory and legal norms, it is not possible for execution because of financial barriers. Alternative 2- Implementation of conventional electricity generation project Although there was the possibility of developing a conventional fossil fuel based project for strengthening the grid, however, since the investment has been carried out by multiple individual investors, an equivalent conventional unit is not feasible or presented here as a practical alternative. Alternative 3- No project activity; Continuation of current situation The investors in the bundled CDM project are not bound by any regulatory / statutory requirements that require investment in wind energy project and the NEWNE regional grid will continue to operate with the existing grid energy mix. Thus alternative 1 and 3 are feasible alternatives to the candidate CDM project activity. The project activity is thus not the only option available to the investor. Sub-step 1b. Enforcement of applicable laws and regulations. 1. The alternatives shall be in compliance with all applicable legal and regulatory requirements, even if

these laws and regulations have objectives other than GHG reductions, e.g. to mitigate local air pollution. This sub-step does not consider national and local policies that do not have legally binding status.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 19 2. If an alternative does not comply with all applicable legislations and regulations, then show that, based

on an examination of current practices in the country or region in which the law or regulation applies, those applicable legal or regulatory requirements are systematically not enforced and that non-compliance with those requirements is widespread in the country. If this cannot be shown, then eliminate the alternative from further consideration.

3. If the proposed project activity is the only alternative amongst the ones considered by the project

participants that is in compliance with all regulations with which there is general compliance, then the proposed CDM project activity is not additional.

There are no legal or regulatory requirements that prevent alternatives (1) and (2) from occurring. We now proceed to step 2 or 3 of the tool for demonstration of Additionality. Step 2. Investment analysis Determine whether the proposed project activity is economically or financially less attractive than at least one other alternative, identified in step 1, without the revenue from the sale of certified emission reductions (CERs). To conduct the investment analysis, use the following sub-steps: Sub-step 2a. - Determine appropriate analysis method 1. Determine whether to apply simple cost analysis, investment comparison analysis or benchmark

analysis (sub-step 2b). If the CDM project activity generates no financial or economic benefits other than CDM related income, then apply the simple cost analysis (Option I). Otherwise, use the investment comparison analysis (Option II) or the benchmark analysis (Option III).

Sub-step 2b. – Option I. Apply simple cost analysis 2. Document the costs associated with the CDM project activity and demonstrate that the activity

produces no economic benefits other than CDM related income. Option I – Simple cost analysis is not applicable as the project activity sells electricity to the grid and obtains economic benefits in the form of electricity tariffs received against the joint meter reading (JMR) on a monthly basis per the PPA entered into by the investor and the Maharashtra state utility, as described in Section A.2. Also, trading of GHG reductions in Annex-1 countries is another possible revenue stream for the project activity.

Thus, option II or III should be used. Sub-step 2b. – Option II. Apply investment comparison analysis 1. Identify the financial indicator, such as IRR, NPV, cost benefit ratio, or unit cost of service (e.g.,

levelized cost of electricity production in $/kWh or levelized cost of delivered heat in $/GJ) most suitable for the project type and decision-making context.

The project proponent chooses to exercise option –III, benchmark analysis for demonstrating additionality. Sub-step 2b. – Option III. Apply benchmark analysis

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 20 1. Identify the financial indicator, such as IRR, NPV, cost benefit ratio, or unit cost of service (e.g.,

levelized cost of electricity production in $/kWh or levelized cost of delivered heat in $/GJ) most suitable for the project type and decision context.

Project IRR has been considered as appropriate financial indicator for comparison with the benchmark (WACC). The guidance to investment analysis issued in EB 41 (paragraph 11) states that in cases where a benchmark approach is used the applied benchmark shall be appropriate to the type of IRR calculated. Weighted average costs of capital (WACC) are appropriate benchmarks for a project IRR. Required/expected returns on equity are appropriate benchmarks for equity IRR.

The tool for demonstration and assessment of additionality [para-5, sub step 2(b)] states that in cases where the project has more than one potential developer, the benchmark shall be based on parameters that are standard in the market, considering the specific characteristics of the project type. Accordingly, the weighted average cost of capital applicable to the project type has been considered as the benchmark.

The benchmark WACC for the project is 11.07%. Sub-step 2c. Calculation and comparison of financial indicators (only applicable to options II and III):

1. Calculate the suitable financial indicator for the proposed CDM project activity and, in the case of Option II above, for the other alternatives. Include all relevant costs (including, for example, the investment cost, the operations and maintenance costs), and revenues (excluding CER revenues, but including subsidies/fiscal incentives where applicable), and, as appropriate, non-market cost and benefits in the case of public investors.

2. Present the investment analysis in a transparent manner and provide all the relevant assumptions in the CDM-PDD, so that a reader can reproduce the analysis and obtain the same results. Clearly present critical techno-economic parameters and assumptions (such as capital costs, fuel prices, lifetimes, and discount rate or cost of capital). Justify and/or cite assumptions in a manner that can be validated by the DOE. In calculating the financial indicator, the project’s risks can be included through the cash flow pattern, subject to project-specific expectations and assumptions (e.g. insurance premiums can be used in the calculation to reflect specific risk equivalents).

3. Assumptions and input data for the investment analysis shall not differ across the project activity and its alternatives, unless differences can be well substantiated.

4. Present in the CDM-PDD submitted for validation a clear comparison of the financial indicator for the proposed CDM activity and:

(a) The alternatives, if Option II (investment comparison analysis) is used. If one of the other alternatives has the best indicator (e.g. highest IRR), then the CDM project activity can not be considered as the most financially attractive;

(b) The financial benchmark, if Option III (benchmark analysis) is used. If the CDM project activity has a less favourable indicator (e.g. lower IRR) than the benchmark, then the CDM project activity cannot be considered as financially attractive.

The financial analysis for calculating the benchmark (post-tax project IRR) is carried out and key assumptions used for calculating the benchmark (post tax project IRR) are set out below; these assumptions have been made on the basis of data available at the time of investment decision for the project.


Project Operation Parameters Values / Assumption

Source

Plant Load Factor 20% MERC Tariff Order for Maharashtra dated November 24, 2003

Insurance Charges @ % of capital cost Various Offer of EPC Contractor - Suzlon Operation & Maintenance Cost as % of capital cost Various Offer of EPC Contractor – Suzlon

Annual O & M Escalation 5.0% Offer of EPC Contractor – Suzlon Capital Cost / WTG Various Purchase Order of individual investor

Rate of interest Various Loan sanction letters of various lending agencies to individual investor

Tariff for 1st year INR 3.50 /kWh MERC Tariff Order for Maharashtra dated November 24, 2003

Annual escalation in tariff INR 0.15 /kWh MERC Tariff Order for Maharashtra dated November 24, 2003

PPA duration 13 Years MERC Tariff Order for Maharashtra dated November 24, 2003

Income Tax Depreciation Rate (Written Down Value basis)

On Wind Turbine Generators 80% Accelerated Depreciation as per Rules. Book Depreciation Rate (Straight Line Method basis)

On all assets 4.5% Straight line for book Depreciation Book Depreciation up to (% of asset value) 100%

Working Capital Requirements (Days)

Receivables (Sale of electricity) 45 As per CERC regulations (Billing Cycle)

O & M Expenditure to be paid in advance 30 As per CERC regulations

The other key assumptions used for calculating the IRR are summarized in the table below: Parameter Value Used Source Income Tax rate 30% Income Tax Act Minimum Alternate Tax 10% Income Tax Act Surcharge 10% Finance Bill (Union Budget) Cess 2% Finance Bill(Union Budget)

Baseline Emission Factor 906.18 tCO2/GWh of electricity generated

CEA database for grid baseline version IV (September 2008)

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 22 On the basis of above assumptions, the investments made by various investors have resulted in the following returns / financial indicators.

Owner Post-tax Project IRR (%)

C. Dinesh & Co. Pvt. Ltd. 7.19% Dharmanandan Diamonds Pvt. Ltd. 7.19% Dharmanandan Diamonds Pvt. Ltd. 7.18% J.B. Diamonds Ltd. 7.19% Kiran Gems Pvt. Ltd. 7.50% Goldstar Jewellery Ltd. 7.19% Syntex Corporation Pvt. Ltd. 7.26% Tanaaya Gems & Jewellery Exports Ltd. 7.19% Sahastra Properties Pvt. Ltd. 7.19% Abhishek Exports Pvt. Ltd. 7.66% Abhishek Exports Pvt. Ltd. 7.19% Famy Care Ltd. 7.25% Khanna Industrial Pipes Pvt. Ltd. 7.19% Gandhi Special Tubes Ltd. 7.43% Jewelex India Pvt. Ltd. 7.22% Fariyas Hotels Ltd. 7.65% Associated Aluminium Industries Pvt. Ltd. 7.20% Hind Aluminium Industries Ltd. 7.20% BDK Marketing Services Pvt. Ltd. 7.29% Sub-step 2d. Sensitivity analysis (only applicable to options II and III):

5. Include a sensitivity analysis that shows whether the conclusion regarding the financial attractiveness is robust to reasonable variations in the critical assumptions. The investment analysis provides a valid argument in favor of additionality only if it consistently supports (for a realistic range of assumptions)


the conclusion that the project activity is unlikely to be the most financially attractive (as per step 2c para 8a) or is unlikely to be financially attractive (as per step 2c para 8b).

It is expected that there could be a possible 10% generation difference (both on the higher as well as lower side) during the normal operational life of the project. Thus sensitivity analysis has been carried out at 18% and 22% PLF to check the robustness of the financial model. The financial model has been developed on the basis of 20% PLF (as assumed by MERC for deciding the tariff of wind energy projects in the state of Maharashtra). The investor with the highest individual project IRR of 7.66% was selected for the sensitivity analysis as shown below:

The below calculations are without consideration of CDM revenues:

Plant Load Factor Project IRR (Post Tax)

18% 6.54%

22% 8.78%

It is clearly evident that the project returns are below the benchmark and thus additional support through CDM revenues is required for the project.

Step 4. Common practice analysis Sub-step 4a. Analyze other activities similar to the proposed project activity: 1. Provide an analysis of any other activities implemented previously or currently underway that are

similar to the proposed project activity. Projects are considered similar if they are in the same country/region and/or rely on a broadly similar technology, are of a similar scale, and take place in a comparable environment with respect to regulatory framework, investment climate, access to technology, access to financing, etc. Other CDM project activities are not to be included in this analysis. Provide quantitative information where relevant.

Sub-step 4b. Discuss any similar options that are occurring: 2. If similar activities are widely observed and commonly carried out, it calls into question the claim

that the proposed project activity is financially unattractive (as contended in Step 2) or faces barriers (as contended in Step 3). Therefore, if similar activities are identified above, then it is necessary to demonstrate why the existence of these activities does not contradict the claim that the proposed project activity is financially unattractive or subject to barriers. This can be done by comparing the proposed project activity to the other similar activities, and pointing out and explaining essential distinctions between them that explain why the similar activities enjoyed certain benefits that rendered it financially attractive (e.g., subsidies or other financial flows) or did not face the barriers to which the proposed project activity is subject.

3. Essential distinctions may include a serious change in circumstances under which the proposed CDM project activity will be implemented when compared to circumstances under which similar projects where carried out. For example, new barriers may have arisen, or promotional policies may have ended, leading to a situation in which the proposed CDM project activity would not be implemented without the incentive provided by the CDM. The change must be fundamental and verifiable.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 24 Investment by private sector in electricity generation is not mandatory in India. Typically wind energy projects are being implemented in 8 states of India wherein additional support is extended by the state governments (in the form of preferential tariffs) and accelerated depreciation benefits are provided by the federal government of India. India being the only country with a special ministry for promotion of renewable and non-conventional technologies, such efforts / promotional benefits are offered to private investors for more than 15 years now. The major investment started happening in this sector with the eligibility of projects for possibility of additional revenue stream under the present Kyoto regime through CDM registration. The project was implemented in the financial year 2005-06. The total installed capacity for electricity generation for utilities in Maharashtra at the end of March, 2005 was 13368.59 MW (Source: Table No. 2.3, CEA General Review 2006). Of this, only 411.2 MW (Source: Table No. 2.4, CEA General Review 2006) comprised of wind installations for utilities electricity generation. The total energy available in the state for the same year was 82075.33 GWh (Source: Table No. 5.3, CEA General Review 2006) of which 495.36 GWh (Source: Table No. 5.5, CEA General Review 2006) was contributed by renewable energy sources including wind energy. Thus, contribution from wind energy throughout the entire year was less than 0.6% of the total energy supply to the state of Maharashtra. A comparison of installed capacities of wind generation sources between year 2002 and 2007 indicates that during this period about 1085.5 MW of wind generating capacity was added in Maharashtra (Source: http://www.windpowerindia.com/statyear.html). These installations came during the time when the Government of India ratified the Kyoto Protocol and investors across the country became aware of the additional revenue benefits that could be accrued to them for investment in cleaner technology. Thus, investment in wind energy accelerated in India beginning from year 2002, and project promoters relied on the potential carbon revenue to strengthen the finances and uncertain returns from projects of this nature. To exemplify this statement, we can see that currently, there is approximately 750 MW of wind energy projects from Maharashtra that are in various stages of CDM development and more are expected to follow. Therefore wind power project development is substantially dependent on CDM and thus is not a common practice. It has been observed that the support offered at state / federal level for promotion of wind energy is not sufficient because the tariff fixed by electricity regulatory commissions does not result in a viable proposition due to the higher capital cost of implementation of wind projects (as compared to the cost assumed by regulatory commissions). This has resulted in poor penetration of wind energy projects (except in the coastal state of Tamil Nadu wherein about 3000 MW of wind energy projects have been implemented till date) as compared to other states in India (with definite wind potential). Sub-steps 4a and 4b are satisfied. The financial analysis carried out for the project as well as the practical situation in the state of Maharashtra clearly justify that neither the projects are able to provide necessary returns to the investors nor the implementation of wind energy installations has become a common practice in the state of Maharashtra.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 25 B.6. Emission reductions:

B.6.1. Explanation of methodological choices:>>

According to the approved consolidated baseline methodology ACM0002 Version 7, the emission reductions ERy by the project activity during a given year “y1” is

ERy = BEy – PEy – Ly……………….(1)

Where,

BEy is the baseline emissions

PEy is project activity emissions and;

Ly is the amount of emissions leakage resulting from the project activity.

Baseline emissions for the amount of electricity supplied by project activity, BEy, is calculated as

BEy = EGy * EFy ………………….(2)

Where,

EGy is the amount of electricity supplied by the project to the grid, and

EFy is the CO2 emissions factor of the grid as calculated below. Calculation of Baseline Emission Factor

The baseline emission coefficient for wind power projects could be either of the following:

(a) A combined margin (CM), consisting of the combination of operating margin (OM) and build margin (BM) according to the procedures prescribed in the ‘Tool to calculate the emission factor for an electricity system’

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. We have used option (a) Combined Margin consisting of operating margin (OM) and build margin (BM) according to the procedures prescribed in “Tool to calculate the emission factor for an electricity system” version 01, as the applicable emission coefficient for determining baseline emissions. According to the tool the baseline emission coefficient will be determined using the following steps: STEP 1. Identifying the relevant electric power system The Indian electricity system is divided into two regional grids, viz. NEWNE and Southern. Each grid covers several states. As the regional grids are interconnected, there is inter-state and inter-regional exchange. A small power exchange also takes place with neighbouring countries like Bhutan and Nepal. 1 Throughout the document, the suffix y denotes that such parameter is a function of the year y, thus to be monitored at least annually.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 26 Power generation and supply within the regional grid is managed by Regional Load Dispatch Centre (RLDC). The Regional Power Committees (RPCs) provide a common platform for discussion and solution to the regional problems relating to the grid. Each state in a regional grid meets its demand with its own generation facilities and also with allocation from power plants owned by the Central Sector such as NTPC and NHPC etc. Specific quotas are allocated to each state from the Central Sector power plants. Depending on the demand and generation, there are electricity exports and imports between states in the regional grid. The regional grid thus represents the largest electricity grid where power plants can be dispatched without significant constraints and thus, represents the “project electricity system” for the Project. As the Project is connected to the NEWNE regional electricity grid, the NEWNE grid is the “project electricity system”. STEP 2. Select an operating margin (OM) method According to the tool the calculation of the operating margin emission factor is based on one of the following methods:

(a) Simple OM, or (b) Simple adjusted OM, or (c) Dispatch data analysis OM, or (d) Average OM.

Any of the four methods can be used, however, the simple OM method (option a) can only be used if low cost/must-run resources

constitute less than 50% of total grid generation in: 1) average of the five most

recent years, or 2) based on long-term averages for hydroelectricity production. The Share of Low Cost / Must-Run (% of Net Generation) in the generation profile of the different grids in India in the last five years is as follows:

Share of Must-Run (Hydro/Nuclear) (% of Net Generation) 2005-06 2006-07 2007-08 NEWNE 18.0% 18.5% 19.0% South 27.0% 28.3% 27.1%

Source: CO2 Baseline Database Version 4 for the Indian Power Sector – Central Electricity Authority The above data clearly shows that the percentage of total grid generation by low cost/must run plants (on the basis of average of five most recent years) for the NEWNE regional grid is less than 50 % of the total generation. Hence the Simple OM method can be used to calculate the Operating Margin Emission factor.

STEP 3. Calculate the operating margin emission factor according to the selected method

The simple OM emission factor is calculated as the generation-weighted average CO2 emissions per unit net electricity generation (tCO2/MWh) of all generating power plants serving the system, not including low-cost / must-run power plants / units. It may be calculated:

• Based on data on fuel consumption and net electricity generation of each power plant / unit (Option

A), or • Based on data on net electricity generation, the average efficiency of each power unit and the fuel

type(s) used in each power unit (Option B), or • Based on data on the total net electricity generation of all power plants serving the system and the

fuel types and total fuel consumption of the project electricity system (option C)

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 27 The CEA, Ministry of Power, Government of India has published a database of Carbon Dioxide Emission from the power sector in India based on detailed authenticated information obtained from all operating power stations in the country. This database i.e. The CO2 Baseline Database provides information about the Combined Margin Emission Factors of all the regional electricity grids in India. The Combined Margin in the CEA database is calculated ex ante using the guidelines provided by the UNFCCC in the “Tool to calculate the emission factor for an electricity system”. We have, therefore, used the Combined Margin data published in the CEA database Version 4, for calculating the Baseline Emission Factor. The CEA database uses the option B i.e. data on net electricity generation, the average efficiency of each power unit and the fuel type(s) used in each power unit, to calculate the OM of the different regional grids. The simple OM emission factor is calculated based on the electricity generation of each power unit and an emission factor for each power unit, as follows:

EFgrid,OMsimple,y = Σ (EGm,y x EFEL,m,y) / ΣEGm,y Where:

EFgrid,OMsimple,y is the simple operating margin CO2 emission factor in year ‘y’ (tCO2/MWh) EGm,y is the net quantity of electricity generated and delivered to the grid by power unit ‘m’ in year ‘y’ (MWh) EFEL,m,y is the CO2 emission factor of power unit ‘m’ in year ‘y’ (tCO2/MWh) m is all power units serving the grid in year ‘y’ except low-cost / must-run power units y is either the three most recent years for which data is available at the time of submission of the CDM PDD to the DOE for validation (ex ante option) or the applicable year during monitoring (ex post option), following the guidance on data vintage in step 2.

The emission factor of each power unit m has been determined using Option B1.

EFEL,m,y = (Σ FCi,m,y x NCVi,y x EFCO2,I,y ) / EGm,y Where:

EFEL,m,y is the CO2 emission factor of power unit ‘m’ in year ‘y’ (tCO2/MWh) FCi,m,y is the amount of fossil fuel type ‘i’ consumed by power unit ‘m’ in year ‘y’ (Mass or volume unit) NCVi,y: is the net calorific value (energy content) of fossil fuel type ‘i’ in year ‘y’ (GJ / mass or volume unit) EFCO2,I,y: is the CO2 emission factor of fossil fuel type ‘i’ in year ‘y’ (tCO2/GJ) EGm,y: is the net quantity of electricity generated and delivered to the grid by power unit ‘m’ in year ‘y’ (MWh) m: is all power units serving the grid in year ‘y’ except low-cost / must-run power units i: is all fossil fuel types combusted in power unit ‘m’ in year ‘y’ y: is either the three most recent years for which data is available at the time of submission of the CDM-PDD to the DOE for validation (ex ante option) or the applicable year during monitoring (ex post option), following the guidance on data vintage in step 2

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 28 As mentioned earlier, Operating Margin in the CEA database has been calculated using the Simple OM method. We have therefore considered the OM numbers provided in the CEA database. Operating margin data for the NEWNE electricity grid for the latest three years available in the CEA database are given below:

Year Operating Margin (t CO2e/MWh)

2005 – 06 1.02 2006 – 07 1.01 2007 – 08 1.00 Average of 3 years 1.01

The Operating Margin applicable for the project activity is taken as average of the latest three years operating margins. Accordingly the Operating Margin is determined as 1.01 tCO2e/MWh and this value of OM has been fixed ex-ante for the entire crediting period for the project activity.

STEP 4. Identify the cohort of power units to be included in the build margin The sample group of power units ‘m’ used to calculate the build margin consists of either:

(a) The set of five power units that have been built most recently, or (b) The set of power capacity additions in the electricity system that comprise 20% of the system

generation (in MWh) and that have been built most recently. Project participants should use the set of power units that comprises the larger annual generation. Accordingly, the CEA database calculates the build margin as the average emissions intensity of the 20% most recent capacity additions in the grid based on net generation. The build margin emission factor has been calculated ex-ante based on the most recent information available on units already built for sample group m at the time of CDM-PDD submission to the DOE for validation. This option does not require monitoring the emission factor during the crediting period. STEP 5. Calculate the build margin emission factor The build margin emissions factor is the generation-weighted average emission factor of all power units m during the most recent year y for which power generation data is available, calculated as follows:

EFgrid,BM,y = (Σ EGm,y x EFEL,m, ) / Σ EGm,y Where:

EFgrid,BM,y is the build margin CO2 emission factor in year ‘y’ (tCO2/MWh) EGm,y is the net quantity of electricity generated and delivered to the grid by power unit ‘m’ in year ‘y’ (MWh) EFEL,m,y is the CO2 emission factor of power unit ‘m’ in year ‘y’ (tCO2/MWh) m is power units included in the build margin y is the most recent historical year for which power generation data is available

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 29 The CO2 emission factor of each power unit m (EFEL,m,y) is determined as per the procedures given in step 3 (a) for the simple OM, using options B1 using for y the most recent historical year for which power generation data is available, and using for m the power units included in the build margin. STEP 6. Calculate the combined margin emissions factor

Combined Margin Emission Factor

As already mentioned, the baseline emission factor (EFy) of the grid is calculated as a combined margin (CM), calculated as the weighted average of the operating margin (OM) and build margin (BM) factor. In case of wind power projects default weights of 0.75 for EFOM and 0.25 for EFBM are applicable as per “Tool to calculate the emission factor for an electricity system” version 01. No alternate weights are proposed.

Using the values for operating margin and build margin emission factors for NEWNE regional electricity grid provided in the CEA database and their respective weights for calculation of combined margin emission factor, the baseline carbon emission factor (CM) is 906.18 tCO2e/GWh or 0.90618 tCO2e/MWh.

Project Emissions:

The project activity uses wind power to generate electricity and hence the emissions from the project activity are taken as nil.

PEy = 0

Leakage:

The project activity is a green field power wind power generation facility and the energy generating equipment used in the project activity has not been transferred from any other activity. Hence, leakage on account of this project activity is negligible and is ignored. Ly = 0

B.6.2. Data and parameters that are available at validation: Data / Parameter: EFOM,y Data unit: t CO2e/MWh Description: Operating Margin Emission Factor of the NEWNE Regional Electricity Grid Source of data used: “CO2 Baseline Database for Indian Power Sector” published by the Central Electricity

Authority, Ministry of Power, Government of India, version 4.0 dated 25 September 2008. The “CO2 Baseline Database for Indian Power Sector” is available at www.cea.nic.in

Value applied:

Year Operating Margin (t CO2e/MWh)

2005 – 06 1.02 2006 – 07 1.01 2007 – 08 1.00

Justification of the

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 30 choice of data or description of measurement methods and procedures actually applied :

Operating Margin Emission Factor has been calculated by the Central Electricity Authority using the simple OM approach in accordance with “Tool to calculate the emission factors for an electricity system”.

Any comment:

Data / Parameter: EFBM,y Data unit: t CO2e/MWh Description: Build Margin Emission Factor of NEWNE Regional Electricity Grid Source of data used: “CO2 Baseline Database for Indian Power Sector” published by the Central Electricity

Authority, Ministry of Power, Government of India, version 4.0. The “CO2 Baseline Database for Indian Power Sector” is available at www.cea.nic.in

Value applied: 2006 – 07 0.5977

Justification of the choice of data or description of measurement methods and procedures actually applied :

Build Margin Emission Factor has been calculated by the Central Electricity Authority in accordance with “Tool to calculate the emission factors for an electricity system”.

Any comment: B.6.3 Ex-ante calculation of emission reductions: >>

Ex-ante calculation of emission reductions is equal to ex-ante calculation of baseline emissions as project emissions and leakage are nil. Baseline emission factor (combined margin) = 0.90618 t CO2e/MWh Annual electricity supplied to the grid by the Project = 38.75 MW (Capacity) x 20% (PLF) x 8760 (hours) / 1000 GWh = 67.89 GWh Annual baseline emissions = 906.18 t CO2e/GWh x 67.89 GWh = 61,520 t CO2e

B.6.4 Summary of the ex-ante estimation of emission reductions: >>


Years

Estimation of project activity

emissions (t CO2e)

Estimation of baseline

Emissions (t CO2e)

Estimation of Leakage

(t CO2e)

Estimation of overall

emission reductions (t

CO2e) 01/05/2009 – 30/04/2010 0 61,520 0 61,520 01/05/2010 – 30/04/2011 0 61,520 0 61,520 01/05/2011 – 30/04/2012 0 61,520 0 61,520 01/05/2012 – 30/04/2013 0 61,520 0 61,520 01/05/2013 – 30/04/2014 0 61,520 0 61,520 01/05/2014 – 30/04/2015 0 61,520 0 61,520 01/05/2015 – 30/04/2016 0 61,520 0 61,520 01/05/2016 – 30/04/2017 0 61,520 0 61,520 01/05/2017 – 30/04/2018 0 61,520 0 61,520 01/05/2018 – 30/04/2019 0 61,520 0 61,520

Total (Tonnes of CO2e) 0 615,200 0 615,200 B.7 Application of the monitoring methodology and description of the monitoring plan:

B.7.1 Data and parameters monitored: Data / Parameter: EGy Data unit: MWh (Mega-watt hour) Description: Net electricity supplied to the grid by the Project Source of data to be used:

Electricity supplied to the grid as per the joint meter readings

Value of data applied for the purpose of calculating expected emission reductions in section B.5

Annual electricity supplied to the grid by the Project = 38.75 MW (Capacity) x 20% (PLF) x 8760 (hours) / 1000 GWh = 67.89 GWh

Description of measurement methods and procedures to be applied:

Net electricity supplied to grid will be measured through meter readings of the two-way export meter installed by MSEDCL. The procedures for metering and meter reading will be as per the provisions of the power purchase agreement

QA/QC procedures to be applied:

QA/QC procedures will be as implemented by MSEDCL pursuant to the provisions of the power purchase agreement

Any comment:

B.7.2 Description of the monitoring plan: >> Approved monitoring methodology ACM0002, Version 7, Sectoral Scope 1, “Consolidated monitoring methodology for zero-emissions grid-connected electricity generation from renewable resources” is proposed to be used to monitor the emissions reductions. This approved monitoring methodology monitoring of the following: • Electricity generated from the project activity

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 32 • OM and BM emission factors of the grid, where ex-post determination of grid emission factor has

been chosen. Further, wind based electricity generation is not associated with any kind of leakages. Hence, the sole parameter for monitoring is the electricity supplied to the grid. The Project is operated and managed by Suzlon Wind-farms Services Limited. Being an ISO certified organization, they follow the documentation practices to ensure the reliability and availability of the data for all the activities as required from the identification of the site, wind resource assessment, logistics, finance, construction, commissioning and operation of the wind power project. The accuracy of monitoring parameter is ensured by adhering to the calibration and testing procedure as set in the power purchase agreement. The project will adhere to all the mandatory regulatory and statutory requirements at the state as well as national level. The operational and management structure implemented by Resurge and Suzlon is as follows:

The authority and responsibility of project registration and overall project management lies with the CDM coordinator, Resurge. B.8 Date of completion of the application of the baseline study and monitoring methodology and the name of the responsible person(s)/entity(ies) >> The baseline study and application of baseline methodology was completed on 10/09/2008. Resurge and their consultants have determined the application of baseline methodology for the identified CDM project. Resurge is not a project participant for this project activity, however Resurge has been duly authorized by the individual investors to take up the CDM project development and due diligence and will be responsible for all communications with CDM-EB and Secretariat. The contact details for Resurge are mentioned in Annex I of this document.

Site Manager / Supervisor

Service Engineers Machine Operators

Suzlon Infrastructure Services Limited Customer Relations Manager

Resurge CDM Coordinator

Monitor, Record, Report and Archive Data

Collection of monitoring data, reviewing and forwarding data to CDM Coordinator

Internal Audit, Review, Corrective Action

Suzlon O & M Team

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 33 SECTION C. Duration of the project activity / crediting period C.1 Duration of the project activity: C.1.1. Starting date of the project activity: >> The starting date of the project activity is March 18, 2005, being the date of placement of the first purchase order in the bundled project activity. The CDM revenue consideration is discussed in Section B.4. C.1.2. Expected operational lifetime of the project activity: >> The expected operational lifetime of the project activity is 20 years and 0 months. C.2 Choice of the crediting period and related information: The project activity will use a fixed crediting period. C.2.1. Renewable crediting period C.2.1.1. Starting date of the first crediting period: >> N/A C.2.1.2. Length of the first crediting period: >> N/A C.2.2. Fixed crediting period: C.2.2.1. Starting date: >> 01/05/ 2008 or date of registration with UNFCCC (whichever is later). C.2.2.2. Length: >>10 years and 0 months SECTION D. Environmental impacts >> D.1. Documentation on the analysis of the environmental impacts, including transboundary impacts: >> Schedule 1 of Ministry of Environment and Forests (Government of India) notification dated January 27, 1994 and EIA Notification (S.O 1533) dated 14th September 2006, provides a list of activities that are

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 34 required to undertake environmental impact assessment1. EIA is not a regulatory requirement in India for wind energy projects. D.2. If environmental impacts are considered significant by the project participants or the host Party, please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party: >> The environmental impacts from the proposed CDM project activity are not considered significant and there are no trans-boundary impacts of the proposed CDM project activity. SECTION E. Stakeholders’ comments >> E.1. Brief description how comments by local stakeholders have been invited and compiled: >> The stakeholder meeting for the project has been carried out at 3 locations essentially covering the complete set of installations in the candidate CDM project. The procedure adopted for obtaining the comments is as follows: 1. Submission of meeting notification to respective village representative, Sarpanch, through the on site supervisory team of Resurge. 2. Discussions for finalization of the date of meeting based on mutual availability of village governing council members and villagers and the representative of the project proponent. 3. On the day of meeting - Presentation by the representative of Resurge about the technology and project in general - Handing over the questionnaire to the villagers and governing council members - Explanations of questions and collection of responses - Discussion of any other issues raised by the general public present at site - Recording minutes of meeting E.2. Summary of the comments received: >> The installations of WTGs in this area are being carried out since the year 2003-04 and it has been observed that the villagers were aware about the complete process of wind installations and allied activities. Few of the villagers were also aware about the CDM procedures and the possibility of additional revenue stream to the project proponent. Minutes of the meeting carried out in all three districts will be provided during validation. There were no specific comments made by the villagers except the following:

- The right of way for usage of land around the site should remain as it is and people / villagers will continue to use it for general purpose and cattle grazing during monsoon season.

- Villagers expect more number of jobs / preferential job opportunities for them - Villagers have sought confirmation that the project will not disturb the rainfall pattern in

the area. 1 http://envfor.nic.in/divisions/iass/notif/eia.htm

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. CDM – Executive Board page 35 E.3. Report on how due account was taken of any comments received: >> It was confirmed by the supervisory team from Resurge as well as the project proponent that:

- The villagers will continue to use the area around wind installations for their general purposes.

- The project proponent will provide preferential opportunities to local community based on their skills and ability.

- The wind installations do not disturb the rainfall / clouds. The project proponent agreed to provide scientific data to the village governing council.


Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY Organization: Resurge Energy Private LimitedStreet/P.O.Box: 2, Shantivan - 1/A, Building: Raheja Township, Malad (East) City: Mumbai State/Region: Maharashtra Postcode/ZIP: 400 097 Country: India Telephone: +91-22-2879 3686 FAX: +91-22-2879 8636 E-Mail: [email protected]; [email protected] URL: www.resurgegroup.com Represented by: Jayesh H. Savalia Title: Director Salutation: Mr. Last Name: Savalia Middle Name: H. First Name: Jayesh Department: Mobile: +91-9833533141 Direct FAX: Direct tel: Personal E-Mail: [email protected]


Annex 2

INFORMATION REGARDING PUBLIC FUNDING

There is no Overseas Development Assistance being diverted into the project activity.


Annex 3

BASELINE INFORMATION

The Operating Margin data for the most recent three years and the Build Margin data for the NEWNE Region Electricity Grid as published in the CEA database are as follows: Grid Emission Factors2: The Operating Margin data for the most recent three years and the Build Margin data for the NEWNE Region Electricity Grid as published in the CEA database Version 4 are as follows:

Simple Operating Margin

NEWNE Grid (t CO2e/GWh) Simple Operating Margin - 2004-05 1.02 Simple Operating Margin - 2005-06 1.01 Simple Operating Margin - 2006-07 1.00 Average Operating Margin of last three years 1.01

Build Margin

NEWNE Grid (t CO2e/GWh)

Build Margin .5977

Combined Margin Calculations

NEWNE Grid (t CO2e/GWh) Combined Margin .90618

Annex 4

2 Baseline Carbon Dioxide Emissions from Power Sector, Baseline Carbon Dioxide Emission Database Version 4.0 on http://cea.nic.in


MONITORING INFORMATION

The general conditions set out for metering, recording, meter readings, meter inspections, Test & Checking and communication are as per the with MSEDCL. Metering: The delivered energy is metered by MSEDCL and Suzlon at the low voltage side of the step up transformer installed at the Project Site. Metering Equipment: Metering equipment is electronic trivector meter of accuracy class 0.2% required for the Project. The metering equipment is maintained in accordance with electricity standards. The meter has the capability of recording hourly and monthly readings. The meter installed is capable of recording and storing half hourly readings of all the electrical parameters for a minimum period of 90 days with digital output. Meter Readings: The monthly meter reading will be taken jointly by the MSEDCL and Suzlon in the first week of the following month. At the conclusion of each meter reading an appointed representative of the MSEDCL and Suzlon sign a document indicating the number of kWh indicated by the meter. The net energy sent out by each project owner shall be taken from the credit note published by MSEDCL. The credit note details the energy supplied to grid, energy intake from the grid and the net energy supplied to the grid for each project owner. Inspection of Energy Meters: The main meters (export and import) and all associated instruments (CTPT) installed at the Project shall be of 0.2% accuracy class. Each meter is jointly inspected and sealed on behalf of MSEDCL and Suzlon. Meter Test Checking : The meter is tested for accuracy annually with reference to a portable standard meter which is of an accuracy class of 0.1%. The portable standard meter is owned by the MSEDCL at its own cost and tested and certified from an accepted laboratory standard meter in accordance with electricity standards. The meters are deemed to be working satisfactorily if the errors are within specifications i.e. + 0.5 %. The consumption registered by the meter will hold good for the purpose of billing as long as the error in the main meter is within the permissible limits. If during the tests, the meter is found to be beyond the permissible limits of error, the meter shall be immediately calibrated and the correction applied to the reading registered by the meter to arrive the correct reading of energy supplied for billing purposes for the period from the last month’s meter reading up to the current test. Billing for the period thereafter till the next monthly reading shall be as per the calibrated meter. The detailed location of substations and feeders to which all the WTGs under this project activity are connected to is given on the next page:


Location with Feeders and Sub Station Details

Sr.No. Loc. No. Company Name Site Section Feeder No Sub Station

1 G227 Dharmanandan Diamonds Pvt. Ltd Sangli Sangli-I (Kundlapur) Savlaj 33 KV Savlaj

2 G228 Dharmanandan Diamonds Pvt. Ltd Sangli Sangli-I (Kundlapur) Savlaj 33 KV Savlaj

3 K115 Dharmanandan Diamonds Pvt. Ltd Dhule Dhule-I (Khori-Titane) Jamde 12 220 KV Jamde

4 J031 Goldstar Jewellery Ltd. Dhule Dhule V (Phopade) Jamde 14 220 KV Jamde

5 G051 Goldstar Jewellery Pvt. Ltd. Sangli Sangli-II (Ghatnandre) Ghatnandre FeederVII

220 KV Ghatnandre

6 K062 Kiran Gems Pvt. Ltd. Dhule Dhule-I (Khori-Titane) Jamde 12 220 KV Jamde

7 K076 Kiran Gems Pvt. Ltd. Dhule Dhule-I (Khori-Titane) Jamde 12 220 KV Jamde

8 K251 Syntex Corporation Pvt. Ltd. Dhule Dhule-III (Aamkhel) Valve 1 220 KV Valve

9 K348 Tanaya Gems & Jewellery Exports Ltd. Dhule Dhule II (Chakala) Jamde 8 220 KV Jamde

10 K150 Abhishek Export (India) Pvt. Ltd. Dhule Dhule-I (Khori-Titane) Jamde 12 220 KV Jamde

11 K200 Abhishek Export (India) Pvt. Ltd. Dhule Dhule-I (Khori-Titane) Jamde 11 220 KV Jamde

12 G044 Abhishek Export (India) Pvt. Ltd. Sangli Sangli-II (Ghatnandre) Ghatnandre FeederVI 220 KV Ghatnandre

13 K430 Abhishek Export (India) Pvt. Ltd. Dhule Dhule-II (Chakala) Jamde 16 220 KV Jamde

14 G312 Abhishek Export (India) Pvt. Ltd. Sangli Sangli-IV (Jarandi) Ghatnandre Feeder III

220 KV Ghatnandre

15 K275 Abhishek Export (India) Pvt. Ltd. Dhule Dhule-III (Aamkhel) Valve 1 220 KV Valve

16 K481 Sahastra Propoerties Pvt. Ltd. Dhule Dhule-II (Chakala) Jamde 16 220 KV Jamde

17 K482 Sahastra Propoerties Pvt. Ltd. Dhule Dhule-II (Chakala) Jamde 16 220 KV Jamde

18 K422 J. B. Diamonds Ltd Dhule Dhule-II (Chakala) Jamde 16 220 KV Jamde



Location with Feeders and Sub Station Details

Sr.No. Loc. No. Company Name Site Section Feeder No Sub Station


21 K399 J. B. Diamonds Ltd Dhule Dhule-VI (Aakhatwada) Jamde 8 220 KV Jamde

22 G306 Famy Care Ltd. Sangli Sangli-IV (Jarandi) Ghatnandre Feeder III

220 KV Ghatnandre

23 K411 C Dinesh & Co Pvt Ltd. Dhule Dhule-VI (Aakhatwada) Jamde 8 220 KV Jamde

24 G64 Khanna Industrial Pipes Pvt. Ltd. Sangli Sangli-II (Ghatnandre) Ghatnandre FeederVII

220 KV Ghatnandre

25 G7 Jewelex India Pvt Ltd. Sangli Sangli-II (Ghatnandre) Ghatnandre Feeder V 220 KV Ghatnandre

26 G11 B D K Marketing Services Ltd. Sangli Sangli-II (Ghatnandre) Ghatnandre Feeder V 220 KV Ghatnandre

27 G305 Jewelex India Pvt Ltd. Sangli Sangli-IV (Jarandi) Savlaj 33 KV Savlaj

28 G16 Gandhi Special Tubes Ltd. Sangli Sangli-II (Ghatnandre) Ghatnandre Feeder V 220 KV Ghatnandre

29 K145 Fariyas Hotels Ltd. Dhule Dhule-I (Khori-Titane) Jamde 12 220 KV Jamde

30 K396 Hind Aluminum Ind. Ltd. Dhule Dhule-VI (Aakhatwada) Jamde 15 220 KV Jamde

31 K397 Associated Aluminum Ind. Pvt. Ltd. Dhule Dhule-VI (Aakhatwada) Jamde 15 220 KV Jamde

Documents

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