cirompang

PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) - Version 03

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CLEAN DEVELOPMENT MECHANISM

PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD)

Version 03 - in effect as of: 22 December 2006

CONTENTS

A. General description of the small scale 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 proposed small scale project activity

Annex 2: Information regarding public funding

Annex 3: Baseline information

Annex 4: Monitoring Information


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Revision history of this document

Version Number

Date Description and reason of revision

01 21 January

2003

Initial adoption

02 8 July 2005 The Board agreed to revise the CDM SSC PDD to reflect guidance and clarifications provided by the Board since

version 01 of this document.

As a consequence, the guidelines for completing CDM SSC PDD have been revised accordingly to version 2. The latest

version can be found at

.

03 22 December

2006 The Board agreed to revise the CDM project design

document for small-scale activities (CDM-SSC-PDD), taking

into account CDM-PDD and CDM-NM.


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SECTION A. General description of small-scale project activity

A.1 Title of the small-scale project activity:

8MW Cirompang Mini Hydro Power Plants at Bungbulang, Garut, Indonesia.

Version : 3.1 Date : 29/08/2012

A.2. Description of the small-scale project activity:

The project activity hereinafter referred to as Project is a new 8 MW run-of-river hydroelectric power plant being developed by PT. Tirta Gemah Ripah (TGR) in Garut district, West Java Province, Indonesia.

The purpose of the project activity is generation of clean hydroelectric power and delivery to Jamali Grid.

The project will be constructed on Cirompang River.

The project activity is run-off river project which is taking place in the existing reservoir. The PP has

received approval to use the water for power generation. There will be no modification done by PP in

existing reservoir for use of water for power generation.

The project is expected to generate net electricity of 47471 MWh/year and expected to bring about GHG

emission reductions of approximately 33,847 tCO2e annually. Hence project activity would contribute to

reduction of CO2 emissions that in the absence of the project activity would have otherwise happened by

gird connected fossil fuel plants.

The project complies with the sustainable development criterias of the host country in the following manner:

Environment:

The project activity is a run-of-river hydroelectric power plant. It is a well established technology which

utilizes water for energy generation without depleting it or impacting the natural environment. Since the

project activity generates electricity from renewable source, it avoids emission such as SOx , NOx and

other particulates matter which would have been emitted from the fossil fuel fired plants.

Social:

Project will aid development of social infrastructure in the region such as roads and water supply. Project

will create job opportunities during the construction and operation stage.

Economy:

Project activity will create new jobs both skilled and unskilled for local population. This increase in

employment will stimulate local economy.

Technology:

The project will contribute to development of technological capacity building in the country as the project

will be implemented with local engineers as well as local labour who will work on the construction.

A.3. Project participants:


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Name of Party involved (*)

((host) indicates a host Party)

Private and/or public

entity(ies)

Project participants (*)

(as applicable)

Kindly indicate if the party

involved wishes to be

considered as project

participant (yes/no)

Sweden Nordic Environment Finance

Corporation NEFCO in its

capacity as Fund Manager to the

NEFCO Carbon Fund (NeCF) Public Entity

No

Indonesia (Host) PT. Tirta Gemah Ripah (Public

Entity)

No

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

at the stage of validation, a Party involved may or may not have provided its approval. At the time of

requesting registration, the approval by the Party(ies) involved is required.

The carbon purchaser is the Nordic Environment Finance Corporation NEFCO in its capacity as Fund

Manager to the NEFCO Carbon Fund (NeCF)

NEFCO Carbon Fund (NeCF)

NEFCO, the Nordic Environment Finance Corporation, is a multilateral risk capital institution financing

environmental projects in Central and Eastern Europe, with an emphasis on the Russian Federation and

Ukraine. Its purpose is to facilitate the implementation of environmentally beneficial projects in the

neighbouring region, with transboundary effects that also benefit the Nordic region. Today, NEFCO

manages funds in an aggregate of approximately 470 million. NEFCO is located in Helsinki, Finland.

The NEFCO Carbon Fund (NeCF) was established as a Public Private Partnership in April 2008, to

provide financial assistance to projects by purchasing emission reduction credits from projects under the

JI and CDM mechanisms. The NEFCO Carbon Fund (NeCF) has the Danish Energy Agency, DONG

Energy, Eesti Energia, the Industrialization Fund for Developing Countries (Denmark), Ministries of

Environment and Foreign Affairs of Finland, Etel-Pohjanmaan Voima Oy (Finland), Kymppivoima Oy

(Finland), GDF Suez, the Norwegian Finance Ministry and NEFCO itself, as participants in the fund. The

total available resources are ca. 165 million.

NEFCO is the Fund Manager of the NeCF, and has been authorized by the governments investing in the

NeCF to participate on their behalf in actions leading to the generation, transfer and acquisition of CERs

under Article 12 of the Kyoto Protocol

A.4. Technical description of the small-scale project activity:

A.4.1. Location of the small-scale project activity:

A.4.1.1. Host Party(ies):

Country: Indonesia


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

Province: West Java

A.4.1.3. City/Town/Community etc:

Village: Cihikeu and Bungbulang

Sub District: Bungbulang

District: Garut

A.4.1.4. Details of physical location, including information allowing the

unique identification of this small-scale project activity :

The geographical coordinates of the project site are

o Dam : North Latitude: -7.4505 , East Longitude: +107.6093

o Power House : North Latitude: -7.4762 , East Longitude: +107.6122

.The physical location of plant site is depicted in the map below:


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Figure 1: Location planned in River Cirompang in Countryside Cihikeu & Bubbulang, District

Gaurt

A.4.2. Type and category(ies) and technology/measure of the small-scale project activity:

According to the Appendix B of the simplified modalities and procedures for small-scale CDM project

activities, project activity falls under the Type I Renewable Energy Projects. The project activity exports the generated electricity to the grid and falls in the category I. D -Grid Connected Renewable

Electricity Generation. Following Table details the same :

Term Description

Type Type I, Renewable Energy Projects

Category D, Grid Connected Renewable Electricity Generation

Technology/Measure Renewable energy generation units (hydro) that supply

electricity to a regional grid.

Technology Description:

The project is a runofriver Hydroelectric power plant on Cirompang river with a total installed capacity of 8MW consisting of 4 X 2MW turbines and a net projected output of 47, 471 MWh annually. The

electricity generated will be transmitted to the Jamali grid via 20 kV transmission line. The main

construction structures of the project consist of:

Channel Intake / Weir

Project location


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The water in the river will be diverted by the weir through an opening in the river side (the `intake') into

an open channel.

Line Carrier (headrace) It will channel water from the canal intake (Intake) towards sand trap.

Sand Trap The water drawn from the river usually carries suspension of small particles. This sediment consists of

hard abrasive materials such as sand which can cause significant damage and rapid wear to turbine

runners. To remove this material the water flow will be slowed down in settling basins so that the silt

particles will settle on the basin floor.

Head Pond/Forebay Tank This head pond is not a storage area, it is meant to flood a sufficient area to regulate water current into

Penstock.

Penstock The penstock is like a pipe to convey water from the head pond to the powerhouse.

Power House Here all mechanical equipment such as turbines and generators as well as electrical equipment such

as panels and controllers will be housed.

Turbine and Generator Four 2 MW pelton turbines will be installed. When water flows into the turbine, it turns the blades in the

turbine which spins the generators shaft. Generator will convert the mechanical energy from the turning shaft into electrical energy.

The characteristics of the Turbine used in the project are presented in Table 1 below.

Table 1: Key Turbine Characteristics

Item Parameter Type/value/Unit

Turbines

Type Pelton

Efficiency at Peak 75%

Efficiency at Design Flow 75%

Turbine Speed 1000 m3/s

Manufacturer Jyoti Ltd , Vadodara,

India

Technology Pelton

Generator Key characteristics:

Parameter Unit


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Number 4

Type Synchronous, vertical axis, 3 phases

Rated capacity 2000 kW

Rated frequency 50 Hz

Rated power factor 0.8

Transmission Lines The power generated will be transmitted to the Grid via 20 KV transmission lines.

The Table 2 below highlights Project key Technical Design data and parameters

Table 2: Key Technical Design Data and Parameters

Design Data /Parameters Unit Quantity

Total Installed Capacity MW 8

Installed Capacity of each

Unit

MW 2

Annual Operating hours hours 8760

Capacity Factor % 68.77

Gross Head m 142


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Figure 2: Typical Scheme of run-off river system

In case of emergency, the diesel generators will be used.

Technology transfer and know-how

The installation and commissioning services are from Indonesia only.

The technology employed by the project proponent does not result in GHG emissions and the project does

not cause any negative impacts on the environment. The technology used does not pose any threat to the

environment in comparison to fossil fuel-fired power plants. Therefore the technology is environmentally

safe and sound.

A.4.3 Estimated amount of emission reductions over the chosen crediting period:

Year

Estimation of annual

emission reductions in tonnes

of CO2e

Year 1 (01/03/2013- 28/02/2014) 33,847

Year 2 (01/03/2014-28/02/2015) 33,847

Year 3 (01/03/2015 -29/02/2016) 33,847

Year 4 (01/03/2016 28/02/2017) 33,847

Year 5 (01/03/2017 28/02/2018) 33,847

Year 6 (01/03/2018 28/02/2019) 33,847


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Year 7 (01/03/2019 29/02/2020) 33,847

Year 8 (01/03/2020 28/02/2021) 33,847

Year 9 (01/03/2021 28/02/2022) 33,847

Year 10 (01/03/2022 28/02/2023) 33,847

Total estimated reductions (tonnes

of CO2e) 338,470

Total number of crediting years 10

Annual average of the estimated

reductions over the crediting

period (tCO2e)

33,847

A.4.4. Public funding of the small-scale project activity:

The project will not receive any public funding from Parties included in Annex I of the UNFCCC.

A.4.5. Confirmation that the small-scale project activity is not a debundled component of a

large scale project activity:

According to paragraph 2 of Appendix C1 of the Simplified Modalities and Procedures for Small-Scale

CDM project Activities, the following results into debundling of large CDM project:

A proposed small-scale project activity shall be deemed to be a debundled component of a large project activity if there is a registered small-scale CDM project activity or an application to register another

small-scale CDM project activity:

With the same project participants; In the same project category and technology/measure; Registered within the previous 2 years; and Whose project boundary is within 1 km of the project boundary of the proposed small-scale activity at the closest point.

The project activity is not a de-bundled component of a large project activity as there is no small scale

CDM project activity or an application to register another small-scale CDM project activity by Project

Proponent (PP) in the same project category and technology in the last two years within 1 km of the

project boundary of the proposed small scale project activity.

SECTION B. Application of a baseline and monitoring methodology

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

small-scale project activity:

The project activity uses the following approved baseline and monitoring methodology available at the

UNFCC website2is a small scale project activity and conforms to Appendix B of the simplified modalities

and procedures for small-scale CDM project activities.

1 http://cdm.unfccc.int/EB/Meetings/007/eb7ra07.pdf


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Title Reference Version

Grid connected renewable electricity generation AMS-I D Version 17

Guidance on the Assessment of Investment

Analysis

EB 62 Annex 5 Version 5

Guideline to small-scale CDM Methodologies

(Indicative Simplified Baseline and Monitoring

Methodologies for selected Small Scale CDM

Project Activity Categories)

EB 61 Annex 21 Version 17

Tool to calculate the emission Factor for an

electricity system EB 63 Annex 19 Version 2.2.1

Tool to calculate project or leakage CO2 emission

from fossil fuel consumption

EB 41, Annex 11 Version 2

B.2 Justification of the choice of the project category:

Applicability of AMS I. D:

The project activity utilizes the hydro power for electricity generation, which falls into the category of

renewable energy. The capacity of the proposed project activity is 8 MW which is below 15 MW, the

eligibility limit of 15 MW for a small-scale CDM project activity applies only to the renewable

component. The project activity is in line with the approved methodology AMS. I. D Version 17; specific

features of proposed project and applicability of methodology are discussed below:

Applicability Criteria with AMS-I.D. Project Applicability

1 This methodology comprises renewable energy generation

units, such as photovoltaic, hydro, tidal/wave, wind,

geothermal and renewable biomass:3

(a) Supplying electricity to a national or a regional grid; or

(b) Supplying electricity to an identified consumer facility via national/regional grid

through a contractual arrangement such as

wheeling.

The project activity involves a

renewable energy generation unit

specifically a hydro power unit that

displaces electricity from Jamali

Grid, an electricity distribution

system supplied by fossil-fuel fired

generating units. Thus the project

activity complies with the

applicability criteria.

2

http://cdm.unfccc.int/methodologies/DB/RSCTZ8SKT4F7N1CFDXCSA7BDQ7FU1X

3 Refer to EB 23, annex 18 or the definition of renewable biomass.


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2 Illustration of respective situations under which each of the

methodology (i.e. AMS-I.D, AMS-I.F and AMS-I.A4) applies

is included in Table 2.

Project type AMS-

I.A

AMS-

I.D

AMS-

I.F

1 Project supplies electricity to

a national/regional grid

2 Project displaces grid

electricity consumption (e.g.

grid import) and/or captive

fossil fuel electricity

generation at the user end

(excess electricity may be

supplied to a grid)


an identified consumer

facility via national/regional

grid (through a contractual

arrangement such as

wheeling)


a mini grid5 system where in

the baseline all generators

use exclusively fuel oil

and/or diesel fuel


household users (included in

the project boundary) located

in off grid areas

The project supplies electricity to

Jamali grid. The grid is owned by

PT Perusahaan Listrik Negara

(PLN), a state owned electricity

company of Indonesia. Thus the

project complies with the

applicability criteria of AMS I.D

3 This methodology is applicable to project activities that (a)

install a new power plant at a site where there was no

renewable energy power plant operating prior to the

implementation of the project activity (Greenfield plant); (b)

involve a capacity addition6; (c) involve a retrofit

7 of (an)

The project activity shall install a

new power plant at a site where

there was no renewable energy

power plant operating prior to the

implementation of the project

4 AMS-I.D Grid connected renewable electricity generation, AMS-I.F Renewable electricity generation for

captive use and mini-grid and AMS-I.A Electricity generation by the user

5 The sum of installed capacities of all generators connected to the mini-grid is equal to or less than 15 MW.

6 A capacity addition is an increase in the installed power generation capacity of an existing power plant through: (i)

the installation of a new power plant besides the existing power plant/units, or (ii) the installation of new power

units, additional to the existing power plant/units. The existing power plant/units continue to operate after the

implementation of the project activity.

7 Retrofit (or Rehabilitation or Refurbishment). It involves an investment to repair or modify an existing power

plant/unit, with the purpose to increase the efficiency, performance or power generation capacity of the plant,

without adding new power plants or units, or to resume the operation of closed (mothballed) power plants. A retrofit


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existing plant(s); or (d) involve a replacement8 of (an) existing

plant(s).

activity (Greenfield plant). Thus the

Project Activity complies with the

applicability criteria (a)

4 Hydro power plants with reservoirs that satisfy at least one of

the following conditions are eligible to apply this

methodology:

The project activity is implemented in an existing reservoir with no change in the volume of reservoir;

The project activity is implemented in an existing reservoir, where the volume of reservoir is increased

and the power density of the project activity, as per

definitions given in the Project Emissions section, is

greater than 4 W/m2;

The project activity results in new reservoirs and the power density of the power plant, as per definitions

given in the Project Emissions section, is greater than

4 W/m2.

The project activity is a run off-river and it is implemented in an

existing reservoir. There will be no

change in the volume of the

reservoir. So the proposed project

activity is implemented in the

existing reservoir with no change in

the volume of reservoir. Hence this

condition is applicable to the

project activity.

5 If the new unit has both renewable and non-renewable

components (e.g., a wind/diesel unit), the eligibility limit of

15 MW for a small-scale CDM project activity applies only to

the renewable component. If the new unit co-fires fossil fuel9,

the capacity of the entire unit shall not exceed the limit of

15 MW.

The project activity has no non

renewable component and has

100% renewable component

(Hydro). The capacity of the

proposed project is 8 MW which is

lower than 15 MW, limit set for

small scale project activity. Hence

this condition is applicable.

6 Combined heat and power (co-generation) systems are not

eligible under this category.

There is no Combined heat and

power (co-generation) in the project

activity. Thus the project activity

complies with the applicability

criteria.

7 In the case of project activities that involve the addition of

renewable energy generation units at an existing renewable

power generation facility, the added capacity of the units

The project activity does not that

involve the addition of renewable

energy generation units at an

existing renewable power

restores the installed power generation capacity to or above its original level. Retrofits shall only include measures

that involve capital investments and not regular maintenance or housekeeping measures.

8 Replacement. It involves investment in a new power plant or unit that replaces one or several existing unit(s) at the

existing power plant. The installed capacity of the new plant or unit is equal to or higher than the plant or unit that

was replaced.

9 A co-fired system uses both fossil and renewable fuels.


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added by the project should be lower than 15 MW and should

be physically distinct10

from the existing units. generation facility. Hence this

condition is not applicable to the

project activity.

8 In the case of retrofit or replacement, to qualify as a small-

scale project, the total output of the retrofitted or replacement

unit shall not exceed the limit of 15 MW.

The project activity does not seek

to any retrofit or replacement.

Hence this condition is not

applicable to the project activity.

Summary: It can be concluded based from the above discussion that the project activity meets the

applicability criteria of approved small scale methodologies AMS I.D

B.3. Description of the project boundary:

According to the paragraph 9 of the small scale methodology AMS-I.D. Version 17 The spatial extent of the project boundary includes the project power plant and all power plants connected physically

to the electricity system11

that the CDM project power plant is connected to. For the project activity, the generated electricity of the project will be delivered to the Jamali Grid, and the auxiliary internal power

consumption of hydropower plants is also contained in the project boundary. Also in case of emergency,

the diesel generators will be used and it comes under project boundary. A general schematic view of the

boundaries is shown in figure below.

10 Physically distinct units are those that are capable of generating electricity without the operation of existing units,

and that do not directly affect the mechanical, thermal, or electrical characteristics of the existing facility. For

example, the addition of a steam turbine to an existing combustion turbine to create a combined cycle unit would not

be considered physically distinct.

11 Refer to the latest approved version of the Tool to calculate the emission factor for an electricity system for definition of an electricity system.


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Table 3 below Summary of gases and sources included in the project boundary, and justification

explanation where gases and sources are not included:

Scenario Source Gas Included/

Excluded

Justification/Explanation

Baseline

scenario

Electricity

Delivered to the

grid by the

CO2 Included Main Emission Source.

N2O Excluded Not Significant. Excluded for simplification and

conservativeness.

Existing reservoir

Tunnel

Penstock

Power house

Transformer

Jamali Grid

Diesel Generator (In case of

emergency, it will be used)

Project boundary

CO2 emission

from diesel

generator


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project activity

that otherwise

would have

been generated

by the operation

of grid

connected

power plants

and by the

addition of new

generation

sources.

CH4 Excluded Not Significant. Excluded for simplification and

conservativeness.

Project

activity

Emissions

associated with

the operation of

the project

CO2 Included Emission from the diesel generator.

N2O Excluded Not Significant. Excluded for simplification and

conservativeness.

CH4 Excluded Not Significant. Excluded for simplification and

conservativeness.

B.4. Description of baseline and its development:

Baseline Scenario:

As per applicable methodology AMS I. D version 17, EB 61 paragraph 10 : the baseline scenario is that

the 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 into the grid.

Hence in the project scenario the electricity delivered to the Jamali 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 into the grid.

Data used to determine the baseline emissions:

The Emission Factor is calculated in a transparent and conservative manner as follows:

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, version 2.2.1, EB 63 Annex 19.

The Directorate General Electricity and Energy Utilization (DJLPE, Direktorat Jenderal Listrik dan

Pemanfaatan Energi), a government institution has issued an official baseline emission factor for the

Jamali grid which is available from.

http://pasarkarbon.dnpi.go.id/web/index.php/komnasmpb/read/20/faktor-emisi-jaringan-listrik-jawa-

madura-bali-jamali-2010-.html

The calculation method opted for expost grid emission factor is as per Tool to calculate the Emission Factor for an electricity system, version 2.2.1, EB 63 Annex 19 is presented in Annex 3 of the PDD.


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The parameters considered in the baseline calculation as presented in table below:

Parameter Unit Description Source of data to

be used

EGBL,y MWh Net electricity supplied to the grid Electricity meter

EFgrid,CM,y tCO2/MWh Combined margin CO2 emission factor

for grid connected power generation in

year y

As published by

Host Country

DNA

EFgrid,BM,y tCO2/MWh Build margin CO2 emission factor for

grid connected power generation in year

As published by

Host Country

DNA

EFgrid,OM,y tCO2/MWh Operating margin CO2 emission factor

for grid connected power generation in

year

As published by

Host Country

DNA

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 small-scale CDM project activity:

The project activity is additional as per the options provided under Non-binding best practice examples to demonstrate additionality for SSC project activities.

According to the Non-binding best practice examples to demonstrate additionality for SSC project

activities (EB 35, Annex 34):

a. Project participants shall provide an explanation to show that the project activity would not have occurred anyway due to at least one of the following barriers: Investment barrier: a financially

more viable alternative to the project activity would have led to higher emissions;

b. Access-to-finance barrier: the project activity could not access appropriate capital without

consideration of the CDM revenues

c. Technological barrier: a less technologically advanced alternative to the project activity involves lower risks due to the performance uncertainty or low market share of the new technology

adopted for the project activity and so would have led to higher emissions

d. Barrier due to prevailing practice: prevailing practice or existing regulatory or policy requirements would have led to implementation of a technology with higher emissions

e. Other barriers: without the project activity, for another specific reason identified by the project participant, such as institutional barriers or limited information, managerial resources,

organizational capacity, financial resources, or capacity to absorb new technologies, emissions

would have been higher.

Among the multiple barriers identified in the implementation of the project activity, the investment

barrier analysis is used to demonstrate the financial non-viability of the project activity in a conservative

and transparent manner. The project activity involves high investment cost. The returns generated from

the project activity are low and hence the CDM funds are considered essential for improving the returns

generated from the project.

Investment barrier


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The investment barrier has been demonstrated in accordance with the Non-binding best practice examples

to demonstrate additionality for SSC project activities provided by CDM EB in its 35th Meeting (Annex

34), which states under investment barrier, Best practice examples include but are not limited to, the application of investment comparison analysis using a relevant financial indicator, application of a

benchmark analysis or a simple cost analysis (where CDM is the only revenue stream such as end-use

energy efficiency).

From the above three best practice options under Investment Barrier, the project proponent has chosen to

demonstrate additionality using benchmark analysis because the baseline scenario for the project activity

is be the electricity import from Jamali grid, for which no investment is required by the Project

Participant. Hence, benchmark approach is best suited approach for PP. This is based on the reference to

the Guidance 19 of Annex 5 of EB 62, "The benchmark approach is therefore suited to circumstances

where the baseline does not require investment or is outside the direct control of the project developer,

i.e. cases where the choice of the developer is to invest or not to invest." This analysis has been selected

and conducted in accordance with the Guidance on the Assessment of Investment Analysis (Version 05) (EB-62, Annex 5). As per the guidance, the most suitable financial indicator for the project activity is

determined to be the project IRR

Selection of Benchmark:

In accordance with the EB Guidance on the assessment of investment analysis (EB-62, Annex 05) Local commercial lending rates or weighted average costs of capital (WACC) are appropriate benchmarks for a project IRR.

In line with the Guidelines on the Assessment of Investment Analysis, EB62 - Weighted average cost of

capital (WACC) is an appropriate benchmark for project IRR. Steps to calculate WACC are detailed

below:

WACC = E *Re + D*Rd*(1-Tc)

V V

where:

WACC: Weighted average cost of capital (%)

E/V : Percentage of financing that is equity (%).

D/V: Percentage of financing that is by debt (%).

Re : Cost of equity

Rd: Cost of debt

Tc: Tax rate

Cost of equity is calculated using CAPM Model as detailed below:

Re = krf + Rp *

where:

krf : Risk free rate

Rp : Market Risk Premium

: Beta of industry

Applicable data used to calculate WACC at the time of decision making is listed in table below:


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Parameter Value Source

E/V 30% Based on the FSR which provides the typical debt/equity finance

structure observed in the hydro power sector of Indonesia, which

is line with the para 18 of the Guidance on the Assessment of Investment Analysis, Version 05, EB 62, Annex 5

D/V 70% Based on the FSR which provides the typical debt/equity finance

structure observed in the hydro power sector of Indonesia, which

is line with the para 18 of the Guidance on the Assessment of Investment Analysis, Version 05, EB 62, Annex 5.

Re 53.96% Calculated based on the formula : Re = krf + Rp *

Rd 13.00% Based on the Feasibility Study Report which provides the lending

rate observed for debt financing which is in line with the

Guidance on the Assessment of Investment Analysis, Version 05, EB 62, Annex 5.

Tc 28% Government Regulation No.17, Year 2000, Clausal No.17, which

is in line with the Guidance on the Assessment of Investment Analysis, Version 05, EB 62, Annex 5.

krf 8.71% http://www.idx.co.id/Portals/0/StaticData/Publication/BondBook/

FileDownload/INDONESIA%20BOND%20MARKET%20DIRE

CTORY%202011.pdf

Bonds published in the year 2010 which have a maturity period of

10 or more which is in line with the Guidance on the Assessment of Investment Analysis, Version 05, EB 62, Annex 5.

Rp 17.69% Calculated (Market return krf). The market return is calculated based on the Jakarta Composite Index (JCI). The krf is calculated

as explained above, which are in line with the Guidance on the Assessment of Investment Analysis, Version 05, EB 62, Annex 5.

2.56 Calculated. http://www.stern.nyu.edu/~adamodar/pc/archives/totalbeta09.xls

The beta value for electrical utility central of 0.95 (The unlevered

beta) is chosen in the benchmark evaluation. The unlevered beta

value is then levered with the D/E ratio 70:30 and the tax rate

28% to get the levered beta 2.56. using the formula

BL=BU*(1+(1-Tc)*(D/E))

BL = Levered beta ;

BU =Unlevered beta

Tc= Tax rate

D/E = Debt: Equity ratio

WACC 22.74% Calculated based on the formula WACC = E/V *Re +

D/V*Rd*(1-Tc)

Beta:


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The Beta value has been calculated based on sector information as compiled by a finance professor of

Stern School of Business, New York University. Due to the lack of publicly available information in the

host country, the project participant chose the Beta of the electricity generating companies listed in the

website.

The beta value for electrical utility central of 0.95 (The unlevered beta) is chosen in the benchmark

evaluation. This electrical utility (central) has minimum beta value, compared to other two listed

electrical utility and this is conservative. The unlevered beta value is then levered with the D/E ratio

70:30 and the tax rate 28% to get the levered beta 2.56.

Debt: Equity ratio:

As per para 18 of the Guidance on the Assessment of Investment Analysis, Version 05, EB 62, Annex 5, If the benchmark is based on parameters that are standard in the market, then the typical debt/equity finance structure observed in the sector of the country should be used..

In line with guideline, PP has considered Debt: Equity ratio of 70:30 based on the FSR which provides

the typical debt/equity finance structure observed in the hydro power sector of Indonesia and the same is

considered in the benchmark evaluation of the project activity.

Market return:

The market return is calculated based on the Jakarta Composite Index (JCI) and was used in the Capital

Asset Pricing Model (CAPM) to calculate the cost of equity. The compounded return for the market is

calculated over a time period of 5 years (Dec 2005- Dec 2010) to determine the market return.

Risk free return:

The risk free rate is determined as an average of 3 government bond rates from Indonesia issued for a

period of more than 10 years and published in the year 2010. The risk free rate is the rate of return on an

asset that is theoretically free of any risk. When doing investment analysis on longer term projects or valuation, the risk free rate should be the long term government bond rate (Estimating Risk Free Rates by Dr. Aswath Damodaran of Stern School of Business, New York University page 6)12. Hence bonds having a maturity period of 10 years or more are considered for risk free rate calculation.

Project IRR (which is post tax ) is calculated based on following information:

Parameter Value Unit Source

Installed Capacity 8 MW Feasibility Study Report

Total Investment 139757 IDR(million) Feasibility Study Report

Annual O& M cost 3257 IDR(million) Feasibility Study Report

Annual Net electricity exported to grid 47,471 MWh Calculated

Electricity Tariff 656 IDR Feasibility Study Report

12

http://jft-newspaper.aub.edu.lb/reserve/data/fina306-ai-project-reading/riskfree.pdf


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Income tax 28 % Indonesia Government

Regulation No.17 Year

2000, clausal No.17

Project Lifetime 20 years Feasibility Study report

Using above data Project IRR without CDM is calculated as below:

Above table shows that Post tax Project IRR without CDM is below the benchmark. The CDM revenue

helps improve the project IRR significantly.

Sensitivity Analysis:

Sub-step 2d: Sensitivity analysis

As per paragraph 20 of Guidelines on the assessment of investment analysis (EB 62, Annex 5); Only variables, including the initial investment cost, that constitute more than 20% of either total project costs

or total project revenues should be subjected to reasonable variation (all parameters varied need not

necessarily be subjected to both negative and positive variations of the same magnitude), and the results

of this variation should be presented in the PDD and be reproducible in the associated spreadsheets.

Where a DOE considers that a variable which constitute less than 20% has a material impact on the

analysis they shall raise a corrective action request to include this variable in the sensitivity analysis.

As per para 21 of the Guidelines on the assessment of investment analysis (EB 62, Annex 5); The DOE should assess in detail whether the range of variations is reasonable in the project context. Past

trends may be a guide to determine the reasonable range. As a general point of departure variations in

the sensitivity analysis should at least cover a range of +10% and 10%, unless this is not deemed

appropriate in the context of the specific project circumstances. In cases where a scenario will result in

the project activity passing the benchmark or becoming the most financially attractive alternative the

DOE shall provide an assessment of the probability of the occurrence of this scenario in comparison to

the likelihood of the assumptions in the presented investment analysis, taking into consideration

correlations between the variables as well as the specific socio-economic and policy context of the project

activity.

In line with the above guidance para 20 and 21 of EB62, Annex 5, following critical parameters have

been identified for conducting the Sensitivity analysis:

Plant load Factor (PLF) which constitutes 22% of total project cost

Operation and Maintenance cost which constitutes 18% of total project revenue.

Tariff rate which constitutes 22% of total project cost

Total project cost.

In line with paragraph 21 of EB62, annex 5, all the above parameters have been varied by at least 10%.

The results of the sensitivity analysis are reflected below:

Project IRR Value Benchmark

(WACC)

Without CDM 14.51% 22.74%


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Particulars IRR with varied parameters (%)

-10.00% 0.00% 10.00%

IRR with variation in project investment 16.13% 14.51% 13.15%

IRR with variation in tariff 12.76% 14.51% 16.19%

IRR with variation in PLF 12.76% 14.51% 16.19%

IRR with variation in O&M expenses 14.76% 14.51% 14.27%

Plant load factor:

The Project IRR crosses the benchmark at PLF of 104.46 % which is not a likely to happen. The capacity

factor determined in the FSR according to historical hydrological data from 1997 to 2006 shows a value

lesser than 104.46%. Hence achieving a PLF value of 104.46% is not possible.

Operation and Maintenance cost:

The Project IRR crosses the benchmark when O&M cost is decreased to -9588 Million IDR. However,

such a situation is not possible as O&M cost usually increases year on year basis. There will not be a

situation of decrease in O & M cost. Hence, such a scenario of decreasing of -9588 Million IDR is not

possible.

Tariff rate:

The Project IRR crosses the benchmark at tariff of 996 IDR/kWh which is not realistic, as the PP signed

long term power purchase agreement for the period of 15 years at the rate of 656 IDR/kWh. As per PPA

Article 10, para 1, page 14 the tariff rate is as per the data by Minister of Energy and Mineral Resources

No. 31 of 2009, which is fixed for 15 years (as per article 3 para 1,page 7) from the date of

commissioning of the project. & Article 3, Para 2 page 7, states that The life of the agreement referred to in paragraph (1) of this Article 3, may extended the lifetime of power plant with the written approval of

THE PARTIES the lifetime of the project can be extended over to 15 years which is mentioned in para 1 by the parties PP and PLN with the written approval. Hence the PP may extend the PPA after 15 years

and so the tariff may also be remains same. Thus the situation is not likely to happen.

Project cost:

The Project IRR crosses the benchmark when the project cost is decreased to 87828 Million IDR.

However it is not possible as PP has already placed purchase orders for 80% of the total project cost.

Hence such a situation is not possible.

Conclusion:

Thus, the financial analysis shows that the project activity is not the most financially attractive, and the

sensitivity analysis shows that it is unlikely to be financially attractive compared to the benchmark under

reasonable variations of the relevant parameters.

Early Consideration of CDM:


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As per the Guidelines on the Demonstration and Assessment of Prior Consideration of the CDM13, version 04, EB 62 (Annex13) , For Project activities with a start date on or after August 2008 the project participant must inform a Host party DNA and the UNFCCC Secretariat in writing of the

commencement of the project activity and of their intension to seek CDM Status. Such Notification must

be made within six months of the project activity starting date

The start date for the project activity is 04/08/2011 when the EPC contract for the project activity was

signed. The prior CDM consideration notification was sent to UNFCCC and Host party DNA on

09th March 2011 and 8

th March 2011 respectively. The same is reflected on UNFCCC website. This

confirms that the project proponent has seriously considered CDM benefits for the proposed project

activity.

The chronology of the events is presented below:

S.No Events Date

1 Board decision to processs the clearance for the 8 MW project activity 23rd

June 2010

2 PPA between PT. PLN (Persero) and PT. Tirta Gemah Ripah for Mini

Hydro Power Plant Total Capacity 2000 kW.

28th June 2010

3 Investment Approval from the Regent of Garut for Cirompang Mini

Hydro Power Plant with capacity 8.000 kW.

23rd July 2010

4 Recommendation on Cirompang MHPs Use of Land Allocation Permit, from the Office of Housing, Spatial Planning, and Settlements,

Garut regency.

26th July 2010

5 Recommendation letter document of Environmental Management

Effort & Environmental Monitoring Effort for Cirompang MHP 8 MW

construction.

2nd Sep 2010.

6 Feasibility study report Nov 2010

7 Board resolution to undertake the project activity under CDM 10th Dec 2010

8 CDM Advisory services agreement between PP and consultant. 2nd March 2011

9 CDM prior intimation to UNFCCC and DNA To UNFCCC - 9th

March 2011

To DNA 8th March 2011

10 Stakeholder consultation meeting 15th April 2011

11 EPC contract between PT. Hutama Karya (Persero) and PT. Tirta

Gemah Ripah

4th Aug 2011

12 The Agreement between PT. TGR with GP3A Daerah Irigasi

Cirompang (affiliation of farmers using Cirompang water) regarding

the Use of Dams, Irrigation Channels, and Tunnels for the Cirompang

Mini Hydro Power Investment Project.

11th Aug 2011

13 PPA between PT. PLN (Persero) and PT. Tirta Gemah Ripah for Mini

Hydro Power Plant Total Capacity 8000 kW

21st Nov 2011

13

http://cdm.unfccc.int/Reference/Guidclarif/reg/reg_guid04.pdf


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B.6. Emission reductions:

B.6.1. Explanation of methodological choices:

Baseline Emissions

As per paragraph 11 of the methodology AMS-I.D., Version 17, the baseline emissions are calculated as

the product of electrical energy baseline yBLEG , expressed in MWh of electricity produced by the

renewable generating unit multiplied by the grid emission factor.

ygridCOyBLy EFEGBE ,,, 2*

Where:

yBE Baseline Emissions in year y (t CO2)

yBLEG , Quantity of net electricity supplied to the grid as a result of the implementation of

the CDM project activity in year y (MWh)

ygridCOEF ,,2 CO2 emission factor of the grid in year y (t CO2/MWh)

The Emission Factor is calculated in a transparent and conservative manner as follows:

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, version 2.2.1, EB 63 Annex 19.

The Directorate General Electricity and Energy Utilization (DJLPE, Direktorat Jenderal Listrik dan

Pemanfaatan Energi), a government institution has issued an official baseline emission factor for the

Jamali grid which is available from.

http://pasarkarbon.dnpi.go.id/web/index.php/komnasmpb/read/20/faktor-emisi-jaringan-listrik-jawa-

madura-bali-jamali-2010-.html

The calculation method opted for expost grid emission factor is as per Tool to calculate the Emission Factor for an electricity system, version 2.2.1, EB 63 Annex 19 is presented in Annex 3 of the PDD.

Project Emissions:

As per paragraph 20 of approved methodology AMS-I.D. (Version-17, EB- 61), emissions from water

reservoir of hydro power plants qualify as project emissions.

The project emission for the project activity will be

PEy = PEHP,y + PEFF,y

Where:


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PEHP,y - Emission from reservoir:

PEFF,y - Emission from fossil fuel consumption in year y. It is the emission from diesel generator which

will be used in emergency purposes and it is calculated by Tool to calculate project or leakage CO2 emission from fossil fuel consumption.

PEHP,y - Emission from reservoir:

The proposed project activity is implemented in the existing reservoir with no change in the volume of

reservoir. Therefore, project activity not shall account for CH4 and CO2 emissions from the reservoir. So

PEHP,y = 0.

PEFF,y - Emission from diesel generator backup:

The project emission includes the proponent of emission from diesel generator which will be used in

emergency purposes and it is calculated by Tool to calculate project or leakage CO2 emission from fossil fuel consumption.

The following formula is applied according to the Tool to calculate project or leakage CO2 emission from fossil fuel consumption:

Emission from the operation of a backup system in process j during the year y is calculated as follows:

PEFC,j,y = FCi,j y COEFi,y COEFi,y = NCVi,y EFCO2,i,y

Where:

PEFC,j,y Are the CO2 emissions from fossil fuel combustion in process j during the year y

FCi,j y Is the quantity of fuel type i combusted in process j during the year y (mass or volume

unit/year)

COEFi,y Is the CO2 emission coefficient of fuel type i in year y (tCO2/mass or volume unit)

NCVi,y Is the weighted average net calorific value of the fuel type i in year y

EFCO2,i,y Is the weighted average CO2 emission factor of fuel type i in year y (tCO2/GJ)

i Are the fuel types combusted in process j during the year y

PEy = 0.

Leakage Emissions:

As per paragraph 22 of the approved methodology AMS-I.D. (Version-17, EB-61), if the energy

generating equipment is transferred from another activity, leakage is to be considered. The leakage

emissions may be considered as zero as no such equipment shall be transferred from another project

activity. Hence LEy = 0

Emission Reductions


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As per paragraph 23 of the approved methodology AMS-I.D. (Version-17, EB-61), Emission reductions

are calculated as follows:

yyyy LEPEBEER

Where:

yER Emission reductions in year y (tCO2/y)

yBE Baseline Emissions in year y (tCO2/y)

yPE Project emissions in year y (tCO2/y)

yLE Leakage emissions in year y (tCO2/y)

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

Data / Parameter: Grid Emission Factor

Data unit: tCO2e/MWh

Description: CO2 emission factor of the grid in year y

Source of data used: Emission Factor for Jamali Grid

Value applied: 0.713

Justification of the

choice of data or

description of

measurement methods

and procedures actually

applied :

The value is published by host country DNA

Any comment: The value is expost and hence it is to be monitored during the crediting period

Data / Parameter: Installed Capacity of the project activity

Data unit: MW

Description: The installed capacity of the project activity

Source of data used: Feasibility Study report

Value applied: 8

Justification of the

choice of data or

description of

measurement methods

and procedures actually

applied :

The data is from Feasibility Study Report.

Any comment: NA

B.6.3 Ex-ante calculation of emission reductions:

Ex- ante emissions are calculated as defined in section 6.1 as given below:

Baseline emissions (BE,y):


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As per paragraph 11 of the methodology AMS-I.D, Version 17, the baseline emissions are the product of

electrical energy baseline yBLEG , expressed in MWh of electricity produced by the renewable generating

unit multiplied by the grid emission factor.

ygridCOyBLy EFEGBE ,,, 2*

Where:

yBE = Baseline Emissions in year y; tCO2e

yBLEG , = Quantity of net electricity supplied to the grid as a result of the implementation of the

CDM project activity in year y (MWh)

ygridCOEF ,,2 = CO2 emission factor of the grid in year y (tCO2e/MWh)

Parameter Units Value Remarks

Capacity of each turbine MW 2 FSR

Number of turbines Nos 4 FSR

Total installed capacity MW 8 Calculated

Total number of hours of operation

annually Hours 8760 FSR

Plant load factor % 68.77 FSR

Gross energy generation MWh 48194 Calculated

Auxiliary consumption % 1.5 FSR

MWh 723 Calculated

Net energy generation from the project

activity MWh 47471 Calculated

Grid emission factor tCO2e/MWh 0.713 Calculated

Baseline emissions tCO2e/year 33,847 Calculated

Project Emissions (PEy)

The project emission includes the proponent of emission from diesel generator which will be used in

emergency purposes and it is calculated by Tool to calculate project or leakage CO2 emission from fossil fuel consumption.

The following formula is applied according to the Tool to calculate project or leakage CO2 emission from fossil fuel consumption:

Emission from the operation of a backup system in process j during the year y is calculated as follows:

PEFC,j,y = FCi,j y COEFi,y COEFi,y = NCVi,y EFCO2,i,y

Where:


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Particular Unit Value Remarks

Quantity of diesel consumption in

the project activity Litres/annum 0

Diesel will be consumed only for

emergency cases

Net Calorific Value of diesel TJ/tonne 0.0433

2006 IPCC Guidelines for

National Greenhouse Gas

Inventories, Volume 2, Chapter 1,

Table 1.2, The upper limit value

has been used.

Emission factor of diesel tCO2/TJ 74.8

2006 IPCC Guidelines for

National Greenhouse Gas

Inventories, Volume 2, Chapter 1,

Table 1.4. The upper limit value

has been used.

Density of diesel T/litre 0.8439*1

0^-3

http://v-c-s.org/sites/v-c-

s.org/files/15.%20E-

FFC%20fossil%20fuels.pdf

Project emission due to

consumption of diesel tCO2e/annum 0 Calculated

Hence PEy = 0

Leakage Emissions (LEy)

LEy = 0

Emission Reduction

ERy, = BEy PEy LEy, = 33,847 0 0 = 33,847

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

Year

Estimation of

project activity

emissions

(tonnes of

CO2e)

Estimation of

baseline

emissions

(tonnes of

CO2e)

Estimation of

leakage

(tonnes of

CO2e)

Estimation of

overall emission

reductions

(tonnes of CO2e)

Year1 (01/03/2013-

28/02/2014) 0 33,847 0 33,847

Year 2 (01/03/2014-

28/02/2015) 0 33,847 0 33,847


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Year 3 (01/03/2015 -

29/02/2016) 0 33,847 0 33,847

Year 4 (01/03/2016 28/02/2017)

0 33,847 0 33,847

Year 5 (01/03/2017 28/02/2018)

0 33,847 0 33,847

Year 6 (01/03/2018 28/02/2019)

0 33,847 0 33,847

Year 7 (01/03/2019 29/02/2020)

0 33,847 0 33,847

Year 8 (01/03/2020 28/02/2021)

0 33,847 0 33,847

Year 9 (01/03/2021 28/02/2022)

0 33,847 0 33,847

Year 10 (01/03/2022

28/02/2023) 0 33,847 0 33,847

Total Emission

Reductions

(tCO2e)

0 338,470 0 338,470

B.7 Application of a monitoring methodology and description of the monitoring plan:

B.7.1 Data and parameters monitored:

Data / Parameter: EGfacility,y= EGBL,y

Data unit: MWh/year

Description: Quantity of net electricity supplied to the grid in year y

Source of data to be

used:

Onsite measurement by Project Developer

Value of data 47,471

Description of

measurement methods

and procedures to be

applied:

Electricity will be measured with an electricity meter and will be recorded on a

monthly basis by Project Developer with the use of Energy Meter (s).

Measured : Continuously

Recorded : Monthly

QA/QC procedures to

be applied:

The meter(s) will be subject to maintenance and calibration according to standard

set by PLN. On site staff will receive training in CDM monitoring and the

maintenance requirements of the electricity meters.

Data measured by the meter(s) will be cross checked using electricity sales

receipts.

The accuracy (class 0.2) of the measurement will be ensured through annually

calibration by a qualified party.

Any comment: Data will be archived at least for two years after the end of the crediting period,


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or the last issuance of CERs, whichever occurs later.

Data / Parameter: ygridCOEF ,,2

Data unit: tCO2e/MWh

Description: CO2 emission factor of the grid in year y


used:

Emission Factor for Jamali Grid.

Value of data 0.713

Description of

measurement methods


applied:

The value is published by the host country DNA. However, the calculation

procedure is provided in Annex 3

QA/QC procedures to

be applied:

The data is a published data by host country DNA. Hence QA/QC procedure is

not applicable.

Any comment: Data will be archived at least for two years after the end of the crediting period,

or the last issuance of CERs, whichever occurs later.

Data / Parameter: yiFC ,

Data unit: Litres/annum

Description: Quantity of fossil fuel consumption(diesel) in project activity in a year


used:

Log book maintained to record onsite consumption of diesel.

Value of data applied

for the purpose of

calculating expected

emission reductions in

section B.6

-

Description of

measurement methods


applied:

The data will be monitored continuously and aggregated monthly.

QA/QC procedures to

be applied:

The diesel consumption quantities can be cross-checked with the records of the

quantity of diesel purchased from the invoices.

Any comment: The data will be archived electronically and the archived data will be kept for 2

years beyond the Crediting Period.

Data / Parameter: yiNCV ,

Data unit: TJ/tonne

Description: Net calorific value of the fossil fuel (i) (diesel) combusted in the project activity

during the year y.


used:

2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume

2,Chapter 1, Table 1.2

Value of data applied 0.0433


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for the purpose of



section B.6

Description of

measurement methods


applied:

The net calorific value of diesel has been sourced from IPCC 2006 default value

at the upper limit of the uncertainty at a 95% confidence interval and any future

revision of the IPCC guidelines will be taken into account in determining the

same.

QA/QC procedures to

be applied:

Project participants have no control on the parameter. Hence, No QA/QC

procedures are applicable.



Data / Parameter: diesel

Data unit: T/Litres

Description: Density of fossil fuel diesel combusted in the project activity


used:

http://v-c-s.org/sites/v-c-s.org/files/15.%20E-FFC%20fossil%20fuels.pdf

Value of data applied

for the purpose of



section B.6

0.8439*10^-3

Description of

measurement methods


applied:

The value of the density of the diesel has been taken based on regional values

available.

QA/QC procedures to

be applied:

Not applicable.



B.7.2 Description of the monitoring plan:

Parties involved in monitoring

This section details the steps taken to monitor the greenhouse gas emissions reductions on a regular basis.

The Monitoring set up for this project has been developed to ensure that from the start, the Project is well

organised in terms of the collection and archiving of complete and reliable data.


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The monitoring of this type of project consists of metering the electricity generated by the renewable

technology. Below is the description of monitoring procedures for data measurement, quality assurance

and quality control.

PLN, as the state-owned company that own the Grid to which the Project Developer send its electricity to,

is responsible in maintaining the electricity generation in the Grid as well as the system of metering to

measure the transferred electricity into the Grid. The monitoring plan of the project will follow PLN

system on measuring the electricity sent to the Grid.

Metering of Electricity Supplied to the Grid

The main electricity meter for establishing the electricity delivered to the grid will be installed at the

project site using a Metering System that is approved by PLN. This electricity meter provides the main

data for CER measurement, thus it will be the key part of the verification process. To check the amount of

electricity delivered to the grid, official data will be used.

In case of emergency purposes, the diesel generators will be used.

Quality Control and Quality Assurance

Quality control and quality assurance procedures will guarantee the quality of data collected. The

electricity meter(s) will undergo periodic calibration once in a year throughout the lifetime of the Project

Activity. Inspection will also be done as requested by PLN subject to manufacturer standards. Moreover,

meter(s) are maintained by qualified spare parts. Documents of these procedures will be available during

the verification.

Data Collection and Archiving:

The monthly data of electricity generation is collected in electronic form. However, the data in electronic

form is archived throughout the life time of the project. The electricity records are maintained regularly

by the team at the site. The archived data will be kept for 2 years beyond the Crediting Period.

The following chart shows the data flow for the monitored data for the project acticity.


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The table below shows the roles and responsibilities and the information flow for the project activity data.

Personnel Responsiblity

Power plant Shift Incharge Monitoring the plant parameters including

the monitoring parameters as described in

the PDD.

Collecting the data recorded in log sheets

of respective sections and prepares the

consolidated report on electricity

generation.

Power plant Operators

Responsible for the overall plant

performance and electricity generation of

the power plant.

Cross check and sign the daily plant

operation reports regularly.

Should look after the periodical tests of the

monitoring equipments as per the

monitoring plan.

Responsible for the storage and archiving

of information in good condition.

Power plant Manager Responsible for the total monitoring plan.

Examining the reports generated by Power

President PT TGR

CDM Manager

Power plant

Manager

Power plant

operators

Power plant Shift -

In charge


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Plant operators with reference to the

monthly electricity generated; net

electricity exported to grid and annual

emission reduction calculations as per the

monitoring plan.

CDM Manager Responsible for overall CDM activities and

proper monitoring of data as mentioned in

monitoring plan.

He will be reporting to Director to look

after the CDM validation / verification

process for the project activity.

President PT TGR President will review the reports regularly

and take necessary corrective action

conforming to CDM.

Emergency procedures:

A back up meter will be installed in the power house and equipped with UPS (Uninterruptible Power

Supply). In the situation of the main meter has problem, the back up meter will maintain the metering

process. To ensure that the data is recorded correctly, the shift engineer will read the meter in power

house and record it in the log book.

B.8 Date of completion of the application of the baseline and monitoring methodology and the

name of the responsible person(s)/entity(ies)

Date of completion of the application of the baseline and monitoring methodology: 14/07/2011

Name of the entity determine the baseline:

Mr.Johan Romadhon, CEO, PT Tirta Gemah Ripah.

PT. Tirta Gemah Ripah. (Project Participant as mentioned in Annex 1)

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:

04/08/2011 (Signing of EPC contract).

C.1.2. Expected operational lifetime of the project activity:

20 years


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C.2 Choice of the crediting period and related information:

Project Activity will use Fixed Crediting Period.

C.2.1. Renewable crediting period

C.2.1.1. Starting date of the first crediting period:

NA

C.2.1.2. Length of the first crediting period:

NA

C.2.2. Fixed crediting period:

C.2.2.1. Starting date:

01/03/2013 or registration date. (Whichever occurs later)

C.2.2.2. Length:

10 years

SECTION D. Environmental impacts

D.1. If required by the host Party, documentation on the analysis of the environmental impacts

of the project activity:

Based on the letter issued by the Department of Mining and Energy ,Directorate General of Electricity

and Energy Development, the project activity does not required to have an Environment Impact

Assessment (AMDAL) however it is still required to submit an Environment Management (UKL) and

Environment Planning(UPL) Procedure to be approved and fulfilled. The same has been approved for the

project activity by Badan Pengelolaan Lingkungan Hidup, Pemerintaah Kabupaten Garut (Local

Government Environment Department) .The project activity will also need to comply with the procedure

by submitting a periodic report.

Table 5: Summary of Environment Management Procedure Findings

Activity Impacts Parameters Environmental Management

Efforts

Pre-construction


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Field Survey

Land

Procurement and

Acquisition

Public

Perception

Public

Perception

Normal daily activities (does not cause

fears and anxieties among the

residents)

Appropriate reimbursement (of the

lands owned by the residents)

Mutual agreements with local

agencies (lands owned by Perhutani)

Socializing the PLTMH

development project to the

community,

Discussion and coordination to set

the reimbursement price for land

acquisition.

Discussion and coordination with

local agencies associated with the

use of lands owned by the residents.

Construction

Workforce

Recruitment and

Layoffs

Public

Perception

Job

Opportunities

Increased

Income

Complaints of the residents

The number of workers recruited from

local residents

Complaints of the residents


local residents

Wage satisfaction

Prioritizing the local workforce in

recruitment

Inform the workers that the jobs for

construction period will be

temporary (during construction

period)


recruitment

Providing the appropriate and

adequate wages

Land Clearing

and Maturation

Degradation of

Water Quality

and

disturbance to

water biota

Loss of

vegetations

Landslide

Water quality standard (PP. no 82

Year 2001 or West-Java Governor

Decision no. 38/1991 )

The magnitude of lost vegetations

(area of cleared space)

Complaints from the residents about

the risk of landslide

Disturbance to environmental function

and stability.

The logging will be carried out

selectively (only as necessary)

The arrangement of execution time

(not during rains)

Digging of pile will be carried out

as necessary and carefully.

Digging and hoarding will be

carried out as necessary and

carefully

Activities will not be conducted

during heavy rainfalls period

Constructing a landslide retainer,

especially in places with high risk

of landslide

Planting vegetations to strengthen

the cliff, this eventually is expected

to prevent landslide.

Construction of

Main Facilities

and

Infrastructure

Landslide and

Degradation of

water quality

Perception and

Complaints of


the risk of landslide


and stability.

Digging and hoarding will be

carried out as necessary and

carefully

Activities will not be conducted

during heavy rainfalls period



of landslide





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37

the

Community

(to the

installation of

transmission

network)

The willingness of residents to allow

electrical poles installed in their land

No request for reimbursement.

Inform the residents about the

benefits of transmission network

installations.

Operations

Recruitment of

Workers

Job

opportunities

Increased

Income


local residents

Adequate wages and satisfaction with

the wage earned


recruitment.

Inform them that the jobs for

construction period will be

temporary and limited to a few

workers.

Providing adequate and appropriate

wages to the workers.

Operations and

Management of

Pembangkit

Listrik Tenaga

Mikro Hidro

(PLTMH) and

Maintenance of

PLTMH

facilities

Facilities

provided to the

community

(electricity)

Nuisance

Landslide

Public

perceptions

Improvement

of Water

Quality

Accidents and

Safety Issues

Addition of Electrical Capacity

Noise Standards (kepMenLH No Kep-

48/MenLH/11/1996)


the risk of landslide.


and stability.

Satisfaction of community

Quality standards of River Water (PP

no. 82 Year 2001 or West-Java

Governor Decision No.38/1991).

Success of reforestation.

Number of Reported Accidents

Optimizing the operations

Placing the turbine in closed space



of landslide




Inviting community participation in

managing PLTMH

Coordinating with local authorities

and agencies in managing PLTMH

If the mud precipitates in the

tranquilizing pool, it will not be

thrown directly to the river, but

removed from the pool to other

area.

The clearance of water entering the

turbine (by installing trash

trapper/trap).

Keeping the hygiene

Conducting reforestation in the

open activity locations due to

PLTMH development activities

Developing clear work instructions

which are obeyed by all workers.

Installing warning/notification


CDM Executive Board

38

Environmental

Security

New Business

Opportunities

(because the

availability of

electricity)

Number of disturbances to the

PLTMH facilities.

Disruptions of the forest areas

surrounding the location.

Improvement of local economy

board.

Creating boundary or setting up

fences for important and accident-

prone facilities.

Providing the workers with personal

protective equipment and first aid

kit.

Coordinating with local agencies.

Keeping the environmental

securities together with the

community and local government

agencies.

Organizing community

development activities in

Bungbuland and Cihikeu villages.

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 project is expected to deliver an overall positive sustainable impact and development on the local and

global environment All negative environmental impacts are subjected to observation and management as

described above.

SECTION E. Stakeholders comments

E.1. Brief description how comments by local stakeholders have been invited and compiled:

The project developer conducted a stakeholders consultation meeting at their project site with the local village people residing in and around the vicinity of this project activity in order to view the concerns of

the local stakeholders and their opinion about the proposed project activity on 15/04/2011. Some of the

key local stakeholders were also invited by an invitation letter14

. The local population and regulatory

authorities participated in that meeting. An advertisement was also published to inform local people

regarding the project activity in daily newspaper i.e. Radar Garut on 4 April 2011.

Mr. Herman Rachmat (General Manager TGR) briefed the attendees about the project and the agenda of

the stakeholder meeting and introduced the global warming and the climate change.

Mr.Yulianto (Project Director TGR) introduced the company/project to the audience and also presented a brief overview of the hydro power business.

After this brief introduction of company, climate change, Kyoto Protocol and CDM, he explained to the

attendees the purpose of the stakeholder consultation meeting as to seek the concern, opinion and

suggestion of the stakeholders.

14 Copy of invitation letters shall be provided at the time of validation


CDM Executive Board

39

Subsequently, project promoter invited the stakeholders to ask for their queries and suggestions. The

questions and responses to their query are given in the next section.

E.2. Summary of the comments received:

People participated with great enthusiasm and raised a few questions, which were answered to in an

appropriate manner by the project developer. Summary of these comments is given as follows;

Mr.Ayi Saripudin (Cibungbulang Head of Sub-districts Secretary) Opening Statement:

We would like to thank PT. Gemah Ripah for its contribution to the Bungbulang Sub-district by

developing the Cirompang Mini Hydro Power Plant (MHPP), hereafter referred as MHPP. We also fully

support the CDM project, a global/international scale program, which allows us to contribute to save the

environment.

Mr.Burhanudin Apip (Head of Local Environmental Management Council)

Opening Statement:

We support the development of Cirompang MHPP, because Garut Regency still lacks electricity. In

addition, 18500 houses in our regency are still not connected to the electrical network. Therefore, we

support the development of Cirompang MHPP.

Mr. M.Mahfudin (GP3A of Mitra Cai)

Question: We fully support the development of Cirompang MHPP and CDM proposal, and according to

the agreement between TGR and Mitra Cai, we hope that the rice fields will continue to be irrigated and

we hope that TGR will conduct reforestation in the area surrounding the project location.

Answer: TGR will neither destroy the existing channels nor use the old tunnels, but we will construct

new channels and tunnels. Therefore, the irrigation will not be disturbed during the construction period.

In accordance to the agreement between TGR Mitra Cai, the water will be prioritized to irrigate the rice fields up to 800 L/seconds, and the rest will be allocated to MMPH.

Mr. Ridwan Taufik (Sabareuma Environmental Activist)

We support the Development of Cirompang MMPH, because it represents clean, environmentally friendly

energy.What are the advantages of CDM to the community and environment?

Answers:

To supply the electricity to Garut Regency

To preserve the environment because PLTM is free of pollution.

To provide jobs to the members of Bungbulang community according to their skill set.

To assist in increasing the CSR activities to the community surrounding the project.

Mr.Tjahya (Head of Intellegence, Bungbulang Police Department)

In principle, we support the continuation of the Cirompang MHPP project.We request a coordination

between TGR, Muspika of the Sub-district, and police department for the safety and continuity of the


CDM Executive Board

40

project. The police department is ready to help the project in preventing any provocation, in order to aid

safe and continuous development of PLTMH.

Mr. Aos Suryana (Water and Mining Resources Agency)

At the location of Cirompang irrigation grounds belonging to SDAP, above the bridge to be exact, there is

an area of around 2-3 Hectares, which can be utilized for reforestation. We hope that from the CDM

project, the TGR can participate in restoring the area for greener purposes

The meeting was concluded with vote of thanks by Mr. Herman Rachmat from TGR. In general, all

participants in the forum supported the implementation of proposed project.

E.3. Report on how due account was taken of any comments received:

No negative comments have been received on the Project.


CDM Executive Board

41

Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY

Organisation: Nordic Environment Finance Corporation NEFCO in its capacity as Fund

Manager to the NEFCO Carbon Fund (NeCF)

Street/P.O.Box: Fabianinkatu 34, P.O. Box 249

Building:

City: Helsinki

State/Region:

Postal code: FI-00171

Country: Finland

Phone: +358 10 6180 644

Fax: +358 9 630 976

E-mail:

URL: www.nefco.org/cff

Represented by: Ash Sharma

Title: Vice President,

Head, Carbon Finance and Funds Unit

Salutation: Mr.

Last name: Sharma

Middle name:

First name: Ash

Department:

Phone (direct): + 358 10 6180 644

Fax (direct): +358 9 630 976

Mobile: +358 10 6180 644

Personal e-mail: [email protected]

Organization: PT. Tirta Gemah Ripah

Street/P.O.Box: Jl. Tubagus Ismail Depan No. IA

Building:

City: Bandung

State/Region: West Java

Postfix/ZIP: 40134

Country: Indonesia

Telephone: +62-222535852/+62-8112209514

FAX: +62-222535851

E-Mail:

URL: -

Represented by: Mr Johan Romadhon

Title: CEO

Salutation: Mr

Last Name: Romadhon


CDM Executive Board

42

Middle Name:

First Name: Johan

Department: -

Mobile: +62-8112209514

Direct FAX: +62-222535851

Direct tel: +62-222535852/+62-8112209514

Personal E-Mail: [email protected]


CDM Executive Board

43

Annex 2

INFORMATION REGARDING PUBLIC FUNDING

No public funding is involved in this project activity


CDM Executive Board

44

Annex 3

BASELINE INFORMATION

Calculation of Grid Emission Factor

The Board decision on CDM consideration for the project activity is in Dec 2010. The emission factor

value considered for Emission factor calculation in the PDD is based on the data published in the year 2010

by the Indonesian DNA in its website stating Emission factor for electricity system of the Java-Madura-

Bali (Jamali) based on the 2010 update which in turn refers the documents No: 2478/21/600.4/2011 dated

31st Mar 2011 and document No: B-48/DNPI/05/2011 dated 5th May 2011 which gives 0.713 tCO2e/MWh

as value, which is the recent data available before webhosting of the PDD for GSP during 09 Dec 11 - 07

Jan 12.

The expost grid emission factor has been estimated using the following six steps of according to Tool to

calculate the emission factor for an electricity system (Version -02.2.1, EB- 63, Annex 19):

Step 1: Identify the relevant sy