concentrated solar power project in anantapur district of andhra pradesh

UNFCCC/CCNUCC

CDM – Executive Board

PROJECT DESIGN DOCUMENT FORM

FOR CDM PROJECT ACTIVITIES (F-CDM-PDD)

Version 04.1

PROJECT DESIGN DOCUMENT (PDD)

Title of the project activity Concentrated Solar Power Project In Anantapur

District Of Andhra Pradesh

Version number of the PDD 01

Completion date of the PDD 12/12/2012

Project participant(s) MEIL Green Power Limited

(Private entity)

Host Party(ies) India (host Party)

Sectoral scope and selected methodology(ies) Energy industries(renewable-/non-renewable

sources)(1) Approved consolidated baseline

and monitoring methodology ACM0002

“Consolidated baseline methodology for grid-

connected electricity generation from

renewable sources”(Version 13.0.0)

Estimated amount of annual average GHG

emission reductions

80,968 tCO2e

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SECTION A. Description of project activity

A.1. Purpose and general description of project activity

>>

Concentrated Solar Thermal Power Project (here by refereed as project activity) in Anantapur District of

Andhra Pradesh state is being developed by MEIL Green Power Limited (here after referred as MGPL).

The capacity of the power plant is 50 MW.

The technology of Solar thermal power generation is based on the principle of producing steam by

concentrating the solar radiation from a large area on to a smaller area and the generated steam is used to

drive a turbine in a similar fashion as in thermal plant. Project activity uses parabolic trough technology

and the solar field for generation of power in the project activity.

The purpose of the proposed CDM project is to generate zero-emission solar power and supply it to

Southern regional grid. For the project activity:

(a) The scenario existing prior to the start of the implementation of the project activity is Southern

regional power grid providing the same electricity supply as the project activity will be delivering;

(b) The project scenario is the implementation of the proposed project (considering CDM revenue), i.e.,

the installation and operation of 50 MW concentrated solar power plant, which supply on an average

90,394 MWh to Southern regional power grid annually and replace the same amount of electricity

generated by the operation of grid-connected power plants and by the addition of new generation sources

into Southern regional grid.

(c) The baseline scenario is the same as the scenario existing prior to the start of implementation of the

project activity.

The project activity reduces greenhouse gas emissions by supplying zero-emission solar power to

Southern regional grid, which replaces the same amount of electricity generated by fossil fuel fired

power plants connected into Southern regional grid, and therefore, avoids the CO2 emissions in

generating the same amount of electricity provided by the fossil fuel fired power plants, with an average

annual supply of 90,394 MWh.

As per the estimates the project activity would reduce 80,968 tonnes of CO2 per annum and 566,773

tonnes of CO2 over the chosen crediting period.

The contributions of the proposed project1 to sustainable development goal are summarized as follows:

Being located in a power grid dominated by fossil-fired power plants2, development of the

proposed project will not only reduce GHG emissions but also mitigate local environmental

pollution caused by air emissions from coal-fired power plants.

The operation of the proposed project would increase employment and boost the economy in the

local region.

1 The project proponent commits 2% of CERs equivalent towards the welfare of local community leading to sustainable

development. 2 http://cea.nic.in/reports/monthly/inst_capacity/jul12.pdf

http://cea.nic.in/reports/monthly/inst_capacity/jul12.pdf

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Development of the proposed project could contribute to sustainable development in the local region. In

view of above, project activity is complying with the sustainable development criterion adopted by the

host country.

CER revenue sharing requirements with the utility as per the provisions of the Power Purchase

Agreement (PPA).

A.2. Location of project activity

A.2.1. Host Party(ies)

>>

India

A.2.2. Region/State/Province etc.

>>

Andhra Pradesh

A.2.3. City/Town/Community etc.

>>

Anantapur District

A.2.4. Physical/Geographical location

>>

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The proposed project is located in Nagalapuram Village, Peddavaduguru Mandal of Anantpur district.

Its geographical coordinates are northing 14.950 (14

056’42”N) and easting 77.58

0 (77

0 41’50”E

). The site

is well connected with National Highway-44 running close to the location. The nearest town is Pamidi

about ~12 km and the nearest railway line is through Anantapur-50 km to the south of the project site.

The nearest airport is Bangalore at around 150 km from the project site. The Nearest sea port is Chennai

at a distance of 500 km

A.3. Technologies and/or measures

>>

The purpose of the proposed project is to generate zero-emission solar power and supply it to southern

Power Grid. For the proposed project:

(a) The scenario existing prior to the start of the implementation of the project activity is that southern

regional Power Grid providing the same electricity supply as the proposed project; (b) The project

scenario is the implementation of the proposed project i.e., the installation and operation of 50 MW

Concentrated Solar Thermal Power Plant(CSP) using parabolic technology and will supply an average

of 90,394 MWh per annum to Southern regional Power Grid . Hence the solar thermal power project

replace the same amount of electricity generated by fossil fuel fired power plants connected into

Southern regional Power Grid;.

The purpose of the Project activity is to develop, operate and maintain a grid-connected concentrated

Solar power plant for power generation. Concentrating Solar Power systems use concentrated solar

radiation as a high temperature energy source to produce electricity using thermal route. The

mechanism of conversion of solar to electricity is fundamentally similar to the traditional thermal power

plants except use of solar energy as source of heat. Schematic diagram of the technology proposed to be

utilized in the project activity is as below:

Parabolic Trough Solar Thermal:-

Parabolic trough collector is composed of parabolic mirrors, Heat Collection Elements (HCE) and a

support structure. The HCEs are located at the focal line of the mirrors and utilizes the Direct Normal

Irradiance (DNI) from the sun that is concentrated onto the HCE. The support structure is a pedestal-

based mounting structure that employs a drive system to allow the collector to track the sun across the

sky throughout the day. The collectors are located on areas with very little slope and are arranged in

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parallel rows that typically run from North to South. These parallel rows of collectors are referred to as

the solar field. With this North-to-South arrangement, single-axis tracking allows the collectors to follow

the sun and maintain the reflectors focus on the heat collection elements. A working fluid, usually oil, is

circulated through the receiver and heated to temperatures of around 400ºC. After passing through the

collectors in the solar field, the heated Heat Transfer Fluid (HTF) flows to steam generators at a Power

Block, where it is cooled and returned to the solar field for re-heating. High-pressure superheated steam

will be generated from the heat in the HTF. The High pressure steam will be used to generate electricity

through a conventional steam turbine generator.

The proposed project activity consists of following major subsystems/ equipments

Solar Island

Steam Turbine and Accessories

Solar Collectors

Solar Collector element

Absorber Pipe

Support Structures, pylons, Drives

and controls

Tracking

Solar Field Heat Transfer Piping

System

Steam Generator and Auxiliaries

Expansion Vessel, Overflow Tanks

& Ullage system

Condensing Equipment

Condensate extraction pumps

Deaerating heater and closed heaters

Boiler feed pumps and drives

Feed water Heaters

he power generation system consists of one (1) number turbine generator (TG) of 50 MW rating. The

electricity generated from the project activity will be evacuated to the regional electricity grid ie southern

region through nearest 132kV generation/pooling substation at Gooty at distance of ~ 15 km from plant

location. Lifetime of the project activity is 25 years3.

Specifications of Steam generator

Quantity One number

Capacity 238 TPH

Pressure 103 kg/cm2(g)

Temperature 380 °C

Specifications of Turbine and Generator set

Type of turbine Condensing type.

Quantity one in number

Capacity 50 MW

Steam 101 kg/cm2(g)

Temperature at the TG inlet 373 Deg C

Condensing system Water cooled type

Type of generator Synchronous

Quantity one in number

Out put 62.5 MVA

Power factor(pf) 0.8

Power (MVA × pf) 50 MW

Voltage 11,000 V

Frequency 50 Hz

3 vide page 11 - http://www.cercind.gov.in/Final-Tariff_10.html

http://www.cercind.gov.in/Final-Tariff_10.html

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Technology used in the project would result in transfer of technology from Annex-I (Portugal) to the

host country. The construction of the project activity power plant will transfer environmentally safe and

sound technology and the know-how to use it to the Host Country.

A.4. Parties and project participants

Party involved

(host) indicates a host Party

Private and/or public

entity(ies) project participants

(as applicable)

Indicate if the Party involved

wishes to be considered as

project participant (Yes/No)

India

(host)

Private entity :

MEIL Green Power Limited

No

A.5. Public funding of project activity

>>

The project does not receive public funding from parties included in Annex I

SECTION B. Application of selected approved baseline and monitoring methodology

B.1. Reference of methodology

>>

(a) selected methodology

Title:“Consolidated baseline methodology for grid-connected electricity generation from renewable

sources”

Reference:- ACM0002 (Version 13.0.0, EB 67, Valid from 11th May 2012 on wards)

(b) Any tools and other methodologies to which the selected methodology(ies) refer

o “Tool for the demonstration and assessment of additionality”(Version 07.0.0)

o “Combined tool to identify the baseline scenario and demonstrate additionality”(Version 05.0.0)

o “Tool to calculate the emission factor for an electricity system”,(Version 03.0.0)

o “Tool to calculate project or leakage CO2 emissions from fossil fuel combustion” (Version 02.0)

For more information regarding the methodology and the tools as well as their consideration by the

Executive Board please refer to http://cdm.unfccc.int/methodologies/PAmethodologies/approved.html.

Further referred the

- Clean Development Mechanism Project Standard (Version 02.1.0,EB 70)

- Clean Development Mechanism Project Cycle Procedure (Version 03.1, EB 70)

B.2. Applicability of methodology

>>

The applicable methodology ACM0002, Version 13.0.04 states that - “This methodology is applicable to

grid-connected renewable power generation project activities that

(a) install a new power plant at a site where no renewable power plant was operated prior to the

implementation of the project activity (greenfield plant);

(b) involve a capacity addition;

(c) involve a retrofit of (an) existing plant(s); or

(d) involve a replacement of (an) existing plant(s).”

The proposed project activity is a grid-connected solar power generation project (i.e. renewable power

generation project activity) and installs a new power plant at the project site where no renewable power

4 The project being solar power generation activity there by the applicability criteria of Hydro plants has not been

assessed as per the applicable methodological version.

http://cdm.unfccc.int/methodologies/PAmethodologies/approved.html

UNFCCC/CCNUCC


plant is in operation/was operated prior to the implementation of the project activity (i.e. greenfield

plant). Hence, the project category qualifies under clause (a) of the above paragraph in the methodology

describing the category of projects applicable. Detailed assessment of applicability criteria as mentioned

in the applied methodological version are discussed below:

Applicability Condition Justification

This methodology is applicable to grid-

connected renewable power generation project

activities that (a) install a new power plant at a

site where no renewable power plant was

operated prior to the implementation of the

project activity (greenfield plant); (b) involve a

capacity addition; (c) involve a retrofit of (an)

existing plant(s); or (d) involve a replacement

of (an) existing plant(s).

The project activity is a new renewable solar

thermal power generation project at the project

site where no renewable power plant was

operated prior to the implementation of the

project activity (green field plant). The

renewable electricity generated from the project

activity will be supplied to Southern regional

power grid. Thus, meets the condition (a) as per

applicability criteria.

The project activity is the installation, capacity

addition, retrofit or replacement of a power

plant/unit of one of the following types: hydro

power plant/unit (either with a run-of-river

reservoir or an accumulation reservoir), wind

power plant/unit, geothermal power plant/unit,

solar power plant/unit, wave power plant/unit

or tidal power plant/unit;

The project activity is the new installation of a

solar power plant and not the capacity additions

retrofit or replacement of a power plant/unit of

one of the other types as stated in the

applicability condition. Thus the project meets

the applicability criteria.

In the case of capacity additions, retrofits or

replacements (except for wind, solar, wave or

tidal power capacity addition projects which

use Option 2: on page 10(of Methodology) to

calculate the parameter EGPJ,y): the existing

plant started commercial operation prior to the

start of a minimum historical reference period

of five years, used for the calculation of

baseline emissions and defined in the baseline

emission section, and no capacity or retrofit of

the plant has been undertaken between the

start of this minimum historical reference

period and the implementation of the project

activity;

The project is of new installation and not being

the capacity additions, retrofits or replacements,

thereby this clause does not apply.

In case of hydro power plants:

One of the following conditions must apply:

The project activity is implemented in

an existing single or multiple

reservoirs, with no change in the

volume of any of the reservoirs; or

The project activity is implemented in

an existing single or multiple

reservoirs, where the volume of any of

reservoirs is increased and the power

density of each reservoir, as per the

definitions given in the Project

Emissions section, is greater than 4

The project activity is not a hydro power plant.

Hence this condition(s) is not applicable to the

project activity.

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W/m2

after the implementation of the

project activity; or

The project activity results in new

single or multiple reservoirs and the

power density of each reservoir, as per

the definitions given in the Project

Emissions section, is greater than 4

W/m2 after the implementation of the

project activity.

In the case of retrofits, replacements, or

capacity additions, this methodology is only

applicable if the most plausible baseline

scenario, as a result of the identification of

baseline scenario, is .the continuation of the

current situation, i.e. to use the power

generation equipment that was already in use

prior to the implementation of the project

activity and undertaking business as usual

maintenance.

The project is a new installation and is not a

retrofit, replacements, or capacity additions;

hence this criterion is not applicable.

The methodology is not applicable to the following:

Project activities that involve switching from

fossil fuels to renewable energy sources at the

site of the project activity, since in this case

the baseline may be the continued use of fossil

fuels at the site;

The proposed project does not involve an on-

site switch from fossil fuels to a renewable

source; hence this criteria is not applicable to

the project activity.

Biomass fired power plants; The proposed project is a new Solar power

plant that generates and supply electricity and

not the biomass power project activity. Thus

this condition does not met by the project

activity.

A hydro power plant that results in the creation

of a new single reservoir or in the increase in

an existing single reservoir where the power

density of the power plant reservoir is less than

4 W/m2.

The project activity is not a hydro power plant

and thus justified, the condition.

The description provided in the table above shows that the project activity satisfies the applicable

conditions of the methodology, ACM0002, Version 13.0.0.

The ACM0002 also refers to the latest approved versions of the following tools:

1) “Tool to calculate the emission factor for an electricity system”, Version 03.0:- This tool is used in

line with ACM0002 requirement. This tool is used to determine the CO2 emission factor for the

displacement of electricity generated by power plants in an electricity system, by calculating the

combined margin emission factor (CM) of the electricity system. Since the project activity displaces the

grid generation by renewable energy power, hence the tool is applicable for project activity and used to

calculate emission reductions for the project activity. Further CEA database has also used the same tool

to calculate the OM, BM & CM for the electricity system.

2) Project activity has applied “Tool for the demonstration and assessment of additionality” (Version

07.0), which is not mandatory for project participants when proposing new methodologies. Since project

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activity is using the established methodology ACM0002, project participant has used this tool to

demonstrate the additionality of project activity. As per the tool project activities that apply this tool in

context of approved consolidated methodology ACM0002, only need to identify that there is at least one

credible and feasible alternative that would be more attractive than the proposed project activity.

Justification on alternatives has been provided in detail in section B.5 of PDD.

The geographic and system boundaries for the relevant electricity grid, i.e., the southern regional power

grid, can be clearly identified and information on the characteristics of the grid is available. Therefore,

ACM0002 (Version 13.0.0) methodology is applicable to the project activity.

B.3. Project boundary

The greenhouse gases and emission sources included in or excluded from the project boundary are shown

below

Source GHGs Included

? Justification/Explanation

Base

lin

e

CO2 emissions from

electricity generation in

fossil fuel fired power

plants that are displaced

due to the project activity

CO2 Yes Main emission source

CH4 No Minor emission source

N2O

No Minor emission source

Pro

ject

scen

ari

o

For geothermal power

plants, fugitive emissions

of CH4 and CO2 from non-

condensable gases

contained in geothermal

steam

CO2

No

The project activity is a solar

thermal power project. Hence,

these project emission sources

and gases are not relevant

CH4 No

N2O No

CO2 emissions from

combustion of fossil fuels

for electricity generation in

solar thermal power plants

and geothermal power

plants

CO2 No As per ACM0002 (Version

13.0.0) project emissions are

not considered for solar power

project.

CH4 No Minor emission source

N2O No Minor emission source

For hydro power plants,

emissions of CH4 from the

reservoir

CO2 No The project activity is a solar

power project. Hence, these

project emission sources and

gases are not relevant.

CH4 No

N2O No

The spatial extent of the project boundary includes the project power plant and all power plants

connected physically to the electricity system5 that the CDM project power plant is connected to.

5 Refer to the latest approved version of the “Tool to calculate the emission factor for an electricity system” for

definition of an electricity system.

UNFCCC/CCNUCC


Project Boundary Schematic

B.4. Establishment and description of baseline scenario

>>

According to ACM0002, Version 13.0.0, if the project activity is the installation of a new grid-connected

renewable power plant/unit, 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 project activity is a new grid-connected solar thermal power plant, therefore, the baseline scenario is

electricity delivered to the southern regional 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.

Hence, the baseline for the project activity is the equivalent amount of power from the Southern regional

grid.

The baseline emission factor or grid emission factor ie., combined margin (CM) calculations are

described in Sec B.6.1 as per the “Tool to calculate the emission factor for an electricity system” as

available at the time of PDD development.

B.5. Demonstration of additionality

>>

In accordance to the para 27 of Clean Development Mechanism Project Standard (here by referred

as PS) ( Version 02.1) which further refers to Clean Development Mechanism Project Cycle

Procedure “ (here by referred as PCP) “ Version 03.1 para 7 for the project activities with a starting

date on or after 2 August 2008, the PP must inform a Host Party designated national authority (DNA) and

the UNFCCC secretariat with regard to the commencement of the project activity and their intention to

seek CDM status. Such notification must be made within 180 days of the project activity start date using

the standardized form F-CDM-Prior Consideration.

The start date of the project activity is 05/11/2011 project proponent informed the UNFCCC secretariat

& Host Party designated national authority (DNA) of India – National CDM Authority (Ministry of

Environment and Forests (MoEF) on 16/02/2012 using the standardized form F-CDM-Prior

Consideration, thus meets the requirements of the CDM Project cycle Procedure (PCP). The name of the

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project activity is in the list of notifications received by the UNFCCC available from the UNFCCC

website6. The relevant documents provided to DOE as a part of validation.

The project activity is not the baseline scenario and possesses additionality, which is demonstrated below

in a step-wise manner using the latest version of tool for the “Tool for the demonstration and assessment

of additionality”(Version 07.0.0.) The tool prescribes the following steps for proving additionality of a

project.

Step 1. Identification of alternatives to the project activity consistent with mandatory laws and

regulations

Sub-step 1a. Define alternatives to the project activity:

According to the applicable methodology ACM0002 (Version 13.0.0), as the Project activity is the

installation of a new grid connected solar thermal power plant, the baseline scenario of the project is

provide the same electricity output by Southern regional Power Grid as given in the selected

methodology and prescribes the baseline scenario, thus no further analysis is required7.

According to tool for the “Tool for the demonstration and assessment of additionality ”(Version 07.0.0),

project activities that apply this tool in context of approved consolidated methodology ACM0002, only

need to identify that there is at least one credible and feasible alternative that would be more attractive

than the proposed project activity.

Outcome of Step 1a: According to the above, only two alternatives need to be listed here:

Alternative I: To implement the proposed project activity, but not as a CDM project activity;

Alternative II: To provide the same annual electricity output as the project by Southern regional Power

grid (the continuation of current situation).

Sub-step 1b. Consistency with mandatory laws and regulations:

Outcome of Step 1b: Both Alternative I and Alternative II comply with current laws and regulations of

host country India8.

In conclusion, the Alternative II is the only realistic, credible alternative which is in compliance with all

applicable legal and regulations, which can provide the same output or services as the project activity.

The investment analysis in Step 2 will show the project activity not undertaken as a CDM project and

without CERs income (alternative I) is lack of the attraction for the potential investors.

Step2. Investment analysis

Sub-step 2a. Determine appropriate analysis method.

6 Go to http://cdm.unfccc.int/Projects/PriorCDM/notifications/index_html and type the key word in the title of the

project in respective field. 7 “Clean Development Mechanism Validation and Verification Standard “(Version 02), paragraph 113.

8 The alternatives to the project activity are in compliance with all mandatory applicable legal and regulatory

requirements. The relevant national laws and regulations pertaining to generation of energy are

Electricity Act 2003

National Electricity Policy

Tariff Policy

http://cdm.unfccc.int/Projects/PriorCDM/notifications/index_html

UNFCCC/CCNUCC


“Tool for the demonstration and assessment of additionality”(Version 06.1.0) provides three analysis

methods: simple cost analysis, investment comparison analysis and benchmark analysis. If the CDM

project activity and the alternatives identified in Step 1 generate 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).

The simple cost analysis is not applicable for the proposed project because the project activity will

produce economic benefit (from electricity sale) other than CDM related income. The investment

comparison analysis is also not applicable for the proposed project because the baseline scenario, as

identified in step1, providing the same electricity output by the Southern Regional Power Grid, is not a

new investment project.

As per para 19 of Guidelines on the assessment of investment analysis, EB 62, Annex 5, Version 05, “…

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”.

Since, identified baseline is the continuation of current practice (i.e. equivalent amount of energy would

be generated by grid electricity system through its currently operating power plants and by new capacity

addition) and which is outside the direct control of the project developer, benchmark analysis (option III)

is chosen as the most appropriate analysis method and is is opted to demonstrate the additionality of the

project whether the financial indicator of the proposed project is better than relevant benchmark value.

Sub-step 2b Apply benchmark analysis.

Benchmark:

Paragraph 12 of the “Guidelines on the assessment of investment analysis”, Version 05, EB 62 states that

in cases where a benchmark approach is used the applied benchmark shall be appropriate to the type of

IRR calculated. Local commercial lending rates or weighted average costs of capital (WACC) are

appropriate benchmarks for a project IRR. Required/expected returns on equity are appropriate

benchmarks for an equity IRR.

Further, paragraph 13 of the same guidance states that “In the cases of projects which could be developed

by an entity other than the project participant the benchmark should be based on parameters that are

standard in the market.”

In the present context the subject project is a Greenfield activity that generates and supplies electricity to

the regional electricity grid, therefore the project has more than one possible developer. Therefore as per

guidelines the benchmark is based on parameters that are standard in the market.

Hence PP has selected weighted average costs of capital (WACC). The selection of the WACC as a

benchmark for the proposed project activity is appropriate in view of the fact that the investment for the

project includes two components viz.: loan and equity. In order to evaluate the financial viability of the

project, it is required to assess the expected minimum returns on debt as well as equity components of the

total investment. Hence, the benchmark selected needs to consider the risks associated with each of the

components of the total investment. Thus, from this perspective, WACC is one of the most appropriate

benchmark for comparing project IRR since it is the weighted average of the total cost of different

components of the investment.

It was calculated as

WACC = ({Cost of Equity ×% of Equity} + {Cost of debt ×(1- Tax rate) × % of Debt} )

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Parameter Units Description

% of Debt

Currency Value considered is of 60% of the total investment

% of Equity

Currency Value considered is of 40% of the total investment

Cost of Equity % As per para 15 of Guidelines on the assessment of the

investment analysis (Version 05, EB 62), the value for

cost of equity can be selected from Appendix of the

guidance - The project is Solar power project, which falls

under Group 1 as ‘Energy Industries’. The default return

on equity value in real terms for India for Group 1, i.e.

11.75% is selected. Further, in accordance with paragraph

7 of the Appendix the value converted to nominal terms

using the inflation forecast of the central bank, i.e.

Reserve Bank of India (RBI). The forecasted inflation rate

of 6.00% was taken from ‘Survey of Professional

Forecasters - Results’ published by RBI9- the central bank

of host country India . Default expected return on equity

value in real terms was converted to nominal terms by

adjusting with forecasted inflation rate as below:

Nominal Benchmark = ((1+Benchmark real)*(1+inflation

rate)-1))

Where:

Nominal Benchmark = Expected return on equity on

nominal basis

Benchmark real = Expected return on equity on real basis.

Inflation = Forecasted inflation rate

The value calculated from the above approach is

= {(1+11.75%) × (1+6.0%) -1} = 18.46%

For the project activity that is Return on Equity is thus,

calculated as 18.46 %, which corresponds to the nominal

Return on Equity.

Cost of Debt % Cost of debt is defined as the rate at which lender’s agree

to lend money to a project. The ‘Guidance on the

Assessment of Investment Analysis’ clarifies that, ‘In the

cases of projects which could be developed by an entity

other than the project participant, the benchmark should

be based on parameters that are standard in the market is

suitable in the context of he project activity.

Accordingly, lending rate of SBI10

data available has been

considered the project activity.

T- tax rate % The applicable tax rate pertaining to date of decision

9 page 4/10 vide

http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/PRE12T050810.pdf 10

SBI PLR rates - http://in.reuters.com/article/2011/08/16/india-plr-idINL3E7JG1CV20110816

( Considered 12.75% for case –I and 14.0% for case II) in WACC calculations

http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/PRE12T050810.pdf

http://in.reuters.com/article/2011/08/16/india-plr-idINL3E7JG1CV20110816

UNFCCC/CCNUCC


making on the project activity in the host country of the

CDM project. The rate applicable11

is 19.93%12

for year

2010-11 & 20.01% for year 2011-12.

A debt to equity ratio of 60:40 has been considered for WACC calculation for the project activity

Based on above values for the cost of equity and using the prime lending rate (cost of debt) the weighted

average cost of capital (after tax) works out to be

For Case-I13

-WACC works out to be 13.51 %

For Case-II14

-WACC works out to be 14.10 %

The selected benchmark is in conformity with guidance 12 and 13 of Annex 5, EB 62. The WACC

calculation is provided in the IRR analysis worksheet.

Choice of Financial Indicator:

Project IRR (post –tax) has been chosen as the financial indicator to compute returns of the project

activity. Having regard to the fact that the project involves investment and is funded by a mix of debt and

equity, and that guidance 12 of Annex 5, EB 62 permit the use of project IRR as one of the financial

indicators to demonstrate additionality, thus the selection of project IRR is appropriate for the project

type.

Sub-step 2c: Calculation and comparison of financial indicators:

1) Parameters needed for calculation of IRR

The assumptions used for the carrying out the IRR analysis are as shown below:

The key input parameters for financial analysis are based on the Detailed Project Report (DPR)

financials, tariff as per the PPA and permission/sanction letters. Copies of the relevant documents will be

provided to DOE for Validation.

Parameter Case-I Case-II

Plant Capacity 50 MW 50 MW

Total hours in year 8760

(=365×24)

8760

(=365×24)

11

In accordance with the Guidelines on Assessment on Investment Analysis version 05, as the project activity can be

developed by any entity other than the project participant, the tax rate used for computation of benchmark should

also be applicable to any investor investing in power sector projects in India. Tax holiday that is applicable to the

power sector projects (developed as Independent Power Producers) is ten years from the first fifteen years and

there by power sector projects do not have to pay normal tax rate as a result of tax holiday and have to pay only

the applicable Minimum Alternate Tax.Hence a Minimum Alternative Tax rate is applicable as per the provision of

taxation rules.

Projects being developed as independent power producer (IPP), for additionality one consider the returns from the

project activity as an independent project activity, even though the project is developed a business group. The

project activity is eligible for Tax holiday under the rules of Income Tax Act, Hence for IRR analysis, MAT rate as

prevailing is used in the calculations of the WACC. 12

http://taxguru.in/budget-2010/minimum-alternate-tax-%E2%80%93-enhancement-budget-2010.html 13

Case-I corresponds to the situation at the time of decision making 14

Case-II represents the scenario of the actual implementation. Design capacity approved by NVVNL

http://taxguru.in/budget-2010/minimum-alternate-tax-%E2%80%93-enhancement-budget-2010.html

UNFCCC/CCNUCC


Capacity Utilization

factor(CUF) 35%

23%

Energy generation @CUF 153,300 MWh/yr 100,740 MWh/yr

Auxiliary Consumption @10% 15,330 MWh/yr 10,074 MWh/yr

Net energy generation /

Exportable

137,970 MWh/yr 90,666 MWh/yr

Deration factor

-For 1st ten years of

operation)

0.10% 0.10%

-For next 15 years of

operation )

0.15% 0.15%

Tariff 11.31 INR/kWh 11.31 INR/kWh

Project cost INR 10,820 Million INR 7,060 Million

Debt Component @60% INR 6,492 Million INR 4,236 Million

Equity Component@40% INR 4,328 Million INR 2,824 Million

Interest on Term Loan 11.5% 13.25%

Moratorium 0.5 year 0.9 year

Loan Repayment 11.0 years 13.5 years

O& M expenses INR 81.176 Million INR 81.176 Million

Escalation on O& M 5.72 % 5.72 %

Working Capital Margin

- Receivables 1 Month 1 Month

- O&M 2 Month 2 Month

- Maintenance spares @15% on O&M @15% on O&M

Interest rate on Working

Capital

12.0 % 13.25 %

Minimum Alternative Tax

(inc. Surcharge and Education

cess)

19.93%

(for FY 2010-11)

20.01%

(for FY 2011-12)

Corporate Tax Rate 15

(incl. Surcharge and

Educational cess)

33.2%

(for FY 2010-11)

32.45%

(for FY 2011-12)

Book Depreciation rates 16

- Civil Works

-Plant & Machinery

3.34%

5.28%

As per income tax17

As per PPA

The estimated output from the solar power plant depends on the design parameters since there are several variables

which contribute to the final output from a plant. It is natural that any material used in the mirrors/reflectors,

receivers, etc. of Solar Thermal Power Plant, loses its efficiency due to aging these could be on account of de-rating

of modules at higher temperatures, other design parameters like ohmic loss, atmospheric factors such as prolonged

cloud cover and mist. The Prime lending rate prevailing at the time of decision making

As per Loan Sanction

As per (Terms and Conditions for Tariff determination from Renewable Energy Sources) (First Amendment)

Regulations,2010 15

http://catuts.com/minimum-alternate-tax-mat/ 16

Companies Act Schedule XIV www.fastfacts.co.in/resources/DepCoAct.rtf 17

Income Tax Act ( http://law.incometaxindia.gov.in/DIT/Fileopener.aspx?page=ITRU&schT

http://www.fastfacts.co.in/resources/DepCoAct.rtf

http://law.incometaxindia.gov.in/DIT/Fileopener.aspx?page=ITRU&schT=rul&csId=4a23cee1-1818-45d6-ab19-f155e08ed789&rNo=&sch=&title=Taxmann%20-%20Direct%20Tax%20Laws

UNFCCC/CCNUCC


- Civil Works

- Plant & Machinery

10.00%

15.00%

IRR analysis has been prepared for a period of 25 years as per EB 62, Annex 05.

In the calculation of the project IRR, the PP had included the salvage value (taken at in the terminal year

as the expected realisation on the sale of the assets in accordance with the local accounting principles).

This is in conformance to the para 4 of the ‘Guidelines on the assessment of investment analysis’. Annex

5 EB 62.

In financial indicator computation, actual interest has been taken as required under Guidance 11, Annex

5, EB 62 which also conforms to Guidance 6 of the same.

The PP would further like to clarify that the proposed CDM project is not eligible for any subsidies or

financial incentives from National/ State governmental policies and also that the there are no

international or private financial support being received for the proposed project other than those

considered in the investment analysis.

Based on the assumptions presented above, the project IRR works out to be without consideration of

CDM revenues works out to be 9.23% (case-I) and 9.21% (case-II).

The comparison of financial indicator (Project IRR) as computed above and benchmark is presented

below:

For Case-I

Item Project IRR Benchmark

Internal Rate of

Return(IRR)

9.23% 13.51%

For Case-II

Item Project IRR

Benchmark

Internal Rate of

Return(IRR)

9.21% 14.10%

Clearly comparison of the benchmark and financial indicator would reveal that the project is additional

Sub-step 2d. Sensitivity analysis

In order to determine whether the conclusion regarding financial economic attractiveness is robust to

withstand reasonable variations in the critical assumptions, a sensitivity analysis of Project IRR has been

carried out. Generation/PLF , Project Cost and O&M costs as the key variables that will impact the

financial attractiveness of the project. In this context it may be stated that the tariff is fixed for a period

of 25 years by the PPA , there by the parameter has not been included in the sensitivity analysis .

However, as O&M cost is the only stand-alone expenditure, it has also been subjected to sensitivity

analysis. Therefore, the parameters selected for sensitivity analysis conform to Guidance 20 of Annex 5,

EB 62.

=rul&csId=4a23cee1-1818-45d6-ab19-f155e08ed789&rNo=&sch=&title=Taxmann%20-

%20Direct%20Tax%20Laws )



UNFCCC/CCNUCC


The project is under implementation and is likely to experience a cost overrun; the generation is based on

the solar energy source. Therefore variation even by 1% in any of these parameters is not possible.

However, as required by the Guidance the sensitivity analysis is done and the results are given below.

The results of the sensitivity analysis are shown below:

For Case-I- Variation in IRR due to reasonable variation of sensitive parameters

Parameter -10% Base case +10% The critical points of

the factors to make

the IRR reach

benchmark are :

Generation /PLF 8.01% 9.23% 10.39% 39.10%

Project cost 10.41% 9.23% 8.21% -29.75%

O&M Cost 9.33% 9.23% 9.13% >-100%

For Case-II- Variation in IRR due to reasonable variation of sensitive parameters

Parameter -10% Base case +10% The critical points

of the factors to

make the IRR

reach benchmark

are :

Generation /PLF 7.92% 9.21% 10.41% 34.40%

Project cost 10.37% 9.21% 8.20% -27.85%

O&M Cost 9.22% 9.21% 9.20% >-100%

As could be seen from above the project would not lose its additionality in case of an increase in the

generation by 10% or a reduction in the project cost and /or O&M by 10%.

To conclude, under the reasonable variations in the critical assumptions, the conclusion regarding the

financial additionality is robust and supported by sensitivity analysis.

Outcome of step 2:

From the above it is evident that the return on investment from the project activity is lower than the

established benchmark. Therefore the project activity is financially unattractive for the investment.

Step 3: Barrier analysis

Investment analysis has argued that the project is the economically less attractive than other alternatives

without the revenue from the sale of CERs. According to tool for the “ Tool for the demonstration and

assessment of additionality “(Version 07.0.0), this PDD skips the barrier analysis and argues the

additionality. Proceeded to step 4 – common practice analysis

Step 4. Common practice analysis

I. Definition

1. Applicable Geographical area covers entire host country as a default; as per the guidelines, host

country i.e. India is considered as the applicable geographical area.

2. Measure (for emission reduction activity): Project activity using solar energy ,falls under the option

(b) of the measures i.e. switch of technology with or without change of energy source.

3. Output: is good/services produced by the project activity including, among other things, heat steam,

electricity, methane, and biogas unless otherwise specified in the applied methodology.

The projects out put is solar power generation.

UNFCCC/CCNUCC


“Tool for the demonstration and assessment of additionality” (Version 07.0) referes “Guidelines on

common practice” (Version 02) and the proposed CDM project activity(ies) applies measure(s) that are

listed in the definitions section above, where analysis presented through the following

Sub-step 4a:The proposed CDM project activity(ies) applies measure(s) that are listed in the

definitions section as defined above.

Step 1: Calculate applicable output range as +/-50% of the design output or capacity of the proposed

project activity.

The project is concentrated solar thermal power project with capacity 50 MW. Hence applicable output

range will be ±50% of 50MW, i.e. 25 MW to 75 MW.

Step 2: In the applicable geographical area, identify all plants that deliver the same output or capacity,

within the applicable output range calculated in Step 1, as the proposed project activity and have started

commercial operation before the start date of the project. Note their number Nall. Registered CDM

project activities and projects activities undergoing validation shall not be included in this step;

As outlined in the definition above the ‘electric power’ is considered as ‘output’. Hence, all the

technologies in the host country which delivers electric power within the applicable output range (i.e. 25

MW to 75 MW) and have started commercial operation before the start date of the project ie 05/10/2011

are considered for Nall.

Step 3: Within plants identified in Step 2, identify those that apply technologies different that the

technology applied in the proposed project activity. Note their number Ndiff.

Ndiff = All the power plants with technologies different from that of the proposed project activity in the

applicable output range in the applicable geographical area. Hence for the proposed project activity, this

will include all the power plants in the range from 25 MW to 75 MW commissioned in India before the

start date of the proposed project activity i.e. 05/10/2011 and use technologies different from solar

thermal technology for power generation as will be used by the proposed project activity.

Step 4: Calculate factor F=1-Ndiff/Nall representing the share of plants using technology similar to the

technology used in the proposed project activity in all plants that deliver the same output or capacity as

the proposed project activity.

(Nall – Ndiff) represents all the plants using concentrated solar thermal technology in the range of 25 MW

to 75 MW installed in India before 05/10/2011.

As per the publically available information, from government department - MNRE report18

on MW size

grid connected solar power plants in India, as on 31/07/2011, there was no solar power plant installed in

India in the range of 25 MW to 75 which use the concentrated solar thermal MW capacity till

05/10/2011.

Therefore, (Nall – Ndiff) = 0 and F = (Nall – Ndiff)/Nall = 0

The proposed project activity is a common practice, within a sector in the applicable geographical area if

both the following conditions are fulfilled:

(a) the factor F is greater than 0.2, and (b) Nall-Ndiff is greater than 3.

As for the project activity F = 0 (< 0.2) and Nall-Ndiff = 0 (< 3) .

18

http://mnre.gov.in/file-manager/UserFiles/MW_size_Grid_Solar_Power_Plants_in_India.pdf

http://mnre.gov.in/file-manager/UserFiles/MW_size_Grid_Solar_Power_Plants_in_India.pdf

UNFCCC/CCNUCC


Since any of the conditions are not fulfilled by the project activity, it is concluded that the project activity

is not a common practice.

Sub-step 4b. Discuss any similar options that are occurring:

It is not required as per “Tool for the demonstration and assessment of additionality” (Version 07.0)

There by the project passes the step 4.

Hence the project activity is additional

B.6. Emission reductions

B.6.1. Explanation of methodological choices

>>

Methodology ACM0002(Version 13.0.0) is used to calculate Baseline Emissions, Project Emissions and

Leakage. The project is a grid connected renewable energy project, emission reduction quantity depends

on the units of electricity exported to the grid (in MWh) and the baseline emission factor of the combined

regional grid. Formula used to calculate the emission reduction for the project activity is as below:

Baseline emissions

Baseline emissions include only CO2 emissions from electricity generation in fossil fuel fired power

plants that are displaced due to the project activity. The methodology assumes that all project electricity

generation above baseline levels would have been generated by existing grid-connected power plants and

the addition of new grid-connected power plants. The baseline emissions are to be calculated as follows:

yCMgridyPJy EFEGBE ,,, * (1)

Where:

BE y = Baseline Emissions in year y (t CO2/yr)

EGPJ,y = Quantity of net electricity generation that is produced and fed into the grid as a result

of the implementation of the CDM project activity in year y (MWh/yr)

EF grid, CM, y = Combined margin CO2 emission factor for grid connected power generation in year y

calculated using the latest version of the “.Tool to calculate the emission factor for an

electricity system”. (tCO2/MWh)

Calculation of EGPJ,y

The calculation of EGPJ,y is different for: (a) greenfield plants, (b) retrofits and replacements; and

(c) capacity additions.

As the project activity is the green field thereby the following adapted from the methodology in

calculation of EGPJ,y

Calculation of EG PJ, y for Greenfield plants

If the project activity is the installation of a new grid-connected renewable power plant/unit at a site

where no renewable power plant was operated prior to the implementation of the project activity, then:

yfacility,yPJ, EGEG (2)

Where:

yPJ,EG = Quantity of net electricity generation that is produced and fed into the grid as a result

of the implementation of the CDM project activity in year y (MWh/yr)

yfacility,EG = Quantity of net electricity generation supplied by the project plant/unit to the grid in

UNFCCC/CCNUCC


year y (MWh/yr)

Calculation of EF grid, CM, y

The baseline emission factor for the project is determined ex-ante as a combined margin, consisting of

combination of the operating margin (OM) and build margin (BM) of the Southern regional power grid.

Central Electricity Authority (CEA) (which is an official source of Ministry of Power, Government of

India) have worked out baseline emission factor for various grids in India and made them publicly

available i.e. “CO2 Baseline Database” Version 07 , Jan 2012. The Combined margin is of 0.89571

tCO2/MWh for the southern regional grid the connected electrical sysytem.

See Appendix 5 for further details in this report.

Project emissions

For most renewable power generation project activities, PEy = 0. However, some project activities may

involve project emissions that can be significant. These emissions shall be accounted for by using the

following equation:

yHPyGPyFFy PEPEPEPE ,,, (3)

Where:

yPE = Project emissions in year y (tCO2e/yr)

yFFPE , = Project emissions from fossil fuel consumption in year y (tCO2/yr)

yGPPE , = Project emissions from the operation of geothermal power plants due to the release of

non-condensable gases in year y (tCO2e/yr)

yHPPE , = Project emissions from water reservoirs of hydro power plants in year y (tCO2e/yr)

According to the chosen baseline methodology ACM0002 (Version 13.0.0) for solar energy based

renewable power generation projects activities, PEy = 0.

Leakage

No leakage emissions are considered. The main emissions potentially giving rise to leakage in the context

of electric sector projects are emissions arising due to activities such as power plant construction and

upstream emissions from fossil fuel use (e.g. extraction, processing, transport). These emissions sources

are neglected.

Emission Reductions:

Since the project emissions as well as the leakage are zero, the emission reductions are equal to the

baseline emissions. These are calculated based on the monitored net amount of electricity supplied to the

grid, and the baseline emission factor.

ER y = BE y - PE y

Where,

ER y = Emission reductions in year y (tCO2e)

BE y = Baseline Emissions in year y (tCO2e)

The sample estimates are shown in sec B.6.3 below

UNFCCC/CCNUCC


B.6.2. Data and parameters fixed ex ante

(Copy this table for each piece of data and parameter.)

Data / Parameter EFgrid,CM,y

Unit tCO2/MWh

Description Combined margin CO2 emission factor for grid connected power

generation in year y calculated using the latest version of the “Tool to

calculate the emission factor for an electricity system”

Source of data CEA published data. CO2 Baseline Database, version 7.0, Jan 2012

http://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm

Value(s) applied 0.89571

Calculated as under :

EFgrid,CM, y = WOM × EFgrid, OM,y + WBM × EFgrid,BM,y

= (0.75 × 0.94965 + 0.25 × 0.73389) = 0.89571

Choice of data

or

Measurement methods

and procedures

The grid emission factor is calculated from the OM & BM values

considered from CEA published values on Indian regional grid systems,

calculation is based on the guidelines in “Tool to calculate the emission

factor for an electricity system” (Version 03.0.0). As per the EB

guidelines a weightage of 75:25 is assumed in the calculation of emission

factor as this is a solar based power generation project.

Since, CEA is the prime authority for publishing all the relevant to Indian

power sector, the choice of the data is appropriate.

Purpose of data Calculation of baseline emissions

Additional comment The parameter has been calculated ex-ante and will remain fixed for the

first crediting period of the project activity.

Data / Parameter EFgrid,OM,y

Unit tCO2/MWh

Description Operating margin emission factor of southern region grid




Choice of data

or

Measurement methods

and procedures

Calculated it as CEA sourced data 3 years vintage data (2008-09, 2009-10

and 2010-11) and option of ex ante calculation based on Simple

Operating Margin Method. Computed once during PDD finalization. For

details






UNFCCC/CCNUCC


Data / Parameter EFgrid,BM,y

Unit tCO2/MWh

Description Build Margin emission factor for southern region grid




Choice of data

or

Measurement methods

and procedures

Calculated as per CEA sourced data for the year 2010-11. The build

margin is calculated in this database as the average emissions intensity of

the 20% most recent capacity additions in the grid based on net

generation and option of ex ante calculation. Computed once during PDD

finalization.




B.6.3. Ex ante calculation of emission reductions

>>

The ex-ante calculations of the emission reductions are given below. The applicable formulae are as

described in section B.6.1. of this document.

Base parameters considered for calculations19

for the first year :

Gross energy generation = Plant capacity (MW) × operation hours (h) × Plant load factor (%)

= 50 × 8760× 23% = 100,740 MWh /yr

Auxiliary Consumptio@10% on gross generation = 100,740 × 10% =10,074 MWh/yr

EG facility, y = Quantity of net electricity generation that is produced and fed into the grid as a result of the

implementation of the CDM project activity in year y (MWh/yr)

= (Gross energy generation – Auxiliary Consumption )

= 100,740 MWh /yr -10,074 MWh/yr = 90,666 MWh/yr20

Weighted average combined margin CO2 emission factor for grid connected power generation

EFgrid,CM,y = 0.89571 tCO2 /MWh

Baseline emissions (BEy ):

As per Equation 1 in sec B.6.1

BE y = EG PJ, y * EF grid, CM, y = EG facility, y * EF grid, CM, y

= 90,666 MWh/yr × 0.89571 tCO2 /MWh = 81,211 tCO2/yr

Project activity emissions

The project activity does not involve usage of fossil fuel. Thus, PEFF,y =0

19

The ERs estimations made based on the 23% PLF 20

The value is for the first year and the value quote in Sec A.1 is the average for the first crediting period which

accounts deration factor too.


UNFCCC/CCNUCC


The project activity does not involve operation of geothermal power plants, thus, PEGP,y= 0

The project activity does not involve water reservoir and hydro power plant, thus, PE HP, y=0

Thus, PEy= 0

EMISSION REDUCTIONS

Emission reductions from the project activity are estimated as the difference between baseline emissions,

project emissions.

ER y = BE y - PE y = 81,211 - 0 tCO2/yr = 81,211 tCO2/yr

B.6.4. Summary of ex ante estimates of emission reductions

The ex ante calculation of emission reductions for all years of the crediting period21

, using the table

below.

Year

Baseline

emissions

(t CO2e)

Project

emissions

(t CO2e)

Leakage

(t CO2e)

Emission

reductions

(t CO2e)

09/05/2013 to 10/05/2014 81,211 0 0 81,211

09/05/2014 to 10/05/2015 81,130 0 0 81,130

09/05/2015 to 10/05/2016 81,048 0 0 81,048

09/05/2016 to 10/05/2017 80,967 0 0 80,967

09/05/2017 to 10/05/2018 80,886 0 0 80,886

09/05/2018 to 10/05/2019 80,806 0 0 80,806

09/05/2019 to 10/05/2020 80,725 0 0 80,725

Total 566,773 0 0 566,773

Total number of crediting

years

7

Annual

average over the crediting

period

80,968 0 0 80,968

[This space in the document left blank intentionally]

21

The change in the emission reductions is due to the duration factor

UNFCCC/CCNUCC


B.7. Monitoring plan

B.7.1. Data and parameters to be monitored

(Copy this table for each piece of data and parameter.)

Data / Parameter EGGross,y

Unit MWh/yr 22

Description Total electricity produced by the project activity, including the electricity

supplied to the grid and the electricity supplied to internal loads, in year y

Source of data Plant records at project site.

Value(s) applied Ex- post

Measurement methods

and procedures

The parameter is the value recorded from the measured values of the

electricity/energy meter located in the plant.

Monitoring frequency Measured continuously, the frequency of recording is at least monthly and

aggregated annually.

QA/QC procedures The Meters used for reading the Gross electricity generation will be

calibrated as per national standards and frequency of re-calibration will be

once in a year . The meter will be of accuracy class 0.5.

Purpose of data For cross checking purpose

Additional comment Data archiving: for two years after the end of the crediting period or the

last issuance of CERs, whichever occurs later;

Data / Parameter EGexported,y

Unit MWh/yr

Description Electricity exported/supplied to the grid by the project activity during the

year, y

Source of data Monthly Statement by APTRANSCO(and/or their Distribution

Company) /NVVN

Value(s) applied Ex-post

Measurement methods

and procedures

Readings of meter(s) 23

installed at inter connection point/grid interface

used for billing purposes i.e Energy statements.

Monitoring frequency It is continuous measurement, the frequency of recording is at least

monthly and aggregated annually. The accuracy class of the meter(s) used

for measuring the parameter will be 0.2s.

QA/QC procedures The re-calibration meter(s) will be in accordance with the Central

Electricity Authority (Installation and operations of Meters) Regulations

200624

, where in the frequency is of once in five years.

Cross check measurement results with records for sold electricity.

Purpose of data Calculation of baseline emissions; i.e to Calculate EGfacility, y



22

If meter reading is in kWh. The value is then converted to MWh. as 1,000 kWh = 1MWh ; 1,000 MWh= 1GWh 23

The standby meters or check meters if any installed also form a part of the monitoring plan. 24

Central Electricity Authority (Installation and Operation of Meters) Regulations, 2006.

http://www.powermin.nic.in/whats_new/pdf/Metering_Regulations.pdf -pg 12/20

http://www.powermin.nic.in/whats_new/pdf/Metering_Regulations.pdf

UNFCCC/CCNUCC


Data / Parameter EGimported, y

Unit MWh/yr

Description Electricity imported/received by the project activity from the grid during

the year, y

Source of data Monthly Statement by APTRANSCO(and/or their Distribution

Company) /NVVN


Measurement methods

and procedures

Readings of meter(s) 25

installed at inter connection point/grid interface

used for billing purposes i.e Energy statements.

Monitoring frequency It is continuously measured and the frequency of recording is at least

monthly and aggregated annually. The accuracy class of the meter would

be 0.2s.

QA/QC procedures The re-calibration meter(s) will be in accordance with the Central

Electricity Authority (Installation and operations of Meters) Regulations

200626

, where in the frequency is of once in five years.

Cross check measurement results with records for bills.

Purpose of data Calculation of baseline emissions; ie to Calculate EGfacility, y



[This space in the document left blank intentionally]

25

The standby meters or check meters if any installed also form a part of the monitoring plan. 26

Central Electricity Authority (Installation and Operation of Meters) Regulations, 2006.

http://www.powermin.nic.in/whats_new/pdf/Metering_Regulations.pdf -pg 12/20

http://www.powermin.nic.in/whats_new/pdf/Metering_Regulations.pdf

UNFCCC/CCNUCC


Data / Parameter EGfacility, y

Unit MWh/yr

Description Quantity of net electricity generation supplied by the project plant/unit to

the grid in year y

Source of data Plant Records

Value(s) applied Determined during ex-post as per the calculations presented in the PDD

sec B.6.1.

Measurement methods

and procedures

The following parameters shall be measured:

(i) The quantity of electricity supplied by the project plant/unit to the grid;

and

(ii) The quantity of electricity delivered to the project plant/unit from the

grid

The value is calculated from measured values of electricity supplied to the

grid and delivered from the grid interface.

The calculation formula used is: EGfacility,y= EGexported y - EGimported y .

Monitoring frequency Continuously measurement and at least monthly recorded for the

parameters used in deriving the value

QA/QC procedures Cross check measurement results with records for sold electricity.

Purpose of data Calculation of baseline emissions;



Data / Parameter EGAux, y

Unit MWh/yr

Description Electricity achieved by the proposed project for auxiliary usage in year y.

Source of data Plant records


Measurement methods

and procedures

The parameter is the value recorded from the measured values of the

electricity/ energy meter located in the plant.

Monitoring frequency Measured continuously, the frequency of recording is at least monthly and

aggregated annually

QA/QC procedures The Meter(s) used for reading the auxiliary electricity consumption will be

calibrated as per national standards and frequency of re-calibration is once

in a year. The meter will be of accuracy class1

Purpose of data Used for cross checking purposes



B.7.2. Sampling plan

>>

As the data and parameters monitored in Sec B.7.1 above are not determined by a sampling approach,

hence this doesn’t apply to the project activity.

B.7.3. Other elements of monitoring plan

>>

UNFCCC/CCNUCC


Monitoring plan is a division and schedule of a series of monitoring tasks. Monitoring tasks must be

implemented according to the monitoring plan and actual conditions of the plant in order to ensure that

the real, measurable and long-term greenhouse gas (GHG) emission reduction for the proposed project is

monitored and reported.

The organizational structure for the monitoring plan is shown below.

Designation Responsibilities

Plant Manager

Verification of Data (Consistency & Completeness)

Ensuring Storage of Data (Archiving)

Review / Corrective and preventive Actions

QA/QC procedures

Site Engineer/Incharge

/ Operation and

Maintenance

engineer

Recording of monitored data

Storage of Data (Archiving)

Verification of Data

Operation & Maintenance

(Electrical/Mechanical will look after the respective

works)

Service

provider/Technician

Recording of monitored data

The parameters monitored ex-post are respectively the quantity of electricity supplied by the proposed

project activity in the year y (EGexported,y), the electricity imported from the grid by the project activity in

the year y (EGimported,y).The net electricity supplied to the grid (EGfacility,y) in the year y is exports

subtracting imports (i.e.EGexported,y- EGimport,edy). The grid interface/interconnection main and backup

meters measure both exports to the grid and imports from the grid. The on-grid electricity will be

monitored continuously and recorded on a monthly basis. The meters are bi-directional and their

accuracy is 0.2s.

All meters will be calibrated according to the relevant industrial/national standard.

Uncertainties:

Any uncertainty like inconsistency/discrepancy of data parameters will be dealt with through corrective

actions. These will be reported along with its time of occurrence, possible reasons and duration.

Uncertainty with metering will be dealt jointly both by PP and APTRANSCO and or NVVNL27

representatives. Corrective actions will be undertaken after identification of reason for such uncertainty.

The back-up record of monitoring data will be taken, which can be presented in case of loss of original

data. In case of discrepancy in the measured parameters the suitable corrective action(s) will be taken to

rectify the error. The uncertainty will be reported and corrective actions will be taken.

Procedures of exception handling and reporting

Problem occurred in monitoring and measurement process will be recorded and reported to company

administrator or supervisor. Consequently, the corrective resolution will be adopted to deal with that

problem and to avoid it occur again in future.

Emergency:

27

The project participant has signed Power Purchase Agreement (PPA) for 25 years period, with NTPC Vidyut

Vyapar Nigam Limited (NVVN), New Delhi, India

UNFCCC/CCNUCC


The plant will be equipped with Automatic Alarming System to detect any emergency. This will help the

authority to take immediate preventive measures. All the critical & essential spares & consumables will

be kept at project site to reduce the breakdown time.

The project activity will not result in any unidentified activity that can result in substantial emissions

from the project activity. No need for emergency preparedness in data monitoring is visualized.

In addition the power plant will take standard measures for tackling emergency arising from black out

/load throw off etc.,

Data Management plan will develop to ensure adequate measures are in place during the operational

phase of the project activity.

Throughout the CDM crediting period + 2 years, the electricity generated from the project will be

monitored and electronically archived by the project proponent.

Action Plan for Monitoring of 2% CER Revenue Committed Towards Sustainable Development

Project proponent contributes 2% of the CDM revenue realized from the sale of CERs towards

sustainable development. Project proponent will undertake an annual review of the actual CERs accrued

and the price transacted. On the basis of the actual price and exchange rate, Project proponent will

commit 2% of the net revenue received from sale of CERs for sustainable development activities in the

local areas through an annual review process. PP commits to assign to an management representative to

oversee the activities towards sustainable development and to ensure that the activities are undertaken

and concluded in a timely manner each year.

As part of the annual review, Project proponent will undertake informal discussions with the local

community at the project site and commit the revenue towards society or community development

activities in areas that are of most concern to the local population. These areas could include health,

education, sanitation, skill development, infrastructure development, etc. The annual review process will

detail the exact activities that would be undertaken using the 2% revenue and the detailed mode of

implementation of the proposed activity.

SECTION C. Duration and crediting period

C.1. Duration of project activity

C.1.1. Start date of project activity

>>

05/10/2011 (Date of placement of EPC for the plant)

C.1.2. Expected operational lifetime of project activity

>>

25. years- 00 months

C.2. Crediting period of project activity

C.2.1. Type of crediting period

>>

Renewal

C.2.2. Start date of crediting period

>>

09/05/2013 (Or the date of registration of the project with UNFCCC, whichever is later)

C.2.3. Length of crediting period

>> 7 Years 00 Months

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SECTION D. Environmental impacts

D.1. Analysis of environmental impacts

>>

As per the Environmental Impact Assessment (EIA) notification from MoEF dated September 14, 200628

,

and further order in June 201129

. given by the Ministry of Environment and Forests under the

Environment (Protection) Act 1986, the proposed project doesn’t fall under the list of activities

Environmental Clearance(EC) Hence, Solar Thermal Power Projects are exempted from EC.

D.2. Environmental impact assessment

>>

As the Project uses the solar energy as source which is the clean power and environment friendly. Further

there are no polluting emissions or discharges in air or water bodies.

SECTION E. Local stakeholder consultation

E.1. Solicitation of comments from local stakeholders

>>

MEIL Green Power Limited invited the local stakeholders for the meeting through newspaper

advertisement (published newspapers – 1.) Surya 2.) The Hans India , on 09/05/2012), direct verbal

communication and public notice prior to the scheduled date of the meeting was made in the project

area.

Place of meeting: MEIL Green Power Limited, Plant site, Anantapur District, Andhra Pradesh.

Date: 17/05/2012 Time: 11:00 Hrs to 13:30 Hrs.

E.2. Summary of comments received

>>

All the stakeholders agreed that the implementation of the project activity would not have any adverse

effect on environment and would result in the development of local communities.

The details of the comments / queries by various stakeholders and their reply are presented below:

S.No Question/Comment Response by PP Action Measure if

any

1. -Will there be any radiation

effects like heating or ill

health effects on the human

population in the area

surrounding the Project.

No, it will not have any effect on the

human population. As the Project

deploys the technology where in it uses

the heat energy in the solar rays for

generation of power. The Project has

already obtained the consent to establish

from the Pollution control Board. It was

clarified Solar Thermal Power project is

a non polluting clean energy project.

--

2 -Will there be any liquid

effluents discharge from the

Proposed Power Project

There shall be no liquid effluent

discharge from the Proposed Power

Project and the project will have septic

tanks to discharge and it adapts the

technology to maximize the re use of the

waste water with proper treatment with

--

28

http://envfor.nic.in/legis/eia/so1533.pdf 29

http://moef.nic.in/downloads/public-information/JNNSM.pdf

http://envfor.nic.in/legis/eia/so1533.pdf

http://moef.nic.in/downloads/public-information/JNNSM.pdf

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in the plant premises like gardening etc.,

3 the contribution of company

towards peripheral

development and increase of

basic eminites (like water,

transport etc.,)

It was clarified that the company will

provide assistance for social

development in the nearby villages up on

consultation with the local as required

and with development of project better

transport road and overall development

will take place.

The appropriate

action plans will be

made in

consultation with

local panchayat as

and when needed .

4 -about the increase in local

employment due to this

project.

It has been replied that, skilled and

trained people will be given priority

during the recruitment stage and non-

skilled worker will be taken from local

region only. As the Project is present in

the implementation stage that most of

the work would require technically

skilled manpower. Such manpower if

available with appropriate skills in the

local villages would be given preference.

The same will

considered if any

employment

/Recruitment takes

place.

E.3. Report on consideration of comments received

>>

Since there is no negative comment received and the local are unsupportive of he project activity it’s no

need to make adjustment on design, construction and operation of the proposed project.

SECTION F. Approval and authorization

>>

The letter(s) of approval from Party (ies) for the project activity is not available at the time of the

submission of PDD to the validating DOE.

- - - - -

UNFCCC/CCNUCC


Appendix 1: Contact information of project participants

Organization name MEIL Green Power Limited

Street/P.O. Box Technocrat Indl.Estate, Balanagar

Building S-2

City Hyderabad

State/Region Andhra Pradesh

Postcode 500037

Country India

Telephone +91-40- 44336700

Fax +91-40-44336800

E-mail [email protected]

Website --

Contact person

Title Director-Finance

Salutation Mr

Last name Rao

Middle name Thirupathi

First name Nadipineni

Department Finance

Mobile +91-9908732288

Direct fax +91-40-44336800

Direct tel. +91-40-44336700

Personal e-mail [email protected]

Appendix 2: Affirmation regarding public funding

Not applicable as no public funding to the project activity from Annex-I Parties

Appendix 3: Applicability of selected methodology

Relevant Info provided in SecB.2 of this PDD, the Project meets the applicable criteria of the

methodology ACM0002 (Version 13.0.0) due to following reasons:

- The Project is a newly-built grid-connected solar thermal power plant with zero-emission that install a

new power plant at a site where no renewable power plant was operated prior to the implementation of

the project activity (green field plant);

-The Project dose not involves switching from fossil fuels to renewable energy sources at the site of the

Project activity. Therefore the methodology ACM0002 (Version 13.0.0) is applicable to the Project

mailto:[email protected]

mailto:[email protected]

UNFCCC/CCNUCC


Appendix 4: Further background information on ex ante calculation of emission reductions

Calculation of EFgrid,CM,y

In accordance with the “Tool to calculate the emission factor for an electricity system” Version 03.0.0,

combined margin CO2emission factor for grid connected power generation is calculated stepwise as

below:

The data used for the calculation of the baseline emission factor was obtained from the baseline

calculations published by the CEA, CO2 data base version 07.

Step 1: Identify the relevant electricity systems

For the purpose of determining the electricity emission factors, a project electricity system and

connected electricity systems are to be defined. The Indian power system is divided into two regional

grids, namely NEWNE and Southern grid. Each grid covers several states. 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 their demand with their 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. There are also

electricity transfers between regional grids, and small exchanges in the form of cross-border imports and

exports (e.g. from Bhutan).Recently, the Indian regional grids have started to work in synchronous mode,

i.e. at same frequency.

States connected to different regional grids

Regional grid NEWNE grid Southern

grid Northern Eastern Western North

Eastern

States Haryana Bihar Gujarat Arunachal

Pradesh

Andhra

Pradesh

Himachal

Pradesh

Orissa Madhya Pradesh Assam Karnataka

Jammu&

Kashmir

West Bengal Maharashtra Manipur Kerala

Punjab Jharkhand Goa Meghalaya Tamil Nadu

Rajasthan Sikkm Chattisgargh Mizoram

Uttar Pradesh Nagaland

Uttarakhand Tripura

Union

Territory

Delhi Andaman-

Nicobar

Daman&Diu Pondichery

Chandigarh Dadar&Nagar

Haveli

Lakshwadeep

UNFCCC/CCNUCC


The Southern regional grid constitutes several states and union territories including Andhra Pradesh.

These states under the regional grid have their own power generating stations as well as centrally shared

power-generating stations. While the power generated by own generating stations is fully owned and

consumed through the respective state’s grid systems, the power generated by central generating stations

is shared by more than one state depending on their allocated share. Presently the share from central

generating stations is a small portion of their own generation.

Since the CDM project would be supplying electricity to the Southern regional grid, it is preferable to

take this grid as the project boundary rather than the state boundary. It also minimizes the effect of

interstate power transactions, which are dynamic and vary widely.

Step 2: Choose whether to include off-grid power plants in the project electricity system (optional)

Project participants may choose between the following two options to calculate the operating margin and

build margin emission factor:

Option I: Only grid power plants are included in the calculation.

Option II: Both grid power plants and off-grid power plants are included in the calculation.

The project participant has chosen Option I for the calculation of the operating and build margin

emission factor i.e. off-grid power plants are not being included in the calculation.

Step 3: Select a method to determine the operating margin (OM)

The calculation of the operating margin emission factor (EFgrid,OM,y ) 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.

For the proposed project activity, simple OM method (option a) has been chosen to calculate the

operating margin emission factor (EFgrid,OM,y). However, the simple OM method 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 low-cost/must-run

resources are defined as power plants with low marginal generation costs or power plants that are

dispatched independently of the daily or seasonal load of the grid. They typically include hydro,

geothermal, wind, low-cost biomass, nuclear and solar generation

Table: Share of Low Cost / Must-Run (% of Net Generation)

2006-07 2007-08 2008-09 2009-10 2010-11 Average

NEWNE 18.53% 19.0% 17.4% 15.9% 17.6% 17.69%

Southern 28.3% 27.1% 22.8% 20.6% 21.0% 23.96%

India 20.9% 21.0% 18.7% 17.1% 18.4% 19.22%

Ref: CO2 Baseline Database for the Indian Power Sector – CEA, Version 07

http://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm.

UNFCCC/CCNUCC


Percentage of total grid generation by low cost/must run plants (on the basis of average of five most

recent years) = 23.96%

The calculation above shows that the generation from low-cost/must-run resources constitutes less than

50% of total grid generation, hence usage of the Simple OM method in the project case is justified.

The Simple OM emission factor can be calculated using either of the two following data vintages for

years(s) y:

- Ex ante option: If the ex-ante option is chosen, the emission factor is determined once at the

validation stage, thus no monitoring and recalculation of the emissions factor during the crediting

period is required. For grid power plants, use a 3-year generation-weighted average, based on the

most recent data available at the time of submission of the CDM-PDD to the DOE for validation.

For off-grid power plants, use a single calendar year within the 5 most recent calendar years prior

to the time of submission of the CDM-PDD for validation.

or

- Ex post option: If the ex post option is chosen, the emission factor is determined for the year in

which the project activity displaces grid electricity, requiring the emissions factor to be updated

annually during monitoring. If the data required to calculate the emission factor for year y is

usually only available later than six months after the end of year y, alternatively the emission

factor of the previous year (y-1) may be used. If the data is usually only available 18 months after

the end of year y, the emission factor of the year proceeding the previous year (y-2) may be used.

The same data vintage (y, y-1 or y-2) should be used throughout all crediting periods.

The project proponent chooses the Ex ante option for estimating the simple OM emission factor wherein

as described above a 3-year generation-weighted average, based on the most recent data available at the

time of submission of the CDM-PDD to the DOE for validation, without requirement to monitor and

recalculate the emissions factor during the crediting period will be undertaken.

Step 4: Calculate the operating margin emission factor according to the selected method

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. The

Simple OM must be calculated as: Option A: Based on the net electricity generation and a CO2 emission factor of each power unit; or

Option B: Based 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.

The project proponent is using values for calculating OM that are published in the CEA database for

calculating CO2 emissions Version 7, dated Jan 2012 . These calculations are based on "Tool to Calculate

the Emission Factor for an Electricity System", Version 03.0.0, EB 70. These correspond with option A

of the current version of the Tool.

(a) Simple OM

The full generation weighted average for the most recent years has been considered from the Central

Electricity Authority data.

Operating

Margin

tCO2/ MWh

(A)

Net Generation in

Operating Margin

(MWh) (B)

Generation

(C=A*B)

2008-09 0.97044 121471250.5 117880640.08

UNFCCC/CCNUCC


2009-10 0.94113 134716872.2 126786214.66

2010-11 0.93963 137387256.6 129093635.82

Simple OM (tCO2/ MWh)

393575379.34 373760490.56

0.94965

CEA database CO2 data base Version 07 Jan 2012

Step 5: Calculate the build margin emission factor (EF grid, BM,y)

In terms of vintage of data, PP has chosen option a) build margin emission factor 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.

Calculations were done by the CEA (database version 6) to determine Emission Factor. CEA adopted

build margin calculation based on an approach similar to Option b and c) “for sample group of power

units m used to calculate the build margin” of the current Tool to calculate emission factor in the

electrical system’- Version 03.0.0 ,

Build margin is calculated by the formula:

EFgrid, BM,y = Σ(EG m,y × EF EL,m,y)/ Σ EG m,y

Where:

EFgrid,BM,y = Build margin CO2 emission factor in year y (tCO2/MWh)

EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m in year y (MWh)

EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh)

m = Power units included in the build margin

y = Most recent historical year for which power generation data is available

BM is calculated ex-ante based on the most recent information available at the time of submission of

PDD and is fixed for the entire crediting period.

Build Margin (BM)

(2010-11) 0.73389 tCO2/ MWh

Step 6. Calculate the combined margin emission factor

The calculation of the combined margin (CM) emission factor (EFgrid,CM,y) is based on one of the

following

methods:

(a) Weighted average CM; or

(b) Simplified CM.

The weighted average CM method (option A) should be used as the preferred option.

The simplified CM method (option b) can only be used if:

The project activity is located in (i) a Least Developed Country (LDC) or in (ii) a country with less than

10 registered CDM projects at the starting date of validation or (iii) a Small Island Developing States

(SIDS);

The host country India is not a LDC or with less than 10 registered CDM projects or a Small Island

Developing States (SIDS); at the starting date of validation, thus PP has chosen option a) Weighted

Average CM, in calculation of combine Margin emission factor

(a) Weighted average CM

UNFCCC/CCNUCC


The combined margin emissions factor is calculated as follows:

The following default values should be used for wOM and wBM:

• Wind and solar power generation project activities: wOM = 0.75 and wBM = 0.25 (owing to their

intermittent and non-dispatchable nature) for the first crediting period and for subsequent

crediting periods;

• All other projects: wOM = 0.5 and wBM = 0.5 for the first crediting period , and wOM = 0.25 and

wBM = 0.75 for the second and third crediting period, unless otherwise specified in the approved

methodology which refers to this tool.

Combined Margin/ Grid Emission Factor

Parameter Value

Simple OM (tCO2/ MWh) 0.94965

Build Margin (BM)

(2010-11) ( tCO2/ MWh) 0.73389

Weighted Average Combined Margin (CM)

(tCO2/ MWh)

= ({0.75×0.94965} +.{0.25 ×0.73389})

= 0.89571

Ex-ante calculation of emission reductions is provided in section B.6.3.

Appendix 5: Further background information on monitoring plan

Detailed monitoring plan for the project activity is provided in section B.7.3.

Appendix 6: Summary of post registration changes

Not applicable, as the CDM project activity is not yet registered hence there are no post registration

changes.

- - - - -

UNFCCC/CCNUCC


History of the document

Version Date Nature of revision

04.1 11 April 2012 Editorial revision to change version 02 line in history box from Annex 06 to Annex 06b.

04.0 EB 66 13 March 2012

Revision required to ensure consistency with the “Guidelines for completing the project design document form for CDM project activities” (EB 66, Annex 8).

03 EB 25, Annex 15 26 July 2006

02 EB 14, Annex 06b 14 June 2004

01 EB 05, Paragraph 12 03 August 2002

Initial adoption.

Decision Class: Regulatory

Document Type: Form

Business Function: Registration

concentrated solar power project in anantapur district of andhra pradesh

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