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PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 1

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

Version 03 - in effect as of: 28 July 2006

CONTENTS A. General description of project activity

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

Annexes Annex 1: Contact information on participants in the project activity Annex 2: Information regarding public funding Annex 3: Baseline information Annex 4: Monitoring plan

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 2 SECTION A. General description of project activity A.1. Title of the project activity: >> Datang Wendeng Phase Ⅱ Wind Power Project PDD version 1.0 Completed on 25th October 2011 A.2. Description of the project activity: >> Datang Wendeng Phase Ⅱ Wind Power Project (the proposed project) is located in Wendeng City, Shandong Province, and is developed by Datang Wendeng Clean Energy Development CO.,Ltd. The objective of the project is to generate renewable electricity from wind and sell the generated power to the North China Power Grid (NCPG). Based on the conditions of the project site, the developer is planning to install 33 wind turbines, each with a capacity of 1.5MW. The total installed capacity of the proposed project activity, therefore, will be 49.5MW. The expected net generation of the project activity is 90,685.9 MWh per year with the plant load factor of 20.91%. The PLF reflects the annual grid-connected output of the proposed project and has been determined by one qualified third party according to the guidelines from Annex11 of EB 48th meeting. As the baseline scenario, comparable capacity or electricity generation addition provided by the NCPG, is dominated by the thermal power generation, the operation of the proposed project will lead to emission reductions of CO2, which is estimated to be approximately 84,420 tonnes of CO2e per year. The proposed project will therefore help local government to promote the economy development and improve the air quality. The proposed project promotes local sustainable development through the following aspects: • Reducing CO2, SO2 and NOx emissions; • Creating local employment opportunity during the assembly and installation of wind turbines, and

for operation of the proposed project; • Reducing other particulate pollutants resulting from the fossil fuel fired power plants compared

with a business-as-usual scenario.

A.3. Project participants: >>

Name of Party involved Private and/or public entity(ies) project participants (as applicable)

Party involved wishes to be considered as project participant (Yes/No)

P.R. China (host) Datang Wendeng Clean Energy Development CO.,Ltd No

The United Kingdom Blue World Carbon Capital PCC No

A.4. Technical description of the project activity:

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 3 A.4.1. Location of the project activity: A.4.1.1. Host Party(ies): >> People’s Republic of China A.4.1.2. Region/State/Province etc.: >> Shandong Province A.4.1.3. City/Town/Community etc: >> Wendeng City A.4.1.4. Details of physical location, including information allowing the unique identification of this project activity (maximum one page): >> The proposed project is located within Wendeng City, Shandong Province, The project is divided into two area, the geographical coordinates of area one are around: East longitude 122°5'12"~122°7'58" and north latitude 36°55'3"~36°57'8"; the geographical coordinates of area two are around: East longitude 122°7'30"~122°9'23" and north latitude 36°58'1"~37°00'00". The Geographyical Location of the Project is shown in Figure 1 below.


Figure 1 Map showing the location of the Project A.4.2. Category(ies) of project activity: >> Category: Renewable electricity in grid connected applications Sector scope (1): Energy industries A.4.3. Technology to be employed by the project activity: >> The purpose of the Proposed Project Activity is the generation of electricity from wind and the supply of this electricity to the Grid. For the proposed project scenario, 33 units of wind turbines (Model type: WTG3-1500) with 1500KW unit capacity will be installed, providing a total capacity of 49.5MW.Total net annual generation of electricity is expected to be 93,162MWh. The main parameters of the wind turbine are shown in table 1. Table 1. Key Technology to be employed at the Project Wind Farm Key Technology Parameter Value

Shandong Province

Project Site

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 5 Rotor diameter (m) 87 Cut-in wind speed (m/s) 3.0 Rated wind speed (m/s) 10 Cut-out wind speed (m/s) 22 Rated voltage (V) 690 Rated power (kW) 1500 Expected life (year) 21（including 1 year construction period） Each turbine will have a transformer from 690V to 35kV, and are connected with the newly-built 110kV substation on the wind farm. The onsite substation is connected to the grid substation via 110kv transmission line. All the electricity generated by the wind farm will be transferred to the NCPG via the grid substation. The project scenario is the installation of 33 wind turbines with an aggregate capacity of 49.5MW. The wind turbines are estimated to generate on average 90,685.98MWh of electricity annually once fully operational. The expected load factor of 20.91% is determined by an independent qualified design institute in the FSR using detailed onsite information and long-term local wind data, in accordance with EB guidance on plant load factors (EB48 Annex 11). The net electricity supplied by the proposed project activity to the grid will be monitored through the main meter installed in the grid substation, recording exports to the grid (supply) and imports from the grid (consumption). There will be also electric meters of the wind farm as backups. Prior to the implementation of the project activity, the electricity was generated by grid-connected power plants. Without the implementation of the project, this scenario would have continued and is considered as the baseline scenario. As the NCPG is dominated by thermal power generation, the establishment of the proposed project activity will lead to greenhouse gas (GHG) emission reductions, estimated following the baseline methodology below. The proposed project involves no technology transfer from abroad.

A.4.4 Estimated amount of emission reductions over the chosen crediting period: >> The project participants chose renewable crediting period. The ex-ante estimated average annual emission reductions over the first seven-year crediting period of the project are as follows: Table 2 Estimated amount of emission reductions over the chosen crediting period

Years Annual estimation of emission reductions in tonnes of CO2e

01/04/2012-31/12/2012 63,315 01/01/2013-31/12/2013 84,420 01/01/2014-31/12/2014 84,420 01/01/2015-31/12/2015 84,420 01/01/2016-31/12/2016 84,420 01/01/2017-31/12/2017 84,420


01/01/2018-31/12/2018 84,420 01/01/2019-31/03/2019 21,105

Total estimated reductions (tonnes of CO2e) 607,075 Total number of first crediting years 7

Annual average over the crediting period of estimated reductions (tonnes of CO2e) 86,725

A.4.5. Public funding of the project activity: >> There is no pubic funding from Annex 1 Parties for this project. SECTION B. Application of a baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the project activity: >> Title of the approved methodology: ACM0002 Consolidated baseline methodology for grid-connected electricity generation from renewable sources (Version 12.1.0/EB 58/Annex 7, 26 November 2010, valid from 17 Sep 2010 onwards) Tools referenced in this methodology: “Tool for the demonstration and assessment of additionality”(Version 05.2 /EB 39/Annex 10) “Tool to calculate the emission factor for an electricity system” (Version 02.2.0 /EB61/Annex 12) http://cdm.unfccc.int/methodologies/PAmethodologies/approved.html. B.2 Justification of the choice of the methodology and why it is applicable to the project activity: >> 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). Therefore, the methodology is applicable as the proposed project activity is the installation of a Greenfield, grid-connected wind power plant (a). The methodology is applicable under the following conditions: Criteria Applicability Conclusion 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 proposed project activity is the installation of a wind power plant.

OK

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 7 In the case of capacity additions, retrofits or replacements: 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 expansion 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 proposed project activity is a Greenfield plant and does not represent a capacity addition to an existing plant.

OK

In case of hydro power plants, one of the following conditions must apply: • The project activity is implemented in an existing

reservoir, with no change in the volume of reservoir; or

• 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; or

• 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.

Not applicable. The proposed project activity is a wind power plant.

OK

The methodology is not applicable to the following: Criteria Applicability Conclusion 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 activity does not involve switching from fossil fuels to renewable energy at the site of the project activity

OK

Biomass fired power plants Not applicable. The proposed project activity is a wind power plant

OK

Hydro power plants that result in new reservoirs or in the increase in existing reservoirs where the power density of the power plant is less than 4 W/m2

Not applicable. The proposed project activity is a wind power plant

OK

In addition, the applicability conditions included in the tools referred to above apply.1 Any conditions for the application of the tools are addressed in the sections below where the tools are used, sections B.5 and B.6, showing that the tools are applicable to the proposed project activity. In 1 The condition in the “Combined tool to identify the baseline scenario and demonstrate additionality” that all potential alternative scenarios to the proposed project activity must be available options to project participants does not apply to this methodology, as this methodology only refers to some steps of this tool.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 8 addition, it is noted that: • the project is a Greenfield project, therefore the “Combined tool to identify the baseline scenario

and demonstrate additionality” is not required to identify the baseline scenario of the proposed project; and

• the project is a wind power project, there are no fossil fuels used for electricity generation, so there are no CO2 emissions and leakage from combustion of fossil fuels, and thus the “Tool to calculate project or leakage CO2 emissions from fossil fuel combustion” is not applicable to the proposed project.

B.3. Description of the sources and gases included in the project boundary >> Spatial boundary: The spatial extent of the proposed project boundary includes Datang Wendeng Phase Ⅱ Wind Power Project (including wind fans, main transformer, transmission line and substation) and all power plants connected physically to the NCPG. The project boundary is shown in the figure below:

Figure 2 Flow diagram of the project boundary

According to the delineation of grid boundaries as provided by the DNA of China, the NCPG, including Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia and Shandong2, is the project electricity system, which is defined by the spatial extent of the power plants that can be dispatched without significant transmission constrains. The electricity transmission between different provinces in the NCPG is very large and it is unreasonable for the proposed project to regard the Provincial Power Grid as the project boundary. The connected electricity system is the Northeast Power Grid (NEPG), consisting of three provincial grids: Jilin, Liaoning and Heilongjiang, and Central China Power Grid (CCPG), consisting of six provincial grids: Jiangxi, Henan, Hubei, Hunan, Chongqing and Sichuan. Emission sources and gases: Following the methodology, only CO2 emissions from electricity generation by fossil fuel fired power plant that is displaced due to the project activity are taken into account for determining the baseline emissions. According to the methodology, project emissions from geothermal, solar thermal and hydro

2 Chinese DNA designates it at http://qhs.ndrc.gov.cn/qjfzjz/t20090703_289357.htm

flow of electricity

export →← import

onsite transformer

station

EF:emission

factor

Project boundary

Turbines

ProposedProjectActivity

Electricitymeters

grid substation

projectelectricitysystem

connectedelectricitysystem

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 9 power plants need to be taken into account; there are no project emissions for a wind power plant, thus PEy = 0.The Emission sources and GHG included in the project boundary are as follows: Table 3 Emission sources and GHG included in the project boundary

Source Gas Included? Justification / Explanation

Baseline

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.

Project Activity Wind power plant

CO2 No According to the ACM0002(version

12.1.0),the electricity is produced by wind resource,

therefore there is no emission of CO2,CH4 and

N2O.

CH4 No

N2O No

B.4. Description of how the baseline scenario is identified and description of the identified baseline scenario: >> Because the project activity is the installation of a new grid-connected renewable power plant/unit, and is not a modification/retrofit of an existing plant/unit, the baseline scenario, according to the methodology, 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”. B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered CDM project activity (assessment and demonstration of additionality): >> CDM consideration The incentive from the CDM had been taken into account prior to the starting date of the project activity, aiming to obtain the additional funding to secure the project financially. In the feasibility study of the project, the potential revenue from CDM was analyzed and it was concluded that if the project were registered as a CDM project, the revenue from CDM would make the project financially attractive. Then the project owner decided to apply for CDM registration to overcome the financial barriers and signed the Emission Reduction Purchase Agreement with a CER buyer. The starting date of the Proposed Project Activity is after 02 August 2008, therefore, following EB guidelines (EB 49 Annex 22) the project participant informed the Host Party DNA and the UNFCCC secretariat in writing of the commencement of the project activity and of the intention to seek CDM status. These notifications were made within six months of the Proposed Project Activity start date as shown in the timeline below.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 10 In addition to this confirmation of serious prior consideration of the CDM by the project participants, the description and timeline below indicates continuing and real actions to secure CDM status for the project. The timeline of the project is shown below: Time schedule of the implementation of the project Time Milestone 29th.Nov.2010 EIA approval letter issued Apr.2010 The feasibility study report has been compiled which considered the

CERs by CDM. 30th.Apr.2010 FSR approval letter issued May.2010 Board meeting decided to apply for CDM. 30th. Jun. 2011 Notification of the intention to develop this project as CDM to UNFCCC 5th. Jul. 2011 Notification of the intention to develop this project as CDM to DNA Aug.2011 Emission Reduction Purchase Agreement signed 18th.February.2011 Wind power facility purchase contract Additionality The approved methodology requires the use of the latest version of the “Tool for the demonstration and assessment of additionality”. The Tool consists of 4 steps as described below. Step 1. Identification of alternatives to the project activity consistent with current laws and regulations Realistic and credible alternatives to the project activity are defined through the following sub-steps: Sub-step1a. Define alternatives to the project activity: The demonstration about the alternative that provides outputs or services comparable with the proposed CDM project activity is as follows: a) The proposed project activity undertaken without being registered as a CDM project activity. • Alternative a) is in compliance with all applicable legal and regulatory requirements. But according

to the detailed analysis in step 2, this scenario is less attractive with low IRR and is not realistic without CDM financing.

b) A fossil fuel-fired power plant with the comparable capacity or electricity generation. • Taking into account the required capacity for the same annual generation, according to the current

laws and regulations, it is not a realistic alternative (please refer to the analysis in sub-step 1b). c) A power plant using other source of renewable energy with the comparable capacity or electricity

generation, such as PV, biomass and hydro, etc. • Besides wind energy, other kinds of renewable energy technologies, such as solar PV, geothermal,

biomass and hydro are possible grid-connected sources that could be used in China. However, due to the technology development status and the high cost for power generation, solar PV, geothermal


and biomass of similar installed capacity as the proposed project are not realistic alternatives in China3. Biomass power generation also faces barriers and is difficult to be operated without policies& financial support, only hydropower projects can have an investment return rate that competes with that of wind power projects in China4. However, due to dry climate and the lack of water resource recently years in project area, there is no commercially exploitable hydro power resource which can provide same electricity generation output as the proposed project activity. Therefore, this alternative is not realistic.

d) Comparable capacity or electricity generation addition provided by the NCPG. • Scenario d) is a realistic and feasible alternative which can provide outputs or services comparable

with the proposed project and comply with applicable laws and regulations. Added capacity is dominated by thermal (coal-fired) power plants as determined in B.6.

Sub-step 1b. Consistency with mandatory laws and regulations: According to Chinese regulations, coal-fired power plants of less than 135MW are prohibited from being built in areas covered by the large grids such as provincial grids5. Therefore, a fossil fuel fired power plant with the same capacity as the proposed project activity, or with a capacity with comparable electricity generation, which would be 19MW6, as described in alternative b in sub-step 1a, conflicts with Chinese regulations and practice. Alternative b, therefore, is not a realistic alternative. The other alternatives described in sub-step 1a are all in compliance with applicable legal and regulatory requirements. However, only comparable capacity or electricity generation addition provided by North China Power Grid (alternative d) is a realistic alternative consistent with current laws and regulations. Indeed, it is very common in the power grid to increase the generation output of some operating units to satisfy the load demand. According to the analysis in sub-step 1a and 1b, alternative (a) and alternative (d) are the realistic and feasible alternatives which comply with applicable laws and regulations. Step 2. Investment analysis The purpose of this step is to determine whether the proposed project activity is economically or financially less attractive than other alternatives, identified in step1, without the revenue from the sale of certified emission reductions (CERs). To conduct the investment analysis, use the following sub-steps: Sub-step 2a. Determine appropriate analysis method

3 http://scitech.people.com.cn/GB/5347113.html, http://www.sdpc.gov.cn/zjgx/t20071123_174054.htm 4 http://www.chinaenergy.gov.cn/news.php?id=15688 5 Notice on Strictly Prohibiting the Installation of Fuel fired Generators with the Capacity of 135MW or below issued by the General Office of the State Council, Decree No. 2002-6. 6 According to the China Electric Power Yearbook, (2010 Edition), China Electric Power Press, the average annual utilisation rate of thermal power units in China in 2008 was 4865 hours. A 19MW unit with average utilization rate could generate the same electricity as the proposed wind farm.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 12 This step determines whether to apply the simple cost analysis, investment comparison analysis or benchmark analysis (sub-step 2b): Following the EB guidance on the assessment of investment analysis7, if the alternative to the project activity is the supply of electricity from the grid, this is not to be considered an investment and a benchmark approach is considered appropriate. As the baseline alternative involves the continuation of current practices, supply of electricity from the grid, a benchmark analysis is used to identify whether the project is economically attractive (Option III). The use of a benchmark analysis is also in line with Chinese practice and is followed in the FSR. Therefore, the benchmark analysis (Option III) is adopted. Sub-step 2b – Option III. Apply benchmark analysis According to the Interim Rules on Economic Assessment of Electrical Engineering Retrofit Projects issued by former State Power Corporation of China in 2002, the benchmark of total investment financial internal rate of return (IRR) of electric power industry is 8%, and only if the total investment IRR of the project is higher than or equivalent to this benchmark, the proposed project is financially feasible. Sub-step 2c. Calculation and comparison of financial indicators: The investment estimation in the Feasibility Study Report is based on national regulation, material and equipment price levels. The relevant data are listed in table 4: Table 4 Relevant indicators for financial assessment

Item Value Data source Net supplied power to the grid 90,685.98 MWh FSR

Static investment 48,333.62 104 Yuan RMB FSR Average annual O&M 1165 104 Yuan RMB FSR

Free cash 148.5 104 Yuan RMB FSR Depreciation ratio 6.4% FSR

On-grid tariff (Including VAT) 0.61 Yuan RMB/kWh FSR Expected operational lifetime 20 years FSR

Value added tax rate 17% FSR Income tax rate 25％ FSR

Education supplement tax rate 3% FSR Urban maintenance and

construction tax rate 5% FSR

CER price 10.5 €/t CO2e Expected Table 5 shows the IRR of the project without and with CER revenue. It can be seen that IRR without CER revenue is below the benchmark 8% and with revenue from CDM at the CER price level, the proposed project would be more financially attractive.

Table 5. Total investment analysis of the proposed project

7 Paragraph 19, ‘Guidance on the Assessment of Investment Analysis’ (version 04), EB 61 Annex 13.


IRR without CDM with CDM revenue

5.27％ 8.00％ The revenue from the sale of CERs is expected to have a significant impact on the IRR. Although some uncertainties still exist, investors would gain reasonable financial return to reduce the risk. And the internal return rates,8.00% for total investments would appear more financially attractive for prospective investors. Sub-step 2d. Sensitivity analysis A sensitivity analysis is used for assessing the financial uncertainties by identifying the potential impact from changes in some key parameters such as capital investments, costs, prices, etc., on the economic performance of the proposed project. For a wind farm project without CDM funding, the factors that influences the IRR of total investment are mainly: 1) Static total investment; 2) Annual O&M cost; 3) Expected Tariff (Inc.VAT); 4) Annual output delivered to the grid.

Assuming these four parameters change within a range between -10% and 10%, the outcome of the IRR analysis is presented in Table 6 and Figure 2 below.

Table 6. IRR sensitivity analysis of the proposed project -10.00% -5.00% 0.00% 5.00% 10.00%

Static total investment 6.56% 5.89% 5.27% 4.70% 4.17% Annual O&M Cost 5.64% 5.45% 5.27% 5.08% 4.90% Expected tariff (Inc.VAT） 3.72% 4.51% 5.27% 5.99% 6.68% Annual output delivered to the grid 3.72% 4.51% 5.27% 5.99% 6.68%


Figure 2 IRR sensitivity analysis for the proposed project

When static total investment, annual O&M Cost , tariff and Annual output delivered to the grid changing range from -10% to 10%, IRR will not reach the benchmark IRR of 8%, and the result of investment analysis will also remain the same. Thus, the sensitivity analysis confirms that the Project faces a rigorous financial barrier and hence presents a clear additionality of the Project. The next sensitivity analysis examines the fluctuation of above four financial parameters when the project IRR reaches the benchmark, here is the result, see Table 7 given below.

Table 7. Variation of financial parameters to make the project IRR reach 8%

Variation of the parameters to make

IRR reach the benchmark 8%

Static total investment O&M cost Expected tariff

(Inc.VAT）

Annual grid connected

output

-19.4% -78.0% 20.0% 20.0%

From the table 7, the change of static total investment is an important factor influencing the financial attractiveness of the proposed project. In the case that the static total investment is decreased by 19.4%, the IRR of the proposed project begins to reach the benchmark. However, as the prices, including equipments and commodities, also the labour costs have been increasing in recent years8; regarding as the wind project, the cost of turbine, engineering construction and related accessories consist main budget of the investment. It is impossible for the static total investment to decrease by 19.4% under the circumstances that the price of equipments and materials and so on are increasing currently (due to the price increase of raw materials, e.g. steel and iron). A significant reduction in the level of investment is particularly unlikely. So the static total investment is not likely to decrease by 19.4%. Annual O&M cost comprises maintenance cost, salary, materials and other costs. Since all of these cost 8 http://fj.steelinfo.cn/news.asp?col=dqyw&id=19001

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 15 are determined by long term operational experience, it is impossible to decrease the annual O&M cost as much as 78.0%. Thus it can be demonstrated that within the range of reasonable variations in key parameters as mentioned above, the conclusion that the proposed project is lack of financial attractiveness is still robust. The tariff increase by 20.0% the IRR of proposed project begins to exceed the benchmark. However there is extremely unlikely for the tariff of the proposed project to have an increase of 20%. Based on the notification on feed-in tariff policy issued by NDRC dated 20 July 20099, China has been divided into four areas based on the wind resource conditions and construction conditions. The feed-in tariff for the four areas is 0.51RMB/kWh, 0.54RMB/kWh, 0.58RMB/kWh, and 0.61RMB/kWh. Jinan City, Shandong Province, where the proposed project is located, is classified as wind resource area IV. This means that the feed-in tariff for the proposed project is 0.61RMB/kWh certainly. Therefore the impact of variation in the expected tariff will not be addressed in the sensitivity analysis, and it is unlikely to increase by20.0% about the tariff of the proposed project. The annual net electricity delivered to the grid by the project activity would fluctuate annually along with the seasonal changes in wind power resource availability, along with the age increase in project operation, the time period needed for regular maintenance of wind equipment would also increase, which would tend to decrease the annual electricity generation. The expected annual electricity output of the proposed project indicated in the FSR was calculated based on historical wind data and electricity demand, therefore, a 20.0% increase in annual net electricity is not reasonable. To conclude, the sensitivity analysis shows that without CER revenue, IRR of the project is unlikely to reach the benchmark 8%, which supports the conclusion that the proposed project is not financially feasible without CDM support. Step 3. Barrier analysis Not applied. Therefore, the analysis proceeds to step 4. Step 4. Common practice analysis Sub-step 4a. Analyze other activities similar to the proposed project activity: In line with the EB guidance on the additionality tool, the common practice analysis shall cover similar projects in the same region and taking place in a comparable environment with regards to regulatory framework, investment climate, etc. In China, the regulatory framework and investment climate for wind farm projects can be called similar and comparable when the projects are connected to the same grid and located in the same Province. So here we only cover the wind power projects in Shandong Province. In April 2002, China implemented power sector reform to establish a more commercialized power market in China. Since market conditions for wind power project development changed significantly as a result of this sector reform, the common practice analysis excluded projects prior to April 2002. The common practice analysis excluded projects prior to 2002 and restricted to large scale project (using 9 http://www.sdpc.gov.cn/zcfb/zcfbtz/2009tz/t20090727_292827.htm

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 16 the CDM definition of large scale: >15 MW). Also, other CDM projects activities are excluded in line with the guidance of the additionality tool. Using the statistics collated by Professor Shi Pengfei10 of installed capacity of wind power in China in 2007, the wind farm projects similar to the proposed project activity are listed in Table 8 below. Table 8. Similar-scale Wind farm projects located in Shandong Province Name Commissioning date Capacity (MW) Note

Shandong Jimo Qingdao Huawei Wind Farm 2002- 2003 16.35

Obtained favourable loan and Foreign support as demonstration project

Source: “Statistics of domestic wind farm installation capacity in 2007”, Shi Pengfei; http://www.jimo.gov.cn/government/inc/webmenupagegongkai.asp?newsid=10233. Sub-step 4b. Discuss any similar options that are occurring: The project listed in the table above is the only similar activities occurring which is not registered as a CDM activity .The Shandong Jimo project received financial support from a German company and it was also faced with financial barriers and applied for Voluntary Emission Reductions11. All the other wind farms in Shandong have already successfully been registered or are applying as CDM projects in EB. Therefore, the wind power projects similar with the proposed project activity do not have common practice in Shandong Province. → If Sub-steps 4a and 4b are satisfied, i.e. similar activities cannot be observed or similar activities are observed, but essential distinctions between the project activity and similar activities can reasonably be explained, then the project activity is additional. In conclusion, all the steps above are satisfied, the proposed CDM project is not the baseline scenario, and the project activity is additional. B.6. Emission reductions:

B.6.1. Explanation of methodological choices:>> 1. Baseline Emission Calculation According to ACM0002, the baseline emissions include only CO2 emissions from electricity generation in fossil fuel fired power plants that are displaced or influenced due to the project activity, calculated as follows:

yCMgridyPJy EFEGBE ,,, ∗= (1) Where: BEy = Baseline emissions in year y (tCO2/yr). 10 “Statistics of domestic wind farm installation capacity in 2007”, Shi Pengfei, see http://www.xjwind.com/cn/UploadFiles/200851412232316.pdf 11 The verification report of Shandong Qingdao Huawei Wind Power Project, Report No.20070225.

http://www.bestonecapital.com/chinese/03.htm

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 17 EGPJ,y = The 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). EFgrid,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”. Calculation of EGPJ,y As the proposed 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, the following applies: EGPJ,y = EGfacility,y Where: EGPJ,y is the 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). EGfacility,y is the quantity of net electricity generation supplied by the project plant/unit to the grid in year y (MWh/yr). The baseline emission factor (EFy) is calculated as a combined margin (EFgrid,CM,y), consisting of the combination of operating margin (EFgrid,OM,y) and build margin (EFgrid,BMy,) factors according to the following six steps defined in the “Tool to calculate the emission factor for an electricity system”. Data for the calculations are based on official national statistics books: China Energy Statistical Yearbook and China Electric Power Yearbook. Step 1. Identify the relevant electricity systems The power generated from the proposed project activity will be supplied to the grid. As the DNA has published a delineation of the project electricity system and connected electricity systems, these delineations are used. Following the DNA delineation, the project electricity system is the North China Power Grid (NCPG), consisting of six provincial grids: Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia and Shandong. The connected electricity system is the Northeast Power Grid (NEPG), consisting of three provincial grids: Jilin, Liaoning and Heilongjiang, and Central China Power Grid (CCPG), consisting of Jiangxi, Henan, Hubei, Hunan, Chongqing and Sichuan. There is electricity transferring from the connected electricity systems to the project electricity system, so the CO2 emission factor for net electricity imports (EFgrid,import,y) from the connected electricity system should be determined using one of the following options for the purpose of determining the operating margin emission factor: (a) 0 tCO2/MWh, or (b) The weighted average operating margin (OM) emission rate of the exporting grid; or (c) The simple operating margin emission rate of the exporting grid; or (d) The simple adjusted operating margin emission rate of the exporting grid.

The option (c) is selected to calculated the CO2 emission factor(s) for net electricity imports (EFgrid,import,y) according to the delineation.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 18 The electricity imports from the Northeast Power Grid to the North China Power Grid has not changed significantly in recent years (see Annex 3), and the electricity from Central China Power Grid to North China Power Grid just started from 2006 and the imported electricity is negligible compared to the power generated from NCPG. So for the purpose of determining the build margin emission factor, the spatial extent is limited to the project electricity system according to the tool. 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. Following the calculations of the DNA, and the statistical data available, Option I is chosen. Step 3. Select a method to determine the operating margin (OM) According to the tool, four various methods are provided for calculating the operating margin emission factor (EFgrid,OM,y), including: a) Simple OM; b) Simple Adjusted OM; c) Dispatch data analysis OM; d) Average OM According to the tool, the Simple OM method (a) is applicable to the project if the low-cost 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 Since generation from all sources (including hydro power) other than thermal plants were less than 1% of total generation in the NCPG in 200612 and this percentage has not changed significantly in recent years, the Simple OM method is applicable to the proposed project. The Simple OM emissions factor can be calculated using either ex-ante or ex-post data vintages. The project proponents have chosen to use the ex-ante option, and EFgrid,OM,y is fixed for the duration of the first crediting period. • Ex ante option: 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.

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

12 Page 474, Electric Power in China (2006) by China Electricity Council

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 19 The Simple Operating Margin emission factor EFgrid,OM,y is defined as the generation-weighted average emissions per unit net electricity generation (tCO2/MWh) of all generating sources serving the system, not including low-operating cost and must-run power plants. Two options can be selected to calculate the simple OM: • Based on data on fuel consumption and net electricity generation of each power plant / unit (Option

A); or • Based on data on the total net electricity generation of all power plants serving the system and the

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

As data for options A is not available, and only nuclear and renewable power generation are considered as low-cost / must-run power sources and the quantity of electricity supplied to the grid by these sources is known, therefore, option B is chosen to calculate the OM emission factor, following the published DNA data and calculations. For Option B, the Simple OM emission factor is calculated based on the net electricity supplied to the grid by all power plants serving the system, not including low-cost / must-run power plants / units, and based on the fuel type(s) and total fuel consumption of the project electricity system, as follows:

2, , , ,

, ,

i y i y co i yi

grid OMsimple yy

FC NCV FEF

EG

× ×Ε=∑

(2)

Where

, ,grid OMsimple yEF is the simple operating margin CO2 emission factor in year y (tCO2/MWh) FCi,y is the amount of fossil fuel type i consumed in the project electricity system in year y (mass or volume unit) NCVi,y is the net calorific value (energy content) of fossil fuel type i in year y (GJ/mass or volume unit) EFCO2,i,y is the CO2 emission factor of fossil fuel type i in year y (tCO2/GJ) EGy is the net electricity generated and delivered to the grid by all power sources serving the system, not including low-cost / must-run power plants / units, in year y (MWh) i is all fossil fuel types combusted in power sources in the project electricity system in year y y, when using the ex-ante option, is the three most recent years for which data is available at the time of submission of the CDM-PDD to the DOE for validation On the basis of the data available, the three-year average operating margin emission factor is calculated by the DNA as a full-generation-weighted average of the emission factors13: EFgrid,OMsimlpe,y = 0.9914tCO2/MWh Step 5. Calculate the build margin (BM) emission factor The sample group of power units m used to calculate the build margin consists of the set of power capacity additions in the electricity system that comprise 20% of the system generation (in MWh) and

13 http://cdm.ccchina.gov.cn/WebSite/CDM/UpFile/File2552.pdf

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 20 that have been built most recently.14 This option is chosen as it comprises larger annual generation than the five units built most recently. Following the deviation15, the latest statistical data available (from the China Power Yearbook) is used by the DNA to determine the most recent year from which the added generation capacity is equal to or just exceeds 20% of the latest statistic year 2008. The added generation capacity is the sample group of power units m used to calculate the build margin. In terms of vintage of data, project participants can choose between option 1 ex-ante, and option 2 ex-post data vintages. The project proponents have chosen to use the ex-ante option, and EFgrid,BM,y is fixed for the duration of the first crediting period. • Option 1. For the first crediting period, calculate the 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. For the second crediting period, the build margin emission factor should be updated based on the most recent information available on units already built at the time of submission of the request for renewal of the crediting period to the DOE. For the third crediting period, the build margin emission factor calculated for the second crediting period should be used. This option does not require monitoring the emission factor during the crediting period.

The build margin emissions factor is the generation-weighted average emission factor (tCO2/MWh) of all power units m during the most recent year y for which power generation data is available, calculated as follows:

, , ,

, ,,

m y EL m ym

grid BM ym y

m

EG EFEF

EG

×=∑

∑ (3)

EFgrid,BM,y is the Build margin CO2 emission factor in year y(t CO2/MWh); EGm,y is the Net quantity of electricity generated and delivered to the grid by power unit m in year y (MWh); EFEL,m,y is the CO2 emission factor of power unit m in year y (tCO2/MWh); m is the power units included in the build margin; y is the most recent historical year for which power generation data is available. The CO2 emission factor of each power unit m (EFEL,m,y) should be determined as per the guidance in step 3 (a) for the simple OM. However, due to the limited availability of publicly available data, the DNA uses the accepted deviation mentioned in Step 4 to calculate EFBM, y, as follows: • Use of capacity additions for estimating the build margin emission factor for grid electricity. • Use of weights estimated using installed capacity in place of annual electricity generation. • Using the latest statistical data available from China Energy Statistical Yearbook 2009 to calculate

the different CO2 emission percentage (λi) of solid, liquid and gas fuel in the total emission from thermal generation in the North China Power Grid in 2008.

14 If 20% falls on part capacity of a unit, that unit is fully included in the calculation. 15 Deviation for projects in China (DNV, 7 Oct 05), see http://cdm.unfccc.int/Projects/Deviations.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 21 • Based the emission percentage (λi) of different kind fossil fuels and the corresponding emission

factor (EFi) according to the best technology commercially available in the China, the weighted emission factor of thermal power (EFthermal)is calculated.

• Using the latest statistical data available (from the China Electric Power Yearbook) determine the year from which the added generation capacity is equal to or just exceeds 20% of the capacity of the latest statistic year 2008. Regarding the added generation capacity above 20%, calculate the Build Margin through multiply the weighted emission factor of thermal power (EFthermal) by the capacity percentage of the thermal power among the about 20% new capacity of 2008.

And the EFgrid,BM,y of North China Power Grid is 0.7495 tCO2/MWh16. (see Annex 3 for more details) Step 6. Calculate the combined margin (CM) emissions factor According to the tool, there are two methods for calculation of the combined margin (CM) emission factor, i.e. (a) Weighted average CM; or (b) Simplified CM, and the weighted average CM method (option a) should be used as the preferred option. The combined margin emission factor is calculated as follows: EFgrid,CM,y= wOM • EFgrid,OM,y + wBM • EFgrid,BM,y (4) Where EFgrid,BM,y is the build margin CO2 emission factor in year y (tCO2/MWh) EFgrid,OM,y is the operating margin CO2 emission factor in year y (tCO2/MWh) wOM is the weighting of operating margin emissions factor (%) wBM is the weighting of build margin emissions factor (%). The default weights are used, i.e. for the wind farm projects in the first crediting period and the subsequent crediting period, wOM = 0.75 and wBM = 0.25. On the basis of these weights for the first crediting period, the combined margin emission factor is calculated, and fixed ex-ante: EFgrid,CM,y = 0.9309 tCO2/MWh Using Operating Margin and Build Margin emission factors that are fixed for the duration of the first crediting period, the baseline emissions factor is also fixed for the first crediting period. These parameters will be recalculated at any renewal of the crediting period using the same steps 1-5 in the tool and the latest data available at that time. Table 8. Values obtained when calculating the baseline emission factor using ACM0002 Variable Value Operating Margin Emissions Factor (EFgrid,OM,y in tCO2/MWh) 0.9914 Build Margin Emissions Factor (EFgrid, BM,y in tCO2/MWh) 0.7495 Baseline Emissions Factor (EFgrid,CM,y in tCO2/MWh) 0.9309

16 http://cdm.ccchina.gov.cn/WebSite/CDM/UpFile/File2552.pdf

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 22 Baseline emissions (BEy) now can be calculated as the combined margin CO2 emission factor (EFgrid,CM,y) multiplied by the annual net generation of the Proposed Project (EGPJ,y). 2. Project emission According to the methodology, for most renewable energy project activities, PEy = 0. However, the methodology prescribes project emission calculations for geothermal, solar thermal and hydro power plant. As a wind power plant, therefore, there are no project emissions according to the methodology: PEy = 0 3. Leakage According to the methodology, no leakage is considered for the proposed project. 4. Calculate Emission Reduction The emission reduction ERy by the project activity during a given year y is the difference between baseline emission (BEy) and project emissions (PEy), as follows: ERy = BEy – PEy (5) Where the baseline emissions (BEy in tCO2) are the product of the baseline emissions factor (EFy in tCO2/MWh) times the electricity supplied by the project activity to the grid (EGPJ,y in MWh). The calculation formula is as follows:

yCMgridyPJy EFEGBE ,,, ∗= (6) As 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:

yn,consumptioytogrid,,facility, - EGEGEGEG yyPJ == Where: EGPJ,y is the 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) EGfacility,y is the quantity of net electricity generation supplied by the project plant/unit to the grid in year y (MWh/yr) EGto grid,y is the quantity of annual electricity delivered to the grid by the proposed project(MWh); EGconsumption,y is the quantity of annual electricity purchased from the grid by the proposed project(MWh).

B.6.2. Data and parameters that are available at validation: Data / Parameter: FCi,y Data unit: Mass or volume Description: the amount of the fossil fuel i consumed in the project electricity system in year

ySource of data used: China Energy Statistical Yearbook Value applied: See Annex 3 Justification of the choice of data or

Based on official national statistics

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 23 description of measurement methods and procedures actually applied : Any comment: Data / Parameter: EGgrid,y and EGm,y Data unit: MWh Description: Electricity supplied to power grid by included sources in year y Source of data used: China Electric Power Yearbook Value applied: See Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied :


Any comment: Data / Parameter: NCVi Data unit: GJ/mass or volume unit Description: Net caloric value of fossil fuel type i consumed in the project electricity system

in year y Source of data used: China Energy Statistic Yearbook Value applied: See Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied :


Any comment: Data / Parameter: EFCO2,i,y and EFCO2,m,y Data unit: tCO2/GJ Description: CO2 emission factor of fossil fuel type i in year y Source of data used: Taken from DNA of China, see

http://cdm.ccchina.gov.cn/WebSite/CDM/UpFile/File2552.pdf Original data used are the IPCC default values at the lower limit of the uncertainty at a 95% confidence interval as provided in table 1.4 of Chapter1 of Vol. 2 (Energy) of the 2006 IPCC Guidelines on National GHG Inventories

Value applied: See Annex 3 Justification of the choice of data or description of measurement methods and procedures actually


PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 24 applied : Any comment: Data / Parameter: Efficiency of the best technology commerciallyData unit: %

Description: Best commercial available efficiency of coal, gas, oil fuel power plant Source of data used: http://cdm.ccchina.gov.cn/WebSite/CDM/UpFile/File2551.pdf Value applied: Best efficiency for coal plant is 39.08%;

Best efficiency for oil plant is 51.46% Best efficiency for gas plant is 51.46%

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


Any comment: Data / Parameter: Installed CapacityData unit: MW

Description: Installed capacity of the NCPG in year y Source of data used: China Electric Power Yearbook Value applied: See Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied :


Any comment: Data / Parameter: Import ElectricityData unit: MWh

Description: Net import electricity from NEPG to the NCPG Source of data used: China Electric Power Yearbook Value applied: See Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied :


Any comment: Data / Parameter: Import ElectricityData unit: MWh

Description: Net import electricity from CCPG to the NCPG

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 25 Source of data used: China Electric Power Yearbook Value applied: See Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied :


Any comment:

B.6.3. Ex-ante calculation of emission reductions: >> Based on the Feasible Study Report, the proposed project will generate 93,162MWh electricity to the NCPG annually. The emission reduction ERy by the project activity during a giving year y is calculated as follows:

yCMgridyfacilityy EFEGBE ,,, ×= = 90,685.9 MWh × 0.9309 tCO2/MWh = 84,420 tCO2 ERy = BEy﹣PEy = 84,420﹣0= 84,420 tCO2 The emission reduction ERy by the project activity during a giving year y is 84,420 tCO2 and the total emission reduction in the first crediting period is 590,940 tCO2.

B.6.4 Summary of the ex-ante estimation of emission reductions: >> Table 9 Emission reduction of the proposed project in the first crediting period

Year

Estimated value of emission of the

proposed project activity(tCO2e)

Estimated value of emission of the baseline

(tCO2e)

Estimated value of emission of

leakage (tCO2e)

Estimated value of total

emission reduction (tCO2e)

01/04/2012-31/12/2012 0 63,315 0 63,315 01/01/2013-31/12/2013 0 84,420 0 84,420 01/01/2014-31/12/2014 0 84,420 0 84,420 01/01/2015-31/12/2015 0 84,420 0 84,420 01/01/2016-31/12/2016 0 84,420 0 84,420 01/01/2017-31/12/2017 0 84,420 0 84,420 01/01/2018-31/12/2018 0 84,420 0 84,420 01/01/2019-31/03/2019 0 21,105 0 21,105

Total (tCO2e) 0 590,940 0 590,940 B.7. Application of the monitoring methodology and description of the monitoring plan: >> Following the approved methodology ACM0002 (version 12.1.0), the data that is required to be

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 26 monitored to establish the emission reductions, is the net electricity generation (EGfacility,y).

B.7.1 Data and parameters monitored: Data / Parameter: EGfacility,y Data unit: MWh Description: Quantity of net electricity generation supplied by the project plant/unit to the

grid in year y Source of data to be used:

Electricity meter, monitoring supply to the grid (EGto grid,y) and imports from the grid (EGconsumption,y)

yn,consumptioytogrid,,facility - EGEGEG y = Value of data applied for the purpose of calculating expected emission reductions in section B.5

93,162 MWh/year once fully operational

Description of measurement methods and procedures to be applied:

Net electricity generated by the proposed project activity will be monitored continuously through the main metering equipment at the Grid substation. This meter has two-way metering, recording both exports to the grid ((EGto grid,y)) and imports from the grid (EGconsumption,y); net electricity supplied to the grid is calculated as exports minus imports.

QA/QC procedures to be applied:

Back-up meters will be installed at the on-site substation. The metering equipments are calibrated and checked for accuracy by the qualified third party in accordance with industry standards. Monthly net generation data will be approved and signed off by CDM manager before it is accepted and stored. Net supply of electricity to the grid is double-checked against records for sold electricity.

Any comment: Data / Parameter: EGtogrid,y Data unit: MWh Description: The quantity of annual electricity delivered to the grid by the proposed project Source of data to be used:

Electricity Meter

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

90,685.9


Grid-connected electricity generated by the proposed project will be monitored through the main metering equipment at the Grid substation. The backup meters will also be installed at the onsite substation. The metering equipments will be calibrated and checked annually for accuracy so that the metering equipment shall have sufficient accuracy.


The quantity of annual electricity delivered to the grid by the proposed project is cross-checked against records for sold electricity.


Monthly supplied generation data will be approved and signed off by CDM manager before it is accepted and stored. This audit will check compliance with operational procedures in this monitoring plan (for details, see Section B.7.2). This internal audit will also identify potential improvements to procedures to improve monitoring and reporting in future years. If such improvements are proposed these will be reported to the DOE and only operated after approval from the DOE.

Any comment: Data / Parameter: EGconsumption,y Data unit: MWh Description: The quantity of annual electricity purchased from the grid by the proposed

project Source of data to be used:

Electricity Meter

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

0


The electricity purchased from the grid by the proposed project will be monitored through the main metering equipment at the Grid substation. The backup meters will also be installed at the onsite substation. The metering equipments will be calibrated and checked annually for accuracy so that the metering equipment shall have sufficient accuracy.


The quantity of annual electricity purchased from the grid by the proposed project is cross-checked against records for sold electricity. Monthly purchased electricity data will be approved and signed off by CDM manager before it is accepted and stored. This audit will check compliance with operational procedures in this monitoring plan (for details, see Section B.7.2). This internal audit will also identify potential improvements to procedures to improve monitoring and reporting in future years. If such improvements are proposed these will be reported to the DOE and only operated after approval from the DOE.

Any comment:

B.7.2 Description of the monitoring plan: >> The aim of the monitoring plan is to make sure that the net electricity generation delivered to the grid is

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 28 monitored completely, consistently, reliably and precisely. The details are summarized as follows: 1. Introduction The Datang Wendeng Phase Ⅱ Wind Power Project adopts the approved consolidated monitoring methodology ACM0002 “Consolidated baseline methodology for grid-connected electricity generation from renewable sources” (version 12.1.0) to determine the emission reductions from the net electricity generation from the wind farm. 2. Monitoring subject The data required for the calculation of emission reductions are the export electricity supply to the power grid (EGtogrid,y) and the import electricity supply from the power grid (EGconsumption,y).The quantity of net electricity generation supplied by the project plant/unit to the grid EGfacility,y is the quantity of annual electricity delivered to the grid by the proposed project (EGtogrid,y) minus the electricity purchased from the grid by the proposed project (EGconsumption,y).

yn,consumptioytogrid,,facility - EGEGEG y = Therefore the EGtogrid,y and EGconsumption,y will also be monitored to calculate the EGfacility,y. 3. Monitoring management structure In order to obtain reliable monitoring data, the project developer will establish a monitoring management framework prior to the starting of the crediting period. Overall responsibility for monitoring and carrying out the monitoring following this monitoring plan lies with Datang Wendeng Clean Energy Development CO.,Ltd. Clear responsibilities will be assigned to all staff involved in the CDM project. A CDM manager will be appointed who has the overall responsibilities for the monitoring of the project, other staff will be responsible for the data recording, data collecting, data archiving and emission reductions calculation. The CDM operating and management structure is illustrated as follows:

Datang Pinyin Clean Energy Development CO.,Ltd.

CDM Manager

Monitoring Staff

Internal Audit Staff

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 29 The main responsibility of each department: CDM Manager: Review the calculation results of the net electricity generation of each month. Cross-check the data and submit the monitoring reports and data to DOE; liaise with DOE and CDM consultants. Monitoring staff: During the operating of the wind farm, record, report and store the data of export and import electricity generation, calculate the net electricity generation during the crediting period. Internal Auditing staff: Cross-check electricity import, export and net electricity generation and records for sold electricity, check the calibration of the metering equipment to ensure the validity of the meters. 4. Training The project developer will train all related staff before the start of the crediting period. The training contains CDM knowledge, operational regulations, quality control (QC), data monitoring requirements and data management regulations, etc. 5. Installation of meters The net electricity generation of the Datang Wendeng Phase Ⅱ Wind Power Project will be monitored through the main metering equipment installed at the grid substation, recording exports to the grid (supply) and imports from the grid (consumption). Net generation supplied is calculated as exports minus imports. A backup meter will be installed at the onsite substation. The error resulting of the meters will not exceed 0.5%. The electricity meters monitor the flow continuously and are reported monthly. The net supplied power monitored by these meters will suffice for the purpose of billing and emission reductions, as long as the error in the meters is within the agreed limits. Should any additional generating capacity be installed, sharing transmission and transformer facilities as well as the metering equipment at the substation with the proposed project activity, the generation recorded by the main meter at the substation will be allocated between the proposed project activity and any such added capacity on the basis of generation as recorded by meters onsite. If such additional capacity is installed, the output data from turbines and other relevant data will be monitored and be used to calculate the share of the project in the overall net output, the net electricity supplied by the project activity (EGproject) is calculated as follows: EGproject = EGtotal * Eproject / (Eproject +Eother)

EGtotal is the total net electricity supplied to the grid based on the data metered by the main meter. It is the difference between the reading of export to the grid and import from the grid measured by the main meter;

Eproject is the electricity generation from the project activity metered by the separate meters;

Eother is the electricity generation from other wind farms metered by the other separate meters. 6. Calibration and Maintenance The metering equipments including the main meters and the separate meters will be calibrated and

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 30 checked annually by qualified third party for accuracy according to industry standards so that the error of the metering equipment shall not exceed 0.5%. The meters shall be jointly inspected and sealed on behalf of the parties concerned and shall not be interfered with by either party except in the presence of the other party or its accredited representatives. All the meters installed shall be tested by the NCPG within 10 days after: the detection of a difference larger than the allowable error in the readings of both meters; the repair of all or part of meter caused by the failure of one or more parts to operate in accordance with the specifications. If any errors are detected the party owning the meter shall repair, recalibrate or replace the meter giving the other party sufficient notice to allow a representative to attend during any corrective activity. Should any previous month’s reading of the main meter be inaccurate by more than the allowable error, or otherwise functioned improperly, the net generation output shall be determined by: (a) first, by reading backup meter, unless a test by either party reveals it is inaccurate; (b) if the backup system is not with acceptable limits of accuracy or operation is performed improperly the Datang Wendeng Phase Ⅱ Wind Power Project and the NCPG shall jointly prepare a reasonable and conservative estimate of the correct reading, and provide sufficient evidence that this estimation is reasonable and conservative when DOE undertakes verification; and (c) if the NCPG and Datang Wendeng Phase Ⅱ Wind Power Project fail to agree then the matter will be referred for arbitration according to agreed procedures. 7. Quality control Monthly net on-grid supplied electricity for the purpose of emission reduction calculations will be cross-checked against records for sold electricity or commercial data and approved and signed off by CDM Manager before it is accepted and stored. This internal audit will also identify potential improvements to procedures to improve monitoring and reporting in future years. If such improvements are proposed these will be reported to the DOE and only operationalised after approval from the DOE. 8. Data management system Physical document such as paper-based maps, diagrams and environmental assessments will be collated in a central place, together with this monitoring plan. In order to facilitate auditors’ reference of relevant literature relating to the Datang Wendeng Phase Ⅱ Wind Power Project, the project material and monitoring results will be indexed. All paper-based information will be stored by the technology department of Datang Wendeng Clean Energy Development CO.,Ltd. and all the materials will have a copy for backup. And all data including calibration records are kept until 2 years after the end of the total crediting period of the CDM project. B.8 Date of completion of the application of the baseline study and monitoring methodology and the name of the responsible person(s)/entity(ies) >>

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 31 Date of completion of the baseline study and monitoring methodology: 15/08/2011 • Ms. Wangle, [email protected], SinoCarbon Innovation & Investment Co.,Ltd., Room B922

Ge Hua Tower, No.1 Qing Long Alley, Dongcheng District, Beijing, PRC, 100007, Tel: +86 10 8418 6127. (not Project participant)

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 32 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: >> 18/02/2010(Wind power facility purchase contract) C.1.2. Expected operational lifetime of the project activity: >> 20 years C.2. Choice of the crediting period and related information: C.2.1. Renewable crediting period C.2.1.1. Starting date of the first crediting period: >> 01/04/2012 (it is an indicative starting date and it will be updated by the secretariat as the effective date of registration, according to the Annex 12 of EB 59th meeting) C.2.1.2. Length of the first crediting period: >> 7 years C.2.2. Fixed crediting period: C.2.2.1. Starting date: >> Not applicable. C.2.2.2. Length: >> Not applicable.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 33 SECTION D. Environmental impacts D.1. Documentation on the analysis of the environmental impacts, including transboundary impacts: >> Environmental Impact Assessment (EIA) for the proposed project was approved by the Environmental Protection Bureau of the City of Jinan in Nov. 2010. The main impacts identified in the EIA are summarised below. 1. The analysis of the environment impact in the construction period • The waste water from construction is mainly the sewage from construction staff and other waste

water from the construction activity. The small quantity of sewage will be treated before discharge; the daily waste water will be collected and transported to a designated site to be disposed properly. So it will not have impact on the local water environment.

• The solid wastes in the construction period include the construction wastes and household garbage. The construction wastes will be used to backfill the road and the surrounding area of the wind farm. And it is required that the household garbage wastes are collected and will be moved to the local dump to be disposed properly. So the solid wastes will not have the impact on the environment.

• The project temporarily uses some grass land for construction use. Measures will be taken to reduce impact of land disturb, including piling up the material, covering, etc.The occupied land will be restored and grassing after construction. Overall, land use impact on the local residents arising from the Project is considered to be insignificant.

2. The analysis of the environment impact in operation period • At a distance of 250m, The noise from blades of wind power machine rotating during project

construction drop down to the national standard 45dB(A)--Class 1 requirement of Standard of Environmental Noise of Urban Area (GB 3096-93). Furthermore the resident regions are 3000m away from the wind farm, so the noise does not influence the residential districts nearest to the site.

• Onsite daily garbage will be collected and transferred to a landfill site for final treatment. Therefore, the negative impact is insignificant.

• The waste water produced will be transported to local sewage farm to be treated and discharged. Hence, the waste water will not have the impact on the local water environment.

• The major concern of the impact to the ecological environment by the operation of the wind farm is the potential damage to birds. The places with large number of night-migrating birds are excluded during project site selection process, which indicates minimal chance of collision between the birds and generators. The impact to local birds by the operation of the proposed project is very small.

3. Conclusion The wind farm does not put much pressure on the local environment when generating renewable power. However it will bring great environmental as well as the social benefit.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 34 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: >> Environmental impacts are not considered significant. The Environmental Protection Bureau of the city of Jinan has approved the EIA on 22nd NOV.2010.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 35 SECTION E. Stakeholders’ comments E.1. Brief description how comments by local stakeholders have been invited and compiled: >> In June of 2010, the staff from the project owner carried out a survey of the local villagers and residents in the area. 1 page questionnaire was designed to fill in and has the following sections: 1) Project introduction 2) Respondent’s basic information and education level 3) Questions on: ♦ Are they satisfied with their living environment? ♦ Do they have any knowledge or understanding about wind power projects? ♦ What is their view of the local wind power projects? ♦ What positive impacts of the project will be brought to respondents? ♦ Will the project have negative impacts on their livelihoods? ♦ What special measures should be considered to reduce the negative impacts? ♦ Do they support the construction of the project? ♦ What other comments and suggestions do they have on the project? 4) Space for the respondents’ signature and date E.2. Summary of the comments received: >> Following is a summary of the local survey. The survey forms are available from the project owner. The questionnaires were sent to 50 households and the survey had a 100% response rate. The result of the survey indicated the support to the project. The statistic of opinion: The survey had a 100% response rate (50 questionnaires returned out of 50) and the following is a summary of the key findings:

Gender of the respondents: male (72%) and female (28 %) Education level of the respondents: high school and above (22 %), others middle level (78 %) 72% of the respondents are satisfied with their living environment. 40% of the respondents have much knowledge and understandings about wind power projects, 60%

have some knowledge and understandings about wind power projects. 94% of the respondents support the local hydropower projects, others don't’ care much. 90% of the respondents consider the project will reduce pollution, 20% of the respondents consider

the project will reduce the electricity price; 22% of the respondents consider the project will increase the local income; 56% of the respondents consider the project will increase the job opportunity; 60% of the respondents consider the project will improve the living quality.

100% of the respondents believe that the Project will mainly have positive impacts on their livelihoods.

100% of the respondents support the development of the project. Conclusions from the survey:

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 36 The survey shows that the proposed project has strong local support among the local people. They all believe the proposed project will promote the local economic development and agree with the project construction. E.3. Report on how due account was taken of any comments received: >> The villagers and local government are all supportive of the proposed project and to date there has been no need to modify the project design according to the comments received. The project owner has an overall environment-friendly plan to guarantee that the project has the minimum negative impact on the environment during the project construction and operation.


Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY Organization: Datang Wendeng Clean Energy Development CO.,Ltd. Street/P.O.Box: Room 1816 Building: Jinshi Building City: Qingdao City State/Region: Postcode/ZIP: 266000 Country: People’s Republic of ChinaTelephone: 0086-532-5556-3137FAX: 0086-532-5556-1234E-Mail: [email protected] URL: Represented by: Feng Zhihong Title: Salutation: Mr. Last Name: Feng Middle Name: /First Name: Zhihong Department: /Mobile: /Direct FAX: 0086-532-5556-1234Direct tel: 0086-532-5556-3137Personal e-mail: [email protected]

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 38 Organization: Blue World Carbon Capital PCC Street/P.O.Box: Green Street Building: Channel House City: St Helier State/Region: Jersey Postcode/ZIP: JE2 4UH Country: UK Telephone: +44 1534 834626 FAX: +44 1534 834601 E-Mail: [email protected] URL: Represented by: Emma Parmiter Title: Manager Salutation: Mrs Last Name: Emma Middle Name: First Name: Parmiter Department: Mobile: Direct FAX: +44 1534 834601 Direct tel: +44 1534 834626 Personal E-Mail: [email protected]


Annex 2

INFORMATION REGARDING PUBLIC FUNDING There is no public funding for the proposed project.


Annex 3

BASELINE INFORMATION Step 1. Identify the relevant electricity systems See B.6. Following the DNA delineation, the project electricity system is the North China Power Grid (NCPG), consisting of six provincial grids: Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia and Shandong. The connected electricity systems are the Northeast Power Grid (NEPG), consisting of three provincial grids: Jilin, Liaoning and Heilongjiang, and Central China Power Grid (CCPG), consisting of six grids: Jiangxi, Henan, Hubei, Hunan, Chongqing, Sichuan. Step 2. Choose whether to include off-grid power plants in the project electricity system (optional). See B.6. Option I is chosen: only grid power plants are included in the calculation. Step 3: Select a method to determine the operating margin (OM). Table A1 Power generation in NCPG from 2004 to 2008 Year Low-cost/must-run generation Total generation Share

108kWh 108kWh2004 40.32 5308.04 0.8%2005 45.51 6077.82 0.7%2006 48.04 6099.71 0.8%2007 76.4 8457 0.9%2008 91.1 7166.94 1.3%Total 301.4 33,109.5 0.9%Average 100.5 11,036.5 0.9%Source: China Power Year Book (2005/p474) (2006/p568) (2007/p638)(2008/p733)(2009/p716)Note: Only nuclear/renewables are considered low-cost/must-run Step 4. Calculate the operating margin emission factor according to the selected method Option B – Calculation based on total fuel consumption and electricity generation of the system

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 41 Table A2 Net calorific value and CO2 emission factor of fossil fuels

Fuel CO2 Emission Factor * (kgCO2/TJ)

SolidsRaw coal 20,908 kJ/kg 87,300Clean coal 26,344 kJ/kg 87,300Other washed coal 8,363 kJ/kg 87,300Moulding coal 20,908 kJ/kg 87,300Coke 28,435 kJ/kg 95,700

Liquids Crude oil 41,816 kJ/kg 71,100Gasoline 43,070 kJ/kg 67,500Diesel 42,652 kJ/kg 72,600Fuel oil 41,816 kJ/kg 75,500Other petroleum products 41,816 kJ/kg 72,200Other coking products 28,435 kJ/kg 95,700

Gases Natural gas 38,931 kJ/m3 54,300Coke oven gas 16,726 kJ/m3 37,300Other gas 5,227 kJ/m3 37,300LPG 50,179 kJ/kg 61,600Refinery gas 46,055 kJ/kg 48,200Other energy 0 0Sources: LCV from China Energy Statistical Year Book 2009, p507-508; CO2 emission factor from theChinese DNA (also 2006 IPCC Guidenlines for National Greenhouse Gas Inventories, Vol 2 (Energy),Chapter 1, Tables 1.3 and 1.4)

Net Calorific Value

Note: * Using IPCC default values at the lower limit of the uncertainty at a 95% confidence interval asprovided in table 1.4 of Chapter1 of Vol. 2 (Energy) of the 2006 IPCC Guidelines on National GHGInventories Fossil fuel consumption Fuel consumption is taken from the latest China Energy Statistical Yearbook editions. The yearbooks present a range of more than 10 fuels for each province. Data for fuel use is presented in Table A3.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 42 Table A3 Fuel consumption in thermal power generation in NCPG, 2006-2008 Fuel Unit 2006 2007 2008 TotalRaw coal 104 t 35,607.41 40,115.43 42,732.16 118,455.00

Clean coal 104 t 39.77 18.43 23.88 82.08

Other washed coal 104 t 1,198.00 1,446.87 1,479.37 4,124.24

Moulding coal 104 t 35.74 50.79 83.53 170.06

Coke 104 t 3.23 4.11 6.09 13.43

Coke oven gas 108 m3 35.56 45.57 53.64 134.77

Other gas 108 m3 140.73 238.39 307.10 686.22

Crude oil 104 t 0.74 - 0.02 0.76

Gasoline 104 t 0.01 0.01 - 0.02

Diesel 104 t 9.61 8.38 3.58 21.57

Fuel oil 104 t 10.56 7.27 2.81 20.64

LPG 104 t 0.01 - - 0.01

Refinery gas 104 t 4.75 4.56 3.37 12.68

Natural gas 108 m3 4.67 10.53 14.88 30.08

Other petroleum products 104 t 0.28 1.72 1.45 3.45

Other coking products 104 t - 4.74 15.58 20.32

Other E (standard coal) 104 tce 429.50 643.68 739.69 1,812.87 Sources: DNA; and China Power Year Book (2007, 2008, 2009) Emissions from fossil fuel consumption The emissions from this fuel use are calculated using the following formulae in B.6., and are presented in Table A4: CO2 emissions = ∑i (FCi,y × NCVi,y × EFCO2,i,y)

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 43 Table A4 Emissions from thermal generation in NCPG, 2006-2008 Fuel 2006 2007 2008 TotalRaw coal 649,930,803 732,214,267 779,976,613 2,162,121,683 Clean coal 914,643 423,859 549,200 1,887,701 Other washed coal 8,746,477 10,563,452 10,800,731 30,110,660 Moulding coal 652,351 927,054 1,524,647 3,104,051 Coke 87,896 111,843 165,723 365,461 Coke oven gas 2,218,517 2,843,020 3,346,491 8,408,028 Other gas 2,743,772 4,647,821 5,987,440 13,379,032 Crude oil 22,001 - 595 22,596 Gasoline 291 291 - 581 Diesel 297,577 259,490 110,856 667,923 Fuel oil 333,391 229,522 88,715 651,627 LPG 309 - - 309 Refinery gas 105,443 101,225 74,809 281,477 Natural gas 987,216 2,225,993 3,145,563 6,358,772 Other petroleum products 8,454 51,929 43,777 104,159 Other coking products - 128,986 423,968 552,954 Other E (standard coal) - - - - Total 667,049,139 754,728,750 806,239,126 2,228,017,015 Calculation of net generation from included sources Gross generation for each province is presented in the yearbooks. The data is also broken down into three categories: thermal, hydro and other sources. For the OM calculations, only thermal generation is included. Gross generation and own consumption are used to calculate net generation from included sources. The calculations are presented in Table A5 below.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 44 Table A5 Thermal generation, own consumption rate, and net supply in NCPG

Region Gross generation (108 kWh) Own use (%) Net generation (108 kWh)Beijing 207.05 7.51 191.50 Tianjin 359.24 6.86 334.60 Hebei 1,438.88 6.63 1,343.48 Shanxi 1,502.50 7.45 1,390.56 Inner Mongolia 1,395.93 7.58 1,290.12 Shandong 2,309.22 7.12 2,144.80 NCPG 6,695.06



Source: DNA; and China Power Year Book (2007,2008,2009)

2006

2007

2008

Imports The connected electricity systems are the Northeast Power Grid (NEPG), consisting of three provincial grids: Jilin, Liaoning and Heilongjiang and the Central China Power Grid (CCPG), consisting of six provincial grids: Jiangxi, Henan, Hubei, Hunan, Chongqing and Sichuan. There are electricity transfers from the connected electricity systems to the project electricity system, and therefore the emissions related to these imports should be accounted for. Table A6 Electricity imports and origin

2006 2007 2008

Origin (exporting grid) 108kWh 108kWh 108kWh

Northeast Power Grid (NEPG) 26.18 17.90 52.86

Central China Power Grid (CCPG) 4.97 8.03 0.00 Source: Electricity industry statistical document summary (2007, 2008, 2009) Following the calculations of the DNA, the “simple operating margin (OM) emission rate of the exporting grid” is used. The simple operating margin for the two connected systems is calculated in detail in the

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 45 calculations spreadsheet, and the resulting emission factors given in Table A7. Table A7 Simple operating margin emission factors of NEPG and CCPG Exporting grid 2006 2007 2008

NEPG 1.1497 1.0819 1.1049

CCPG 1.1216 1.1020 - Note: For detailed calculations see the calculation spreadsheet. Calculation of the simple OM On the basis of the data available, the simple OM emission factor is calculated based on the net electricity supplied to the grid by all power plants serving the system, not including low-cost / must-run power plants/units, and based on the fuel type(s) and total fuel consumption of the project electricity system, as follows:

2, , , ,

, ,

i y i y co i yi

grid OMsimple yy

FC NCV FEF

EG

× ×Ε=∑

Table A8 Operating margin emission factor calculation

2006 2007 2008 Total / 3-year averageCO2 emissions (tCO2) 667,049,139 754,728,750 806,239,126 2,228,017,015 Net generation (MWh) 669,506,473 776,346,330 802,797,350 2,248,650,153 Imports

From NEPG (MWh) 2,618,060 1,789,750 5,286,140 9,693,950 Associated EF (tCO2/MWh) 1.1497 1.0819 1.1049 Associated emissions (tCO2) 3,010,025 1,936,260 5,840,581 10,786,866 From CCPG (MWh) 497,060 803,000 - 1,300,060 Associated EF (tCO2/MWh) 1.1216 1.1020 - Associated emissions (tCO2) 557487.5842 884881.91 - 1,442,369

Total CO2 emissions (tCO2) 670,616,652 757,549,892 812,079,707 2,240,246,251 Total supply (MWh) 672,621,593 778,939,080 808,083,490 2,259,644,163 EF OM (tCO2/MWh) 0.99702 0.97254 1.00495 0.9914 Based on above data, the simple OM emission factor of NCPG is calculated ex-ante using a 3-year generation-weighed average is 0.9914 tCO2e/MWh. Step 5. Calculate the build margin (BM) emission factor The sample group of power units m used to calculate the build margin consists of the set of power capacity additions in the electricity system that comprise 20% of the system generation (in MWh) and that have been built most recently. This option is chosen as it comprises larger annual generation than the five units built most recently. Following the deviation, the latest statistical data available (from the China Power Yearbook 2009) is used by the DNA to determine the most recent year from which the added generation capacity is equal to or just exceeds 20% of the latest statistic year 2008. The added generation

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 46 capacity is the sample group of power units m used to calculate the build margin. Table A9 Identify the year from which the added generation capacity is equal to or just exceeds 20% of the latest statistic year 2008 Plant type Capacity 2006 Capacity 2007 Capacity 2008 Added 2006-2008 Added 2007-2008 Share of additions 2006-2008Thermal 141,538 164,800 179,040 46,111 17,847 93.98%Hydro 4,004 4,510 5,260 520 9 1.06%Nuclear - - 0 - - 0.00%Other 937 1,719 3,370 2,433 1,651 4.96%Total 146,479 171,029 187,670 49,064 19,507 100.00%Share of recent additions 26% 10%Selected Yes No Source: China Power Year Book (2007, 2008, 2009). As described in step5, because of the limited availability of publicly available data, this proposed project uses a substitute method accepted by EB to calculate EFBM,y Sub-step 1: Calculate the CO2 emission share of thermal generation by fuel type The fuel emission shares in the latest year are calculated from the emissions presented in Table A4 above. Table A10 Fuel shares in NCPG in 2006

Emissions ShareFuel type (tCO2e) lSolid 793,440,881 98.41%Liquid 243,942 0.03%Gas 12,554,302 1.56%Total 806,239,126 100% Source: China Energy Statistical Year Book (2009). Sub-step 2: Calculate the weighted emission factor of thermal power Table A11 Calculation of CO2 Emission Factor of Coal, Oil and Gas Fuel Power Plant with the Best Commercial Efficiency in China Plant type Best efficiency Carbon Emission Factor EFi,Adv

η (kgCO2/TJ) (tCO2e/MWh)Coal/solid 39.08% 87,300 0.8042 Oil/liquid 51.46% 75,500 0.5282 Gas 51.46% 54,300 0.3799 http://cdm.ccchina.gov.cn/WebSite/CDM/UpFile/File2551.pdf Using the fuel shares as indicated in Table A10 above, the weighted average emission factor for thermal power plant can be calculated.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 47 Table A12 Weighted average emission factor for thermal power plant in the build margin Plant type EFi,Adv Share EFthermal

(tCO2e/MWh) λ (tCO2e/MWh)Coal/solid 0.8042 98.41%Oil/liquid 0.5282 0.03%Gas 0.3799 1.56%Thermal 0.7975 Sub-step 3: Calculate the build margin emission factor Using the identified cohort of power units and the emission factor of thermal power, calculate the build margin emission factor. Table A13 Build margin calculation Plant type Added capacity EFi EFBM

(%) (tCO2e/MWh) (tCO2e/MWh)Thermal 93.98% 0.7975 Hydro 1.06% - Nuclear 0.00% - Other 4.96% - Total 100.00% 0.7495 Step 6. Calculate the combined margin (CM) emissions factor. The combined margin emission factor is calculated as follows (rounded down to the fourth digit): EFgrid,CM,y= wOM • EFgrid,OM,y + wBM • EFgrid,BM,y = 0.75× 0.9914 + 0.25×0.7495 = 0.9309 tCO2/MWh


Annex 4

MONITORING INFORMATION No additional information.

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