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UNFCCC/CCNUCC CDM – Executive Board

PROJECT DESIGN DOCUMENT FORM FOR CDM PROJECT ACTIVITIES (F-CDM-PDD)

Version 04.0

PROJECT DESIGN DOCUMENT (PDD)

Title of the project activity Phu Yang Diew Wind Farm Project (82.50MW)

Version number of the PDD Version 01

Completion date of the PDD 1st June 2012

Project participant(s) Thai Wind Power Co., Ltd, Thailand Mercuria Energy Trading SA, Switzerland

Host Party(ies) Thailand

Sectoral scope and selected methodology(ies) The project follows the ACM0002 consolidated baseline methodology for grid-connected electricity generation from renewable sources, Version 12.3.0, Scope 1, EB 66. Methodological tool “Tool to calculate the emission factor for an electricity system”, version 02.2.1, EB 63. Methodological tool “Tool for the demonstration and assessment of Aditionality Version 06.0.0, EB65

Estimated amount of annual average GHG emission reductions

87,958 tCO2e


SECTION A. Description of project activity A.1. Purpose and general description of project activity The Phu Yang Diew Wind Farm Project (82.50 MW) (hereafter referred to as “the project”) is a wind power project developed by Thai Wind Power Company Limited (TWC). The project involves installation of a grid connected wind power farm located in the North-Eastern part of Thailand. The objective of the proposed project is to generate green electricity using state-of-the-art wind power generation technology and to export the power to the national electricity grid. The proposed project will result in CO2 emission reduction, as it will displace the power generation that otherwise would be based on a mix of fossil fuels. The wind power farm will have an expected minimum operating lifetime of 20 years. In total, 33 wind turbines with a nominal capacity of 2.5 MW each will be installed, providing a total installed capacity of 82.50MW. A power purchase agreement (PPA) will be signed under the EGAT’s Small Power Producer (SPP) scheme. The project is expected to be implemented in 2 phases as follows:

Phase Power capacity (MW) Expected start date1 Expected commercial operation date

1 45 February 2012 October 2014 2 37.50 February 2013 January 2015

Total 82.50 - - In 2001 a report was completed, covering an assessment of the wind power potentials in Thailand2. The Report included a “ Wind Map of Thailand” which indicated that the highest annual wind speed exists at the southern coastal part of Thailand on the eastern coastal area of the gulf of Thailand. In these areas the land cost is high, and also due to the pertaining unrest situation in the southern part of Thailand and the difficulty of development in ridge area, the developers considered other alternative area. Of these alternatives the north eastern part of Thailand has been identified. The Wind Power Class of the north eastern part of Thailand indicates potentially fair wind sites and should provide better opportunity for investments, provided that the site would be located in high terrain area and where the hub height of wind tower can be increased to harvest wind speed at higher altitude. The project proponent has identified Mukdahan Province for conducting further assessments of the potentials. A wind map conducted by the World Bank (2001) indicated sufficient wind - as shown in Figure 1.

1 Date of EGAT Bond to finance PPA guarantee 2 The report was sponsored by the Energy Conservation Fund, the Department of Alternative Energy Development and Efficiency (DEDE).


Figure 1. Wind energy resource atlas of Southeast Asia by The World Bank1

The project schedule is shown in below table Table 1. The schedule of wind farm project

Year Planning schedule for project activities 2008, 4th Quarter The detail design of engineering works and EIA/PPP was

finished. The memorandum of understanding of land lease agreement was made.

2009, 3rd Quarter Land lease agreement was made when Tambon (Sub-district) Administration Organization approves the project. After that, the construction permits were applied for.

2010, 1st Quarter – 4th Quarter Continuing wind observations and approaches to debt and equity partners.

2012, 2nd Quarter Financial Close 2012, 3rd Quarter – 2014 1st Quarter

Construction of 88km Transmission Line

2012, 3rd Quarter – 2014 1st Quarter

Construction of roads, foundations, substation, electrical works and installation of WTGs

2014, 3rd Quarter Start commercial operation (Phase 1) 2015, 1st Quarter Start commercial operation (Phase 2) There are only a few number of small wind turbines (0.2 – 1,250 kW) installed in Thailand with a combined capacity of 3.5 MW2. There is no large scale commercial wind farm operating in Thailand and hence this proposed activity is likely to be one of the first of its kind in the country, and further more become the very first wind mills to be erected in north eastern part of Thailand.

1 Source: http://siteresources.worldbank.org/EXTEAPASTAE/Resources/wind_atlas_complete.pdf 2 Department of Alternative Energy Development and Efficiency, Draft 15-Year Renewable Energy Develop Plan,

November 2008.

UNFCCC/CCNUCC CDM – Executive Board Sustainable Development Benefits of the Project Sustainable development requires the effective integration of four key elements: the environmental, social, technological and economical dimensions of development. By providing positive impacts on these four dimensions, the project activity will facilitate multi-dimensional sustainable development benefits to the local communities as well as to the nation, which are furnished below: Economic dimension Due to the increasing demand for electricity in Thailand, the proposed project will be vital for the Thai economy in the future nationally as well as locally. It helps to a diversification of the energy resources and tab into renewable source at a significant scale, and thereby decrease the dependence for (mainly imported) fossil fuel. The proposed project will then add to the sustainable development of Thailand. The proposed project is contributing to the local economy by generating employment opportunities, both during construction of the wind farm, and also during the operation of the wind farm. The suppliers of the turbines may decide on partly manufacturing the towers of the wind turbines in Thailand. Furthermore could the foundations, transformers and other electrical equipment potentially be produced locally, depending on competitive pricing. A potential spin-off effect of such a new project is that the wind farm may develop into a small tourist attraction, which also could stimulate to increased income generation among the local communities and inhabitants. This view is based on the experiences from other test wind turbines erected by Ministry of Energy and the Department of Alternative Energy Development and Efficiency (DEDE) in the Southern part of Thailand. The project developer is planning to establish a local knowledge and information centre, which will be managed by a new established Wind Energy Foundation. This Foundation will collect knowledge experiences gained through the planning, commissioning and operation of the wind farm. This centre will further more be able to assist in training activities for future workers in the wind energy business, and provide demonstrations and presentations and involve the local communities. Social dimension The proposed project will include involvement of local communities during the construction of the wind farm. The consultation of the affected community includes both provision of updated information and newsletters, holding local information days, talks to local organisations and schools and tours of operating wind farms. Furthermore, the local communities will be offered regular opportunities to provide input into the design, planning and operation of the wind farm. Environmental dimension Wind energy is a renewable source of energy that generates electricity without any emission of greenhouse gasses. Compared with traditional fossil fuel fired power plants wind is not polluting the local and global environment. Technology dimension Technology is transferred from Europe and thereby some of the most advanced technology is applied which can pave the way for future installations of wind turbines, and contribute both directly and indirectly to development of a local jobs. Project installation and commissioning of the project implies the construction of the foundations for the wind turbines, and the establishment of the transmissions lines and the substations which will further more provide an opportunity for technology transfer.

UNFCCC/CCNUCC CDM – Executive Board A.2. Location of project activity A.2.1. Host Party(ies) Kingdom if Thailand A.2.2. Region/State/Province etc. Mukdahan A.2.3. City/Town/Community etc. Nikhom Kham Soi District A.2.4. Physical/Geographical location The proposed project is located in the Nikhom Kham Soi district, province of Mukdahan in the North Eastern part of Thailand (Figure 2). Mukdahan is situated on the bank of the Mae Khong River opposite Suwannakhet in Laos. The city is 642 kilometers north-east from Bangkok.

Figure 2. Location of Phu Yang Diew Wind Farm Project (Phase 1 and 2) The project site is located at a ridge named Phu Yang Diew in the south western part of the province – where the topographic conditions and the wind availability have been assessed for several years by local and international wind energy experts. The developer has cooperated with a local team of wind energy specialist and has performed wind measurements at several heights at and near the identified location. The proposed locations for phases 1 and 2 are shown in Figure 2 and Figure 3, respectively. The site is located at following coordinates: (16° 21’ 10.81’’ North), (104° 24’ 15.94’’ East). The figure below indicates the location of the wind farm as well as an approximate location of the 33 wind turbines.


Figure 3. Phu Yang Diew Project location

A.3. Technologies and/or measures The proposed project is expected to install 33 wind turbines at 2.5 MW capacity each, - 82.50 MW in total for the wind farm. The specific project data are as follows: Table 2. Wind farm characteristics Installed capacity Phase 1: 45 MW

Phase 2: 37.50 MW Number of wind turbines 33 Nominal capacity 2.5 MW Rotor 3 blades Rotor blade type GFC shell construction Cut-in speed 3 m/s Cut-out speed 25 m/s Annual estimated production Phase 1: 92,301 MWh/yr

Phase 2: 88,617 MWh/yr Wind Turbines Repower of the type 100 / 100 HH at 2.5 MW has been specifically optimised for use in regions of low to medium wind speeds. The electricity from the project of 690 V output voltages will be connected to either EGAT or PEA transmission line (depending on the location) by the low voltage cable installed inside the tower and downward to Pad Mounted Transformer 690/22 kV. At 22 kV side of Pad Mounted Transformer there is a Ring Main Unit (RMU). From this, the 22 kV cable will be buried underground to Pole Riser which typically installed at public road. Then Arial cable will be installed overhead on concrete poles to secondary power transformer, at this substation the electricity will be raised to 115 kV level and be connected to the existing transmission line of EGAT or PEA.


Figure 5. Pad Mounted Transformer, and Pole Riser 22 kV

Figure 6. EGAT 115 kV Substation

A.4. Parties and project participants

Name of Party

involved (*)

((host) indicates a

host Party)

Private and/or public entity(ies) project participants

(*) (as applicable)

Kindly indicate if the Party

involved wishes to be

considered as project participant

(Yes/No)

Thailand (host country) Thai Wind Power Co., Ltd. No

Switzerland Mercuria Energy Trading S.A. No

A.5. Public funding of project activity No public funds from Annex I countries are involved in the proposed project.


SECTION B. Application of selected approved baseline and monitoring methodology B.1. Reference of methodology The project follows the ACM0002 consolidated baseline methodology for grid-connected electricity generation from renewable sources, Version 12.3.0, Scope 1, EB 66. ACM0002 references the following tools which are relevant to the project activity : Methodological tool “Tool to calculate the emission factor for an electricity system”, version 02.2.1, EB 63. Methodological tool “Tool for the demonstration and assessment of Aditionality Version 06.0.0, EB65. B.2. Applicability of methodology The applied methodology ACM002 Version 12.3.0 is applicable to grid-connected renewable power generation project activities that involve electricity capacity additions. The methodology is applicable under the following conditions: 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 is a wind power project and it is therefore covered by the ACM0002 methodology. The ACM0002 methodology requires that the geographic and system boundaries for the relevant electricity grid can be clearly identified and information on the characteristics of the grid is available. The proposed project involves the installation of a wind power farm in Thailand. In Thailand the national electricity grid can be clearly identified and the information on the characteristics is available. The wind farm is designed so that it will be connected to it own connection line which again is directly connected to the national electricity grid owned by the PEA or EGAT. (See more in section B.6 and Annex 3 for specific details on grid definition and baseline calculations). 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;

Biomass fired power plants; 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. The proposed wind power project does not involve any of the limitations listed above. Therefore the chosen methodology ACM0002 is fully applicable to the proposed wind power project.

UNFCCC/CCNUCC CDM – Executive Board B.3. Project boundary The project boundary for the purpose of calculating project and baseline emissions consists of the physical wind farm site and teh Thailand electrical grid. The only relevant emission source is the CO2 emissions from electricity generation in fossil fuel fired power plants that are displaced due to the project activity. For more details refer to the table below.

Source GHGs Included? Justification/Explanation

Bas

elin

e sc

enar

io

Electricity delivered to the grid by the operation of grid-connected power plants and by the addition of new generation sources.

CO2 Yes According to ACM0002 methodology: For the baseline determination, project participants shall only account CO2 emissions from electricity generation in fossil fuel fired power that is displaced due to the project activity

CH4 No N2O No

Pro

ject

sc

enar

io Proposed Project CO2 No Zero-emission grid-connected

electricity generation from renewable energy

CH4 No N2O No

B.4. Establishment and description of baseline scenario

UNFCCC/CCNUCC CDM – Executive Board Regarding the baseline scenario it is stated in the methodology applied in the proposed project that: “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 proposed project will reduce the anthropogenic greenhouse gas emission from the electricity generation in Thailand by supplying zero greenhouse gas emission power to the national grid, which will replace fossil fuel fired electricity generation. At present less than 5% of the Thai electricity grid generation is based renewable energy source, and in the future still a very large share will continue to be based fossil fuel fired power plants. The “tool for the demonstration and assessment of addityionality” requires the consideration of EB guidance on national / local / sectoral policies in the calculation of financial indicators utilised for teh assessment of additionality. EB22, Annex 3, specifies that national policies or regulations that give comparative advantage to less emissions-intensive technologies (E- policies) may be excluded if the national policy or regulation was implemented after 11 November 2011. Wind power projects are currently eligible to receive an adder tariff in accordance with the National Energu Policy Council (NEPC) policy for “adder payments” which was approved by the NEPC in the third resolution of the 106th meeting (3/2006) on 4th September 20063. The Thailand adder tariff is specifically for renewable energy projects which are less carbon intensive than conventional sources of electricity and the tariff can be fully attributabed to policy changes at a national level. As such, the tariff can be excluded, but in the investment analysis both tariffs are shown. Below are two tables to illustrate the plans for future supply of electricity in Thailand. The first list provides an overview of the plants, by type and size to be added to the Thai grid in the period 2007-2010, including import. This table clearly shows how a large share of electricity generation will be based on fossil fuels in the coming years.

Table 3. List of new projects during 2009-2015 under the Thai national grid1.

Year Power Plants Fuel Type Capacities

(MW) 2009 VSPPs N/A 6

SPPs Renewable Energy 26.5South Bangkok Combined Cycle Power Plant Block 3 Natural gas 710Bang Pakong Combined Cycle Power Plant Block 5 Natural gas 710Power Purchased from Lao PDR (Nam Theun 2) Import 920Chao Phraya Hydro Power Plant # 1 Hydro power 6Solar energy and wind energy power plants Solar and wind 3

2010 VSPPs N/A 10 Chao Phraya Hydro Power Plant # 2 Hydro power 6

3 http:\//www.eppo.go.th/nepc/kpc/kpc-106.htm 1 Source: EPPO Thailand Power Development Plan 2007 Revision 2, 2009, p.8


North Bangkok Combined Cycle Power Plant Block 1 Natural gas 670Mae Klong Hydro Power Plant # 1-2 Hydro power 2 x 6Pasak Jolasid Hydro Power Plant Hydro power 6.7Khundan prakanchon Hydro Power Plant Hydro power 10SPPs (Co-generation) N/A 90

2011 Power Purchased from Lao PDR (Nam Ngum 2) Import 596.6

VSPPs N/A 48Kwai Noi Hydro Power Plant Hydro power 2 x 15Naresuan Hydro Power Plant Hydro power 8SPPs Renewable Energy 250Egco-one Co. Ltd. Coal 660

2012 VSPPs N/A 65

SPPs Renewable Energy 924SPP (Co-generation) N/A 220Power Purchased from Lao PDR (Theun-Hinboun, Expansion Project)

Import

2013 VSPPs N/A 50

National Power Supply Co. Ltd. Units 1-2 Coal 2 x 135SPPs (Co-generation) N/A 540Siam Energy Co. Ltd. Block 1-2 Natural Gas 2 x 800

2014 VSPPs N/A 50 National Power Supply Co. Ltd. Units 3-4 Coal 2 x 135 SPPs (Co-generation) N/A 90 Power Generation Supply Co. Ltd. Units 1-2 Natural Gas 2 x 800 Wangnoi Combined Cycle Power Plant Block 4 Natural Gas 800 Jana Combined Cycle Power Plant Block 2 Natural Gas 800

2015 VSPPs N/A 50 Power Purchased from Neighboring countries Import 450

The next table shows which new installations there are planned in Thailand in the period 2016-2021. The data are also clearly indicating that by far the largest part of increased demand for electricity in Thailand will be met by establishment of new fossil fuel fired plants.

Table 4. Total capacity of the new generating units categorized by power producers during 2016-20211.

Owners Capacities

EGAT new power plants (Natural Gas/LNG) 4 x 700 MWEGAT new power plants (Nuclear) 2 x 1000 MWVSPPs 800 MWPower purchased from neighboring countries 2,850 MWNew power plant projects - EGAT 4 x 800 MW - Private investor 2 x 800 MW - Unknown owner 6 x 800 MW

The import of electricity in the future is expected to come from Lao PDR, due to the fact that the electricity imported from Lao PDR stems mostly from renewable hydro power, this will be included in

1 Source: EPPO Thailand Power Development Plan 2007 Revision 2, 2009, p.8

UNFCCC/CCNUCC CDM – Executive Board the baseline calculations as a zero emission power source, which is also in accordance with the applied methodology. Based on the scenarios provided by the two tables above, the developers of the proposed project are confident that the baseline scenarios for the Thai electricity grid will be based mostly on electricity generated by fossil fuel fired plants. The proposed project, where zero emission electricity from wind power will be generated and provided to the Thai grid, will very likely postpone or cancel decisions on installations of new power plants, which would in many case be fueled by coal (or other fossil fuel sources). Therefore the proposed project will result in reduction of anthropogenic greenhouse gas emissions. B.5. Demonstration of additionality The following steps are used to demonstrate the additionality of the proposed project according to tool to demonstrate Additionality” version 0.6.0.0, EB 65 and required for the baseline methodology (ACM0002). Consideration on CDM was integrated in the project planning already at an early stage. Back in June 2008 where a Letter of Intent on potential carbon credits (CERs) generated from the project activities, was negotiated and finally signed by the Royal Danish Embassy in Thailand in August 2008. The Thai DNA was also notified at this time. A PDD was prepared by consultants at the Royal Danish Embassy in Bangkok but by 2010 the Government of Denmark had decided that they would not but any post-2012 carbon credits. In November 2010 the Project Owner contacted a CDM consultant, Asianet Services, who were appointed on 1st November 2010. A termsheet was signed between the Project Owner and their Buyer on 7th June 2011 and the ERPA was agreed on 31st July 2011. Step 1: Identification of alternatives to the project activity consistent with current laws and regulations The objective of this step is to identify realistic and credible alternatives to the proposed project that can be the baseline scenario through the following sub-steps: Sub-step 1a: Define alternatives to the project activity: To provide the same output or services comparable with the proposed CDM project activity, these alternatives are to include: a) Continuation of the current situation, the Electricity Generating Authority of Thailand (EGAT) as the provider for the same capacity and electricity output as the proposed project. b) The proposed project not undertaken as a CDM project activity but as a commercial project. c) Al alternative renewable energy power plant with the same capacity or the same annual electricity output as the proposed project. Elimination of alternatives:

UNFCCC/CCNUCC CDM – Executive Board a) The Power Development Plan for future energy supply in Thailand, as described in section B.4 above, clearly indicates that by far the largest share of all new capacity will be based on fossil fuels. Therefore it is likely that in a situation without the proposed project the power would be provided by fossil fuel based plants, which would result in a situation with greater greenhouse gas emissions. Such a development is fully consisting with legal and regulatory conditions in Thailand and would not face any other barriers. b) The proposed wind power project is the first of its kind in Thailand. So far only small wind turbines have been erected and no full size commercial wind farm exists. The barriers listed in the Additionality Test Step 3 below increase the cost of the project and therefore income from CERs is essential to the viability of proposed project activity. c) There are few renewable energy power plants providing the same output as the proposed project. Sub-step 1b: Consistency with mandatory laws and regulations: For alternative (a), the national Thai grid operated by the Electricity Generating Authority of Thailand (EGAT) which is responsible for he generation and transmission of electricity for the whole country. Mostly such electricity will be generated base on fossil fuels. Therefore there are no legal and regulatory requirements that prevent this alternative from occurring. For alternative (b), the Ministry of Energy has a stated target to increase renewable energy consumption to 20% of total final energy consumption by 2065. Among the renewable technology, the electricity generation from wind is targeted at 800 MW by 2065. This shows that the government supports to the installation of wind turbines. Therefore there are no legal and regulatory requirements that prevent this alternative from occurring. For alternatives (c ), there are a few renewable energy power plants under the small power producer (SPP) scheme using the combination of wood bark, rice husk and black liquor, which can produce the same output. This shows that there are no legal and regulatory requirements that prevent this alternative from occurring. Step 2 – Investment analysis Determine whether the proposed project activity is not: (a) the most economical or financially attractive; or (b) Economically or financially feasible, without the revenue from the sale of certified emission reductions (CERs) Sub-step 2a - Determine appropriate analysis method Considering the options which are available to analyze the additionality of the Phu Yang Diew project (i.e., simple cost analysis, investment comparison or benchmark analysis), benchmark analysis is the most appropriate option. Benchmark analysis has been chosen because that evaluation criterion is used by the project developer to decide whether or not to implement the project. The simple cost analysis is not appropriate because the project will derive economic benefits (e.g. revenues from the sale of energy produced by the project), other than CDM related income. An investment comparison was also not suitable because the project was not compared to any other investment alternatives (as defined in Step 1) by the project developer.

UNFCCC/CCNUCC CDM – Executive Board The option to develop the project came as a result of the opportunity to generate emission certificates in addition to electricity for Thailand. It will be shown that the CDM revenues allow the developer to sell electricity to the grid at a competitive price. For the investment decision, the project developers evaluated the electricity market and regulations in the regional grid; the economics of the Project, the feasibility and advantages of participating in a scheme such as the CDM as well as other criteria. The alternative course of action for Thailand would be investments in infrastructural projects, other than energy generation as will be shown in Step 3 (Barrier analysis). Nevertheless, the evaluation of the generation cost (USD / kWh) was made against the benchmark of the achievable electricity tariff. Sub-step 2b – Option I. Apply simple cost analysis Not applicable. The Project produces economic benefits other than just the CDM related income. Sub-step 2b – Option II. Apply investment comparison analysis Not applicable. The investment decision was not based on a choice between multiple project opportunities. Sub-step 2b – Option III. Apply benchmark analysis “Identify the financial indicator most suitable for the project type and decision context” The decision by the project developer of whether or not to invest in the project was based on an evaluation of the project against several benchmark criteria. The economic benchmark used by the Developer in its decision whether or not to implement the project is the Project Internal Rate on Return (IRR) to assess whether or not the achievable electricity tariff can cover the Weighted Average Cost of Capital (WACC) and a realistic benchmark return for the project. The WACC was calculated using the following parameters :

Cost of Equity 18.53% Cost of Debt 7.32% % Equity 50% % Debt 50% Tax Rate 0% WACC 12.925%

The equation used for the above is shown below.

In this equation,

UNFCCC/CCNUCC CDM – Executive Board Kd = Cost of Debt4 Ke = Cost of Equity5 D = Debt E=Equity T = Tax “Financial/economic analysis shall be based on parameters that are standard in the market, considering the specific characteristics of the project type” The achievable tariff (USD/kWh) for power delivery from Thai windfarms to the grid is the relevant parameter for the Project Developer to calculate the Project IRR and to decide whether to invest in a project or not. This is standard for all power projects in Thailand. Based on the experience from Power Purchase Agreements (PPA) negotiated recently with EGAT, and the Tariff Memorandum received from EGAT, the maximum achievable tariff for energy export to the grid is shown in the table below. In interests of transparency we have included the adder tariff in the initial investment analysis as the adder tariffs are well documented and potential investors are aware of their existence. However, as stated above, for the purposes of CDM, according to EB 22, Annex 3, the adder tariff can be excluded from the calculations. The tariffs can be summarized below.

Year Base Tariff Adder Tariff Total2014 0.0629€ 0.0875€ 0.1504€ 2015 0.0630€ 0.0875€ 0.1505€ 2016 0.0632€ 0.0875€ 0.1507€ 2017 0.0633€ 0.0875€ 0.1508€ 2018 0.0634€ 0.0875€ 0.1509€ 2019 0.0635€ 0.0875€ 0.1510€ 2020 0.0637€ 0.0875€ 0.1512€ 2021 0.0638€ 0.0875€ 0.1513€ 2022 0.0639€ 0.0875€ 0.1514€ 2023 0.0641€ 0.0875€ 0.1516€ 2024 0.0642€ -€ 0.0642€ 2025 0.0643€ -€ 0.0643€ 2026 0.0644€ -€ 0.0644€ 2027 0.0646€ -€ 0.0646€ 2028 0.0647€ -€ 0.0647€ 2029 0.0648€ -€ 0.0648€ 2030 0.0650€ -€ 0.0650€ 2031 0.0651€ -€ 0.0651€ 2032 0.0652€ -€ 0.0652€ 2033 0.0653€ -€ 0.0653€

4 http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=223&language=ENG 5 Stock Exchange of Thailand Website – www.set.or.th

UNFCCC/CCNUCC CDM – Executive Board The above table is based upon the Small Power Producer Scheme Regulations, the Model Non Firm Power Purchase Agreement prepared by EGAT and the Adder Announcement dated 4th August 2009. The EGAT Power Purchase Agreements are for a period of five years. This can be renewed but there is no certainty about the renewal terms. Sub-step 2c - Calculation and comparison of financial indicators: “Calculate the suitable financial indicator for the proposed CDM project activity” The following table shows the Project Internal Rate of Return (IRR) with and without CDM related income with the achievable electricity tariff listed above and is calculated based on a comprehensive forecast of the cash flows throughout the project’s life of twenty (20) years. This has been done on the assumption that the Power Purchase Agreement is renewed. The inputs applied to the investment analysis are relevant to the timing of the investment decision. A summary of the inputs to the investment analysis are provided in the table below. In accordance with the relevant EB guidance on investment analysis, the assessment period of the financial analysis reflects the period of operation of the underlying project. The IRR is calculated before tax. Taxation has not been included as an expense in the IRR calculations and as such the WACC benchmark has not been adjusted for tax. Depreciation has not been deducted for the purpose of calculating the project IRR. All input values to the project IRR are taken at the time of investment decision which is prior to signing the first contracts associated with implementation of the project. Table 1: Project Internal Rate of Return (IRR) of Phu Yang Diew with and without CDM revenues

Without CDM Related Income

With CDM Related Income

Project IRR including Adder Tariff 12.57% 13.55%Project IRR Excluding Adder Tariff 3.39% 4.66% The Project IRR is then compared with the Weighted Average Cost of Capital (WACC) for the Phu Yang Diew project (12.925%). Clearly, the IRR is below the WACC without CDM revenues. Consequently the returns need to be compared with the benchmark returns as published by the Stock Exchange of Thailand. It can be demonstrated that without CDM revenues the project would be below the required default benchmark. Additional CDM revenues would make the project economically viable. “Present the investment analysis in a transparent manner”. Case 1-without benefit of CER sales Case 2-with benefit of CER sales Table 2: Input data for investment analysis Unit Amount Source Investment EUR 129,231,414 Feasibility Study Share of Equity % 50 UNFCCC Default


Values from Guidelines on Investment Analysis

Tax Rate % 0% UNFCCC Investment Analysis Guidelines

Project Period Years 20 Feasibility Study Operation and Maintenance Costs

EUR 1,476,807 Feasibility Study

Power Generation KWh 180,918,000 Feasibility Study Tariff EUR Variable Power Purchase

Agreement Based on Small Power Producer Regulations

CER Price EUR 13 Estimate based on ECX Historical Prices and Analyst Estimates for 2013 - 2020

Benchmark Internal rate of Return: The Project IRR is considered an appropriate financial/economic indicator for the project activity. The benchmark to be applied is the weighted average cost of capital (WACC). The WACC benchmark is calculated using public indices for the cost of debt financing and the cost of equity financing. The average cost of debt financing is obtained from the Bank of Thailand website which demonstrates that the average Minimum Lending Rate (MLR) of commercial banks in Thailand was 6.82% over the three years prior to the decision to invest in the project (2009-2011). This MLR is before any additions by commercial banks. The average cost of equity financing is obtained from the Stock Exchange of Thailand website8

which demonstrates that the average Return on Equity (ROE) of electricity generation companies was 18.53% over the three years prior to the decision to invest in the project (2009-2011). The CDM default debt to equity ratio of 50:50 which results in a WACC benchmark of 12.925%, full details of the calculation and all reference data is provided in the Investment Analysis spreadsheet. The benchmark Project IRR is based on the financing structure of the project (mixture of equity and debt) is calculated using the UNFCCC Default as published in the Guidelines for Investment Analysis Sub-step 2d - Sensitivity analysis (only applicable to options II and III): Please refer to the table below for a sensitivity analysis for Cases 1 and 2. Table 3 shows how much the key parameters have to be deviated in order that the Project IRR of Case 1 (without CDM revenues) comes close to the benchmark of 12.925%. Table 3: Required deviations of key parameter in order to meet the benchmark IRR


IRR BAU 12.57%IRR CDM 13.55%IRR 5% Capacity Inc. 13.45%IRR 10% Capacity Inc. 14.31%IRR 15% Capacity Inc. 15.15%IRR 5% Tariff Inc. 13.01%IRR 10% Tariff Inc. 13.44%IRR 15% Tariff Inc. 13.86%IRR 5% CAPEX Dec. 13.42%IRR 10% CAPEX Dec. 14.35%IRR 15% CAPEX Dec. 15.36%IRR 5% O&M Red. 12.64%IRR 10% O&M Red. 12.71%IRR 15% O&M Red. 12.78%

This is illustrative graphically in the chart below.

The table above shows that without CER revenues the project only meets the benchmark of 12.925% Project IRR only if the project performance is significantly enhanced, the Tariff is significantly increased or the capital expenditure on the project is greatly reduced. None of these deviations are realistic due to the following reasons. It is assumed that the investment costs taken for the cash-flow analysis are already a low figure due to the following facts:


The investment cost figure is taken from the Feasibility Study Report and an analysis of alternatives from many wind turbine suppliers.

The Tariff is the maximum possible. Indeed, there is a great deal of doubt about whether or not the Adder Tariff will continue. The tariff is set under the Thai Government Small Power Producer Scheme and cannot be negotiated by individual project developers.

The cost of equipment remains constant despite the global economic slowdown because of buoyant and resilient demand in the sector. Despite the temporary weakness of the Euro, Civil Contractors are based in the region and are adjusting their quotes to ensure that they make a margin.

The output figures are based on the most optimistic forecasts (P50) which is consistent with the PPA Application. Many investors would adopt a less optimistic approach (P75 or P90) but we have used the most conservative P50 approach and any increase in output would not be a realistic proposition.

Similaly the turbines have been selected to optimise the power output so it is not feasible to simply install larger turbines.

Step 3: Barrier analysis Sub-step 3a: Identify barriers that would prevent the implementation of the proposed CDM project activity: This step has not been undertaken because Additionality is proven by the above financial analysis. Sub-step 3 b: Show that the identified barriers would not prevent the implementation of at least one of the alternatives (except the proposed project activity): This step has not been undertaken because Additionality is proven by the above financial analysis. Step 4: Common practice analysis Sub-step 4a: Analyze other activities similar to the proposed project activity: There are no other activities similar to the proposed project in Thailand. So far only very small wind turbines have been erected in Thailand, and only for demonstration purpose. No full scale commercial wind park exists in Thailand. There are news of the private investors are interested in developing a wind farm in Thailand. However, as of September 2011, there is no wind farm with the comparable size in operation. Sub-step 4b: Discuss any similar Options that are occurring: As of September 2011, total combined installed capacity of wind turbines is 3.585 MW. In these micro sittings only a limited number of small mills have been erected, only 5 are above 100 kW1. Based on the above information, the proposed project is not considered common practice, and hence additional to anything that would occur in absence of the Clean Development Mechanism. In conclusion, in Thailand where fossil fuel based power plant projects are preferred, this first wind farm project is clearly not the business-as-usual alternative. Only the CER revenues will enable the Project to be economically viable and reduce the financial risk.

1 Source: DEDE handout slide” Draft 15-Year Renewable Energy Development Plan , Nov 2008.

UNFCCC/CCNUCC CDM – Executive Board Therefore, the project passes this last step of the additionality test and consequently the project activity is additional. Finally, it is worth mentioning that registration of the Phu Yang Diew Wind Farm Project under the CDM scheme will enable project developers to promote development of clean energy projects in a region of Thailand with excellent wind resources. B.6. Emission reductions B.6.1. Explanation of methodological choices The calculations of GHG emissions reductions by the proposed project is done according to the approved methodology ACM0002 consolidated baseline methodology for grid-connected electricity generation from renewable sources, Version 12.3.0, Scope 1, EB 65. Emission reductions are calculated as follows: ERy = BEy - PEy (1) Where: ERy = Emission reductions in year y (tCO2e/yr) BEy = Baseline emissions in year y (tCO2/yr) PEy = Project emissions in year y (tCO2e/yr) Baseline Emission Baseline emissions include only CO2 emissions from electricity generation in fossil fuel fired power plants that are displaced due to the project activity. The baseline emissions are to be calculated as follows: BEy = EGPJ,y * EFgrid,CM,y (2) Where: BEy = Baseline emissions in year y (tCO2/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) 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” (tCO2/MWh)

Calculation of EGPJ,y

The calculation of EGPJ,y for a greenfield plant is as follows: The proposed project activity is the installation of a new grid-connected renewable power plant at a site where no renewable power plant was operated prior to the implementation of the project activity, then EGPJ,y = EGfacility,y (3) Where: 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) EGfacility,y = Quantity of net electricity generation supplied by the project plant/unit to the grid in year

y (MWh/yr) In accordance with tool to calculate the emission factor for an electricity system, the combined margin emission factor (EFgrid,CM,y) is calculated as a weighted average of operating margin (OM) and build margin (BM) emission factors. The information used to calculate the grid emission factor should be publicly available. In Thailand, the energy generation is publicly available, but the fuel consumption by type of fuel used in electricity generation is limited to certain level.

UNFCCC/CCNUCC CDM – Executive Board In August 2010 the Thailand Greenhouse Gas Office (TGO) which is a public organization inder the Ministry of Natural resources and Environment (MNRE), published a Grid Emissions factor for Project Developers. This calculation provides information about the Operating Margin and Build Margin as well as Combine Margin Emission Factors of national Thai grid, therefore, emission factor calculation in this PDD will use the data published in the TGO calculation for calculating the CO2 Emission Factor. Details of the TGO calculations are described below: The Operating Margin emission factor: Operating Margin Emission Factor (EFgrid,OM,y) is calculated based on generation of all power plants in the system boundary. There are four options for the calculation of OM as follows;

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

The availability of data, the amount of fuels consumed, electricity delivered to the grid and CO2 emission coefficient of fuel, are the key factors to justify the choice used. According to the available data a Simple OM is chosen as the OM calculation method. However, the Simple OM can be used where Low-cost/must-run (LC/MR) resources comprise less than 50% of the total grid generation in average of the five most recent years. LC/MR 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. EGAT is in charge of a national electricity grid for sufficient supply in Thailand. EGAT presently owns approximately 56% of total power plants capacity in the country and the rests are owned by private power companies in three categories as shown in Table 5. Table 5. Types and portions of private power companies selling electricity to EGAT

Private power companies Sale to EGAT

(MW/power plant) Portion in grid system

(%) Independent Power Producers (IPPs)

> 90 44.63

Small Power Producers (SPPs) 10 - 90 9.62 Very Small Power Producers (VSPPs)

< 10 0.00

Some of SPP and VSPP power plants use both of renewable and conventional energy. Therefore, the calculation of LC/MR in this study includes also electricity generated from SPP and VSPP power plants. Based on the data from EGAT’s “Electricity Report 2008-2010”, the average LC/MR of the three most recent years is determined to be 5.76% as shown in Table 6. Consequently, the Simple OM is deployed for calculation of the OM emission factor in this study. Table 6. National grid generation in Thailand, 2008 – 2010

Year Electricity (GWh) LC/MR1

Total2 Hydro SPP & VSPP3

Others4 GWh %

1 Including electricity generated from SPP and VSPP power plants 2 Electricity Report 2008 – 2010 / Electricity Generating Authority of Thailand


2008 145,232.00 9,115.86 14,092.83 9,115.86 6.282009 145,300.19 9,106.39 13,971.37 9,106.39 6.272010 160190.96 7,587.24 13,897.27 7,587.23 4.74

3 - year average 5.76 The simple OM emission factor can be calculated in three options based on the obtained data.

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

Option b) is based on data on net electricity generation, the average efficiency of each power unit and the fuel type(s) used in each power unit

Option c) is based on data on the total net electricity generation of all power plants serving the system based on the fuel types, and total fuel consumption of the project electricity system.

According to the available data in Electricity Report 2008-2010 option C is the most suitable method. The data vintage is the ex ante option using a 3-year generation-weighted average based on the most recent data available in the year 2008 to 2010. The simple OM emission factor is calculated as the generation weighted average emissions in tCO2/MWh of all generating power plants serving the national grid system, excluding LC/MR plants.

y

iyiCOyiyi

yOMsimplegrid EG

EFxNCVxFCEF

,,2,,

,, (3)

Where: EFgrid,OMsimple,y = Simple operating margin CO2 emission factor in year y (tCO2/MWh) FCi,y = Amount of fossil fuel type i consumed in the project electricity system in year y

(mass or volume unit) NCVi,y = Net calorific value (energy content ) of fossil fuel type i in year y (GJ/ mass or

volume unit) EFCO2,i,y = CO2 emission factor of fossil fuel type i in year y (tCO2/GJ) EGy = 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 = All fossil fuel types combusted in power sources in the project electricity system in year y

Build Margin Emission Factor: Build Margin Emission Factor (EFgrid,BM,y) is the generation-weighted average emission factor (tCO2/MWh) of the sample group of power units serving to the grid. The sample group of power units m consists of either:

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

generation (in MWh) and that have been built most recently. Project participants should use the set of power units under option a or b above that comprises the larger annual generation.

3 Generated from renewable and conventional energy 4 Including geothermal, solar cell, and wind turbine, etc.

UNFCCC/CCNUCC CDM – Executive Board As general guidance, a power unit is considered to have been built at the date when it started to supply electricity to the grid. Therefore the commercial operating date (COD)1 is considered for power plant selection. The Electricity Report 2008-2010 reported that the total national grid generation in 2010 was equal to 160,190.96 GWh. Hence 20% of the total system generation is 32,038GWh. From the available power plant information, the 5 most recently built power plants account for more 20% of total generation. Consequently, option a above is chosen. The set of five power units that have been built most recently are selected as sample group m for calculating the build margin The option 1 of vintage of data for build margin is selected as follows:

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 calculated as follows:

mym

mymELym

yBMgrid EG

EFxEGEF

,

,,,

,,

(4) 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) FEEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh) m = Power units included in the build margin The CO2 emission factor of each power unit m (EFEL,m,y) is determined as per the guidance in step 3 (a) for the simple OM, using option B3, using for y the most recent historical year for which power generation data is available, and using for m the power units included in the build margin. Combined Margin Emission Factor: As already mentioned, the combined margin emission factor (EFgrid,CM,y) is calculated as the weighted average of the operating margin (OM) and build margin (BM) emission factor. In case of wind power project, the default weighting of 0.75 for operating margin and 0.25 for build margin are applicable as per ACM0002 for the first crediting period and for subsequent crediting period. BMyBMgridOMyOMgridyCMgrid wxEFwxEFEF ,,,,,, (5)

Where: EFgrid,BM,y = Build margin CO2 emission factor in year y (tCO2/MWh) EFgrid,OM,y = Operating margin CO2 emission factor in year y (tCO2/MWh) wOM = Weighting of operating margin emission factor (%) wBM = Weighting of build margin emission factor (%)

1 Date of COD of the recent power plants during 2003-2007 obtained from Energy Policy and Planning Office

(EPPO).

UNFCCC/CCNUCC CDM – Executive Board The detailed calculation is provided in Annex 3. Project emission The project activity uses wind power to generate electricity and hence the emissions from the project activity are taken as nil. PEy = 0 tCO2/MWh B.6.2. Data and parameters fixed ex ante

Data / Parameter EFgrid,OMsimple,y

Unit tCO2/ MWh

Description Operating margin emission factor of the grid

Source of data Study of Emissions Factor for an Electricity System in Thailand 2010published by the Thailand Greenhouse Gas Office (TGO)

Value(s) applied 0.5994

Choice of data or Measurement methods and procedures

Calculated as per “Tool to calculate the emission factor an electricity system” version 02.2.1with 3-year vintage data and option of ex-ante calculation based on Simple Operating Margin Method

Purpose of data To identify ex-ante emissions reductions

Additional comment Study of Emissions Factor for an Electricity System in Thailand 20010, published by the Thailand Greenhouse Gas Office (TGO)

Data / Parameter EFgrid,BM,y

Unit tCO2/ MWh

Description Build Margin emission factor of the grid

Source of data Study of Emissions Factor for an Electricity System in Thailand 2010, published by the Thailand Greenhouse Gas Office (TGO)



Calculated as per “Tool to calculate the emission factor an electricity system” version 02.2.1 with ex-ante calculation based on sample group m comprising of 20% of the system generation (in MWh)




Data / Parameter FCi,y

Unit Million Tonnes, MMSCF, Million Litres

Description Amount of each fossil fuel consumption by type of fuel


Value(s) applied See table 3 in Annex 3


For fossil fired generation units, EGAT and DEDE provide fuel consumption data. Likewise, the choice of data satisfies with the methodology in “Tool to calculate the emission factor an electricity system”



Data / Parameter NCVi,y

Unit TJ/Unit

Description Net calorific value of the fuel combusted in grid based power plants used in the determination of the emission factor.


Value(s) applied Varies for each fuel types


Use for unit conversion.




Data / Parameter EFCO2,i,y

Unit tCO2/TJ

Description Emission Factor of Carbon dioxide gas emitted from fossil fuel combustion in grid based power plants used in the determination of the emission factor.

Source of data default values from IPCC 2006

Value(s) applied Varies for each fuel types


For fossil fired generation units, EGAT and DEDE provide fuel consumption data. Likewise, the choice of data satisfies with the methodology in “Tool to calculate the emission factor an electricity system”



Data / Parameter EFgrid,CM,y

Unit tCO2/ MWh

Description Combined margin emission factor of the grid

Source of data Calculated as weighted average of Simple OM and BM



Calculated ex-ante as per “Tool to calculate the emission factor an electricity system” based on 75% of OM and 25% of BM values approach



B.6.3. Ex ante calculation of emission reductions The estimated ex ante emission reduction ERy = BEy − PEy

As mentioned above wind power project activities, there is no any greenhouse gas emission to the atmosphere, PEy = 0 tCO2e/year, therefore ERy = BEy

Baseline emissions calculation: Referring to the Study of Emissions Factor for an Electricity System in Thailand 2010, published by the Thailand Greenhouse Gas Office (TGO), the simple Operating Margin is determined as follows:

i


y

iyiCOyiyi

yOMsimplegrid EG

EFxNCVxFCEF

,,2,,

,, = 0.5994 tCO2e/MWh

Referring to the Study of Emissions Factor for an Electricity System in Thailand 2009, published by the Thailand Greenhouse Gas Office (TGO), the Build Margin emission factor, it is determined as: i

mym

mymELym

yBMgrid EG

EFxEGEF

,

,,,

,, = 0.4231 tCO2e/MWh

Finally, the combine margin emission factor is calculated through a weighted-average formula, considering both the OM and the BM, being the weights 75% and 25%. That gives: EFgrid,CM,y = (EFgrid,OM,y * wOM) + (EFgrid,BM,y * wBM) = 0.5554 tCO2e/MWh Baseline emissions due to displacement of electricity are calculated by multiplying the combined margin emission factor (EFgrid,CM,y) with the electricity delivered to the grid of the project activity. BEy = EFgrid,CM,y * EGPJ,y

= EFgrid,CM,y * EGfacility,y = 12,816 tCO2 /year (for year 2014)

Ex ante emission reduction calculation: ERy = BEy = 12,816tCO2 /year (for year 2014) Since this wind power project consists of two phases of operation. The first phase comprises 18 wind turbines which can generate 45 MW of electric power supply to the grid. The second includes 10 wind turbines with 25 MW of electric power generation. The result of ex ante emission reduction of the project can be revealed in table 8. Table 8. Ex ante emission reduction of wind power project

Phase 1 Phase 2 Power capacity (MW) 45 37.50 Electricity Generation (MWh) 92,301 88,617 Ex ante Emission Reduction (tCO2/ y)

51,264 49,218

The above figures are based on a full year of production. Further detail of calculation is illustrated in Annex 3.

UNFCCC/CCNUCC CDM – Executive Board B.6.4. Summary of ex ante estimates of emission reductions

Year Baseline Emissions (t CO2e)

Project Emissions (tCO2e)

Leakage (tCO2e)

Emissions Reductions (t CO2e)

2014 12,816 - - 12,816 2015 100,482 - - 100,482 2016 100,482 - - 100,482 2017 100,482 - - 100,482 2018 100,482 - - 100,482 2019 100,482 - - 100,482 2020 100,482 - - 100,482

Total 615,707 - - 615,707

Total Number of Crediting Years

7

Annual Average Over the Crediting Period 87,958 - - 87,958

B.7. Monitoring plan B.7.1. Data and parameters to be monitored

Data / Parameter EGfacility,y

Unit MWh/year

Description Quantity of net electricity generation supplied by the project plant to the Thai grid in year y

Source of data Measured data from electricity meter

Value(s) applied Power sold to grid

Measurement methods and procedures

The provisions for metering will be as per regulation described in the power purchase agreement.

Monitoring frequency Continuous measurement and monthly recording

QA/QC procedures The meter will be calibrated in accordance with manufacturer’s recommendation. The meter reading will be cross checked with the electricity receipt.

Purpose of data Toc calculate actual emissions reductions when compared to x-ante estimates based on the power generated and sold to the grid, therevy displacing other sources of power on the grid.

Additional comment B.7.2. Sampling plan The data monitored will not be a sample but the actual data, therefore a sampling plan is not needed. B.7.3. Other elements of monitoring plan TWC is well aware of the importance of having a good operational and management team in order to execute a well-defined monitoring plan for the project activity. From this perspective, the company has an operational and management structure, created exclusively to monitor the relevant plant parameters. The

UNFCCC/CCNUCC CDM – Executive Board responsibility of data monitoring, archiving and analyzing will fall on different members of the monitoring team. This team will be composed of a Manager, engineers, and technicians as shown in the chart below. The Manager will make sure that the monitoring system is properly implemented.

Under the supervision of the Manager, data monitoring and archiving will be done by the technician team. All the data will be recorded according to the data archiving procedures and stored electronically in a systematic and transparent manner. The engineer will review the archived data and submit a complete set of documentation, which will indicate the calculation procedure as well as the ex-post emission reduction estimation, to the Manager for internal verification regularly on quarterly basis. Based on the feedback from the Manager, the engineer will review the data and apply quality check on a regular basis. This documentation will be verified again by an external independent Designated Operational Entity (DOE) annually. Quality assurance and quality control Calibration will be carried out in accordance with the national/international standards, as applicable. TWC will take responsibility for the quality assurance and quality control for recording, maintaining and archiving all the data by appointing consultants and/or technical support team to carry out the system analysis, equipment calibration and overall maintenance on a regular basis throughout the crediting period. TWC will also provide sufficient number of staff for data collection and monitoring and impart necessary training in order to improve the efficiency of their work. Data logging, presentation and storing TWC will monitor the gross and net electricity produced, auxiliary electricity consumption, and electricity exported to the grid using meters installed in the plant. The monitoring reports will be checked and discussed periodically. Daily operation and maintenance log books will be maintained by responsible operators. They will be able to provide detailed on-the-spot information about the operation of the plant. Any distinguishing event will be reported and recorded as special log. Emergency Procedure

Manager

Engineers - Electrical engineer

- Mechanical engineer

Technician - Electrical technician - Mechanical technician

Data recording and archiving

UNFCCC/CCNUCC CDM – Executive Board TWC will implement an Emergency Procedure in the plant, for which a detailed manual will be developed. The manual will contain instructions on how to handle an emergency situation in the plant, and measures to be taken to ensure that there is no accident from the system. All the plant operators will be familiarised on the procedure. In case of differences between the output measurements and the electricity bill, the reasons for this will immediately be initiated and only the correct numbers will be applied in the calculation of the annual emission reduction. CDM Training With regard to CDM training, the key calibration regulations are contained within the PPA and WTG manufacturer documentation. Specific CDM training will by provided by the CDM consultant and will take the form of workshops held for the relevant staff, and a CDM Monitoring manual which will follow the regulations set out in the PPA and the PDD.


SECTION C. Duration and crediting period C.1. Duration of project activity C.1.1. Start date of project activity 01/02/2012. C.1.2. Expected operational lifetime of project activity The technical lifetime of the project is 20 years. C.2. Crediting period of project activity C.2.1. Type of crediting period 7 years renewable twice C.2.2. Start date of crediting period 01/01/2014 C.2.3. Length of crediting period 7 years


SECTION D. Environmental impacts D.1. Analysis of environmental impacts According to the National Environmental Quality Act of B.E. 25356, the thermal power plant with capacity of 10 MW or more is required to conduct the Environmental Impact Assessment (EIA) report and to be approved by the National Environment Board. So there is no law enforcement to conduct the EIA Report for wind farm development project in Thailand. Wind farm seems to have no environmental impacts due to air, wastewater and solid waste pollution. TWC intends to conduct the EIA study to ensure the environmental protection and acceptance from all project stakeholders. However, it does not require to be approved by the National Environment Board. In addition, the Board of Investment (BOI) has approved the project on the 7 December 2007 with a condition that the project has to provide and utilize protection system to protect and control any damages to the quality of environment or disturb the nearby residents under the approval of concerned governmental agencies. EIA final report of the Phu Yang Diew Wind Farm Project was completed on the 10 February 2009. The project activity has no significant adverse impact on the environment. However, certain foreseen impacts due to the project activity are discussed below during the construction phase and operation phase: Construction Phase: The major impacts are traffic-transportation, dust, noise, accident, health & safety and compensation of crop clearance. The mitigation measures are mostly practical that is to strictly follow and monitor the transportation and construction activities according to the relevant standards and regulations. The impacts during construction phase are considered temporary short term and will be back to normal condition when the activities finish.

Identified Environmental Impacts Mitigation Measures Air Pollution Dust from construction and

transportation Cover the construction areas and truck with cover materials, keep engines of vehicles in good condition, and limit the driving speed

Contaminant emissions during the use of heavy machinery

Maintain all vehicles and machines in good working condition

Noise Pollution Noise from construction Avoid night time construction, and use good quality

equipments Water pollution Wastewater from construction Schedule to implement activities, and provide settling sump Wastewater from the staff Provide primary waste water treatment units Soil pollution Loss surface soil from the

excavation WTG foundation Backfill WTG area with subsoil and then topsoil

Laying the underground cables Use existing road right of way for transmission system Land lease/Crop compensation Land lease Plan/Design the land use carefully, and pay for land lease Crop compensation The compensation rate must be fair and acceptable. Public health and safety Dust, Noise, and Vibration Cover both trucks and construction areas, and use of good

machine Increase the rate of accidents:

transportation, and road and Provide warning sign, use personal protection devices, traffic route planning,

6 http://www.onep.go.th/eia/ENGLISH/size/e_size_index.htm


transmission system construction, Operation Phase: As wind energy is a clean process, it will not generate any water and air pollution. The experience in oversea countries reports major negative operation impacts of noise, shadow flickering, bird collision, accident and safety. The assessment of these impacts within the project area is considered low and can be mitigated. Moreover, the project will provide Center of Complaints that can take immediate identifying and solving actions when any problems occur. Noise emission: When the turbine operates, it creates the noise of 50 dB at the base of turbine column. Most of the community is located at least 500 meters from the wind turbine. So they should not get any impact. Wastewater: They will be no wastewater emission from the wind turbine. They are not using the water for cooling. Shadow casting: in some cases turbines are casting shadows that might disturb people living or working near them. Since most of the community is located at least 500 meter from the turbines this is not supposed to be a problem. Occupying farm land: since the wind turbines will be erected in a rubber farm area the issue of how much farm land is going to be occupied has to be considered. In order to lower the negative impacts the project has decided to limit the number of wind turbines directly located on farm land. Today it seems as if only 3 wind turbines locations will be in rubber plantation. In order to mitigate the impact of these 3 wind turbines to be installed in the rubber plantation, the project has decided to apply a so called "single blade" installation as alternative to the normal installation procedure where the rotor is assembled on the ground prior to lifting it to its final position. Hereby the number of rubber trees to be cut during construction is reduced.

Identified Environmental Impacts Mitigation Measures Noise Pollution WTG’s operation Routine checking and maintenance of WTGs Shadow Flickering Shadow Flickering Keep distance from household of at least 150 meters. Bird collision Bird collision Bird can learn to avoid collision, and all WTGs locate on

private property so the animal disturbance will be low. Public health and safety Danger from electricity,

electromagnetic field Provide electrical circuit breaker, and follow the PEA and EGAT regulations to generate electricity

WTGs tower collapse due to storm/lightning

The turbines are designed to withstand much greater windspeeds without collapse, than are normally prevalent in Thailand.

D.2. Environmental impact assessment Most of the project’s impacts were identified as minor in the EIA process, the noise from the turbines is considered to be within acceptable parameters, furthermore the project will contribute to sustainable development for the local and national area, and the project is expected to have an overall positive impact on the local and global environment. All negative environmental impacts are subject to mitigation measures as described above.


SECTION E. Local stakeholder consultation E.1. Solicitation of comments from local stakeholders There are four activities organized for local stakeholders meetings as followed:

Activity 1 Consultation Meetings: Four public consultation meetings at community leader level (Village and Tambon) were held on 17-19 June 2008 to preliminary assess the leaders’ attitudes.

Activity 2 First Public Consultation Meeting: It was held on 9 August 2008 at Nikhom Khum Soi District Meeting Hall. Main stakeholders consist of villager, local government agencies’ representative and community leaders.

Activity 3 Socio-economic Field Survey: Local people were visited and interviewed via questionnaires to collect data of socio-economic status and attitudes towards the project development.

Activity 4 Second Public Consultation Meeting: It was held on 11 December 2008 at Nikhom Khum Soi District Meeting Hall. Most of participants were WTG land owners and the vicinity land owners from various areas and sectors. This meeting was intended to publicize the progress of project, the result of environmental impact assessment study, and the CDM to the local people, and also to other stakeholders, especially the concerning governmental agencies and the representatives from Danish Embassy.

There were 2 public participation activities to collect the feedback from participants

Question and Answer: After ending of the project presentation session, many questions and concerns were asked as well as suggestions were proposed from the floor. The questions are clarified and end up with 100 % vote for project approval.

Questionnaire Feedback Form: Each participant was requested to fill in the questionnaire feedback form to collect the individual remaining issue. Most of them were filled by the land owners who get direct impact from the project.

E.2. Summary of comments received Overall of local stakeholders meetings, positive comments and observations were provided by participants of the public forum. The following list includes general comments and observations about the project from participants at the public consultation.

Most of participants wantssuch a project to be implemented as fast as possible as they wants to see the development within their communities.

Most of land owners worry about land lease and some of those have not received the final title deed of land.

Group of nearby land owners would like to know the compensation rate for building, land, and crop that damaged from road and transmission system construction.

Some participants are afraid of the impacts from sound wave, and wind power interference with the electromagnetic field of the electrical appliance.

Some land owners want to be employed during construction period belong to the local Thai Citizen opportunity, not the neighboring countries workforce.

E.3. Report on consideration of comments received According to the Environmental Impact Assessment and the feedback received from the local stakeholders, the Phu Yang Diew Wind Farm Project’s developer clarify as follows:

If the land is owned legally by the government agencies like the Agriculture Land Reform Office (ALRO). The developer will sign two leasing contracts, one with the land owners and the other


with the ALRO so land lease payment can be paid to the land owner every year through 25 years of the contract.

The compensation covering for building, land, and crop affected by the project construction will be paid fairly and according to the fact.

WTG will be produced at high standards and must pass the technical compliance test so there will be no electromagnetic field interference. Moreover, the setback distance from any building must be at least 150 meters. At present, there has been no problem so far from the existing high voltage transmission line between Mukdahan and Amnaj Charoen Provinces, passing Nikhom Kham Soi District. EGAT can monitor the transmission line according to standard and can prevent interference by following the mitigation measures guideline.

For WTGs and transmission system construction, the construction contractor will surely consider local employment for the legal convenience sake of both employers and employees.


SECTION F. Approval and authorization The project has been submitted to the Thailand Greenhouse Gas Office (TGO) and the Project Owner is awaiting the LOA. Once this is received, the project will be submitted to the Swiss DNA for their approval.

- - - - -


Appendix 1: Contact information of project participants

Organization name Thai Wind Power Co., Ltd. (TWC)

Street/P.O. Box 29 Soi Chidlom Pathumwan

Building 12th Fl, Vanissa Building

City Bangkok

State/Region

Postcode 10330

Country Thailand

Telephone +66 89 4815787

Fax +66 89 4815787

E-mail

Website

Contact person

Title Director

Salutation Mr.

Last name Poulsen

Middle name

First name Claus

Department

Mobile

Direct fax

Direct tel.

Personal e-mail

UNFCCC/CCNUCC CDM – Executive Board Organization name Mercuria Energy Trading SA Street/P.O. Box 50, Rue du Rhone Building City Geneva State/Region Postcode 1204 Country Switzerland Telephone +41 (22) 5958004 Fax +41 (22) 5943901 E-mail [email protected] Website Contact person Title Salutation Mr. Last name Steels Middle name First name Jean-Francois Department Mobile Direct fax Direct tel. Personal e-mail


Appendix 2: Affirmation regarding public funding

This project will not receive any public funding.


Appendix 3: Applicability of selected methodology

The applied methodology ACM002 Version 12.3.0 is applicable to grid-connected renewable power generation project activities that involve electricity capacity additions. The methodology is applicable under the following conditions: 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 is a wind power project and it is therefore covered by the ACM0002 methodology.


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

BASELINE INFORMATION

The following emission factor calculation is refers to the “Study of Emissions Factor for an Electricity System in Thailand 2011” which was published by the Thailand Greenhouse gas Office (TGO) in 2011. The combined margin emission factor (EFgrid,CM,y) is calculated as per methodological tool “Tool to calculate the emission factor an electricity system” version 02.2.1, consisting of the combination of operating margin (OM) and build margin (BM) emission factors as shown in the following steps:

Step 1: Calculate the Operating Margin emission factor(s) (EFgrid,OM,y)

The operating margin is based on the Simple OM emission factor (EFgrid,OMsimple,y), which is calculated as the generation-weighted average emissions per electricity unit (tCO2/MWh) of all generating sources serving the system (option C), not including low-operating cost and must-run power plants as follows:

y

iyiCOyiyi

yOMsimplegrid EG

EFxNCVxFCEF

,,2,,

,,

Where:

EFgrid,OMsimple,y = Simple operating margin CO2 emission factor in year y (tCO2/MWh)

FCi,y = Amount of fossil fuel type i consumed in the project electricity system in year y (mass or volume unit)

NCVi,y = Net calorific value (energy content) of fossil fuel type i in year (GJ/ mass or volume unit)

EFCO2,i,y = CO2 emission factor of fossil fuel i in year y (tCO2/ GJ)

EGy = 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 = All fossil fuel types combusted in power sources in the project electricity system in year y

y = either the three most recent years for which data is available at the time of submission of the CDM-PDD to the DOE for validation (ex-ant option).

By using the default value from Revised 2006 IPCC Guideline for National Greenhouse Gas Inventories, the CO2 emission coefficient of each fuel type is demonstrated in Table 3. The default oxidation factor is assumed to be one.

UNFCCC/CCNUCC CDM – Executive Board Table 1. CO2 emission coefficient of each fuel type

Fuel Type Net Calorific Value1 (NCV) CO2 emission coefficient2 (COEFi) MJ/Unit Unit tCO2/TJ tCO2/Unit Unit

Natural gas 1.02 scf 54.30 0.0544 scf Bunker 39.77 litres 75.50 3.0026 litres Diesel oil 36.42 litres 72.60 2.6441 litres Lignite 10,470 ton 90.90 951.23 tonnes Bituminous 26,370 ton 89.50 2,360.11 tonnes

Table 2 shows the CO2 emission from each fuel type generated from the national grid system during 2008-2010. According to the methodological tool, imported electricity should be included in the calculation with zero tCO2/MWh. The results in Table 2 show that the 3-year average OM emission factor is 0.5994 tCO2/MWh

Table 2 CO2 emissions and OM emission factor of grid electricity generation, 2008 – 2010

Unit Volume2010

Total 88,409,924,423 Natural Gas scf. 1,073,084,673,019 0.0554 59,448,890,885 Lignite ton 16,043,174 951.7230 15,268,657,689 Bituminous ton 5,502,160 2,360.1150 12,985,730,348 Bunker litre 233,228,746 3.0026 700,292,633 Diesel litre 2,402,658 2.6441 6,352,868

Unit Volume2009

Total 82,192,233 Natural Gas scf. 968,924,717,809 0.0554 53,678,429 Lignite ton 15,818,265 951.7230 15,054,607 Bituminous ton 5,486,248 2,360.1150 12,948,176 Bunker litre 158,017,445 3.0026 474,463 Diesel litre 13,825,937 2.6441 36,557

Unit Volume2008

Total 84,097,036 Natural Gas scf. 977,016,893,281 0.0554 54,126,736 Lignite ton 16,407,465 951.7230 15,615,362 Bituminous ton 5,578,567 2,360.1150 13,166,060 Bunker litre 350,209,394 3.0026 1,051,539 Diesel litre 51,941,958 2.6441 137,340

Fuel TypeFuel Consumption CO2 Emissions

(kgCO2/Unit)CO2 Emissions (kgO2)





1 Study of Emissions Factor for an Electricity System in Thailand 2010. Also note that the value of Lignite is based

on Mae Moh site. 2 Revised 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Table 2.3 p. 2.18 - 2.19


Table 3 – OM Emissions Factor 2010

tCO2/MWh) gCO2/kWh)2010 88,452,088 152,603.73 0.57962 579.622009 82,178,673 136,193.80 0.60340 603.402008 84,083,369 136,116.14 0.61770 617.73

Summary 254,714,130.00 424,913.67 0.59945 599.45

YearCO2 Emissions

(tCO2)Grid

Comsumption OM Emission Factor

Step 2: Calculate the Build Margin emission factor (EFgrid,BM,y)

The build Margin emission factor is calculated as the generation-weighted average emission factor (tCO2/MWh) of a sample of power plants m, as follows:

mym

mymELym

yBMgrid EG

EFxEGEF

,

,,,

,,

Where:

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

EFEL,m,y = CO2 emission factor of power unit m 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)

m = Power units in the build margin

List of IPPs, comprising 20.56% of the total electricity generation, is used in the BM emission factor calculation shown in the table 3. The BM emission factor of the national grid system equals to 0.4231 tCO2/MWh as shown in Tables 4 and 5.

Table 4. List of selected larger annual generation power plants for BM calculation.

UNFCCC/CCNUCC CDM – Executive Board Power Consumption by the Most Recently Built Power PlantsPower Unit Grid Generation (GWh) CODNorth Bangkok Power Plant (Unit 01) 1,584.22 19/11/2010Bangpakong Power plant (Unit 05) 4,643.22 16/9/2009Phu Kieaw Bio Power Project 2 79.46 15/9/2009Dan Chang Bio Power Project 2 76.75 15/9/2009South Bangkok Power Plant (Unit 03) 4,431.92 1/3/2009Chana Power Plant (Unit 01) 5,090.02 15/7/2008Ratchaburi Power Company Limited (RPCL) (Unit 1&2) 7,124.72 1/7/2008Gulf Power Generation Co. Ltd. (Unit 1&2) 9,903.93 1/3/2008Summary 32,934.24 As percentage of 2010 Grid Generation 20.56%

Table 5. BM emission factor 2010

Unit VolumeTotal 13,933,411 Natural Gas scf. 251,512,881,819 0.0554 13,930,292 Lignite ton - 951.7230 - Bituminous ton - 2,360.1150 - Bunker litre - 3.0026 - Diesel litre 1,179,772 2.6441 3,119


(kgCO2/Unit)CO2 Emissions

(tCO2)

Build Margin 0.4231 t CO2 / MWh

Step 3: Calculate the baseline emission factor

The Combined Margin emission factor is calculated as the weighted average of the Operating Margin emission factor (EFgrid,OM,y) and the Build Margin emission factor (EFgrid,BM,y) as follows:

EFgrid,CM,y = EFgrid,OM,y * wOM + EFgrid,BM,y * wBM

Where:

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

EFgrid,OM,y = Operating margin CO2 emission factor in year y (tCO2/MWh)

wOM = Weighting of operating margin emissions factor (%)

wBM = Weighting of build margin emissions factor (%)


The default values of wOM and wBM for wind power generation project are 75% and 25% respectively as stated in the tool. The CM emission factor is calculated as shown in the equation above:

Table 6 demonstrates that the baseline emission factor of Thailand’s national electricity system in 2010 is 0.5554 tCO2/MWh.

Table 6. Baseline emission factor of Thailand’s national electricity system in 2010

Weight Emission Factor

Operating margin 0.75 0.5994

Build margin 0.25 0.4231

Baseline (Combined margin) 0.5554

Baseline emissions

BEy = EFgrid,CM,y * EGPJ,y

= EFgrid,CM,y * EGfacility,y

Where:

BEy = Baseline emission for year y, tCO2/ year

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” (tCO2/MWh)

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)

EGfacility,y = Quantity of net electricity generation supplied by the project plant/unit to the grid in year y (MWh/yr)

Since wind farm has two phases, baseline emission will be calculated based on electricity generation of each phase. Table 6 shows baseline emission of wind farm project, total baseline emission is equal to 100,482 tCO2/y

Table 7. Baseline emission of the project


Phase 1 Phase 2Combined margin emission factor (tCO2 / MWh) 0.5554 0.5554Electricity generation (MWh) 92,301 88,617 Baseline emission (tCO2 / year) 51,264 49,218 Total baseline emission (tCO2 / year) year 2015 onwards 100,482

Step 4: Emission Reductions

Since there are no anthropogenic emissions by sources of GHG due to the project activity, the emission reduction will be equal to the baseline emission.

ERy = BEy

Where:

ERy = Emission reductions generated in year y, tCO2e/yr

BEy = Baseline emissions in year y, tCO2e/yr

Table 8 illustrates ex ante emission reduction and annual average of the estimated reductions over the crediting period. For phase 2, it will commence operations in January 2015.

Table 8. The ex ante estimation of emission reductions

Phase 1 Phase 2 Total2014 12,816 - 12,816 2015 51,264 49,218 100,482 2016 51,264 49,218 100,482 2017 51,264 49,218 100,482 2018 51,264 49,218 100,482 2019 51,264 49,218 100,482 2020 51,264 49,218 100,482

Total number of crediting yearsEstimated reductions (tonnes CO2e) 320,400 295,307 615,707 Total estimated reductions (tCO2e) 615,707 615,707

Annual average of the estimated reductions over the crediting period (tCO2e) 87,958.16 87,958

YearEstimation of annual emission reductions (tCO2e)

7


Appendix 5: Further background information on monitoring plan

The methodology requires monitoring of actual electricity supplied from the project activity. Analysis of daily power generation reports, performance report and monthly meter reading is handled by project proponent on regular basis. The project developer will be the main responsible to develop the procedures which are mentioned below, as well the maintenance of the wind farm and the staff training. CDM project responsibility: Prior to the start of the crediting period, Thai Wind Power Company have to promote plant manager to organize and operate wind farm. Clear roles and responsibilities will be assigned to all staffs involved in the CDM project and the Plant Manager will coordinate and support for all CDM monitoring activities. The Plant Manager will have the overall responsibility for the CDM monitoring system on this project. Data Monitoring: The methodology requires monitoring of the net electricity generation from the project activity. Archiving of data: All staffs are responsible for ensuring that any data or records are accuracy. These data are kept for two years after crediting period or from the last issuance. Data are to be archived electronically and/or on paper. Electricity measurement: Gross electricity produced, auxiliary load, and net electricity generation will be recorded monthly from the electricity meters installed in the substation by the O&M Team. It will report them in the spreadsheet for measurement control. Electricity meters calibration: The meters will be calibrated according to instructions received from entity buying electricity from the plant (EGAT and/or PEA). Electricity meters maintenance: The maintained procedure will be followed by all staffs involved in checking and maintaining the on site electricity meter. Staff training: Personnel of the O&M Team will be received sufficient and continuous training in terms of monitoring and verification on these following aspects:

Reading and calibration of meters Recording of the readings Adjustment of readings Reporting of readings

If new personnel are hired, they have to follow up a training program and will be formed before in the specific skills required to carry out the Monitoring Plan.


Appendix 6: Summary of post registration changes


- - - - -

History of the document

Version Date Nature of revision 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 06 14 June 2004

01 EB 05, Paragraph 12 03 August 2002

Initial adoption.

Decision Class: Regulatory Document Type: Form Business Function: Registration

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