6 mw wind power project in gujarat by gpcl

8/10/2019 6 MW Wind Power Project in Gujarat by GPCL

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

CDMExecutive Board

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CLEAN DEVELOPMENT MECHANISM

PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD)

Version 03 - in effect as of: 22 December 2006

CONTENTS

A. General description of the small scale project activity

B. Application of a baseline and monitoring methodology

C. Duration of the project activity / crediting period

D. Environmental impacts

E. Stakeholderscomments

Annexes

Annex 1: Contact information on participants in the proposed small scale project activity

Annex 2: Information regarding public funding

Annex 3: Baseline information

Annex 4: Monitoring Information

Annex 5: Selection of Appropriate Benchmark


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Revision history of this document

Version

Number

Date Description and reason of revision

01 21 January2003

Initial adoption

02 8 July 2005 The Board agreed to revise the CDM SSC PDD to reflect

guidance and clarifications provided by the Board sinceversion 01 of this document.

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

version can be found at.

03 22 December2006

The Board agreed to revise the CDM project designdocument for small-scale activities (CDM-SSC-PDD), takinginto account CDM-PDD and CDM-NM.
http://cdm.unfccc.int/Reference/Documentshttp://cdm.unfccc.int/Reference/Documents


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SECTION A. General description of small-scale project activity

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

6 MW wind power project in Gujarat by GPCL

Version: 04Date: 15/06/2012

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

Gujarat Power Corporation Limited (GPCL) plans to develop a 6 MW wind power project in the state of

Gujarat in India. The project activity will involve development, supply, commissioning and operation of 4

Wind Turbine Generators (WTGs) of rated capacity 1500 kW each. The make of the machines used in thewind farm is Suzlon (Model: S-82). The project activity will produce electricity which shall be suppliedto the state electricity utility in the state of Gujarat. The project activity will assist in promotingsustainable development of the region by providing clean energy to the state electricity grid

The windfarm is connected by a 66 kV line to a 33/220 kV, 3 x 25 MVA capacity Shikarpur sitesubstation at Shikarpur. The Shikarpur site substation is connected to GETCOs Shivlakha substation.

Objective of the Project

The purpose of the project activity is to harness renewable wind energy for generation of electricity. Theproject activity leads to reduction of anthropogenic emissions of greenhouse gases (GHGs) into the

atmosphere.

In the absence of the project activity the equivalent amount of electricity would have been generated fromthe connected/ new power plants in the NEWNE grid, which are / will be predominantly based on fossilfuels

1. On the other hand the electricity generation from operation of WTGs is free from GHG emissions.

As per the applicable methodology, the baseline scenario for the project activity is the grid based

electricity system, which is also the pre-project scenario.

Nature of Project

The Project channels renewable resources in the region, thereby displacing non-renewable naturalresources and leading to sustainable development. Suzlon Energy Limited (Suzlon) will be the EPC

contractor for the Project. The Project is owned by GPCL and the generated electricity will be supplied toGujarat Urja Vikas Nigam Limited (GUVNL) under a long-term Power Purchase Agreement (PPA).

Contribution to sustainable development

The Ministry of Environment and Forests (MoEF), Govt. of India has formulated the following guidelinesfor consideration of a CDM project.

1. Social well being:

1http://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm
http://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htmhttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htmhttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm


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The project activity will lead to the development of supporting infrastructure such as road

network etc., in the wind park location, the access to which is also provided to the local

population.

The project activity will lead to alleviation of poverty by establishing direct and indirect benefits

through employment generation and improved economic activities by strengthening of local grid

of the state electricity utility.

The project activity requires temporary and permanent, skilled and semi-skilled manpower at the

wind park; this will create additional employment opportunities in the region

2. Environmental well being:

The project activity employs renewable energy source for electricity generation instead of fossil

fuel based electricity generation which would have emitted gaseous, liquid and/or solid

effluents/wastes.

Being a renewable resource, using wind energy to generate electricity contributes to resource

conservation. Thus the project causes no negative impact on the surrounding environment and

contributes to environmental well-being. The solid waste generated during project

implementation is disposed in accordance with all applicable environmental laws and regulations.

3. Economic well being:

The use of a renewable energy source reduces the nations dependence on imported fossil fuels

and associated price variation thereby leading to increased energy security.

The generated electricity will be fed into the NEWNE grid through local grid, thereby improving

the grid frequency and availability of electricity to the local consumers (villagers & sub-urbanhabitants) which will provide new opportunities for industries and economic activities to be setupin the area thereby resulting in greater local employment, ultimately leading to overalldevelopment.

4. Technological well being:

Increased interest in wind energy projects will further push R&D efforts by technology providers

to develop more efficient and better machinery in future.

A.3. 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)

India(Host)

Gujarat Power Corporation Ltd.(Public entity)

No

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

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


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A.4.1.1. Host Party(ies):

India

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

Western Region/ Gujarat State

A.4.1.3. City/Town/Community etc:

The project is located at villages Manaba and Pethapar, Kutch District in the state of Gujarat, India:

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

unique identification of this small-scale project activity :

The project is spread over two villages, Manaba & Pethapar, in the Kutch district of Gujarat. The nearestairport and railway station are located at a distance of 100 km from the project site in Bhuj.

Table 1 Individual WTG details

S.

No.

WTG No. Date of

Commissioning

Site & Survey no. Latitude

(dd0mm' ss")

Longitude

(dd0mm' ss")

1 SEL/1500/10-11/1931 02.02.2011 S-255 23 19 17.5 N 70 44 24.7 E

2 SEL/1500/10-11/1930 02.02.2011 S-254 23 19 16.8 N 70 43 51.1 E

3 SEL/1500/10-11/1929 02.02.2011 2-253 23 18 57.6 N 70 43 31.9 E

4 SEL/1500/10-11/1928 02.02.2011 S-248 23 18 29.1 N 70 44 49.7 E

Location map of India and Gujarat state showing project site


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

The type and category of project activity as per Appendix B to the simplified modalities and proceduresfor small-scale CDM project activities are as under:

Sectoral Scope :I Energy Industries (renewable/non-renewable sources).Project Type :Renewable energy projectsProject Category :D, Grid connected renewable electricity generation

Methodology:AMS-I.D.: Grid connected renewable electricity generation --- Version 17.0

Technology employed in the project activity

Wind possesses considerable kinetic energy because of its motion at high speeds. When wind flows overthe blades of the wind turbine, the kinetic energy is transformed into mechanical energy through therotation of the turbine blades. This mechanical energy is converted into electricity through the generator.The technology involved is clean as there are no GHG emissions associated with the generation ofelectricity.

The project installs 4 units of Suzlon S-82 model WTGs, each with a generation capacity of 1.5 MW. Theaverage life time of the WTG is around 20 years as per the industry standards Technical specifications of

the WTG are furnished below:

Technical specifications of Suzlon S 82/1500kW

Rotor

Diameter 82 m

Installed electrical output 1500 kW

Cut-in wind speed 4 m/sec

Cut out wind speed 20 m/sec

Rotor swept area 5281 m2

Rotational speed 15.6/18.4 rpm

Rotor material Epoxy bonded fibre glass

Gear Box

Type One planetary stage/ Two helical stages

Gear ratio 1:95.09


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Nominal load 1650 kW

Type of cooling Forced oil cooling lubrication system

Generator

Type Single speed induction generator with slip rings variable motor resistancevia Suzlon-Flexi-Slip system

Rotation speed 1511 RPM

Rated Output 1500 kW

Rated Voltage 690 V AC

Frequency 50 Hz

Insulation Class H

Technology transfer:

No technology transfer from other countries is involved in this project activity

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

The total emissions reduction achieved during the 10-year crediting period amounts to 118,670 tonnes ofCO2e, as shown in the table below:

YearsEstimation of annual emission

reductions in tonnes of CO2 e

Year 1 (2012-2013) 11,867

Year 2 (2013-2014) 11,867

Year 3 (2014-2014) 11,867

Year 4 (2015-2016) 11,867

Year 5 (2016-2017) 11,867

Year 6 (2017-2018) 11,867

Year 7 (2018-2019) 11,867

Year 8 (2019-2020) 11,867

Year 9 (2020-2021) 11,867

Year 10 (2021-2022) 11,867

Total estimated reductions (tonnes of CO2 e) 118,670

Total number of crediting years 10

Annual average of the estimated reductions

over the crediting period (t CO2 e)11,867


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Thus, the project activity is not a de-bundled component of a large scale project activity.

SECTION B. Application of a baseline and monitoring methodology

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

small-scale project activity:

Title: AMS I.D (grid connected renewable electricity generation), version 17, EB 612

Reference: Appendix B of the Simplified Modalities and Procedures for small-scale project activities.

The following tools and guidelines are used in this document:

1. Tool to calculate the emission factor for an electricity system Version 02.2.1, EB 63, Annex 19(source:http://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-07-v2.2.1.pdf)

2. Guidelines on the Assessment of Investment Analysis Version 05.0, EB 62, Annex 5 (source:http://cdm.unfccc.int/Reference/Guidclarif/reg/reg_guid03.pdf)

3. Attachment A of Appendix B version 08, EB 63, Annex 24 (source:http://dm.unfccc.int/Reference/Guidclarif/ssc/methSSC_guid05.pdf)

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

The approved small scale methodology AMS-I.D Version 17 is the choice of the baseline and monitoringmethodology and is applicable because:

2http://cdm.unfccc.int/UserManagement/FileStorage/V9LRSXKP24Q7YT6HZDUBO3C0ING8AJ
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Para No. Applicability Conditions as per AMS-I.D

Version 17

Applicability to this Project

ActivityPara 1.

This methodology comprises renewable energygeneration units, such as photovoltaic, hydro,tidal/wave, wind, geothermal and renewable biomass:

a) Supplying electricity to a national or a

regional grid; or

b) Supplying electricity to an identified

consumer facility via national/regional gridthrough a contractual arrangement such aswheeling.

The project activity involvesinstallation of a new wind energypower plant.

The project activity supplies

electricity to the state grid ofGujarat, which forms a part of the

NEWNE regional grid.

Applicability criterion is

fulfilled.

Para 2Illustration of respective situations under which each ofthe methodology (i.e. AMS-I.D, AMS-I.F and AMS-I.A) applies is included in Table 2

Table 2: Applicability of AMS-I.D, AMS-I.F andAMS-I.A based on project types:

1. Project supplies electricity to a national/regional grid(AMS-I.D)

2. Project displaces grid electricity consumption (e.g.grid import) and/or captive fossil fuel electricitygeneration at the user end (excess electricity may besupplied to a grid) (AMS-I.F)

3. Project supplies electricity to an identified consumerfacility via national/regional grid (through a contractualarrangement such as wheeling) (AMS-I.D)

4. Project supplies electricity to a mini grid systemwhere in the baseline all generators use exclusively fueloil and/or diesel fuel (AMS-I.F)

5. Project supplies electricity to household users(included in the project boundary) located in off gridareas (AMS-I.A)

Yes, the project activity supplieselectricity to a national grid(NEWNE grid).


fulfilled.

Para 3.This methodology is applicable to project activitiesthat: (a) Install a new power plant at a site where

there was no renewable energy power plant operatingprior to the implementation of the project activity(Greenfield plant); (b) Involve a capacity addition; (c)Involve a retrofit of (an) existing plant(s); or (d)Involve a replacement of (an) existing plant(s).

The project activity is installationof new power plant (energygeneration from wind) wherethere was no renewable energypower plant operating prior to theimplementation of the project


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activity (Greenfield plant)

Applicability criterion isfulfilled.

Para 4.Hydro power plants with reservoirs that satisfy at leastone of the following conditions are eligible to applythis methodology:

a) The project activity is implemented in anexisting reservoir with no change in the

volume of reservoir;

b) The project activity is implemented in anexisting reservoir, where the volume of

reservoir is increased and the power densityof the project activity, as per definitions givenin the project emissions section, is greaterthan 4 W/m2;

c) The project activity results in new reservoirs

and the power density of the power plant, asper definitions given in the project emissions

section, is greater than 4 W/m2.

The project activity involvesinstallation of a new wind energy

power plant.

This condition is not relevant, asthe project activity is not theinstallation of a hydro power

plant.

Applicability criterion is notrelevant.

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

components (e.g. a wind/diesel unit), the eligibilitylimit of 15 MW for a small-scale CDM projectactivity applies only to the renewable component. Ifthe new unit co-fires fossil fuel, the capacity of theentire unit shall not exceed the limit of 15 MW.

The project activity involves

installation of a new wind energypower plant. The capacity of theproject activity is 6 MW, which iswithin the eligibility limit for asmall-scale CDM project activityThe project activity does notinvolve both renewable and non-renewable components.

Applicability criterion is not

relevant.

Para 6.Combined heat and power (co-generation) systems arenot eligible under this category.

The project activity involvesinstallation of a new wind energypower plant. The project activitydoes not involve co-generationpower plant installation.


fulfilled.


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Para 7.In the case of project activities that involve the

addition of renewable energy generation units at anexisting renewable power generation facility, theadded capacity of the units added by the projectshould be lower than 15 MW and should be physicallydistinct from the existing units.


installation of a new wind energypower plant. The project activitydoes not involve any capacityaddition to an existing renewablepower generation facility.


relevant.

Para 8.In the case of retrofit or replacement, to qualify as asmall-scale project, the total output of the retrofittedor replacement unit shall not exceed the limit of

15 MW.


installation of a new wind energypower plant. The project activity

does not involve any retrofit orreplacement.


relevant.

The above comparison confirms that the chosen methodology is applicable for this project activity.

The project proponent hereby confirms that the capacity of the project activity will not exceed 15 MWduring the entire crediting period.

B.3. Description of the project boundary:

As per the approved small scale methodology AMS I.D, the spatial extent of the project boundaryincludes the project power plant and all power plants connected physically to the electricity system thatthe CDM project power plant is connected to.

The significant anthropogenic emissions attributable to the project activity are listed in the table below.

Table 2 Emissions sources included in or excluded from the project boundary

Source Gas Included? Justification / Explanation

Base

line

Grid electricitygeneration

CO2 Yes Main emission source.

CH4 NoExcluded for simplification. This isnegligible.

N2O NoExcluded for simplification. This isnegligible.

ProjectActivity

Electricity

generation fromWind Turbine

Generators.

CO2 NoThe project activity does not emitany CO2 emissions

CH4 NoNo methane generation is expectedto be emitted.

N2O NoNo nitrous oxide generation isexpected to be emitted.


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The project boundary thus includes the 4 WTGs, the metering equipment for each WTG and substation,and the grid which is used to transmit the generated electricity. The project is supplying the generated

electricity to the NEWNE regional grid, thus the NEWNE grid has been chosen as the grid system for thebaseline calculation.

The windfarm is connected by 66 kV line to 33/220 kV, 3 x 25 MVA capacity Shikarpur site substation atShikarpur. The Shikarpur site substation is connected to GETCOs Shivlakha substation.

Figure below demonstrates the project boundary for the proposed project activity:

B.4. Description of baseline and its development:

The methodology applicable to the proposed CDM project activity is AMS- I.D. (Version 17).Accordingly, the baseline scenario being considered is as directed in paragraph 10 of AMS- I.D. (Version17). The proposed CDM project activity is the installation of a new grid-connected renewable powerplant/unit and hence the baseline scenario is that the electricity delivered to the grid by the project activity

would have otherwise been generated by the operation of grid-connected power plants and by the additionof new generation sources into the grid.

The wind energy power plant is located in the state of Gujarat and connected to NEWNE grid.


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For the proposed CDM project activity, as per paragraph 11 of AMS- I.D. (Version 17), the baselineemissions are the product of electrical energy baseline EGBL,yexpressed in MWh of electricity produced

by the renewable generating unit multiplied by the grid emission factor.

BEy = EGBL,y* EFCO2,grid,y

Where:BEy Baseline Emissions in year y; t CO2

EGBL,y Quantity of net electricity supplied to the grid as a result of the implementation of theCDM project activity in yeary; MWh

EFCO2,grid,y CO2emission factor of the grid in year y; t CO2/MWh

As per paragraph 12 of the AMS- I.D. (Version 17), the Emission Factor (EFCO2,grid,y)can be calculated ina transparent and conservative manner as follows:

(a) A combined margin (CM), consisting of the combination of operating margin (OM) and buildmargin (BM) according to the procedures prescribed in the Tool to calculate the emission factor

for an electricity system.

OR

(b) The weighted average emissions (in t CO2/MWh) of the current generation mix. The data of the

year in which project generation occurs must be used.

The applicable methodology also states that, calculations must be based on data from an official source(where available) and made publicly available. With the purpose of providing a ready reference for the

emission coefficients to be used in CDM projects, the Government of India, has published, CO2BaselineDatabase for the Indian Power Sector, Version 6.0, March 2011. This database is an official publicationof the Government of India for the purpose of CDM baselines. It is based on the most recent dataavailable with the Central Electricity Authority (CEA), Government of India.

The project proponents selected Combined Margin (CM) ex ante approach to calculate emissioncoefficient (measured in t CO2/MWh) based on the publicly available data from official source.

Following information is used for determination of baseline emissions:

Variable Data Source

EGBL,y = Quantity of net electricitygeneration that is produced and fed intothe grid as a result of the implementationof the CDM project activity in year y(MWh/yr)

Certificate for share of electricity generated by wind farmissued by state utility, hereafter referred as (Share certificate)

Parameter Data Source

EFOM, y = Operating Margin EmissionFactor for NEWNE grid in year y(tCO2/MWh)

Baseline Carbon Dioxide Emission Database Version 6.0 fromthe Central Electricity Authority websitehttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm

EFBM, y = Build Margin Emission Factor

for NEWNE grid in year y (tCO2/MWh)

Baseline Carbon Dioxide Emission Database Version 6.0 from

the Central Electricity Authority websitehttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm
http://www.cea.nic.in/planning/c%20and%20e/database_publishing_ver3.ziphttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htmhttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htmhttp://www.cea.nic.in/planning/c%20and%20e/database_publishing_ver3.ziphttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htmhttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htmhttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htmhttp://www.cea.nic.in/planning/c%20and%20e/database_publishing_ver3.ziphttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htmhttp://www.cea.nic.in/planning/c%20and%20e/database_publishing_ver3.zip


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EFCM.y= Combined Margin EmissionFactor for NEWNE Grid in year y

(tCO2/MWh)

Calculated as the weighted average of the operating marginand build margin.

Baseline Carbon Dioxide Emission Database Version 6.0 fromthe Central Electricity Authority websitehttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm

B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below

those that would have occurred in the absence of the registered small-scaleCDM project activity:

National policies and circumstances relevant to the baseline3:

1) Baseline CO2database Version 06 Central Electricity Authority

2) Gujarat Electricity Regulatory Commission (GERC Tariff Order - 2010)3) Electricity Act 2003

The Electricity Act, 2003 provides an enabling framework for accelerated and more efficientdevelopment of the power sector. The Act seeks to encourage competition with appropriate regulatoryintervention. Competition is expected to yield efficiency gains and in turn result in availability of quality

supply of electricity to consumers at competitive rates.

The Section 3 (1) of the Electricity Act 2003 requires the Central Government to formulate, inter alia, theNational Electricity Policy in consultation with Central Electricity Authority (CEA) and StateGovernments. The provision is quoted below:

"The Central Government shall, from time to time, prepare the National Electricity Policy and tariffpolicy, in consultation with the State Governments and the Authority for development of the power systembased on optimal utilization of resources such as coal, natural gas, nuclear substances or materials,hydro and renewable sources of energy".

Further, as per section 5.2.12 of the National Electricity Plan:

Even with full development of the feasible hydro potential in the country, coal would necessarily continueto remain the primary fuel for meeting future electricity demand.

The National Electricity Plan also emphasizes the use of other fossil fuel like gas, LNG, Lignite, other

imported fossil fuels in meeting the future electricity need. It further emphasize on the Renovation andModernization (R&M) of the low performing thermal power stations in the country. This will enable to

achieve improved PLF of the thermal power plant.

In the absence of this project activity, electricity would have been generated from the present fossil fuelmix in the NEWNE grid. The NEWNE grid is dominated by fossil fuel fired power plants and thus thisproject reduce the anthropogenic emissions of greenhouse gases (GHGs) in to the atmosphere associatedwith the equivalent amount of electricity generation. Wind power development in India has been

3http://www.powermin.nic.in/JSP_SERVLETS/internal.jsp
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promoted since July 1995 (Source:http://www.mnre.gov.in/prog-wind.htm)but there are no national orlocal laws or regulations that mandate this investment i.e. setting up of wind power projects. Setting up of

wind power projects is a voluntary activity.

Demonstration of Additionality

The additionality is being demonstrated using Attachment A to Appendix B of the Simplified Modalitiesand Procedures for CDM Small Scale Project Activities (attachment A to appendix B, EB 63, Annex

24)4.As per paragraph 1 of EB 63 Annex 24,

Project participants shall provide an explanation to show that the project activity would not haveoccurred anyway due to at least one of the following barriers:

(a) Investment barrier: a financially more viable alternative to the project activity would have led to

higher emissions;

(b) Technological barrier: a less technologically advanced alternative to the project activity involveslower risks due to the performance uncertainty or low market share of the new technology adopted for theproject activity and so would have led to higher emissions;

(c) Barrier due to prevailing practice: prevailing practice or existing regulatory or policy requirements

would have led to implementation of a technology with higher emissions;

(d) Other barriers: without the project activity, for another specific reason identified by the projectparticipant, such as institutional barriers or limited information, managerial resources, organizationalcapacity, financial resources, or capacity to absorb new technologies, emissions would have been higher.

From the list of barriers listed above, the project proponent proposes to demonstrate the additionality of

the project activity by using Option aInvestment barrier.

The financial indicator that is identified is the post-tax Equity IRR.

Investment Barrier

For Sub-step 2a of Tool for the demonstration and assessment of Additionality, an appropriate analysis

method from simple cost analysis, investment comparison analysis or benchmark analysis needs to bedetermined.

Since the project activity will generate financial income from sale of power to the grid, we shall rule outOption I (simple cost analysis) and apply either Option II (Investment comparison analysis) or Option III(Benchmark analysis).

As per Guidelines on the Assessment of Investment Analysis (EB62, Annex 5), Guidance 19

If the proposed baseline scenario leaves the project participant no other choice than to make aninvestment to supply the same (or substitute) products or services, a benchmark analysis is not

appropriate and an investment comparison analysis shall be used. If the alternative to the project activityis the supply of electricity from a grid this is not to be considered an investment and a benchmark

approach is considered appropriate.

4https://cdm.unfccc.int/Reference/Guidclarif/ssc/methSSC_guid05.pdf
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In absence of the project activity the equivalent power would have been generated from the power plantsconnected to the NEWNE Grid. Hence, Option III (Benchmark analysis) is selected as the appropriate

method for demonstration of Investment analysis.The project proponent has chosen to demonstrate additionality by way of a benchmark analysis. The post-tax Equity IRR was chosen as the appropriate financial indicator to demonstrate the additionality of theproject.

Appropriateness of financial indicator

Post-tax Equity IRR is a widely accepted financial metric used by many corporations and financial

institutions for investment decision-making and is a long-established benchmark for investment decisions

in the Indian power sector. Hence post-tax Equity IRR is chosen as the appropriate financial indicator for

carrying out the investment analysis.

Appropriateness of Benchmark

The project is a greenfield wind electricity generation project. In accordance with the guidance on

assessment of investment analysis (version 05.0) Para 13, EB 62 Annex 05, the cases of projects which

could be developed by an entity other than the project participant the benchmark should be based on

publicly available data sources which can be clearly validated by the DOE. Accordingly, the external

benchmark has been calculated using publically available financial data that is applicable at the time of

investment decision making. As per Para12 EB62 Annex 5, return on equity is an appropriate benchmark

for post-tax equity IRR accordingly same has been considered.

Calculation of Benchmark

The return on equity has been calculated as per the Capital Asset Pricing Model method. The benchmark

has been calculated as follows:

Ke = Rf+ B x (Rm- Rf)

Where: Ke = Rate of return on equity; Rf = Risk-free rate of return; B = Beta; Rm= Market return

The benchmark return on equity for the project using CAPM works out to be 16.38 %.

Further details of the benchmark computation using CAPM have been provided in Annex 5.

In the webhosted PDD, the benchmark return on equity had been calculated using the default values for

the approximate expected return on equity for different project types and host countries as provided in theappendix to Guidelines on the assessment of investment analysis, EB 62, Annex 5.This value (default

real return on equity) was obtained by looking at the respective value for India corresponding to Group 1(Energy Industries). The nominal benchmark (after incorporating inflation) in line with Guidelines onthe assessment of investment analysis, EB 62, Annex 5 worked out to be17.34%

5.

5The default value for the expected return on equity (in real terms): 11.75%

Also, as per Para 7 of the appendix to Guidelines on the assessment of investment analysis, EB 62, Annex 5

In situations where an investment analysis is carried out in nominal terms, project participants can convert the

real term values provided in the table below to nominal values by adding the inflation rate. The inflation rate shall

be obtained from the inflation forecast of the central bank of the host country for the duration of the crediting

period.


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Since the above guideline was not available at the time of investment decision (20 thAugust 2010), thebenchmark return on equity calculated using CAPM has been conservatively taken as the applicable

benchmark.Therefore, the applicable benchmark return on equity for the project is 16.38 %.

The decision to invest in the project activity was taken on 20thAugust 2010 vide Approval by GPCLs

Managing Director. The approval acknowledged that the project does not generate sufficient returnswithout taking into account CDM revenue and the approval for investment in the project has been givenupon considering CDM revenue in the cash flows.

Key assumptions used for calculating post-tax Equity IRR in line with Para 6 of EB62 Annex 5 are set outbelow:

Assumptions for Financial Model Basis

Capacity of Machines in Kw 1500 Suzlon offer dated 08.03.2010Number of Machines 4 Suzlon offer dated 08.03.2010Project Capacity in MW 6.0 Suzlon offer dated 08.03.2010Expected project commissioning date 02-Feb-11 Suzlon offer dated 08.03.2010

Operation & Maintenance4thyear (free

for first 3 years)

INR 6.067 million Letter from Suzlon dated 10.03.2010 (#

SEL:AHD:MKTG:AD:750)% of escalation per annum on O & M

Charges

5% Letter from Suzlon dated 10.03.2010 (#

SEL:AHD:MKTG:AD:750)Plant Load Factor 23.8% Third party assessment report

Tariff

Base year Tariff fixed for the lifetime of

the project - Rs./KWh

3.56 GERC Tariff Order 30.01.2010

Project Cost INR million

Total Project Cost 356.292 Suzlon offer dated 08.03.2010

Means of Finance INR Million

Own Source 356.292 (100%)

Term laon 0 (0%)

Total Source 356.292

Income Tax Depreciation Rate (SLM)

on WTGs (Accelerated depreciation) 80% Income Tax Act

Book Depreciation Rate (SLM) 4.50% Companies Act:

Straight Line method (90% depreciation

According to the Reserve Bank of Indias Survey of Professional Forecasters: Results of Twelfth Round (Q1:2010 -

11) dated 5th

August 20105, WPI based inflation is expected to be 5.0 per cent over the next ten years.

Benchmark = (1 + Expected return on equity (in real terms)) * (1 + Inflation rate) - 1

= (1 + 11.75%) * (1 + 5%) - 1

= 17.34%6www.taxclubindia.com/simple/depincometax.rtf(Please refer to point no. A8xiiil for reference to 80%)
http://www.taxclubindia.com/simple/depincometax.rtfhttp://www.taxclubindia.com/simple/depincometax.rtfhttp://www.taxclubindia.com/simple/depincometax.rtfhttp://www.taxclubindia.com/simple/depincometax.rtf


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assumed over 20 years)

Book Depreciation up to (% of asset value) 90% Companies Act

Salvage value 10% Companies Act:Remaining value after depreciation

Income Tax

Income Tax rate 33.2175% Income Tax Act

The post-tax equity IRR for the Project without CDM revenues is 9.51% i.e. less than the benchmark.

Sensitivity Analysis

As per the Guidance to investment analysis EB 62 Annex 5 Para 20 Only variables, including the initial

investment cost, that constitute more than 20% of either total project costs or total project revenues should

be subjected to reasonable variation (all parameters varied need not necessarily be subjected to bothnegative and positive variations of the same magnitude), and the results of this variation should be

presented in the PDD and be reproducible in the associated spreadsheets

The critical parameters to which the project activity is sensitive are mentioned below:

Capital Cost

Plant Load Factor

O&M cost

Tariff

Rest all other parameters have less than 20% impact on the project revenues/project expenses, so theirimpact on post-tax equity IRR is very insignificant and hence these parameters have not been considered

for sensitivity analysis. A detailed explanation of the range of values of parameters considered for thesensitivity analysis is presented below:

Capital Cost

The project cost taken in the investment analysis is based on the price offer given by Suzlon. Inaccordance with the Guidance on assessment for investment analysis the sensitivity has been conducted ata variation 10% of the project cost.

10% decrease in Capital

Cost (INR 320.663million)

Capital Cost (Base)

(INR 356.292 million)

10% increase in Capital

Cost (INR 391.922million)

Post-tax equity IRR 11.18% 9.51% 8.10%

7Refer to point no. 8 (http://www.icai.org/resource_file/11398p012-14.pdf)

830% Income tax rate + 7.5% Surcharge + 3% Education Cess (Applicable for FY 2010-11)

Refer Page 38,http://www.cercind.gov.in/2010/November/Signed_Order_256-2010_RE_Tariff_FY_11-12.pdf
http://www.icai.org/resource_file/11398p012-14.pdfhttp://www.icai.org/resource_file/11398p012-14.pdfhttp://www.icai.org/resource_file/11398p012-14.pdfhttp://www.cercind.gov.in/2010/November/Signed_Order_256-2010_RE_Tariff_FY_11-12.pdfhttp://www.cercind.gov.in/2010/November/Signed_Order_256-2010_RE_Tariff_FY_11-12.pdfhttp://www.cercind.gov.in/2010/November/Signed_Order_256-2010_RE_Tariff_FY_11-12.pdfhttp://www.cercind.gov.in/2010/November/Signed_Order_256-2010_RE_Tariff_FY_11-12.pdfhttp://www.icai.org/resource_file/11398p012-14.pdf


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Plant Load Factor

Plant Load Factor is the key variable encompassing variation in wind profile. Sensitivity has beenconducted for a variation of 10% over the base case.

10% decrease in PLF(21.4%)

Base PLF (23.8%) 10% increase in PLF(26.2%)


O&M Cost

The O&M cost taken in the investment analysis is based on the price offer submitted by Suzlon. Inaccordance with the Guidance on assessment for investment analysis the sensitivity in O&M cost hasbeen conducted for a variation of 10% over the base case.

10% decrease in O&Mcost (INR 5.46 million)

O&M Cost (Base) (INR6.067 million)

10% increase in O&Mcost (INR 6.67 million)


Tariff

As per Gujarat Electricity Regulatory Commission (GERC) Tariff Order dated 30.01.2010 applicable attime of investment decision, tariff for entire lifetime of wind power projects has been fixed at Rs. 3.56 per

Unit. Therefore sensitivity on tariff is not applicable.Even though the tariff is fixed for the lifetime of the project the sensitivity analysis has been carried out at 10% variation over base case and the results are presented below

10% decrease in Tariff(INR 3.2)

Base Tariff (INR 3.56) 10% increase in tariff(INR 3.92)


The sensitivity analysis clearly shows even with a 10% variation in key parameters, the project is not ableto generate sufficient returns. It can therefore be concluded that the project is financially not viablewithout CDM benefits.

Sensitivity analysis has been performed for the parameters to analyse the value at which they cross thebenchmark. The results are tabulated below:

Parameter Post-taxequity IRR %

Comments

Plant Load Factor @ 33.8%(42% higher than base PLF)

16.39% The Post-tax equity IRR crosses the benchmark at PLFof 33.8%, which is 42% higher than the estimated basePLF, which is highly unlikely scenario. The probabilityof occurrence of such a high annual PLF is very low asthe recommended value as per GERC tariff order dated


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11th August 2006 is 23% and the maximum achieved.

Moreover, the actual PLF achieved by the project in the

period February 2011 to January 2012 is 19.81%.

O&M Expenses @ Nil (100%reduction)

11.72 % The Post-tax equity IRR does not cross the benchmarkeven if O&M expenses are taken to be nil.

Capital cost @ 240.50 Million(32.50% reduction in capital

cost)

16.38 % The Post-tax equity IRR crosses the benchmark at areduced capital cost of INR 240.50 million which is a

32.50% reduction from the base value. This is also avery unlikely scenario as the final purchase order price

is INR 353.07 million, a 0.906% reduction in cost.

Tariff @ INR 5.06 (42%higher than base tariff)

16.39 % The Post-tax equity IRR crosses the benchmark atTariff of INR 5.06 which is 42% higher than the baseTariff, which is highly unlikely scenario as in the PPAthe tariff is fixed for the lifetime of the project.

As can be seen, the post-tax equity IRR of the project activity remains well below the benchmark evenunder the sensitivity analysis. Therefore it can be concluded that the proposed CDM project activity is

unlikely to be the most financially/economically attractive. Hence, the project activity is additional. Theproject participant has considered CDM as a source of revenue to improve financial viability of theproject and had decided to invest in the project on this consideration

Prior consideration of CDM

The project activity has been conceived as a CDM project since its inception. The Project Participant (PP)notified the UNFCCC and the DNA on 3

rdFebruary 2011 about the project activity initiative which is

within 6 months after the project start date of 20th August 2010, and hence qualifies the CDM prior

consideration criteria of intimating within a period of six months before or after the start date of theproject activity.

The chronology of events for demonstration prior consideration of CDM is shown in table below:

Event Documentary Evidence Date

Suzlons offer Offer 8.03.2010

Suzlons clarification letter on O&Mcharges

Clarification letter 10.03.2010


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MDs approval for the project (CDMconsideration)9

Note 19.05.2010

MDs approval based on PLF estimateby third party

10

Note 20.08.2010

Placement of Purchase order for WTGsto Suzlon

Purchase Order 20.08.2010

Finalisation and appointment of CDMconsultant

Engagement Letter from PwC 21.12.2010

Commissioning of the project activity Commissioning certificate 02.02.2011

Prior consideration of CDM notification

submitted to the UNFCCC and host

country DNA

Notification Letter 03.02.2011

Local stakeholder meeting for the windpower CDM project

Minutes of local stakeholder meeting 25.05.2011

Global stakeholder consultation UNFCCC website November 2011

B.6. Emission reductions:

B.6.1. Explanation of methodological choices:

According to the approved methodology AMS-I.D Version 17 para 23 (equation (10)), Emission

reductions are calculated as follows:

ERy = BEy PEy LEy.. (1)

Where: ERy: Emission reductions in year y (t CO2/y)BEy: Baseline Emissions in year y (t CO2/y)PEy: Project emissions in year y (t CO2/y)

LEy: Leakage emissions in year y (t CO2/y)

According to the approved methodology AMS-I.D Version 17 para 11 (equation (1)), Baseline Emissionsfor the amount of electricity supplied by project activity,BEyis calculated as

BEy = EGBL,y* EFCO2,grid,y..(2)

Where:BEy Baseline Emissions in year y; t CO2

EGBL,y Quantity of net electricity supplied to the grid as a result of the implementation of theCDM project activity in yeary; MWh

9 The first approval was based on offer from Suzlon (dated 8.03.2010) for two sites: Jangi/ Ambliyara and

Shikarpur. The PLF assumption was taken from GERC tariff order. It was decided to undertake a third party

assessment for the plant load factor so as to get a better estimate of the generation.

10The final approval was based on the PLF assessment carried out for the two offered sites.


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EFCO2,grid,y CO2emission factor of the grid in year y; t CO2/MWh

A. Calculation of net electricity supplied to the grid

Ex-ante calculation of net electricity supplied to the grid as a result of the implementation of the CDM

project activity is as follows

EGBL,y = Capacity x PLF x Generating Hour (in a year).. (3)

During verification, the quantity of net electricity supplied to grid would be taken from the certificate of

share of electricity provided by state utility.

B. Calculation of CO2 emission factor of grid

According to AMS-I.D Version 17, the baseline emissions are the product of electrical energy baselineEGBL, yexpressed in MWh of electricity produced by the renewable generating unit multiplied by the gridemission factor which can be calculated in a transparent and conservative manner as:

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

OR

(b) The weighted average emissions (in kg CO2e/kWh) of the current generation mix. The data of theyear in which project generation occurs must be used.

The project proponents have chosen the combined margin approach to calculate the emission coefficientfor the grid. According to the tool to calculate emission factor for an electricity system the baselineemission coefficient (Version 02.2.1)will be determined using the following steps:

STEP 1. Identifying the relevant electricity systems

Historically, the Indian power system was divided into five independent regional grids, namely Northern,Eastern, Western, Southern, and North-Eastern. Each grid covered several states. Since August 2006,however, all regional grids except the Southern Grid have been integrated and are operating insynchronous mode, i.e. at same frequency. Consequently, the Northern, Eastern, Western and North-

Eastern grids will be treated as a single grid and is being named as NEWNE grid from FY 2007-08onwards as depicted in the CO2 Baseline Database. The Southern grid has also been planned to be

synchronously operated with rest of all Indian Grid by early 12th

Plan (2012-2017).

NEWNE Grid Southern Grid

Northern Eastern Western North-Eastern Southern

Chandigarh Bihar ChhattisgarhArunachal

PradeshAndhra Pradesh

Delhi Jharkhand Gujarat Assam Karnataka


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Haryana Orissa Daman & Diu Manipur Kerala

HimachalPradesh West Bengal

Dadar and NagarHaveli Meghalaya Tamil Nadu

Jammu &Kashmir

Sikkim Madhya Pradesh Mizoram Pondicherry

PunjabAndaman-Nicobar

Maharashtra Nagaland Lakshadweep

Rajasthan Goa Tripura

Uttar Pradesh

Uttarakhand

As the Project is connected to the NEWNE electricity grid, the same is the project electricity system.

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.

In this PDD, Option I is chosen to calculate OM and BM emission factor.

STEP 3. Select a method to determine the operating margin (OM)According to the tool the calculation of the operating margin emission factor is based on one of thefollowing methods:

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

Any of the four methods can be used, however, the simple OM method (option a) can only be used if low

cost/must-run resources

constitute less than 50% of total grid generation in: 1) average of the five mostrecent years, or 2) based on long-term averages for hydroelectricity production.

The Share of Low Cost / Must-Run (% of Net Generation) in the generation profile of the different gridsin India in the last five years is as follows:

Share of Must-Run (Hydro/Nuclear) (% of Net Generation)

2005-06 2006-07 2007-08 2008-09 2009-10

NEWNE 18.0% 18.5% 19.0% 17.3% 15.9%

South 27.0% 28.3% 27.1% 22.8% 20.6%

India 20.1% 20.9% 21.0% 18.6% 17.1%


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Source: CO2Baseline Database for the Indian Power Sector, Central Electricity Authority (Version 6.0)

The above data clearly shows that the percentage of total grid generation by low cost/must run plants (onthe basis of average of five most recent years) for the NEWNE regional grid is less than 50 % of the totalgeneration.

As per tool to calculate emission factor for an electricity system (Version 02.2.1), The simple OM method(option a) can only be used if low-cost/must-run resources constitute less than 50% of total grid

generation in: 1) average of the five most recent years, or 2) based on long-term averages forhydroelectricity production. Since the low cost/must run resources constitute less than 50% of total grid

generation as seen from the average of five most recent years, the Simple OM method can be used tocalculate the Operating Margin Emission factor.

The project proponents choose an ex ante option for calculation of the Simple OM with a 3-year

generation-weighted average, based on the most recent data available at the time of submission of theCDM-PDD to the DOE for validation, without requirement to monitor and recalculate the emissionsfactor during the crediting period.

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

The simple OM emission factor is calculated as the generation-weighted average CO2emissions per unit

net electricity generation (tCO2/MWh) of all generating power plants serving the system, not including

low-cost / must-run power plants / units.

The simple OM may be calculated:

Option A: Based on the net electricity generation and a CO2 emission factor of each power unit; orOption B: Based on the total net electricity generation of all power plants serving the system and the fuel

types and total fuel consumption of the project electricity system.

The Central Electricity Authority, Ministry of Power, Government of India has published a database of

Carbon Dioxide Emission from the power sector in India based on detailed authenticated informationobtained from all operating power stations in the country. This database i.e. The CO2 Baseline Databaseprovides information about the Combined Margin Emission Factors of all the regional electricity grids inIndia. The Combined Margin in the CEA database is calculated ex ante using the guidelines provided by

the UNFCCC in the Tool to calculate the emission factor for an electricity system, Version 01.111

.We

have, therefore, used the Combined Margin data published in the CEA database, for calculating theBaseline Emission Factor.

11The CEA database uses version 1.1 of tool to calculate the emission factor for an electricity system. The latest

tool available is version 2.2.1. The revisions carried out from version 2.0 to 2.2.1 do not impact the calculated value

of emission factor and hence have no bearing on the emission reduction estimate. The same can be verified from

CEA database version 7.0 (http://www.cea.nic.in/reports/planning/cdm_co2/user_guide_ver7.pdf,

http://www.cea.nic.in/reports/planning/cdm_co2/database_7.zip)which uses the latest version of the tool (Version

2.2.1). The calculated values of the operating margin for years 2007-08, 2008-09 and 2009-10 and build margin for

2009-10 in CEA database version 7.0 are the same as that in CEA database version 6.0 which uses Version 1.1 ofthe tool.
http://www.cea.nic.in/reports/planning/cdm_co2/user_guide_ver7.pdfhttp://www.cea.nic.in/reports/planning/cdm_co2/user_guide_ver7.pdfhttp://www.cea.nic.in/reports/planning/cdm_co2/user_guide_ver7.pdfhttp://www.cea.nic.in/reports/planning/cdm_co2/database_7.ziphttp://www.cea.nic.in/reports/planning/cdm_co2/database_7.ziphttp://www.cea.nic.in/reports/planning/cdm_co2/database_7.ziphttp://www.cea.nic.in/reports/planning/cdm_co2/user_guide_ver7.pdf


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As per Tool to calculate the emission factor for an electricity system, Option A (Based on the netelectricity generation and a CO2 emission factor of each power unit) is used to calculate simple OM

emission factor. Where Option A is used, the simple OM emission factor is calculated based on theelectricity generation of each power unit and an emission factor for each power unit, as follows:

EFgrid,OMsimple,y= (EGm,y x EFEL,m,y) / EGm,y

Where:

EFgrid,OMsimple,y Simple operating margin CO2 emission factor in year y (tCO2/MWh)EGm,y Net quantity of electricity generated and delivered to the grid by power unit m in year y

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

m All power units serving the grid in year y except low-cost / must-run power unitsy the relevant year as per the data vintage chosen in STEP 3

The CO2 emission factor (EFEL,m,y) data for simple OM, available under the CEA database12

(Version 6.0)for the last three years is as follows.

CO2 emission factor for simple OM (tCO2/MWh) (incl. Imports)

Grid 2007-08 2008-09 2009-10

NEWNE 0.99990 1.00655 0.97774

South 0.99086 0.97292 0.94150

India 0.99797 1.00940 0.97823

The net electricity generation (EGm,y) data, available under the CEA database13 (Version 6.0), of all

generating power plants (not including low-cost / must-run power plants / units) for the last three year isas follows:

Net Electricity Generation for Simple OM (MWh) (incl. Imports)

Grid 2007-08 2008-09 2009-10

NEWNE 401,642 421,803 458,043

South 114,634 121,471 134,717

India 516,275 543,274 592,760

Thus, as can be seen from the above tables, the 3 years generation-weighted OM average for the mostrecent three years available at the time of PDD for validation, i.e. 2007-08, 2008-09, 2009-10 for

NEWNE grid is:

EFgrid,OMsimple,y= (EGm,y x EFEL,m,y) / EGm,y

(401,642,000*0.9999 + 421,803,000*1.00655 + 458,043,000*0.97774)= ---------------------------------------------------------------------------------------- tCO2/MWh

(401,642,000+ 421,803,000+ 458,043,000)




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= 0.99417tCO2/MWh

The ex-ante OM value obtained is 0.99417 tCO2/MWh

STEP 5. Calculate the build margin emission factor

The project proponents have chosen Option I, i.e. fixing 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-PDDsubmission to the DOE for validation.

The build margin emissions factor is the generation-weighted average emission factor of all power units

m during the most recent year y for which power generation data is available, calculated as follows:

EFgrid,BM,y

= (EGm,y

x EFEL,m,

) / EGm,y

Where:EF

grid,BM,yBuild margin CO

2emission factor in year y (tCO

2/MWh)

EGm,y

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

EFEL,m,y

CO2emission factor of power unit m in year y (tCO

2/MWh)

m Power units included in the build marginy Most recent historical year for which power generation data is available

The CO2emission factor of each power unit m (EF

EL,m,y) is determined as per the procedures given in step

4 (a) for the simple OM, using options A1B1 using forythe most recent historical year for which powergeneration data is available, and using for mthe power units included in the build margin.

The build margin emission factor (EFgrid,BM,y) for the year 2009-10 (most recent year) for NEWNE gridis 0.81230 tCO2/MWh

STEP 6. Calculate the combined margin emissions factor

The emission factor EFy of the grid is represented as a combination of the Operating Margin (OM) andthe Build Margin (BM). Considering the emission factors for these two margins as EFgridOM,yand EFgrid

BM,y, then theEFy is given by:

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

Where:EF

grid, BM, yBuild margin CO

2emission factor in year y (tCO

2/MWh)

EFgrid, OM, y

Operating margin CO2emission factor in year y (tCO

2/MWh)

wOM

Weighting of operating margin emissions factor

wBM

Weighting of build margin emissions factor (where wOM+ wBM= 1).


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The Tool to calculate the emission factor for an electricity system requires that for intermittent sourcesfor power generation like solar as in the case of proposed CDM project activity the following weights to

be used for calculating the emission factor for Combined Margin.

WOM= 0.75

WBM= 0.25

Using the values of emission factors for OM and BM for NEWNE grid, provided in the CEA official

database and as computed above; and the weights provided above, the value of the emission factor for thecombined margin has been determined to be:

= 0.99417 * 0.75 + 0.81230 * 0.25 tCO2/MWh

= 0.94870tCO2/MWh

Project Emissions:

The project activity uses wind energy to generate electricity and hence the emissions from the projectactivity are taken as NIL (as per AMS-I.D Version 17 para 20).PEy = 0

Leakage:

Since no equipment is transferred from another project activity or that any existing equipment istransferred to another activity, leakage as per AMS-I.D Version 17 para 22 is taken as zero.LEy = 0

Details of Baseline data:

Data of Operating and Build Margin for the three financial years from 2007-08 to 2009-10 has beenobtained from -

The CO2Baseline Database for the Indian Power SectorMinistry of Power: Central Electricity Authority (CEA)Version 6Dated: March 2011Key baseline information is reproduced in annexure 3.The detailed excel sheet is available at:http://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm

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

Data / Parameter: EFgridOM,y

Data unit: tCO2/MWh

Description: Operating Margin Emission Factor for NEWNE Grid

Source of data used: CO2 Baseline Database for Indian Power Sector published by the CentralElectricity Authority, Ministry of Power, Government of India. Version 6.0


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dated March 2011

The CO2 Baseline Database for Indian Power Sector is available athttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm

Value applied:0.99417

Justification of thechoice of data ordescription ofmeasurement methodsand procedures actuallyapplied :

The CO2Baseline Database for the Indian Power Sector, User Guide, Version6.0 dated March 2011, released by the Central Electricity Authority, Ministry ofPower, Government of India, is the official database for statistics on the powersector in India in the various grids. It has been specially created to meet the datarequirements for emission factors for the CDM project activities in the country.

The database is used in accordance with the requirements in the applicablemethodology stated as, Calculations must be based on data from an officialsource and made publicly available

Operating Margin Emission Factor has been calculated by the CentralElectricity Authority using the simple OM approach in accordance with Toolto calculate emission factor for an electricity system,Version 02.2.1.

Any comment: Operating margin emission factor is fixed ex-ante throughout the creditingperiod.

Data / Parameter:EF

gridBM,y

Data unit: tCO2/MWh

Description: Build Margin Emission Factor for NEWNE Grid

Source of data used: CO2 Baseline Database for Indian Power Sector published by the CentralElectricity Authority, Ministry of Power, Government of India. Version 6.0dated March 2011

The CO2 Baseline Database for Indian Power Sector is available athttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm

Value applied: 0.81230

Justification of the

choice of data ordescription ofmeasurement methods

and procedures actuallyapplied :

The CO2Baseline Database for the Indian Power Sector, User Guide, Version6.0 dated March 2011, released by the Central Electricity Authority, Ministry ofPower, Government of India, is the official database for statistics on the power

sector in India in the various grids. It has been specially created to meet the datarequirements for emission factors for the CDM project activities in the country.

The database is used in accordance with the requirements in the applicablemethodology stated as, Calculations must be based on data from an official

source and made publicly available

Build Margin Emission Factor has been calculated by the Central Electricity


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Authority in accordance with Tool to calculate emission factor for anelectricity system, Version 02.2.1.

Any comment: Build margin emission factor is fixed ex-ante throughout the crediting period.

Data / Parameter: EFgridCM,y orEFCO2,grid,y

Data unit: tCO2/MWh

Description: Combined Margin Emission Factor for NEWNE Grid

Source of data used: Computed using the following formulaEFCO2,grid,y= WOM* EF grid,OM,y+ WBM *EF grid, BM,yhttp://cdm.unfccc.int/methodologies/SSCmethodologies/AppB_SSC_AttachmentA.pdf

EFCO2,grid,y= 0.75 * 0.99417 + 0.25* 0.81230 = 0.9487

Combined margin CO2emission factor for grid connected power generation inyear y calculated using the latest version of the Tool to calculate the emissionfactor for an electricity system, Version 02.2.1

The CO2 Baseline Database for Indian Power Sector, Version 6.0 datedMarch 2011 is available at:http://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htm

Value applied: 0.94870

Justification of the

choice of data ordescription ofmeasurement methodsand proceduresactually applied :

This is in accordance with the latest version of the applicable methodology,AMS-I.D Version 17 Grid Connected Renewable Electricity Generation, andthe Tool to calculate the Emission Factor for an Electricity System, Version02.2.1

Any comment: Combined margin emission factor is fixed ex-ante throughout the creditingperiod.

B.6.3 Ex-ante calculation of emission reductions:

According to the approved methodology AMS-I.D Version 17 para 23, Emission reductions arecalculated as follows:

ERy = BEy PEy LEy.. (1)

Where:BEy is the baseline emissionsPEy is project activity emissions and;

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

Ex-ante calculation of emission reductions is equal to ex-ante calculation of baseline emissions as projectemissions and leakages are taken as NIL as per AMS-I.D Version 17 para 20 and 22 respectively.
http://cdm.unfccc.int/methodologies/SSCmethodologies/AppB_SSC_AttachmentA.pdfhttp://cdm.unfccc.int/methodologies/SSCmethodologies/AppB_SSC_AttachmentA.pdfhttp://cdm.unfccc.int/methodologies/SSCmethodologies/AppB_SSC_AttachmentA.pdfhttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htmhttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htmhttp://www.cea.nic.in/reports/planning/cdm_co2/cdm_co2.htmhttp://cdm.unfccc.int/methodologies/SSCmethodologies/AppB_SSC_AttachmentA.pdfhttp://cdm.unfccc.int/methodologies/SSCmethodologies/AppB_SSC_AttachmentA.pdf


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ERy = BEy = EGBL,y* EFCO2,grid,y

EGBL,y = Capacity x PLF (Third party estimate) x Generating Hour (in a year) ..(3)= 6 MW x 23.80% x 8760

= 12509.28 MWh

EFCO2,grid,y(Baseline emission factor (combined margin) as calculated in Section B.6.1.)

= 0.94870 tCO2/MWh

ERy = EGBL,y* EFCO2,grid,y..(2)

= 12509.28 MWh x 0.94870 tCO2e/MWh= 11,867 tCO2e

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

Years

Estimation of

project activity

emissions (tCO2e)

Estimation of

baseline Emissions

(tCO2e)

Estimation of

Leakage (tCO2e)

Estimation of overall

emission reductions

(tCO2e)

Year 1 (2012-2013) 0 11,867 0 11,867Year 2 (2013-2014) 0 11,867 0 11,867

Year 3 (2014-2014) 0 11,867 0 11,867Year 4 (2015-2016) 0 11,867 0 11,867

Year 5 (2016-2017) 0 11,867 0 11,867Year 6 (2017-2018) 0 11,867 0 11,867Year 7 (2018-2019) 0 11,867 0 11,867

Year 8 (2019-2020) 0 11,867 0 11,867Year 9 (2020-2021) 0 11,867 0 11,867

Year 10 (2021-2022) 0 11,867 0 11,867

Total (tonnes of

CO2 e)0 118,670 0 118,670

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

B.7.1 Data and parameters monitored:

Parameter: EGBL,y,

Unit: MWh (Mega-watt hour)

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

Source of data:Net Electricity exported to the grid as per the Certificate for share ofelectricity generated by wind farm issued by state utility, hereafter referred as(Share certificate)

Value of data: 12509.28

Brief description ofmeasurement methods

1. A meter is installed in the transformer yard of each WTG. The switchyardmeter is a Tri-vector meter (TVM) of 0.5s accuracy class. The switchyard


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and procedures to beapplied:

meter reading is recorded by Suzlon and given to the state utility on a monthlybasis for apportioning the energy.

2. The project activity WTGs (including other non-project WTGs) areconnected to Shikarpur substation3. An ABT (Availability Based Tariff) meter is installed at the substation4. The ABT meter is of 0.2s accuracy class5. Recording frequency- Reading from ABT meter is taken atleast on a monthlybasis by the state utility and representative of Project Proponent and afterapportioning the final reading is presented in the monthly issued sharecertificate. ABT meter measures net electricity in 15 minute time-blocks (realtime) and hence meets the requirement of Continuous monitoring, hourlymeasurement and at least monthly recording prescribed in the methodology.5.In case the ABT is found to be malfunctioning, the ABT meter at the GETCOsubstation (Shivlakha) is used to record the energy reading. The ABT meter at

GETCO substation is of 0.2s accuracy class.6. The state utility apportions the electricity and issues the certificate for shareof electricity generated by the project. The details are presented in section B.7.2

QA/QC procedures tobe applied:

1. The ABT meter is tested for accuracy once in 3 years by the state utility.2. These test reports would be available with the PP

3. The switchyard meters are tested annually by Suzlon through an externalagency

4. The monitored values can be cross checked using the invoices raised by PP.Payment received by PP through cheque or online transfer could be used tocross verify the electricity generated depicted in the share certificate

Any comment:Archiving policy: Data, share certificate, will be archived for a period ofcrediting period + 2 years in paper and electronic form.

B.7.2 Description of the monitoring plan:

The applicable simplified baseline and monitoring methodology for selected small scale CDM projectactivities AMS-I.D Version 17 requires monitoring of net electricity supplied to the grid.

Further, wind based electricity generation is not associated with any kind of project emissions andleakages. Hence, the sole parameter for monitoring is the electricity supplied to the grid. The Project isoperated and managed by Suzlon Windfarm Services Limited (SISL) which is an ISO certifiedorganization. They follow the documentation practices to ensure the reliability and availability of the data

for operation of the wind power project. The monitored data can be found from the certificate of share ofelectricity issued by state utility to the project participants.

QA/QC:

The meter located at the grid sub-station is sealed and maintained by the state electricity utility. The meteris tested for accuracy once in 3 years. In case during testing, meter is found to be functioning beyond thepermissible limits, they are immediately calibrated. Calibration of meters will be carried out by stateutility. The accuracy class of meter at sub-station is 0.2s. The accuracy class of meter at switchyard ofWTG is 0.5s. The switchyard meters are calibrated annually for accuracy by SISL through an externalagency.


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Monitoring will be done as:

Meter reading: The ABT meter readings at the Shikarpur substation are taken jointly by therepresentatives of state utility and the representative of power producer (Suzlon) on atleast on a monthlybasis and after apportioning the final reading is presented in the monthly issued share certificate. Such

meter readings shall be treated as the accurate and final measurement of the energy supplied to GUVNLby the power producer for preceding month. Reading from the ABT meter at Shivlakha Substation istaken by the representatives of state utility and the PP in case the ABT meter at Shikarpur Substation is

faulty. The ABT meter reading recorded at the Shikarpur substation indicates total net energy exported byall the WTGs in the wind farm including non-project activity WTGs. PPs representative (SISL) also

provides the monthly reading of the meter in switchyard of WTG to the state utility. Based on themonthly ABT meter reading at the substation and the monthly reading of meter at switchyard of WTG

provided by SISL, the state electricity utility prepares and submits the Certificate for share of electricitygenerated by wind farm to the individual investor. Based on this share certificate, authorized by the state

electricity utility, the PP raises an invoice. Payments are made by the state utility to the PP through eitherthe cheque or online transfer. Continuous monitoring, hourly measurements by the meters, and monthlyrecordings will be carried out.

Net Electricity Exported to the Grid by the project activity as per apportioning procedure followed

by state utility:

EGBL,y = EGSS,Net ExportX (EGSwitchyard,Project WTGs,Net Export/EGSwitchyard, Project & Non project WTGs ,Net Export)

Where,

EGSS,Net Export: Net electricity exported by all WTGs connected to the substation(project activity WTGs and non-project activity WTGs), as

recorded by the ABT meter at substation (Shikarpur) (MWh)

EGSwitchyard,Project WTGs,Net Export: Net electricity exported by the project activity, as measured atSwitchyard meter (MWh)

EGSwitchyard, Project & Non project WTGs ,Net Export: Net electricity exported by all the project owners connected tothe substation (MWh) measured at switchyard meters

The net electricity supplied to the grid will be cross-checked with records of sold electricity. Paymentreceived through cheque or online transfer could be used to cross verify the electricity generated depictedin the share certificate.

Procedures for handling data uncertainty for GETCO substation meters/switchyard meters:

a- In case ABT meter at Shikarpur Substation is faulty- ABT meter at the GETCO (Shivlakha)substation is used to calculate the electricity exported to the grid. ABT meter at ShikarpurSubstation is immediately replaced by a new meter and meter reading from the replaced meter isused thereafter.

b- In case the ABT meter at the GETCO (Shivlakha) substation is faulty- ABT meter at the GETCO

(Shivlakha) substation is immediately replaced. The emission reduction calculation would not beaffected as reading from ABT meter at Shikarpur Substation is used to calculate the net electricity

exported to the grid.


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c- In case error is identified duringaccuracy testing- If during the tests, the meter is found to bebeyond the permissible limits of error, the meter shall be immediately calibrated and replaced, if

necessary. The error that is identified in the accuracy testing would be applied to all the readingsof electricity exported as indicated in the share certificate from the date of last accuracy testing.Billing for the period thereafter shall be as per the calibrated meter.

d- The switchyard meters are tested annually by SISL through an external agency. The meters arereplaced immediately in case of a fault.

Roles and responsibilities

The operational and management structure implemented by the project proponents and Suzlon is asfollows:

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

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

Date of completion: 19/09/2011Name of responsible person/entity: Gujarat Power Corporation Ltd and their consultant.

Contact information:Mr. Rajendra Mistry

Senior Executive (Projects)

Mobile: +91 9978407405Direct FAX: 079 - 23251254Direct tel: 079 - 23251260Personal E-Mail: [email protected]

The contact details are also furnished in Annex 1.

Site Manager

Service EngineersMachine Operators

SISL

Customer Relations Manager

Project Proponent (GPCL)

CDM Coordinator

SISL O&M Team

Review, Corrective Action

Review, Check, Internal Audit,

authorize and forward monitoring

data

Monitor, Record, Report and

Archive Data


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The consultant has only assisted GPCL in application of the baseline and monitoring methodology. Theconsultant is not a project proponent and GPCL is the only project proponent for this project activity

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:

20/08/2010,being the date of placement of purchase order for WTGs.

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

20 Years and 00 months

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

Fixed- 10 years

C.2.1. Renewable crediting period

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

NA

C.2.1.2. Length of the first crediting period:

NA

C.2.2. Fixed crediting period:

Fixed crediting period -10 years and 0 months.

C.2.2.1. Starting date:

01/07/2012 or the date of submission of the project activity to UNFCCC by the DOE (whichever is later)

C.2.2.2. Length:

10 Years and 0 months


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SECTION D. Environmental impacts

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

of the project activity:

As per the Schedule 1 of the EIA notification 2006, given by the Ministry of Environment and Forestsunder the Environment (Protection) Act 1986, the proposed project doesnt fall under the list of activitiesrequiring EIA14. The project will not involve any negative environmental impacts, as the WTGs areinstalled for generation of power using wind which is a clean source of energy, thus no EIA study wasconducted.

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 environmentalimpact assessment undertaken in accordance with the procedures as required by the host Party:

The environmental impacts from the proposed CDM project activity are not considered significant.

SECTION E. Stakeholderscomments

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

A local stakeholder meeting was conducted at Shikarpur village (Suzlon CMS), Gujarat on 25 thMay 2011

to invite comments from local stakeholders and to understand any issues they may have with respect tothe project activity. An advertisement was placed in the local newspapers Kutch MItra, Bhuj and DivyaBhaskar, Bhuj on 7thMay 2011 informing the local stakeholders for the meeting. Personal invites werealso given to local villagers. The local stakeholders were notified 15 days prior (notice period) to theactual date of the meeting. The stakeholders included members of the local village Panchayats, residentsof the area, Suzlon representatives as well as Project Participants (GPCL) representatives.

The meeting was presided over by Mr. Rajendra Mistry (GPCL, Mr.Sunil Patel (GPCL) and Mr. UjjwalSurana (Suzlon).

E.2. Summary of the comments received:

The meeting started with Mr. Rajendra Mistry, Sr. Executive (GPCL) welcoming all the stakeholders andexplaining the agenda for the meeting. The stakeholders included members of the local village

Panchayats, residents of the area, Suzlon representatives as well as Project Participants (GPCL)representatives.

Mr. Rajendra Ministry stated that the Project developer is installing Wind Turbine Generators that willgenerate Green power. The stakeholders were presented, in vernacular (Gujarati), with an overview of theproject activity as well as the technological, economic, environmental and social issues associated with it.

14http://envfor.nic.in/divisions/iass/notif/eia.htm
http://envfor.nic.in/divisions/iass/notif/eia.htmhttp://envfor.nic.in/divisions/iass/notif/eia.htmhttp://envfor.nic.in/divisions/iass/notif/eia.htmhttp://envfor.nic.in/divisions/iass/notif/eia.htm


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Mr Sunil Patel GET-Electrical (GPCL) spoke about CDM to all the stakeholders, explained how carbondioxide level in the atmosphere is increasing and how renewable energy initiatives help in reducing

greenhouse gas levels. The stakeholders were then invited to give their comments, suggestions andconcerns regarding the project activity. Local villagers asked questions related to local electricity supply,employment opportunities and local development etc.

Details of comments made by stakeholders and their respective responses by project proponent are givenbelow:

S.No. Query

Query Raised

By Response

Response given by

1 Will the project help in

improving electricitysupply to the villagers

or the neighbouringareas?

Ravi, Local

villager

The power generated

from the wind farmwill be fed to the state

electricity grid. It isexpected that thesupply position in thevillage will bestrengthened.

Mr Rajendra Mistry,

GPCL

2 Will the Project provideemploymentopportunities or help ineconomic developmentof the area?

BhaveshParmar, Localvillager

The social andeconomicdevelopment of thenearby villages willtake place as a result

of employmentopportunities created

by the project activityduring theconstruction phase andthe operation phase

Mr Rajendra Mistry,GPCL

3

Will there be anyproblem for animalgrazing or for birds dueto activity being carriedout at the project site?

Alpeshvallabhai, Localvillager

The project activitywill pose noobstruction to theanimal grazing in andaround the localpremised of theproject activity

Mr Sunil Patel,GPCL

4

Will there be any harm

to the localinfrastructure because ofthe project activity?

Alpeshvallabhai, Localvillager

There will be no harmto any localinfrastructure because

of the project activity.As a matter of fact,

local infrastructure,such as roads will beimproved.

Mr Ujjwal Surana,Suzlon

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


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Overall a positive response was received from the stakeholders. There were no negative comments and

the attendees identified employment generation, local area development and creating awareness as someof the benefits from the project activity.

Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY

Organization: Gujarat Power Corporation Ltd.

Street/P.O.Box:

Building: 6tFloor, 6 & 8 Block, Udhyog Bhawan, Sector - 11

City: Gandhinagar

State/Region: Gujarat

Postfix/ZIP: 382011Country: India

Telephone: 07923251255

FAX: 07923251254

E-Mail: [email protected]

URL:

Represented by:

Title: Senior Executive (Projects)

Salutation: Mr.

Last Name: Mistry

Middle Name:

First Name: Rajendra

Department:

Mobile: +91 9978407405

Direct FAX: 079 - 23251254

Direct