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CDM-SSC-PDD (version 04) CDM – Executive Board page 1

CLEAN DEVELOPMENT MECHANISM

SIMPLIFIED PROJECT DESIGN DOCUMENT FOR SMALL-SCALE PROJECT ACTIVITIES (SSC-CDM-PDD)

Version 02

CONTENTS

A. General description of the small-scale project activity B. Baseline methodology C. Duration of the project activity / Crediting period D. Monitoring methodology and plan E. Calculation of GHG emission reductions by sources F. Environmental impacts G. Stakeholders comments Annexes Annex 1: Information on participants in the project activity Annex 2: Information regarding public funding

CDM-SSC-PDD (version 04) CDM – Executive Board page 2 SECTION A. General description of the small-scale project activity A.1. Title of the small-scale project activity: Cabo Engaño Wind Project Date of completion: 3rd July 2006 Version 1 A.2. Description of the small-scale project activity: The Cabo Engaño wind project proposes to install and operate a wind farm in La Altagracia province in the eastern side of the Dominical Republic. The project will be realised by the Consorcio Energético Punta Cana-Macao S.A. (CEPM) and will consist of 5 Vestas NM82 G58 wind turbines of 1650 kW nominal capacity, for a total installed capacity of 8.25 MW. The location of the wind farm is in the area surrounding Cabo Engaño, in the Altagracia province, in eastern Dominican Republic. The Cabo Engaño investment will help reduce the GHG emissions generated by the current energy mix in the CEPM concession area of Polo turístico del Este. With an expected average annual production of 25.294 GWh, the project will be able to deliver a reduction in emissions of around 20,235 tCO2e (tons of carbon dioxide equivalent) per annum between 2007 and 2013 on average. CEPM was established in November 1992 to be the first private company established in the Dominican Republic to deliver a public service. CEPM generates, distributes and sells electricity in the unconnected area from Macao to Juanillo, in the eastern part of the island. The CEPM isolated grid currently serves 32 hotels and around 4,350 users among small businesses and households, meeting the ever increasing power demand exclusively with liquid fossil fuels. The base load demand is met relying on heavy fuel oil (HFO or bunker oil) fired generators while peak load is met with light fuel oil. In early 2006 the grid was characterised by 73 MW installed capacity (with a maximum demand of 51 MW) and distributed approximately 304,455 MWh of electricity. The purpose of the project is to ensure the continuing development of the Polo Turístico del Este, the concession area served by the isolated CEPM grid, through the provision of electricity by using a renewable, clean, indigenous source of energy to meet the increasing demand for a secure supply of energy, while at the same time diversifying the energy mix. The project complies with the relevant regulations and laws of the Dominican Republic and has been granted a no objection certificate from the Navy1 in July 2005. The land where the sub-station will be built was purchased by CEPM in 2005. CEPM also entered into agreement with the landowners of the plots where the turbines and the power line will be installed . In line with the Dominican Republic “Ley General de Electricidad 125-01; Reglamento 07/2002”, a full EIA was carried out for the Cabo Engaño Wind project in May 2003. The project received the “Permiso Ambiental”2 in September 2003.

1 The Dominican Navy has responsibility over all land developments occurring within 60m from the sea shore for national security and strategic reasons. 2 Secretaría de Estado de Medio Ambiente y Recursos Naturales, Subsecretaría de Gestión Ambiental: Permiso Ambiental 0204 – 03.

CDM-SSC-PDD (version 04) CDM – Executive Board page 3 The project activity will contribute to both local and global sustainable development in a number of ways. In terms of local benefits, the project will mainly contribute to the reduction of local air pollutants, since the electricity generated by the Cabo Engaño wind project will displace HFO generated power. In conjunction with the installation of the wind farm, the local grid will be enlarged to include the area of the project, thus increasing the reach of electricity to areas previously not connected. It is also expected that the project will contribute to local employment during both the construction and operation phases of the wind farm. Most fundamentally, the project will provide an incentive to private investments in renewable energy in the Dominican Republic and contribute to the creation of legislation in support of renewable resources. From a technology transfer point of view, the planned investment will employ up-to-date, environmentally sound wind power technology. It has been assessed that a wind turbine specifically designed for a low mean wind speed, like the Vestas NM82-1.65MW wind turbine, will be optimal for the site. The Cabo Engaño wind farm is the first wind investment in the country and will therefore provide invaluable local experience with the development and operation of wind power on a commercial scale. A.3. Project participants:

Name of Party involved (*) ((host) indicates a host Party)

Private and/or public entity(ies) project participants (*)

(as applicable)

Party involved wishes to be

considered as project participant

(Yes/No) Dominican Republic (Host) Consorcio Energetico Punta Cana-Macao

(CEPM) No

(*) In accordance with the CDM modalities and procedures, at the time of making the CDM-PDD public at the stage of validation, a Party involved may or may not have provided its approval. At the time of requesting registration, the approval by the Party(ies) involved is required. The Dominican Republic ratified the Kyoto Protocol on 12 February 2002. The Contact for the CDM project Activity is CEPM. All contact details are included in Annex 1. A.4. Technical description of the small-scale project activity: The Cabo Engaño wind project proposes to install and operate a wind farm in La Altagracia Province in eastern Dominican Republic. The investment includes the civil and electrical infrastructure of the wind farm and the installation of a substation on site. A 69 kV 10 km power line from the Cabo Engaño substation to the existing Caribe substation will also be part of the investment as well as the upgrade works for the access road to the site. In preparation for the project, wind resources were measured over a two years period from February 2002 until January 2004 during a study commissioned by CEPM and undertaken by RISØ. The selection of the measurement site was based on data available from the Wind Energy Resource Atlas of the Dominican Republic3, published by NREL in 2001. A 30 m NRG tubular tower equipped with cup anemometers, wind vanes and temperature sensors was set up 100 m from the sea nearby the proposed

3 The “Wind Energy Resource Atlas of the Dominican Republic” is available online from the NREL website at: http://www.nrel.gov/international/rr_assessment.html

CDM-SSC-PDD (version 04) CDM – Executive Board page 4 project site (see Figure 1). Measurements were taken at 30m above ground level starting in February 2002 until January 2004. Data availability at the site was 96.7% over the entire period of measurements. Normally a 90% data recovery is considered acceptable for a wind recovery assessment study. Following data collection Risø prepared a report “CEPM Wind Energy Project, Two Year Status” with the relevant characteristics of wind resources at the project site4.

Figure 1: Location of the measurement mast

The prevailing wind direction throughout the year is easterly as shown in Figure 2. The measured annual mean wind speed at 30m AGL is V30m = 6.5 m/s, while the wind power density is 233 W/m2. According to the wind power classification for the Dominican Republic5 the wind resources at Cabo Engaño represent a Class 2: Moderate resource potential for utility-scale applications. This is the minimum potential to be considered suitable for wind power development. Table 2 shows the main characteristics at the project site.

Figure 2: Wind Atlas based on 24 months data from 1 Feb 2002 to 31 Jan 2004. The height is 50m and the roughness class is zero.

4 Exhibit A: Risø; CEPM Wind Energy Project: Two Year Status (2004) 5 NREL (2001); “Wind Energy Resource Atlas of the Dominican Republic”.

CDM-SSC-PDD (version 04) CDM – Executive Board page 5 Table 1: Project site characteristics

Cabo Engaño Wind Farm – site characteristics Mean wind speed, 30 m AGL 6.5 m/s Mean wind speed, 50 m AGL 6.97 m/s Mean wind power density, 30 m AGL 233 W/m2 Mean wind power density, 50 m AGL 294 W/ m2 Annual mean temperature* 26°C Average air density† 1.172 kg/m3

Notes: * Based on existing measurements at 10m ASL taken from year 2002 to 2006. The high ambient temperature in the Dominican Republic leads to a 3-4% lower average air density. † Based on the mean temperature and the site mean altitude of 0m ASL. In order to achieve the highest energy output a wind turbine specifically designed for a low mean wind speed was selected for the project. Vestas NEG Micon NM82 1650kW single speed wind turbines were chosen after an open bid was sent out to ten international wind turbine suppliers in February 2004. Of the turbine suppliers contacted six companies responded. The legal contract was sent to Neg Micon in September 2004 and once the company was bought by Vestas an amendment to the contract was issued the following year. The negotiations for the equipment were concluded in February 2006 with Vestas. The civil works to set the foundations of the turbines are expected to commence in June 2006. Table 2 shows a summary of the technical characteristics of the proposed Cabo Engaño project. The power curve shown in Figure 3 was used in the production calculations. The production estimate has been carried out using WAsP 8.0 and WindPro 2.4 software6. The production estimates include array losses due to wake effect. Electrical and availability losses have not been included in the calculations.

Table 2: Project nominal data

Cabo Engaño Wind Farm Number of wind turbines 5 Wind turbine Vestas NM82 Nominal Capacity 5*1650 kW Installed Capacity 8.25 MW Hub height 70 m Nominal Annual Generation 27,960 MWh Capacity Factor 38.69% at 70m

The total installed capacity at the Cabo Engaño Wind Farm will be 8.25MW. Based on the analysis of the available wind resource at hub height of 70m and an expected load factor of 38.7%, the annual nominal generation for the planned layout of the 5 turbines is approximately 27,960 MWh. The energy production calculations have been carried out on basis of:

• A power curve corrected to an air density of 1.172 kg/m3; • 2 years of raw data from on-site measurement supplied by Risø; • an estimated roughness length of 0.03 m; • site wind turbine layout as per Figure 4.

6 Exhibit B: Vestas “Production estimate; Cabo Engaño – Dominican Republic”; Commercial in Confidence document.


Figure 3: Power curve for NM82/1650 at the site conditions

Figure 4: Layout of the wind farm at Cabo Engaño

A.4.1. Location of the small-scale project activity: A.4.1.1. Host Party(ies): Dominican Republic A.4.1.2. Region/State/Province etc.: La Altagracia Province A.4.1.3. City/Town/Community etc: Municipio de Higuey A.4.1.4. Detail of physical location, including information allowing the unique identification of this small-scale project activity(ies): The wind farm site is situated in La Altagracia Province at Cabo Engaño, the most easterly point of the Dominican Republic. It is a coast site, facing east and exposed directly to the Atlantic Ocean (see Figure 5). The land towards west is flat with generally low vegetation. The wind turbines site is also characterised by low vegetation like grass and low bushes and 5 to 10m high palm trees with lower vegetation in between. The soil type is old coral reef7. The project site coordinates are: Latitude: North 18.36° 59’ 01” Longitude: West 69.19° 36’ 02”

7 Exhibit C: Risø; CEPM Wind Energy Project: Site Inspection Report (2002).

CDM-SSC-PDD (version 04) CDM – Executive Board page 7 The wind farm area is approximately 5 km2. The wind turbines will be installed around a small bay (see Figure 6) at sea level where the terrain is flat and not restricted by vegetation or buildings. The project site is approximately 4 km away from the nearest road, while the electrical Substation Caribe is located approximately 10 km away. The wind development will be connected to this substation via a 69 kV aerial power line which is part of the project.

Figure 5: The project location in the Dominican Republic.

Figure 6: Detailed map of the small bay at Cabo Engaño, the project site location.

A.4.2. Type and category(ies) and technology of the small-scale project activity: Since the Cabo Engaño wind development is a renewable energy project with a nominal installed capacity is 8.25 MW (below 15MW), the project conforms to the definition of Type (i) small scale CDM project activities given by Annex II of Decision 21/CP.8 Simplified Modalities and Procedures for Small-scale CDM Project Activities8. Furthermore, as the wind farm will sell electricity to the local isolated grid within the same concession, the Cabo Engaño wind project can be categorised as a TYPE 1D project (Renewable Electricity Power for a Grid) according to Appendix B of Annex II to Decision 21/CP.89. The selected Neg-Micon/Vestas technology is well known internationally and is proven technology in many wind conditions. A.4.3. Brief explanation of how the anthropogenic emissions of anthropogenic greenhouse gas (GHGs) by sources are to be reduced by the proposed small-scale project activity, including why the emission reductions would not occur in the absence of the proposed small-scale project activity, taking into account national and/or sectoral policies and circumstances: The inclusion of the Cabo Engaño wind farm in the CEPM grid will directly reduce the greenhouse gas emissions in the Dominican Republic as a whole and in the eastern part of the island in particular by displacing and reducing the need for power to be generated from fossil fuels. With an estimated average annual generation of approximately 25 GWh from a clean energy source, the average annual emission reductions will amount to 20,235 tCO2. Under the business as usual scenario new HFO generators would be the sole generating source in the power mix of the Polo Turístico del Este served by CEPM. The 8 http://cdm.unfccc.int/Reference/Documents/AnnexII/English/annexII.pdf 9 http://cdm.unfccc.int/Projects/pac/ssclistmeth.pdf

Cabo Engaño wind project location

CDM-SSC-PDD (version 04) CDM – Executive Board page 8 amount of GHG savings claimed by the project is estimated using the baseline methodology and monitoring plan which make up this project design document. The emission reductions would not occur in the absence of the proposed CDM project activity because of the following national circumstances and barriers to the project:

• In the Dominican Republic there are significant legislative barriers to develop renewable resource projects as the current “Ley General de Electricitad” does not provide any incentive to overcome the higher financial barriers for the development of renewable energy. The draft legislation for renewable energy has been with the National Congress for approval since 1996.

• Conditions for foreign investments in the Dominican Republic have only recently improved. Until 2004, when the current government came into power, the country was rated C by the International Bureau of credit. Without the CDM incentive, it would have proven very difficult for CEPM to secure finance for the project. A.4.3.1 Estimated amount of emission reductions over the chosen crediting period: A crediting period of 7 (seven) years (renewable twice) is selected for the small scale project activity. An estimation of emissions reductions expected over the crediting period is provided in the table below. The emission reductions were calculated considering a load factor of 35% and an annual generation of approximately 25,294 MWh. The load factor chosen for the calculations is conservative with respect to the one used by Vestas to estimate the project generating performance (38.69%) in order to account for electrical and availability losses, which were not included in the Vestas calculations (see SectionA.4).

Years

Annual estimation of emission reductions in tonnes of CO2 e

2007 20,2352008 20,2352009 20,2352010 20,2352011 20,2352012 20,2352013 20,235

Total estimated reductions (first crediting period) (tonnes of CO2 e)

141,646

Total number of crediting years 21Annual average over the crediting period of estimated reductions (tonnes of CO2 e)

20,235

A.4.4. Public funding of the small-scale project activity: There is no public funding of the project. A.4.5. Confirmation that the small-scale project activity is not a debundled component of a larger project activity:

CDM-SSC-PDD (version 04) CDM – Executive Board page 9 According to paragraph 2 of Appendix C to the Simplified Modalities and Procedures for Small-Scale CDM project activities (FCCC/CP/2002/7/Add.3)10, a small-scale project is considered a debundled component of a large project activity if there is a registered small-scale activity or an application to register another small-scale activity: • with the same project participants; • in the same project category and technology; and • registered within the previous two years; and • whose project boundary is within 1 km of the project boundary of the proposed small-scale activity. None of the above applies to the Cabo Engaño wind project and CEPM have not registered or operated another wind project within 1 km of the project boundary. Indeed, the Cabo Engaño wind farm is the first commercial wind development in the country. Therefore the proposed project is not a de-bundled component of a larger CDM project activity.

10 http://cdm.unfccc.int/Projects/pac/howto/SmallScalePA/sscdebund.pdf

CDM-SSC-PDD (version 02) CDM – Executive Board page 10 SECTION B. Application of a baseline methodology: B.1. Title and reference of the approved baseline methodology applied to the small-scale project activity: Project Type: I Renewable energy project Project Category: I D Renewable electricity generation for a grid. Methodology: AMS-I.D B.2 Project category applicable to the small-scale project activity: According to Appendix B of the simplified modalities and procedures for small scale CDM project activities, for a system where all generators use exclusively fuel oil and/or diesel fuel, the baseline is the annual kWh generated by the renewable unit times an emission coefficient for a modern diesel generating unit of the relevant capacity operating at optimal load. The CEPM isolated grid generates power exclusively from HFO with an element of peaking using diesel. The total capacity installed on the CEPM grid is 73 MW, with a peak demand of 51 MW; therefore the emission factor for the proposed project is a default value of 0.8 tCO2/MWh; as specified in Table I.D.111 reported below. The GHG emissions connected to the baseline are calculated by multiplying the power generated by the project times the above fixed emission factor for the isolated grid.

B.3. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered small-scale CDM project activity:

11 Table I.D.1 is reported in paragraph 8 of Section I.D, Type I – Renewable Energy Projects of Appendix B of the simplified modalities and procedures for small scale CDM project activities.

CDM-SSC-PDD (version 02) CDM – Executive Board page 11 In line with Attachment A to Appendix B of the Simplified Modalities and Procedures for Small-Scale CDM project activities12 evidence to show that the proposed project is additional can be provided under at least one of the following categories of barriers: (a) investment barrier; (b) technological barrier; and (c) prevailing practice. In the case of the Cabo Engaño wind project, the analysis presented below demonstrates that the project is additional on the grounds of all three categories of barriers. a) Investment Barrier The total economic investment for the Cabo Engaño project is USD 14,528,137. The seed financing for the project has come from within the group, while the implementation of the project has been funded by a combination of entities: a loan by ABN Amro with export related mixed credits from Danida to cover the interests and a guarantee provided by the International Finance Corporation (IFC). The Danida funds do not constitute a redirection of ODA. The proportion of funding is represented in Table 3 below:

Table 3: Proportion of funding

Origin Per cent total requirement Equity 0% Loan: ABN Amro 100% Loan: Danida Covers the interests on the loan13

The process of securing the credit guarantee from the IFC took approximately two years and a half, during which CEPM prepared all the financial and company due diligence documents to meet the IFC requirements. At the time of applying for finance, the Dominican Republic was classified C by the International Bureau of Credit14, therefore the process of securing finance for the wind development was extremely lengthy. Eventually the loan by ABN Amro has been provided in the knowledge that the CEPM was going to implement the project with the CDM, thus seeking a revenue stream in Euros or Dollars. Exhibit D shows how the CERs impact on the project’s NPV. The calculations consider the value of the wind project measured at the cost of fuel saved by CEPM (assuming a conservative price for oil at 40$/bbl) versus the financial costs of building the windfarm. The difference between the flows is taken to calculate the project’s NPV based on the following assumptions:

• 6.6% discount rate over a 14 years period; • value of carbon credits of 12$/tCO2; • 20,000 tCO2/year.

12 http://cdm.unfccc.int/methodologies/SSCmethodologies/AppB_SSC_%20AttachmentA.pdf 13 The interest rate on the loan is equivalent to the LIBOR (London Inter Bank Offer Rate) rate + 3%. 14 Currently, after the government change in 2004, the Dominican Republic is rated B for credit worthiness.

CDM-SSC-PDD (version 02) CDM – Executive Board page 12 The contribution of the CERs to the project financial performance is extremely significant, taking the project’s NPV from zero (without CERs) to approximately US$ 2m at an assumed spot price of CERs of 12$ a tonne. Additionally, given the financing difficulties that the project has encountered, the consequential delays to implementation and therefore the negative impact on the projects budget, the project owners are looking to the CDM to support the project going forwards. The project owners have therefore sought to ensure the future success of the project activity by providing additional revenues to maximise the technology transfer through training and dissemination as well as support the environmental monitoring activities. The CDM will strengthen both the financing of the project and the ability of CEPM to ensure successful operation of the project given the unfamiliarity of the technology as well as the unpredictable weather conditions as specified in the following paragraph. b) Technological Barrier The 2001 NREL wind study15 suggests that about 1,500 km2 exist in the Dominican Republic with good-to-excellent wind resource potential. Using conservative assumptions of about 7 megawatts (MW) per km2, this area could potentially support more than 10,000 MW of installed capacity and deliver over 24,000 GWh per year. If the areas of moderate wind resources are considered as well, the total surface with wind potential increases to more than 4,400 km2, corresponding to slightly more than 9% of the total land area of the Dominican Republic. This could potentially support more than 30,000 MW of installed capacity. The extreme south-western and north-western regions of the country are estimated to have the greatest number of areas with good-to-excellent wind resources for utility-scale applications. However, additional studies are required to assess with higher accuracy the wind electric potential, considering factors such as the location of the existing transmission grid and site accessibility. Despite the wide potential for developing wind resources, the Cabo Engaño project is the first commercial wind investment in the Dominican Republic. As such in the country there is very little experience about wind power and as a consequence the confidence in the technology is small. This, together with the lack of local expertise and very little in country service support infrastructure, is viewed as one of the major obstacles to the widespread development of wind capacity. In addition to the lack of local technical expertise, the uncertain nature of power production concur in making investments in the wind sector highly risky and require a long term strategy. Furthermore, Cabo Engaño is among the areas characterised by moderate wind resource for utility-scale applications; hence CEPM has endeavoured to optimise the use of the proposed site by selecting an IEC Class II wind turbine for moderate and low wind speeds. In addition, tropical cyclones (tropical depressions, tropical storms, and hurricanes) hit the Dominican Republic an average of once every two years. Despite the general trend is for hurricanes to have the

15 NREL (2001); “Wind Energy Resource Atlas of the Dominican Republic.

CDM-SSC-PDD (version 02) CDM – Executive Board page 13 greatest impact along the southern coast, the hurricane George in 1998 followed an unusual path across the island; as can be seen in Figure 7. The season for cyclones lasts from the beginning of June to the end of November, with August, September, and October as the peak months. CEPM will have to insure the turbines against the event of a hurricane hitting the area of the project.

Figure 7: Hurricane tracks in 1998

c) Prevailing Practice The electricity market in the Dominican Republic is characterised by heavy dependence on fossil fuels, with nearly 85% of the total generating capacity provided by a mix of heavy fuel oil, natural gas, diesel and coal. The remaining 15% of capacity is provided by hydroelectric resources. This situation is a reflection of the national circumstances which, at the time of the Cabo Engaño project development, lacked policies favourable to the development of renewable resources. An example of this situation is the draft legislation to incentivise the uptake of renewable energy generation (“Proyecto de Ley de Incentivo al Desarrollo de Fuentes Renovables de Energias y de sus Regimes Especiales”) which has been waiting for approval by the National Congress since 1996. A final draft version was produced early in 2006 and is currently under the scrutiny of the National Congress.

In addition the CEPM isolated grid relies 100% on fossil fuels to meet the ever increasing power demand in its concession area, where CEPM currently serves 32 hotels and around 4,350 users among small businesses and households. The base load demand is met with HFO while peak load is met with diesel. In early 2006 the grid was characterised by 73 MW installed capacity (with a maximum demand of 51 MW) and distributed approximately 304,000 MWh of electricity. Table 4 shows the main characteristics of the generators installed on the CEPM grid.

Table 4: Total installed capacity (generators) in CEPM isolated grid


Location Equipment Manufacture Model Rpm KvCapacity

kWPunta Cana III WA 1 Leroy Somer LSA 58M 55.10P 720 12.47 2,960

Punta Cana III WA 2 Leroy Somer LSA 58M 55.10P 720 12.47 2,960

Punta Cana IV WB 1 ABB HSG 900 MP 10 720 12.47 4,145




Punta Cana V WC 1 ABB HSG 900 MP 10 720 12.47 6,218

Punta Cana V WC 2 ABB HSG 900 MP 10 720 12.47 6,218

Punta Cana V WC 3 ABB AMG0900XU10 720 12.47 6,218

Punta Cana V WC 4 ABB AMG0900XU10 720 12.47 6,218

- HA 1 Hyundai HSV763982K 900 3.7 1,800

Punta Cana VI HB 1 Hyundai HSR7637-8P 900 3.7 1,800




- DA 1 Magnamax 743RSL4050 1800 480 1,350

- DA 2 Magnamax 743RSL4050 1800 480 1,350

- DA 3 Magnamax 743RSL4050 1800 480 1,350

- DA 4 Magnamax 743RSL4050 1800 480 1,350

Punta Cana EMD 1 Baylor G855 RNV 417 920 4.16 2,865

Punta Cana EMD 2 Synchronous AB20- 24-24 920 4.16 2,865



73,232 To meet the increased power demand (on average there are in between 50 and 70 new clients every month) CEPM is currently installing about 6.8 MW additional capacity of HFO engines (four Hyundai engines) which will become operational in July 2006. This new development is in line with the historical trend of the company, as confirmed by the most recent investments in generating capacity shown in Table 5. With the Cabo Engaño wind project CEPM will become the first company in the Dominican Republic to generate power harnessing the country’s wind resources.

Table 5: CEPM most recent investments in generating capacity

CDM-SSC-PDD (version 02) CDM – Executive Board page 15 Location Equipment Type Manufacturer Model Serial Number Year Capacity (kW)Punta Cana V WC 3 Generador ABB AMG0900XU10 4564506 2000 6,218Punta Cana V WC 3 Motor Wartsila Vasa 18V 32D 20497 2000Punta Cana V WC 4 Generador ABB AMG0900XU10 4564507 2000 6,218Punta Cana V WC 4 Motor Wartsila Vasa 18V 32D 20498 2000Punta Cana DA-1 Generador Deutz 743RSL4050 WA-529055-0901 2001 1,350Punta Cana DA-1 Motor Deutz ID7xL710021 2202461 2001Punta Cana DA-2 Generador Deutz 743RSL4050 WA-529055-0901 2001 1,350Punta Cana DA-2 Motor Deutz ID7xL710021 2202423 2001Punta Cana DA-3 Generador Deutz 743RSL4050 WA-529055-0901 2001 1,350Punta Cana DA-3 Motor Deutz ID7xL710021 2202452 2001Punta Cana DA-4 Generador Deutz 743RSL4050 WA-529055-0901 2001 1,350Punta Cana DA-4 Motor Deutz ID7xL710021 2202460 2001Punta Cana HA-1 Generador Hyundai 02-2REH003-2 HSV7-639-82K 2002 1.7 Punta Cana HA-1 Motor Hyundai 9H21/32 BA1272 2005Punta Cana HB-1 Generador Hyundai 02-2REH003-2 HSV7-639-82K 2005 1.7 Punta Cana HB-1 Motor Hyundai 9H21/32 BA1790-1 2005Punta Cana HB-2 Generador Hyundai 02-2REH003-2 HSV7-639-82K 2005 1.7 Punta Cana HB-2 Motor Hyundai 9H21/32 BA1790-2 2005Punta Cana HB-3 Generador Hyundai 02-2REH003-2 HSV7-639-82K 2005 1.7 Punta Cana HB-3 Motor Hyundai 9H21/32 BA1790-3 2005Punta Cana HB-4 Generador Hyundai 02-2REH003-2 HSV7-639-82K 2005 1.7 Punta Cana HB-4 Motor Hyundai 9H21/32 BA1790-4 2005

Year 2000

Year 2001

Year 2005

B.4. Description of how the definition of the project boundary related to the baseline methodology selected is applied to the small-scale project activity: As referred to in Appendix B for small-scale CDM project activities, the project boundary encompasses the physical, geographical site of the renewable generation source. The project boundary for the Cabo Engaño Wind Power project includes the physical and geographical site of the project itself, including all the direct emissions from activities that occur at the project location. Conforming to the guidance and rules for small-scale CDM project activities, all GHG emissions associated with the production of parts, supplies and machinery for the construction of the wind farm will not be accounted for as these do no occur at the physical and geographical site of the project.

The Cabo Engaño wind project will be connected to the isolated grid at the Polo Turístico del Este; hence the system boundary for the proposed project is defined as the extension of CEPM independent mini grid for the following reasons:

1. The area is not interconnected to the main national grid and CEPM has run the isolated grid since November 1992. CEPM currently generates, distributes and sells electricity to approximately 29 hotels and 3,232 households connected to the mini grid.

2. There are no plans to connect the area to the main grid in the future.

3. Historical data for annual power generation in the CEPM grid are available since 1995. Data for the Polo Turístico del Este grid (number of generating units, power generated by each unit, fuel consumption etc.) are readily available from CEPM, the grid operator and project developer. Exhibit E shows the extension of the mini grid and its location in the Eastern part of the Dominican Republic. B.5. Details of the baseline and its development:

CDM-SSC-PDD (version 02) CDM – Executive Board page 16 The appropriate baseline for the proposed project is the kWh produced by the renewable generating unit multiplied by an emission coefficient for a modern diesel generating unit of the relevant capacity operating at optimal load as specified for project category Type I D (paragraph 8) in Appendix B to FCCC/CP/2002/7/Add.3. Date of completing the final draft of this baseline section: 03/07/2006 Name of person/entity determining the baseline: Ottavia Mazzoni Energy for Sustainable Development Ltd. Overmoor, Neston, Corsham, Wiltshire, SN13 9TZ, UK Tel: +44 1225 816830 Fax: +44 1225 812103 email: [email protected] ESD are not a project participant SECTION C. Duration of the project activity / Crediting period: C.1. Duration of the small-scale project activity: C.1.1. Starting date of the small-scale project activity: 01/01/2007 C.1.2. Expected operational lifetime of the small-scale project activity: 25 years C.2. Choice of crediting period and related information: C.2.1. Renewable crediting period: 21 years C.2.1.1. Starting date of the first crediting period: 01/01/2007 C.2.1.2. Length of the first crediting period: 7 years C.2.2. Fixed crediting period: N/A

CDM-SSC-PDD (version 02) CDM – Executive Board page 17 C.2.2.1. Starting date:

N/A C.2.2.2. Length: N/A SECTION D. Application of a monitoring methodology and plan: D.1. Name and reference of approved monitoring methodology applied to the small-scale project activity: No name and reference is suggested for the monitoring methodology at the UNFCCC CDM website at the time of writing the PDD. The monitoring methodology will consist of metering the electricity generated by the wind farm as specified in the Simplified Procedures for SSC projects for Type ID projects (Appendix B to FCCC/CP/2002/7/Add.3). D.2. Justification of the choice of the methodology and why it is applicable to the small-scale project activity: The monitoring methodology was selected as the only option suggested for Type ID projects in the Simplified Procedures for SSC projects.

CDM-SSC-PDD (version 02) CDM – Executive Board page 18 D.3 Data to be monitored: ID number

Data type Data variable

Data unit

Measured (m), calculated (c) or estimated (e)

Recording frequency

Proportion of data to be monitored

How will the data be archived? (electronic/ paper)

For how long is archived data to be kept?

Comment

1

Net electricity generation delivered to the grid by the project

EGy

--- MWh Measured Continuous 100% Electronic and paper

Crediting period plus 2

years

Data source: project developer Electricity measurements will be net of any amount used on site.

The net electricity generation will be monitored at the substation of the wind farm.

CDM-SSC-PDD (version 02) CDM – Executive Board page 19 D.4. Qualitative explanation of how quality control (QC) and quality assurance (QA) procedures are undertaken: For a small-scale CDM project activity the only set of data to be monitored is the net electricity output from the project (see table in D.3). QC and QA procedures will be the responsibility of the designated manager/s (as identified in D.5). D.5. Please describe briefly the operational and management structure that the project participant(s) will implement in order to monitor emission reductions and any leakage effects generated by the project activity: The table below shows the technical and commercial monitoring responsibilities for data acquisition and emission reductions calculation with the project developer.

Monitoring Responsibilities with CEPM Technical responsibility Contact person: EDUARDO GARCIA-MANTERO

Address: Edif. Ambar 6to Piso, Ave. Lincoln Phone/fax: 809.549.7659 E-mail: [email protected]

Commercial responsibility Contact person: ESTEBAN GOMEZ Address: Edif. Ambar 6to Piso, Ave. Lincoln Phone/fax: 809.549.7659 E-mail: [email protected]

Responsibility for data acquisition (Continuous, monthly and yearly)

Contact person: CHARLY DE LA ROSA Address: Edif. Ambar 6to Piso, Ave. Lincoln Phone/fax: 809.549.7659 Ext. 254 E-mail: [email protected]

Responsibility for calculation of emission reductions (Monthly and yearly)

Contact person: CHARLY DE LA ROSA Address: Edif. Ambar 6to Piso, Ave. Lincoln Phone/fax: 809.549.7659 Ext. 254 E-mail: [email protected]

Responsibility for monitoring supervision (Continuous)

Contact person: EDUARDO GARCIA-MANTERO Address: Edif. Ambar 6to Piso, Ave. Lincoln Phone/fax: 809.549.7659 E-mail: [email protected]

D.6. Name of person/entity determining the monitoring methodology: Ottavia Mazzoni Energy for Sustainable Development Ltd Overmoor, Neston, Corsham Wiltshire SN 13 9TZ, UK [email protected]

CDM-SSC-PDD (version 02) CDM – Executive Board page 20 Tel: +44 1225 816 831 Fax: +44 1225 812 103 ESD are not a project participant SECTION E.: Estimation of GHG emissions by sources: E.1. Formulae used: E.1.1 Selected formulae as provided in appendix B: No specific formula to calculate the baseline is provided to calculate emission reductions for Project Category I D. E.1.2 Description of formulae when not provided in appendix B: E.1.2.1 Describe the formulae used to estimate anthropogenic emissions by sources of GHGs due to the project activity within the project boundary: Emissions by sources of GHG due to the project activity are zero since wind power is a carbon neutral source of energy. As a consequence no formulae were used to calculate emissions. E.1.2.1 = 0 E.1.2.2 Describe the formulae used to estimate leakage due to the project activity, where required, for the applicable project category in appendix B of the simplified modalities and procedures for small-scale CDM project activities Calculation of leakage is not necessary since the renewable energy technology used does not require equipment transferred from another project. Project leakage is zero. E.1.2.2 = 0 E.1.2.3 The sum of E.1.2.1 and E.1.2.2 represents the small-scale project activity emissions: The project overall results in zero emissions. E.1.2.3 = E.1.2.1 + E.1.2.2 = 0 E.1.2.4 Describe the formulae used to estimate the anthropogenic emissions by sources of GHGs in the baseline using the baseline methodology for the applicable project category in appendix B of the simplified modalities and procedures for small-scale CDM project activities: For the proposed project the GHG emissions connected to the baseline are calculated by multiplying the power generated by the project times a fixed emission factor for the isolated grid. The emission factor is 0.8 tCO2/MWh; as described in Section B.2. E.1.2.4 = EGy * 0.8 = 25,294 * 0.8 = 20,235 tCO2

CDM-SSC-PDD (version 02) CDM – Executive Board page 21 E.1.2.5 Difference between E.1.2.4 and E.1.2.3 represents the emission reductions due to the project activity during a given period: E.1.2.4 – E.1.2.3 = 20,235 tCO2 E.2 Table providing values obtained when applying formulae above:

Annual power generation Emission Coefficient CERs MWh tCO2/MWh tCO2

25,294.00 0.80 20,235.20 SECTION F.: Environmental impacts: F.1. If required by the host Party, documentation on the analysis of the environmental impacts of the project activity: An Environmental Impact Assessment (EIA) for the Cabo Engaño wind farm and associated power transmission line was completed in May 2003 in accordance with the Dominican Republic “Ley General de Electricidad 125-01; Reglamento 07/2002”. The outcome of the EIA was favourable and the project was not found to have significant environmental impacts overall. As a consequence the Secretaria de Estado de Medio Ambiente y Recursos Naturales granted CEPM the Permiso Ambiental to proceed with the development of the project in September 2003. The greatest negative impact was found to be on sedentary and migratory bird species as well as damage to the natural landscape and the hydrogeologic system. Disruption to the 65 bird species found in the project area (of which 44 are migratory species) will be mainly caused by the power transmission lines due to possible collision of birds against them. The risk of collision against the wind turbines is considered to be lower; as well as the disruption due to maintenance work in the area. In terms of disruption to the natural landscape this will occur only from an aesthetic point of view and mainly on the coastal area of the project. Where impacts were identified, mitigation measures were suggested and these will be implemented in full by the project. To this end a dedicated programme under the Plan for Management and Environmental Adaptation (PMAA), namely The Global Monitoring Programme, will be set up. Most of the RD$ 854,000 budget will be dedicated towards mitigation plans in the areas with greatest impact such as the monitoring of the avifauna and of the hydrogeologic system. The PMAA was established in order to make sure that all mitigation measures on the impacts are carried out including those to mitigate moderate impacts. These plans are organised into eight programmes and further subdivided into 12 sub-programmes. For each of these, objectives, responsible parties, action plans, associated costs, indicators and procedure methods were defined. Please refer to the attached PMAA Matrix summary16 for more detailed information on the above. The key points of the EIA conclusions are:

16 Exhibit F: Plan for Management and Environmental Adaptation (PMAA) summary matrix.


• The impact on local birds and landscape by the project is minimal compared to the current damage to the flora and fauna due to emissions caused by the combustion of fossil fuels whose impact tends to be irreversible;

• Wind energy was perceived as an environmentally sound source of energy; • Positive impacts such as improvements to the local economy and the landscape were identified.

SECTION G. Stakeholders’ comments: G.1. Brief description of how comments by local stakeholders have been invited and compiled: The process of Public Consultation and Circulation of information was undertaken in four stages:

• Socio-economic characterisation and preliminary identification of interested parties in the area; • Information circulation and first identification of interested parties (local residents, nearby hotels,

arts and crafts centre and the airport). Project objectives and goals were circulated. This was done through verbal communication, field visits, questionnaires17 and interviews, and direct observation of the nearby area of the project. Ideas and suggestions were gathered in order to produce the EIA;

• Analysis of interested parties- all interested sectors in the area were reviewed as well as potential ones;

• Public consultation with interested parties. The public consultation was carried out on the 22nd March, 2003 at the Central de Consorcio Energético Punta Cana-Macao, Bávaro. 80% of the local population in the area of direct influence took part. Two main sections of the local population were identified in the area of the project installation: • Stakeholders directly influenced:

o 16 people representing residents in the area; o and the landowners of the plots on which the turbines will be installed and the power line

will be passing18 (not all resident in the area).

• Stakeholders indirectly influenced including: o Hotel and Restaurant Association, Zona Este y Punta Cana; o Punta Cana Airport- 5 km south of the area; o Ecological Department, Punta Cana Ecological Foundation; o Association of Craftsmen, Cabeza de Toro, Cabo Engaño (AVANCE).

G.2. Summary of the comments received: The public consultation which took place on 22nd March, 2003 was a very important evaluation tool to collect and address the comments of those interested in the project. It was confirmed that:

• The landowners agree with the execution of the project; • The project will contribute to provide a solution to the local energy supply; • The local stakeholders perceive the project as an important element for the development of the

area, in particular of it economy;

17 Exhibit G: Questionnaire submitted to local stakeholders as part of the consultation process. 18 The plot of land where the substation will be built has been acquired by CEPM.


• At present all the institutions in the area of indirect impact are all favourable to the project. All questions and concerns were addressed. People’s attitude towards the project was overall very positive and therefore the project developers gained the local community’s full authorisation to proceed with the development of the project activity.

Table 6: Summary of stakeholders’ concerns collected during the public consultation

CONCERNS EXPLANATIONS AND ANSWERS What will happen in the tourist recreational area where project has been approved?

The project has been designed in such a way that it respects the land use and properties in the area. CEPM endeavours to make any necessary changes to the plans in order to achieve this.

What area will be used up by each of the wind towers? How many towers will there be and what distance will there be between them?

Each tower will use up an area of 16.5 x 16.5 m. For 5 wind turbines approximately 1,400 m² of land will be taken up. A distance of about 220 m will be kept between the turbines. This could vary depending on land conditions. The impact on the landscape will be minimal due to the limited size of the wind farm.

In changing the landscape, will this be completely destroyed?

The area of land which will be interested by impacts during the construction phase is limited to the surrounding areas of the wind turbines and the transmission line. The area will be re-planted when the construction phase is over. Visible changes will occur in the landscape in the coastal area where several towers will be installed. CEPM will monitor the response from local residents and tourists. From experience however, wind farms tend to become destinations that attract tourists and people value the benefits of electricity without the nuisance of smoke and noise, normally produced by diesel and heavy fuel oil generating units.

Will bird species be destroyed?

There will be an impact on the avifauna but this will be low and measures will be taken to reduce this impact. In the case of migratory birds, the danger of collision is low during day flights as long as weather conditions are good. This risk of collision does increase during night time flights and bad weather conditions when visibility is minimized. However, birds do become accustomed to the towers and tend to avoid them just like they do with trees and other natural obstacles.

What is the percentage rate in terms of support from landowners?

The response has been very positive and they have been very supportive. The main reason being that they are interested in the supply of electricity on a permanent basis. CEPM are confident that no problems will occur. In case there were problems CEPM will find solutions which are mutually beneficial to all those involved.

When will you start? How long will it last? Will you provide electricity?

CEPM are presently in the process of obtaining permits and environmental evaluations in order to comply with all legal and bank requirements. We estimate the beginning of the project to start in August 200419. In terms of electricity supply we expect to provide electricity in the area even before the wind farm is set up through connection to the

19 The actual beginning of installation works is estimated to be June 2006.


mini grid. G.3. Report on how due account was taken of any comments received: The issues relevant to the project activity raised by the stakeholders and expressed in the conclusions of the EIA were taken into account during the identification of appropriate mitigation measures to the identified impacts. It was concluded that the project will have a positive or negligible impact on the community from both economic and environmental points of view. It will also have a positive impact on the grounds of providing a permanent source of clean electricity to the area. Due account was taken of the local people’s expectations over the latter perceived benefit. The project promoters confirmed to all interested parties that the area will be connected to the local mini grid. The prospect of a permanent renewable source of electricity is the main reason why the project was so widely accepted in the area by its local community.


Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY

Organization: Consorcio Energético Punta Cana-Macao S.A. CEPM Street/P.O.Box: Ave. Abraham Lincoln, Esq. J.F. Kennedy Building: Edif. Ambar, 6to. Piso City: Santo Domingo State/Region: Distrito Nacional Postcode/ZIP: 10126 Country: Dominican Republic Telephone: 809.549.7659 FAX: 809.549.7757 E-Mail: [email protected] URL: http://cepm.com.do/ Represented by: CEPM Title: Projects Manager Salutation: EGM Last Name: García-Mantero Middle Name: First Name: Eduardo Department: Projects management Mobile: 809.223.1754 Direct FAX: 809.549.7757 Direct tel: 809.549.7659 Personal E-Mail: [email protected]


Annex 2

INFORMATION REGARDING PUBLIC FUNDING Not applicable

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