Initial Environmental Examination (Draft)

September 2013

People’s Republic of : Jinta Concentrated Solar Power Project

Prepared by China Huadian Corporation for Asian Development Bank

This is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature.

CURRENCY EQUIVALENTS (as of May 2013) Currency Unit – yuan (CNY) CNY 1.00 = US$ 0.1613 USD 1.00 = 6.20 CNY

ABBREVIATIONS

ADB – Asian Development Bank AP – Affected Person ASL – Above sea level CHD – China Huadian Group Corp CHEC – China Huadian Engineering Co., Ltd CHP – Combined Heat and Power CNG – Compressed Natural Gas CNY – Chinese Yuan CRS – Central Receiver Systems CSC – Construction Supervision Company CSP – Concentrating Solar Power DCS – Distributed Control System DI – Design Institute DNI – Direct Normal Irradiance DSG – Direct Steam Generation EA – Executing Agency EHS – Environment, Health and Safety EIA – Environmental Impact Assessment EMoP – Environmental Monitoring Plan EMP – Environmental Management Plan EMS – Environmental Monitoring Station EMU – Environmental Management Unit EPB – Environmental Protection Bureau FSR – Feasibility Study Report GDP – Gross Domestic Product GHG – Green House Gas GRM – Grievance Redress Mechanism HTF – Heat Transfer Fluid IA – Implementing Agency IEE – Initial Environmental Examination

IT – Interim Target LIEC – Loan Implementation Environment Consultant LFR – Linear Fresnel Reflectors LNG – Liquid Natural Gas MEP – Ministry of Environmental Protection MSDS – Material Safety Data Sheet NDRC – National Development and Reform Committee NWPG – Northwest Power Grid OM – Operations Manual, ADB PCR – Physical Cultural Resources PPCU – Project Public Complaint Unit PPE – Personnel Protective Equipment PPTA – Project Preparatory Technical Assistance PRC – People’s Republic of China PV – Photovoltaic SCA – Solar Collector Assembly SCE – Solar Collection Element SPS – Safeguard Policy Statement, ADB TA – Technical Assistance TES – Thermal Energy Storage TF – Thin-film WB – World Bank WHO – World Health Organization WWTP – Wastewater Treatment Plant

WEIGHTS AND MEASURES

– BOD5 Biochemical Oxygen Demand, five days cm – Centimeter – CO2 Carbon Dioxide COD – Chemical Oxygen Demand dB(A) – A-weighted sound pressure level in decibels DO – Dissolved Oxygen GWh – Gigawatt Hour ha – Hectare kg – Kilogram km – Kilometer kV – Kilovolt kWh – Kilowatt Hour

kWh/m2 – Kilowatt Hour Per Square Meter m – Meter m/s – Meters per Second m³ – Cubic Meters mg/l – Milligrams per Liter mg/m3 – Milligrams per Cubic Meter MW – Megawatt – NO2 Nitrogen Dioxide – NOx Nitrogen Oxides oC – Degrees Celsius pH – A measure of the acidity or alkalinity of a solution – PM10 Particulate Matter smaller than 10 micrometers – SO2 Sulfur Dioxide TN – Total Nitrogen TSP – Total Suspended Particulates TWh – Terawatt Hour

TABLE OF CONTENTS

EXECUTIVE SUMMARY ...... I

A. THE PROJECT AND RATIONAL ...... I B. LEGAL FRAMEWORK FOR ENVIRONMENTAL IMPACT ASSESSMENT ...... I C. PROJECT SCOPE ...... II D. POWER PRODUCTION IN A CSP PLANT ...... II E. IMPLEMENTATION ARRANGEMENTS ...... II F. BUDGET AND TIME SCHEDULE ...... II G. DESCRIPTION OF THE ENVIRONMENT ...... III H. ENVIRONMENTAL BASELINE ...... IV I. ANTICIPATED IMPACTS AND MITIGATION MEASURES ...... IV J. ALTERNATIVE ANALYSIS ...... V K. INFORMATION DISCLOSURE AND PUBLIC CONSULTATIONS ...... V L. GRIEVANCE REDRESS MECHANISM...... VIII M. ENVIRONMENTAL MANAGEMENT PLAN ...... VIII N. CONCLUSION ...... VIII

I. INTRODUCTION ...... 1

A. THE PROJECT ...... 1 B. REPORT PURPOSE ...... 4 C. APPROACH TO IEE PREPARATION ...... 4 D. REPORT STRUCTURE ...... 5

II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK ...... 7

A. ENVIRONMENTAL LEGAL FRAMEWORK OF THE PRC ...... 7 B. RELEVANT INTERNATIONAL AGREEMENTS ...... 9 C. OTHER RELEVANT GUIDELINES ...... 9 D. APPLICABLE STANDARDS ...... 10 E. PRC’S ENVIRONMENTAL IMPACT ASSESSMENT FRAMEWORK ...... 11 F. PROJECT DOMESTIC EIA REPORT APPROVAL STATUS AND CONDITIONS ...... 12 G. APPLICABLE ADB POLICIES, REGULATIONS AND REQUIREMENTS ...... 14

III. PROJECT DESCRIPTION ...... 16

A. THE PROJECT ...... 16 B. PROJECT RATIONAL ...... 16 C. PROJECT SCOPE ...... 17 D. POWER PRODUCTION IN A CSP PLANT ...... 17

E. PROJECT LOCATION AND LAYOUT ...... 18 F. CSP GENERATION SYSTEM ...... 21 G. IMPLEMENTATION ARRANGEMENTS ...... 31 H. BUDGET AND TIME SCHEDULE ...... 31

IV. DESCRIPTION OF THE ENVIRONMENT ...... 32

A. LOCATION ...... 32 B. PHYSICAL RESOURCES ...... 32 C. ECOLOGICAL AND SENSITIVE RESOURCES ...... 36 D. SOCIAL AND CULTURAL RESOURCES ...... 37 E. ENVIRONMENTAL BASELINE MONITORING ...... 38

V. ANTICIPATED IMPACTS AND MITIGATION MEASURES ...... 44

A. ANTICIPATED POSITIVE IMPACTS ...... 44 B. POTENTIAL NEGATIVE IMPACTS AND MITIGATION MEASURES ...... 44 C. ANTICIPATED PRE-CONSTRUCTION PHASE IMPACTS AND MITIGATION MEASURES ...... 45 D. ANTICIPATED CONSTRUCTION PHASE IMPACTS AND MITIGATION MEASURES ...... 47 E. ANTICIPATED OPERATION PHASE IMPACTS AND MITIGATION MEASURES ...... 56

VI. ALTERNATIVE ANALYSIS ...... 63

A. NO PROJECT ALTERNATIVE ...... 63 B. ALTERNATIVE METHODS OF GENERATING POWER ...... 63 C. ALTERNATIVE SOLAR POWER GENERATION METHODS ...... 65 D. ALTERNATIVE PROJECT DESIGN ...... 67 E. OVERALL ALTERNATIVE ANALYSIS ...... 69

VII. INFORMATION DISCLOSURE AND PUBLIC CONSULTATION ...... 70

A. PRC AND ADB REQUIREMENTS FOR PUBLIC CONSULTATION ...... 70 B. PROJECT INFORMATION DISCLOSURE AND PUBLIC CONSULTATION ...... 70 C. STAKEHOLDER QUESTIONNAIRE ...... 71 D. FUTURE CONSULTATION ACTIVITIES ...... 74

VIII. GRIEVANCE REDRESS MECHANISM...... 75

A. INTRODUCTION ...... 75 B. ADB’S GRM REQUIREMENTS ...... 75 C. PROPOSED PROJECT GRM ...... 75 D. GRIEVANCE TYPES AND ELIGIBILITY ASSESSMENT ...... 75 E. GRM STEPS AND TIMEFRAME ...... 76

IX. CONCLUSIONS ...... 79

APPENDIX 1: ENVIRONMENTAL MANAGEMENT PLAN ...... 80

A. OBJECTIVES ...... 80 B. IMPLEMENTATION ARRANGEMENTS ...... 80 C. INSTITUTIONAL STRENGTHENING AND CAPACITY BUILDING ...... 82 D. POTENTIAL IMPACTS AND MITIGATION MEASURES ...... 85 E. ENVIRONMENT MONITORING PLAN ...... 85 F. REPORTING REQUIREMENTS ...... 115 G. PERFORMANCE INDICATORS ...... 116 H. ESTIMATED BUDGET FOR MITIGATION AND MONITORING ...... 118 I. MECHANISMS FOR FEEDBACK AND ADJUSTMENT ...... 118 J. EPB ENVIRONMENTAL ACCEPTANCE ...... 118

EXECUTIVE SUMMARY

A. The Project and Rational

1. This is the Initial Environmental Examination (IEE) report for the proposed Gansu Jinta Concentrated Solar Power (CSP) Project (the Project) in Gansu Province of the People’s Republic of China (PRC). The proposed Project will construct a 50 megawatt (MW) CSP plant, which is a first-of-its-kind CSP demonstration plant in the PRC. The Asian Development Bank (ADB) is considering providing a loan of $100 million from ADB’s ordinary capital resources to help finance the Project.

2. The PRC power sector has grown rapidly in recent years in tandem with economic growth, and installed power capacity has expanded by approximately 70% in the past 5 years alone. Coal supplied more than 75% of electricity produced in 2011, and coal dependency for electricity generation has contributed to GHG emissions. The PRC is now widely recognized as the world’s largest GHG emitter.

3. The Government of the PRC has recognized the challenges posed by the rapid rise in energy consumption and associated emissions, and has committed to achieve from 40%–45% carbon intensity reduction by 2020 compared to 2005 levels. It aims to increase the share of non-fossil fuel energy in the primary energy supply to 15% by 2020 compared to 8.4% in 2010. The Twelfth Five-Year Plan (2011–2015) has set intermediate targets of non-fossil fuel energy to 11.4% and 17% decreased carbon intensity by 2015.

4. More than 700,000 square kilometers (km2) of the PRC is suitable for CSP installation, with a potential to generate more than 51,000 terawatt hour (TWh) of electricity per year (compared to PRC’s total electricity generation of 4,700 TWh in 2011). But CSP is at an early stage of development in the PRC, primarily due to limited hands-on experience with the technology.

5. The Project’s location in Jinta County is one of the most suitable locations within Gansu Province, having a direct normal irradiation (DNI) of about 1,921 kWh/ m2 and over 3,320 daylight hours per year. The Project will utilize a parabolic trough CSP and will annually deliver 88 GWh of electricity to the Northwest Power Grid (NWPG). Operation of the Project will avoid estimated annual consumption of an estimated 30,000 tons of standard coal, and estimated annual emissions of 81,000 tons of CO2, 260 tons of SO2, 440 tons of NOx, and 60 tons of TSP. The Project will also provide valuable hands on experience and mitigate some of the technology risks associated with first-of-kind projects. Successful demonstration will help lead to market acceptance and large scale CSP deployment in the PRC.

B. Legal Framework for Environmental Impact Assessment

6. Environmental impact assessment (EIA) procedures have been established in the PRC for over 20 years. Domestic EIA studies are required to be undertaken by relevant PRC environmental laws and regulations. National and local legal and institutional frameworks for EIA review and approval have been established to ensure that proposed projects are environmentally sound, designed to operate in line with applicable regulatory requirements, and are not likely to cause significant environment, health, social, or safety hazards. The domestic EIA report for the Project was prepared by a qualified EIA consultant and submitted to the Gansu Environmental Protection Bureau (EPB) for review. The EIA was approved on 14 ii November 2011.

7. ADB’s Safeguard Policy Statement (SPS, 2009) has also been carefully considered. The Project has been classified by ADB as environment category B, requiring the preparation of an IEE (this report). All applicable requirements of the SPS have been addressed in the IEE.

C. Project Scope

8. The proposed Project will include: (i) 346,620 m2 of solar field area with 106 solar collector loops; (ii) one 50 MW steam turbine and wet cooling; (iii) molten salt-tanks with 1 hour thermal energy storage (TES) capacity; and (iv) natural gas fired heaters for startup and antifreeze protection.

D. Power Production in a CSP Plant

9. CSP is a state-of-the-art renewable energy technology that converts direct solar irradiation into usable heat generating medium to high temperature saturated steam that runs a steam turbine for power generation.

10. The parabolic trough solar collector system is designed to concentrate the sunrays via parabolic curved solar reflectors (mirrors) onto a thermally efficient linear receiver (absorber tubes). The receiver is located in the optical focal line of the collector. The receiver consists of a specially coated metal absorber tube embedded in an evacuated glass envelope. Synthetic thermal oil is used as a heat transfer fluid (HTF) and is circulated in the absorber tubes.

11. The HTF will be heated to approximately 400°C by the sunrays. Heat exchangers will transfer the collected solar energy to water, and this process will continue until the temperature of the water is heated sufficiently to generate steam. After pre-heater, evaporator and super- heater, the superheated stream will be used to run a conventional steam turbine generating kinetic energy and converting it into electrical energy. The cooled HTF will be circulated back to the absorber tubes. The exhaust steam leaving the turbine will be transported to a water cooled condenser, which cools the steam and forms water. The water is returned to the heat exchanger and the cycle is repeated.

E. Implementation Arrangements

12. The borrower will be the Government of the PRC. The China Huadian Corporation (CHD), a wholly state-owned enterprise, will be the executing agency (EA). CHD will take overall responsibility for the Project implementation including financial and audit management. The Gansu Huadian Jinta Solar Thermal Power Co. Ltd. (GHJSP) will be the implementing agency (IA), responsible for day to day project implementation management including procurement and contract management, payment to contractors, operation and maintenance, and social and environment safeguard monitoring. The China Huadian Engineering Co., Ltd. (CHEC), an affiliated enterprise of CHD, will provide management support for procurement and contract management by maintaining oversight of the IA, under the guidance of the EA. GHJSP will be fully owned by CHEC, and will be established in September 2013.

F. Budget and Time Schedule

13. The Project cost is estimated at $169.6 million. The ADB loan will finance $100 million (59.0%) of the total Project cost. The EA will finance $33.9 million (20.0%), and the on-lending iii bank will also provide financing in the amount of $35.7 million (21.0%). The construction period will be approximately 2 years, and the Project expected lifetime is 25 years.

G. Description of the Environment

Location and Topography

14. The Project is located in southern Jinta County, on the eastern edge of City, in northwestern Gansu Province, PRC. Jinta County has an area of 16,700 km2, including 1,200 km2 of oasis area. The Project site is 180 ha (2,700 mu), located approximately 4 km to the southeast of the urban center of Jinta County on a flat plain which is part of the Gobi desert. The Project site is unused desert land under the authority of Jinta County, and has been designated for solar power development. It is considered by local authorities to be “waste land” that it is barren, unoccupied, mostly devoid of vegetation, and has not been used previously for farming, industry, commercial or residential use. The site elevation ranges from 1,266 to 1,274 masl and it has a slope of between 0.1-0.3% from north to south.

Meteorology and Climate

15. Jinta County has a temperate continental arid climate, characterized by low precipitation and high sunshine and evaporation rates; cold winters; warm and wetter summers as a result of flow from the southeast Pacific; cool autumns; and dry springs with numerous sand storms. The majority of rainfall occurs from June to October.

Water Resources

16. There is no surface water at the Project site, and the Beida River, approximately 8 km southwest of the Project site, is the main river and surface water source in the Project area. The Beida River (also referred to as the Taolai River) originates in the Qilian Mountains to the south in Qinghai Province. From Jiuquan the river flows north into the Yuanyangchi and Jiefangcun reservoirs, the latter of which supplies Bantan Lake, the main water source for the Project. Although Jiuquan City is an arid region, surface and water resources in the Project area are relatively abundant, and southern Jinta County is considered one of the oasis areas of the Hexi corridor.

17. The Yuanyangchi Reservoir has a storage capacity of 100,000,000 m3, Jiefangcun Reservoir has a storage capacity of 39,000,000 m3, and Bantan Lake has a storage capacity of 5,000,000 m3. Average flow between the Jiefangcun and Yuanyangchi reservoirs is 363,000,000 m3 per year (480,000,000 m3 in 2010). Water withdrawn from the reservoirs is primarily used for agriculture with a small amount allocated to industry. Groundwater is the main residential water source in Jinta County, and is primarily within two aquifers.

Ecological and Sensitive Resources

18. Jinta County is characterized by typical desert and semi-desert grassland vegetation with low species diversity. Vegetation in the general Project area is sparse; only drought-tolerant species can survive and coverage is less than 2%. The Project site is in unused desert land under the authority of Jinta County, and has been designated for solar power development. It is unoccupied and almost completely devoid of vegetation.

19. Ecological surveys indicate that there are no rare or endangered flora or fauna at the

iv Project site or its immediate vicinity. The Project site does not contain any significant bird habitat and is not located along or near a bird migratory route. There are no parks, nature reserves or protected areas with special ecological significance in the Project area, nor are there surface water sources, scenic areas, cultural or sport facilities, schools, hospitals or clinics. The closest potential sensitive receptor is a residential farming village area to the northwest, the southern edge of which is approximately 350 meters from the northern site boundary at its closest. The power generation complex including the turbine generator will be located in the south central portion of the site, over 1,200 m from the village boundary.

Socioeconomic Conditions

20. Gansu Province has a population of 26.0 million and Jiuquan City has a population of 1.1 million (2011). Jinta County has a population of 151,000 (2012). The GDP of the Jinta County was CNY 5.76 billion in 2012. The tertiary sector and industrial production are the main contributors to the local economy.

Infrastructure Access

21. The Project site is 4 km southeast of the urban center of Jinta County in an area designated by the local government for solar energy development. The site has good access to road, rail and air transportation infrastructure. The site is also served by the local Jinta domestic water supply and electric power systems.

22. The Project will connect to the existing 110 kV substation, which is 6 km away from the east of the site. The Project will construct a 6 km 110 kV transmission line from the Project site to the substation. The Project will also construct water (for production water of the CSP plant) and natural gas pipelines, which will be built in the road right-of-ways within existing municipal infrastructure-service corridors. Thus, they will have minimal impacts.

Physical Cultural Resources

23. There are no known physical cultural resources (PCR) on or adjacent to the Project site. The nearest known PCR are tombs approximately 10 km to the west of the Project site.

H. Environmental Baseline

24. Baseline environmental monitoring was conducted by a certified environmental monitoring station during the preparation of the domestic EIA. The monitoring results indicate that local air quality is in compliance with applicable standards; river water quality met applicable surface water standards with the exception of BOD5, which is believed to be higher than the standards due to the upgrade of the Jiuquan urban wastewater system that had resulted in some non-compliance wastewater discharges in the area; groundwater quality is good and met the applicable standards; and only at southern boundary of the Project site did noise levels exceeds the applicable standard, due to the monitoring site’s proximity to access roads and nearby construction.

I. Anticipated Impacts and Mitigation Measures

25. Anticipated positive and negative environmental impacts of the proposed CSP Project were assessed during the IEE preparation based on the findings of the domestic EIA report and a draft Project feasibility study report, supported by site visits, stakeholder consultations, and v additional surveys undertaken by national and international environmental consultants.

Positive Impacts

26. The electrical power generated by the proposed CSP will replace power that otherwise would have been generated by coal-fired power plants. Once operational the Project will generate approximately 102 gigawatt hours (GWh) of electricity per year and supply 88 GWh to the power grid, thereby avoiding annual consumption of approximately 30,000 tons of standard coal, and providing a global public good by reducing the annual emission of 81,000 tons of carbon dioxide (CO2), a greenhouse gas. In addition, Project operation will have a significant positive impact on air quality by avoiding annual emissions from coal burning of approximately 260 tons of sulpher dioxide (SO2), 440 tons of nitrous oxides (NOx), and 60 tons of total suspended particulates (TSP).

27. The construction of the CSP will play a significant role in utilizing renewable natural resources, saving non-renewable fossil energy, reducing pollution and protecting the ecological environment. The development of solar power will not only save precious non-renewable resources, but also bring benefits to the environment; it thus serves as an important mean to realize the sustainable development of energy, economy and society.

Negative Impacts and Mitigation Measures

28. The results of the assessment analysis indicate that during the pre-construction phase issues are limited, and are mostly to do with ensuring good project design. Key negative construction phase environmental impacts are associated with potential soil erosion, construction noise and fugitive dust. During the operation phase the key negative environmental impacts are associated with water use, risks from HTF leakage-including soil contamination risks, and fire and burn hazards, and wastewater. A summary of key mitigation measures is presented in Table E-1.

J. Alternative Analysis

29. An analysis of Project alternatives was undertaken to determine the best way of achieving the Project objectives while minimizing environmental and social impacts.

30. Coal has provided 70% of the primary energy consumed and nearly 75% of electricity generation in the PRC. If the Project is not implemented, a traditional coal-fired power plant would be built to meet the increasing demand for electricity. This will cause an increase in GHGs and air pollutants.

31. To demonstrate the CSP technology, evaluate the performance of the CSP plant in the PRC and achieve the optimal operating efficiency, the most prevalent and mature CSP technology, parabolic trough CSP with thermal storage and natural gas fired heaters for startup and antifreeze protection, has been selected for the Project. Base on the overall alternative analysis, the Project has selected a suitable location with the most appropriate choice of solar power generation technology.

K. Information Disclosure and Public Consultations

32. Information disclosure and public consultations were conducted in Jinta County in three phases during the course of the domestic EIA preparation:

vi i) Initial information disclosure in 2010, with the EIA team visiting villages in the project site vicinity, and providing the project information to affected people including a project description, potential environmental impacts, and potential mitigation measures to be taken.

ii) Consultation and questionnaire during EIA preparation in 2011, with the EIA team and CHEC visiting local villages and governmental departments, presenting Project information and distributing a questionnaire.

iii) Disclosure of the EIA report through a public information notice of the Project published in the Jiuquan Daily newspaper from 14-21 January, 2011. The domestic EIA Report was also available for review in the Gansu EPB, and this IEE will be available for review at ADB’s website at www.adb.org. vii

Table E-1: Summary of Major Environmental Issues and Mitigation Measures

Phase Environmental Issue Mitigation Measures Pre- Include mitigation measures - Environmental mitigation measures identified in the IEE construction in engineering design, environmental management plan (EMP) and the domestic EIA will bidding and contracting be incorporated in the engineering design documents, and will be included in bidding and civil construction and equipment installation contracts. Impacts on Affected Persons - GRM to be established, including Project Public Complaints Unit (PPCU) in IA’s office. Training needs - Training to be provided to the IA, contractors and construction supervision company (CSC) on EMP implementation. Construction Soil erosion and - Minimize active open excavation, stabilize earthwork disturbance contamination areas, reuse or remove construction wastes. - Plant native trees and grass in the CSP plant to control soil erosion and properly slope and re-vegetate disturbed surfaces. - Use best management practices to prevent oil and chemical spills. Wastewater - Treat construction and domestic wastewater and reuse for dust control. - Provide adequate sanitary facilities and ablutions for construction workers. Noise and vibration - Restrict operation of machinery with high noise and vibration at nighttime and place noise barriers around noise sources. - Provide workers with noise personnel protective equipment (PPE) Fugitive dust - If weather data analysis indicates it is required, construct a wind breaker. - Spray water to suppress dust and cover soil piles. Solid waste - Provide waste storage containers at construction site; wastes should be reused or recycled if possible, and remaining waste should be transported to an approved landfill; transport spoil to approved disposal sites; prohibit on-site burning. HTF - All HTF loading, storage, waste and other facilities to be contained within impermeable concrete surface and dykes. - HTF spill response plan and staff properly trained. - Suppliers of HTF must hold a proper license Other chemicals and - Protocol for the handling and disposal of hazardous materials hazardous materials during construction including a spill prevention and emergency plan. - Storage facilities for fuels, oil, chemicals and other hazardous materials within secured areas on impermeable surfaces provided with dikes. Occupational health and - Contactor to appoint environment, health and safety (EHS) safety Officer; prepare an EHS plan in compliance with the EMP, and provide training on its implementation; workers to be provided personnel protective equipment (PPE); provide signage in risk areas. Physical Cultural Resources - Chance find procedure established. Operation Air pollution - Heaters will use clean burning natural gas. - Heaters will only be used for start-up, HTF temperature control and freezing protection. - Emissions will be in compliance with the WB and PRC standards for natural gas heaters. Soil - Use recycled water to suppress dust emission. - Only non-toxic propylene glycol antifreeze will be used for mirror washing water. Water consumption and - All wastewater produced at the CSP will be treated in accordance wastewater production with PRC standards and reused onsite for site greening and/or dust suppression.

viii

Phase Environmental Issue Mitigation Measures HTF - HTF waste and hazardous waste will be stored temporarily in closed containers by properly trained staff. - HTF fire management plan will be in place. PPE will be worn when handling HTF and other hazardous waste. - HTF and other hazardous waste will be collected and recycled or disposed by licensed contractors. Chemicals and hazardous - Store chemicals and hazardous materials on impermeable materials surfaces with protective dikes - Provide training and PPE to workers. Noise from steam and power - Latest technology incorporating maximum noise suppression generation systems measures for the CSP plant components. - Power generation complex located in the south central portion of the site, approximately 1,200 m from the village boundary. Emergency response and - Develop and implement occupational health and safety plan and worker safety emergency response plan. - Provide training and conduct emergency exercises. - Notify local authorities if emergency affects public safety.

33. The survey results show that most of the participants (84%) knew of the proposed Project, indicating that the Project information had been well disseminated. Almost all participants (98%) felt that the Project will result in an overall environmental improvement, and 100% of participants indicated that the site selection was appropriate and the Project will enhance the local economic development and local employment. All participants (100%) supported the Project.

34. The IA will conduct regular community liaison activities during the construction and operations phases.

L. Grievance Redress Mechanism

35. A project-level grievance redress mechanism (GRM) will be established to receive and facilitate resolution of complaints about the Project’s environmental performance during construction and operation phase. The GRM includes procedures for receiving grievances, recording/ documenting key information, and evaluating and responding to the complainants in a reasonable period of time. Any concerns raised through the GRM will need to be addressed quickly and transparently, and without retribution to the affected person.

M. Environmental Management Plan

36. A comprehensive EMP was developed to ensure (i) implementation of identified mitigation and management measures to avoid, reduce, and mitigate anticipated adverse environment impacts; (ii) implementation of monitoring and reporting against the performance indicators; and (iii) Project compliance with the PRC’s relevant environmental laws, standards, and regulations; and the ADB’s SPS. The EMP includes an environment monitoring plan (EMoP) to monitor the environmental impacts of the Project and assess the effectiveness of mitigation measures, and an instructional strengthening and training program. Organizational responsibilities and budgets are clearly identified for execution, monitoring and reporting. The EMP is presented in Appendix 1.

N. Conclusion

37. The proposed Project is a first-of-kind CSP demonstration project in the PRC. It will bring ix positive environmental benefits locally as well as globally by generating electrical power through zero emission solar energy instead of by a traditional coal-fired power plant. The Project will deliver 88 GWh of electricity to the grid per year, thereby avoiding annual consumption of 30,000 tons of standard coal and providing a global public good by reducing the annual emission of 81,000 tons of carbon dioxide (CO2). In addition, the Project will avoid annual emissions from coal burning of 260 tons of sulpher dioxide (SO2), 440 tons of nitrous oxides (NOx), and 60 tons of total suspended particulates (TSP).

38. The Project environmental assessment process has i) selected an appropriate technology to reduce the emission of pollutants; ii) identified negative environment impacts and appropriately established mitigation measures; iii) received public support from the majority of the Project beneficiaries and affected people; iv) established effective Project GRM procedures; v) assessed the capacity of the EA and the IA; and vi) prepared a comprehensive EMP including environmental management and supervision structure, environmental mitigation and monitoring plans, and institutional strengthening and personnel training.

39. Based on the analysis conducted it is concluded that overall the Project will result in significant positive socioeconomic and environmental benefits, and will not result in significant adverse environmental impacts that are irreversible, diverse, or unprecedented. Any minimal adverse environmental impacts associated with the Project can be prevented, reduced, minimized or otherwise compensated through the appropriate application of mitigation measures and GRM. It is therefore recommended that: i) the Project’s categorization as ADB environment category B is confirmed; ii) this IEE is considered sufficient to meet ADB’s environmental safeguard requirements for the Project, and no additional studies are required; and iii) the Project be supported by ADB, subject to the implementation of the commitments contained in the EMP and allocation of appropriate technical, financial and human resources by the EA and IA to ensure these commitments are effectively and expediently implemented.

I. INTRODUCTION

A. The Project

1. The People’s Republic of China (PRC) power sector has grown rapidly in recent years in tandem with economic growth. Installed power capacity has expanded by approximately 70% in the past 5 years alone. Coal dependency for electricity generation (coal supplied more than 75% of electricity produced in 2011) has contributed to large greenhouse gas (GHG) emissions, and the PRC is now widely recognized as the world’s largest GHG emitter.1

2. The Government of PRC has recognized the challenges posed by the rapid rise in energy consumption and associated emissions and has committed to achieve 40%–45% carbon intensity reduction by 2020 compared to the 2005 level. It aims to increase the share of non- fossil fuel energy in the primary energy supply to 15% by 2020 compared to 8.4% in 2010. The Twelfth Five-Year Plan (2011–2015) has set intermediate targets of non-fossil fuel energy to 11.4% and 17% decreased carbon intensity by 2015.2

3. The proposed Gansu Jinta Concentrated Solar Power (CSP) Project (the Project) will develop a 50 megawatt (MW) CSP plant in Jinta County, Jiuquan City, Gansu Province, PRC (Figure 1-1 and 1-2). The Project is one of the four first generation utility-scale CSP demonstration plants to be built in the PRC.

4. The PRC has more than 700,000 square kilometer (km2) of area suitable for CSP installation. The proposed Project site, which is located about 4 km to the southeast of the urban center of Jinta County, is a highly suitable location due to high direct normal irradiation (DNI) of 1,921 kWh/m2/year and over 3,320 sunlight hours per annum; good access to infrastructure (road, rails and the 110 kV (kilovolt) electric substation); land availability; and availability of water for cleaning and cooling purposes.3

5. The proposed 50 MW plant will use parabolic trough technology with one hour thermal storage and natural gas fired heaters for startup and antifreeze protection. Parabolic trough is the most mature and commercially proven CSP technology, accounting for approximately 94% of operating CSP plants in worldwide.4 Once operational the Project will generate approximately 102 gigawatt hour (GWh) of electricity per year and supply 88 GWh to the power grid, thereby avoiding annual consumption of 30,000 tons of standard coal, and annual emissions of 81,000 tons carbon dioxide (CO2), 260 tons of sulpher dioxide (SO2), 440 tons of nitrous oxides (NOx), and 60 tons of total suspended particulates (TSP).

6. The Project will also provide valuable hands on experience and mitigate some of the technology risks associated with first-of-kind projects. Successful demonstration will help the CSP technology lead to better market acceptance and large scale CSP deployment in the PRC.

1 In 2011, the power sector accounted for about 46% of the total GHG emissions in the PRC. 2 National Energy Administration, 2011. Report on PRC’s Energy Development for 2011. Beijing. 3 Assuming DNI of 1,800 kWh/m²/year as the minimum threshold to make CSP plants economically feasible, Qinghai, Xinjiang, and Xizang, central areas of , the western tip of Gansu, and the northwestern border of Sichuan are the most suitable areas for CSP in the PRC. 4 Other CSP technologies such as solar tower was not selected for the first generation CSP demonstration plants because it has limited operation experience around the world with a higher technical risk compared to parabolic trough.

Figure 1-1: Project Location, Gansu Province 2

Project Location

Figure 1-2: Project Location, Jiuquan City

Project Location 3

4

The Project cost is estimated at $169.6 million. The Asian Development Bank (ADB) is considering providing a loan of $100 million from ADB’s ordinary capital resources to help finance the Project.

B. Report Purpose

7. ADB’s environmental safeguard requirements are specified in the Safeguard Policy Statement (SPS 2009). The Project has been screened and classified by ADB as Environment Category B, requiring the preparation of an Initial Environmental Examination (IEE) including an environmental management plan (EMP). This IEE for the Project has been prepared in compliance with the ADB’s SPS requirements.

C. Approach to IEE Preparation

8. This IEE report has been prepared based on a domestic Feasibility Study Report (FSR), domestic Environmental Impact Assessment (EIA) report, and additional surveys and consultations undertaken by national and international environmental consultants hired for the project preparatory technical assistance (PPTA) of the Project. Key data are presented below:

Project Description - Data sources include: (i) FSR prepared by qualified consultants from the China Huadian Engineering Co., Ltd., a certified domestic feasibility study institute, and the Spanish STA Solar Power Company;5 (ii) domestic EIA report prepared in compliance with the PRC’s environmental assessment requirements and regulatory framework at the national and local levels by a certified EIA institute, the Gansu Environmental Protection Science Design Institute in (see Chapter II for additional information on the domestic EIA process); (iii) Project due diligence work (site visits, surveys, consultations) undertaken by ADB national and international PPTA consultants, including environment, social, and CSP technical specialists.6

Climate - Data sources for local climate include data collected by the domestic EIA consultants from available databases.

Topography, Geology, Soil - Data sources include: (i) field surveys conducted by the domestic EIA consultants from 2010 to 2011; and (ii) site visits conducted by ADB environmental consultants in May 2012 and June 2013.

Terrestrial Ecological Resources - Data sources include: (i) ecological field surveys conducted by the domestic EIA consultants from 2010 to 2011; and (ii) site visits conducted by ADB environmental consultants in May 2012 and June 2013.

Air Quality Baseline - Data sources include: (i) publicly available ambient air monitoring data; (ii) site specific air quality monitoring for particulate matter less than ten micrometer in diameter (PM10), total suspended particulates (TSP), sulfur dioxide (SO2) and nitrogen dioxide (NO2) undertaken by a certified organization on behalf of the IA; and (iii) data collected by the domestic EIA consultants from available existing databases.

Background Noise - Data for background noise levels came from onsite noise

5 Huadian Jinta Hongliuwa 50 MW Solar Thermal Power Station Engineering Feasibility Study Report, Construction Serial No.: CHEC.NE- F137K, prepared by China Huadian Engineering Co., Ltd. and Spanish STA Solar Power Company, July, 2012 6 Consultant services provided through ADB TA-8349 PRC: Gansu Jinta Concentrated Solar Power Project. 5

monitoring undertaken by a certified organization in March 2011.

Water Resources – Baseline water quality data came from samples were collected and analyzed by a certified organization in March 2011.

Socioeconomic Status - Socioeconomic surveys and data were collected by the domestic EIA consultants and the social consultant of the project PPTA.

Public Consultation and Information Disclosure - Project information was disclosed by the IA with the assistance from the domestic EIA consultants between December 2010 and January 2011. Additional public consultations were undertaken by The China Huadian Engineering Co., Ltd. (CHEC), who is the project developer and responsible for the Project until the project implementation agency is established, through questionnaire surveys in the same time period.

Energy Efficiency and Emissions Reduction - Coal saving data was calculated based on the domestic FSR and EIA reports and information from ADB’s CSP technical consultants. Analyses on air pollutant emission reductions were undertaken the PPTA environmental consultants.

D. Report Structure

9. This IEE report consists of an executive summary, nine chapters and an appendix. The report is structured as follows:

Executive Summary Summarizes critical facts, significant findings, and recommended actions.

I Introduction Introduces the proposed Project, scope, report purpose, and IEE structure.

II Policy, Legal, and Administrative Framework Discusses PRC’s and ADB’s environmental assessment legal and institutional frameworks.

III Description of the Project Describes the Project rationale, scope, components, location, layout, impact, budget and implementation schedule.

IV Description of the Environment Describes relevant physical, biological, and socioeconomic conditions within the Project area.

V Anticipated Environmental Impacts and Mitigation Measures Describes impacts predicted to occur as a result of the Project, and identifies suitable mitigation measures.

VI Analysis of Alternatives Presents an analysis of Project alternatives undertaken to determine the best way of achieving the Project objectives while minimizing environmental and social impacts.

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VII Information Disclosure, Consultation, and Participation Describes the process undertaken for engaging stakeholders and carrying out IEE disclosure and public consultation.

VIII Grievance Redress Mechanism Describes the Project grievance redress mechanism (GRM) for resolving complaints.

IX Conclusion and Recommendation Presents conclusions drawn from the assessment and recommendations.

Appendix Presents the environmental management plan (EMP), including required construction and operation phase environmental mitigation measures, an environmental monitoring plan (EMoP), reporting requirements, and capacity building.

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II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK

A. Environmental Legal Framework of the PRC

10. The environmental protection and management system in the PRC consists of a well- defined hierarchy of regulatory, administrative and technical institutions. At the top level the People’s Congress of the PRC has the authority to pass and revise national environmental laws; the Ministry of Environmental Protection (MEP) under the State Council promulgates national environmental regulations; and the MEP either separately or jointly with the Administration of Quality Supervision, Inspection and Quarantine issues national environmental standards. The provincial and local governments can also issue provincial and local environmental regulations and guidelines in accordance with the national ones. In addition, national and local five-year environmental protection plans form an important part of the legal framework.

11. EIA procedures have been established in the PRC for over 20 years. The primary laws that govern the EIA study of new projects are provided in Table 2-1.

Table 2-1: Applicable Environmental Laws

No. Title of the Law Year Issued 1 Environmental Protection Law 1989 2 Environmental Impact Assessment Law 2003 3 Water Law 2002 4 Water Pollution Prevention and Control Law 2008 5 Air Pollution Prevention and Control Law 2000 6 Noise Pollution Control Law 1999 7 Solid Waste Pollution Prevention and Control Law 2005 8 Water and Soil Conservation Law 2011 9 Forest Law 1998 10 Wild Fauna Protection Law 2004 11 Energy Conservation Law 2008 12 Cleaner Production Promotion Law 2012 13 Urban and Rural Planning Law 2008 14 Land Administration Law 1999 Source: PPTA Consultants.

12. The implementation of environmental laws is supported by a series of associated management and technical guidelines issued by the MEP and summarized in Table 2-2.

13. The environmental quality standard system that supports the implementation of the environmental protection laws and regulations in the PRC is classified into two categories by

8 function, pollutant emission/discharge standards and ambient environmental standards. The relevant main standards applicable to the Project are shown in Table 2-3.

Table 2-2: Applicable Environmental Management and Assessment Guidelines

No. Guideline Code/Year 1 Guideline for Technical Review of EIA on Construction Projects HJ 616-2011 2 Management Guideline on EIA Categories of Construction Projects 2008 Further Enhance the Management of EIA and Preventing Environmental 3 2012 Risks Guideline on Jurisdictional Division of Review and Approval of EIAs for 4 2009 Construction Projects 5 Guideline on EIA Categories of Construction Projects 2008 6 Interim Guideline on Public Consultation for EIA 2006 7 Technical Guidelines for EIA – General Program HJ 2.1-2011 8 Technical Guideline for EIA – Atmospheric Environment HJ 2.2-2008 9 Technical Guideline for EIA – Surface Water HJ/T 2.3-1993 10 Technical Guideline for EIA – Acoustic Environment HJ 2.4-2009 11 Technical Guideline for EIA – Groundwater Environment HJ 610-2011 12 Technical Guideline for EIA – Ecological Impact HJ 19-2011 Technical Guidelines for Environmental Risk Assessment for Construction 13 HJ/T 169-2004 Projects Source: PPTA Consultants.

Table 2-3: Applicable Environmental Standards

No. Standard Code 1 Surface Water Quality Standards GB 3838-2002 2 Environmental Quality Standards for Noise GB 3096-2008 GB 3095-1996 and 3 Ambient Air Quality Standards 2000 revised 2012 4 Integrated Emission Standard of Air Pollutants GB 16297-1996 5 Integrated Wastewater Discharge Standard GB 8978-1996 6 Groundwater Quality Standard GB/T 14848-93 7 Standards for Drinking Water Quality GB 5749-2006 8 Water Standard for Irrigating Vegetation GB/T 18920-2002 Pollution Control Standards for Storage and Disposal Site of General 9 GB 18599-2001 Industrial Solid Waste 10 Noise Standards for Construction Site Boundary GB 12523-2011 11 Noise Standards for Industrial Enterprises GB 12348-2008 9

12 Wastewater Quality Standards for Discharge to Municipal Sewers CJ 343-2010 Emission Standard of Air Pollutants from Coal-Burning, Oil-Burning and 13 GB 13271-2001 Gas-Fired Boilers 14 Standard for Pollution Control on Hazardous Waste Storage GB 18597-2001 Source: PPTA Consultants.

14. In addition to environmental laws and regulations, there are occupational health and safety laws and regulations the Project must comply with, including the PRC Safety Production Law (2002), State Administrative Regulations of Safety Production (2004), PRC Occupational Illness Law (2011) and Administrative Regulation of Administration of Occupational Health (2009).

B. Relevant International Agreements

15. The PRC has signed a large number of international agreements regarding environmental and biological protection. Those which have potential application to the Project are listed in Table 2-4.

Table 2-4: Applicable International Agreements

No. Agreement Year Purpose 1 Ramsar Convention on Wetlands of 1975 Prevention of the progressive International Importance Especially as encroachment on and loss of wetlands Waterfowl Habitat for now and the future 2 Convention on Biological Diversity 1993 Conservation and sustainable use of biological diversity 3 United Nations Framework Convention on 1994 Stabilization of greenhouse gas Climate Change concentrations in the atmosphere 4 Kyoto Protocol to the United Nations 2005 Further reduction of greenhouse gas Framework Convention on Climate Change emissions 5 Montreal Protocol on Substances That Deplete 1989 Protection of the ozone layer the Ozone Layer 6 United Nations Convention to Combat 1996 The combating of desertification and Desertification in Those Countries Experiencing mitigating of the effects of drought Serious Drought and/or Desertification Source: PPTA Consultants.

C. Other Relevant Guidelines

16. The World Bank (WB) Group’s Environmental, Health and Safety (EHS) Guidelines are considered as recognized standards for pollution prevention and control technologies and practices in the ADB’s SPS. 7 The general EHS guidelines, in conjunction with the Industry Sector Guidelines, provide the context of international best practice and will contribute to establishing targets for environmental performance. The relevant sector guidelines referenced include: General EHS Guidelines (covering occupational health and safety and community health and safety); Waste Management Facilities sector guidelines; Water and Sanitation

7 World Bank Group, Environmental, Health, and Safety Guidelines, April 30, 2007, Washington, USA. http://www.ifc.org/ifcext/enviro.nsf/Content/EnvironmentalGuidelines

10 sector guidelines; and Electric Power Transmission and Distribution sector guidelines. The air, noise, and water quality standards in the WB’s EHS guidelines have also been referenced in the PRC standards.

D. Applicable Standards

17. Ambient air quality limits are intended to indicate safe exposure levels for the majority of the population, including the very young and the elderly, throughout an individual’s lifetime. Limits are given for one or more specific averaging periods, typically one-hour average, 24- hour average, and/or annual average. There are three sets of ambient air quality standards for Class 1, 2 and 3 areas respectively in the PRC “Ambient Air Quality Standards” (GB 3095-1996 and revisions in 2000. Revision in 2012 is not applicable since the effectiveness is in 2016).8 The World Health Organization (WHO) Air Quality Guidelines are recognized as international standards. The PRC standards and WHO guideline values are shown in Table 2-5. In addition to guideline values, interim targets (IT) are given for each pollutant by the WHO. These are proposed as incremental steps in a progressive reduction of air pollution and are intended for use in areas where pollution is high. The PRC standards are closer to the WHO IT-1 values which are also shown in Table 2-5.9 The PRC standards for Class 2 areas are applicable for the Project.

Table 2-5: PRC Standards and WHO Ambient Air Quality Guidelines

Standard PM10 SO2 NO2 WHO annual mean/IT-1 20/70 -- 40

WHO 24-hr mean/IT-1 50/150 20/125 -- WHO 1-hr mean 200 PRC GB annual mean 40/100 20/60 40/80 (class 1/class 2) PRC GB 24-hr mean 50/150 50/150 80/120 (class 1/class 2) PRC GB 1-hr mean 150/500 120/240 (class 1/class 2) Source: WHO Air Quality Guidelines (2006) and PRC GB 3095-1996, and 2000.

18. The emission limits for fugitive and uncontrolled discharge of new pollution sources covered by “Integrated Emission Standard of Air Pollutants (GB 16297-96)” will be followed for fugitive dust emission from the CSP plant. As for natural gas heater, the PRC standards for natural gas stack emissions (GB 13271-2001) and the WB’s EHS Guidelines-Small Combustion Facilities Emissions Guidelines (3MWth – 50MWth) will be applied.

19. During construction of the CSP facility, noise levels will comply with the standards in “Noise Standards for Construction Site (GB 12523-2011),” and during operation the applicable standard is Category-II Standard stated in “Noise Standards for at Industrial Enterprises (GB 12348-2008).” Construction noise will be evaluated at sensitive receptor sites and operational noise will be evaluated within one meter of the boundary of the CSP facility.

8 Class 1 area includes natural reserve and environmentally sensitive areas; Class 2 area includes most of PRC areas other than Class 1 and 3; and Class 3 is for specially designated industrial area. 9 T-1 levels are associated with about a 15% higher long-term mortality risk relative to the WHO air quality guideline level. 11

20. The Project will also comply with relevant PRC waste standards, including the Category I Standard of “Pollution Control Standards for Storage and Disposal Site of General Industrial Solid Waste (GB 18599-2001)” and “Standard for Pollution Control on Hazardous Waste Storage (GB 18597-2001)”.

21. The Project will also comply with relevant PRC wastewater standards, including Class I of the “Integrated Wastewater Discharge Standard (GB 8978-1996)”, Wastewater Discharge Standard, Class I, GB 18918-2002, “Water Standards for Irrigating Vegetation (GB/T 18920- 2002)”,and Code for design of wastewater reclamation and reuse (GB 50335-2002)” (Table 2- 6).

Table 2-6: PRC’s Wastewater Standards Type of COD SS BOD NH -N Parameter 5 3 Wastewater (mg/L) (mg/L) (mg/L) (mg/L) Wastewater Standard, Class I, GB 8978- 100 70 20 15 Industrial 1996 Wastewater Standard, GB/T 18920-2002 - - 20 20 Wastewater Standard, Class I, GB 8978- Residential 100 70 20 15 1996 Wastewater Discharge Standard, Class I, GB 18918-2002 (A (treated water for 50/60 10/30 10/20 5(8)/8(15) reuse/B(treated water for discharge to lake) Wastewater Standard, GB/T 18920-2002 - - 20 20 Type of Turbidity COD cr SS DS BOD NH -N Wastewater Parameter NTU 5 3 (mg/L) (mg/L) (mg/L) (mg/L) (mg/L) (mg/L) Direct flow cooling - 30 - - 30 - Wastewater Recycling cooling reclamation 60 - 5 - 10 10 and reuse water (Code of Toilet - - 5 1500 10 10 design of Dust control - - 10 1500 15 10 wastewater reclamation Vegetation watering - - 10 1000 20 20 and reuse, Vehicle washing - - 5 1000 10 10 GB 50335- Building 2002) - - 20 - 20 20 construction COD, SS, BOD, NTU, DS, NH3-N Source: Gansu Jinta CSP PRC EIA Report (2011) and PPTA consultants

22. Considering the current environmental conditions, the Project specific situations, and environmental benefits the Project will bring, it is appropriate for the Project to comply with relevant PRC standards.

E. PRC’s Environmental Impact Assessment Framework

23. Article 16 of the PRC Law on Environmental Impact Assessment (2003) stipulates that an EIA document is required for any capital construction project producing significant environmental impacts. On 2 September 2008, the MEP issued the “Management Guideline on

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EIA Categories of Construction Projects,” which classifies projects into three categories:

(i) Category A: Projects with significant adverse environmental impacts, for which a full EIA report is required; (ii) Category B: Projects with adverse environmental impacts which are of a lesser degree and/or significance than those of Category A, for which a simplified tabular EIA report is required; and (iii) Category C: Projects unlikely to have adverse environmental impacts, for which an EIA registration form is required.

24. Based on MEP’s guidelines, a full EIA report and a simplified tabular EIA report for category A and B are similar to ADB’s EIA and IEE reports, respectively. The registration form of an EIA is similar to an ADB Category C project (see section II.G for more information on ADB’s EIA requirements).

25. The MEP guidelines provide detailed EIA requirements for 23 sectors and 198 subsectors based on the project’s size, type (e.g., water resources development, agriculture, energy, waste management, etc.), and site environmental sensitivity (e.g., protected nature reserves and cultural heritage sites). In accordance with the guidelines, the proposed Project has been classified into the subcategories of Social and Regional Development and Energy Efficiency Improvement, requiring the preparation of an EIA.

26. The PRC MEP’s “Guidelines on Jurisdictional Division of Review and Approval of EIAs for Construction Projects” (2009) defines which construction project EIAs require MEP review and approval, and which EIAs are delegated to the provincial EPBs. The proposed Project was delegated to the Gansu EPB for EIA review and approval.

F. Project Domestic EIA Report Approval Status and Conditions

27. The Gansu Jinta CSP EIA report was prepared by qualified EIA consultants of the Gansu Environmental Protection Science Design Institute in Lanzhou. The EIA was submitted to the Gansu provincial EPB, which organized an environmental team to review the report. Based on the evaluation’s recommendation, the Gansu EPB approved the Project EIA on 14 November 2011. The approval document specifies requirements for the IA to comply with during construction and operation, summarized as follows:

i) Gansu EPB has authorized the Jiuquan and Jinta EPBs to take the lead for environmental monitoring and inspection of the Project during the construction period.

ii) Project construction should comply with State environmental laws and regulations, and pollution emissions should meet relevant discharge standards.

iii) The main environmental impacts during Project construction include noise, construction wastewater, residential wastewater, dust and soil loss. To address these environmental issues, the mitigation measures in the EIA report should be undertaken.

iv) The layout of construction sites should be rationalized, and construction schedule optimized. Minimize the impact of construction activities by limiting 13

the areas of temporary facilities such as worker’s camp, construction roads, etc. The ecological system is weak in the Project area, and soil erosion control measures should be taken.

v) Ambient air protection measures should be taken as per the EIA report, including management of soil storage sites, material sites and construction camps; and covering and water spray measures should be taken to control dust emissions. The flue gas from gas fired heaters should meet the discharge standard (GB 13271-2001).

vi) Production wastewater should be treated onsite by physical (reverse osmosis) and chemical methods. The treated water is to be used as makeup water for the water recycling system, and concentrated wastewater is to be used for dust control or sent to evaporation without any discharge.

vii) Residential wastewater is treated by underground septic system; the treated water is used to water trees and grasses in the near term, and may be sent to an urban wastewater treatment plant in the future. A 500 m3 buffer pond should be established to accept any accident discharge.

viii) Give priority to utilizing equipment with low noise levels in construction and operation periods and implement noise-reduction measures for equipment with high levels of noise to avoid disturbance to the public; a 50 m wide isolation zone should be secured for possible noise impact control during Project operation.

ix) Solid waste and construction waste should be collected and transported to designated site for treatment.

x) During Project operation, hazardous materials including heat transfer fluid (HTF), HTF residue, and waste lubricant oil will be generated; the hazardous waste should be properly stored and treated, and the HTF provider will be responsible for the collection and treatment of the waste HTF. A 20 m3 hazardous waste storage tank should be constructed to temporarily store the hazardous waste. The waste lubricant oil and waste HTF should be collected and stored in a steel tank, and then sent to Gansu Hazardous Waste Treatment Center for treatment. The storage, transport of hazardous waste should be conducted strictly following regulations for hazardous waste treatment. The temporary storage of waste storage batteries, electrical components, transformer fluid and greasy wastes from the recycling of heat transfer oil shall stringently comply with the requirements of the “Standard for Pollution Control on Hazardous Waste Storage” (GB 18597-2001) to prevent pollution.

xi) During Project operation, light pollution should be monitored, and in case of any light pollution of sensitive sites, mitigation measures should be undertaken.

xii) The main environmental risks include fire and explosion due to leakage of heat transfer oil and natural gas, and groundwater pollution due to leakage of oils. Work safety measures should be taken to avoid leakage of heat transfer oil and natural gas, anti-penetration measures should be taken at storage tank area to

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avoid water pollution. Accident emergency preparedness should be worked out and work safety training should be conducted to avoid environmental pollution and ecological impact.

xiii) After the completion of construction and prior to CSP operation, the IA shall submit an application to the Jiuquan Environmental Protection Bureau (EPB) for environmental acceptance testing in compliance with the “Management Guidelines for Environmental Protection for Check and Acceptance of Completed Construction Projects” (2002). The CSP plant can only be put into operation after receiving approval from the Gansu EPB.

G. Applicable ADB Policies, Regulations and Requirements

28. The major applicable ADB policies, regulations, requirements and procedures for EIA are the Environmental Safeguards – A Good Practice Sourcebook (2012), and the Safeguard Policy Statement (SPS 2009), which provides the basis for this IEE. The SPS promotes good international practice as reflected in internationally recognized standards such as the WB’s EHS Guidelines. The policy is underpinned by the ADB Operations Manual for the SPS (OM Section F1, 2010).

29. All projects funded by ADB must comply with the SPS, which establishes an environmental review process to ensure that projects undertaken as part of programs funded through ADB loans are environmentally sound, are designed to operate in line with applicable regulatory requirements, and are not likely to cause significant environment, health, social, or safety hazards.

30. At an early stage in the project cycle, typically the project identification stage, ADB screens and categorizes proposed projects based on the significance of potential project impacts and risks. A project’s environment category is determined by the category of its most environmentally sensitive component, including direct, indirect, induced, and cumulative impacts. Project screening and categorization are undertaken to:

i) reflect the significance of the project’s potential environmental impacts;

ii) identify the type and level of environmental assessment and institutional resources required for the safeguard measures proportionate to the nature, scale, magnitude and sensitivity of the proposed project’s potential impacts; and,

iii) determine consultation and disclosure requirements.

31. ADB assigns a proposed project to one of the following categories:

i) Category A. Proposed project is likely to have significant adverse environmental impacts that are irreversible, diverse, or unprecedented; impacts may affect an area larger than the sites or facilities subject to physical works. A full-scale environmental impact assessment (EIA) including an environmental management plan (EMP), is required.

ii) Category B. Proposed project’s potential environmental impacts are less adverse and fewer in number than those of category A projects; impacts are 15

site-specific, few if any of them are irreversible, and impacts can be readily addressed through mitigation measures. An initial environmental examination (IEE), including an EMP, is required.

iii) Category C. Proposed project is likely to have minimal or no adverse environmental impacts. No EIA or IEE is required although environmental implications need to be reviewed.

iv) Category FI. Proposed project involves the investment of ADB funds to, or through, a financial intermediary.

32. The Project has been classified by ADB as environment category B, requiring the preparation of an IEE (this report).

33. The SPS 2009 requires a number of additional considerations, including: (i) project risk and respective mitigation measures and project assurances; (ii) project-level grievance redress mechanism; (iii) definition of the project area of influence; (iv) physical cultural resources damage prevention analysis; (v) climate change mitigation and adaptation; (vi) occupational and community health and safety requirements (including emergency preparedness and response); (vii) economic displacement that is not part of land acquisition; (viii) biodiversity conservation and natural resources management requirements; (ix) provision of sufficient justification if local standards are used; (x) assurance of adequate consultation and participation; and (xi) assurance that the EMP includes an implementation schedule and measurable performance indicators. These requirements, which may not be covered in the domestic EIA, have been considered, and all applicable environmental requirements in the SPS 2009 are covered in this IEE.

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III. PROJECT DESCRIPTION

A. The Project

34. The proposed Gansu Jinta CSP Project will construct a 50 megawatt (MW) concentrated solar thermal power (CSP) plant in Jinta County, Jiuquan City, Gansu Province. The Project is one of the four first generation utility-scale CSP demonstration plants to be built in the PRC. The Project will be a first-of-kind CSP demonstration plant using one hour thermal energy storage in the PRC.

B. Project Rational

35. The power sector in the PRC has grown rapidly in tandem with economic growth, and installed power capacity has expanded by approximately 70% in the past five years alone. Since the power sector relies heavily on coal-fired power generation which accounts for more than 75% of total electricity produced, the rapid expansion in capacity has caused a large increase in Carbon Dioxide (CO2) emissions, the major greenhouse gas (GHG) responsible for climate change. Promoting a more diversified energy mix with a higher share of renewable energy is a core priority to decarbonize the country’s power sector and reduce its carbon intensity.

36. In 2005, the Renewable Energy Law of the PRC was enacted to stimulate large scale renewable energy development. The Renewable Energy Law was accompanied by a set of incentives and policy measures to promote non-hydro renewable technologies. In 2007, the National Development and Reform Commission (NDRC) issued the Medium and Long-Term Development Plan for Renewable Energy in the PRC, which aims to increase the share of renewable energy in the total primary energy consumption to 15% by 2020. The Twelfth Five- Year Plan, 2011-2015, has set an intermediate target to increase the share of renewable energy to 11.4% and to reduce decrease carbon intensity by 17% by 2015 compared with 2005 levels, so as to meet the 2020 targets.

37. According to the Jinta County DRC the total planned power generation capacity of Gansu province is 10,000 MW by 2020, including: 2,500 MW PV capacity, 800 MW CSP capacity, 4,000 MW coal fired capacity, 1,500 MW wind power capacity, and 1,200 MW capacity from other power projects.

38. CSP is a state-of-the-art renewable energy technology that converts direct solar irradiation into usable heat generating medium to high temperature saturated steam that runs a steam turbine for power generation. Combined with thermal energy storage, CSP plants can run at full load during the night time or during the day time periods of insufficient direct solar irradiation. Thus, CSP plants can produce reliable, predicable, and dispatchable electricity at any time of the day allowing grid companies to schedule their dispatches economically. This unique feature enables CSP to overcome grid integration issues posed by unpredictable wind and solar PV plants. By 2012, utility scale CSP plants of 2.46 GW installed capacity were in commercial operation and an additional 2.36 GW installed capacity were under construction, mainly in Spain and the United States.

39. CSP plants require direct normal irradiance (DNI) of at least 1,900 kilowatt hour per 17 square meter (kWh/m2). In the PRC, more than 700,000 square kilometers (km2) are suitable for CSP installation, with a potential to generate more than 51,000 terawatt hour (TWh) of electricity per year (compared to PRC’s total electricity generation of 4,700 TWh in 2011). But CSP is at an early stage of development in the PRC primarily due to limited hands-on experience with the technology. Other factors such as extreme cold climate and water scarcity in suitable locations combined with a lack of CSP specific development policy and insufficient tariff support have inhibited or slowed investment in CSP, thereby causing a delay in CSP demonstration and deployment.

40. The Project’s location in Jinta County is one of the most suitable locations within Gansu province, having a DNI of about 1,921 kWh/ m2 and over 3,320 daylight hours per year. The Project will utilize a parabolic trough CSP, which is one of the four major CSP technologies, with 50 MW of installed capacity and 1 hour thermal storage system. On completion the Project will annually deliver an estimated 88 GWh of (net) electricity, which will feed into a 110 kV substation 6 km east of the site, and which is part of the Northwest Power Grid (NWPG). Operation of the Project will avoid an estimated annual consumption of 30,000 tons of standard coal, and estimated annual emissions of 81,000 tons of CO2, 260 tons of SO2, 440 tons of NOx, and 60 tons of TSP.

C. Project Scope

41. The proposed Project will include: (i) a 346,620 m2 solar mirror field area with 106 solar collector loops; (ii) one 50 MW steam turbine with wet cooling; (iii) two molten salt-tanks with 1 hour thermal energy storage (TES) capacity; and (iv) natural gas heaters for startup and antifreeze protection.

D. Power Production in a CSP Plant

42. CSP technologies generate electricity in a similar way to conventional power stations, by using steam to drive a turbine. The fundamental principle of CSP technologies is to collect the energy carried by sunrays, allowing a heat transfer fluid (HTF) to absorb the collected energy, and then converting the thermal energy into electricity. Excess energy is stored in molten salt tanks and is used when sunrays are insufficient to generate energy. The process of energy conversion in a CSP plant is illustrated in Figure 3-1.

43. The parabolic trough solar collector system is designed to concentrate the sunrays via parabolic curved solar reflectors (mirrors) onto a thermally efficient linear receiver (absorber tubes). The receiver is located in the optical focal line of the collector. The receiver consists of a specially coated metal absorber tube embedded in an evacuated glass envelope. Synthetic thermal oil is used as the HTF and is circulated in the absorber tubes.

44. The HTF will be heated to approximately 400°C by the sunrays. Heat exchangers will transfer the collected solar energy to water, and this process will continue until the temperature of the water is heated sufficiently to generate steam. After pre-heater, evaporator, and super- heater, the superheated stream will be used to run a conventional steam turbine generating kinetic energy and converting it into electrical energy. The cooled HTF will be circulated back to the absorber tubes. The exhaust steam leaving the turbine will be transported to a water cooled condenser, which cools the steam and forms water. The water is returned to the heat exchanger and the cycle is repeated.

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Figure 3-1: Major Components of a CSP Plant

TES HTF/Salt HE Solar Irradiation Excessive Heat Energy

Heat Energy Heated HTF Parabolic Mirrors HCE HTF/Water HE

Steam Grid Electricity Substation Steam Turbine

HCE‐heat collection element; HTF‐heat transfer fluid; TES‐thermal energy storage; HE‐heat exchanger

Source: PPTA consultants.

E. Project Location and Layout

1. Location and Main Infrastructure Layout

45. The Gansu Jinta CSP Project will be located on a 2,700 mu (180 ha) site located about 4 km southeast of the Jinta County downtown area, in Gansu Province (Figures 1-1, 1-2 and 3-2). The site is in an area designated by Jinta County for solar power development, which has been secured by CHEC and will be leased from Jinta County for 30 years. The site is unused desert land under the authority of Jinta County, and is considered by local authorities to be “waste land” in that it is barren, unoccupied, mostly devoid of vegetation, and has not been used previously for farming, industry, commercial or residential use. Thus the Project will not require any land acquisition or resettlement.

46. The site is easily accessed off provincial highway No. 214, 4 km to the west. Local roads provide access to the site boundary, and the Project will develop all required necessary access roads within the site boundaries.

47. A Donghua C/LNG station is located approximately 7.4 km by road from the Project site boundary. Water will be sourced from Bantan Lake at the Jinta oasis through underground pipelines. The Project location including main infrastructure (water supply, natural gas supply, transmission line) is shown in Figure 3-3.

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Figure 3-2: Project Site, Jinta County, Gansu Province, PRC

Source: Jinta DRC and Google Earth.

Figure 3-3: Project Site and Main Infrastructure Layout

Source: Jinta County NRC and Google Earth

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2. CSP Layout

48. The CSP plant will be divided into two areas: the solar energy collection area (e.g. the solar mirror field) and the electrical power generation complex (including the turbine, HTF main pumping station, HTF system area, fire truck house, molten salt tank area, heat conversion system, natural gas supply station, office building, water pumping station, impounding water ponds and wastewater treatment facility) (Figures 3-4 and 3-5). The solar energy collection area will be in the central north portion of the site, and the power generation complex will be located at the extreme southern of the solar field, as far from the nearest village to the north as possible.

Figure 3-4: CSP Layout (at preliminary design stage)

Source: The China Huadian Engineering Co., Ltd. (CHEC)

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Figure 3-5: Power Generation Complex Layout (at preliminary design stage)

Source: The China Huadian Engineering Co., Ltd. (CHEC)

F. CSP Generation System

49. The CSP generation system includes five subsystems: (i) concentrating solar energy; (ii) heat exchange; (iii) power generation; (iv) heat accumulation and storage; and (v) auxiliary power. The entire CSP system is illustrated in Figure 3-6.

1. Concentrating Solar Energy Subsystem (Solar Mirror Field)

50. The concentrating solar energy subsystem is the core of the entire CSP system. The solar mirror field is a modular distributed system of solar collector assemblies (SCAs). Each module is called a “loop”, which is formed with four SCAs. Two SCAs are connected in series by pipes to form one row and two rows next to each other forms a loop. The loops are connected in parallel through insulated pipes and they work independently. The solar field in this project consists of 106 loops.

51. Each SCA is formed by twelve solar collection elements (SCEs). SCE includes reflective mirrors, supporting structure, heat receivers, monitoring control equipment, and driving devices.

52. Reflective mirrors are critical optical components of the CSP system. The mirrors are parabolic in shape and are made of low-iron glass with silver coated back surfaces. This type of glass has good sunlight irradiance transmission due to its low iron content, which prevents sun

22 rays being absorbed by the glass.

Figure 3-6: Concentrated Solar Power System Schematic

Source: Abengoa (www.abengoa.com)

53. Ultra-white thin glass is used for the mirrors to ensure a solar energy reflection rate of over 94%. The glass is composed of one low iron glass layer, coated by high reflection silver at the back, and then protected by a copper layer and a final weather resistant layer further back (Figure 3-7). This structure increases the strength of the mirror, minimizing breakage and helping to ensure a long life time. The mirrors will be periodically cleaned using water. Mirror cleaning in winter may be performed using brush cleaning or other method instead of water cleaning to avoid the risk of damage from icing. 23

Figure 3-7: Typical Parabolic Mirror

Source: Flabeg(www.flabeg.com).

54. The concentrated solar energy is transferred to low temperature HTF distributed in the receiver-absorber tubes and the solar field pipes. The Project will use synthetic oil as the HTF, consisting of diphenyl ether (73.5%) and biphenyl (26.5%); about 1,350 tons will be required. The Project HTF is a colorless, flammable and toxic chemical with a distinct smell. It is in liquid form with a density of 1.06 g/cm3 at 25 °C, and solidifies at 12 °C. The flash point of HTF is 110°C using a Pensky-Martens closed tester and 124°C using a Cleveland open cup tester. Its fire point is 127°C and auto-ignition point is 612°C.

55. The HTF piping system will be pressurized. Detection devices will detect any pressure change, which can be considered to be HTF leakage. When the pressure drops, automatic control valves will shut off at the entrance and exit of the loop so that the loop can be isolated from the rest of the solar field. Minor HTF leakage cannot be detected by the detection devices, thus, inspection and monitoring will also be conducted to detect the minor HTF leakage by smell.

56. The heat receiver-absorber tubes, which are located in the focus line of the reflective mirror, consist of two concentric tubes separated in a vacuum. The inner tube is made of carbon steel coated with heat absorbing layer. The inner tube, which contains the HTF, is insulated by an evacuated outer tube that is made of glass with high solar transmittance. A reflection-reduction coating is applied to the outside the glass tube such that 96% of the solar energy will be transmitted through the glass tube. At both ends of the tube expansion joints are installed to accommodate differences between the steel pipe and glass pipes. Inside each glass tube there is a device which changes color when the vacuum level is changed. As vacuum loss will lead to HTF heat loss, frequent visual inspections will be conducted to check all tubes and detect any changes in vacuum levels.

57. The structure of a heat absorber tube is illustrated in Figure 3-8.

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Figure 3-8: Structure of a Heat Absorber Tube

Source: Abengoa (www.abengoa.com)

58. Each SCE is mounted to a supporting structure, which interfaces with the collector foundation and provides the rigidity to the SCAs (Figure 3-9). The structure with tracing and driving systems is designed to enable SCAs to track the sun from sunrise to sunset. The axles to support SCAs usually lines up in a south-north direction. Each SCA is equipped with a sun sensor and can rotate from east to west along a rotation axle so that it can track the sunlight and maximize solar energy to be collected (see Figure 3-10 and 3-11). During cloudy days and at night, the mirrors will be in a face down position to protect the mirrors and minimize the dust deposition on the surfaces of the mirrors. The supporting structures will be designed taking into consideration wind loads in the Project site.

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Figure 3-9: Different Types of CSP Mirror Support Systems

Source: PPTA consultant.

Figure 3-10: Solar Collection System Tracking the Sun

Source: PPTA consultant.

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Figure 3-11: Solar Concentration Element

Source: PPTA consultant.

2. Heat Conversion Subsystem

59. The heat transfer system will transfer the collected heat energy from the solar collection loops to the water/steam circulation loop in the power block area via heat exchangers. In addition, surplus heat energy collected will be transferred to the molten salt for thermal energy storage.

60. Concentrated sun rays will heat the HTF to approximately 400°C. The heated HTF will be circulated within the closed collector pipe system and fed into HTF-water heat exchangers, where the collected solar energy in the HTF is transferred to water that is circulated in the turbine loop. This process continues until the temperature of the water is heated sufficiently to generate steam. Under normal operation the temperature of HTF entering the solar energy heat collection area is about 290 °C, and when it leaves the solar loop it is about 393 °C.

61. The cooled HTF will be sent back to the solar field or the thermal storage system where the surplus heat from HTF can be stored. The HTF containing surplus heat will be sent to HTF- molten salt heat exchangers and will heat up molten salt in the thermal storage system. All parts of the HTF system and the piping will be insulated with mineral wool to reduce thermal energy loss, and thermal-bridge stoppers will be attached wherever HTF pipes have contact with other metal and concrete materials. All connection and ball joints will be equipped with weather resistant gaskets and covers to prevent leakage and provide sand damage protection.

62. Maintaining high quality HTF is critical for ensuring efficiency of the solar energy collection and conversion systems. Over time HTF slowly degrades and requires replacement. Approximately 2% of the total HTF, around 27 tons, will be replaced annually. The process of injecting new HTF and extracting waste HTF will occur at the ullage system, where the HTF will be cleaned by filtering and capture of HTF degradation gases. The degraded HTF will be considered a hazardous waste, and will be collected and temporarily stored on site in a secure waste oil storage tank. It will be collected by a certified HTF waste handling company on a regular basis, who will then treat and recycle it.

63. The entire ullage system area will be contained within a concrete foundation with bund walls high enough to hold expected amount of degraded HTF to be collected at the ullage system. This will minimize the risk of HTF leakage and spillover in the ullage system. 27

64. When HTF is heated its volume increases. To accommodate this, the Project will incorporate an HTF expansion system, consisting of expansion tanks, overflow containers and pipes. The HTF expansion tank will be filled with nitrogen gas, and is usually located in an elevated position. The HTF expansion system will have a concrete dike underneath with enough capacity to hold all HTF in the expansion tank so as to prevent soil contamination from any accidental HTF leak and spillover. Overflow containers will be installed to hold additional HTF when the expansion vessel reaches its maximum capacity. When the volume of HTF is reduced, overflow return pumps will move the HTF from the overflow containers back to the expansion tank, so that a sufficient amount of HTF is maintained in the expansion tank.

65. The temperature of HTF in some parts of the system may drop in the evenings or during cold weather. When the thermal gauge detects a temperature drop, main pumps in the HTF system will operate to keep circulating HTF so as to regulate the temperature throughout the entire HTF system. If the temperature of HTF cannot be kept above 250oC, a natural gas heater will be used to heat it to prevent freezing. The pump and HTF heater will operate until the HTF system is out of antifreeze mode.

3. Power Generation System

66. The power generation system consists of a 50 MW steam turbine generator, a preheater, a steam generator, a super-heater and a re-heater. The main parameters of the steam turbine generator are presented in Table 3-1.

67. Thermal energy from the heated HTF is transferred to water through HTF-water heat exchangers. Through the pre-heater, the steam generator and the super-heater, the water turns into super-heated steam. The super-heated steam will run a conventional steam turbine in the power block to generate mechanical energy, which then, is converted to electrical energy. The system has a two-pressure turbine configuration which is adapted to the working temperature achievable by heated HTF and is designed for efficient solar energy conversion. The exhaust steam from turbines will be transported to a condenser, where the steam will be condensed to a liquid state. The water will be returned to the HTF-water heat exchangers.

Table 3-1: Steam Turbine Generator Unit Parameters

Parameter Unit Data

Rated power MW 50 Rated voltage kV 10.5 Rated frequency Hz 50 Rated speed r.p.m 3,000 Turbine-inlet temperature °C 371-383 Turbine-inlet pressure MPa 9.5 Rated turbine-inlet steam t/h 220 Source: Huadian Jinta Solar Thermal Power Station Engineering Feasibility Study Report, 2012.

4. Cooling System

68. The Project will use wet cooling system (evaporative cooling). Once steam has passed

28 through a turbine, it must be cooled back into water before it can be reused to produce more electricity. Colder water cools the steam more effectively and allows more efficient electricity generation. Wet cooling system uses a cooling tower to expose water to ambient air in order to provide cooling. Some of the water evaporates; the rest is then sent back to the condenser. The evaporative heat transfer aspect of wet cooling that makes it a better performing system when compared to dry cooling system. It consumes more water10 than dry cooling system but it is a predominant method for power plant due to high efficiency.

5. Thermal Energy Storage

69. Thermal energy storage (TES) involves diverting excess heat collected from the sun to a storage material such as molten salt. When power production is required during a cloudy period, the stored heat is released into the steam cycle and the plant continues to produce electricity. Having thermal storage will give a “buffering” capacity to the CSP plant, allowing smooth electricity production and eliminating short-term variations that other solar technologies exhibit during cloudy days. In this project, TES is designed to generate normal power for one hour.

70. The TES system contains one hot and one cold molten salt tanks, six tubular heat exchangers, molten salt pumps, and immersed electric heaters. The thermal storage medium is a 60% sodium nitrate (NaNO3) and 40% potassium nitrate (KNO3) molten salt mixture. It can absorb moisture so nitrogen will be used to prevent water entering the tanks. Good insulation at the bottom of the tanks is critical to prevent heat loss, and the molten salt tanks will be insulated by mineral wool or fiberglass insulation.

71. The excess heat in the HTF it will be transferred to the molten salt through HTF-molten salt heat exchangers, and the heated molten salt will be pumped to the thermal storage tank. The temperature of the hot molten salt can reach 386 °C. If the temperature of the molten salt drops between 223 and 238 °C, it solidifies. Thus, the temperature of the molten salt will be maintained above 240 °C at all times to avoid damage to the TES system. The molten salt can be heated using the heat from the HTF or the immersive electric heaters to be installed inside the molten salt tanks.

72. When heat generated from the solar energy collection system is insufficient, the heat stored in the hot molten salt will be transferred to the HTF via HTF-molten salt heat exchangers. The heated HTF will then be sent to HTF-water heat exchangers to heat water to generate steam for running the turbine.

6. Auxiliary Facilities

a) HTF tanks

73. After the completion of the system installation HTF will need to be added into the HTF piping system. Prior to HTF injection, HTF tank and pipe systems need to be filled with nitrogen gas in order to prevent HTF contact with air. As it is a slow process to fill HTF in the entire system, it normally takes a week. Usually a CSP plant is equipped with HTF storage tanks with 2-3 truck volume and HTF expansion tanks. The area where HTF tanks are located must have

10 According to the CSP PPTA technical consultants, around 4 kg water is used to generate 1 KWh of electricity. The project is expected to generate 88 GWh electricity per year, which means that the wet cooling of the project will consume around 352,000 m3 of water per year. 29 impermeable surface with bund walls to hold 110% of total HTF amount in order to prevent any soil contamination from HTF leakage.

b) Nitrogen Storage Tanks

74. Nitrogen gas will be used to prevent HTF and molten salt from contacting air. Nitrogen will be delivered to the Project site in cylinders, compressed by a nitrogen compressor and stored in onsite liquid nitrogen storage tanks.

c) Water Purification System

75. The water used for mirror cleaning and generating steam needs to be purified before it can be used. The suspended solids and dissolved impurities will be removed using reverse osmosis and either ion exchange resins or electrode-ionization. The system will generate ultrapure water.

d) Automatic Control System

76. The Project will install a Distributed Control System (DCS), which will monitor all major components of the CSP plant, including their system configurations and working status. DCS enables the automation in plant operation and enhances the ability of the plant to quickly respond to any defaults and risks during the operation.

7. Other Project Components

a) Water Sources, Water Supply Pipeline and Water Storage Pond

77. An estimated 380,000 m3 of water will be required per year, most of which will be used for wet cooling, the turbine water/steam system and mirror washing. Production water will be sourced from Bantan Lake, which is supplied by an open channel from Jiefangcun Reservoir, and which in turn is supplied by Yuanyangchi Reservoir (Figure 3-3). The environmental due diligence confirmed that there is no risk of water shortage in Bantan lake caused by frozen water channels between Bantan Lake, Jiefangcun and Yuanyangchi Reservoirs. The reservoirs have been created by a dam on the Beida River (also referred to as the Taolai River). Water will be transported from Bantan Lake through a 3.5 km road side 600 mm diameter insulated pipeline buried below the frost line. Filtering and chlorination will be conducted at the water intake in order to protect the water pump and pipeline. The pipeline will be in the road right-of- way, and no land acquisition will be required. Domestic water will come from the municipal water supply network, which has been built and is managed by the Jinta Water Company.

78. The Project will include a 2,000 m3 onsite storage pond. The water stored in the pond will be used for emergency backup in case of any interpretation of the water supply. In addition, the Project will use domestic water from the municipality water supply system as a secondary backup emergency plan.

b) Natural Gas Source and Pipeline

79. Natural gas will be used for CSP plant start-up and freeze-protection. The estimated annual natural gas consumption will be approximately 1.4 million Nm3, and the Jinta DRC has issued a commitment letter to supply up to 8 million Nm3 per year.

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80. Natural gas in Jinta is sourced from the Sebei gas field in Qinghai and delivered to in Gansu by pipeline. From there LNG is trucked to a C/LNG station in Jinta County, southwest of the site. From this station gas will be delivered through a 7.5 km long 1600 mm diameter underground pipeline to be constructed and operated by the Dunhuang Gas Company. As with the water pipeline, the gas pipeline will be in the road right-of-way, and no land acquisition will be required (Figure 3-3). Part of the pipeline route will parallel an existing Dunhuang Gas Company pipeline servicing customers in the Jinta County urban area.

c) Power Transmission Line

81. The electricity generated at the Project will be fed into the 110 kV substation, which is located 6 km away from the east of the Project site. The Project will construct a 6 km 110 kV transmission line from the Project site to the substation (Figure 3-3). The substation and transmission line route are on unused desert land under the authority of Jinta County, and both areas are considered by local authorities to be “waste land” in that they are barren, unoccupied, mostly devoid of vegetation, and have not been used previously for farming, industry, commercial or residential use. No land acquisition will be required.

d) Wastewater Treatment

82. To minimize the risk of surface and groundwater contamination, and to maximize water conservation, all wastewater produced at the CSP will be treated and reused onsite.

- Site Drainage Treatment and Reuse During Construction All site runoff and construction wastewater will be directed to sedimentation ponds, and oil traps will be installed wherever necessary prior to the sedimentation ponds. Then, the water will be used for greening and/or dust suppression.

- Mirror Wash Water Treatment and Reuse During Operation All mirror wash water will be directed to the ground and used for dust suppression.

- Domestic Wastewater Treatment and Reuse During Construction and Operation All domestic wastewater will be treated in an underground septic system in compliance with PRC standards. The treated and disinfected effluent will be stored and used for site greening and/or dust suppression.

- Industrial Waste Water Treatment and Reuse During Operation All industrial wastewater including water purification system wastewater and boiler wastewater, wastewater collected from other parts of the CSP, runoff water from workshops, vehicles washing areas and other equipment, and oil contaminated water will be treated onsite in a 10 m3/h capacity industrial wastewater treatment plant (WWTP). The WWTP will be equipped with an oil/water separator. The treated water will be sent to a storage pond and then reused for site greening and/or dust suppression.

83. All treated wastewater will be in compliance with relevant PRC standards, including Class I of the “Integrated Wastewater Discharge Standard (GB 8978-1996)”, and “Water Standards for Irrigating Vegetation (GB/T 18920-2002)” 31

e) Landscaping and Vegetation Buffer

84. The site will be vegetated with appropriately selected native drought tolerant trees and shrubs.

G. Implementation Arrangements

85. The borrower will be the Government of the PRC. The China Huadian Corporation (CHD) will be the executing agency (EA).11 CHD will take overall responsibility for the Project implementation including financial and audit management. The Gansu Huadian Jinta Solar Thermal Power Co. Ltd. (GHJSP) will be the implementing agency (IA), responsible for day to day project implementation management including procurement and contract management, payment to contractors, operation and maintenance, and social and environment safeguard monitoring.12 The China Huadian Engineering Co., Ltd. (CHEC), who is the project developer and responsible for the Project until the project implementation agency is established, will provide management support for procurement and contract management by maintaining oversight of the IA, under the guidance of the EA.13,14

H. Budget and Time Schedule

86. The Project cost is estimated at $169.6 million. The ADB loan will finance $100 million (59.0%) of the total cost, the EA will finance $33.9 million (20.0%), and the on-lending bank will provide financing in the amount of $35.7 million (21.0%).

87. The construction period will be approximately 2 years. The Project expected lifetime is 25 years.

11 CHD is a wholly state-owned enterprise established in 2002 with a registered capital of CNY 12 billion. CHD's main businesses are generation and supply of electricity and heat, development of power-related primary energy such as coal, and supply of pertinent technological services. By December 2012 the total installed capacity of CHD exceeded 100 GW. 12 GHJSP is the project company for the proposed Project, and will be fully owned and established by CHEC in September 2013. 13 CHEC is an affiliated enterprise of CHD, and plays an important role in developing engineering technology industry. CHEC has competitive advantages in the core business of high-tech products R&D and manufacturing, engineering design and EPC contracting, and energy technology research and service. In 2009 CHEC was named an “excellent enterprise” by the China Electric Power Industry Association, with total assets of 9.9 billion, annual sales amount of 9 billion, average rate of increase of 20%, 186 patents, and 203 science and technology progress awards. 14 Since the implementing agency, GHJSP, has not been legally incorporated yet, CHEC who will be the sole shareholder of GHJSP has discussed and reached agreements on matters related to GHJSP such as assurance and loan covenants in the loan agreement, project agreement, and the project administration manual.

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IV. DESCRIPTION OF THE ENVIRONMENT

A. Location

88. The Project site is located in southern Jinta County, on the eastern edge of Jiuquan City, in northwestern Gansu Province, PRC (Figure 1-1, 1-2 and 4-1).

- Gansu Province is located in north-central PRC. It borders Mongolia, Inner Mongolia, and Ningxia to the north, Xinjiang and Qinghai to the west, Sichuan to the south and west, and Shaanxi to the east. The Yellow River passes through the southern part of the province. The province has an area of 425,800 km2.

- Jiuquan City is a prefecture-level city in the western part of Gansu. It is more than 600 km wide from east to west, and has an area of 191,342 km2.

- Jinta County is located in the northeast of Jiuquan City. The county has an area of 16,700 km2, including 1,200 km2 of oasis area. It ranges from 39°47′N to 40°15′N latitude, and from 98°00′E to 100°07'E longitudee.

- The Project will be located at a 180 ha site locateed approximately 4 km to the southeast of the urban center of Jinta County (Figure 3-2 and 3-3).

Figure 4-1: Jinta County (pink), within Jiuquan City ((yellow), within Gansu Province (grey)

Project Location

B. Physical Resources

1. Geography and Topography

89. Jinta County is located in the middle of Hexi corrridor, a long, narrow passage stretching for approximately 1,000 km from the steep Wushaolin hills near Lanzhou to the border with Xinjiang. It is located on the northern edge of the Tibetan Plateau and the southern fringe of the Gobi Desert. There are many fertile oases along the corridor, including the Jinta oasis at the 33

Beida River. Elevations range from approximately 1,,100 to 1,400 meters above sea level (masl), and average maximum winter soil freeze depth is 1.0 to 1.2 m.

90. The Project site is located on a flat desert plain which is part of the Gobi desert, and has hills to the south and east, provincial highway No. 214 and the Beidda River and the Jiefangcun and Yuanyangchi Reservoirs to the west, and farming communities to the north. The site elevation ranges from 1,266 to 1,274 masl and it has a slope of between 0.1-0.3% from north to south (Figure 4-2 and 4-3). Acccording to the PRC Earthquake Parameter Map (GB 18306- 2001) the site area is in Earthquake Intensity Zone VII, a moderate risk zone where the peak ground acceleration is 0.15 g.15

91. Sand runs throughout the entire soil layer in the Project area, and the site is dominated by sandy soil. This soil type has high permeability and low fertility, is easily eroded, and is too poor to be cultivated. As the area has harsh climatic conditionss and dry weather with little rainfall, soil desertification is a significant concern.

Figure 4-2: Site Topography

Project Location

Source: Google Earth

2. Meteorology and Climate

92. Jinta County has a temperate continental arid cliimate, characterized by low precipitation and high sunshine and evaporation rates; cold winters; warm and wetter summers as a result of flow from the southeast Pacific; cool autumns; and dry springs with numerous sand storms.

15 g= acceleration due to gravity at the Earth's surface (9.8 m/s2); 10 % probability of being exceeded within 50 years.

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The majority of rainfall occurs from June to October. Meteorological data provided by the Jinta County Weather Bureau is presented in Table 4-1.

Figure 4-3: Project Site Photos

Source: PPTA Consultants

Table 4-1: Main Meteorological Data, Jinta County

Parameter Unit Value Average Temperature °C 8.1 Average Maximum Temperature °C 23.6 Average Minimum Temperature °C -10 Annual Average Precipitation mm/y 59.5 Average Wind Speed m/s 3 Annual Average Evaporation mm/a 2538.6 Maximum Winter Soil Freeze Depth cm 141 Annual Average Sunshine h 3193.3 Annual Average Frost-Free Period d 141 Source: Jinta County Weather Bureau in Source: Huadian Jinta Solar Thermal Power Station Engineering Feasibility Study Report, 2012.

93. Ground level solar resource, typically expressed in terms of direct normal irradiation (DNI), is a key factor in determining CSP locational suitability.16 Based on 9 years of on-site

16 The radiation reaching the earth's surface can be represented in a number of different ways. Global Horizontal Irradiance (GHI) is the total amount of shortwave radiation received from above by a surface horizontal to the ground. This value is of particular interest to photovoltaic installations and includes both Direct Normal Irradiance (DNI) and Diffuse Horizontal Irradiance (DIF).

DNI is solar radiation that comes in a straight line from the direction of the sun at its current position in the sky. DIF is solar radiation that does not arrive on a direct path from the sun, but has been scattered by molecules and particles in the atmosphere and comes equally from all directions. On a clear day, most of the solar radiation 35 ground measured data, the Project site has a high DNI of 1,921 kWh/m2 per year and over 3,320 sunlight hours per year. Figure 4-4 shows monthly GHI and DHI levels.

Figure 4-4: Monthly GHI and DNI Values, Jinta County

Months Source: Huadian Jinta Solar Thermal Power Station Engineering Feasibility Study Report, 2012.

3. Water Resources

94. There is no surface water at the Project site, and the Beida River (also referred to as the Taolai River), approximately 8 km southwest of the Project site, is the main river and surface water source in the Project area. The Beida River originates in the Qilian Mountains to the south in Qinghai Province. It has a watershed area of approximately 7,500 km2 upstream of Jiuquan.17 From Jiuquan the river flows north into the Yuanyangchi and Jiefangcun reservoirs, the latter of which supplies Bantan Lake, the water source for the Project, by an open channel (Figures 3-3 and 4-5). Although Jiuquan City is an arid region, surface and water resources in the Project area are relatively abundant, and southern Jinta County is considered one of the oasis areas of the Hexi corridor.

95. The Yuanyangchi Reservoir has a storage capacity of 100,000,000 m3, Jiefangcun Reservoir has a storage capacity of 39,000,000 m3, and Bantan Lake has a storage capacity of 5,000,000 m3. Average flow between the Jiefangcun and Yuanyangchi reservoirs is

received by a horizontal surface will be DNI, while on a cloudy day most will be DIF. 17 Source: Initial Environmental Examination, People’s Republic of China: Gansu Jiuquan Integrated Urban Environment Improvement Project. Prepared by the Jiuquan Municipal Government for the Asian Development Bank, January 2013.

36

363,000,000 m3 per year (480,000,000 m3 in 2010). Water withdrawn from the reservoirs is primarily used for agriculture with a small amount allocated to industry.18

96. Groundwater is the main residential water source in Jinta County, and is primarily within two aquifers. The main source is an upper aquifer dominated by sandy scree and sandstone, with loose structure, ranging in thickness from 40-600 m. It is encountered at a depth of 6-16 m, and a single well can produce 2,500-3000 m3/d. The lower aquifer is dominated by mid and fine sized sandstone, with a thickness greater than 50 m and encountered at a depth of over 70 m. A single well can produce 100-400 m3/d.

Figure 4-5: Surface Water Resources in the Project Area

Beida River

Source: Google Maps 2013

C. Ecological and Sensitive Resources

97. Jinta County is characterized by typical desert and semi-desert grassland vegetation, with low species diversity. Vegetation can be divided into 3 categories:

- Xeric vegetation dominated by Hongsha (Reaumuria soongorica, a perennial semi- shrub), Camel-thorn bush (Alhagi maurorum) and other xeric shrubs in desert areas, with vegetation cover of approximately 2-3%; - Natural vegetation distributed at the edges of oases, dominated by Euphrates Poplar (Populus euphratica), willow, reeds, etc., with vegetation cover of approximately 10%; - Human introduced vegetation, such as fruit trees and crops.

98. Due to harsh climatic conditions and poor soils vegetation in the general Project area is particularly sparse and coverage is less than 2%. Only drought-tolerant species such as the Camel-thorn bush can survive. The Project site itself is unused desert land under the authority

18 Source: Gansu Water Resource Bureau, 2013. 37 of Jinta County designated for solar power development. It is considered by local authorities to be “waste land” in that it is barren, unoccupied, mostly devoid of vegetation, and has not been used previously for farming, industry, commercial or residential use (Figure 4-3).

99. Ecological surveys undertaken by the Gansu Environmental Protection Science Design Institute as part of the domestic EIA indicate that there are no rare or endangered flora and fauna at the Project site or its immediate vicinity. Though there is wildlife in Jinta County, the Project site is in an industrial area adjacent to Jinta County town, and there is little wildlife present at the site. The only known significant animals near the Project area are domestic livestock in a residential and farming area to the north.

100. The Project site does not contain any significant bird habitat and is not located along or near a bird migratory route. The Jinta County EPB has confirmed that there are no environmentally sensitive areas that could be affected by the Project. There are no parks, nature reserves or areas with special ecological significance in the Project area, nor are there surface water sources, scenic areas, cultural or sport facilities, schools, hospitals and clinics or other sensitive receptors.

101. The closest potential receptor is a residential farming village area to the northwest, the southern edge of which is approximately 350 meters from the northern site boundary at its closest.

D. Social and Cultural Resources

1. Socioeconomic Conditions

102. Gansu Province has a population of 26.0 million (2011) and Jiuquan City has a population of 1.1 million (2011). Jinta County has a population of 151,000 (2012), 119,000 of whom were involved in agriculture. There is over 28,100 ha of land suitable for agriculture in Jinta County. Farmers own 453,800 mu and the cultivated land area per agriculture population is 3.8 mu. Main crops include wheat, corn, peas and potatoes.

103. The GDP of the Jinta County was CNY 5.76 billion in 2012. The ratios of the primary, secondary and tertiary sectors were 26.3%, 35.6% and 38.1% respectively. This indicates that the tertiary sector and industrial production are the main contributors to the local economy.

104. GDP per capita was CNY 38,000 in 2012. The average income per capita of the rural population was CNY 9,684 in 2012, and the average income per capita of the urban population was CNY 19,903.

2. Infrastructure Access

105. The Project site is 4 km southeast of the urban center of Jinta County in an area designated by the local government for solar energy development. The site has good access to transportation and other infrastructure. It is approximately 50 km from the Jiuquan railway station and 70 km from the Jiayuguan Airport. Provincial Highway #214 passes through Jinta County approximately 4 km to the west of the Project site, and local roads connect the highway to the site. The site is also served by the local Jinta domestic water supply and electric power systems.

106. There are two 110 kV substations in the vicinity, but the Project CSP will connect to a

38 new 110 kV substation to be built 6 km to the east of the site. The substation will be constructed by the Jinta County government and operated by the Gansu Power Company.

3. Physical Cultural Resources

107. The domestic EIA certifies that there are no known physical cultural resources (PCR) on or adjacent to the Project site, and this was confirmed by the Jinta County Cultural Heritage Bureau in 2013.19 The nearest known PCR are tombs approximately 10 km to the west of the Project site.

E. Environmental Baseline Monitoring

108. As part of the domestic EIA process baseline environmental monitoring was conducted by the Jiuquan Environmental Monitoring Station (EMS) from February 25th to March 3rd 2011. Monitoring was undertaken for air quality, surface water quality, groundwater quality, and noise levels.

1. Air Quality

109. Two monitoring points were established, one in a residential area 2000 m west of the Project site, the other at the Project site (Figure 4-6). The monitoring results are presented in Table 4-2.

19 Physical cultural resources (PCRs): movable or immovable objects, sites, structures, groups of structures, and natural features and landscapes that have archaeological, paleontological, historical, architectural, religious, aesthetic, or other cultural significance. Physical cultural resources may be located in urban or rural settings and may be above or below ground or under water. Their cultural interest may be at the local, provincial, national, or international level. Within the Project area these could include: - Funeral site: graves, cemeteries, shrines, stupas. - Religious buildings: Temples or Pagodas, complete or ruins. - Religious objects: Buddhist images or sculpture. - Sacred sites: sacred caves, forest, hills or cliffs. - Historical sites or objects: artifacts, tools, relics, memorials. - Spirit sites: sites residents believe are occupied by a spirit (house, tree, stone, etc.). 39

Figure 4-6: Environmental Monitoring Sites

Source: Gansu Jinta CSP PRC EIA Report (2011) and Google Earth

110. The monitoring results show that all parameters (TSP, PM10, SO2 and NO2) met the applicable Class II Standard of the PRC’s “Ambient Air Quality Standard” (GB 3095-2012).20

3 Table 4-2: Air Quality Monitoring Results, mg/m Monitoring Parameter Concentration Average Non- Class II 3 3 point (mg/m ) (mg/m ) compliance Standard rate (GB3095- (%) 1996) Donggou village TSP 0.15~0.21 0.18 0 0.30 PM 0.08~0.14 0.11 0 0.15 10 SO 0.0035 0.0035 0 0.15 2 NO 0.002L 0.0025 0 0.12 2 Project Site TSP 0.11~0.19 0.14 0 0.30 PM 0.07~0.14 0.10 0 0.15 10 SO 0.0035 0.0035 0 0.15 2 NO 0.0025 0.0025 0 0.12 2 Note: “L” designates reported value is at detection limit of monitoring instrument, actual value may be lower. Source: Gansu Jinta CSP PRC EIA Report (2011)

20 3 3 The Class II daily average concentration standards in GB 3095-2012 are: TSP: 0.3 mg/m , PM10: 0.15 mg/m , 3 3 SO2: 0.15 mg/m , NO2: 0.08 mg/m . Class I standards only apply to natural reserves and protected areas while other areas are subject to Class II standards.

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2. Surface Water Quality

111. There is no surface water at the Project site, so water quality was water monitored in the Yuanyangchi and Jiefangcun reservoirs (Figure 4-6). The monitoring was conducted in January, March and September 2010, and results are presented in Table 4-3. The results show that all the parameters met the relevant surface water standard, Class III of the PRC’s “National 21 Surface Water Quality Standard” (GB 3838-2002), with the exception of BOD5 in March. This is believed due to the upgrade of the Jiuquan urban wastewater system at that time, which resulted in some non-compliance wastewater discharges.

3. Groundwater Quality

112. Groundwater monitoring was undertaken at three well locations on March 2nd and 3rd, 2011 (Figure 4-6). A total of 18 parameters were analyzed, and results are presented in Table 4-4. The results show that overall the groundwater quality is good, and all parameters met the relevant water standard, Class III of the PRC’s “Standard of Groundwater Quality” (GB/T 14848-93), except sulphate at the Tayuan temple.

4. Noise

113. Noise was monitored at four points around the Project site and one point at the nearest residential area (Figure 4-6). The monitoring was conducted on March 2nd and 3rd, 2011, and the results are presented in Table 4-5. The results show that only at southern boundary of the Project site did the noise level exceeds the relevant standard, Class II of the PRC’s “Standard of Sound Environment Quality” (GB 3096-2008). This is due to the monitoring site’s proximity to access roads and nearby construction.

21 Class III surface water standards apply to drinking water sources.

Table 4-3 Surface Water Quality Monitoring Results

Name of Sampling Tempe pH DO Perman- BOD5 NH3- Oil Total Total Volatile Hg Cu Zn Reservoir Date 2011 -rature ganate mg/L N mg/L Nitrogen P Hydroxybenzene mg mg/L mg/L Index mg/L mg/L mg/L mg/L /L Yuanyangchi January 0 7.84 5.76 1.58 2L 0.051 0.015 0.612 0.01L 0.003 0.00002 0.001L 0.031 March 2 7.83 5.42 1.58 5.2 0.054 0.015 0.629 0.01L 0.003 0.00002 0.001L 0.05 September 19.3 8.31 8.27 2.02 2L 0.27 0.035 0.938 0.042 0.002L 0.00002 0.001L 0.02L Jiefangchun January 1 8.01 6.31 1.35 2 L 0.05L 0.012 0.527 0.01L 0.003 0.00001 0.001L 0.07 March 2 7.95 5.44 1.45 4.3 0.05L 0.012 0.561 0.01L 0.003 0.00001 0.001L 0.05L September 20.8 8.53 5.72 1.91 2L 0.29 0.03 0.9 0.047 0.002L 0.00002 0.001L 0.0227 GB 3838-2002 Class III 6-9 ≥5 ≤6 ≤4 ≤1.0 ≤0.05 ≤1.0 ≤0.05 ≤0.005 ≤0.0001 ≤1.0 ≤1.0 Standard

Name of Sampling Date Fluoride Selenium arsenic Cadmium Hexad value Anion Sulfide lead COD Coliform Reservoir 2011 Chrome surfactant mg/L mg/L mg/L mg/L mg/L mg/L mg/L mg/L mg/L amount/L Yuanyangchi January 0.135 0.0005L 0.0005L 0.0004L 0.007 0.124 0.031 0.001L 10L 0 March 0.38 0.0005L 0.0005L 0.0004L 0.008 0.05L 0.019 0.001L 12.77 140 September 0.241 0.003 0.004 0.0001L 0.011 0.122 0.073 0.001L 5L 50 Jiefangchun January 0.208 0.0005L 0.0005L 0.0004L 0.007 0.106 0.015 0.001L 10 20 March 0.38 0.0005L 0.0005L 0.0004L 0.004 0.05L 0.013 0.001L 11.63 140 September 0.299 0.004 0.001 0.0001L 0.007 0.132 0.038 0.001L 5 20 GB 3838-2002 Class III ≤1.0 ≤0.01 ≤0.05 ≤0.005 ≤0.05 ≤0.2 ≤0.2 ≤0.05 ≤20 ≤ 10000 Standard Note: “L” designates reported value is at detection limit of monitoring instrument, actual value may be lower. Source: Gansu Jinta CSP PRC EIA Report (2011)

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Table 4-4 Groundwater Quality Monitoring Results

Total Volatile Dissolved Total Sulphate Hydroxybenzene Chloride NH3-N Solids Monitoring Point Date PH hardness mg/L mg/L CODmn mg/L Nitrite mg/L mg/L mg/L mg/L Tayuan Temple March 2 8.10 442 328.0 0.002L 0.65 0.005L 41.28 0.049 780 March 3 8.14 417 324.4 0.002L 0.67 0.005L 43.29 0.063 776

Yangjiadazhuang March 2 8.32 308 130.8 0.002L 0.57 0.005L 51.35 0.091 431 March 3 8.36 318 156.8 0.002L 0.57 0.005L 55.37 0.097 428 Yingjiadazhuang March 2 8.14 302 173.6 0.002L 0.57 0.005L 33.22 0.109 440 March 3 8.15 304 160.4 0.002L 0.60 0.005L 34.83 0.146 447 Class III Standard of 6.5-8.5 ≤450 ≤250 ≤0.002 ≤3.0 ≤0.02 ≤250 ≤0.2 ≤1000 Groundwater Environment Quality

Monitoring Date Hg mg/L Arsenic Cd Cr+6 Pb Nitric acid-N Cu Oil Coliform Point mg/L mg/L mg/L mg/L mg/L mg/L mg/L Tayuan Temple March 2 0.00001L 0.0005L 0.0001L 0.004L 0.001L 1.70 0.001L 0.005L none March 3 0.00001L 0.0005L 0.00023 0.004L 0.001L 1.63 0.001L 0.005L none Yangjiadazhuang March 2 0.00001L 0.0005L 0.0001L 0.004L 0.001L 1.04 0.001L 0.005L none March 3 0.00001L 0.0005L 0.0001L 0.004L 0.001L 1.03 0.001L 0.005L none Yingjiadazhuang March 2 0.00001L 0.0005L 0.0001L 0.004L 0.001L 1.06 0.001L 0.005L none March 3 0.00001L 0.0005L 0.00037 0.004L 0.001L 1.04 0.001L 0.005L none Class III Standard of ≤0.001 ≤0.05 ≤0.01 ≤0.05 ≤0.05 ≤20 ≤1.0 - ≤3 Groundwater Environment Quality Note: “L” designates reported value is at detection limit of monitoring instrument, actual value may be lower. Source: Gansu Jinta CSP PRC EIA Report (2011) 43

Table 4-5: Noise Monitoring Results

Monitoring Monitoring Monitoring Sound March 1, 2011 March 2, 2011 Site No. Location Source Daytime Night Daytime Night dB(A) dB(A) dB(A) dB(A) Project Site 1 East Background 58.7 43.4 53.6 41.7 boundary 2 South Background 60.1 48.1 61.0 44.7 boundary 3 West Background 53.4 39.9 55.4 40.4 boundary 4 North Background 54.7 50.8 58.7 40.9 boundary Nearest 5 Biangou Residential 54.8 37.4 59.6 34.7 Village Village Area Maximum value 60.1 50.8 61 44.7 Class II Standard of Sound Environment 60 50 60 50 Quality GB 3096-2008 Source: Gansu Jinta CSP PRC EIA Report (2011)

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V. ANTICIPATED IMPACTS AND MITIGATION MEASURES

114. Anticipated positive and negative environmental impacts of the proposed CSP Project were assessed during the IEE preparation based on the findings of the approved domestic EIA report supported by site visits, stakeholder consultations, and additional surveys undertaken by national and international environmental consultants in 2013. Applicable and specific requirements by the PRC EIA regulations and ADB’s SPS, and experiences from existing CSP projects around the world, were considered carefully in assessing the environmental impacts.

115. The impacts were grouped under three general categories: physical, biological and socio-economic. Pre-construction, construction phase and operation phases were each considered separately. Potential impacts from the Project were considered under the following categories: i) direct impacts – directly due to the Project; ii) induced impacts – resulting from activities arising from the Project, but not directly attributable to it; and (iii) cumulative impacts – which in combination would exert significant additional influences.

A. Anticipated Positive Impacts

116. The electrical power generated by the proposed CSP will replace power that otherwise would have been generated by coal-fired power plants. Once operational the Project will generate approximately 102 gigawatt hours (GWh) of electricity per year and supply 88 GWh to the power grid, thereby avoiding annual consumption of 30,000 tons of standard coal, and providing a global public good by reducing the annual emission of 81,000 tons of carbon dioxide (CO2), a greenhouse gas. In addition, Project operation will have a significant positive impact on air quality by avoiding estimated annual emissions from coal burning of 260 tons of sulpher dioxide (SO2), 440 tons of nitrous oxides (NOx), and 60 tons of total suspended particulates (TSP).22

117. The construction of the CSP will play a significant role in utilizing renewable natural resources, saving non-renewable fossil energy, reducing pollution and protecting the ecological environment. The development of solar power will not only save precious non-renewable resources, but also bring good benefits to the environment and climate change mitigation; thus it serves as an important mean to realize the sustainable development of energy, economy and society.

B. Potential Negative Impacts and Mitigation Measures

118. The results of the assessment analysis indicate that during the pre-construction phase

22 Coal avoidance based on Gansu Jinta FSR, December 2011, using a factor of 337 gce/kWh. By comparison, on average, the standard coal consumption per unit electricity from coal-fired power plants across China is 355 g/kWh, as reported in Qinghai CSP IEE, 2013.

CO2 avoidance based on a baseline emission factor of 0.91798 tCO2/MW for the Northwest China Power Grid, as researched and verified in the Gansu Jinta PV Project CDM verification report No. JCI-VAL 11/013 REVISION NO.02, 24 January 2012.

SO2 avoidance based on a baseline emission factor of 0.00867 tSO2/tce; TSP avoidance based on a baseline emission factor of 0.00202 tTSP/tce; and NOx avoidance based on a baseline emission factor of 0.01478 tNOx/tce; all based on the Hebei Guangyuan Solar Energy subproject, Hebei Energy Efficiency Improvement and Emission Reduction Efficiency Improvement and Emission Reduction Project EIA Report, 2011. 45 issues are limited, and are mostly associated with ensuring good project design. Key negative construction phase environmental impacts are associated with potential soil erosion, construction noise and fugitive dust. During the operation phase the key negative environmental impacts are water use, risks from HTF leakage, and wastewater. There are no significant predicted negative induced or cumulative impacts, considering the insignificant water uptake and emissions from the use of natural gas throughout the life cycle of the Project.

C. Anticipated Pre-construction Phase Impacts and Mitigation Measures

1. Land Acquisition

119. The Project will lease 180 hectares (2700 mu) of land from the Jinta County government which has been secured by CHEC.23 The site is considered by local authorities to be “waste land” in that it is barren, mostly devoid of vegetation, and has not been used previously for farming, industry, commercial or residential use. The land will be leased by CHEC for a 30 year period, which remains negotiable and feasible for extension. The land is unoccupied, and there will be no loss of personal property, structures, crops, trees or other assets. There will also be no land acquisition required for the water or gas pipelines as they will be within the existing road right-of-ways. Overall, there will be no economic or physical displacement resulting from land acquisition, and no potential adverse environmental impacts on disadvantaged or vulnerable groups, including the poor, women and children, and Indigenous Peoples.

120. Nonetheless, during detailed design the CSP site and the layout will be reconfirmed to avoid or minimize any potential adverse impacts on the surrounding environments and communities. In addition, a detailed soil analysis will be undertaken so as to design an appropriate soil foundation for the CSP plant, and detailed weather data will be collected and analyzed, and based on the results a plant wind break will be designed if required.

2. Rare, Endangered and Protected Species

121. The Project will be located on barren unused Gobi desert land, and no rare and endangered species will be impacted by the Project according to the domestic EIA report. This conclusion has been confirmed by the Jinta County EPB 24 and by PPTA environmental consultants during the additional site visit conducted in May 2013.

3. Soil Analysis and Design for Foundation Work

122. As sandy soil runs throughout the entire soil layer in the Project area, a detailed soil analysis is required to identify risks and to design proper foundation work for the Project. Based on the result of detailed soil analysis, certified civil engineers for CSP projects will recommend the most suitable foundation work for the Project. The Project IA will follow the recommendation in order to reduce predictable risks. In addition, the soil analysis will help the identification of spoil disposal site.

23 Jinta County government issued a commitment letter to CHEC indicating that 180 hectares (2700 mu) for CSP plant has been secured to CHEC. Upon the establishment of the project implementing agency, the project IA will lease the land for a 30 year period. 24 Gansu Jinta FSR, December 2011.

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4. Electromagnetic Fields

123. The 6 km of 110 kV transmission line will generate electromagnetic fields. This issue will be carefully evaluated during the design, and the transmission line will comply with all relevant national engineering criteria and the conditions specified in the EIA approval. However, it should also be noted that the transmission line corridor is located on unoccupied barren unused Gobi desert land designated for solar energy development, and will in no way affect any human settlements.

5. Mitigation Measures during Detailed Engineering Design

124. Mitigation measures to be adopted during detailed engineering design to minimize the direct and induced impacts are as follows:

(i) Design and bidding documents. Environmental mitigation measures indicated in this IEE, the EMP and the domestic EIA will form part of the design document and bidding documents, and will be included in contracts for civil constructions and equipment installations. All contractors will be required to strictly comply with the EMP. (ii) Electromagnetic protection. Anticorona, noise-reduction and electromagnetic protection measures will be adopted during the detailed design to make sure that : i) 0.5 megahertz radio interference is less than 46 decibel (microvolt/meter) at a 20-meter distance from the wall of the substations and traverse leg projection; ii) the power frequency electric field will be less than 4 kilovolt/meter in good weather; and iii) the power frequency magnetic field will be less than 0.1 milliteslas outside the boundary and on the ground under transmission line. (iii) Fire, health and safety hazards. The design will minimize fire, health and safety hazards, and will include a fire protection system.

6. Bidding and Contracting

125. All environmental mitigation measures indicated in the EMP will be incorporated in bidding documents and construction contracts for the Project.

7. Grievance Redress Mechanism

126. In accordance with the Grievance Redress Mechanism (GRM) presented in Chapter VIII of the IEE, a Project Public Complaints Unit (PPCU) will be established in the IA’s office; GRM training will be provided for PPCU members and GRM access points; and the PPCU’s phone number, fax, address, and email will be disclosed to the public.

8. Training and Capacity Building

127. An institutional strengthening and training program will be delivered by environmental consultants and experts/officials from the Jinta County EPB (see Table A-2 in EMP). The program will focus on ADB’s and PRC’s environmental, health and safety laws, regulations and policies; the GRM; implementation of the EMoP; HTF and waste HTF handling; and international good practices in CSP plant operation. Training will be provided to the IA, contractors and construction supervision companies (CSCs). 47

128. The IA shall ensure that the training and capabilities of the Contractor’s site staff are adequate to carry out the designated tasks. No operator shall be permitted to operate critical mechanical equipment without having proper certification. Staff should be educated as to the need to refrain from indiscriminate waste disposal and/or pollution of local soil and water resources and receive the necessary safety training.

D. Anticipated Construction Phase Impacts and Mitigation Measures

1. Impacts on Topography and Soil

a) Impact on Topography

129. Potential impacts on topography are most likely to occur in the Project as a result of: (i) land leveling, (ii) excavation and filling activities for foundations of the structures in the CSP, and (iii) spoil disposal and earth borrowing. These activities may cause topographical changes and visual problems unless properly controlled.

b) Impacts on Soil Erosion and Contamination

130. The Project could affect soil in the construction area through erosion, contamination and inappropriate spoil disposal.

131. Moderate soil erosion levels are expected during construction when surface desert vegetation and soil are damaged or disturbed. The primary areas for soil erosion include foundation construction of troughs and storage tanks and other structures in the CSP plant.

132. Soil erosion can also occur after completion of construction in areas if site restoration is inadequate. The most vulnerable soil erosion areas in the construction site include excavation sites, leveling sites, spoil sites, temporary construction sites, and other areas where surface soil is disturbed. Construction activities may generate surplus spoil even after maximizing reuse of spoil on-site. Soil contamination may result from the inappropriate transfer, storage, and disposal of petroleum products, chemicals, hazardous materials, liquids, and solid waste during construction.

133. Mitigation measures for control of soil erosion, soil contamination, spoil disposal and other hazards due to construction activities are as follows:

(i) Minimize active open excavation areas during trenching activities and use appropriate construction compaction techniques. (ii) The contractor should, prior to the commencement of earthworks, determine the average depth of topsoil. The full depth of topsoil should be stripped from areas affected by construction and related activities prior to the commencement of major earthworks including the building footprints, working areas and storage areas. (iii) Care will be taken not to mix topsoil and subsoil during stripping. (iv) Removed topsoil should be used onsite to rehabilitate disturbed areas or for landscaping, or be transported to an approved spoil disposal site. (v) Ensure that the minimum area of soil is exposed to potential erosion at any one time. (vi) Limit construction and material handling activities during periods of rains and high winds.

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(vii) Assess and estimate storm water runoff and prepare a storm water drainage system accordingly to minimize soil erosion. (viii) Build a temporary detention pond to control topsoil runoff. (ix) Stabilize all earthwork disturbance areas within 14 days after earthwork.; (x) Plant native trees and grass on the site to control soil erosion and properly slope and re-vegetate disturbed surfaces. (xi) Maximize the use of most of excavated and leveled-out earth and spoil generated during construction, and the rest of the spoil and construction wastes will be transported to a designated spoil landfill site. (xii) Temporary spoil disposal sites will be identified, designed, and operated to minimize impacts. The temporary spoil disposal site will be restored at the conclusion of disposal activity. (xiii) Properly store petroleum products, chemicals and hazardous materials on a bunded impermeable surface. (xiv) Use best management practices to prevent spill of oil and chemical to avoid pollution. (xv) Any planned paving or vegetating of the area will be done as soon as the materials are removed to protect and stabilize the soil. (xvi) Appropriately set up temporary construction camps and storage areas to minimize land area required and impact on soil erosion; (xvii) Provide spill cleanup measures and equipment at the construction site. (xviii) Contractors will be required to develop contingency plans for control of oil and other dangerous substances to prevent soil contamination.

2. Impacts on Hydrology and Water Quality

a) Surface and Groundwater Contamination

134. There are no surface water bodies around the construction site; the nearest surface water is the Beida River, approximately 8 km southwest of the Project site. However, inappropriate transportation of petroleum products and hazardous materials, or accidental spills, disposal of domestic wastewater from construction camps, and wash-down water from construction equipment and vehicles may contaminate surface water or groundwater resources. Contractors will be required to store all toxic, hazardous or harmful construction materials including petroleum products in a place with bunded impermeable surfaces and to manage them in such a way to prevent spillage or leakage during storage and transportation.

b) Construction and Domestic Wastewater

135. Wastewater produced during construction may come from washing aggregates, pouring and curing concrete, and oil-containing wastewater from machinery repairs. A small amount of construction wastewater from equipment washing will also be generated.

136. The peak work force is estimated at 100 workers. The total amount of residential wastewater from labor camps will be 1,162 m3 during the whole construction period according to the EIA, with a daily average of 3.5 m3.

c) Mitigation Measures for Wastewater

137. To avoid surface and groundwater pollution, the following mitigation measures will be taken: 49

(i) A wastewater treatment facility will be constructed onsite. (ii) An underground septic system will be constructed onsite. (iii) A 1,000 m3 settlement (and evaporation) pond will store industrial wastewater after treatment, for use in dust control and vegetation watering. (iv) Areas where construction equipment is being washed will be equipped with water collection basins and sediment traps. (v) Wastewater from construction activities will be collected in sedimentation tanks, retention ponds, and filter tanks to remove silts and oil. (vi) Storm water channels or natural water path ways will not be blocked. (vii) The construction wastewater, after sedimentation, will be used as the spray water for fugitive dust control on the construction site. (viii) Adequate sanitary facilities and ablutions will be provided for construction workers. (ix) Domestic wastewater from workers camp, after septic treatment, will be utilized for watering vegetation, both planted and natural.

3. Noise Impacts

a) Noise Intensity

138. A significant increase in localized noise is expected during construction. Construction activities will involve excavators, bulldozers, concrete-mixing plants, loaders, graders, rollers, and other heavy machinery. Noise during pipeline construction will be generated by trench excavators, rollers and other compaction machinery. Though noise levels may be high, the impacts will be temporary and localized, and with the exception of the pipelines focused on the uninhabited Project site area. The major construction machinery noise testing values are presented in Table 5-1.

Table 5-1: Construction Machinery Noise Levels

Average sound level No. Machine Type at 5m distance from machine dB (A) 1 Excavator 100 2 Bulldozer 110 3 Concrete Mixer 110 4 Pile Driver 120 5 Vibrating Bar 105 6 Crane 75 7 Vehicle 70 Source: Gansu Jinta CSP PRC EIA Report (2011)

b) Methodology for Noise Prediction

139. Construction equipment is considered a point noise source, and the predictive model is as follows:

Ri Li  L0  20 lg  L R0

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Where, Li and L0 are equipment noise sound levels at Ri and R0, respectively, ∆L is additional decrement produced by barriers, vegetation and air.

140. For the impact of multiple construction machines on a location, sound level superposition uses the following formula:

0 .1 L L  10 lg  10 i

c) Noise Prediction Results

141. Peak construction noise levels at different distances from the source are presented in Table 5-2. This assumes a worst case scenario: all high noise equipment is operating simultaneously, without noise barriers or mitigations, noise source is at Project site boundary, and sound absorption in air is not included). The PRC “Standard of Noise Limits for Construction Sites” (GB 12523-2011) specifies the noise limit for Class II areas as 75 dB (A) during the daytime and 55 dB (A) during the nighttime.

Table 5-2: Peak Construction Noise at Distance from Project Site Boundary Distance from Noise Source 30 100 200 300 500 800 1000 1266 2000 (m) Predicted Peak Noise 87.5 77.05 71.02 67.5 63.07 60.0 57.05 55 51.0 Level dB(A) Source: Gansu Jinta CSP PRC EIA Report (2011)

142. The worst case peak construction noise prediction results show that during the day areas beyond 200 m from the site will be in compliance with the standard, but during the nighttime compliance will be achieved at 1,266 m. The boundary of the nearest village is 350 m from the Project site boundary. Thus, the worst case noise level at the village boundary during the daytime will be below the applicable standard. However, at nighttime the standard will not be reached at the village boundary. To mitigate this impact, construction activity will be prohibited during the nighttime (22:00 h to 07:00 h).

143. As the nearest residence area is about 350 m from the Project site boundary and there are environmentally sensitive receivers like schools and hospitals in that area, noise impacts will be mainly on the construction workers who operate the equipment.

d) Mitigation Measures for Noise Impacts

144. A systematic approach towards mitigation of construction noise will be followed. Noise control strategy includes source control and path control. Source control is the preferred strategy because it limits noise generation or restricts allowable types or operating times of heavy equipment, and is also the easiest to monitor.

145. These following mitigation measures will be adopted to ensure construction activities meet PRC noise standards and protect workers and adjacent residents: 51

(i) Construction activities, and particularly the noisy ones, are to be contained to reasonable hours during the day and early evening. Construction activities will be strictly prohibited during the nighttime (22:00 h to 07:00 h). (ii) Ensure that noise levels from equipment and machinery conform to the PRC standard GB 12523-2011, and properly maintain construction vehicles and machineries to minimize noise. (iii) Locate sites for rock crushing, concrete-mixing, and similar activities a sufficient distance from sensitive sites in accordance with the PRC standards (250 m during day time and at least 1.3 km away during the night time). (iv) Machines in intermittent use should be shut down in the intervening periods between work or throttled down to a minimum. (v) Place temporary signs or noise barriers around noise sources during construction, if necessary. (vi) Provide noise personnel protective equipment (PPE) to workers. (vii) Vehicles transporting construction materials or wastes will slow down and not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals.

e) Vibration Impact and Mitigation Measures

146. Significant vibrations are expected during construction for the foundations of the power generation unit, trough and storage tanks, cable trench compaction, and others. On the construction site, different degrees of mechanical vibration will occur during construction. Pile drivers and vibrating road rollers will likely have the highest. Pilling and compaction operations at night will be prohibited, which will effectively reduce the vibration impact to acceptable levels.

4. Air Quality

a) Pollution Sources

147. Anticipated sources of air pollution from construction activities include: (i) dust generated from earth excavation, filling, loading, hauling and unloading; (ii) dust generated from disturbed and uncovered construction areas, especially on windy days; (iii) dust generated by the movement of vehicles and heavy machinery on unpaved access and haul roads; (iv) dust from aggregate preparation and concrete-mixing; and (v) emissions from construction vehicles (gaseous CO and NO2) and heavy diesel machinery and equipment.

b) Mitigation Measures

148. To reduce air quality impacts during the construction period the following air quality management measure will be implemented:

(i) If weather data analysis indicates it is required, wind breakers will be constructed. (ii) Spray water on construction sites and earth/material handling routes where fugitive dust is being generated. (iii) Keep transport vehicles at low speed in the construction site to reduce the fugitive dust. (iv) Stop construction activities during high wind events. (v) Cover materials during truck transportation of fine materials to avoid spillage or fugitive dust generation.

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(vi) Excavations and other clearing activities must only be done during agreed working times and permitting weather conditions to avoid drifting of sand and dust into neighboring areas. (vii) Store petroleum or other harmful materials in appropriate places and cover to minimize fugitive dust and emission. (viii) Provide regular maintenance to vehicles in order to limit gaseous emissions (to be done off-site). (ix) Maintain vehicles and construction machineries to a high standard to ensure efficient operating and fuel-burning and compliance with the PRC emission standards GB 18352-2005, GB 17691-2005, GB 11340-2005, GB 2847-2005, and GB 18285-2005.

5. Solid Waste

a) Waste Sources

149. Solid waste generated in the construction phase will include construction and domestic waste. Construction wastes include fill, various building materials such as steel, timbers, rubble, and other types of waste. An estimated of 0.5 kg/day per worker of domestic waste will be generated from construction workers. Inappropriate waste storage and disposal could affect soil, groundwater, and surface water resources, and hence, public health and sanitation.

b) Mitigation Measures

150. The following solid waste management measure will be implemented:

(i) All wastes should be reused or recycled to the maximum extent possible. (ii) A temporary on-site storage and sorting area for solid wastes will be established away from water bodies or other environmentally sensitive areas. (iii) Wastes at the storage area should be regularly sorted into what can be reused or recycled. Waste which cannot be reused or recycled should be transported on a regular basis by a qualified contractor to an approved landfill in Jinta County for final disposal, in accordance with relevant PRC regulations and requirements. (iv) Provide appropriate temporary waste storage containers at construction sites and regularly remove waste from containers and transport to temporary storage area for recycling, reuse, or transport to landfill. (v) All rubble must either be used on site as part of the existing development, or be taken for final disposal at an approved landfill facility in Jinta County. Rubble must not be dumped on site. (vi) All excavated soil will be backfilled onsite. (vii) There should be no final waste disposal on site. (viii) Waste incineration at or near the site is strictly prohibited. (ix) Contractors will be held responsible for proper removal and disposal of any significant residual materials, wastes, and contaminated soils that remain on the site after construction. 53

6. HTF

151. Inappropriate storage, handling and accidental spillage of HTF poses a risk for soil, water and groundwater contamination. To mitigate this risk:

(i) Based on the detailed soil analysis result and the civil engineering design for soil protection, properly conduct foundation work if it is required. (ii) Build impermeable concrete surface with sufficient height dikes (to hold 110% of HTF amount that would be contained in the HTF tanks and HTF expansion tank) for the area where HTF and HTF expansion tanks are located. (iii) Install a containment pit to unload HTF trucks. (iv) Build a stand-alone closed storage facility onsite with impermeable surface for temporary storage of all HTF waste (until removal by licensed contractors). (v) Install a comprehensive fire response system and equipment to respond to HTF related fire hazards. (vi) Prepare a HTF spill response plan and properly train designated staff. (vii) Suppliers of HTF must hold a proper license.

7. Other Hazardous and Polluting Materials

152. A construction material handling and disposal protocol that includes spill emergency response will be prepared and implemented by contractors.

153. The following mitigation measures will be taken to prevent soil, and surface and groundwater contamination from harmful materials:

(i) Prepare and implement a protocol for the handling and disposal of hazardous materials during construction including a spill prevention and emergency plan. (ii) Build storage facilities for fuels, oil, chemicals and other hazardous materials within secured areas on impermeable surfaces provided with dikes, and at least 300 m from drainage structures and important water bodies. A standalone site within the storage facility should be designated for hazardous wastes. (iii) Suppliers of chemicals and hazardous materials must hold proper licenses. They shall follow proper protocol for transferring fuel and the “Operation Procedures for Transportation, Loading and Unloading of Dangerous or Harmful Goods” (JT 3145-91). (iv) A licensed company will be hired to collect, transport, and dispose of hazardous materials in accordance with relevant PRC regulations and requirements. (v) Vehicles and equipment will be properly maintained and refueled in designated service areas on impermeable surfaces at least 300 m from drainage structures and important water bodies. (vi) Oil traps will be provided for service areas and parking areas.

8. Impacts to Biological Resources

a) Potential Impacts on Flora and Fauna

154. Potential impacts on flora and fauna include the removal of vegetation and disruption of the ecosystem during construction. However, the construction activities will take place on unused desert wasteland with virtually no vegetation cover. There are no rare, threatened, or endangered flora and fauna species within the construction boundaries or in the adjacent area,

54 including the pipeline routes. Impacts will be localized and minimal.

b) Mitigation measures

155. Although impacts on flora and fauna are low, the following mitigation measures will nonetheless be implemented:

(i) Preserve any existing vegetation in areas where no construction activity is planned, or temporarily preserve vegetation where activity is planned for a later date. (ii) Remove shrubs only as a last resort if they impinge directly on permanent structures. (iii) Construction activities will be implemented only within the Project site boundaries and the route for pipelines and the transmission line, so as to minimize damage to the nearby land. (iv) Properly backfill, compact, and re-vegetate piping/cable trenches after construction. (v) All natural areas impacted during construction must be rehabilitated with appropriate locally indigenous xeric vegetation. (vi) Enhance worker awareness on protection of wildlife. Workers are forbidden to hunt wildlife in the construction and surrounding areas, in accordance with PRC’s Law on Wildlife Protection. (vii) Identify, demarcate and protect sites wildlife habitat sites to the maximum extent possible, if any are encountered. (viii) Develop and implement a site vegetation plan, utilizing appropriate native xeric vegetation wherever possible.

9. Impacts on Socio-Economic Resources

a) Community Disturbance and Safety

156. The Project is located about 4 km away from urban Jinta County area and the nearest human settlement is 350 m away from the Project site boundary; thus, construction is not expected to have significant impacts on community disturbance and safety such as traffic congestion or public safety risks from construction activities, heavy vehicles and machinery traffic. In addition there should be no unexpected interruptions in municipal services and utilities resulting from damage to pipelines for water supply, drainage, heating supply, and gas, as well as to underground power cables and communication cables (including optical fiber cables).

157. Nonetheless, the contractors will be required to implement safety measures around the construction sites to protect the public, including warning signs to alert the public to potential safety hazards, and barriers to prevent public access to construction sites. Heavy machinery will not be used at night. In addition, a traffic control plan, agreed to by the local traffic control authority, will be developed and implemented in order to minimize community disturbance.

b) Worker Occupational Health and Safety

158. Intensive use of heavy construction machinery, tools, and materials may cause physical hazards to workers, which could be caused by noise and vibration, dust, handling heavy materials and equipment, falling objects, work on slippery surfaces, fire hazards, chemical hazards such as toxic fumes and vapors, and others. 55

159. Contractors will implement adequate precautions to protect the health and safety of their workers. The occupational health and safety risks will be managed by applying measures in the following order of preference: avoiding, controlling, minimizing hazards, and providing adequate protective equipment. The contractors will undertake the following activities:

(i) Each contractor will prepare an environment, health and safety (EHS) plan for the construction works on the basis of the EMP and in compliance with relevant PRC laws and regulations. (ii) An EHS officer will be appointed by each contractor to implement and supervise the EHS management plan. (iii) Fire extinguishers and other safety protection devices will be in place. (iv) First-aid station will be in place.

160. The EHS Plan will include the following:

(i) Identify and minimize the causes of potential hazards to workers. (ii) Implement safety measures and work procedures and provide first aid facility onsite. (iii) Worker training on occupational health and safety during construction, especially with respect to using potentially dangerous equipment. (iv) Provide preventive and protective measures, including modification, substitution, or elimination of hazardous conditions. (v) Contractors must ensure that all equipment is maintained in a safe operating condition. (vi) Contractors will take all the necessary precautions against the spreading of disease. (vii) Material stockpiles or stacks, such as, pipes must be stable and well secured to avoid collapse and possible injury to site workers. (viii) Provide appropriate personal protective equipment (PPE) to workers to minimize risks, including ear protection, hard hats and safety boots. (ix) Post adequate signage in risk areas. (x) Provide procedures for limiting exposure to high noise or heat working environments in compliance with PRC noise standards for construction sites (GB 12523-2011). (xi) Provide training to workers on the storage, handling and disposal of hazardous wastes. (xii) Provide emergency prevention, preparedness, and response arrangements and training to workers. (xiii) Hold safety meetings with staff before each shift.

10. Physical Culture Resources

161. The Project site and the 6 km long 110 kV transmission line will be located on barren unused Gobi desert land, and there are no known cultural heritage or archaeological sites on or adjacent to these areas that will be temporarily or permanently affected or lost. The water supply and gas pipelines will be within existing road right-of-ways that also do not contain any known cultural heritage or archaeological sites. The Jinta County Cultural Heritage Bureau has confirmed these conclusions.25

25 This certification was presented in the domestic Gansu Jinta CSP EIA, and was repeated in a workshop held in

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162. Nonetheless, construction activities may have the potential to disturb as yet unknown underground cultural relics, and a construction phase chance find procedure will be established and activated if any chance finds of PCR are encountered:

i) construction activities will be immediate suspended if any archaeological or other cultural relics are encountered; ii) destroying, damaging, defacing, or concealing cultural relics will be strictly prohibited in accordance with PRC regulations; iii) the Jinta County Cultural Heritage Bureau will be promptly informed and consulted; and, iv) construction activities will resume only after thorough investigation and with the permission of the Jinta County Cultural Heritage Bureau.

E. Anticipated Operation Phase Impacts and Mitigation Measures

163. The Project may cause some adverse environmental impacts during operation including minor air pollution from natural gas combustion, noise from the pumps and blowers, wastewater pollution, solid waste pollution, soil contamination from HTF leaks, fire and safety hazards, and others.

1. Air Pollution

164. A CSP project generates electricity by collecting the energy carried by sunrays and converting thermal energy into electricity in a steam turbine. No fossil fuels are burned to create steam, and there are no emissions associated with the steam turbine. However, there are small emissions of air pollutants associated with the use of a boiler for start-up, HTF temperature control and freezing protection during cold weather. The predicted flue gas concentrations are 3 3 3 NO2: 178 mg/m ; SO2: 9.52 mg/m ; and TSP: 22.86 mg/m (Table 5-3). Highest predicted emissions are less than 46% of the Class II Standard for natural gas stack emissions (GB 13271-2001) and are also in compliance with the WB’s EHS Guidelines, and these emissions will only occur intermittently. Overall, as noted earlier in this chapter, once operational the Project will generate approximately 102 GWh of electricity per year and supply 88 GWh to the power grid, thereby avoiding annual consumption of approximately 30,000 tons of standard coal, and estimated annual emissions of 81,000 tons CO2, 260 tons of SO2, 440 tons of NOx, and 60 tons of TSP.

Table 5-3: Predicted Natural Gas Stack Emissions Pollutant Emission Class II Standard WB Stack parameters Concentration (GB 13271-2001) EHS Guidelines Mg/m3 Mg/m3 Mg/m3 H/D/oC TSP 22.86 50 - SO2 9.52 50 - 25/0.3/70 NO2 178.16 400 320 Source: Gansu Jinta CSP PRC EIA Report (2011).

165. Fugitive dust may be generated by strong winds and can negatively affect local air quality. To address this issue the following mitigation measures will be adopted:

Jinta County on 13 June 2013. 57

(i) If necessary, wind breakers will have been installed to minimize the fugitive dust generation during strong wind; (ii) Use recycled water to suppress dust emission; (iii) Use mirror washing water to suppress dust from solar collection field.

2. Soil

166. Soil contamination may occur if the project use toxic antifreeze agent for mirror washing water mix during the winter time of the Project operation. To mitigate such potential impact, only non-toxic propylene glycol antifreeze agent will be used.

3. Water Consumption

167. The Project will use wet cooling towers (evaporative cooling) to cool the steam condenser. The Project will require an estimated 380,000 m3 of water per year, most of which will be used for cooling and the remainder for mirror washing. Water will be sourced from Bantan Lake at the Jinta Oasis, and will be transported from Bantan Lake through an underground road side pipeline.

168. Bantan Lake has a storage capacity of 5,000,000 m3, Jiefangcun Reservoir has a storage capacity of 39,000,000 m3, and Yuanyangchi Reservoir has a storage capacity of 100,000,000 m3. Annual average flow between the Jiefangcun and Yuanyangchi reservoirs is 326,000,000 m3 per year. The Project’s annual water consumption is about 0.1% of the annual average flow. A water balance study was undertaken as part of the Gansu Jinta CSP EIA prepared by the Gansu Environmental Protection Science Design Institute, which indicated that the water withdrawals will have no significant negative impact on other water users or the ecology or hydrology of the river and reservoirs. The Gansu Water Resource Bureau has confirmed this conclusion, and has already given its formal approval for the annual water withdrawal. Nonetheless, to reduce water consumption, all wastewater produced at the CSP will be treated and reused onsite for site greening and/or dust suppression.

169. Domestic water will come from the municipal water supply network, which is managed by the Jinta Water Company. Domestic was use will be minimal and no discharge of domestic waste water from the Project, thus, it poses no environmental impacts.

4. Water Pollution

a) Wastewater

170. There will be wastewater generated from the CSP plant operation, including:

- Site drainage. - Domestic wastewater, estimated at 1,100 m3/year. - Wastewater from the purification system that will create the ultrapure boiler feed water. The discharge will have high levels of salts and dissolved solids. - Wash water from cleaning the parabolic troughs mirrors, estimated around 10,600 m3/year; and, - Boiler wastewater from periodic acid washing.

171. Inappropriate management of wastewater has the potential to negatively impact local surface and groundwater quality.

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b) Wastewater Treatment

172. To minimize the risk of surface and groundwater contamination, and to maximize water conservation, all wastewater produced at the CSP will be treated and reused onsite.

- Site Drainage Treatment and Reuse All site runoff and construction wastewater will be directed to sedimentation ponds, and oil traps will be installed wherever necessary prior to the sedimentation ponds. Then, the water will be used for greening and/or dust suppression.

- Mirror Wash Water Treatment and Reuse During Operation All mirror wash water will be directed to the ground for dust suppression.

- Domestic Wastewater Treatment and Reuse During Construction and Operation All domestic wastewater will be treated in an underground septic system. The treated and disinfected effluent will be stored and used for site greening and/or dust suppression. Sludge will be collected by a qualified party via pumper truck and disposed in a designated landfill on a regular basis. In the future it is anticipated that a municipal domestic wastewater treatment plant will be built in the site vicinity, at which time the Project domestic wastewater may be sent to that plant for treatment.

- Industrial Waste Water Treatment and Reuse During Operation All industrial wastewater including water purification system wastewater and boiler wastewater, wastewater collected from other parts of the CSP, runoff water from workshops, vehicles washing areas and other equipment, and oil contaminated water will be treated onsite in a 10 m3/h capacity industrial wastewater treatment plant (WWTP). The WWTP will be equipped with an oil/water separator. The treated water will be sent to a storage pond and then reused for site greening and/or dust suppression.

173. The onsite wastewater treatment facility will be operated in accordance with PRC standards and requirements and no wastewater will be discharged. All treated wastewater will be in compliance with relevant PRC standards, including Class I of the “Integrated Wastewater Discharge Standard (GB 8978-1996)”, and “Water Standards for Irrigating Vegetation (GB/T 18920-2002)” (Table 5-4).

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Table 5-4: Predicted Wastewater Quality After Treatment and Comparison with PRC Standards

Type of COD SS BOD NH -N Parameter 5 3 Wastewater (mg/L) (mg/L) (mg/L) (mg/L) Industrial Discharge concentration 20 20 - - Wastewater Standard, Class I, GB 8978-1996 100 70 20 15 Wastewater Standard, GB/T 18920-2002 - - 20 - Residential Discharge concentration 90 65 18 12.5 Wastewater Standard, Class I, GB 8978-1996 100 70 20 15 Wastewater Standard, GB/T 18920-2002 - - 20 - Source: Gansu Jinta CSP PRC EIA Report (2011).

174. In addition, the following measures will be undertaken:

(i) The solid waste collection and sanitation systems will be managed effectively so as to avoid any chance of ground and surface water pollution. (ii) All vehicle loading/unloading points will be within a bounded area to minimize the potential for spills to enter the storm water. (iii) Any run-off that is discharged from the site must be uncontaminated and meet standards for discharge.

5. HTF

175. The HTF used in the Project will be 73.5% diphenyl ether and 26.5% biphenyl, and along with natural gas poses a risk to workers in case of accidental release and leakage. HTF handling needs special care to protect workers and the environment, and HTF leakage may cause soil and water pollution and human health problems. Maintaining high quality HTF is critical for ensuring the high efficiency of the solar energy collection and conversion systems. Over time HTF slowly degrades and requires replacement. Around 2% of the total HTF in the Project, approximately 56 tons, will be replaced annually.

176. To mitigate potential risks from HTF the following measures will be taken:

(i) HTF will be transported in spill proof containers. (ii) HTF will be stored in designated areas with impermeable surfaces and protective dikes. (iii) A comprehensive fire management plan (including fire protection and control procedures) will be implemented in HTF storage, heat conversion, HTF expansion areas, and the solar field. (iv) Based on a proper fire management plan, if necessary, control boxes in the solar field will be equipped with fire extinguishers. (v) Permanent monitoring (inspection) for any minor HTF leakage will be conducted. (vi) The HTF system will be equipped with automatic pressure monitoring devices. HTF leakage will be automatically detected triggering an alarm in the control system. (vii) The ullage system should have a concrete surface and dikes and should be operated at all times when the plant is in operation.

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(viii) Concrete dikes should have sufficient capacity to hold 100 % of the HTF amount contained in the HTF tanks and expansion tanks. (ix) An emergency response procedure for HTF leakage will be developed and implemented by properly trained staff. (x) HTF contaminated soil will be properly removed in accordance with the relevant PRC standards and properly stored in a temporary storage place until final removal by licensed contractors. (xi) Degraded HTF and HTF contained filters from the ullage system will be treated as a hazardous material and temporarily stored on site in spill proof tanks until they can be removed for treatment. (xii) HTF contaminated soil will also be treated as a hazardous material and will be temporarily stored onsite in a bunded area with an impermeable surface until it can be removed for treatment. (xiii) Only contractors properly licensed to handle waste HTF will collect, transport, treat, recycle and/or dispose of all waste HTF in accordance with the laws and regulations of the PRC.

6. Other Chemicals and Hazardous Materials

177. Toxic, hazardous, and harmful materials present in the operation of a CSP include petroleum products, solvents and chemicals used for water purification, nitrogen as asphyxiant during purging, and mirror cleaning additives. These can have impacts on human health and the environment if not appropriately managed. Special care will be taken to mitigate these risks, including:

(i) All toxic, hazardous, and harmful materials will be transported in spill proof tanks with filling hoses and nozzles in working order, and stored in designated areas with impermeable surfaces and protective dikes such that spillage or leakage will be contained from affecting soil, surface water or groundwater systems. (ii) Material safety data sheets (MSDSs) will be posted for all hazardous materials. (iii) Oil absorbents will be readily accessible in marked containers. (iv) Good housekeeping procedures will be established to avoid the risk of spills. (v) Spills will be dealt with immediately, and personnel will be trained and tasked with this responsibility. (vi) Identify and maintain a register of all activities that involve the handling of potentially hazardous substances, and devise and supervise the implementation of protocols for the handling of these substances. This will include all fuels, oils, grease, lubricants, and other chemicals. (vii) Workers should be properly trained before handling hazardous wastes and have the requisite PPE. (viii) Store hazardous waste temporarily in closed containers away from direct sunlight, wind, water and rain in secure designated areas with impermeable surfaces and protective dikes such that spillage or leakage will be contained. (ix) Oil sludge will be collected and disposed by licensed contractors as a needed basis. (x) Hazardous waste shall be separated from general waste. All hazardous wastes will be contracted to a certified contractor for transporting and disposal.

7. Solid Waste

178. The Project will generate an estimated 25t of domestic solid waste annually, which if not 61 properly managed can cause visual and environmental impacts. To mitigate this risk, the following measures will be implemented:

(i) No permanent on-site solid waste disposal will be allowed. (ii) No burning of wastes will be permitted at the plant site. (iii) All structures and/or components replaced during maintenance activities will be reused or recycled to the extent possible. Non-recyclable parts will be disposed at a designated waste disposal site in Jinta County. (iv) All wastes will be routinely collected by an appropriately licensed waste management companies. Wastes will be reused or recycled to the extent possible. Non-recyclable wastes will be transported for final disposal at a designated waste disposal site in Jinta County.

8. Noise

179. The noise impact during operation will mainly be from the CSP plant equipment, such as the steam generator system, power generation equipment, gas heater, transformer, pumps, and cooling equipment. The noise level of the equipment ranges from 85 to 100 dB(A).

180. To mitigate noise impacts, the latest technology incorporating maximum noise suppression measures for the CSP plant components will be used. Mufflers will be installed at equipment with air flow noise such as air compressors, and vibration reduction devices will be installed between foundation and noisy mechanical equipment such as fans and pumps. All plant and equipment, including vehicles will be properly maintained in order to minimize noise. Also, appropriate personal noise protective equipment (PPE) will be provided to the workers who are likely to be exposed to high noise level environments.

181. In addition, a 50 m wide isolation zone will be secured between the project site and the nearest village as a sound and sight barrier.

9. Community Health and Safety

182. To protect community health and safety from transmissions line, electrical and magnetic field (EMF) monitoring will be conducted prior to the commencement of the project operation, ensuring that it does not pass near any human settlement.

10. Occupational Health and Safety

183. Accidental release of HTF, other chemicals, and hazardous materials may present health and safety risks to workers. Natural gas and other flammable gases have fire hazards and the molten salt may cause burn hazards to workers.

184. To mitigate potential health and safety risks, the following measures will be taken:

(i) An operation phase occupational health and safety plan including fire prevention and control will be developed and implemented, and workers will be trained regularly on its implementation. (ii) The plant general arrangement will be designed in strict compliance with relevant PRC fire, health and safety standards. Fire compartments will be established based on the fire risk; and fire-resistant buildings/structures will include fire-proof doors and windows.

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(iii) The storage tank area will be surrounded by ring-shaped fire passages for fire- fighting vehicles. (iv) A fire-alarm system will be installed and tested regularly to ensure it functions properly. (v) The process control system will include an out-of-limit alarm to ensure all hazardous materials are safety under control at all time. (vi) PPE, including goggles, gloves, safety shoes, will be provided to workers. (vii) Unauthorized personnel should not be around the molten salt storage tanks and authorized personnel working at thermal storage tanks must have PPE at all times to prevent burn hazards. (viii) Naked fire sources, hot surfaces, electric sparks, electrostatic sparks and ignition sources will be strictly controlled, especially near HTF and natural gas. (ix) Control measures will be strictly undertaken to ensure the discharge, exhaust and safety relief of flammable fuels in enclosed systems. (x) A fire monitoring system will be installed to ensure safety in production and operation and provide early warning to plant personnel. (xi) At risk areas will have catalytic bead type combustible gas test detectors which are able to make an acousto-optic alarm, and electrochemical type toxic gas test detectors also capable of making an acousto-optic alarm.

11. Emergency Response Plan

185. An emergency response plan will be established to prevent risks from HTF, chemicals and natural gas during the operation of the CSP plant. The plan will be in accordance with the “National Environmental Emergency Plan” (24 January 2006) and other relevant PRC laws, regulations and standards. Major elements of the emergency response plan are presented in Table A-3 of Appendix 1.

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VI. ALTERNATIVE ANALYSIS

186. An analysis of Project alternatives was undertaken during the project design to determine the best way of achieving the Project objectives while minimizing environmental and social impacts.

A. No Project Alternative

187. The electrical power demand in PRC and in Gansu province has been increasing due to the growth of economic activities. Energy consumption in Gansu increased at an annual average growth rate of 5% from 1991-2009. In 2012 the total electrical power consumption in the province was 99,800 GWh, and it is expected to reach 136,000 GWh in 2015 (Gansu DRC). Despite growth in energy production, Gansu is unable to meet demand, and must import energy from other provinces.

188. Coal has provided 70% of the primary energy consumed and nearly 75% of electricity generation in the PRC. This high proportion of fossil fuel consumption, driven by the increasing demand for energy to support rapid economic growth in the last three decades, has raised serious environmental concerns. One way to mitigate this is to increasing the share of renewable energy in the overall energy supply.

189. If the Project is not implemented, electricity from a traditional coal-fired power plant will be required to meet the increasing demand for electricity in Gansu. The rapid expansion in coal-fired power plants in the PRC has caused large increase in CO2, the major GHG 2 responsible for climate change, as well emissions of SO , TSP, PM10 and NOx. The Project will improve air quality and significantly reduce coal consumption and GHG emissions. It will also provide valuable hands on experience and mitigate some of the technology risks associated with first-of-kind projects. Successful demonstration will help lead to market acceptance and large scale CSP deployment in the PRC. Therefore, the “no project” alternative is considered not acceptable.

B. Alternative Methods of Generating Power

190. There are a variety of methods to generate electric power, including coal-fired thermal power plant, natural gas power plant, wind power, biomass, geothermal, and nuclear. All are considered less suitable than CSP power generation.

1. Coal Power

191. The primary electrical power source in the PRC is coal-fired power plants, which are responsible for more than 70% of all electrical power generation. In Gansu province coal-fired power plants account for over 65% of electrical power production, followed by hydropower and wind at 20% and oil at 12%. Even though the pollutants emissions per unit of power generation have significantly reduced over the last three decades in the PRC due to energy efficiency improvements and emission controls, coal-fired power plants are still the main stationary sources of air pollutants, and are not recommended.

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2. Natural Gas Power

192. Natural gas production and consumption has increased significantly in the last decade. In the PRC natural gas is mainly used in residential, public service, chemical industry, industrial, transportation, and power sectors. Chinese natural gas consumption in 2011 had already increased fourfold from 2000 levels and reached 130 billion m3, making it the fourth largest gas market in the world. In its current 12th Five-Year Plan (2011 to 2015), the PRC government plans to double the share of natural gas in the primary energy production and reach consumption levels up to 260 billion m3 by 2015.

193. Modern power plants can be built to combust natural gas as the primary fuel. Natural gas is considered as a clean fossil fuel as significantly less pollutants and GHG are generated from natural gas electrical power plants comparing to coal-fired plants. The need to curb coal demand growth to reduce air pollution and improve air quality in big cities is high, and natural gas offers at least part of the solution. However, natural gas is not widely used for power generation in the PRC as it is much more expensive than coal, the main competitor to gas in the power sector, and the fuel comprised less than 4 % of the country's total primary energy consumption in 2009. In addition, LNG must be trucked to the Jinta C/LNG station, and although this supply is sufficient for CSP antifreeze heaters, it is not sufficient to be a primary fuel source.

3. Wind Power

194. Wind energy is kinetic energy of wind exploited for electricity generation in wind turbines. Wind power has experienced dramatic growth since the turn of the 21st century. Global installed capacity at the end of 2011 was around 238 GW, up from 18 GW at the end of 2000.26 Around 41 GW was added in 2011 alone. In the last few years wind power’s center of growth has moved from Europe and North America to Asia. China became the global leader in terms of total installed capacity in a very short time, overtaking the United States in 2010.

195. There is some reluctance to expand wind energy development in Gansu and neighboring Qinghai, due to over investments in other wind rich provinces such as Inner Mongolia Autonomous Region. Also, the nature of wind energy is intermittence of power generation based on the wind availability, which creates concerns about the impacts on the stability of power systems. For instance, the curtailment of wind power in certain regions of PRC is as high as 25%.27 Therefore, it is recommended to develop more solar-based power generation system in Gansu province taking advantage of its rich solar resources.

4. Geothermal Power

196. Geothermal energy can be utilized for space heating or electrical power generation, but is used more frequently for heating. The global capacity of geothermal power plants is approximately 9 GW, with an annual electricity generation of less than 1% of the global electricity demand. Geothermal heating plants have a global capacity of approximately 18,000 MW thermal, mostly shallow geothermal resources. The future of geothermal energy will be the development of enhanced geothermal systems to exploit deep geothermal resources, which could expand the potential of geothermal energy considerably.

26 IEA website http://www.iea.org/topics/windpower/ 27 Non-absorption of electricity generated by wind power plants by power system dispatch center. 65

197. Large-scale geothermal power development is currently limited to tectonically active regions such as areas near plate boundaries, rift zones, and mantle plumes or hot spots. These active, high heat-flow areas include countries around the ‘Ring of Fire’ (Indonesia, The Philippines, Japan, New Zealand, Central America, and the west coasts of Canada and the United States) and rift zones such as Iceland and East Africa. These areas are the most promising for geothermal development. If technological breakthroughs made new geothermal power technologies available, then geothermal power might expand to other regions. Gansu, however, does not have adequate geothermal resources for power generation.

5. Biomass Power

198. Power generation and Combined Heat and Power (CHP) based on biomass and on biomass co-firing in coal-fired power plants, are growing. The capacity of biomass CHP plants varies considerably. Biogas anaerobic digesters are usually associated to gas-fired engines for heat and power generation with electrical capacity up to a few MW. Biomass-fired power plants and CHP plants have capacities ranging from a few MW up to 350 MW. Small and medium- size CHP plants are usually sourced with locally available biomass. Large CHP plants and coal/biomass co-firing power plants require biomass sourcing from a wide region and/or imported wood or forestry residues.

199. Biomass-based CHP or power generation is widely used in regions that have ample fuel wood resources, forestry or agricultural residues. Biomass use in CHP plants may compete with other, non-energy uses of agricultural residues such as straw, or with wood processing industry (i.e. pulp and paper) in the case of forestry residues. On a global scale, biomass supplies more than 1% of the electricity demand. Biomass is also used in CHP plants. Gansu and the Jinta area in particular has limited biomass fuel resources and thus it is not feasible to used biomass fuel for power generation.

C. Alternative Solar Power Generation Methods

200. Two solar power options were considered, photovoltaic and concentrated solar power.

1. Photovoltaic

201. Solar photovoltaic (PV) cells convert sunlight directly into electricity. Currently, crystalline silicon (c-Si) and thin-film (TF) technologies dominate the global PV market. In a c-Si PV system slices (wafers) of solar-grade (high purity) silicon are made into cells that are assembled into modules and electrically connected. TF PV technology consists of thin layers of semiconducting material deposited onto inexpensive, large-size substrates such as glass, polymer or metal. Crystalline silicon PV is the oldest and currently dominant PV technology with approximately 85-90% of the PV market share. Compared with c-Si-based PV systems, the production of TF PV system is less energy-intensive and requires significantly less active (semiconducting) material. TF solar PV is therefore generally cheaper, though less efficient and requires substantially more surface area for the same power output compared to c-Si-based systems.

202. PV power has an enormous energy potential and is usually seen as an environmentally positive technology. Over the years many countries have implemented specific policies and incentives to support solar PV deployment. This has led to a rapid increase in the total installed capacity of PV from 1.4 GW in 2000 to around 100 GW at the end of 2012, with about 30 GW of capacity installed per year in 2011 and 2012. The associated industrial learning and market

66 competition have resulted in very significant and rapid cost reductions for solar PV systems. Continued cost reductions for solar PV systems are an essential requirement for accelerating the attainment of grid-parity of electricity generated using on-grid solar PV systems. In countries with good solar resources and high electricity tariffs, residential solar PV systems have already reached parity with electricity retail prices, whilst in general PV is now fully competitive with power generated from diesel-based systems.

203. Solar PV, as a variable renewable electricity source, can be readily integrated into existing grids up to a penetration level of about 20% depending on the configuration of the existing electricity generation mix and demand profiles. Increasing the integration of a high level of variable renewable power from PV systems into electricity grids requires re-thinking of grid readiness with regards to connectivity, and energy storage solutions.

2. Concentrated Solar Power

204. Concentrated solar power (CSP) use devices to concentrate energy from the sun’s rays to heat a receiver to high temperatures. This heat is transformed first into mechanical energy (by turbines or other engines) and then into electricity. CSP can provide low-carbon, renewable energy resources in countries or regions with strong sunshine and clear skies as measured in DNI. Given the arid/semi-arid nature of environments that are well-suited for CSP, a key challenge is accessing the cooling water needed for CSP plants. Dry or hybrid dry/wet cooling can be used in areas with limited water resources.

205. CSP uses renewable solar resource to generate electricity while producing very low levels of greenhouse-gas emissions. Thus, it has a high potential to be a key technology for mitigating climate change. Unlike solar PV technologies, CSP has an inherent capacity to store heat energy for later conversion to electricity. When combined with thermal storage capacity, CSP plants can continue to produce electricity even when clouds block the sun or after sundown. CSP plants can also be equipped with backup power from combustible fuels, such as natural gas. These factors give CSP the ability to provide reliable electricity that can be dispatched to the grid when needed, including after sunset to match late evening peak demand or even around the clock to meet base-load demand.

206. CSP technology has been proven commercially in USA and Spain with a good track record. The first commercial plants began operating in California from 1984 to 1991, spurred by federal and state tax incentives and mandatory long-term power purchase contracts. A drop in fossil fuel prices then led the federal and state governments to discontinue the policy framework that had supported the advancement of CSP. In 2006, the market reemerged in Spain and the United States, again in response to government measures such as feed-in tariffs and policies obliging utilities to obtain some share of power from renewable, and from large solar in particular.

3. Solar Technology Selection

207. CSP is a stable predictable source of energy that can stabilize other renewable energy sources such as wind and solar PV. In Gansu additional wind and solar PV power development is planned, but this is not feasible if no reliable power generation source is installed, such as CSP.

208. There is no commercial scale CSP facility in the PRC. To diversity the energy supply and reduce energy dependency on coal-fired power plants, the PRC government has decided to support the Project and demonstrate the CSP technology in Gansu province. Experience 67 learned from this demonstration project will be very valuable in further developing and promoting this very promising renewable technology.

D. Alternative Project Design

1. Alternative Locations

209. The sunlight hits the Earth’s surface both directly and indirectly, through numerous reflections and deviations in the atmosphere. The main differences in the direct sunlight available from place to place arise from the composition of the atmosphere and the weather. The solar energy that CSP plants use is measured as DNI, which is the energy received on a surface tracked perpendicular to the sun's rays.

210. DNI measures provide only a first approximation of a CSP plant’s electrical output potential. In practice, what matters most is the variation in sunlight over the course of a day: below a certain threshold of daily direct sunlight, CSP plants have no net production due to constant heat losses in the solar field.

211. Good DNI is usually found in arid and semi-arid areas with reliably clear skies, which typically lay at latitudes from 15° to 40° north or south of the equator. DNI is also significantly better at higher altitudes, where absorption and scattering of sunlight are much lower. Jinta County in Gansu Province, is a highly suitable location due to high DNI of 1,921 kWh/m2/year and over 3,320 sunlight hours per annum.

212. Within Gansu the EA and IA evaluated 4 different high DNIs locations for the project based on topography, land use, land availability, average and maximum wind speeds, proximity to roads, and proximity to water. Although all four site were relatively close together and similar in nature, the proposed Project site was selected based on land availability and access to road and water sources.

2. Alternative CSP Technologies

213. There are four main CSP technologies, categorized by the manner in which they focus the sun’s rays and the technology used to receive the sun’s energy: parabolic troughs, linear fresnel reflectors, parabolic dishes and solar towers (Figure 6-1).

a) Parabolic Troughs

214. Parabolic trough systems consist of parallel rows of mirrors (reflectors) curved in one dimension to focus the sun’s rays. The mirror arrays can be more than 100 m long with the curved surface 5 m to 6 m across. Carbon steel pipes (absorber tubes) with a selective coating serve as the heat collectors. The coating is designed to allow pipes to absorb high levels of solar radiation while emitting very little infra-red radiation. The pipes are insulated in an evacuated glass envelope. The reflectors and the absorber tubes move in tandem with the sun as it crosses the sky.

215. All parabolic trough plants currently in commercial operation rely on synthetic oil as the fluid that transfers heat (the heat transfer fluid or HTF) from collector pipes to heat exchangers, where water is preheated, evaporated and then superheated to steam. The superheated steam goes through a turbine which drives a generator to produce electricity. After being cooled and condensed, the water returns to the heat exchangers.

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216. Parabolic troughs are the most mature of the CSP technologies and form the bulk of current commercial plants.

Figure 6-1: The Four Main CSP Technologies

b) Linear Fresnel reflectors

217. Linear Fresnel Reflectors (LFRs) approximate the parabollic shape of trough systems but use long rows of flat or slightly curved mirrors to reflect the suun’s rays onto a downward- facing linear, fixed receiver. A more recent design, known as compact LFRs, uses two parallel receivers for each row of mirrors and thus needs less land than parabolic troughs to produce a given output.

218. The main advantage of LFR systems is that their simple design of flexibly bent mirrors and fixed receivers requires lower investment costs and facilitates direct steam generation (DSG), thereby eliminating the need for heat transfer fluids and heat exchangers. LFR plants are, however, less efficient than troughs in converting solar energy to electricity, and it is more difficult to incorporate storage capacity into their design.

c) Solar Towers

219. Solar towers, also known as central receiveer systemss (CRS), use hundreds or thousands of small reflectors (called heliostats) to concentrate the sun’s rays on a central receiver placed atop a fixed tower. Some commercial tower plants now in operation use DSG in the receiver; others use molten salts as both the heat transfer fluid and storage medium.

220. The concentrating power of the tower concept achieves very high temperatures, thereby 69 increasing the efficiency at which heat is converted into electricity and reducing the cost of thermal storage. In addition, the concept is flexible and designers can choose from a wide variety of heliostats, receivers, transfer fluids and power blocks. However, there is currently no commercial scale application of this technology.

d) Parabolic Dishes

221. Parabolic dishes concentrate the sun rays at a focal point propped above the center of the dish. The entire apparatus tracks the sun, with the dish and receiver moving in tandem. Most dishes have an independent engine/generator (such as a Stirling machine or a micro- turbine) at the focal point. This design eliminates the need for a heat transfer fluid and for cooling water.

222. Parabolic dishes offer a reasonable solar-to-electric conversion performance and have several other features including compact size, absence of cooling water, and low compatibility with thermal storage and hybridization, and it competes with PV modules, especially concentrating PV. However, parabolic dishes are limited in size (typically tens of kW or smaller) and each produces electricity independently, which means that hundreds or thousands of them would need to be co-located to create a large-scale plant.

e) CSP Technology Selection

223. To demonstrate the CSP technology, evaluate the performance of the CSP plant in the PRC and achieve the optimal operating efficiency, the most common and mature CSP technology, parabolic trough CSP with thermal storage and natural gas fired heaters for startup and antifreeze protection, has been selected for the Project.

E. Overall Alternative Analysis

224. Base on the overall alternative analysis, the Project has selected a suitable location with the most appropriate choice of solar power generation technology.

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VII. INFORMATION DISCLOSURE AND PUBLIC CONSULTATION

A. PRC and ADB Requirements for Public Consultation

1. PRC Requirements

225. Relevant provisions in the PRC Environmental Impact Assessment Law (2003) and the Regulations on the Administration of Construction Project Environmental Protection (No. 253 Order of the State Council, 1998) require that an EIA study for a construction project shall solicit opinions from affected residents, as well as other organizations and concerned stakeholders. However, the requirements for public consultation are different for various sectors and projects. For an environmental Category A project (such as a coal-fired power plant), full EIA reports are required including two rounds of public consultations, while for a Category B project (such as a solar or wind power project), only a simplified tabular EIA is required without a requirement for any public consultation.

2. ADB Requirements

226. ADB’s SPS has specific requirements for information disclosure and public consultation. Information disclosure involves delivering information about a proposed project to the general public and to affected communities and other stakeholders, beginning early in the project cycle and continuing throughout the life of the project. Information disclosure is intended to facilitate constructive engagement with affected communities and stakeholders over the life of the project.

227. In order to make key documents widely available to the general public, the SPS requires submission of a finalized EIA for Category A projects, and a final IEE for Category B projects, to ADB for posting on the ADB website. The SPS requires that borrowers take a proactive disclosure approach and provide relevant information from environmental assessment documentation directly to affected peoples and stakeholders.

228. The SPS also requires that the borrower carry out meaningful consultation with affected people and other concerned stakeholders, including civil society, and facilitate their informed participation. Meaningful consultation goes beyond information disclosure. It involves two-way communication between the borrower and the affected communities and stakeholders, and active participation of affected communities and stakeholders in project design and implementation.

B. Project Information Disclosure and Public Consultation

229. Information disclosure and public consultations were conducted in Jinta County during the course of the domestic EIA preparation, in accordance with the PRC Guidelines for Public Consultation for EIA (2006). Disclosure and consultation was undertaken in three phases:

Stage I Initial information disclosure

In early December 2010 the EIA team of the Gansu Environmental Protection Science Design Institute visited villages in the Project site vicinity, providing Project information to affected people including a Project description, potential 71

environments, and potential mitigation measures to be taken.

Stage II Consultation and questionnaire during EIA preparation

In January 2011 the EIA team and CHEC visited local villages and governmental departments, presenting Project information, environment impacts and mitigation measures. Questionnaires were distributed to local residents, and comments collected (see discussion below for additional information).

Stage III Disclosure of EIA report

A Project public information notice was published in the Jiuquan Daily newspaper from January 14-21, 2011. The notice summarized the Project owner, purpose, scope, location, content, investment, EIA contents and findings, and mail and email methods for providing public input (Figure 7-1). There was no response or comment from the public in response to the public Project information notice.

The domestic EIA Report was also available for review in the Gansu EPB.

230. In addition, this English IEE will be available for review at ADB’s website at www.adb.org, and all semi-annual and annual environmental progress and performance reports will be available at ADB’s website during the implementation of the Project.

Figure 7-1: Project public information notice, Jiuquan Daily Newspaper

Source: The China Huadian Engineering Co., Ltd. (CHEC)

C. Stakeholder Questionnaire

231. In Stage II of the public disclosure and consultation process a survey questionnaire was undertaken to engage stakeholders and obtain their feedback on the proposed Project. The survey was conducted from 4 to 14 January 2011, and targeted potentially affected residents, farmers, workers and local government officials. A total of 80 questionnaires were distributed

72 and 80 completed questionnaires were returned. The profiles of the participants are summarized in Table 7-1 while the results of the survey are presented in Table 7-2. Figure 7-2 presents a completed questionnaire.

Table 7-1: Profile of Survey Participants Number of Category Respondent Details Percent Respondents Male 45 56 Number Surveyed Female 35 44 30 or below 19 23 Age Distribution 30-49 58 73 50 or above 3 4 Junior high school or below 13 16 Education Level Senior high school 30 38 Junior college or above 37 46 Worker 33 41 Farmer 6 7 Occupation Official 7 9 Technical personnel 34 43 Source: Gansu Jinta CSP PRC EIA Report (2011)

Table 7-2: Summary of Survey Results Questions Survey Answers Number of Percentage respondents (%) 1. How well you understand the Clear 24 30 project ? Basically clear 43 54 Unclear 13 16 2. What is the main Air pollution / / environmental issue in the Noise pollution 5 6 local area? Water pollution / / Solid waste pollution 20 25 Ecological impact 55 69 3. Are you satisfied with Satisfied 70 88 environmental status in Jinta, Not satisfied 3 4 Gansu? No comment 7 8 4. What do you think is the main Air pollution / / environmental issue Water pollution / / associated with the project? Noise pollution 7 8 Solid waste pollution 23 29 Ecological impact 50 63 5. Do you think the project can Yes 78 98 improve the environment? No / / Unclear 2 2 6. What do you think is the Significant 80 100 contribution of the project to Normal / / local economic development? Insignificant / / 7. Do you think the project site Suitable 80 100 selection is suitable? Unsuitable / / 8. What is your attitude toward Support 80 100 the Project? No comment / / 73

Against / / Source: Gansu Jinta CSP PRC EIA Report (2011)

Figure 7-2: Sample of a Completed Stakeholder Questionnaire

Source: The China Huadian Engineering Co., Ltd. (CHEC)

232. The survey covered a wide age range, and 56% of respondents were male and the

74 remainder female. Over 45% of respondents had an education level of college and above, while slightly less than 40% of participants had only completed high school. The occupation of the participants was quite diverse, representing the opinions of a wide range of Project stakeholders.

233. Most of the participants (84%) knew of the proposed Project, indicating that the Project information had been well disseminated. When the participants were asked to identify the main environmental impact, 63% were concerned about ecological impact, while 23% and 7% were concerned about solid waste and noise, respectively. Most participants (88% of participants) were satisfied with the current environmental conditions in the local area. The information on the Project objective and associated positive and negative impacts, and mitigation measures has been disseminated and communicated. Then, almost all participants (98%) felt that the Project will result in an overall environmental improvement, and 100% of participants indicated that the site selection was appropriate and the Project will enhance the local economic development and local employment. All participants (100%) supported the Project.

D. Future Consultation Activities

234. The IA will continue to conduct regular community liaison activities during the construction and operations phases, including the implementation of the grievance redress mechanism (GRM, see Chapter VIII). 75

VIII. GRIEVANCE REDRESS MECHANISM

A. Introduction

235. A Project grievance can be defined as an actual or perceived Project related problem that gives ground for complaint by an affected person (AP). As a general policy, the IA of the project will work proactively toward preventing grievances through the implementation of impact mitigation measures and community liaison activities that anticipate and address potential issues before they become grievances. In addition, as the Project has strong public support and will not involve any land or property acquisition or resettlement, significant grievance are unlikely. Nonetheless, during construction and operation it is possible that unanticipated impacts may occur if the mitigation measures are not properly implemented, or unforeseen issues arise. In order to address complaints if or when they arise, a Project grievance redress mechanism (GRM) has been developed in accordance with ADB requirements and Government practices. A GRM is a systematic process for receiving, recording, evaluating and addressing AP’s Project-related grievances transparently and in a reasonable period of time.

B. ADB’s GRM Requirements

236. The ADB’s SPS requires the IA to establish a GRM to receive and facilitate resolution of affected person’s concerns and complaints about the project’s environmental performance during construction as well as operation phase of the project. The GRM should be scaled to the risks and adverse impacts of the project; should address affected people’s concerns and complaints promptly, using an understandable and transparent process; should be readily accessible to all sections of the community at no cost and without retribution; and, should not impede access to the PRC’s judicial or administrative remedies.

C. Proposed Project GRM

237. In consultation with the EA and CHEC, it was agreed that the IA will establish a Project Public Complaints Unit (PPCU). The PPCU will be coordinated by a designated staff. The contact persons for the different GRM entry points (residential community leaders, neighborhood organizations, local authorities, district EPB, and contractors, operators) will be defined prior to construction. Organizational charts of the GRM, including the contact persons of the entry points and the PPCU, will be disclosed at every construction site. Phone numbers, addresses, and email addresses of all access points and the PPCU will be disclosed to the public through the Project city’s website and/or on information boards at each construction site. The Project will provide training to the members of the PPCU and the contact persons of the GRM entry points to ensure that responsibilities and procedures are clear. The concept of the proposed project GRM is shown in Figure 8-1.

D. Grievance Types and Eligibility Assessment

238. Public grievances addressed by the project GRM will most likely relate to environmental issues encountered during the construction and operation phases, as comprehensive consultations with potentially affected people that were conducted during project preparation confirmed their basic support of the project. Grievances may include vehicle operation and transportation of heavy equipment and materials; fugitive dust emissions and construction

76 noise; soil erosion and haphazard disposal of waste materials in inappropriate places; and safety measures for the protection of the general public and construction workers. Construction-related grievances can be numerous, and managing them is the contractor’s responsibility under its contract with the IA. Operation related grievances may occur due to complaints about the plant’s environmental performance.

239. Each complaint will be assessed following a well-established procedure. Once a complaint is received and filed, the PPCU will identify if the complaint is eligible. Eligible complaints include those where (i) the complaint pertains to the project, and (ii) the complaint falls within the scope of environmental issues that the GRM is authorized to address. Ineligible complaints include those where (i) the complaint is clearly not project-related, (ii) the nature of the issue is outside the mandate of the environment GRM (such as issues related to resettlement, allegations of fraud or corruption), and (iii) other company or community procedures are more appropriate to address the issue. If the complaint is rejected, the complainant will be informed of the decision and the reasons for the rejection.

240. It’s very important that all complains are recorded in a systematic fashion by the PPCU. Effective tracking and documentation will accomplish the following objectives: (i) The PPCU will be responsible for the classification. The level of severity guides requirements for alerting senior management and determines the seniority of management oversight needed; (ii) Provide assurance that a specific person is responsible for overseeing each grievance—from receipt and registration to implementation; (iii) Promote timely resolution; (iv) Inform all concerned (the complainant and appropriate Project personnel) about the status of the case and progress being made toward resolution; (v) Document the responses and outcome(s) to promote fairness and consistency; (vi) Provide a record of settlements and help develop standards and criteria for use in the resolution of comparable issues in the future; (vii) Monitor the implementation of any settlement to ensure that it is timely and comprehensive; and (viii) Assess the effectiveness of the process and action(s) to resolve complaints.

E. GRM Steps and Timeframe

241. A fundamental goal of the GRM is to solve problems early at the lowest level. Therefore, the IA, through the person assigned to receive, record and document grievances, will attempt to address grievances at the first instance and in a pro-active manner to preclude elevating grievances to higher level. Procedures and timeframes for the grievance redress process are described as follows (also see Figure 8-1): (i) Step 1: If a concern arises, the affected person tries to resolve the issue of concern directly with the contractor/operator and/or the project manager, or through Local EPBs, community leaders. Any concern will be reported to the PPCU designated staff. The contractor/operator, the project manager, and/or the PPCU staff shall provide a response within seven working days. If the concern is resolved successfully, no further follow-up is required. Yet, the PPCU staff at the project IA shall record any complaint and actions taken to resolve the issues and report the results to ADB by indicating them in periodic environmental monitoring reports; 77

(ii) Step 2: If no solution is found, the PPCU must properly assess the eligibility of the complaint, identify a solution, give a clear reply within 14 working days, and timely convey to the complainant and to the implementing agency, or contractor the suggested solution. The contractor, during construction, and the implementing agency, during operation, shall implement the redress solution and convey the outcome to the PPCU within seven working days; (iii) Step 3: If no solution is identified by the PPCU or if the complainant is not satisfied with the suggested solution under Step 2, the PPCU will organize, within 14 working days, a multi-stakeholder hearing (meeting) where all relevant stakeholders, including the complainant, the IA, contractor/operator, and local EPB will be invited. The meeting will aim to find in a solution acceptable to all, and identify responsibilities and an action plan. The contractor during construction and the IA during operation will implement the agreed-upon redress solution and convey the outcome to the PPCU within seven working days; (iv) Step 4: If the multi-stakeholder hearing process is not successful, the PPCU, through the IA, will inform the EA and provincial EPB accordingly. The EA with the consultation from the EPB and ADB will deliver alternative approaches to resolve the issues.

242. The PPCU as well as the local EPB will accept the complaints and grievances lodged by the affected persons free of charge. Any costs incurred should be covered by contractor or the IA or from the contingency of the contract.

243. A summary of GRM activities will be reported by the IA in the annual project progress reports and sent to ADB. The GRM will be operational during the entire construction phase and during the operations until the project completion.

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Figure 8-1: Project-Level GRM

Grievances/Complaints entry points (oral or written complaint)

Contractor/Operator Local EPBs, Issue and/or the Project Inform AP community leaders Manager Solved

Forward Forward if issue not solved

Project Public Complaint Unit (PPCU) under IA Record complaint And report to ADB through environmental monitoring reports Assess eligibility

IA and contractor Solution not found identify solution, get back to AP

Solution Conduct multi- found stakeholder meeting Solution to identify solution and found action

Solution not found

PMO informs ADB and EPB Implement Solution and develops solution

During During Construction Operation

Contractor Operator

ADB = Asian Development Bank, AP = affected person, EA = executing agency, EPB = environmental protection bureau, IA = implementation agency. Source: TA consultants

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IX. CONCLUSIONS

244. The proposed CSP project in Jinta County, Gansu Province will bring positive environmental benefits locally as well as globally by generating electrical power with zero emission solar energy and clean natural gas instead of by traditional coal-fired power plants. The Project will annually deliver approximately 88 GWh of electricity to the grid, thereby avoiding annual consumption of 30,000 tons of standard coal and providing a global public good by reducing the estimated annual emission of 81,000 tons of carbon dioxide (CO2), a greenhouse gas. In addition, Project operation will avoid estimated annual emissions from coal burning of 260 tons of sulpher dioxide (SO2), 440 tons of nitrous oxides (NOx), and 60 tons of total suspended particulates (TSP).

245. Through the environmental assessment process the Project has i) selected an appropriate technology to reduce the emission of pollutants; ii) identified negative environment impacts and appropriately established mitigation measures; iii) received public support from the majority of Project beneficiaries and affected people; iv) established an effective Project GRM; v) assessed the capacity of the executing agency and the implementing agency; vi) prepared a comprehensive EMP including environmental management and supervision structure, environmental mitigation and monitoring plans, and institutional strengthening and personnel training.

246. Based on the analysis conducted it is concluded that overall the Project will result in significant positive socioeconomic and environmental benefits, and will not result in significant adverse environmental impacts that are irreversible, diverse, or unprecedented. Any minimal adverse environmental impacts associated with the Project can be prevented, reduced, minimized or otherwise compensated through the appropriate application of mitigation measures. It is therefore recommended that:

i) the Project’s categorization as ADB environment category B is confirmed; ii) this IEE is considered sufficient to meet ADB’s environmental safeguard requirements for the Project, and no additional studies are required; and iii) the Project be supported by ADB, subject to the implementation of the commitments contained in the EMP and allocation of appropriate technical, financial and human resources by the EA and IA to ensure these commitments are effectively and expediently implemented.

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APPENDIX 1: ENVIRONMENTAL MANAGEMENT PLAN

A. Objectives

1. This is the Environmental Management Plan (EMP) for the Gansu Jinta concentrated solar thermal power (CSP) Project. The Project will construct a 50 megawatt (MW) CSP plant in Jinta County, Gansu Province, in the People’s Republic of China (PRC). The Project will be a first-of-kind CSP demonstration plant using one hour thermal energy storage (TES) in the PRC.

2. The objectives of the EMP are to ensure (i) implementation of identified mitigation and management measures to avoid, reduce, mitigate, and compensate for anticipated adverse environment impacts; (ii) implementation of monitoring and reporting against the performance indicators; and (iii) Project compliance with the PRC’s relevant environmental laws, standards and regulations and ADB’s Safeguard Policy Statement (SPS). Organizational responsibilities and budgets are clearly identified for execution, monitoring and reporting.

B. Implementation Arrangements

3. The China Huadian Corporation (CHD) will be the executing agency (EA).1 CHD will take overall responsibility for the Project implementation including financial and audit management. The Gansu Huadian Jinta Solar Thermal Power Co. Ltd. (GHJSP) will be the implementing agency (IA), responsible for day to day project implementation management including procurement and contract management, payment to contractors, operation and maintenance, and social and environment safeguard monitoring. 2 The China Huadian Engineering Co., Ltd. (CHEC) will provide management support for procurement and contract management by maintaining oversight of the IA, under the guidance of the EA.3,4

4. The EA will have the ultimate responsibility for EMP implementation and EMP reporting. It will provide guidance, together with CHEC, to the IA, coordinate with other governmental agencies as necessary, and submit EMP monitoring reports to ADB semi-annually during construction and annually during operation of the Project.

5. The IA will be responsible for operational implementation of the EMP, and will nominate an adequate number of qualified environment officers to undertake effective environmental

1 CHD is a wholly state-owned enterprise established in 2002 with a registered capital of CNY 12 billion. CHD's main businesses are generation and supply of electricity and heat, development of power-related primary energy such as coal, and supply of pertinent technological services. By December 2012 the total installed capacity of CHD exceeded 100 GW. 2 GHJSP is the project company for the proposed Project, and will be fully owned and established by CHEC in September 2013. 3 CHEC is an affiliated enterprise of CHD, and plays an important role in developing engineering technology industry. CHEC has competitive advantages in the core business of high-tech products R&D and manufacturing, engineering design and EPC contracting, and energy technology research and service. In 2009 CHEC was named an “excellent enterprise” by the China Electric Power Industry Association, with total assets of 9.9 billion, annual sales amount of 9 billion, average rate of increase of 20%, 186 patents, and 203 science and technology progress awards. 4 Since the implementing agency, GHJSP, has not been legally incorporated yet, CHEC who will be the sole shareholder of GHJSP has discussed and reached agreements on matters related to GHJSP such as assurance and loan covenants in the loan agreement, project agreement, and the project administration manual. 81 management activities specified in the EMP.

6. The IA will form an environment management unit (EMU), which will consist of a leader and an appropriate number of staff to coordinate environment, health, and safety issues with the contractor, construction supervision company (CSC) and the EA. To ensure that contractor implements the mitigation measures during construction, the IA will ensure that environmental mitigation measures and management requirements are included in all contracts with contractors and CSCs; and approved spoil disposal sites, material haulage routes, borrow pit locations and waste disposal arrangements are defined in the contracts as appropriate.

7. The IA will be responsible for hiring a local Environment Monitoring Station (EMS) to do ambient and discharge monitoring. The IA will prepare and submit the environmental (EMP) monitoring reports to the EA, who will review the reports and submit them to ADB.

8. The EMU will be supported by loan implementation environment consultants (LIECs) and supervised by the local EPB. 5 The LIEC will assist with EMP compliance and environmental (EMP) monitoring and reporting, and addressing any environment related issues that arise including grievances.

9. Contractors will be responsible for implementing relevant mitigation measures during construction specified in the EMP supported by the CSC. Following the award of the construction supervision contracts, i) the contractor will prepare a Construction Site Environmental Management Plan which details the means by which the contractor will comply with the Project EMP; ii) the CSC will prepare an Environmental Supervision Plan; and iii) both plans will be reviewed and approved by the IA. The contractor will implement the Construction Site Environmental Management Plan, and will take all reasonable measures to minimize the impact of construction activities on the environment. CSC environmental engineers will be responsible for daily internal inspections of mitigation measures at the construction site.

10. The local EPB will ensure compliance with the PRC’s environmental standards and regulations through random environmental compliance monitoring and inspections during construction and operation, and through the review of Project monitoring reports. The EPB will also conduct an environmental acceptance inspection after a three months trial operation period.

11. The Jiuquan City EMS will conduct ambient and discharge monitoring in accordance with the EMP environmental monitoring plan (EMoP).

12. ADB will be responsible for reviewing the overall environmental performance of the Project. ADB will review the semi-annual and annual EMP performance reports submitted by the EA and will disclose the reports on its website. ADB will conduct the project review missions on a regular basis. If the EA and the IA fail to meet safeguards requirements described in the EMP, ADB will seek corrective measures and advise the EA and the IA on items in need of follow-up actions.

13. Key Project institutions and their EMP implementation responsibilities are summarized in Table A-1.

5 This will be either the Jinta County EPB and/or the Jiuquan Prefecture EPB.

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C. Institutional Strengthening and Capacity Building

14. During the Project implementation experts from the local EPB and the LIEC consultants will provide a series of training workshops to strengthen the capacity of the EA and the IA for EMP implementation. The training topics, contents, estimated budgets and number of participants are listed in Table A-2. LIECs will be responsible for developing training materials and providing training along with CSP technical experts.

Table A-1: Summary of Institutions and Responsibilities for EMP Implementation Institution Responsibilities EA (CHD) Hold ultimate responsibility for overall EMP implementation and monitoring; provide advice and guidance to the IA; review EMP monitoring reports submitted by the IA, and submit them to ADB. CHEC Establish appropriately staffed and supported IA project company; provide project management support and oversight to the IA; review project implementation progress and take additional measures if necessary. IA (GHJSP) Establish environmental management unit (EMU); work with design institutes and the tendering company in preparing bidding documents to ensure environmental protection provisions are included in them; provide supervision to contractor and CSC, and submit monthly reports to the EA on the implementation of the EMP and monitoring results; establish a Project Public Complaints Unit (PPCU) and ensure implementation of grievance redress mechanism (GRM); submit EMP monitoring reports (semi-annually during construction and annually during operation) to the EA; hire and supervise EMS; and hire loan implementation environment consultants (LIECs). Contractor Develop and implement a Construction Site Environmental Management Plan in accordance with the EMP and other contract conditions. CSC Undertake daily inspections and evaluations of the implementation of EMP mitigation measures. Loan Provide technical assistance to the EA and the IA in EMP implementation; provide Implementation training to the staff of the EA, the IA, contractor and CSC; assist in the Environment development of construction and operation phase health and safety plans; assist Consultant (LIEC) and coordinate environmental monitoring, including undertaking compliance inspections and assisting EMS with ambient and discharge monitoring; assist the IA in addressing any environmental issues that may arise, including grievances; and assist the IA in preparing semi-annual and annual environmental EMP monitoring reports. Local EMS Conduct ambient and discharge environmental monitoring according to the EMP monitoring plan (EMoP). Local EPB Inspect the facilities during construction and operation to ensure compliance; enforce applicable the PRC’s environmental laws and regulations; review EMP monitoring reports; and conducting an environmental acceptance inspection after a three months trial operation period. ADB Monitor and supervise the overall environmental performance of the project; review the EMP monitoring reports and disclose the project monitoring reports on its website; review EMP performance and environment issues of the project during the project review missions.

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Table A-2: Institutional Strengthening and Training Program

Number Budget Traine Source of Training Attendees Contents Time Days of (CNY rs Funds Person 1,000)  ADB’s safeguard policy statement  Project applicable PRC environ- mental, ADB’s and health and PRC’s safety laws, environ- policies, mental, IA, standards LIECs 2 1 10 10 health and Contractor and safety laws, regulations regulations  Internatio- and policies nal environ- mental, health and safety Project manage- procurement ment package practice in (ADB civil financed)for construc- Project tions implementati  GRM on, structure, supervision, IA, Local responsibili- and capacity EPB, ties, and building residential timeframe GRM LIECs communiti 2 1 10 10  Types of es, and grievances Stakehold and ers eligibility assessment  Impacts and mitigation measures during Implemen- IA, EMS, construction tation of LIECs Contractor, and 4 1 15 30 EMoP CSC operation  Monitoring and auditing mechanism  Reporting

83 84

require- ments  Corrective actions for EMP  Corrective actions for HTF injection  Corrective actions to handle, store, HTF and transport IA, waste HTF LIECs HTF and 3 5 15 100 Contractor handling waste HTF  Corrective actions for HTF leakage and HTF related fire and burn hazards  Environ- mental, health and safety issues associated with CSP Internationa and best l good practices of practices in LIECs IA 2 2 10 120 operation CSP plant and operation maintenan- ce of CSP and new solar energy technolo- gies Total 10 5 165 270

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D. Potential Impacts and Mitigation Measures

15. The potential impacts of the project during construction and operation have been identified and appropriate mitigation measures developed (see Chapter V of the IEE). Detailed impacts and mitigation measures are presented in Table A-3.

E. Environment Monitoring Plan

16. An environment monitoring plan (EMoP) to monitor the environmental impacts of the Project and assess the effectiveness of mitigation measures is presented in Table A-4. The EMoP covers air, wastewater, and noise parameters during both construction and operation phases, including monitoring frequencies, responsible parties and estimated costs.

17. The CSC will be responsible for onsite routine environmental compliance inspections during construction, supported by compliance inspections undertaken the LIECs. The IA will be responsible for hiring the local EMS to undertake ambient and effluent monitoring. The monitoring methods, detection limits, and the standard code for each ambient monitoring parameter are shown in Table A-5.

18. The data and results of environmental inspection and monitoring activities will be used to assess: (i) the extent and severity of actual environmental impacts against the predicted impacts and baseline data collected before the project implementation; (ii) performance or effectiveness of environmental mitigation measures or compliance with pertinent environmental rules and regulations; (iii) trends in impacts; (iv) overall effectiveness of EMP implementation; and (v) the need for additional mitigation measures and corrective actions if non-compliance is observed.

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Table A-3: Environment Impacts and Mitigation Measures

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by A. Pre-construction Phase Design Land The site for the Project is barren IA EA 5/mu IA’s Project Mitigation acquisition industrial land zoned for solar (13,500 budget Facilities energy development, and will be total) and leased by the IA from the Jinta Measures County government. Soil Conduct detailed soil analysis DI and IA, EA 20 Included in analysis and design a proper soil exploration and design foundation for the CSP plant as contract for well as spoil disposal site. foundation work Address Anticorona, noise-reduction and DI EA, IA, Included in electroma electromagnetic protection Local design gnetic measures will be adopted during EPB contract protection the detailed design to make sure that : i) 0.5 megahertz radio interference is less than 46 decibel (microvolt/meter) at a 20- meter distance from the wall of the substations and traverse leg projection; ii) the power frequency electric field will be less than 4 kilovolt/meter in good weather; and iii) the power frequency magnetic field will be less than 0.1 milliteslas outside the boundary and on the ground under transmission line. Address Design will minimize fire, health DI and IA Local Included in potential and safety hazards. EPB, EA design health and contract safety hazards

Bidding and Incorporate environmental DI and IA EA, Local Included in Contracting Bidding mitigation measures indicated in EPB design and the EMP and the domestic EIA in contract contract bidding documents and document construction contracts for the preparatio project. All contractors will be n required to strictly comply with the EMP.

Grievance Impacts on In accordance with the IA EA, Local Included in Redress Project Grievance Redress Mechanism EPB IA’s Mechanism Affected (GRM) presented in Chapter VIII operation of the IEE, establish a Project budget 87

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by Persons Public Complaints Unit (PPCU) in IA’s office; provide GRM training for PPCU members and GRM access points; disclose the PPCU’s phone number, fax, address, and email to the public. Training Training An institutional strengthening LIEC, EPB EA, Local 270 Project for the site and training program will be and IA EPB procureme staff to delivered by environmental nt package prevent consultants and experts/officials (ADB pollution from the Jinta County EPB (see financed)fo and health Table A-2 in EMP). The program r Project hazards will focus on ADB’s and PRC’s implement environmental, health and safety ation, laws, regulations and policies; supervision the GRM; implementation of the , and EMoP; HTF and waste HTF capacity handling; and international good building practices in CSP plant operation. Training will be provided to IA, contractors and construction supervision companies (CSCs). The IA shall ensure that the training and capabilities of the Contractor’s site staff are adequate to carry out the designated tasks. No operator shall be permitted to operate critical mechanical equipment without having proper certification. Staff should be educated as to the need to refrain from indiscriminate waste disposal and/or pollution of local soil and water resources and receive the necessary safety training. Subtotal of Pre-Construction Phase 13,790

87 88

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by

B. Construction Phase

Soil Soil  Minimize active open Contractor IA, Local 600 Included in erosion excavation areas during s, CSCs EPB the project and trenching activities and use investment contaminat appropriate compaction ion due to techniques for the constructio construction. n activities  The contractor should, prior to the commencement of earthworks, determine the average depth of topsoil. The full depth of topsoil should be stripped from areas affected by construction and related activities prior to the commencement of major earthworks including the building footprints, working areas and storage areas.  Care will be taken not to mix topsoil and subsoil during stripping.

 Removed topsoil should be

used onsite where possible

to rehabilitate disturbed

areas or for landscaping, or

be transported to an 100 Included in approved spoil disposal site. civil works  Ensure that the minimum 2,260 contract area of soil is exposed to Included in potential erosion at any one civil works time. contracts  Limit construction and material handling activities during periods of rains and high winds.  Assess and estimate storm water runoff and prepare a storm water drainage system accordingly to minimize soil erosion.  Build a temporary detention pond to control topsoil runoff.  Stabilize all earthwork 20 disturbance areas within 14 days after earthwork. Included in 89

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by  Plant native trees and grass civil works in the CSP plant to control contract soil erosion and properly slope and re-vegetate disturbed surfaces.  Maximize the use of most of 800 excavated and leveled-out earth and spoil generated during construction, and the 30 Included in rest of the spoil and civil works construction wastes will be contract transported to a designated spoil landfill site. Included in  Temporary spoil disposal civil works sites will be identified, contract designed, and operated to minimize impacts. The temporary spoil disposal site will be restored at the conclusion of disposal activity.  Properly store petroleum products, chemicals and hazardous materials on a bunded impermeable surface.  Use best management practices to prevent spill of oil and chemical to avoid pollution.  Any planned paving or vegetating of the area will be done as soon as the materials are removed to protect and stabilize the soil.  Appropriately set up temporary construction camps and storage areas to minimize land area required and impact on soil erosion.  Provide spill cleanup measures and equipment at the construction site.  Contractors will be required to develop contingency plans for control of oil and other dangerous substances to prevent soil contamination.

89 90

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by Wastewater Surface  A wastewater treatment Contractor IA, Local 2730 Included in and facility will be constructed s, CSC EPB civil works groundwat onsite. and er  An underground septic installation contaminat system will be constructed 250 contracts ion from onsite. Included in constructio  A 1,000 m3 settlement (and civil works n evaporation) pond will store and wastewate industrial wastewater after 300 installation r, and treatment, for use in dust contracts domestic control and vegetation Included in water watering. civil works  Areas where construction contract equipment is being washed will be equipped with water collection basins and sediment traps.  Wastewater from construction activities will be collected in sedimentation tanks, retention ponds, and filter tanks to remove silts and oil.  Storm water channels or natural water path ways will not be blocked.  The construction wastewater, after sedimentation, will be used as the spray water for fugitive dust control on the construction site.  Adequate sanitary facilities and ablutions will be provided for construction workers.  Domestic wastewater from workers camp, after septic treatment, will be utilized for watering vegetation, both planted and natural. Noise and Noise from  Construction activities, and Contractor IA, Local Vibration constructio particularly the noisy ones, s, CSC EPB n, are to be contained to machinery reasonable hours during the

operation, day and early evening. and Construction activities will transportat be strictly prohibited during

ion the nighttime (22:00 h to 91

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by activities 07:00 h).

 Ensure that noise levels from equipment and machinery conform to the

PRC standard GB 12523- 2011, and properly maintain construction vehicles and

machineries to minimize noise.  Locate sites for rock

crushing, concrete-mixing, and similar activities a sufficient distance from sensitive sites in accordance 10 Included in civil works with the PRC standards (250 m during day time and contract 10 at least 1.3 km away during Included in the night time). civil works  Machines in intermittent use contract should be shut down in the intervening periods between work or throttled down to a minimum.  Place temporary signs or noise barriers around noise sources during construction, if necessary.  Provide noise personnel protective equipment (PPE) to workers.  Vehicles transporting construction materials or wastes will slow down and not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals.  Prohibit pilling and Vibration compaction operations at generating night. by compactin g and rolling  If weather data analysis Ambient Air Fugitive Contractor IA, Local 2000 Included in indicates it is required, dust s, CSC EPB civil works construct a wind breaker. generated contract  Spray water on construction by 20

91 92

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by constructio sites and earth/material Included in n activities handling routes where civil works worsens fugitive dust is being contract ambient generated.

air quality  Keep transport vehicles at low speed in the construction site to reduce

the fugitive dust.  Stop construction activities during high wind events.  Cover materials during truck transportation of fine materials to avoid spillage or fugitive dust generation.  Excavations and other clearing activities must only be done during agreed working times and permitting weather conditions to avoid drifting of sand and dust into neighboring areas.

 Store petroleum or other Contractor IA, Local Air harmful materials in s, CSC EPB emission appropriate places and from cover to minimize fugitive vehicles dust and emission. and constructio  Provide regular n maintenance to vehicles in equipment order to limit gaseous emissions (to be done off- site).  Maintain vehicles and construction machinery to a high standard to ensure efficient operating and fuel- burning and compliance with the PRC emission standards GB 18352-2005, GB 17691- 2005, GB 11340-2005, GB 2847-2005, and GB 18285- 2005.  All wastes should be reused Solid Waste Solid Contractor IA, Local 40 Included in or recycled to the maximum waste from s, CSC EPB the civil extent possible. constructio works and n activities  A temporary on-site storage installation and sorting area for solid contract wastes will be established away from water bodies or 93

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by other environmentally sensitive areas.  Wastes at the storage area should be regularly sorted into what can be reused or recycled. Waste which cannot be reused or recycled should be transported on a regular basis by a qualified contractor to an approved landfill in Jinta County for final disposal, in accordance with relevant PRC regulations and requirements.  Provide appropriate temporary waste storage containers at construction sites and regularly remove waste from containers and transport to temporary storage area for recycling, reuse, or transport to landfill.  All rubble must either be used on site as part of the existing development, or be taken for final disposal at an approved landfill facility in Jinta County. Rubble must not be dumped on site.  All excavated soil will be backfilled onsite.  There should be no final waste disposal on site.  Waste incineration at or near the site is strictly prohibited.  Contractors will be held responsible for proper removal and disposal of any significant residual materials, wastes, and contaminated soils that remain on the site after construction.  Based on the detailed soil HTF HTF Contractor IA, Local analysis result and the civil related s, CSC EPB engineering design for soil soil, water protection, properly conduct and 600 Included in

93 94

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by ground foundation work if it is civil works

water required. contract protection  Build impermeable concrete

surface with sufficient height

dikes (to hold 110% of HTF amount that would be

contained in the HTF tanks

and HTF expansion tank) for

the area where HTF and

HTF expansion tanks are

located.

 Install a containment pit to 500 Included in unload HTF trucks. the  Build a stand-alone closed installation storage facility onsite with contract impermeable surface for temporary storage of all HTF waste (until removal by licensed contractors).  Install a comprehensive fire response system and equipment to respond to HTF related fire hazards.  Prepare a HTF spill response plan and properly train designated staff.  Suppliers of HTF must hold a proper license.

Chemicals Hazardous  Prepare and implement a Contractor IA, Local and and protocol for the handling and s, CSC EPB

Hazardous polluting disposal of hazardous materials during construction Material materials from including a spill prevention constructio and emergency plan. n activities  Build storage facilities for fuels, oil, chemicals and other hazardous materials within secured areas on

impermeable surfaces provided with dikes, and at least 300 m from drainage

structures and important water bodies. A standalone site within the storage facility

should be designated for hazardous wastes.  Suppliers of chemicals and

hazardous materials must hold proper licenses. They 95

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by shall follow proper protocol

for transferring fuel and the “Operation Procedures for Transportation, Loading and Unloading of Dangerous or Harmful Goods of JT 3145- 60 Included in 91”. civil works  A licensed company will be contract hired to collect, transport, and dispose of hazardous materials in accordance with relevant PRC regulations and requirements.  Vehicles and equipment will be properly maintained and refueled in designated service areas on impermeable surfaces at least 300 m from drainage structures and important water bodies.  Oil traps will be provided for service areas and parking areas.  Preserve any existing Flora and Protection Contractor IA, Local vegetation in areas where Fauna of s, CSC EPB no construction activity is vegetation, planned, or temporarily re- preserve vegetation where vegetation activity is planned for a later of date. disturbed areas;  Remove shrubs only as a planting last resort if they impinge directly on permanent and compensat structures. ory  Construction activities will be implemented only within the planting 440 Included in project site boundaries and trees and civil works the route for pipelines and grass contract the transmission line, so as

to minimize damage to the nearby land.

 Properly backfill, compact, and re-vegetate piping/cable trenches after construction.  All natural areas impacted during construction must be rehabilitated with appropriate locally

95 96

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by indigenous xeric vegetation.  Enhance worker awareness on protection of wildlife. Workers are forbidden to hunt wildlife in the construction and surrounding areas, in accordance with PRC’s Law on Wildlife Protection.  Identify, demarcate and protect sites wildlife habitat sites to the maximum extent possible, if any are encountered.  Develop and implement a site vegetation plan, utilizing appropriate native xeric vegetation wherever possible.  Implement safety measures Community Public Contractor IA, Local 10 Included in around the construction sites Disturbance safety s, CSC Public safety to protect the public, and Safety around the Transport manageme including warning signs to constructio ation nt fund alert the public to potential n site Bureau safety hazards, and barriers to prevent public access to construction sites.  Heavy machinery will not be used at night.  Develop a traffic control plan, agreed to by the local traffic control authority, and implement in order to minimize community disturbance.  Each contractor will prepare Occupation Health Contractor IA, Local 750 Included in an environment, health and al Health damage s, CSC EPB, EA civil works safety (EHS) plan for the and Safety and and construction works on the accidents installation basis of the EMP and in during contracts compliance with relevant constructio PRC laws and regulations. n activities  An EHS officer will be

appointed by each contractor to implement and

supervise the EHS

management plan.  Fire extinguishers and other

safety protection devices will 97

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by be in place.

 First-aid station will be in place.

50 The EHS Plan will include the following: Included in  Identify and minimize the safety

causes of potential hazards manageme to workers. nt fund  Implement safety measures

and work procedures and provide first aid facility onsite.

 Workers training on occupational health and safety during construction,

especially with respect to using potentially dangerous equipment. 400  Provide preventive and protective measures, Included in including modification, civil works

substitution, or elimination of and hazardous conditions. 50 installation  Contractors must ensure contracts that all equipment is Included in maintained in a safe civil works operating condition. and  Contractors will take all the installation necessary precautions contract against the spreading of disease.  Material stockpiles or stacks, such as, pipes must be stable and well secured to avoid collapse and possible injury to site workers.  Provide appropriate personal protective equipment (PPE) to workers to minimize risks, including ear protection, hard hats and safety boots.  Post adequate signage in risk areas.  Provide procedures for limiting exposure to high noise or heat working environments in compliance with PRC noise standards

97 98

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by for construction sites (GB 12523-2011).  Provide training to workers on the storage, handling and disposal of hazardous wastes.  Provide emergency prevention, preparedness, and response arrangements and training to workers.  Hold safety meetings with staff before each shift.

Physical Relics may A chance-find procedures for Contractor IA, Jinta - In the Cultural be PCRs will be established and will s, CSC County event that Resources damaged if be activated if any chance finds Cultural a PCR is proper of PCR are encountered:: Heritage discovered precaution  immediate suspension of Bureau, , the direct is not construction activities if any and EA cost for taken. archaeological or other compensat cultural relics are ion to encountered; contractor  destroying, damaging, will be defacing, or concealing covered by cultural relics will be strictly a special prohibited in accordance fund for with PRC regulations; cultural  prompt notification of the relic Jinta County Cultural protection. Heritage Bureau; and,  construction activities will resume only after thorough investigation and with the permission of the Jinta County Cultural Heritage Bureau. Subtotal of Construction Phase 12,030 99

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by

C. Operation Phase

 Heaters only used for start- Air Pollution Localized IA Local EPB up, HTF temperature control air and freezing protection. pollution  Heaters will use clean

burning natural gas.

 Emissions will be in compliance with the WB and IA Local EPB 50 Included in Fugitive PRC standard for natural the IA’s dust may gas boilers and heaters. operating be  If necessary, wind breakers budget generated will have been installed to by strong minimize the fugitive dust wind and generation during strong can affect wind. local air  Use recycled water to quality suppress dust emission.  Use mirrow washing water to suppress dust from solar collection field. Soil  Only non-toxic propylene Soil IA Local EPB Included in contamina glycol antifreeze will be used the IA’s tion from for mirror washing water so operating toxic as to prevent soil budget antifreeze contamination. Excessive  To reduce water Water IA Local EPB see consumpti consumption, all wastewater Consumptio waste- on may produced at the CSP will be n water impact treated and reused onsite for hydrology, site greening and/or dust ecology suppression. and other users  To minimize the risk of Wastewater Water IA Local EPB surface and groundwater pollution contamination, and to and reuse maximize water in CSP conservation, all wastewater produced at the CSP will be treated and reused onsite. IA Local EPB 100 IA’s

operation  Site Drainage Treatment budget and Reuse All site runoff and construction wastewater will be directed to sedimentation ponds, and oil traps will be

99 100

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by installed wherever necessary prior to the sedimentation ponds. Then, the water will be used for greening and/or dust suppression.

 Mirror Wash Water Reuse All mirror wash water will be directed to the ground for dust suppression.

 Domestic Wastewater Treatment and Reuse All domestic wastewater will be treated in an underground septic system. The treated and disinfected effluent will be stored and used for site greening and/or dust suppression. Sludge will be collected by a qualified party via pumper truck and disposed in a designated landfill on a regular basis. In the future it is anticipated that a municipal domestic wastewater treatment plant will be built in the site vicinity, at which time the Project domestic wastewater may be sent to that plant for treatment.

 Industrial Waste Water Treatment and Reuse All industrial wastewater including water purification system wastewater and boiler wastewater, wastewater collected from other parts of the CSP, runoff water from workshops, vehicles washing areas and other equipment, and oil contaminated water will be treated onsite in a 10 m3/h capacity industrial 101

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by wastewater treatment plant (WWTP). The WWTP will be equipped with an oil/water separator. The treated water will be sent to a storage pond and then reused for site greening and/or dust suppression.

 Compliance with Standards The onsite wastewater treatment facility will be operated in accordance with PRC standards and requirements and no wastewater will be discharged. All treated wastewater will be in compliance with relevant PRC standards, including Class I of the Integrated Wastewater Discharge Standard (GB 8978-1996), and Water Standards for Irrigating Vegetation (GB/T18920-2002).

In addition, the following measures will be undertaken:  The solid waste collection and sanitation systems will be managed effectively so as to avoid any chance of ground and surface water pollution;  All vehicle loading/unloading points will be within a bounded area to minimize the potential for spills to enter the storm water;  Any run-off that is discharged from the site must be uncontaminated and meet standards for discharge.  HTF will be transported in HTF HTF IA Local EPB 50 Included in spill proof containers. handling IA’s needs  HTF will be stored in operation designated areas with

101 102

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by special impermeable surfaces and budget care to protective dikes. protect  A comprehensive fire workers management plan (including and fire protection and control environme procedures) will be nt implemented in HTF storage, heat conversion,

HTF expansion areas, and the solar field.  Based on a proper fire management plan, if necessary, control boxes in the solar field will be equipped with fire extinguishers.  Permanent monitoring HTF IA Local EPB 150 Included in (inspection) for any minor leakage IA’s HTF leakage will be may operation conducted. cause soil budget and water  The HTF system will be pollution equipped with automatic and pressure monitoring devices. human HTF leakage will be health automatically detected problems. triggering an alarm in the control system.  The ullage system should have a concrete surface and dikes and should be operated at all times when the plant is in operation.  Concrete dikes should have sufficient capacity to hold 100 % of the HTF amount contained in the HTF tanks and expansion tanks.  An emergency response procedure for HTF leakage will be developed and implemented by properly trained staff.  HTF contaminated soil will be properly removed in accordance with the relevant PRC standards and properly stored in a temporary storage place until final removal by licensed 103

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by contractors.  Degraded HTF and HTF HTF IA Local EPB 150 Included in contained filters from the waste is IA’s ullage system will be treated hazardous operation as a hazardous material and waste and budget temporarily stored on site in cause spill proof tanks until they environme can be removed for ntal treatment. pollution if not  HTF contaminated soil will treated also be treated as a properly. hazardous material and will be temporarily stored onsite in a bunded area with an impermeable surface until it can be removed for treatment.  Only contractors properly licensed to handle waste HTF will collect, transport, treat, recycle and/or dispose of all waste HTF in accordance with the laws and regulations of the PRC.  All toxic, hazardous, and Chemicals Hazardous IA Local 100 Included in harmful materials will be and materials EPB IA’s transported in spill proof Hazardous or operation tanks with filling hoses and Materials chemicals budget nozzles in working order, can lead to and stored in designated soil and areas with impermeable water surfaces and protective pollution dikes such that spillage or and risks leakage will be contained to human from affecting soil, surface health. water or groundwater systems.  Material safety data sheets

(MSDSs) will be posted for all hazardous materials.  Oil absorbents will be readily accessible in marked containers.  Good housekeeping procedures will be established to avoid the risk of spills.  Spills will be dealt with immediately, and personnel

103 104

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by will be trained and tasked with this responsibility.  Identify and maintain a register of all activities that involve the handling of potentially hazardous substances, and devise and supervise the implementation of protocols for the handling of these substances. This will include all fuels, oils, grease, lubricants, and other chemicals.  Workers should be properly trained before handling hazardous wastes and have the requisite PPE.  Store hazardous waste temporarily in closed containers away from direct sunlight, wind, water and rain in secure designated areas with impermeable surfaces and protective dikes such that spillage or leakage will be contained.  Oil sludge will be collected and disposed by licensed contractors as a needed basis.  Hazardous waste shall be separated from general waste. All hazardous wastes will be contracted to a certified contractor for transporting and disposal.  No permanent on-site solid Solid Waste IA Local EPB waste disposal will be Wastes generated allowed. from the  No burning of wastes will be CSP plant and permitted at the plant site.

workers  All structures and/or components replaced during maintenance activities will be reused or recycled to the extent possible. Non-

recyclable parts will be disposed at a designated 50 Included in 105

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by waste disposal site in Jinta the project

County. operation  All wastes will be routinely budget collected by an appropriately

licensed waste management companies. Wastes will be reused or recycled to the extent possible. Non- recyclable wastes will be transported for final disposal at a designated waste disposal site in Jinta County.  The latest technology Noise Noise IA Local EPB 10 Include in incorporating maximum from the IA’s noise suppression measures steam operation for the CSP plant generator budget components will be used. system, power  Mufflers will be installed at equipment with air flow generatio n noise such as air equipment compressors, and vibration reduction devices will be , additional installed between foundation heating, and noisy mechanical equipment such as fans and pump and cooling pumps. All plant and equipment equipment, including vehicles will be properly may impact maintained in order to workers’ minimize noise. hearing.  Appropriate PPE will be provided to the workers who are likely to be exposed to high noise level Operation environments. al noise may also  A 50 m wide buffer zone will affect be secured between the nearest project site and the nearest village village as a sound and sight barrier.  Electrical and magnetic field Project Community Electroma IA Local EPB 10 (EMF) monitoring will be procureme Health and gnetic conducted prior to the nt package Safety protection commencement of the (ADB project operation, ensuring financed)fo that it does not pass near r Project any human settlement. implement ation,

105 106

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by supervision , and capacity building  An operation phase Occupationa HTF may IA Local 200 IA’s occupational health and l Health and present EPB, operation safety plan including fire Safety health and local budget prevention and control will safety Work be developed and risks to Safety implemented, and workers workers in Bureau, will be trained regularly on case of local fire its implementation. accidental station release  The plant general

arrangement will be designed in strict compliance with relevant PRC fire, health and safety standards. Fire compartments will be established based on the fire risk; and fire-resistant buildings/structures will include fire-proof doors and windows.  The storage tank area will be surrounded by ring- shaped fire passages for fire-fighting vehicles. Molten salt  A fire-alarm system will be tanks are installed and tested regularly very hot to ensure it functions and it may properly. present  The process control system some burn will include an out-of-limit hazardous alarm to ensure all to workers hazardous materials are safety under control at all time.  PPE, including goggles, gloves, safety shoes, will be provided to workers.  Unauthorized personnel will not be allowed on the site and authorized personnel working at thermal storage tanks must have PPE at all times to prevent burn hazards. 107

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by  Naked fire sources, hot Natural surfaces, electric sparks, gas and electrostatic sparks and other ignition sources will be flammable strictly controlled, especially gas are near HTF and natural gas. fire hazards  Control measures will be strictly undertaken to ensure the discharge, exhaust and safety relief of flammable fuels in enclosed systems.  A fire monitoring system will be installed to ensure safety

in production and operation and provide early warning to plant personnel.  At risk areas will have catalytic bead type combustible gas test detectors which are able to make an acousto-optic alarm, and electrochemical type toxic gas test detectors also capable of making an acousto-optic alarm.

Emergency Large An emergency response plan will IA Local 100 Included in Response amounts be prepared in compliance with EPB and IA’s Plan of HTF the requirements of the “National Local operating and other Environmental Emergency Plan” Fire budget hazardous (24 January 2006) and relevant Departm chemicals laws, regulations and standards. ent may The plan must be established create and in place before the plant is health operational. risks to Procedures for responding to worker different types of emergency and pollute situations will be identified in the the response plan. environme nt Emergency exercises will be conducted and they should include different emergency scenarios.

Training Requirements  Appropriate operating and maintenance employees will be trained to ensure that they are knowledgeable of

107 108

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by the requirements of emergency response plan. Training will be provided as follows: (i) Initial training to all employees before the CSP plant is put in operation; (ii) When new equipment, materials, or processes are introduced. (iii) When emergency response procedures have been updated or revised.

Annual Emergency Simulation  Simulated emergency exercises will be conducted at least annually.

Receiving Notification of a Possible Emergency  When a supervisor receives a report of a possible emergency situation, he/she should obtain at minimum the following information from the reporting person: (i) Name of person reporting emergency; (ii) Nature of emergency - leak, fire, interruption of service if leak, odor present, etc. (iii) Details of emergency: location, amount, how long has the odor been noticed, what actions have been taken, etc. (iv) Leaks or other emergencies require prompt investigation. 109

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by

Immediate On-site Action  The first responder will assess the nature of the report. This assessment should include the status of the emergency, an estimation of how the incident might progress, and an evaluation of the manpower, equipment, and materials needed to adequately cope with the situation.  If there is a strong odor or any measurable reading of gas detected inside a structure: (i) Clear the building of all occupants. (ii) Eliminate potential ignition sources. (iii) Localize or isolate the problem and shut off gas as needed. (iv) Determine the extent of the hazardous area and establish a restricted area.  The responding supervisor shall determine the extent of the emergency and inform the dispatcher of the condition at the site.  If emergency procedures are put into effect, the responding supervisor should select a location and establish an emergency command post.  The responding supervisor will assign one person to remain at the command post to maintain communications until the emergency is over.  When necessary, the command post will be coordinated with the local

109 110

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by emergency responders. When local emergency responders are involved, they will be in charge of the incident.  The responding supervisor will make himself known to fire and/or police department officials, or other authority having jurisdiction, and will remain with them during the emergency.  All employees reporting to the scene of the emergency will report to the command post for identification and instructions.  Key personnel will be alerted, and it will be their responsibility to keep the emergency personnel under their supervision informed and available for emergency call out.  When a system failure cannot be made safely by normal procedures, emergency shutdown procedures should be implemented.  Reduce system pressure or segment a section before repair procedures are implemented.  Well trained and qualified personnel will be dispatched to monitor system pressure and repair work.

Communication with Public Officials  When an emergency resulting in a hazard to the public safety occurs, the local fire department, police, the city medical emergency center and other relevant public officials should be notified.  An emergency call list will 111

Potential Responsibility Budget Impacts Mitigation Measures and/or Source of Category (CNY in and Safeguards Implemen Supervis Funds 1,000) Issues ted by ed by be prepared and make it available at the plant control room. Subtotal of Part C (per year) 960 CSP = concentrated solar thermal plant, DI = design institute, EA = executing agency, EIA = environment impact assessment, EMP = environment monitoring plan, EMS = environment monitoring station, EPB = environment protection bureau, GRM = grievance redress mechanism, IA = implementing agency, km = kilometer, LB = labor bureau, LIEC = loan implementation environmental consultant, m = meter, m3 = square meter, mg = milligram,PRC = the People's Republic of China, SO2 = sulfur dioxide.. Source: Gansu Jinta CSP PRC EIA Report (2011) and TA consultants estimate.

111 112

Table A-4: Environmental Monitoring Plan (EMoP)

Estimat Impleme Supervi ed Cost Source of Subject Parameter Location Frequency nted by sed by (CNY Fund 1,000) A. Construction Phase Wastewater Inspection of The Waste water CSC and IA 50 Included in generated wastewater construction effluent sites, LIECs supervision from mitigation site Monthly contract constructio measures (water n collection basins and sediment traps, etc.) pH, SS, oil, BOD, The Monthly: a day EMS IA 30 Project COD construction each time and procureme site one sample nt package (ADB financed)fo r Project implement ation, supervision , and capacity building Ambient air Ambient air The Monthly: a day EMS IA 130 Project monitoring; construction each time and procureme site and two samples; nt package nearby areas (ADB CSC and IA 50 financed)fo Inspection of Daily when there LIECs r Project dust mitigation are construction implement measures (water activities. ation, spraying, cover supervision transport , and vehicles, etc.); capacity and maintenance building and condition of vehicles and construction equipment. 113

Subject Parameter Location Frequency Impleme Supervi Estimat Source of Noise Leq dB(A) All sensitive Monthly: a day EMS IA 15 Project receivers each time and procureme nearby two samples; nt package construction once during (ADB site daytime, once financed)fo during nighttime. r Project implement ation, supervision , and capacity building Constructio Spoil waste Construction Once a month; CSC and IA 40 Included in n spoil waste and once after LIECs supervision disposal disposal completion of contract sites. spoil disposal Total 315

113 114

Estimat Impleme Supervi ed Cost Source of Subject Parameter Location Frequency nted by sed by (CNY Fund 1,000) B. Operation Phase Noise from Leq dB(A) 1m outside of Monthly IA IA 10 Project CSP the CSP procureme boundary and nt package at nearest (ADB residence, financed)fo and at r Project pumping implement station ation, supervision , and capacity building

Wastewater SS, COD, BOD5 Treated water Monthly IA EA 30 Project and sludge quality procureme from CSP nt package (ADB financed)fo r Project implement ation, supervision , and capacity building Leakage of Leakage of the CSP Real time control IA Local 150 Project hazardous HTF and natural fire procureme Materials gas station, nt package and Wastes Local (ADB EPB, EA financed)fo r Project implement ation, supervision , and capacity building Total Annual Cost 190 CNY = Chinese Yuan, CSC = construction supervision company, dB = decibel, EMS = environment monitoring station, EPB = environment protection bureau, IA = implementing agency, Leq = equivalent continuous noise level, LIEC = loan implementation environmental consultant, NO2 = nitrogen dioxide, pH = potential hydrogen, PM = particulate matter, SO2 = sulfur dioxide, CSP = concentrated solar thermal plant. Source: Gansu Jinta CSP PRC EIA Report (2011) and TA consultants estimate. 115

Table A-5: Monitoring Parameters and Methods

Media Monitoring Parameter Method (Standard No.) Standard Limit

Gravimetric (GB/T 15432- TSP (mg/m3) 0.3033 1995) Gravimetric with specific Air PM (mg/m3) 0.15 10 sampler (HJ/T93-2003) Saltzman Method (GB/T NO (mg/m3) 0.12 x 15435-1995) Equivalent Continuous A Acoustimeter Method (GB 60 (day)/ Noise Sound (Leq) 12524-90) 50 (night) Glass electrode method (GB pH value 6-934 6920-86) Permanganate index (GB 11914- COD (mg/L) 6 Mn 89) Surface Infrared spectra photograph Petroleum (mg/L) 0.05 water (GB/T 16488-1996) Gravimetric method (GB 11901- SS (mg/L) 250 89) Membrane filter (GB/T 575.12- Total coliforms (no./L) 10,000 2006) Source: PRC standards

19. To ensure monitoring accuracy and data integrity, QA and QC procedures will be established and implemented by the EMS in accordance with the following regulations:

(i) Regulations of QA/AC Management for Environmental Monitoring (SEPA, July 2006); (ii) QA/QC Manual for Environmental Water Monitoring, the State Environmental Monitoring Center, 2001; and (iii) QA/QC Manual for Environmental Air Monitoring, the State Environmental Monitoring Center, 2001.

F. Reporting Requirements

20. The EMS will conduct required ambient and effluent monitoring according to the EMoP and submit the quarterly monitoring results to the IA with the assistance of the LIECs. The CSC will also report to the IA monthly on the results of compliance inspections, again with the assistance of the LIECs.

21. The IA will collate the monitoring results, with the assistance of the LIECs, and submit monthly environmental reports to the EA. The IA will also prepare and submit semi-annual and

33 All the air parameters are Grade II ambient air standards (daily average). 34 All the water parameters are Grade III standards.

115 116 annual environmental (EMP) reports to the EA, who will review and submit environmental (EMP) monitoring reports to ADB semi-annually during construction and annually during operation.

22. No later than two months after completion of the construction work the IA shall collect data from the contractor and CSC and submit a construction completion report to the EA and the local EPB in order to comply with the PRC regulations. Within three months after project completion, an environmental acceptance inspection will be undertaken by the local EPB. ADB can request the IA for a copy of the construction completion and environmental acceptance reports.

23. The environmental reporting requirements during the implementation of the project are summarized in the Table A-6.

Table A-6: Reporting Requirements

Report Prepared by Submitted to Frequency A. Construction Phase Environmental report CSC IA Monthly

IA, supported by LIEC and Environmental (EMP) EMS, prepares and ADB Semi-annually monitoring report submits to EA; EA reviews and submits to ADB Once within two months IA, supported by LIEC and Construction completion report Local EPB from the completion of EMS construction

B. Operation Phase IA, supported by LIEC and Environmental (EMP) EMS, prepares and EA Annually monitoring report submits to EA; EA reviews and submits to ADB

G. Performance Indicators

24. Performance indicators (Table A-7) have been developed to assess the implementation of the EMP. These indicators will be used to evaluate the effectiveness of environmental management.

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Table A-7: Performance Indicators

No. Description Indicators (i) Qualified environment officer is assigned in IA before project implementation. 1 Staffing (ii) EMU is established with appropriate number of staff in the IA before project implementation. (i) Environment mitigation cost during construction and operation is sufficiently and timely allocated. 2 Budgeting (ii) Environment monitoring cost is sufficiently and timely allocated. (iii) Budget for capacity building is sufficiently and timely allocated. (i) Requirement of environmental inspection and monitoring during construction period is included in the contracts between the IA and CSC and LIECs. 3 Monitoring (ii) Ambient, effluent and compliance monitoring is conducted by the local EMS according to EMoP. (iii) Compliance monitoring is conducted by contractors, CSC, LIECs as scheduled. (i) IA and LIECs supervise environmental inspection and monitoring done CSC and EMS. 4 Supervision (ii) ADB mission will review EMP implementation on a regular basis during the project implementation period. (i) Monthly environment reports prepared by the IA and LIECs are submitted to EA. (ii) Semi-annual (during construction period) and annual (during 5 Reporting operation) environmental (EMP) monitoring reports prepared by the IA and LIECs are submitted to ADB through the EA. (iii) Construction completion report prepared by the IA is submitted to EA and local EPB. (i) Training on ADB safeguard policy is provided to the EA and the IA at the beginning of project implementation (ii) Training on grievance redress mechanism (GRM) is provided at Capacity 6 least once during the project implementation Building (iii) Training on EMP and best environmental practices of CSP operation and maintenance is provided during the project implementation. (i) Project public complaints unit (PPCU) is established in the IA. Grievance (ii) Contact persons of PPCU are assigned and disclosed to the 7 Redress public before construction. Mechanism (iii) Complains are recorded and processed within the set time framework in the GRM of this IEE. Compliance (i) Project complies with the PRC’s environmental laws and 8 with the PRC regulations and meets all required standards. standards

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H. Estimated Budget for Mitigation and Monitoring

25. The estimated budgets for environmental mitigation and monitoring are summarized as follows.

- Pre-construction phase mitigation costs are estimated at CNY 13.79 million or $2.22 million (includes costs of leasing site land). Construction phase mitigation costs are estimated at CNY 12.03 million or $1.94 million. Annual operation phase mitigation costs are estimated at CNY 0.96 million or $ 0.15 million. Mitigation costs are typically included in the construction or operating budgets.

- Monitoring cost during construction is estimated at CNY 315,000 or $51,000, while the estimated annual monitoring cost during operation is CNY 190,000 or $31,000, respectively. Monitoring costs are typically included in the construction or operating budgets.

- The estimated budget for capacity building is CNY 270,000 or $44,000.

I. Mechanisms for Feedback and Adjustment

26. Based on environmental inspection and monitoring results, the local EPB will decide whether (i) further mitigation measures are required as corrective actions, or (ii) some improvements are required for environmental management practices.

27. The effectiveness of mitigation measures and environmental monitoring plans will be evaluated through a feedback reporting system. The EA will assess the results of EMP and then propose any changes to the EMP monitoring and mitigation plan, if necessary. However, any major adjustments will be subject to ADB review and approval.

28. If, during inspection, substantial deviation from the EMP is observed or any changes are made to the project that may cause substantial adverse environmental impacts or significant increase in the number of affected people, then the EA and the IA must consult with the local EPB and ADB. ADB may pursue additional environmental assessment and, if necessary, further public consultation. The EMP can be revised based on the changes of the project activities and the revised EMP will be passed to the EA, the IA, CSC, and the contractor(s) for implementation.

29. Any proposed changes in the EMP should be sent to ADB’s review and approval. The revised EMP with ADB confirmation is subject to reposting on the ADB’s website as the ADB public communications policy requires.

30. A conceptual diagram of the EMP feedback and adjustment process is presented in Figure A-1.

J. EPB Environmental Acceptance

31. After a three months trial period the local EPB will conduct an environmental acceptance inspection for the project. If the project is in compliance with all conditions for approval of the domestic EIA (see section II.F), the project can be put into formal operation.

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Figure A-1: Mechanism for Feedback and Adjustment of EMP

EA & Local EPBs ADB

IA LIEC

CSC

Contractor IA operation staff

EA informs ADB and EPB and develops solutions

Implementation Feedback Implementation of Mitigation Comments and Measures and Monitoring Suggestions Programs

ADB = Asian Development Bank, CSC = Construction Supervision Company, EA = Executing Agency, EPB = Environmental Protection Bureau, IA = Implementing Agency, LIEC = Loan Implementation Environmental Consultant. Source: TA consultants

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