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

CDM – Executive Board

CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) Version 03 - in effect as of: 22 December 2006

CONTENTS

A. General description of the small scale project activity

B. Application of a baseline and monitoring methodology

C. Duration of the project activity / crediting period

D. Environmental impacts

E. Stakeholders’ comments

Annexes

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

Annex 2: Information regarding public funding

Annex 3: Baseline information

Annex 4: Monitoring Information

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Revision history of this document

Version Date Description and reason of revision Number 01 21 January Initial adoption 2003 02 8 July 2005 • The Board agreed to revise the CDM SSC PDD to reflect guidance and clarifications provided by the Board since version 01 of this document. • As a consequence, the guidelines for completing CDM SSC PDD have been revised accordingly to version 2. The latest version can be found at . 03 22 December • The Board agreed to revise the CDM project design document for 2006 small-scale activities (CDM-SSC-PDD), taking into account CDM-PDD and CDM-NM.

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SECTION A. General description of small-scale project activity

A.1 Title of the small-scale project activity: >> Poweronicks Biomass Power Project Version 10 [26/02/2008]

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

Poweronicks limited has setup a 6 MW biomass power plant in rural at Siruguppa Village, District, Karnataka in the year 2004. This Power plant has helped in resolving local electricity problems of electricity supply, while making use of locally available resources in a more environmentally sound way than burning other fossil fuel such as coal, diesel etc. The plant benefits the local community, local agriculture and local industry.

The plant has pioneered the commercial use of low-density crop residues such as coconut shell, groundnut shell, rice husk, paddy straw, cotton stalks, sunflower stalks etc, which are otherwise burned in the open fields. The use of crop residues as commercial fuels has previously been inhibited by low productivity and high costs associated with the collection, loading, compaction, transportation and storage of the biomass. The plant is specifically designed for the multiple firing of a wide range of the permitted biomass fuels such as rice husk, Sunflower residues, Coconut shell, groundnut Shell, Paddy straw, cotton stalk etc.

The fuel requirement for the operation of biomass plant at 100% capacity is around 70,000 Tonnes per annum (as per the past actual consumption figures) per year as against the availability of 1407320 Tonnes per annum1. Considering the adequate availability of biomass in the area, Poweronicks have chosen the location of power plant in Sirguppa village.

The following local benefits are also envisaged due to the setting up of project: 1. It addresses the failures of centralized electricity supply. 2. It is environmentally sound. 3. There are spin-off benefits for local farmers, industry and the broader community.

1 Reference : Biomass Assessment report prepared by Institute for Energy Studies, Anna University funded by Ministry of New and Renewable Energy (MNRE) The name “Ministry of Non-Conventional Energy Sources (MNES)” have been changed to “Ministry of New and Renewable Energy”(MNRE).

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Contribution to Sustainable Development

In the face of growing demand, ’s electricity sector faces problems of capacity, poor reliability, and frequent blackouts. India is the third largest coal-consuming country in the world, behind China and the United States; it accounts for about 8 per cent of the world’s annual coal consumption and about 7.5 per cent of the world’s annual coal production. Nearly three-quarters of India’s electricity and two-thirds of its commercial energy comes from coal, and the demand for coal has been steadily increasing over the past decade. India also faces major problems with infrastructure and capacity for electricity supply, with the country’s State Electricity Boards (SEBs) ill-equipped to fund or carry out plant construction or upgrading.

Since this project activity is a renewable energy power project and export clean power to Karnataka Power Transmission Corporation Limited (KPTCL)2, the generation of power will substitute the power generated due to conventional fossil fuels dominated grid thereby minimizes the use of finite natural resource like coal/gas/oil, or else increasing its availability to other important processes. Government of India has stipulated the following indicators for sustainable development in the interim approval guidelines3 for CDM projects. 1. Social well being 2. Economic Well Being 3. Environmental well being 4. Technological well being Project activity contributes to the sustainable development in following ways:

1. Social well being Since the biomass resources are collected and transported to the site thereby it creates jobs to the rural people. It also minimizes the migration of people from village to urban areas. The project will create a business opportunity for local stakeholders such as bankers, consultants, suppliers, manufacturers, contractors etc. It accentuates the value created for low density crop residues which otherwise will be getting wasted in fields by flaring process. More and more industrial setup in rural places will improve the infrastructure in the area, which ultimately leads to rural development.

2 During inception stage, it was decided by the Karnataka government to supply power to KPTCL. But when project was under commissioning, the Karnataka Electricity Regulation Commission (KERC) restructured the Power Supply to Karnataka into Four Zones and this project activity falls under Gulbarga Jurisdiction (GESCOM). Therefore Poweronicks Limited is exporting power to GESCOM. 3 Ministry of Environment and Forest web site : http://envfor.nic.in:80/divisions/ccd/cdm_iac.html

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2. Economic well being The main resources for power generation are biomass fuels such as rice husk, Sunflower residues, Coconut shell, groundnut Shell, Paddy straw, cotton stalk, rice husk etc. Crop residues are collected from the farmers out of their field and brought to the project, thus generate additional revenue on account of supply of these crop residues to the project, which are otherwise being under-utilized / burnt so far with no commercial value. In other words, the plant is generating commercial value to crop residues enabling the farmers to get better price out of their produce augmenting their income.

3. Environmental well being Since, the project uses only biomass materials for power generation, which otherwise would have been a fossil fuel such as coal, lignite and gas, the project does not lead to GHG emissions.

Since the biomass is formed by fixing the atmospheric CO2 by the action of photosynthesis in the presence of sunlight, the CO2 released due to combustion of biomass is assumed to be equal to the CO2 fixed by the photosynthesis. Again the CO2 released during the combustion will be consumed by the plant species for their growth. In view of the above, biomass combustion and growth of biomass and associated CO2 consumption and release can be treated as cyclic process resulting in no net increase of CO2 in the atmosphere. Hence, the project will not lead to GHG emissions.

4. Technological well being The technology selected for the project is a more energy efficient technology due to the following features. The project uses a steam turbo generator with matching boiler of traveling grate type capable of firing multiple fuels with highest possible system efficiency. In addition, the auxiliary power consumption for traveling grate type is relatively less than other efficient combustion system types. In view of the above the project participant considers that the project activity profoundly contributes to the sustainable development.

A.3. Project participants: >>

Name of Party involved (*) Private and/or public entity(ies) Kindly indicate if the Party ((host) indicates a host Party) project participants (*) involved wishes to be considered (as applicable) as project participant (Yes/No) India (Host) Poweronicks limited No (Private Entity) See contact information in Annex-1 to this PDD A.4. Technical description of the small-scale project activity:

The project activity is 6 MW capacity grid-connected biomass based renewable energy power plant with high-pressure steam turbine configuration. The auxiliary power consumption of the plant on an average is

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CDM – Executive Board around 13.1%. The plant is operating at an annual average plant load factor of 85 %. Since the biomass availability is abundant, Poweronicks has not been using coal since the commissioning of the plant, though the project proponent has permission to use coal along with biomass. No transmission and distribution losses are considered while calculating GHG emission reductions, since the project exports power to the KPTCL grid, which is located very near to the site. A hydraulic unit with which the speed of the grate varies depends on the boiler load and the fuel being fired in the furnace. The combustor is lined with refractory wall on the front wall. The water walls provided on all four sides above the combustor is of membrane construction. This arrangement helps in maintaining the furnace flue gas outlet temperature of desirable order. The major fuel for this project is Rice Husk and hence traveling grate type boiler has been chosen. The boiler is also capable for firing 100% Sunflower stalks, Rice Husk, Cotton stalk, Groundnut shell, Paddy straw, Bagasse, Coconut shell, Chilly stalks etc. A multistage turbine coupled to an electric generator, condenser, air ejector system for condenser, condensate pumps, feed water heater, deaerator, lubricating oil and governing system, controls and instrumentation systems as required have been installed. In general all power plants follows Rankine cycle as the base. The steam power cycle adopted for this project activity is modified Rankine cycle. That is to improve the efficiency of the power plant steam is extracted from the turbine for feed water heating and for deaerator too. The energy recovery from the main steam is directly related to the temperature of the steam than the pressure. In this project, the steam turbine is a straight condensing type machine with uncontrolled bleeds for regenerative feed heating. The boiler is designed to produce a maximum of 27 tons per hour of steam. The steam conditions at the boiler heat outlet are at a pressure of 66 kg/cm2 and the temperature of 485 0C. The condenser is operated at a pressure of 0.1 kg/cm2. The feed water temperature at economizer inlet is 105 0C.

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

A.4.1.1. Host Party(ies): >>India

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

A.4.1.3. City/Town/Community etc: >>Bellary District A.4.1.4. Details of physical location, including information allowing the unique identification of this small-scale project activity : >>

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The site for the plant has been acquired and the plot area measures around 37 acres. The site is located at 50 km to the north of Bellary abutting the southwest side Bellary – Highway in Siruguppa village, . The project site lies 15.63320 N latitude and 76.89170 E longitude4.

Power generated from the plant at 11 kV stepped to 33 kV and is being evacuated to GESCOM grid which is very near to the plant.

A.4.2. Type and category(ies) and technology/measure of the small-scale project activity: >> As per Clause 2 of Type AMS I.D (Version 13) of Appendix B of simplified modalities and procedures

4 http://www.gorissen.info/Pierre/maps/googleMapLocationv3.php

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for small-scale CDM project activities (Version 13: EB 36), in case of unit which co-fires renewable biomass and fossil fuel the capacity of the entire unit shall not exceed the limit of 15 MW, for the project to qualify as a small-scale CDM project. As this project activity is a 6 MW Biomass based Power project which is less than 15 MW, this project activity can be defined under

Type I Renewable Energy Projects (Small Scale) Category: “D”, ‘Grid connected renewable electricity generation’ (Biomass based Power Project) Technology of the project The technology adopted for the project activity is a standard and widely accepted practice for power generation using renewable sources. No technology transfer is required though know how for the project technology was not well established during project implementation stage in the state. Steam is generated in a high pressure boiler which is sized to produce a maximum of 27 tons per hour of steam. High pressure steam is passed through a straight condensing type machine with uncontrolled bleeds for de-aerator feed water heating to generate power to export to grid.

A.4.3 Estimated amount of emission reductions over the chosen crediting period: >> Year Annual estimation of emission reductions in tonnes of

CO2e **2008-2009 29548 2009-2010 29548 2010-2011 29548 2011-2012 29548 2012-2013 29548 2013-2014 29548 2014-2015 29548 2015-2016 29548 2016-2017 29548 2017-2018 29548 Total estimated reductions (tonnes of CO2e) 295480 Total number of crediting years 10 Annual average over the crediting period of estimated reductions (tonnes of CO2 e) 29548 ** The crediting period will start from the date of registration. The emission reduction has been calculated with the use of past records. As per the Consent for Establishment, the project proponent has got permission to use coal upto 25% of the fuel requirement.

A.4.4. Public funding of the small-scale project activity: >>

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No public funding from parties included in Annex I is available to the project. Project is implemented with equity of project proponent Poweronicks and long term debt by Vijaya bank.

A.4.5. Confirmation that the small-scale project activity is not a debundled component of a large scale project activity:

According to Appendix C of Simplified Modalities & Procedures for small scale CDM project activities, ‘Debundling’ is defined as the fragmentation of a large project activity into smaller parts. A small-scale project activity that is part of a large project activity is not eligible to use the simplified modalities and procedures for small-scale CDM project activities. A proposed small-scale project activity shall be deemed to be a de-bundled component of a large project activity if there is a registered small-scale CDM project activity or an application to register another small-scale CDM project activity:

• With the same project participants; • In the same project category and technology/measure; • Registered within the previous 2 years; and • Whose project boundary is within 1 km of the project boundary of the proposed small- scale activity at the closest point.

With reference to the criteria mentioned, this biomass power plant is not a de-bundled component of a large project activity as there is no other project activity within one kilometer of this project activity by same project participants.

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SECTION B. Application of a baseline and monitoring methodology

B.1. Title and reference of the approved baseline and monitoring methodology applied to the small-scale project activity: >>

The small scale methodology applicable to the project activity is

Type I – Renewable Energy Projects, Subset D - Grid connected renewable electricity generation Version: 13

Tool to calculate the emission factor for an electricity system (Version 01)5.

Reference: The project activity meets the eligibility criteria to use the simplified modalities and procedure for small-scale CDM project activities as set out in paragraph 6 (c) of decision 17/CP.7.

Details of methodology for baseline calculations for CDM projects of capacity less than 15 MW are available in the “Appendix B of the simplified modalities and procedure for small scale CDM project activities”. Reference has been taken from indicative simplified baseline and monitoring methodologies for selected small scale (CDM projects less than 15 MW) project activity categories.

B.2 Justification of the choice of the project category: >> Type I.D (Version 13) of Appendix B of simplified modalities and procedures for small-scale CDM project activities comprises the following:

1. This category comprises renewable energy The project activity is a biomass based power generation units, such as photovoltaics, hydro, project of installed capacity 6.00 MW that supplies tidal/wave, wind, geothermal and renewable biomass, electricity to the grid that would have been supplied that supply electricity to and/or displace electricity by fossil fuel fired generating unit. from an electricity distribution system that is or would have been supplied by at least one fossil fuel fired generating unit. 2. If the unit added has both renewable and non- The project activity comprises renewable energy renewable components (e.g.. a wind/diesel unit), the generation unit with a capacity of 6.00 MW, which eligibility limit of 15MW for a small-scale CDM is less than 15 MW.

5 http://cdm.unfccc.int/methodologies/Tools/EB35_repan12_Tool_grid_emission.pdf

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CDM – Executive Board project activity applies only to the renewable component. If the unit added co-fires fossil fuel, the capacity of the entire unit shall not exceed the limit of 15MW. 3. Combined heat and power (co-generation) systems The project activity is not a cogeneration system. are not eligible under this category. The project activity is a biomass based power project with generation capacity of 6.00 MW. 4. In the case of project activities that involve the The project activity does not involve addition of addition of renewable energy generation units at an renewable energy generation unit at an exiting existing renewable power generation facility, the renewable power generation facility. The project added capacity of the units added by the project should activity is a new biomass based power project with be lower than 15 MW and should be physically generation capacity of 6.00 MW. distinct from the existing units. 5. Project activities that seek to retrofit or modify an The project activity does not seek to retrofit or existing facility for renewable energy generation are modify an existing facility for renewable energy included in this category. To qualify as a small scale generation. The project activity is new biomass project, the total output of the modified or retrofitted based power project with generation capacity of unit shall not exceed the limit of 15 MW. 6.00 MW

As discussed above, since the project activity is a renewable energy generation units that supply electricity to an electricity distribution system that would have been supplied by at least one fossil fuel fired generating unit and the capacity of the entire unit does not exceed the limit of 15 MW, this project activity can be defined under

Type I: Renewable Energy Projects (Small Scale) Category: “D”, Grid connected Renewable Electricity Generation

B.3. Description of the project boundary: >> As per the guidelines mentioned in Type I. D. of Annex B of the simplified modalities and procedures for small-scale CDM project activities, project boundary encompasses the physical and geographical site of the renewable generation source. Hence, the project boundary covers the physical boundary of the project activity. The system boundary covers the terminal point of electricity generation, transportation to KPTCL grid and for the purpose of calculation of baseline emissions; Southern Regional grid is also included in the project boundary. As the plant uses only biomass residues or wastes (Paddy husk), the area where the biomass is extracted or produced is not included in the boundary. Thus, boundary covers fuel storage and processing, boiler, Steam Turbine Generator (STG) and all other power generating equipments, auxiliary consumption units and electricity grid.

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B.4. Description of baseline and its development: >> The baseline methodology has followed the one specified under Project category I.D in Appendix B of the Simplified M&P for small scale CDM project activities.

As the project activity involves generation of power using biomass and supplying the power to the grid, the “Tool to calculate the emission factor for an electricity system” has been used for determination of the baseline.

Calculation of the Baseline Emission Factor

Step 1: Identifying the relevant electric power system A “project electricity system” is defined by the spatial extent of the power plants that are physically connected through transmission and distribution lines to the project activity and that can be dispatched without significant transmission constraints.

A “connected electricity system” is defined as an electricity system that is connected by transmission lines to the project electricity system. Power plants within the connected electricity system can be dispatched without significant transmission constraints but transmission to the project electricity system has significant transmission constraint. The tool requires the following considerations while determining whether significant transmission constraints exist or not:

• In case of electricity systems with spot markets for electricity: there are differences in electricity prices (without transmission and distribution costs) of more than 5 percent between the systems during 60 percent or more of the hours of the year.

• The transmission line is operated at 90% or more of its rated capacity during 90% percent or more of the hours of the year.

In the Indian context, as no well established spot markets exist, the first criterion is not applicable. Similarly, a transmission line fulfilling the second criteria is an exception in Indian Context. Hence the use of these criteria does not result in a clear grid boundary. In such a scenario, the use of a regional grid definition in case of large countries with layered dispatch systems (e.g. provincial, regional/national) is recommended. Further, it states that a provincial grid definition may in many cases be too narrow given significant electricity trade among provinces that might be affected, directly or indirectly, by a CDM project activity.

The Indian power system is divided into five independent regional grids, namely Northern, Eastern, Western, Southern and North-Eastern. Each grid covers several states. The southern grid covers four states and two Union Territories including the state of Karnataka, where the project activity is located.

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Each state in a regional grid meets its own demand with its own generation facilities and also with allocation from power plants owned by the central sector. Depending on the demand and generation, there are electricity exports and imports between states in the regional grid. The volume of the net transfers between the regions in India is relatively small and electricity is largely produced and consumed within the same states. Consequently, it is appropriate to assume that the impacts of the project activity will be confined to the regional gird in which it is located. Hence for the purpose of estimation of the baseline emission factor, the Southern Regional grid has been chosen as the relevant electricity system.

Step 2: Selection of an Operating Margin method

The project proponent wishes to use the Simple Operating Margin (OM) method for the estimation of the baseline. The use of the Simple OM method is justified as the share of the low cost/ run resources constitute less than 50% of the total grid generation. The Ex ante option has been chosen where in a three year generation weighted average based on the most recent data would be calculated ex ante and would be fixed for the entire crediting period. Hence, the parameters for the calculation of OM do not need to be monitored and the OM does not need to be calculated during the chosen crediting period of ten years. .

Step 3: Calculation of the OM according to the Simple OM method

The simple OM emission factor is calculated as the generation-weighted average CO2 emissions per unit net electricity generation (tCO2/MWh) of all generating power plants serving the system, not including low- cost / must-run power plants / units.

The data provided by the Central Electricity Authority (CEA), an official data source has been relied upon for the calculation of the OM6. The same has been detailed in Annex 3. The latest version of the database, Version 3 has been used. The OM calculations have been based upon generation data, fuel consumption and the Gross Calorific value (GCV) of the fuel.

Assumptions

The following assumptions have been made in case of unavailability of data at station level:

Net generation: In case of stations where only gross generation data is available, CEA standard values for auxiliary consumption have been applied to calculate the net generation.

6 http://www.cea.nic.in/planning/c%20and%20e/Government%20of%20India%20website.htm

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GCV: Default GCV values for some thermal power stations have been used for cases where station specific data was unavailable.

The following assumptions have been in case of unavailability of data at unit level:

Net generation: The data is not monitored at a unit level and hence the following assumptions have been made

1. The auxiliary consumption (in % of gross generation) of the unit was assumed to be equal to that of the respective stations in the following cases: • All units of a station fall into the build margin; or • All units of a station have the same installed capacity; or • The units in the station have different capacities but do not differ with respect the applicable standard auxiliary consumption.

2. In all other cases, standard values for auxiliary consumption adopted by CEA were applied.

Fuel consumption and GCV: Fuel consumption and GCV are generally not measured at unit level. Instead, the specific CO2 emissions of the relevant units were directly calculated based on heat rates. Calculation Approach

The Simple OM has been calculated using the following formula:

Where:

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

FCi,m,y = Amount of fossil fuel type i consumed by power plant / unit m in year y (mass or volume unit)

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

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

EGm,y = Net electricity generated and delivered to the grid by power plant / unit m in year y (MWh) m = All power plants / units serving the grid in year y except low-cost / must-run power plants / units i = All fossil fuel types combusted in power plant / unit m in year y y = Either the three most recent years for which data is available at the time of submission of the PDD to the DOE for validation (for ex ante option)

The Operating Margin thus calculated is 1.0

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Step 4: Identification of the cohort of power units to be included in the Build Margin

The sample group of power units m selected for calculation of the build margin consists of the set of power capacity additions in the electricity system that comprise 20% of the system generation (in MWh) and that have been built most recently. The data pertaining to the units thus identified are detailed in the Version 3 of the Baseline Carbon Dioxide Emissions database of the CEA7.

With regards to data vintage, the project participant wishes to use Option 1 viz., For the crediting period, calculate the build margin emission factor ex-ante based on the most recent information available on units already built for sample group m at the time of CDM-PDD submission to the DOE for validation.

Step 5: Calculate the build margin emission factor

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

Where:

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

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

EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh) m = Power units included in the build margin y = Most recent historical year for which power generation data is available The Build Margin would be calculated ex ante during the first crediting period. For ex ante calculation the most recent data available has been used.

The build margin thus calculated is 0.71.

7 http://cea.nic.in/planning/c%20and%20e/Government%20of%20India%20website.htm

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Step 6: Calculation of the combined Build Margin

The combined margin will be calculated as follows:

Where,

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

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

The default values to be used for Biomass based Power projects are

WOM= 0.5 WBM= 0.5

Hence, the Baseline Emission Factor is calculated as below:

EF = WOM * OM + WBM * BM = 0.5 * 1.00 + 0.5 * 0.71

= 0.853 kgCO2/kWh

The Baseline Factor of 0.853 kgCO2/kWh thus calculated has been fixed for the entire crediting period.

Baseline Emission Calculation

As per the procedures laid out in Paragraphs 13 to 18 of the approved methodology AMS I.D. (Version 13) and detailed in Section B.6, the amount of power exported is 35.46 Million KWh per annum

Hence, the Baseline Emissions is calculated as below:

Baseline Emissions = 35.46 x 10^6 x 0.853 /1000 = 30247 tonnes of CO2

B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered small-scale CDM project activity:

The project activity meets the eligibility criteria to use simplified modalities and procedure for small-scale CDM project activities as set out in paragraph 6 (c) of decision 17/CP.7.

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As per the decision 17/cp.7 Para 43, a CDM project activity is additional if anthropogenic emissions of greenhouse gases by sources are reduced below those that would have occurred in the absence of the registered CDM project activity. Further referring to attachment A to Appendix B document of indicative simplified baseline and monitoring methodologies for selected small scale CDM project activity categories, project participants shall provide a qualitative explanation to show that the project activity would not have occurred anyway, at least one of the listed elements should be identified in concrete terms to show that the activity is either beyond the regulatory and policy requirement or improves compliance to the requirement by removing barrier(s);

1. Prevailing Practice Barrier

During the year 2002-2003, the Ministry had taken a number of steps to create widespread awareness and promote the acceptance of biomass power/cogeneration. A number of workshops, business meets and training programmes on biomass/bagasse cogeneration, and industrial co-generation projects were organised during the period. Interaction meetings were held with State Governments, financial institutions, State Nodal Agencies, State Electricity Boards, manufacturers, developers, investors and consultants to stimulate their interest and generate support for the biomass power generation programmes. The promotion of biomass-based power generation in the country was being encouraged through policies introduced at the Central and State levels. A package of fiscal incentives such as concessional custom duties; exemptions from excise duty and sales tax; tax holiday and accelerated depreciation; and, soft loans were available for commercial projects. The Ministry continued its efforts during the year to persuade the State Governments/State Electricity Boards/State Electricity Regulatory Commissions to announce remunerative polices for purchase/wheeling/banking or power generated from biomass power/co-generation projects8.

Generation Mix of KPTCL* Source MW % Thermal# 2184.42 37.43 Hydro# 3108.3 53.26 Biomass* 4.5 0.08 Wind@ 99.155 1.70 Nuclear# 440 7.54 Total 5836.375 100 *Before start date of Project Activity # http://www.cea.nic.in/planning/c%20and%20e/Government%20of%20India%20website.htm @ http://kredl.kar.nic.in/docs/List_of_Wind_Power_Projects_Commissioned_in_Karnataka1.xls * http://www.kredl.kar.nic.in/Docs/Biomass%20-%20commissioned%20as%20on%20date.doc

8 http://mnes.nic.in/annualreport/2002_2003_English/ch5_pg13.htm

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The contribution of Biomass based power, at that point in time, stood at a mere 0.08% of the total generation mix of KPTCL. This clearly highlights the low penetration (0.08%) of biomass power projects and hence we may conclude that the proposed project is not a common practice in the region in spite of the efforts and incentives from the government.

Total Sanctioned Capacity of Biomass based Power 437.70 MW Project by Govt. of Karnataka Total project commissioned till inception of Malavalli Power plant, 4.5 MW (2001) Poweronicks

However with reference to the table above it may be observed that in spite of the total sanctioned capacity of 437.70 MW9, only one biomass based power plant was commissioned with a capacity of 4.50 MW8 before conceptualization of the project activity10. The contribution of Biomass based power in the state of Karnataka stood at only 1.03% of the total sanctioned capacity

However, the promoters of Poweronicks were not defeated by these barriers. Fully aware of challenges ahead they took the initiative to lead the way, set an example for other by generating power utilizing biomass as primary fuel because they knew the barriers could be overcome with the availability additional funds through the sale of CERs that would be generated once the project got implemented.

2. Financial barrier

The CDM fund for the project is significantly required due to the following reasons: a. The increase in cost of fuel ; and b. The change in tariff by virtue of revised tariff by the off taker

The above factors are factual for the project activity and in absence of the CDM funds it is very likely that project activity would have used (or may use) coal as a fuel. The CDM fund for the project was initially considered to cover the project risk related to the fuel (biomass) price increase in the future. Therefore, the revenue from CDM could prove to be vital, as it will significantly improve the sustainability of the project. Raw material cost per tonne since inception has increased, a brief comparison of which is given herewith.

9 http://www.kredl.kar.nic.in/List%20of%20Biomass%20Projects%20Alloted.xls 8 http://www.kredl.kar.nic.in/Docs/Biomass%20-%20commissioned%20as%20on%20date.doc

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DPR COST, RS. COST (2004-05),RS. COST (2005-06),RS

Paddy husk 500 1400 1480 Groundnut shell 500 1400 1480 Agro Wastes 500 800 1400 Due to the increase in the raw material cost there has been a continuous increase in the cost per unit of generation since the project inception. It is envisaged that the raw material cost in the subsequent years would continue to increase. The increase in the raw material cost, per unit of generation since the project inception to date is shown below. It is envisaged that the raw material cost in the subsequent years would continue to increase and the gap between the cost of generation and revenue from per unit sale to the third parties.

Sl. No Item Rs./Unit DPR 2005-06 (during inception) 1 Raw material cost 0.82 2.31

From the above table, it is clear that there has been a continuous increase in the cost of generation due to increase in the raw material cost.

CDM Benefits for 10 years:

Cost per unit CERs Rate (Euros) Exchange rate Million INR Million Units replaced (Rs.)

Poweronicks 295480 8 55 130.01 354.6 0.37

The CDM benefit per unit (kWh) of power replaced is about Rs. 0.37. It is envisaged that the raw material cost would further increase, which would lead to further increase in the cost of generation (including wheeling charges) from present Rs. 3.18/unit in coming years. In this regard, this CDM benefit per unit of power would definitely help the plant to operate in sustainable manner.

The internal rate of return of the project during project conceptualization conditions (inclusive of MNRE subsidy on interest at the rate of 2% and income tax subsidy for the first five years on production) is 9.3% and with consideration of the CDM revenue the IRR of the project would improve to 12.7%.

Thus the project justifies the need of CDM funds for the project activity, which will help in significantly improving the project competitiveness and financial sustainability due to reduction in tariffs and increase in

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3. Other Barrier (Policy related barriers)

The initial PPA with off taker KPTCL was signed on 12/04/2001 at a tariff of Rs. 2.25 per unit with base year as 1994-95 and 5% escalation per year and to be revised on 1st April of every year. As per PPA, Poweronicks should get around Rs 4.04/unit for the current year (2006-2007). When the PP started the project activity (08/03/2003), KPTCL had cancelled the PPA signed with Poweronicks on 5th July 2003. It was also brought to notice to the PP that from the date of export the PP will be paid only Rs.2.8/unit as against the actual tariff to be paid of Rs.4.04.unit. This has confounded the PP as there will be a revenue loss of Rs 1.24/unit. This would result in financial losses and put an additional burden on the financial sustainability of the project. However, biomass power plants located in and around Karnataka approached court to increase their power tariff. But so far there is no positive response from the government.

Hence it is clear that for sustainable operation of project activity to mitigate the effects due to tariff policy CDM funds are very much essential. By getting CDM revenues Rs 0.38 / unit, the Poweronicks limited will get Rs 3.18 / unit as against Rs 2.8 / unit. This will slightly improve the financial constraint in the project. This discussion suggests that there are clear policy related threats and barrier to the proposed project activity, which can be mitigated to certain11 extent from CDM benefit.

B.6. Emission reductions:

B.6.1. Explanation of methodological choices: >>

The Emission Reduction calculation procedure is detailed below. The procedures laid out in AMS I.D. (Version 13) have been followed for the estimation of the emission reduction.

Baseline

The Baseline Emissions Factor, calculated as per the procedures laid out in the ‘Tool to calculate the

Emission Factor for an Electricity System’, works out to 0.853 kgCO2/ kWh

The procedures followed, the choices made, the assumptions made and the source of data used for the calculation of the Baseline Emission Factor is detailed in Section B.4

Baseline Emission Calculation

9 Uncertainty related to carbon market and cash flows are also a deterrent.

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The methodology AMS I.D. (Version 13) requires ex ante specification of the following parameters:

• Specific fuel consumption for all types of biomass to be consumed in the power plant. • Specific fuel consumption for all types of fossil fuels to be consumed in the power plant.

Further, Paragraph 16 of the methodology states that if fossil fuel is used the electricity generation metered should be adjusted to deduct electricity generation from fossil fuels using the specific fuel consumption and the quantity of fossil fuel consumed.

Also, the amount of electricity generated using biomass fuels calculated as per paragraph 16 shall be compared with the amount of electricity generated calculated using specific fuel consumption and amount of each type of biomass fuel used. The lower of the two values should be used to calculate emission reductions.

The project activity expects to generate 40.80 Million kWh on an annual basis. The biomass assessment study conduct in the region revealed ample rice husk availability for sustained operation of the power plant. The project activity expects to consume Rice husk, Juliflora, Sunflower waste and other agro wastes for the operation of the plant.

The Station Heat Rate (SHR) of the plant is 4200 kcal/kWh and the same has been used for the estimation of the specific fuel consumption for each type of biomass expected to be used in the power plant.

SHR = 4200 kcal/kWh

Where, SHR is the station heat rate in kcal/kWh.

The calorific value for each type of biomass to be used in the plant is provided in the table below.

Fuel Type Data Parameter Calorific Value (kcal/kg)

Rice Husk NCVRice Husk 2420

Sunflower Waste NCVJuliflora 4200

The Specific fuel consumption is calculated using the below given formula:

SFCi = SHR/ NCVi

Where,

SFCi is the Specific fuel consumption for the fuel of type i.e. kg/kWh

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NCVi is the Calorific Value of the fuel type i in kcal/kg.

The Specific fuel consumption as calculated using the above formula for each type of biomass is provided in the table below:

Fuel Type Data Parameter (kg/kwh)

Rice Husk SFCRice Husk 1.74

Sunflower Waste SFC Sunflower waste 1.00

As the annual coal consumption is assumed to be zero, the power generated using biomass is calculated as below:

QCoal = 0 tonnes

EGen = 40.80 Million kWh.

EGen,coal = QCoal x 1000 /SFCcoal

0 x 1000 = ------1.167

= 0 kWh

EGen,Biomass = 40.80 x 10^6 – 0 = 40.80 x 10^6 kWh…………….………………………..…………………… (a)

Where,

EGen is the amount of power generated during the year in kWh.

EGen, Coal is the amount of power generated using coal during the year in kWh.

EGen, Biomass is the amount of power generated using biomass during the year in kWh.

QCoal is the Quantity of coal consumed during the year y in tonnes.

For the purpose of Ex Ante Estimation of Emission Reduction, the following quantity of consumption for each type of biomass is assumed. The quantity of fuel consumption for each type of biomass would be monitored separately and the same would be used for the estimation of the emission reduction.

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During the financial year 2005-06

Fuel Type Data Parameter Quantity (Tons)

Rice Husk QRice Husk 70480

Sunflower Waste Q Sunflower waste 193

In order to estimate the power generated using each type of biomass, the following formula is used

ECal,I = QCal i x 1000 / SFCi

Where, QCal i is the quantity of consumption of biomass of type i.

Using the above, formula, the amount of power generated using each type of biomass is provided in the table below:

Fuel Type Data Parameter Million KWh

Rice Husk ECal,Rice Husk 40.61

Sunflower Waste ECal,, Sunflower waste 0.19

The total power generated using biomass is calculated as the sum of the parameters provided above.

Therefore,

ECal,Biomass = ECal,Rice Husk + ECal, Sun flower waste …….(b)

Where,

ECal, Biomass is the amount of power generated using Biomass and calculated as per the procedures laid down in paragraph 18 of AMS I.D. (Version 13)

As per the methodology, the lower of the two figures, EGen, Biomass (a) and ECal, Biomass (b) as calculated above is to be used for the calculation of Emission Reduction.

Therefore, for the purpose of Emission Reduction calculations, the power generated using biomass is 40.80 Million kWh.

EY = Min ( EGen, Biomass and ECal, Biomass) = 40.8 Million kWh.

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Where EY is the quantity of electricity used for the calculation of Emission Reduction in kWh.

The auxiliary consumption for the power plant is expected to be around 13.1% of the total power generated and the same has been used for Ex Ante calculation of Emission Reduction. Hence Auxiliary consumption

(EAux) is calculated as shown below:

EAux = 40.80 * 0.131 = 5.34 Million kWh.

However, during the crediting period, the EAux would be determined as below:

EAux = EGen - EExp

Where,

EAux is the Amount of Auxiliary power consumption in kWh.

EGen is Total amount of Power Generated in kWh.

EExp is Total amount of Power Exported to the Grid in kWh.

However, during the monitoring period, EAux, would be calculated using the below given formula:

EAux = EGen – EExp

Therefore, the power exported to the grid using biomass is

EExp, Biomass = EY- EAux

= 40.80 – 5.34 = 35.46Million kWh.

Where, EExp, Biomass is the quantity of electricity generated using biomass and exported to the grid in kWh.

The Baseline Emissions is hence calculated as

BE = EF x EExp, Biomass x 1000 = 0.853 x 35.46x 1000 = 30247 tonnes.

Where,

BE is the baseline emissions during the year y in tonnes of CO2

The baseline emissions, thus calculated Ex Ante work out 30247 tonnes.

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Project Emissions

Project proponent would import power from the grid for startup basis and during exigencies. The power imported from the grid would be monitored using meters and the project emissions on account of such imports would be calculated using the following formula:

PEimp = EF x Eimp x 1000

Where,

PEimp = Project Emissions due to the import of power in tones of CO2

Eimp = Electricity imported from the grid in Million kWh.

For Ex ante calculations, the power import has been assumed to be 2% of power generated.

Hence, Eimp = 0.2 * 40.80 = 0.82 Million kWh.

PEimp = 0.82 x 0.853 x 1000

= 699 tonnes of CO2

Leakage

The leakage activity identified, which contributes for GHG emissions outside the project boundary is transportation of biomass from biomass collection centres to biomass power project site. Calculation of leakage has been carried-out as under:

Biomass procured A 70673 Tons Average Distance between project B 40 Km Site and biomass collection centers Biomass load per truck C 10 MT Number of return trips D=A/C 7067.3 Mileage (Specific Consumption) E 2.5 Kmpl Total Diesel consumption (L per F=(D*40*2)/E 226153.6 Litres annum) Density of Diesel G 0.83 Kg/l Total Quantity of Diesel (MT per H=(F*G)/1000 187.71 MT annum) Oxidation Factor I 0.99 Calorific Value of Diesel J 10072 KCal/Kg CO2 emission factor for Diesel K 74.1 t CO2 / TJ CO2 emission per annum L=[(H*1000)*I*J*K*4186]/(1012) 573.69 t CO2

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Since the leakage emission is almost 1% of the total emission reduction, the same has been neglected. In addition to above, project emissions also occur due to transportation of the fly ash for disposal. Plant generates around 10000 tons of fly ash per annum. Number of trips to dispose fly ash to destination is around 3 per day. However, the distance of transport of fly ash from the plant to brick manufacturers in the area is well below 25 km and number of truck trips per annum are less than 498, hence the emissions due to the same have also been neglected.

Further to this, no other energy generating equipments have been transferred either from any other project activity or to any other project activity. Therefore leakage has not been considered. The leakage due to coal transportation has not been added while calculating the baseline of Southern grid and hence a small leakage due to transportation of biomass has been neglected from the calculations and estimations of emission reductions.

As per the general guidance on leakage in biomass projects, for small scale energy CDM project activities involving renewable biomass, there are three types of emission sources that are potentially significant (>10% of emission reductions) and attributable to the project activities. These emission sources may be project emissions (if under the control of project participants, i.e. if the land area where the biomass is grown is included in the project boundary) or sources of leakage (if the source is not under control of project participants). The following table summarises for different types of biomass, the cases where the emission source is relevant and the cases where it is not.

Biomass Type Activity/Source Shift of pre- Emissions from biomass Competing project generation / cultivation use of activities biomass Biomass from Existing forests - - X forests New forests X X - Biomass from In the absence of the croplands or project the land X X - grasslands (woody would be used as or non woody) cropland/wetland In the absence of the project the land - X - would be abandoned Biomass residues Biomass residues or or wastes wastes are collected - - X and used

For the project activity, the following are considered to calculate the possible emissions due to leakage:

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1. As the project activity will use only biomass residues, the implementation of activity will not lead to shift of pre project activities. 2. The biomass that will be used in the plant is generated from various crops. This waste will anyhow be generated even in the absence of the project activity and would have burnt or mixed with soil. As the fuel used in the plant is mostly of agriculture waste, there is no involvement of using fertilizer and clearance of lands for the generation of same and hence there are no emissions towards the same. 3. There is sufficient biomass available in the region and the same is revealed in Biomass assessment reports by Institute of Energy Studies, Anna University. Based on the Biomass Assessment report, the following calculation has been done to evaluate the leakage.

12 Total biomass generation Qbiogen = 1407320 Tonnes / year

Total Consumption Qbiocons= 1001624 Tonnes / Year (as used for Animal feed and fuel) Biomass consumption for the plant = 70673 Tonnes / year Total consumption = 1072297 Tonnes / year 1.25 times of the total consumption = 1340371 Tonnes / year

Total availability of biomass in the region is greater than the 25 % of the utilisation including project activity. Hence leakage is not considered. This clearly indicates that the quantity of biomass that is available in the region is more than 25% of the quantity of biomass that is utilized including the project activity and hence the leakage can be neglected. Biomass assessment in the region (Shiruguppa region - Bellary District) will be carried out annually based on the latest available literature / data from the government sources to determine if the biomass is at least 25% larger than the total quantity utilized by the project activity as well as existing users. In the absence of the official data, a biomass assessment study will be carried out by employing third party assessors who have past experience of doing such work.

LQ Biomass = [TQ Biomass - (BQ project + BQ other users)*1.25]

LQ Biomass = Quantity of Biomass more or less than the required 25% larger than combined usage (in Kg)

TQ Biomass = Total Biomass Quantity available in the region in Kg

BQ project = Biomass Quantity utilized by project activity in Kg

BQ others users = Biomass Quantity utilized by other users in Kg

In case LQ Biomass is positive (+) then there would be no leakage, hence Leakage (L) will be zero. However, if LQ Biomass is negative (-), then the leakage would be due to the use of equivalent amount of coal in the region and the same shall be calculated using the following formulae:

L = {[-(LQ Biomass) x NCV Biomass]} x EF Coal

12 Biomass Assessment report prepared by Institute for Energy studies, Anna Chennai funded by Ministry of New and Renewable Energy (MNRE, NEW Delhi)

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L = Leakage (tCO2)

LQ Biomass = Difference between total biomass quantity in the region and 25% larger than Biomass quantity utilized by project activity and other users.

NCV Biomass = Net Calorific Value of Biomass (in TJ/Kg)

EF Coal = Emission Factor of Coal (IPCC Default, tCO2/TJ)

From the above analysis, it can be concluded that the project activity does not have any sources of leakage due to type of biomass utilised.

Hence EL= 0.

Emission Reduction

ER = BE-PE-EL

Where ER Emission reduction by project activity during the year y. BE Baseline Emissions during the year y. PE Project Emissions during the year y. E Leakage during the year y. EL Emission leakage (tonnes/year) (= 0)

As calculated using the procedures described above,

Baseline Emissions = 30247 Tonnes of CO2

Project Emissions = 699 Tonnes of CO2

Leakage = 0 Tonnes of CO2

Therefore,

ER = 30247 – 699 – 0 Tonnes of CO2

= 29548 Tonnes of CO2

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

Data / Parameter OM

Data Unit: tCO2/MWh Description: Simple Operating Margin Source of data used: CEA

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Value Applied: 1.0 Justification of the choice of data or The data used for calculation of the OM would be sourced description of measurement methods and from CEA, an official source. The calculation procedures procedures actually applied. provided in the latest version of the “Tool to calculate the Emission Factor for an electricity system” would be used for the calculations. Any Comments

Data / Parameter BM

Data Unit: tCO2/MWh Description: Simple Operating Margin Source of data used: CEA Value Applied: 0.71 Justification of the choice of data or The data used for calculation of the BM would be sourced description of measurement methods and from CEA, an official source. The calculation procedures procedures actually applied. provided in the latest version of the “Tool to calculate the Emission Factor for an electricity system” would be used for the calculations. Any Comments

Data / Parameter EF

Data Unit: tCO2/MWh Description: Baseline Emission Factor Source of data used: CEA Value Applied: 0.853 Justification of the choice of data or The data used for calculation of the EF would be sourced description of measurement methods and from CEA, an official source. The calculation procedures procedures actually applied. provided in the latest version of the “Tool to calculate the Emission Factor for an electricity system” would be used for the calculations Any Comments Details of the calculation provided in Annex - 3

Data / Parameter EFdiesel

Data Unit: tCO2/TJ

Description: CO2 emission factor for diesel Source of data used: IPCC Default Value Value Applied: 74.1 Justification of the choice of data or IPCC value has been used as no country specific value is description of measurement methods and available. procedures actually applied.

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Any Comments

Data / Parameter OFDiesel Data Unit: Not Applicable (Constant) Description: Oxidation Factor of each fuel type, i Source of data used: IPCC default values Value Applied: 1 Justification of the choice of data or IPCC value has been used as no country specific value is description of measurement methods and available. procedures actually applied. Any Comments

Data / Parameter D Data Unit: Kg/l Description: Density of diesel Source of data used: Local available data Value Applied: 0.83 Justification of the choice of data or The data obtained from Central Electricity Authority description of measurement methods and (CEA)13 procedures actually applied. Any Comments

Data / Parameter NCVdiesel Data Unit: kCal/kg Description: Net calorific value of diesel Source of data used: Local available data Value Applied: 10072 Justification of the choice of data or The data obtained from Central Electricity Authority description of measurement methods and (CEA)14 procedures actually applied. Any Comments

Data / Parameter NCVRice Husk Data Unit: Kcal/kg Description: Net Calorific value of rice husk

11, 12 Source: CEA http://www.cea.nic.in/planning/c%20and%20e/user_guide_ver2.pdf

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Source of data used: Lab analysis reports Value Applied: 2420 Justification of the choice of data or description of measurement methods and procedures actually applied. Any Comments

Data / Parameter NCVSunflower waste Data Unit: Kcal/kg Description: Net Calorific value of Juliflora Source of data used: Lab analysis reports Value Applied: 4200 Justification of the choice of data or description of measurement methods and procedures actually applied. Any Comments

Data / Parameter SHR Data Unit: Kcal/kWh Description: Station Heat Rate Source of data used: Plant records Value Applied: 4200 Justification of the choice of data or description of measurement methods and procedures actually applied. Any Comments

B.6.3 Ex-ante calculation of emission reductions: >> Based on the methodology and formulas detailed in the above section, the Carbon Emission Reductions have been calculated and are provided in Appendix C

B.6.4 Summary of the ex-ante estimation of emission reductions: >> Project Estimation Baseline Estimation of overall Emissions of leakage Operating Years Emissions Emission Reductions (tonnes of (tonnes of (tonnes of CO2) (tonnes of CO2) CO2) CO2) **2008-2009 30247 699 0 29548 2009-2010 30247 699 0 29548

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2010-2011 30247 699 0 29548 2011-2012 30247 699 0 29548 2012-2013 30247 699 0 29548 2013-2014 30247 699 0 29548 2014-2015 30247 699 0 29548 2015-2016 30247 699 0 29548 2016-2017 30247 699 0 29548 2017-2018 30247 699 0 29548 Total estimated emission 302470 6990 0 295480 reductions (tonnes of CO2e) **The crediting period will start from the date of registration.

Therefore, a conventional energy equivalent of 354.6 Million kWh for a period of 10 years in Karnataka would be saved by exporting power from the 6 MW Biomass based power plant which in turn will reduce

295480 tons of CO2 emissions.

The emission reduction has been calculated with the use of past records.

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

B.7.1 Data and parameters monitored:

Parameter EGen Unit: kWh Description: Electricity Generated Source of Data: Tri-vector Energy Meter Value of Data: 40.8 million units Brief description of The parameter is measured using a tri-vector energy meter available in measurement methods and the switch yard at PL. procedures to be applied: QA/QC procedures to be The data will be directly measured and monitored at the project site. All applied (if any): relevant records will be checked to ensure consistency. The meters will be calibrated as per the standards. Any Comments

Parameter EExp Unit: Million kWh Description: Power Export Source of Data: Tri-vector Energy Meter Value of Data: 354.6

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Brief description of The parameter is measured using a tri-vector energy meter available in measurement methods and the switch yard at KPTCL sub-station. procedures to be applied: QA/QC procedures to be The data will be directly measured and monitored by KPTCL. All applied (if any): relevant records will be checked to ensure consistency. The meters will be calibrated as per the standards. Any Comments

Parameter Eimp Unit: kWh Description: Power Import Source of Data: Tri-vector Energy Meter Value of Data: 0.82 million units Brief description of The parameter is measured using a tri-vector energy meter available in measurement methods and the switch yard at KPTCL sub-station. procedures to be applied: QA/QC procedures to be The data will be directly measured and monitored by KPTCL. All applied (if any): relevant records will be checked to ensure consistency. The meters will be calibrated as per the standards. Any Comments

Parameter Qbio Unit: Tonnes/year Description: Fuel Used (Rice Husk and other Biomass used) Source of Data: Weigh Bride reading Value of Data: 70,673 Brief description of The parameter is measured using a weigh bridge located at the project measurement methods and site. The truck carrying the fuel will be weighed twice upon entry and procedures to be applied: exit. Each type of biomass will be monitored separately. Only permitted biomass will be used. QA/QC procedures to be The data will be directly measured and monitored at the project site. All applied (if any): relevant records will be checked to ensure consistency. The weigh bridge will be calibrated as per the standards. Any Comments

Parameter NCVbio Unit: kCal/kg Description: Net Calorific Value (Biomass) Source of Data: Analysis reports Value of Data: 3500

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Brief description of Through sample testing in an authorized laboratory once in half year. measurement methods and Tested quarterly only if the source of fuel is different. procedures to be applied: QA/QC procedures to be All relevant records will be checked to ensure consistency. applied (if any): Any Comments Based on the sample tests conducted.

Parameter Q coal Unit: Tonnes/year Description: Fuel Used (Coal) Source of Data: Weigh Bride reading Value of Data: Nil Brief description of The parameter is measured using a weigh bridge located at the project measurement methods and site. The truck carrying the fuel will be weighed twice, upon entry with procedures to be applied: the fuel and during exit after unloading. QA/QC procedures to be The data will be directly measured and monitored at the project site. All applied (if any): relevant records will be checked to ensure consistency. The weigh bridge will be calibrated as per the standards. Any Comments The data on quantity of fuel will be separate for all types of fuels

Parameter HSDcons Unit: Litres/y Description: Diesel consumption for DG sets and other equipments Source of Data: Daily records of fuel usage. Value of Data: 620 Brief description of Level Gauge indicator for DG Set and other equipment within the measurement methods and project boundary. procedures to be applied: QA/QC procedures to be The data will be directly measured and monitored at the project site. All applied (if any): relevant records will be checked to ensure consistency. The weigh bridge will be calibrated as per the standards. Any Comments

Parameter AVD Unit: Km Description: Average round trip distance Source of Data: Local available data Value of Data: 349125 Brief description of The vehicle number, number of vehicles and distance of procurement measurement methods and will be monitored on day to day basis and the same will be recorded in

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CDM – Executive Board procedures to be applied: the log book. QA/QC procedures to be The data will change only if there is any change in supplier. Apart from applied (if any): that the secondary statistical distance from the place of procurement to the site will be checked to ensure consistency. Any Comments

Parameter P carbon Unit: Percentage (% ) Description: Total carbon content of Coal Source of Data: Laboratory ultimate analysis reports / Coal Supplier report / Bureau of Energy Efficiency (Table 1.6, http://www.energymanagertraining.com/GuideBooks/2Ch1.pdf) Value of Data: 41.11 Brief description of The lab analysis of the coal samples will be done batch wise. The measurement methods and instruments used for the analysis will be checked for their calibration. procedures to be applied: QA/QC procedures to be The data will be directly measured and monitored at the project site. All applied (if any): relevant records will be checked to ensure consistency. Any Comments -

Parameter Qbiogen Unit: Tonnes/year Description: Biomass generated during the year from various fields Source of Data: Biomass Assessment Report Value of Data: 1407320 Brief description of Total biomass generation in the region based upon the statistical survey measurement methods and conducted by PP. procedures to be applied: QA/QC procedures to be The data will be taken from the assessment report conducted by PP and applied (if any): it will be cross checked with the yearly statistical report published by Ministry of Non-conventional Energy Sources. Any Comments

Parameter Qbiocons Unit: Tonnes/year Description: Consumption of biomass outside the project boundary Source of Data: Biomass Assessment Report Value of Data: 1001624 Brief description of Total biomass generation in the region based upon the statistical survey measurement methods and conducted by PP.

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CDM – Executive Board procedures to be applied: QA/QC procedures to be The data will be taken from the assessment report conducted by PP and applied (if any): it will be cross checked with the yearly statistical report published by Ministry of Non-conventional Energy Sources. Any Comments

All the above mentioned parameters will be monitored 2 years in addition to the crediting period (10 + 2 Years).

B.7.2 Description of the monitoring plan: >> Project proponent implemented the following operational and management structure in order to monitor emission reductions and any leakage effects, generated by the project activity Project proponent formed a CDM team/committee comprising of five persons from relevant departments who are responsible for monitoring of all the parameters mentioned in this section. In the CDM team, a special group of operators were formed and each of them were assigned responsibility of monitoring of different parameters and record keeping. On daily basis, the monitoring reports have been checked and discussed.

CDM Team

Process Owners and Responsibilities

Plant Manager: Plant operation with the help of shift-in-charge. One shift-in-charge for each shift and the plant runs for 3 shifts per day. Shift-in-charge will coordinate with yard-in-charge and yard supervisors to monitor receipt of raw materials and its consumptions. He will also coordinate with time office for staff duties and attendance and reject any raw material based if not permitted to use.

Manager Stores and Purchase: Purchase of raw materials and equipments such as spares, etc, in consultation with Managing Director and Executive Director and rejects any raw material based if not permitted to use.

Weighbridge Operator: Weighing of raw materials and reporting the same to Managing Director on shift basis. Reject any raw material based if not permitted to use.

Financial Officer: Submission of bills, raise invoice, collection of payments from vendors and KPTCL coordination with accounts department. Report to Managing Director on financial matters of the plant.

Accounts: to compile receipts from plant, purchase department, weighment slips, check for quantity and price and verify the bills, report to Financial Officer and Managing Director for final approval.

The organization chart is as given below:

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Managing Director

Executive Director

Plant Manager Stores and Administration and Financial Officer Purchase Weighbridge

Shift – In – Charge Accounts

Yard – In - Charge

B.8 Date of completion of the application of the baseline and monitoring methodology and the name of the responsible person(s)/entity(ies) >> Date of completing the final draft of this baseline section: DD/MM/YYYY 26/02/2008

Name of person/entity determining the baseline: Poweronicks Limited, who is also a project participant (as mentioned in Annex-I)

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SECTION C. Duration of the project activity / crediting period

C.1 Duration of the project activity:

C.1.1. Starting date of the project activity: >> The project start date is 08/03/2003. The boiler purchase order is considered as the start date of the project activity.

C.1.2. Expected operational lifetime of the project activity: >> Life time of the project: 25 years

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

C.2.1. Renewable crediting period

C.2.1.1. Starting date of the first crediting period: >> Not applicable

C.2.1.2. Length of the first crediting period: >> Not applicable

C.2.2. Fixed crediting period:

C.2.2.1. Starting date: >> 01/04/2008. (However the project proponent would start the crediting period from the date of registration for the project activity)

C.2.2.2. Length: >> 10 years (10-y)

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SECTION D. Environmental impacts >>

D.1. If required by the host Party, documentation on the analysis of the environmental impacts of the project activity: >> The project being a renewable energy biomass based power project it does not fall under the purview of the Environmental Impact Assessment (EIA) notification of the Ministry of Environment and Forest, Government of India. As per the government of India notification dated June 13, 2002 based on environment protection rule, 1986, public hearing and EIA is required for those industries/projects which are listed in the predefined list of ministry of environment and forest. Thermal power projects with investment of less than Rs.100 crores have been excluded from the list. Hence, it is not required by the host party.

The project has taken all the care to follow the rules and regulations for conservation of the environment prescribed by licensing authorities like KSPCB as per the terms and conditions mentioned through letter no. KSPCB/CFE-CELL/POWERONICKS/AEO-2/2000-2001 dated 06th January 2001. However, Poweronicks limited has conducted a detailed environmental study by a third party and the brief description of the study is as follows: Measures adopted to minimize Air Pollution • Installation of high efficiency ESP having SPM emission rate less than 95 mg/m3 though the CPCB norms allows up to 150 mg/m3. • Interlocking of ESP with boiler operation • Elaborate dust suppression and dust collection systems at sources causing fugitive emissions in work zone. • Taller chimney (of about 43 m against 40 m recommended by CPCB) and higher exit velocity than specified by CPCB norms to increase dispersion area there by reducing ground level concentration of pollutants, • Dedicated monitoring team

Measures adopted to minimize water pollution • The effluent generated is directed to ETP (Effluent Treatment Plant) for treatment and the treated effluent is used for Green belt development • The PH value of the effluent is 6.5 – 8 as against the limit of 6 – 6.5 • The suspended solids level in the effluent is maintaining around 150 mg/l as against the CPCB norms of 200 mg/l. • (Since the effluent quantity to be handled is less, sewage treatment plant is not required) Measures adopted to minimize solid waste management Regarding ash storage and disposal,

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• a Poly Vinyl Chloride film lining at the bottom of the ash storage • Water collected in the ash storage is regularly pumped to ETP • Leachate is also periodically monitored • The quantity of ash to be disposed is distributed to the brick manufacturers at free of cost.

Measures adopted to minimize the noise pollution • Silencers are provided on all safety valves and vent valves • Low speed and heavy duty fans have been installed • Frequent checking of air and steam leakages • Hollow brick construction is been made to minimize the noise to outer • Frequent monitoring of vibration levels of high speed machines

D.2. If environmental impacts are considered significant by the project participants or the host Party, please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party: >> Not Applicable

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SECTION E. Stakeholders’ comments >>

E.1. Brief description how comments by local stakeholders have been invited and compiled: >> The local stakeholder comment invitation and compilation process involved is as follows: The local stakeholders are immediately affected by the activities of the project. The effect is on the local environment, social life and economics. All the individuals and organizations falling in the above effects are perceived as stakeholders. They can be within the boundaries of the village, district, state or nation. On deciding above criteria for qualification of the stakeholders, the idea was to decide most appropriate representatives who are covering above. During interaction of the corporate headquarter and the plant management, the stakeholders were identified as:

• Office bearers of the Siruguppa village, Block Siruguppa

• Office bearers of the neighbouring village’s local bodies

• Fuel suppliers

• Customer (KPTCL)

• Licensing and regulatory authorities like KSPCB Poweronicks has been constantly in touch with all above mentioned stakeholders and other identified stakeholders like licensing and regulatory authorities. The views of licensing and regulatory authorities are reflected in the form of permissions granted for the project. In this aspect, the permission by KSPCB and MNRE are indication of favorable impression for the project.

Stakeholders Involvement The village Panchayat /local elected body of representatives administering the local area is a true representative of the local population in a democracy like India. Hence, their consent / permission to set up the project is necessary. Poweronicks limited has already completed the necessary consultation and documented their approval for the project.

Local population comprises of the local people in and around the project area. The local rice mill owners and farmers are involved in the supply of the biomass and hence the project is a beneficial project for these stakeholders. In addition to this, the project would also lead to local manpower working at the plant site. Since, the project will provide good direct and indirect employment opportunities the local populace is encouraging the project. The project does not require displacement of any local population. In addition, the local population is also an indirect consumer of the power that is supplied from the power plants. The distance between the electrical substation for power evacuation and the plant is very near hence installation of transmission lines will not create any inconvenience to the local population.

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Karnataka State Pollution Control Board (KSPCB) has prescribed standards of environmental compliance and monitors the adherence to the standards as per their letter no.KSPCB/APC/DEO-TC/AEO-2/2005-06 dated 28th October 2005 The project has already received No Objection Certificate (NOC) from KSPCB to start the plant.

Karnataka Renewable Energy Development Limited (KREDL) implements policies in respect of non- conventional renewable power projects in the state of Karnataka and has accorded approval to the project vide letter no. KREDL/03/POL/01/336 dated 03 March 2001.

As a buyer of the power, the KPTCL is a major stakeholder in the project. They hold the key to the commercial success of the project. KPTCL has already cleared the project and Poweronicks has already signed Power Purchase Agreement (PPA) with KPTCL on 12 April 2001.

The government of India, through Ministry of New and Renewable Energy (MNRE), has been promoting energy conservation, demand side management and viable renewable energy projects including wind, small hydro and bagasse cogeneration / bio-mass power. The project meets their requirements. In order to get their views about the project activity, the poweronicks limited has arranged a stake holder meeting on 26th June 2006. The project proponent has invited all stakeholders through letters to the site and the meeting had been conducted and views are recorded and summarized below.

E.2. Summary of the comments received: >> As mentioned above, Poweronicks has already received the approvals and clearances for their project from the following stakeholders: • Consent order of Establishment/Operation from KSPCB • Power Purchase Agreement with KPTCL; • Clearance from the Gram Panchayat, Siruguppa block • Although public participation at any stage of project implementation is not required, being a CDM activity, project proponent has invited the local stakeholders including Sarpanch (head) of village, representative of local population, representative of local NGO and biomass suppliers (Rice mill owners) to express their views on the project and the summary is presented as below.

Village Sarpanch (head of locally elected body) expressed his happiness about the implementation of the project. Before the inception of the project, there were frequent power failures in the village. After the implementation of the project activity, the power failures have been reduced drastically. He added that this project creates approximately direct employment for about 40 members and indirect employment for about

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200 peoples. Villagers expressed their happiness that they get reasonable monitory gains for their harvested agricultural residues by supplying it to the project activity.

Local KPTCL member explained that before the inception of the project activity, the power was supplied to the village from 200 km (Raichur). Hence there is higher transmission and distribution losses and frequent voltage drop. The voltage drop is of the order of approximately 29% which leads to fuse lot of bulbs. After the implementation of the project activity, the voltage profile is improved very much and the transmission and distribution losses are also reduced

Representative Biomass suppliers expressed their happiness about project implementation by poweronicks in this area, which has provided them an opportunity to earn money. Most of the biomass suppliers supplying fuels to the project are farmers. Before commencement of the project, these farmers follow a habitual action of burning the agricultural residues in the land itself after harvesting. Hence there is no value for the crop residues leads to zero monetary benefits. After the implementation of the project activity, the low density crop residues after harvesting and rice husk generated in the rice mill have got commercial value. Hence farmers have started earning very good money thereby their financial status have improved from sub-zero level to a very good level. They also mentioned that this project activity provides employment for local labors, skilled and unskilled workers and minimizing migration of local peoples to nearby cities. They further added that, the project activity has provided business opportunity for local transporters also.

Local Pollution Control Board (representative for KSPCB) narrated that it is one of the best plants in this district (Bellary) and Poweronicks are well within the pollution control board norms. They got necessary licenses from all approved agencies to run the power plant and renewing the same periodically without failure. Fly ash generated during biomass burning is effectively collected by state of the art ESP (Normal costs 20 lakhs and ESP installed at the site costs 80 lakhs) and it is disposed to brick manufacturers. Hence no ash is being stored in the site. In summary, every stakeholder expressed that the project activity is helping the socio-economic development of the village and nearby area without affecting the local environment adversely.

E.3. Report on how due account was taken of any comments received: >> The relevant comments and important clauses mentioned in the project documents like Detailed Project Report (DPR), environmental clearances, power purchase agreement, local clearance etc. were considered while preparation of CDM project development document. Further, the document will be published on UNFCCC/Validator’s website for public comments.

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Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY

Organization: Poweronicks Limited Street/P.O.Box: Kukatpally City: Hyderabad State/Region: Postfix/ZIP: 500 042 Country: India Telephone: 91-40-6451 8118 FAX: 91-40-2307 9993 E-Mail: [email protected] URL: Represented by: Title: Managing Director Salutation: Mr. Last Name: Rao Middle Name: First Name: Prasad Department: Mobile: Direct FAX: 91-40-6451 8118 Direct tel: 91-40-2307 9993 Personal E-Mail: [email protected]

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Annex 2

INFORMATION REGARDING PUBLIC FUNDING

No Public Funding is available to the project.

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Annex 3

BASELINE INFORMATION

Emission Factor (The highlighted value has been used for the preparation of PDD)

Simple Operating Margin (tCO2/MWh) (incl. Imports)

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 North 0.98 0.98 1.00 0.99 0.98 0.99 1.00 East 1.22 1.19 1.17 1.20 1.17 1.13 1.09 South 1.03 1.00 1.01 1.00 1.00 1.01 1.00 West 0.98 1.01 0.98 0.99 1.01 0.99 0.99 North-East 0.73 0.71 0.74 0.74 0.84 0.70 0.70 India 1.01 1.02 1.02 1.02 1.02 1.02 1.01

Build Margin (tCO2/MWh) (not adjusted for imports)

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 North 0.53 0.60 0.63 East 0.90 0.97 0.93 South 0.71 0.71 0.71 West 0.77 0.63 0.59 North-East 0.15 0.15 0.23 India 0.70 0.68 0.68

As per ACM0002 (Version 7), the equal weighted average value for simple operating margin and Built Margin has been used for estimating the emission factor and same is given below: Average simple operating margin = (1+1+1.01)/3 = 1.00 Build Margin = 0.71 Therefore, Emission factor = [(0.5 X 1.00) + (0.5 X 0.71)] = 0.853

Baseline Emission Factor is an ex-ante parameter. This value is constant throughout the crediting period.

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Annex 4 Monitoring Plan All the parameters mentioned in the monitoring plan have been monitoring in the plant. The entire process of monitoring has been streamlined and will be made available in the required format during the verification process and for subsequent useful purposes. As per the monitoring plan, plant monitors electricity generated, exported, imported and auxiliary consumption. In addition, plant monitors fuel Consumption data including both biomass of various types and coal. Both the biomass and coal are analysed on regular intervals as per the monitoring plan for their NCV, and all are being maintained in standard formats. The data formats for CDM have already been finalized and started monitoring accordingly to ensure and demonstrate existence of MVP in the plant.

The calibration of monitoring equipment is being maintained as per the requirement of KPTCL and the same is being done regularly. Power Generation, Export & Auxiliary Consumption, fuel consumption are being recorded daily and the same is being verified and approved by General Manager of the plant. These records are being sent to Head Office for review by the Director and for corrective actions if necessary.

Further, Internal Auditors also verify the monitoring data. As per the advices of the Internal Audit team, corrective actions will be taken up for more accurate future monitoring and reporting system.

The Plant is equipped with energy meters/export meters for monitoring and control purpose. There are two energy meters at KPTCL sub station to measure the export power, namely main meter and check meter with 0.2 class accuracy. The energy meters shall be tested and calibrated utilizing a standard meter. The standard meter shall be calibrated once in a year at the approved laboratory of Govt. of India or Govt. of Karnataka as per terms and conditions of supply. The tests of meters shall be jointly conducted by authorised representatives of both the parties and the results and correction so arrived at mutually will be applicable and binding on both the parties. The energy meters shall not be interfered with, tested or checked except in the presence of representatives of company and KPTCL. If any of the meters is found to be registered inaccurately, the affected meter will be immediately replaced. The meters will be checked in presence of both the parties on mutually agreed periods. If during the test checks both the meters are found beyond permissible limits of error, both the meters shall be immediately replaced and the correction applied to the consumption registered by the main meter to arrive at the correct energy exported for billing purposes for the period of one month up to the time of test check, computation of exported energy for the period thereafter till next monthly reading shall be as per the replaced meter. Corrections in exported energy shall be applicable to the period between the two previous monthly reading and the sate and time of test calibration in the current month when error is observed.

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Power generation, export and auxiliary consumption are being recorded at the plant from the installed meters. However, for applying monthly bill to KPTCL the meter readings will be taken on 24th of every month by KPTCL officials in presence of company representatives and readings will be jointly certified. The following log sheets are being maintained for the critical equipment of the plant and readings are being recorded on day to day basis: 1. Turbine log 2. Boiler log 3. Electrical log

If both the both and check meters fail to record or if any of the Potential Transformers fuses are blown out, the export energy will be computed on a mutually agreeable basis for the point of defect. Power generation, export and auxiliary consumption, fuel consumption are being recorded at the plant daily and the same is being verified by Manager of the plant. These records sent to head office for review by the director and for corrective actions if necessary.

In addition to this, biomass assessment study will be conducted every year to ascertain the quantity of biomass in the Bellary district and also to calculate the leakage if any. Emission levels are being monitored as per the statutory requirement. Plant emission levels are being monitored and the results are being sent to KSPCB. For this purpose, the service of external agency is being utilized.

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Traceability of Procedure for calibration Service & Tech S. Data Make of Location of Calibration monitoring the method/ Tag No. def. Of instrument Uncertainty no. description instrument instrument Method parameter calibration and measuring interval Power 04219513 & PL Switch Secondary 1 Tri-vector Meter KPTCL/1 year Energy Meter L&T Low Generated 4219514 Yard Injection Auxiliary PL/ Not PL Switch Secondary 2 Power Tri-vector meter 4219514 Energy Meter L&T Low applicable Yard Injection Consumption Power PL Switch Secondary 3 Export to Tri-vector meter KPTCL/ 1 year 4219514 Energy Meter L&T Low Yard Injection Grid Quantity of IPA 4 all biomass Weigh Bridge PL/ 1 year 324/03 Weigh Bridge PL - Low Flowmatics used Calorific Bomb calorie 5 Value of PL/ 1 year - - - NABL - Low meter biomass HSD for DG Level guage Cummins Primary 6 PL/ 1 year 62287319 - PL plant site Low Set indicator India Ltd Injection IPA 7 Rice husk Weigh Bridge PL/ 1 year - - PL - Low Flowmatics % carbon in By govt 8 PL/Every Batch - - - PL - Low coal authorised lab

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Appendix A Abbreviations

CDM Clean Development Mechanism CEA Central Electricity Authority CER Certified Emission Reductions Cm Centimeter

CO2 Carbon Dioxide DPR Detailed Project Report GHG Greenhouse Gas IPCC Intergovernmental Panel on Climate Change IPP Independent Power Producers kCal Kilo Calories Kg Kilogram Km Kilometer KP Kyoto Protocol KPTCL Karnataka Power Corporation Limited KSPCB Karnataka State Pollution Control Board KREDL Karnataka Renewable Energy Development Limited kW Kilowatt kV Kilovolts kWh Kilowatt hour MNRE Ministry of New and Renewable Energy T Tonnes MW Megawatt NGO Non Government Organizations NOC No Objection Certificate PDD Project Design Document PLF Plant Load Factor PPA Power Purchase Agreement QA Quality Assurance QC Quality Control STG Steam Turbine Generator T&D Transmission and Distribution TJ Tera Joule UNFCCC United Nations Framework Convention on Climate Change GESCOM Gulbarga Electricity Supply Company Limited KERC Karnataka Electricity Regulation commission

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BEF Base line emission factor EF Emission factor HSD High Speed Diesel CPCB Central Pollution Control Board ESP Electro-static Precipitator MVP Monitoring and Verification Protocol SPM Suspended Particulate Matter

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Appendix B REFERENCE LIST

Sr. No References 1. Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) http://cdm.unfccc.int/ 2. Website of United Nations Framework Convention on Climate Change, http://unfccc.int 3. UNFCCC decision 17/CP.7: Modalities and procedures for a clean development mechanism as defined in article 12 of the Kyoto Protocol 4. UNFCCC document: Annex B to attachment 3, Indicative simplified baseline and monitoring methodologies for selected small scale CDM project activity categories 5. Detailed project report on 6 MW Biomass based power project – Poweronicks Limited 6. Website of Central Electric Authority (CEA), Ministry of Power, Govt. of India- http://cea.nic.in 7. CEA published document “16th Electric Power Survey of India” 8. Website of state electricity boards in southern region 9. Website of Ministry of New and Renewable Energy Sources (MNRE), Government of India, http://mnes.nic.in 10. Website of Indian Renewable Energy Development Agency (IREDA), www.ireda.nic.in 11. Karnataka Renewable Energy Development Limited www.kredl.org 12. www.infraline.com/power/ 13. Website of Climate Change Cell, Ministry of Environment & Forest, Govt. of India. http://envfor.nic.in

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Appendix C Calculation of Baseline Emission Factors and Emission Reductions

Year of offer 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

Generation capacity , KW 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 Plant load factor, % 85 85 85 85 85 85 85 85 85 85 No. of hours of plant operation per annum 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 No. of kWh generated in a year,millions 40.80 40.80 40.80 40.80 40.80 40.80 40.80 40.80 40.80 40.80 Auxilliary consumption per annum in kWh,millions 5.34 5.34 5.34 5.34 5.34 5.34 5.34 5.34 5.34 5.34 Power Import per annum in kWh,millions 0.82 0.82 0.82 0.82 0.82 0.82 0.82 0.82 0.82 0.82 No. of kWh exported to grid ,millions 35.46 35.46 35.46 35.46 35.46 35.46 35.46 35.46 35.46 35.46 No. of kWh replaced in the grid ,millions 35.46 35.46 35.46 35.46 35.46 35.46 35.46 35.46 35.46 35.46

Baseline emission factor considered, kgCO2/kWh 0.853 0.853 0.853 0.853 0.853 0.853 0.853 0.853 0.853 0.853 Baseline emissions, tones 30247 30247 30247 30247 30247 30247 30247 30247 30247 30247 Qty of coal used per annum, Tonnes 0 0 0 0 0 0 0 0 0 0 Project emissions, tones 699 699 699 699 699 699 699 699 699 699 Carbon emission reductions in a year 29548 29548 29548 29548 29548 29548 29548 29548 29548 29548

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