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CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 1
Capacity Development for CDM
Fourth National WorkshopCairo, 14-15 June 2004
PDD Preparation for CDM PDD Preparation for CDM ProjectsProjects
Vale Do Rosario Bagasse Vale Do Rosario Bagasse Cogeneration (VRBC) Project - Cogeneration (VRBC) Project -
BrazilBrazilSamir Amous, APEX, TunisiaSamir Amous, APEX, Tunisia
Regional Centre for North Africa and Middle-EastRegional Centre for North Africa and Middle-EastTel : +216 71 848 094 --- Fax : +216 71 843 453 Tel : +216 71 848 094 --- Fax : +216 71 843 453 [email protected]
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 2
Cogeneration Bagasse - Brazil
The first CDM Project to be submitted to the EB (NM0001)
The fourth to get approved by the EB (AM0004)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 3
Cogeneration Bagasse - Brazil
Unilateral CDM Project: Fund raised through the traditional Banking system in Brazil
Crediting Period: 7 years to be renewed twice
670,000 tCO2e for he whole Crediting Period
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 4
Cogeneration Bagasse - Brazil
PDD available at the cdm.unfccc.int Web Site
PDDrevised once, final version : July 2003
105 pages including annexes Very comprehensive PDD, fits entirely
the PDD Format
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 5
VRBC PDD StructureA. General description of project activity
B. Baseline methodology
C. Duration of the project activity/crediting period
D. Monitoring methodology and plan
E. Calculation of GHG emission by sources
F. Environmental impacts
G. Stakeholder comments
Annex 1. Contact information on project participants
Annex 2. Information regarding public funding
Annex 3. New baseline methodology
Annex 4. New monitoring methodology
Annex 5. Table of baseline data
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 6
A. General Descriptionof the Project Activity
(15 Pages)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 7
Cogeneration Bagasse - Brazil
A.1 - Title: Vale Do Rosario Bagasse Cogeneration (VRBC)
A.2 – Description: Expansion of the mill’s cogen system in order to
increase its efficiency and to add value to the bagasse originating from its sugar milling process
Bagasse: the residus of the sugar cane that is left after juice extraction
Expansion made twice in 2 phases: Phase 1 (1990-1994) and Phase 2 (1995-1997)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 8
Cogeneration Bagasse - Brazil
A.2 – Description: VR has still enough bagasse to supply its
internal needs and to sell a small portion to the grid, but needs to shift to higher pressure boilersbeyond the profitability boundaries
CDM can allow for substantial revenuesa higher economic performance of the project
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 9
Cogeneration Bagasse - Brazil
A.2 – Description: Decision:
Phase 3 (2001)15 MW +4 MW (standing-by) Cogen
Phase 4 (2003)50 MW + 8 MW (standing-by) Cogen
Contribution to use a sustainable source of energy (bagasse)
Source of Revenue for the Sugar Industry Preservation of the jobs (1Mo) in this
sector
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 10
Cogeneration Bagasse - Brazil
A.3 – Project Participants: Vale Do Rosario Sugar Mill:
Founded in 1964 104 Shareholders 4 Mo tons of Sugarcane/yr
Project Developer: ECONERGY Brazil: Technical, Financial and Policy
Consultant
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 11
Cogeneration Bagasse - Brazil
A.4 – Technical Description:
Location: Sao Paulo, Brazil,
City: Morro Agudo
2 figures showing the exact location of the Project
Category : Renewable Energy Supply-side grid-
connecteddisplace fuel combustion in energy industries
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 12
Cogeneration Bagasse - Brazil
A.4 – Technical Description:
Technology: Steam-Rankine cycle: Direct combustion of
biomass in a boiler to generate Steamexpanded through a Turbine
Waste-heat from the steam turbine recovered to meet industrial-process heat needs
1 figure showing the process involved by the Cogen
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 13
Cogeneration Bagasse - Brazil
A.4 – Technical Description: Technology:
1 table showing detailed components of Phase 3 and Phase 4 equipments
1 table showing detailed data on the equipments, including power delivered and total capacity to export to the grid
3 other figures showing the process
Description of how the GHG are to be reduced
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 14
Cogeneration Bagasse - Brazil
A.4 – Technical Description:
Public Funding: Funding raised through the traditional
banking system (13% to 15% interest Rate)
Advance negotiation with Swedish to sell CERs
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 15
B. Baseline Methodology(9 Pages)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 16
Cogeneration Bagasse - Brazil
B.1 - Title of the BL Meth.: « Econergy Methodology for Emission
Reductions from grid-connected bagasse cogeneration projects »
B.2 & B.3 - Justification of the use of the Meth. And description
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 17
Cogeneration Bagasse - Brazil
Assumptions : Cogeneration using bagasse comes in
substitution to fossil fuels and hydroelectricity utilized for power generation in the reference scenario or BL
Future development of the electrical sector in Brazilincreasing quantities of fossil fuels (mainly Nat Gas)utilisation of bagassepartly replace marginal power plant that use mainly Nat Gas
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 18
Cogeneration Bagasse - Brazil
Four question to justify Additionality: Would the project be initiated within the
public sector in the absence of CDM ?
Would the project be initiated within the private sector in the absence of CDM ?
Would VR initiate the project in the absence of the CDM ?
Would public-sector policies and/or programs to promote the use of such RE ?
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 19
Cogeneration Bagasse - Brazil
Reasons justifying Additionality: The economic performance of the projects
without CERs are insufficientunable to remove technical, institutionnal, and financial barriers: Brazil is currently intensively investing on the
development of Nat Gas. The thermal electricity will reach 17% in 2004 (vs 9% in 2001)
Brazil is not investing on bagasse campaniesthere is a need to envisage new spirit towards liberalization of the Elec. sector
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 20
Cogeneration Bagasse - Brazil
Reasons justifying Additionality: Cost for cogénération: US$ 35 to US$ 105/MWh
Marginal cost for electricity in Brazil : US$ 33/MWh
Investment on cogeneration should be compared against other investment opportunities with equal risks
Internal Rate of Return 2004-201116% (without CERs), and 22% (with CERs=US$5)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 21
Cogeneration Bagasse - Brazil
Reasons justifying Additionality: High transaction costs bureaucracy to obtain
agreements for Environmental impact assessmentInstitutional burdens
No standard conractual agreements for selling electricity to the grid (guaranty of duration, guarantee of effective payment, etc.)Regulatory burdens
Presidentiel Decree to develop cogeneration waited since 1997, never published Regulatory burdens
No guarantee of performances of Bagasse CogeneratorTechnical burdens
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 22
Cogeneration Bagasse - Brazil
Baseline: Emission factors for the South-South-
East and Midwest grid to which VR is connected and which will receive the electricity from the cogeneratoravoid thermal emissions of the related grid
Conservative assumption: Bagasse would have been burned instead of getting landfilled (CH4 - emissions)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 23
Cogeneration Bagasse - Brazil
Baseline Emission Factor: Total System Average 275 tCO2/GWh
Operating Margin 1 (System Average minus low cost/must run)719 tCO2/GWh
Operating Margin 2 (System Average minus 92% of Hydro, based on contribution of Hydro to the baseload)550 tCO2/GWh
Build Margin 569 tCO2/GWh
Combined Margin: 604 tCO2/GWh
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 24
Cogeneration Bagasse - Brazil
B.5 – Project Boundaries:- Baseline energy grid: the South-South-East
and Midwest Subsystem
- Bagasse cogeneration Plant
B.6 – Details of the BL Development:- Date: July 16, 2003
- Entity : ECONERGY
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 25
C: Duration/CreditingPeriod
(1 Page)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 26
Cogeneration Bagasse - Brazil
Duration: Starting Date: 09/06/2001
Expected Operational Lifetime: 25y-0m
Crediting Period: 7 yrs Renewable Starting Date of the first CP: 09/06/2001
Length of the first CP: 7y-0m
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 27
D: MonitoringMethodology and Plan
(13 Pages)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 28
Cogeneration Bagasse - Brazil
D.1 - Name: « Two Party Monitoring plan for bagasse
cogeneration projects »
D.2 – Justification Only a couple of short sentences
Explanations are provided in Annex 4
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 29
Cogeneration Bagasse - Brazil
D.3-D.4-D.5 tables duly described: D.3 – Data to monitor Emissions from the project:
Monthly recording of energy produced before after the project
Measured energy produced before the project
D.4 – Other relevant data: Mass of bagasse previoulsy marketed
Fossil fuel burned by the former bagasse buyer
Efficiency of the bagasse Cogen.
Efficiency of the fossil fuel plant used by the former bagasse buyer.
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 30
Cogeneration Bagasse - Brazil
D.5 – Other relevant data: Energy generated by Fossil-fueled plants
connected to the Brazialian grid Emission factors (tCO2/MWh) Net Calorific values of fuels used Etc.
D.6 – QA/QC Metering Equipment: a figure is shown,
Accuracy class I, calibrated in 2001
• A camera is also used to monitor the Meter equpment, can be wired to the internet for continuous monitoring by stakeholders
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 31
Cogeneration Bagasse - Brazil
D.6 – QA/QC Certificate of invoice for the electricity sold to
the grid
• An alternative meter is also available
• Two figures are also provided showing the meter location and the technical specifications
D.7 – Person/Entity determining the MM• Econergy
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 32
E: Calculation of GHGEmissions(10 Pages)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 33
Cogeneration Bagasse - Brazil
E.1 – Description of the Formulae for GHG calculation:
E.2 - Description of the Formulae for Leakage calculation:
Certificates from the 3 former bagasse clients on their new energy practices
E.3 – Sum of E1 and E2
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 34
Cogeneration Bagasse - Brazil
E.4 – Description of the Formulae for GHG calculation of the BL and the Emission reductions:
Detailed calculations on how OM and BM have been calculated
E.5 – Table providing detailed values along the 7 yrs of the Crediting Period
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 35
F: EnvironmentalImpacts
(7 Pages)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 36
Cogeneration Bagasse - Brazil
F.1 – F.2 - Env. Impact Study undertaken according to the National RegulationsEnvironmental Licences were finally delivered by the Authorities:
Copies of the Licences are shown in the report
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 37
G: StakeholderComments(5 Pages)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 38
Cogeneration Bagasse - Brazil
G.1 – Description of the Process: Calls for comments were published in the
Newspaper
Figures of the announcements are shown in the report
G.2 – No Comments were received
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 39
References(2 Pages)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 40
Cogeneration Bagasse - Brazil
17 Brazilian and International References listed
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 41
ANNEX 1: Contact Information(2 Pages)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 42
Cogeneration Bagasse - Brazil
Econergy Contact Information
VR Contact Information
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 43
ANNEX 2: Informationregarding Public
Funding(1 Page)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 44
Cogeneration Bagasse - Brazil
Description of the funding resources for the project: the traditional banking system
No contribution from any other ODA resources
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 45
ANNEX 3: New Baseline Methodology
(18 Pages)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 46
Cogeneration Bagasse - Brazil
Comprehensive description of the Baseline Methodology, involving 10 sections
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 47
Cogeneration Bagasse - Brazil
1. TITLE OF THE PROPOSED METHODOLOGY
2. DESCRI PTI ON OF THE METHODOLOGY
2.1. GENERAL APPROACH
2.2. OVERALL DESCRI PTI ON
3. KEY PARAMETERS/ ASSUMPTI ONS, AND DATA SOURCES CONSI DERED AND USED
4. DEFI NI TI ON OF THE PROJECT BOUNDARY RELATED TO THE BASELI NE METHODOLOGY
5. ASSESSMENT OF UNCERTAI NTI ES
6. DESCRI PTI ON OF HOW THE BASELI NE METHODOLOGY ADDRESSES THE CALCULATI ON OF
BASELI NE EMI SSI ONS AND THE DETERMI NATI ON OF PROJECT ADDI TI ONALI TY
7. DESCRI PTI ON OF HOW THE BASELI NE METHODOLOGY ADDRESSES ANY POTENTI AL LEAKAGE
OF THE PROJECT ACTI VI TY
8. CRI TERI A USED I N DEVELOPI NG THE PROPOSED BASELI NE METHODOLOGY, I NCLUDI NG AN
EXPLANATI ON OF HOW THE BASELI NE METHODOLOGY WAS DEVELOPED I N A TRANSPARENT AND CONSERVATI VE MANNER
9. ASSESSMENT OF STRENGTHS AND WEAKNESSES OF THE BASELI NE METHODOLOGY
10. OTHER CONSI DERATI ONS, SUCH AS A DESCRI PTI ON OF HOW NATI ONAL AND/ OR SECTORAL
POLI CI ES AND CI RCUMSTANCES HAVE BEEN TAKEN I NTO ACCOUNT
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 48
ANNEX 4: New Monitoring
Methodology(12 Pages)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 49
Cogeneration Bagasse - Brazil
Comprehensive description of the New Monitoring Methodology, involving 7 sections
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 50
Cogeneration Bagasse - Brazil
1. BRI EF DESCRI PTI ON OF NEW METHODOLOGY
2. DATA TO BE COLLECTED OR USED I N ORDER TO MONI TOR EMI SSI ONS FROM THE PROJECT
ACTI VI TY, AND HOW THI S DATA WI LL BE ARCHI VED*
3. POTENTI AL SOURCES OF EMI SSI ONS WHI CH ARE SI GNI FI CANT AND REASONABLY
ATTRI BUTABLE TO THE PROJECT ACTI VI TY, BUT WHI CH ARE NOT I NCLUDED I N THE PROJECT
BOUNDARY, AND I DENTI FI CATI ON I F AND HOW DATA WI LL BE COLLECTED AND ARCHI VED ON
THESE EMI SSI ON SOURCES*
4. ASSUMPTI ONS USED I N ELABORATI NG THE NEW METHODOLOGY
5. PLEASE I NDI CATE WHETHER QUALI TY CONTROL (QC) AND QUALI TY ASSURANCE (QA)
PROCEDURES ARE BEI NG UNDERTAKEN FOR THE I TEM MONI TORED
6. WHAT ARE THE POTENTI AL STRENGTHS AND WEAKNESSES OF THI S METHODOLOGY?
7. HAS THE METHODOLOGY BEEN APPLI ED SUCCESSFULLY ELSEWHERE AND, I F SO, I N WHI CH
CI RCUMSTANCES?
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 51
ANNEX 5: Baseline Data
(1 Page)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 52
Cogeneration Bagasse - Brazil
Description of Key Elements used to determine the Baseline (Energy, Emission Factor, Calorific Value, Oxidation rate)
CD4CDM - National Workshop on PDD Cairo, 14-15 June 2004 53