CDM RDF 12MW Karimnagar AP

8/20/2019 CDM RDF 12MW Karimnagar AP

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PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03

CDM – Executive Board

page 1

CLEAN DEVELOPMENT MECHANISM

PROJECT DESIGN DOCUMENT FORM (CDM-PDD)

Version 03 - in effect as of: 28 July 2006

CONTENTS

A. General description of 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 project activity

Annex 2: Information regarding public funding

Annex 3: Baseline information

Annex 4: Monitoring plan


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SECTION A. General description of project activity

A.1. Title of the project activity:

>>Title : Power generation through MSW at Karimnagar, Andhra Pradesh

Version: 04Date : 12/12/2011

A.2. Description of the project activity:

>>

Pur pose of the Project Activity

Shalivahana (MSW) Green Energy Ltd. [S(MSW)GEL] intends to establish a 12 MW Power Plant atRebladevpally Village near Sultanabad in Karimnagar District, based on Refuse Derived Fuel (RDF)

generated by processing of Municipal Solid Waste (MSW) generated from various Urban Local Bodies(ULBs) in Andhra Pradesh with processing plants located in Karimnagar and Nizamabad Districts of

Andhra Pradesh. The MSW would be sourced from districts of Karimnagar, Nizamabad, Adilabad,Medak.

The main objective of the project is to utilize the potential energy sourced from RDF generation by processing MSW. To achieve the purpose, the project activity is proposed with a total capacity of 1400TPD waste processing facilities located at three places, namely Karimnagar, Ramagundam and Nizamabad and one power generation unit of 12 MW capacity at Rebladevpally village in Karimnagar

district. Further details of these facilities are provided below. Project activity may use othersupplementary fuel such as surplus biomass available in the region (cotton stalks, Rice husk, Juliflora and

Maize cobs) and coal, in emergency and unavoidable situation. However, the same would be as per theguidelines and within the specified limits of MSW based power generation projects (15% coal or 25% biomass1 or together to a maximum extent of 25%2).

Based on the total 1400 TPD processing capacity, the total expected incoming MSW to the project

including three processing facilities is 511000 TPA. Based on the characteristics of MSW, the totalamount of RDF and compost production is expected to be approximately 163155 tonnes and 60225tonnes per annum respectively.

The project activity involves in two phases. The phase wise implementation of the proposed projectactivity is given below:

Phase I Rated Capacity Phase II Rated Capacity

Power plant 12 MWRDF processing

and Compost plantat Nizamabad

175 TPD RDF &

250 TPD compost

RDF Processing plant atKarimnagar

225 TPD Compost plant atKarimnagar

300 TPD

1 MNRE Guidelines dated 24 April 2007; http://www.mnre.gov.in/energy-uwaste.htm

2 Letter dated 8 November 2010 (Ref: Lr No. 3441/ RES-I/ 2010-3) from Energy Department, Government ofAndhra Pradesh

http://www.mnre.gov.in/energy-uwaste.htmhttp://www.mnre.gov.in/energy-uwaste.htmhttp://www.mnre.gov.in/energy-uwaste.htmhttp://www.mnre.gov.in/energy-uwaste.htm


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RDF Processing plant atRamagundam

225 TPD Compost plant atRamagundam

300 TPD

Processing of RDF involves in stages such as tipping, pre-sorting, manual segregation, magneticseparation, rotary/web screen separation, crushing and shredding, ballistic separation and RDFgeneration. In composting, the process involves in windrow processing, coarse segregation, waste curing,

refinement and packing of compost. The power plant uses RDF in the pusher grate boiler to generate thesteam, which will be fed to the matching steam turbine with generator to produce electricity. The

electricity generated will be supplied to the grid system.

The activities of Phase-I have been partially implemented and the power plant commenced its powergenerations from April 2010. The organic waste generated at Karimnagar and Ramagundam processingfacilities will be disposed in the landfill/disposal facilities till the composting units will be operational.Due to delay in financial closure for the activities covered in Phase-II and these activities are likely to be

commissioned in 2012.

Scenari o Exi sting Prior to Start of the Implementation of the Project Activity

In the pre-project scenario, municipal solid waste is disposed in the existing Solid Waste Disposal Site(SWDS) located in Karimanagr, Ramagundam and Nizamabad. While compaction and levelling3 iscarried out to increase the life of SWDS, there are no measures for Landfill Gas capture/ destruction. (SeePictures below) The open disposal of waste causes a number of environmental and health hazards, in

addition to unabated release of methane in to the atmosphere, which is one of the prominent green housegas.

Thus, the common practice scenario in the absence of the project is disposal of waste without anymeasures to avoid methane emissions (also the baseline scenar io)

Fig: Disposal and compaction of municipal solid waste in the baseline scenario

Project Scenar io

3 Municipal Administration and Urban Development authority letter


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In the project scenario, three processing plants will be set up, at Karimnagar, Ramagundam and

Nizamabad for the purpose of RDF generation based on MSW. The RDF generated from these processing

units will be transported to the power plant site located at Rebladevpally near Sultanabad. The capacitiesof processing plants are provided below:

S.no Processing facility

Total

incoming

waste (TPD)

RDF

capacity

(TPD)

Composting

capacity

(TPD)

1. Karimnagar 500 225 300

2. Ramagundam 500 225 3003. Nizamabad 400 175 250

Processing units will be supplied with required MSW from the surrounding ULBs, where it is refined to

produce RDF fluff and compost. This RDF fluff will be used as fuel to operate the power plant and

compost will be used for soil application as fertilizer. The proposed MSW power plant at Rebladevpallyis expected to be in operation throughout the year. The proposed power plant is equipped with boiler of pusher grate technology, which has been used for the first time in MSW fired boiler in India4. The organicmatter segregated from these processing units will be composted at respective processing unit sites. Thecompost thus produced will be sold as soil conditioner to neighbouring farms.

Electricity generated by the project activity will be sold to a third party. The project has been taken up bythe project proponent to address the critical environmental problem faced in solid waste management by

the state of Andhra Pradesh and particularly Karimnagar, Medak, Adilabad and Nizamabad districts. Inaddition the project activity will also address to some extent the acute energy crisis faced by southernregion of India by producing 12 MW of clean electricity that will be supplied to the local region, which is being fed by southern grid.

Contr ibution to reduction in GHG emissions by the Proposed Project Activi ty

The project would achieve significant reduction in Green House Gas emissions due to the following twocomponents:

Avoidance of methane emission from disposal of solid waste in the SWDS.

Replacement of energy from carbon intensive southern regional grid of India by supply ofrenewable electricity.

Contribution of Project Activity to Sustainable Development:

Indian economy is highly dependent on “Coal” as fuel to generate energy and for production processes.Thermal power plants are the major consumers of coal in India and yet the basic electricity needs of alarge section of population are not being met.

This results in excessive demands for electricity and place immense stress on the environment. Changingcoal consumption patterns will require a multi-pronged strategy focusing on demand, reducing wastage ofenergy and the optimum use of waste to energy, renewable energy sources.

4 Letter from Thermax for using pusher grate technology for the first time in India dated 07 September 2010


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Government of India has stipulated following indicators for sustainable development in the interim

approval guidelines5 for CDM projects.

1. Social well-being2. Economic well-being3. Environmental well-being4. Technological well-being

1. Social well being:

The plant site is in rural area where unemployment, poverty and other economic backwardnessare prevailing; the project would lead to the development of the region

During civil works, a lot of construction work is to be taken place, which will generateemployment for local people around the plant site

Other than these, there are various kinds of mechanical work, which would generate employmentopportunity on regular and permanent basis

Day to day operations in collection of MSW and segregation of MSW, create the employmentopportunities to the local people/ community.

2. Economic well being:

The project activity will generate employment in the local area.

It would provide stable and quality power to the nearest substation which will aid in hassle freemanufacturing of products.

The main resource for power generation is MSW, which is otherwise being disposed without anycommercial value.

In other words, the plant is generating commercial value to RDF. The above benefits due to project activity ensure that the project would contribute to the social and economic well being inthe region.

Hence, the project contributes to the economic sustainability around the plant site, which is promotion of decentralization of economic power.

3. Environmental well being:

A power plant based on RDF as fuel, does not affect the ecology, provided a few precautions aretaken in the design of the plant. Project also reduces pollution since it avoids the methane that

would have been generated in solid waste disposal sites due to anaerobic decay of MSW and alsodisplaces the grid electricity which is a fossil fuel dominated grid

6. All the necessary measures are

planned to be taken in the plant‟s design for minimizing the impact on the ecology of theenvironment.

To limit the SPM emission during RDF firing, Electro static precipitator (ESP) has been placed indesign.

The proposed project ensures the resource sustainability by avoiding the pressure on over-exploited and precious fossil fuel resources and emerging as alternative and sustainable fuelsource for energy purposes.

4. Technological well being:

5 http://www.cdmindia.gov.in/approval_process.php

6 CEA database, Government of India; version 06, March 2011


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The technology selected for the proposed project is the best available technology in India. The

project uses a steam turbo generator with matching boiler of pusher type, which is capable offiring multi fuels. The project activity applied pusher grate technology for the first time in MSW projects in India, which indicates the contribution of the project activity towards technological

advancement in the sector.

In view of the above, the project participant considers that the project activity profoundly contributes tothe sustainable development.

A.3. Project participants:

>>

Name of the Party

involved ((host) indicates a

host party)

Private and/or Public entity (ies)

Project participants

(as applicable)

Kindly indicate if the party

involved wishes to be

considered as projectparticipant (Yes/No)

India (Host) Private entity:Shalivahana (MSW) Green Energy

Ltd.

No

A.4. Technical description of the project activity:

A.4.1. Location of the project activity:

>>

A.4.1.1. Host Party(ies):

>>India

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

>>

State: Andhra Pradesh

A.4.1.3. City/Town/Community etc.:

>>District: Karimnagar and Nizamabad

A.4.1.4. Details of physical location, including information allowing theunique identification of this project activity (maximum one page):

>>

Project Siteo Processing plants : 3 units - Karimnagar, Ramagundam and Nizamabado Power plant : one unit - Rebladevpally

District : Karimnagar & Nizamabad State : Andhra Pradesh Geographical Location : Rebladevpally power plant, Karimnagar and

Ramagundam processing facilities are located in


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Karimnagar district and Nizamabad processing unit in

Nizamabad district, Andhra Pradesh, India.

The power plant is located at 154 km from Hyderabad, which is the capital city of Andhra Pradesh.The nearest Railway Station is at Peddapalli at a distance of 10 km and the nearest Airport is atHyderabad. The other project sites with processing facilities are also well connected by existing roadnetworks and are easily accessible.

Site Latitude Longitude

Karimnagar processing plant 18o 24.769” N 79o 08. 632”E

Ramagundam processing plant 18o 46.000” N 79o 26.029” E

Nizamabad processing plant 18o 38.610” N 78o 04.080” E

Rebladevpally MSW power plant 18o 32.702” N 79o 21.134” E


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Location of processing units and power plant in Nizamabad and Karimnagar districts of Andhra Pradesh

Ramagundamprocessing unit

Power Plant

Karimnagarprocessing unit

Nizamabadprocessing unit

Location of Andhra Pradesh state in India; Location of Adilabad, Nizamabad, Medak and Karimnagar


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A.4.2. Category(ies) of project activity:

>>The project uses UNFCCC Approved Methodology: AM0025 “ Avoided emissions from organic wastethrough alternative waste treatment processes” Version: 12.

Sectoral scope – 1: „Energy industries (renewable -non-renewable sources) andSectoral scope – 13: „Waste handling and Disposal‟.

A.4.3. Technology to be employed by the project activity:

>>The waste treatment process will include all the three treatment technologies; physical segregation, biological treatment and RDF production, subsequently used for energy generation. This kind of waste toenergy MSW based treatment facilities are relatively new concept in India7. Most of the previous

experiences or implemented projects in India are in a conventional way of treating waste using eitherRDF generation or power generation or waste composting as separate activities. The proposed activity is

an integrated facility which generates RDF, uses RDF for power generation and composting of organicmaterial. The proposed waste treatment project integrates three technologies with the following features:

Physical segregation using a combination of Trommel/web screens and Handpicking methods

Organic/Compostable waste is separated for Biological Treatment. The organic waste is

segregated using mechanical means (like trommel/web screens and set of conveyor systems) and

decomposed using Mechanical Composting Means; Windrow Technology

The segregated waste with combustible components (like paper, wood, plastics and garden waste)

is used for preparation of raw feed to the RDF fired boiler in power plant and simultaneouselectricity generation.

The MSW & RDF characterization has been carried out on 18 August 2008 and the test results are provided below:

7 Municipal solid waste management in Indian cities – A reviewhttp://www.unc.edu/courses/2009spring/envr/890/002/readings/SolidWasteIndiaReview2008.pdf

http://www.unc.edu/courses/2009spring/envr/890/002/readings/SolidWasteIndiaReview2008.pdfhttp://www.unc.edu/courses/2009spring/envr/890/002/readings/SolidWasteIndiaReview2008.pdfhttp://www.unc.edu/courses/2009spring/envr/890/002/readings/SolidWasteIndiaReview2008.pdf


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RDF Quality

MSW collected from different sources has different calorific values. However, after drying and separation

of non-combustible fraction, the RDF produced shall have an average Gross Calorific Value of 2000-2500 kcal / kg. The processing of the MSW at the processing plant will be carried out in such as manner

that the physical and chemical properties of the RDF produced would be homogenous and constant over

time.

Expected RDF characteristi cs:

Test Unit of measurement Result obtained

Proximate analysis % by mass

Total moisture % by mass 25.44

Ash Content % by mass 20

Ul timate analysis

Carbon % by mass 25

Hydrogen % by mass 2.8

Nitrogen % by mass 0.23

Sulphur % by mass 0.53

Oxygen % by mass 21

Chlorine % by mass


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rpm. Two waste streams are generated from the trommel; Waste having size + 70 mm and Waste having

size -70mm.

Waste passing through the 70 mm sieve is collected through a belt conveyor into a chute. This wastestream has high organic content, mulch, and green waste, and hence further treated by composting.

CRUSHING AND SHREDDING SYSTEMThe waste arrested in the trommel unit is further passed into a Horizontal Rotary Type Crushing Unit.

The unit is a shredding / crushing mechanism and homogenizes the waste further into size ranging from25 mm to 45 mm dia. All the three units shall be equipped with crushing and shredding units of 15 TPH

capacities.

BALLISTICS SEPARATOR AND RDF GENERATION

Crushed waste from the Rotary Type Crushing Unit is put into a Ballistic Separator which shall operate at

the capacity of 15TPH. The unit separates heavy material from the crushed MSW with necessary drive.Waste of +15 mm size is separated off from the system which is collected into a conveyor belt and passesto the input of Rotary Type Crushing Unit which helps to homogenize waste to the acceptable size. The

light combustible fraction (paper/biomass/textiles etc.) separated from the Ballistic Separator is generallycalled Refuse Derived Fuel (RDF) Fluff. It will have a calorific value in the range of 2000 - 2500 kcal/kgand 15-20% ash which can be incinerated in a boiler of the Power Plant.

The RDF produced from the processing facilities is transported to the power plant, where it is fed into anRDF fired pusher grate boiler. The steam generated from the boiler is used in the turbine to convert it intomechanical energy and the same is converted into electrical energy in the alternator connected to Turbine.The electricity generated after the auxiliary consumption in the plant premises is exported to the grid

system for further supply to the end users.

The organic material generated from the process is used in the compost facilities, with windrowtechnology of aerobic composting. During the aerobic composting process, biodegradable waste matterdegraded into simple organic compounds by certain micro-organisms in the presence of air. Compostinginvolves, screening, sorting, grinding, blending, mixing and curing. The process of biodegradation isnatural and compost will be produced after the retention period of waste in windrow platforms. The final

compost produced will be used for soil applications to improve the soil fertility.

The project activity expected to operate at a PLF of 80%, with gross energy generation of 84.1 GWh andnet export of 75.69 GWh after meeting the auxiliary consumption of 8.41 GWh (10%)

8 to the nearest

substation of APTRASCO at Suglampally village. The power project has been commissioned on

14/04/2010 and is currently under operation.

Technical Specifications of Power Plant

Boiler

Type Pusher grate

Capacity 55 TPH, 66 kg/cm (g), 485 ± 5oC

Features Single drum, natural circulation, single pass, horizontal

8 Detailed Project Report dated December 2010; page 95


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Turbine

Type Multi stage, Impulse, nozzle governed bleed cum

condensingRated capacity 12000 kW

Inlet steam pressure 64 kgf/cm2 (g)

Inlet steam temperature 485 oC

Turbine speed 6827 rpm

Generator

Rated Capacity 12 MW

Power Factor 0.8

Rated Speed 1500 rpm

No technology transfer envisaged in the proposed RDF based power project at Rebladevapally and RDF preparation facilities at Karimnagar, Ramagundam and Nizamabad as part of project activity.

A.4.4. Estimated amount of emission reductions over the chosen crediting period:

>>The Crediting Period of a CDM project is the period for which the CDM Project can generate emissionreductions are furnished below:

Years Estimation of annual emission reductions in

tonnes of CO2 e

2012 381042013 78855

2014 109610

2015 133332

2016 152046

2017 167142

2018 179584

2019 190041

2020 198986

2021 206754

Total estimated reductions

(tCO2 e)1454454

Total number of crediting years 10 years

Annual average of the estimated

reductions over the crediting period

(tCO2 e)

145445

A.4.5. Public funding of the project activity:

>>The project has not received any Official Development Assistance (ODA) from Annex I countries. The project activity has received long term loan from IL&FS to the extent of 75% of the capital cost forPhase-I. The remaining 25% for Phase-I is funded through equity contribution from the project


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promoters. The project activity has not availed any concessions, grants or subsidies from any govt

agencies/institutes.

SECTION B. Application of a baseline and monitoring methodology

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

project activity:

>>

AM 0025 “ Avoided emissions fr om organic waste through alternati ve waste treatment processes ” Version 12, EB 55.Reference used in conjunction with the methodology:

Tool for the demonstration and assessment of additionality (version 05.2)Tool to calculate the emission factor for an electricity system (version 02.2.0)

Emissions from solid waste disposal sites (version 06.0.0)

AMS- I.D, “Grid connected renewable electricity generation” Version 17, EB 61

B.2. Justification of the choice of the methodology and why it is applicable to the project

activity:

>>The project activity meets all the applicability guidelines as set out in AM0025 version 12. They are:

S.No Applicabili ty Conditi on under AM0025, Applicabili ty justifi cation

1. The project activity involves one or a

combination of the following waste treatmentoptions for the fresh waste that in a given yearwould have otherwise been disposed of in alandfill:

a) a composting process in aerobic conditions; b) gasification to produce syngas and its use;c) Anaerobic digestion with biogas collection

and flaring and flaring and/or its use. Theanaerobic digester processes only thewaste for which emission reductions are

claimed in this methodology. If the biogas

is processed and upgraded to the quality ofnatural gas and it is distributed as energyvia natural gas distribution grid, project

activities may use approved methodologyAM0053 in conjunction with thismethodology. In such cases the baseline

scenario identification procedure andadditionality assessment shall be

The project activity involves the fresh waste

treatment9

option (a) composting process inaerobic conditions and (d) the mechanical process to produce refuse- derived fuel (RDF)which is used as a fuel to generate electricity inthe power plant. The project activity uses onlyfresh waste, as the waste collected from ULBs

will be directly supplied to the RDF processingfacilities. The project has the facilities, such as,

weighbridge and recording systems, to monitorthe quantity of incoming fresh waste on daily basis. The project facilities will not accept or

process any waste which is not considered as

fresh waste.

The physical and chemical properties of the produced RDF being homogenous and constantover time10. The project has entered into

agreements with ULBs for supply of MSW.Since the MSW used in the project for

9 Detailed Project Report, Chapter 5, section 5.4, Page 26 and Standard Operating Procedure dated December 2010

10 Detailed Project Report, Chapter 7, section 7.8, Page 38


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undertaken for the combination of the two

components of the project activity i.e. biomethane emission avoidance anddisplacement of natural gas;

d) mechanical/ thermal treatment process to produce refuse-derived fuel (RDF)/stabilized biomass (SB) and its use. The

thermal treatment process (dehydration)occurs under controlled conditions (up to300 degrees Celsius). In case of thermaltreatment process, the process shall

generate a stabilized biomass that would beused as fuel or raw material in other

industrial process. The physical andchemical properties of the producedRDF/SB shall be homogenous and constant

over time;e) Incineration of fresh waste for energy

generation, electricity and/or heat. Thethermal energy generated is eitherconsumed on-site and/or exported to a

nearby facility. Electricity generated iseither consumed on-site, exported to the

grid or exported to a nearby facility. Theincinerator is rotating fluidized bed or

hearth or grate type.

production of RDF is supplied from the same

ULB regions for the entire project life time andthere is no chemical or thermal treatment ofRDF, hence the physical and chemical

characteristics of RDF is not expected tochange. The properties of the same thus areconsidered homogeneous and constant over

time since it will be sourced from samemunicipalities over the project lifetime. Theincoming MSW at the facilities will be processed using manual segregation, magnetic

separation, size reduction, shredding andcrushing activities. As a result, RDF produced

from the processing units, which carry out the processing operations with the same machineryand under similar controlled processing

conditions would result in similar physical andchemical properties of RDF, which will be

homogeneous and constant over time. In theabsence of the project activity, the fresh wastewould have been disposed off in a landfill11.

2. In case of anaerobic digestion, gasification orRDF processing of waste, the residual wastefrom these processes is aerobically compostedand/or delivered to a landfill.

The residual waste will be aerobicallycomposted in the composting facilities locatedat Karimnagar, Nizamabad and Ramagundam12.

3. In case of composting, the produced compostis either used as soil conditioner or disposed of

in landfills.

The produced compost will be used as soilconditioner and/or sold in the nearby regions.

For the purpose of marketing of compost, aradius of 200 km from the processing units is

considered as the region.

4 In case of RDF/stabilized biomass processing,the produced RDF/stabilized biomass should

not be stored in a manner that may result inanaerobic conditions before its use.

In the project activity, the produced RDF will be stored in aerobic conditions before its use13.

The waste collected at the processing units istreated on a day to day basis continuously andstorage of any waste/RDF produced is avoidedon-site. The RDF processing units and storagearea at the power plant is provided with

appropriate coverage (storage yards) to protect

11 Letter from Municipal Administration & Urban Development

12 Detailed Project Report, Chapter 8, section 8.4.1, Page 45

13 Detailed Project Report, Chapter 7, section7.6, Page 39


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the waste processing units and the RDF from

direct exposure to sunlight and rain. Thiswould avoid possibility of RDF being degradeddue to direct exposure to climatic conditions.

Also, the RDF at the processing units will beused on first come first serve basis,continuously during operations, which ensures

storage of RDF only for short period of timeon-site. As a result, possibility of anaerobicconditions is avoided. In addition, the height ofRDF stored at the power plant storage yard will

be restricted to below 5m. All the proposedmeasures described above will ensure that RDF

processed is not subjected to anaerobicconditions.

5 If RDF/SB is disposed of in a landfill, project proponent shall provide degradability analysis

on an annual basis to demonstrate that themethane generation, in the life-cycle of the SBis below 1% of related emissions. It has to bedemonstrated regularly that the characteristics

of the produced RDF/SB should not allow forre-absorption of moisture of more than 3%.Otherwise, monitoring the fate of the produced

RDF/SB is necessary to ensure that it is not

subject to anaerobic conditions in its lifecycle.

In the proposed project activity, the RDFgenerated will be used as a fuel for power

generation and not disposed off in a landfill14

.The RDF production is carried out to ensurecontinuous supply of sustainable fuel to theRDF based power project. The RDF is crucial

for the operation of power project andcontinuous monitoring of RDF production,transport and consumption will be carried out

as part of project operation to ensure that the

RDF generated is completely used for powergeneration and not disposed in landfill. RDFrelated records are maintained at each of the processing plants and power plant. Thequantity of RDF generated at processing unitsand transported (to power plant) will be

recorded on day to day basis. At the same time,the quantity of RDF received at power plant

will be recorded continuously including thedetails of the processing unit from which theRDF is received. At power plant, records ofdaily RDF consumed/fed into the boiler willalso be maintained. This mechanism will

clearly track the RDF generation andconsumption details and can be used to cross

check that the RDF generated is properly usedfor power generation and not disposed inlandfill.

Thus this condition is not applicable to the

project activity.

14 Detailed Project Report, Chapter 9, section9.2.2, Page 50


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6 In the case of incineration of the waste, thewaste should not be stored longer than 10days. The waste should not be stored inconditions that would lead to anaerobicdecomposition and, hence, generation of CH4.

This condition is not applicable to the proposed project activity since the project activity doesnot involve incineration of waste.

The MSW received on site will be treated onday to day basis to produce RDF and compost.

The RDF generated will be supplied to the power plant for consumption of the same inRDF fired boiler immediately. The power plant

will maintain records of the RDF received onsite and the consumption of the same will beensured before 10 days from the date of receipt

of the RDF. The produced compost will be usedas soil conditioner and/or sold in the near byregions.

7 The proportions and characteristics of differenttypes of organic waste processed in the project

activity can be determined, in order to apply amultiphase landfill gas generation model to

estimate the quantity of landfill gas that wouldhave been generated in the absence of the project activity.

The proportions and characteristics of differenttypes of organic waste processed in the project

activity will be determined as per the processdescribed in section of B.7.2 of PDD, in order

to apply a multiphase landfill gas generationmodel to estimate the quantity of landfill gasthat would have been generated in the absenceof the project activity

8 The project activity may include electricitygeneration and/or thermal energy generationfrom the biogas, syngas captured,

RDF/stabilized biomass produced, combustionheat generated in the incineration process,respectively, from the anaerobic digester, thegasifier, RDF/stabilized biomass combustor,and waste incinerator. The electricity can beexported to the grid and/or used internally atthe project site. In the case of RDF/SB

produced, the emission reductions can beclaimed only for the cases where the RDF/SB

used for electricity and/or thermal energygeneration can be monitored.

The project activity includes electricitygeneration from RDF produced and thegenerated electricity will be exported to the

Southern grid. The electricity supply to the gridwill be measurable and hence, emissionreductions will be claimed for RDF generatedelectricity that is monitored.

9 Waste handling in the baseline scenario shows

a continuation of current practice of disposingthe waste in a landfill despite environmentalregulation that mandates the treatment of thewaste, if any, using any of the project activity

The MSW 2000 rules stipulated by Govt. of

India mandated the municipal bodies to treatthe municipal waste in a scientific manner

15.

However, despite the rules, the common practice of handling the waste in the country is

15 http://www.nls.ac.in/CEERA/ceerafeb04/html/documents/Muncipalsoildwaste.htm

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treatment options mentioned above continuation of current practice of disposing

the waste in a disposal sites. In the projectcase, the same is managed by MunicipalAdministration & Urban Development

(MA&UD) with controlled placement of wasteand compaction and leveling being carriedout16. In addition, no single municipality or

local body has complied with the guidelinesstipulated by MSW Rules, 2000 in thecountry

17. Hence the rules are systematically

not enforced and the non-compliance with the

rules is widespread in the country.

10 The compliance rate of the environmental

regulations during (part of) the crediting is below 50%; if monitored compliance with theMSW rules exceeds 50%; the project activityshall receive no further credit, since the

assumption that the policy is not enforced isno longer tenable

The compliance rate of Indian MSW Rules,

2000 is below 50%. Based on the AnnualReport of CPCB, 2008-09, compliance rate toMSW Rules works out as 0.81%

18. The report

was analysed for the compliance rate based of

number of ULBs which are 100% complyingto MSW Rules. The basis for 100%compliance was presence of MSW processingsite and landfill in the ULB. The number of

ULBs complying to rules in India is 24. Thiswas then divided by the total number of ULBs(which is 2960) to arrive at the compliance rate

of 0.81%. However, gradual improvement in

MSW management system is expected over thetime. Hence a conservative value of 10% istaken for ex-ante estimations of emissionreductions.

11 Local regulations do not constrain theestablishment of RDF production plants/thermal treatment plants nor the use of

RDF/stabilized biomass as fuel or raw

Local regulations neither constrain theestablishment of RDF production plants nor theuse of RDF as fuel or raw material for power

generation. Project proponent has obtainednecessary clearances from the Government of

Andhra Pradesh/India19

for the same,confirming no such constrains in the countryexists:

12 In case of RDF/stabilized biomass production, project proponent shall provide evidences that

The project involves mechanical treatment ofwaste to produce RDF

20. There are no onsite

16 Letter from MA&UD

17 Assessment of the status of municipal solid waste management in metro cities, state capitals, class I cities, and

class II towns in India: An insight, 1 July 2008. http://cpcbenvis.nic.in/cups65.htm;

18 Estimations based on CPCB Annual report, 2008-09 published in March 2010

19 Consent for Establishment from PCB for 12 MW dated 7 July 2011

20 Detailed Project Report, Chapter 1, section 2, Page 15

http://cpcbenvis.nic.in/cups65.htmhttp://cpcbenvis.nic.in/cups65.htmhttp://cpcbenvis.nic.in/cups65.htmhttp://cpcbenvis.nic.in/cups65.htm


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no GHG emissions occur, other than biogenic

CO2 due to chemical reactions during thethermal treatment process.

emissions occur as a result of this activity, but

only, indirect GHG emissions due to electricityconsumption. There is no thermal treatmentinvolved in the project activity. Hence, no GHG

emissions occur on-site due to MSW processing or RDF storage.

13 The project activity does not involve thermal

treatment process of neither industrial norhospital waste

The collection of MSW is carried out from

respective municipal authorities, where theindustrial waste is not mixed with the MSW. As per the environmental norms, the treatment and

disposal of industrial waste is carried out byrespective industries and same is not mixedwith municipal solid waste. This is further

confirmed as per the guidelines provided underMunicipal Solid Waste (Management andHandling) Rules, 2000, specifying “Bio-medical wastes and industrial wastes shall not

be mixed with municipal solid wastes and suchwastes shall follow the rules separately specified for the purpose” under point iv, 1.Collection of municipal solid waste, schedule II

(http://envfor.nic.in/legis/hsm/mswmhr.html ).Hence, the waste collected and transported tothe processing facilities by municipal

authorities will not contain any hospital and

industrial waste. In addition, a letter fromMunicipal authorities/MA&UD videMemo.No.8049/2010/H1, confirming that thewaste provided to the project does not containany hospital and industrial waste is provided forverification. In addition, the personnel at the

RDF processing units are clearly instructed toexamine and not to accept/process any batch of

such MSW, which contains industrial/hospitalwaste in the units. This ensures that the projectactivity does not involve in treatment ofindustrial or hospital waste. This has also beenincorporated in the Standard Operating

Procedure for the processing plants.

14 In case of waste incineration, if auxiliary fossil

fuel is added into the incinerator, the fractionof energy generated by auxiliary fossil fuel isno more than 50% of the total energygenerated in the incinerator

There is no waste incineration in the proposed

project activity. Hence, this condition is notapplicable to the project activity.

15 “The methodology is not applicable to projectactivities that involve capture and flaring ofmethane from existing waste in the landfill.

Project activity does not involve capture andflaring of methane from existing waste in thelandfill.

http://envfor.nic.in/legis/hsm/mswmhr.htmlhttp://envfor.nic.in/legis/hsm/mswmhr.htmlhttp://envfor.nic.in/legis/hsm/mswmhr.htmlhttp://envfor.nic.in/legis/hsm/mswmhr.html


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This should be treated as a separate project

activity due to the difference in wastecharacteristics of existing and fresh waste,which may have an implication on the

baseline scenario determination”

Therefore, the project meets the applicability conditions of AM0025.

B.3. Description of the sources and gases included in the project boundary:

The summary of gases and sources included in the project boundary, and justification/ explanation where

gases and sources are not included is listed below:

Source Gas Justification/Explanation

B

a s e l i n e

Emissions

Fromdecomposition ofwaste at thelandfill site

CH4 Included The major source of emissions in the baseline.

N2O Excluded N2O emissions are small compared to CH4 emissions from landfills. Exclusion of this gas isconservative.

CO2 Excluded CO2 emissions from the decomposition of organicwaste are not accounted.

Emissions fromelectricity

consumption

CO2 Included Electricity may be consumed from the grid.

CH4 Excluded Excluded for simplification. This is Conservative.

N2O Excluded Excluded for simplification. This is Conservative.

Emission from

thermal energygeneration

CO2 Excluded There is no thermal energy generation in the

project activity.

CH4 Excluded There is no thermal energy generation in the

project activity.

N2OExcluded There is no thermal energy generation in the

project activity.

P r o j e c t A c t i v i t y

Onsite fossil fuelconsumption dueto project activity

CO2 Included May be an important emission source.

CH4 Excluded Excluded for simplification. This emission sourceis assumed to be very small.

N2O Excluded Excluded for simplification. This emission source

is assumed to be very small.

Emissions from

on-site electricityuse

CO2 Included May be an important emission source.

CH4 Excluded Excluded for simplification. This emission sourceis assumed to be very small.

N2O Excluded Excluded for simplification. This emission sourceis assumed to be very small.

Emissions fromthermal energygeneration

CO2 Excluded There is no thermal energy generation involved inthe project activity

CH4 Excluded There is no thermal energy generation involved inthe project activity


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Project boundary encompasses the physical and geographical site of the renewable generation source.

This includes the MSW processing units, Composting units, fuel handling systems, Boiler, Steam turbine,Alternator and Southern Grid. The proposed project activity evacuates the power to the Southern Grid.

Therefore, all the power plants contributing electricity to the Southern Grid are taken in the connected(project) electricity system for the purpose of baseline estimation.

N2O Excluded There is no thermal energy generation involved inthe project activity

Direct emissionsfrom the wastetreatment

processes

N2O Included May be an important emission source. N2O can beemitted from composting activities and RDFcombustion.

CO2 Included CO2 emissions from combustion of fossil basedwaste are included. CO2 emissions from thedecomposition or combustion of organic waste are

not accounted.

CH4 Included The composting process may not be complete andresult in anaerobic decay. CH4 may be emittedfrom stacks from RDF combustion.

Emissions from

waste watertreatment

CO2 Excluded There is no waste water treatment involved in the

project

CH4 Excluded There is no waste water treatment involved in the project

N2O Excluded There is no waste water treatment involved in the

project


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Fig 3. Project Boundary

Therefore, in the proposed project, the project boundary consists of the waste processing facilitiesadjacent to existing disposal sites (of ULBs) located at Karimnagar, Nizamabad and Ramagundam, power plant located at Rebladevapally. In the absence of the project activity, the waste was being disposed in theexisting disposal site located at Karimnagar, Nizamabad and Ramagundam in a controlled manner. In the

disposal site, compaction and leveling of MSW is being carried out21

. However, there was no methanecapturing involved at the site.

21 Detailed Project Report, Chapter 3, section 3.2, Page 18, also confirmed by MA&UD letter


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B.4. Description of how the baseline scenario is identified and description of the identified

baseline scenario:

>>

The baseline scenario is defined as the most likely scenario in the absence of the proposed CDM projectactivity. As per approved methodology, AM0025 version 12, the following alternatives for thedisposal/treatment of the fresh waste in the absence of the project activity are examined for the baseline:

M1. The project activity (i.e. composting, gasification, anaerobic digestion, and RDF processing/thermal

treatment without incineration of organic waste or incineration of waste) not implemented as a CDM project;

Based on the above alternative, the possible sub alternatives are considered below for evaluation:M1.a. The project activity bio-methanation (anaerobic digestion) not implemented as a CDM project;

M1.b. The project activity waste gasification not implemented as a CDM project;M1.c. The project activity composting and RDF processing not implemented as a CDM project;

M2. Disposal of the waste at landfill where landfill gas is flaredM3. Disposal of the waste on a landfill without the capture of landfill gas

In project scenario electricity generated will be exported to southern grid and no heat generation is

envisaged for this project activity hence credible alternatives are also determined for:

• Power generation in the absence of the project activity;

For power generation, the realistic and credible alternative(s) may include, inter alia:

P1. Power generated from by-product of one of the options of waste treatment as listed in M1 above, not

undertaken as a CDM project activity.P2. Existing or Construction of a new on-site or off-site fossil fuel fired cogeneration plant.P3. Existing or Construction of a new on-site or off-site renewable based cogeneration plant.P4. Existing or Construction of a new on-site or off-site fossil fuel fired captive power plant.P5. Existing or Construction of a new on-site or off-site renewable based captive power plant.

P6. Existing and/or new grid-connected power plants.

National and/or sectoral policies and regulation in the baseline:

The Municipal Solid Wastes (Management and Handling) Rules, 2000 rules has direct influence on the project baseline scenario. The Ministry of Environment and Forest notified Municipal Solid Waste

Management and Handling) Rules 2000 on 25th September 2000

22 after widely circulating the draft rules

in 1999 inviting objections and suggestions if any and made it mandatory for all municipal authorities inthe country, irrespective of their size and population, to implement the rules.

In spite of the regulation being notified for many years, there is wide spread non compliance of the

municipal bodies with the rules all over India. The non compliance is evidenced from various report and

22 http://envfor.nic.in/legis/hsm/mswmhr.html



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publications. One such report is titled “Assessment of status of MSW waste management in metro cities

and state management in metro cities and state capitals”23

. The report has been provided to DoE for

verification. Hence the rules are systematically not enforced and the non-compliance with the rules iswidespread in the country.

Assessment of the potential waste management alternatives

Scenario

No.

Scenario Remarks

M1 The proposed project activity (i.e.composting, gasification, anaerobic

digestion, and RDF processing/thermal

treatment without incineration of organicwaste or incineration of waste) notimplemented as CDM project.

M1.a. The project activity bio-methanation(anaerobic digestion) not

implemented as a CDM project;M1.b. The project activity waste

gasification not implemented as aCDM project;

M1.c. The project activity composting andRDF processing not implemented as a

CDM project;

As per the Technical memorandum oninvestment and funding strategies, under

National Master Plan for Development of

Waste-to-energy in India24

, theconsidered technologies for treatment ofMSW based waste with energygeneration operation in the country are:

Bio-methanation (anaerobicdigestion)

Waste gasification

RDF/Incineration

As per table no. 1-4 of the report, the costof establishment of MSW based Bio-

methanation and Gasification rangesfrom 8.74-16 crores/MW and 11.42-12.12 crores/MW respectively for

observed projects in India. This clearlyindicates that the establishment cost ofother two technologies is much capitalintensive than RDF based powergeneration, considered as 6.6 crores/MW.This clearly demonstrates the non-feasible nature of these projects. Hence,

the same are excluded from considerationas being non-feasible alternatives innature.

Moreover, Biomethanation andGasification technologies need pureorganic waste as raw material. In the

project activity area, no sourcesegregartion practice is followed and thus

23 http://cpcbenvis.nic.in/cups65.htm

24 http://mnre.gov.in/nmp/technology-we.pdf

http://cpcbenvis.nic.in/cups65.htmhttp://cpcbenvis.nic.in/cups65.htmhttp://cpcbenvis.nic.in/cups65.htmhttp://mnre.gov.in/nmp/technology-we.pdfhttp://mnre.gov.in/nmp/technology-we.pdfhttp://mnre.gov.in/nmp/technology-we.pdfhttp://mnre.gov.in/nmp/technology-we.pdfhttp://cpcbenvis.nic.in/cups65.htm


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the project receives mixed MSW as rawmaterial. Hence the two alternatives of

biomethanation and gasification are nottechnically feasible and are excluded.

The alternative M1.c, which is the projectactivity, in the absence of CDM and CERrevenues is not feasible as discussed in

section B5. The proposed scenario whichrequires a good level of technology and,therefore, a high initial capital investmentand associated operational and

maintenance costs. Thus M1 is not arealistic scenario.

M2 Disposal of waste at a landfill (SWDS)

where landfill gas captured is flared.

This alternative is not economically

viable since it involves infrastructuralinvestment and no revenue accruing outof the activity, thus eliminated.

Moreover, it is not mandatory as per theMSW 2000 rules, to implement landfill

gas capture and flaring. Even as per therules, clause no.6, Schedule II25, landfillshall be restricted to non-biodegradables

only, which are the source for landfill gasgeneration due to decomposition of thesame under anaerobic conditions. ThusM2 is not a realistic scenario.

M3 Disposal of the waste on a landfill(SWDS) without the capture of landfillgas.

Currently, waste is disposed in theSWDS, where organic matter is brokendown through uncontrolled anaerobic processes, releasing methane into the

atmosphere.

This is the common practice followed inIndia and in the areas of Karimnagar, Nizamabad and Ramagundam as evidentfrom the letter by MA&UD.

There are no barriers involved in thisscenario and is the most widely practiced

method for MSW disposal throughout thecountry.

This alternative is taken as the baselinescenario for the project activity. Thus M3is the most realistic scenario.

Analysis of scenario for electricity generation




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P1. Power generated from by-product of one of the options of waste treatment not undertaken as a CDM

project activity.

This alternative is the project activity without CDM incentive and has been discussed in details in SectionB.5 of PDD.

P2. Existing or Construction of a new on-site or off-site fossil fuel fired cogeneration plant.

P3. Existing or Construction of a new on-site or off-site renewable based cogeneration plant.

The Alternatives P2 and P3 are not considered, as there is no heat/steam generation under the projectactivity. Thus cogeneration is not required and hence P2 and P3 are excluded.

P4. Existing or Construction of a new on-site or off-site fossil fuel fired captive power plant.

P5. Existing or Construction of a new on-site or off-site renewable based captive power plant.

P4 and P5 are not realistic alternatives to the project activity, as the project activity is implemented to

generate and export the electricity to grid. The project is an Independent Power Plant (IPP) and will notsupply electricity to any facility/factory of the project participants. Since, there is no on-site demand forcaptive power, there is no requirement to setup on-site fossil fuel fired or renewable based captive power

plant. Thus, P4 & P5 are not considered as realistic alternatives to the proposed project activity.

P6. Existing and/or new grid-connected power plants.

The objective of power plant is to generate and export the electricity to the grid system (further to third

party). In the absence of the project activity; the equivalent amount of electricity would have been met by

the existing/new grid connected power plant. Therefore, P6 is considered as the most realistic andcredible baseline alternative.

Analysis of H eat generati on baseli ne alternati ves

The project activity does not involve in heat generation and/or supply of the same in any form, thus no

plausible scenarios are identified for heat generation.

Conclusion

Thus as discussed in details in section B.5 of PDD, in the absence of the Project activity, the most likely

baseline scenario is:

• M3- Disposal of the waste on a landfill (SWDS) without the capture of landfill gas.• P6 - Existing and/or new grid-connected power plants.

Among the above two alternatives, M3 does not involve any investment as a project and is continuationof current practice. There is no investment required (except land cost, which is generally owned bymunicipal authorities or provided by govt) for the alternative, this scenario in India has been wide spread

and practiced.


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The alternative P6 is generation of power at grid connected power plants. However, the projects in the

grid system are mix of various sources of energy and are dominated by conventional power generation

and is business as usual scenario, without any prohibitive barriers for operations.

Step 2: I denti fy the fuel for the baseli ne choice of energy source taking into account the national

and/or sectoral poli cies as appli cable.

The baseline fuels identified are fossil fuels (coal, gas and diesel), which contribute to more than 50% of

the Southern grid installed capacity and energy generation26

. The availability of these baseline fuels areabundant in the country, based on the fuel reserve estimates and various publications 27. Hence, there is

abundant availability of baseline fuel and no supply constraint in the country exists.

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 CDM project activity (assessmentand demonstration of additionality):

>>According to the approved methodology AM0025, version 12, the proposed project activity uses Step 1,Step 2, Step 3 and Step 4 of the “Tool for the demonstration and assessment of additionality”, version 06,

approved by EB to determine the additionality.

Step 1 - Identification of alternatives to the project activity consistent with current laws and

regulations.

While identifying the alternatives to the project activity, AM0025, Version 12 directs to use Step 1 oflatest additionality tool. The methodology states that relevant policies and regulations related to the

management of landfill sites should be taken into account. Such policies or regulations may includemandatory landfill gas capture or destruction requirements because of safety issues or local environmental

regulations. Other policies could include local policies promoting productive use of landfill gas such asthose for the production of renewable energy, or those that promote the processing of solid waste.

Sub-step 1a. Define alternatives to the project activi ty

According to methodology, alternatives for the disposal/treatment of the fresh waste in the absence of the

project activity, i.e. the scenario relevant for estimating baseline methane emissions, to be analysedshould include inter alia:

Scenario No. Scenario Remarks

M1 The project activity i.e.composting and RDF production,

not implemented as a CDM project

This alternative in the absence of CDM revenues isnot feasible. This option is costly as it provides low

return on investment and moreover there is noorganized market for compost and investment on

26 http://www.cea.nic.in/reports/monthly/executive_rep/may11/8.pdf

27 http://www.coal.nic.in/reserve2.htm;

http://www.business-standard.com/india/storypage.php?autono=333749

http://www.powermin.nic.in/whats_new/pdf/Coal_As_Fuel.pps;

http://www.commodityonline.com/news/Indias-Natural-Gas-reserves-to-last-for-29-years-12554-3-1.html

http://www.cea.nic.in/reports/monthly/executive_rep/may11/8.pdfhttp://www.cea.nic.in/reports/monthly/executive_rep/may11/8.pdfhttp://www.cea.nic.in/reports/monthly/executive_rep/may11/8.pdfhttp://www.coal.nic.in/reserve2.htmhttp://www.coal.nic.in/reserve2.htmhttp://www.coal.nic.in/reserve2.htmhttp://www.business-standard.com/india/storypage.php?autono=333749http://www.business-standard.com/india/storypage.php?autono=333749http://www.powermin.nic.in/whats_new/pdf/Coal_As_Fuel.ppshttp://www.powermin.nic.in/whats_new/pdf/Coal_As_Fuel.ppshttp://www.commodityonline.com/news/Indias-Natural-Gas-reserves-to-last-for-29-years-12554-3-1.htmlhttp://www.commodityonline.com/news/Indias-Natural-Gas-reserves-to-last-for-29-years-12554-3-1.htmlhttp://www.commodityonline.com/news/Indias-Natural-Gas-reserves-to-last-for-29-years-12554-3-1.htmlhttp://www.powermin.nic.in/whats_new/pdf/Coal_As_Fuel.ppshttp://www.business-standard.com/india/storypage.php?autono=333749http://www.coal.nic.in/reserve2.htmhttp://www.cea.nic.in/reports/monthly/executive_rep/may11/8.pdf


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marketing, hence, this alternative would make the project unfeasible.

M2 Disposal of the waste at a landfillwhere landfill gas captured isflared

This alternative is not economically viable since itinvolves infrastructural investment and no revenueaccruing out of the activity28, thus is eliminated as a

viable alternative to the project activity.

M3 Disposal of the waste on a landfillwithout the capture of landfill gas

This alternative is the continuation current practiceand business as usual scenario. This is the least cost

alternative and is widely practiced in most of themunicipalities in the country.

If energy is exported to a grid and/or to a nearby industry, or used on-site realistic and credible

alternatives should also be separately determined for:• Power generation in the absence of the project activity;

• Heat generation in the absence of the project activity.

Project activity involves power generation from the RDF produced which will be exported to Southerngrid. For power generation, AM0025 states that the realistic and credible alternative(s) may include, interalia:

• P1: Power generated from by-product of one of the options of waste treatment not undertaken as aCDM project activity;

Scenario P1 may be a considerable alternative to the project activity, however, as demonstrated in the step2 such activity without CDM revenue is not financially viable and the same is demonstrated below.

• P2: Existing or construction of a new on-site or off-site fossil fuel fired cogeneration plant;-Since there is no onsite requirement of steam, no onsite fossil fuel fired cogeneration plant will be set up.

Hence no fossil fuel fired cogeneration facility will be set up onsite/offsite. Hence, P2 can neither beconsidered a viable alternative nor a baseline scenario.

• P3: Existing or construction of a new on-site or off-site renewable based cogeneration plant;Since there is no onsite requirement of steam, no renewable based cogeneration plant will be set up.

Hence no cogeneration facility will be set up onsite/offsite. Thus, P3 is neither a viable alternative nor a baseline scenario.

• P4: Existing or construction of a new on-site or off-site fossil fuel fired captive power plant;The project activity is implemented to generate power and export the same to grid. The project is anIndependent Power Plant and will not supply electricity to any facility of the project participants. Sincethere is no on-site demand for captive power, there is no requirement to setup on-site fossil fuel fired

captive power plant. Thus, P4 is neither considered a viable alternative nor a baseline scenario.

• P5: Existing or construction of a new on-site or off-site renewable based captive power plant;

28 Section 2, pg.no.17, Funding for LFGE projects, Turning a Liability into an Asset: Landfill Methane UtilisationPotential in India; http://www.indiaenvironmentportal.org.in/files/India_methane.pdf . The table clearly shows that

the landfill recovery projects have only two sources of revenues sale of electricity (based on gas) and CDMrevenues. Hence, a typical landfill gas captured and flared is nothing but similar investment, with no revenues (asgas is flared), which is clearly not viable.

http://www.indiaenvironmentportal.org.in/files/India_methane.pdfhttp://www.indiaenvironmentportal.org.in/files/India_methane.pdfhttp://www.indiaenvironmentportal.org.in/files/India_methane.pdfhttp://www.indiaenvironmentportal.org.in/files/India_methane.pdf


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The project activity is the project activity is implemented to generate power and export the same to grid.

The project is an Independent Power Plant and will not supply electricity to any facility of the project

participants. Since there is no on-site demand for captive power, there is no requirement to setup on-siterenewable based captive power plant. Hence, P5 is neither considered a viable alternative nor a baseline.

• P6: Existing and/or new grid connected power plantsP6 is a credible alternative since in the absence of the project activity would, the equivalent amount ofelectricity would have been generated by existing and/ or new grid connected power plants and the grid is

a mix of various sources of energy with fossil fuel as one of the major source of energy. This is the business-as-usual scenario and a credible alternative.

In summary, scenarios P2, P3, P4 and P5 are not considered creditable alternatives to the project activityand hence eliminated from further consideration.

Outcome of Step 1a: The various realistic and credible alternative scenario(s) to the project activity have been identified and provided below:

M3- Disposal of the waste on a landfill (SWDS) without the capture of landfill gas.

P6 - Existing and/or new grid-connected power plants.

M1- The project activity i.e. composting and RDF production, not implemented as a CDM project

P1- Power generated from by-product of one of the options of waste treatment not undertaken as aCDM project activity

Sub-step 1b: Consistency with mandatory laws and regulations:

All the above alternatives are consistent with existing law and regulations of the country except M3

which is not as per recommendation of MSW Rules 200029

. However, the current practice in India isdisposal of municipal solid waste without any treatment and processing

30. Hence the rules are

systematically not enforced and the non-compliance with the rules is widespread in the country.

Hence, the most plausible and credible alternatives to the project activity are:

M3+ P6: this is a possible combination and is business as usual scenario which would havehappened in the absence of the project activity.

M1+P1: this is the project activity without CDM benefits. However it is not possible without

CDM benefits as explained in following steps. M1+P6: this is not possible since this would mean implementing project activity; i.e.,composting and RDF production without electricity generation or selling the RDF for off-site power generation. This is not a feasible alternative since this would either mean no electricityrevenue and disposal of RDF in disposal site without utilizing it or sale of RDF for off-site

power generation. Sale of RDF for off-site power generation is not possible since the project


30 Sunil Kumar ,Bhattacharyya J.K. , Vaidya A.N., Tapan Chakrabarti , Sukumar Devotta , Akolkar A.B. ,

Assessment of the status of municipal solid waste management in metro cities, state capitals, class I cities, and classII towns in India: An insight, pg 3



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has been allocated by government as an integrated project including both processing and

power plant. Moreover there is no demand for RDF in the nearby areas.

M3+P1: This is not a possible combination since it would mean disposal of waste in the solidwaste disposal site without any RDF production and thus no raw material for the RDF power plant

Step 2: Identify the fuel for the baseline choice of energy source taking into account the national

and/or sectoral policies as applicable

The baseline fuels identified are fossil fuels (coal, gas and diesel), which contribute to more than 50% of

the southern grid installed capacity and energy generation31

. The availability of these baseline fuels areabundant in the country, based on the fuel reserve estimates and various publications

32. Hence, there is

abundant availability of baseline fuel and no supply constraint in the country exists.

Step 3: The methodology states that Step 2 and/or Step 3 of the latest approved version of the “Toolfor demonstration and assessment of additionality” shall be used to asses which of these alternatives

should be excluded from further consideration.

Step 2 (Investment analysis) of the latest approved version of the “Tool for demonstration and assessmentof additionality” has been used.

Step 2- I nvestment analysis

Sub-step 2a: Determine appropriate analysis method

According to the “Tool for the demonstration and assessment of additionality” (version 05.2) there arethree options for the execution of the investment analysis.

Option I: Simple cost analysis (the CDM project activity generates no financial or economic benefits

other than CDM related income)

Option II: Investment comparison analysis (the relevant financial indicator (IRR, NPV) is determinedand compared, or

Option III: Benchmark analysis (the relevant financial indicator is compared to a benchmark)

The project will generate revenues from selling compost and power generated from RDF to the third party

and also from credits of emissions reduction, therefore Option I is not applicable. Option II also does notapply since there is no comparable investment alternative available to the project proponent. The mostappropriate financial analysis method is therefore option III: the benchmark analysis.The project promoter has thus chosen to apply Option- III of benchmark analysis.

31 http://www.cea.nic.in/reports/monthly/executive_rep/may11/8.pdf

32 http://www.coal.nic.in/reserve2.htm;

http://www.business-standard.com/india/storypage.php?autono=333749

http://www.powermin.nic.in/whats_new/pdf/Coal_As_Fuel.pps;

http://www.commodityonline.com/news/Indias-Natural-Gas-reserves-to-last-for-29-years-12554-3-1.html

http://www.cea.nic.in/reports/monthly/executive_rep/may11/8.pdfhttp://www.cea.nic.in/reports/monthly/executive_rep/may11/8.pdfhttp://www.cea.nic.in/reports/monthly/executive_rep/may11/8.pdfhttp://www.coal.nic.in/reserve2.htmhttp://www.coal.nic.in/reserve2.htmhttp://www.coal.nic.in/reserve2.htmhttp://www.business-standard.com/india/storypage.php?autono=333749http://www.business-standard.com/india/storypage.php?autono=333749http://www.powermin.nic.in/whats_new/pdf/Coal_As_Fuel.ppshttp://www.powermin.nic.in/whats_new/pdf/Coal_As_Fuel.ppshttp://www.commodityonline.com/news/Indias-Natural-Gas-reserves-to-last-for-29-years-12554-3-1.htmlhttp://www.commodityonline.com/news/Indias-Natural-Gas-reserves-to-last-for-29-years-12554-3-1.htmlhttp://www.commodityonline.com/news/Indias-Natural-Gas-reserves-to-last-for-29-years-12554-3-1.htmlhttp://www.powermin.nic.in/whats_new/pdf/Coal_As_Fuel.ppshttp://www.business-standard.com/india/storypage.php?autono=333749http://www.coal.nic.in/reserve2.htmhttp://www.cea.nic.in/reports/monthly/executive_rep/may11/8.pdf


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Sub-step 2b: Option I I I . Apply benchmark analysis

The likelihood of development of this project, as opposed to continuation of its baseline has beendetermined by calculating its IRR with the benchmark of likely interest rate at which the loan sanctioning

for the project was expected. The Prime Lending Rate (PLR) of Reserve Bank of India (RBI) which is the publicly available information when the initial investment decision taken on 20 June 2008 was at 12.75%33. However, the project participant had expected loan sanctioning at an interest rate of 10.5% based on

the then circumstances and negotiations. Hence, the investment in operation of the plants would beconsidered financially attractive, if the IRR of the plant is at least above the interest rate, at which thefunding was received by plant i.e. 10.5%. The funding pattern is 75:25, i.e., 75% debt and 25% equity.

Thus 10.5% has been taken as appropriate benchmark for the project which is conservative.

The investment analysis has been carried out in according to the “Guidance on the investment analysis,

version 05”. The assumptions considered in the analysis and their compliance with the guidelines is provided in the below table:

Guidance34

Project compliance

General issues in calculation and presentation

Period of assessment The project assessment period is considered as 20 years,which is the expected operational life time of the project.This period is also in line with the guideline, suggesting aminimum of 10 years and a maximum of 20 years basedon equipment supplier letter is considered as appropriate.

Salvage valueConsidered 10% conform to CERC norms vide Page No.19/72 of CERC Order dated 26 Mar 200435 The salvage

value for civil works has been considered as the residualvalue of all the civil costs at the end of 20 years.

Depreciation and other non-cash

items

After deducting in the profit before tax calculations,

Depreciation is added back into the net cash inflow,since, it is not considered as actual expense incurred.Depreciation values are considered for tax calculations, as

the investment analysis is calculated for post tax IRR.The depreciation rates are considered as per the IncomeTax provisions for tax calculations and companies act for book depreciation for the respective year

36.

Time of assessment and input values The investment analysis was carried out during thedecision making period of the project, Phase I decision in2008 and Phase II in January 2011. The initial decision

33 http://www.rbi.org.in/scripts/PublicationsView.aspx?id=12003 or

http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/T1101_STST1118.pdf

34 Tool for the demonstration and assessment of additionality, Version 5.2. Annex: Guidance on the Assessment of

Investment Analysis Version 02. Point no 1 & 2 of the guidance refers to general introduction.

35 http://cercind.gov.in/13042007/Terms_and_conditions_of_tariff.pdf

36 Direct Tax Ready Reckoner by Dr. Vinod K Singhania

http://www.rbi.org.in/scripts/PublicationsView.aspx?id=12003http://www.rbi.org.in/scripts/PublicationsView.aspx?id=12003http://www.rbi.org.in/scripts/PublicationsView.aspx?id=12003http://cercind.gov.in/13042007/Terms_and_conditions_of_tariff.pdfhttp://cercind.gov.in/13042007/Terms_and_conditions_of_tariff.pdfhttp://cercind.gov.in/13042007/Terms_and_conditions_of_tariff.pdfhttp://www.rbi.org.in/scripts/PublicationsView.aspx?id=12003


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page 33

Investment analysis

Particulars Units Values Basis

considered value is inline with theEquipment supplier vide letter dated16 March 2011. Thus the consideredvalue is meeting the requirement ofAnne 11 of EB 48

Tariff Rate Rs. /kWh 3.61 DPR for Phase I prepared by APTDCand PPA

CER Rate Euro/tCO2 12 http://www.carbonyatra.com/news_detail.php?id=991

Exchange Rate Euro Rs. 65 RBI Rate Archive

Total Project Cost Rs. In

million

1261 DPR wherein the project cost

estimated based on the Schedule of

rates and quotations by third party project consultant and Interest duringconstruction

Equity Rs. inmillion

315.3 DPR based on the Schedule of ratesand quotations plus Interest duringConstruction

Loan Rs. Inmillion

945.8 DPR based on the Schedule of ratesand quotations plus Interest during

Construction

Interest on TermLoan

% 10.50 As per ILFS sanction 15 October2008

Repayment period ofloan Quarters 40 As per ILFS sanction 15 October2008

Moratorium period Quarters 8

Income Tax % 33.99 Section 143, Income Tax Act 1961

MAT % 16.995 Income tax rules

Break-up of the Capital Cost

Parameter Amount (INR, million)

Phase-I Phase-II Total

RDF Processing Plants (1400 TPD) 200.20 97.40 297.6

Compost Plants (850 TPD) 0.00 324.1 324.1

Power Plant (12 MW) 366.10 0.00 0.00Tipper trucks for transportation of finished products

16.20 25.80 42.00

Taxes and Duties 51.90 16.1 68.00

Working Capital @ one month electricityrevenue and 2 months compost revenue

0.00 33.00 33.00

Interest During Construction (1 Year Interest) 0.00 130.00 130.00

Total 634.40 626.40 1261.00

Parameters Rate of Return

http://www.carbonyatra.com/news_detail.php?id=991http://www.carbonyatra.com/news_detail.php?id=991http://www.carbonyatra.com/news_detail.php?id=991http://www.carbonyatra.com/news_detail.php?id=991http://www.carbonyatra.com/news_detail.php?id=991http://www.carbonyatra.com/news_detail.php?id=991


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The financial analysis conducted during inception of project as per the DPR prepared by APTDC (AGovernment of Andhra Pradesh venture) has been presented to DOE. The financial analysis shows thateven during inception project IRR without CDM was 9.75% i.e. below the benchmark rate of 10.5%. Onlywith CDM revenue was the project able to achieve a reasonable return of 14.9%.

Though the project has not been implemented as per the configuration specified in the DPR, the DPRclearly proves that CDM benefit was critical even during the inception of the project.

As shown above, the project IRR is much below the benchmark expected and only with CDM revenues the project will achieve the required benchmark. Thus, successful CDM registration of this project activity is

imperative to make it financially attractive.

Sub-step 2d. Sensiti vity anal ysis

The purpose of sensitivity analysis is to examine whether the conclusion regarding the financial viability

of the proposed project is sound and tenable with those reasonable variations in the assumptions. Theinvestment analysis provides a valid argument in favor of additionality only if it consistently supports (for

realistic range of assumptions) the conclusion that the project activity is unlikely to be the most financiallyattractive or is likely to be financially attractive.

Thus, a sensitivity analysis was also applied to the IRR calculations to measure the impact, positive ornegative, of changes in the indicated parameters. The project proponent has chosen various factors as

critical to the operations of the project in accordance with Guidance on the Assessment of InvestmentAnalysis (Version- 02, paragraph- 16), which states that only variables, including the initial investment

cost, that constitute more than 20% of either total project costs or total project revenues should besubjected to reasonable variation.

These factors were subjected to 10% variation on either side, to ascertain the impact on the profitabilityand hence, the IRR of the project. The results of the sensitivity analysis are as presented below:

Minimum expected rate of return (benchmark) 10.5 %

Rate of return without CDM benefits 6.09 %

Rate of return with CDM benefits 18.62 %

Sensitivity parameter Variation and resultant IRR

-10% 0 +10%

Cost of RDF Plant 6.4% 6.09% 5.8%

Cost of Compost Plant 6.4% 6.09% 5.8 %Cost of Power Plant 6.5% 6.09% 5.7 %

PLF 0.8% 6.09% 9.6%

Electricity Revenue 0.8% 6.09% 8%

Compost Revenue 3.9 % 6.09% 8%

O&M Compost 7.6% 6.09% 4.3%

O&M RDF 7.6% 6.09% 4.4%

O&M Power plant 7.1% 6.09% 4.9%

Total Project Cost 7.5% 6.09% 4.9%

Total O&M Cost 10.2% 6.09% -1.4%

Total Revenue -3.7% 6.09% 11.1%


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Thus, the sensitivity analysis for the project clearly reveals that even with subjecting the key parametersto significant changes, the project IRR does not cross benchmark rate. The parameter variations, at whichIRR crossing the benchmark rate is provided below.

The project activity crosses the benchmark in the above scenarios. However, the same is considered not possible for the following reasons:

Cost of RDF Plants - The possibility of reduction in cost of RDF plants by -115% is not realistic since

more than 100% reduction means cost is zero and no RDF plant is constructed which is not possible.

Cost of Compost Plants - The possibility of reduction in cost of compost plants by -105% is not realisticsince more than 100% reduction means cost is zero and no compost plant is constructed which is not possible.

Cost of Power Plant - The possibility of reduction in cost of power plant by -93% is not realistic sincemore than 90% reduction means almost negligible cost and no power plant is constructed which is not

possible.

PLF – The PLF of the project has been determined by EPC contractor based on the plant design and

specifications. The project activity considered the maximum PLF achievable as 80%. As per APERCtariff order 2004 & 2009, the threshold PLF achievable for biomass project is taken at 80%. Biomass fuel, being superior and having high calorific value (also permitted as supplementary fuel) than RDF, thethreshold limit for biomass project is still considered as 80% only. Hence, consideration of 80% PLF for

RDF based power project is reasonable. Moreover, in a similar plant in India in the same state “ SESL 6MW Municipal Solid Waste Based Power Project at Vijayawada & Guntur, Andhra Pradesh”

37 (also

registered CDM Project) 4 year average PLF is 28%. Maximum PLF was achieved in 2004 as 47.71%

after which the PLF has shown a decreasing trend. The best PLF of the plant was witnessed in January2005 with a PLF of 91%. However in the year 2005, the PLF was only 42%. Expecting a average PLF inexcess of 91% for a period of 20 years is not a realistic.

37 http://cdm.unfccc.int/Projects/DB/SGS-UKL1171644490.79/view

Sensitivity parameter% of sensitivity crossing the

benchmark

Cost of RDF Plant >-100% (-115%)

Cost of Compost Plant >-100% (-105%)

Cost of Power Plant -93%

PLF 14%

Electricity Revenue 14%

Compost Revenue 28%

O&M Compost -35%

O&M RDF -35%

O&M Power plant -51%

Total Project Cost -27%

Total O&M Cost -11%

Total Revenue 9%


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Sales income – Electricity – The electricity tariff considered for the project is based on the PPA entered

with the purchasers. However, the escalation in the tariff considered for the project from third yearonwards is 5%, which is conservative, even as per the escalations considered by the APERC. Themaximum escalation observed for MSW based power projects in the state since 2004 was only 5%

38 and

hence, the same is realistic. The increase in sales income or tariff by 14%, is hence, not a possiblescenario.

Sales income compost – In case of sales income, the situation and barriers faced by Indian MSW basedcompost units in the past is worth noting. Most of the MSW based compost units in India have faced

severe barriers in acceptability of waste based compost and hence, marketing and sale of the same isfound to be difficult. As a result, many of the compost units have been shutdown

39. Under these

experiences and circumstances, successful marketing and sale of total compost produced to the

farmers/users is a challenge. Moreover the yield of compost has been taken as 20% which is conservative

considering the existing similar plants40

have reported a yi

Documents

CDM RDF 12MW Karimnagar AP