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

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1 CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) Version 03 - in effect as of: 22 December 2006 CONTENTS A. General description of the small scale project activity B. Application of a baseline and monitoring methodology C. Duration of the project activity / crediting period D. Environmental impacts E. Stakeholders comments Annexes Annex 1: Contact information on participants in the proposed small scale project activity Annex 2: Information regarding public funding Annex 3: Baseline information Annex 4: Monitoring Information Annex 5: Financial analysis 1

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

3 SECTION A. General description of small-scale project activity A.1 Title of the small-scale project activity: Lean Biogas recovery from Palm Oil Mill Effluent (POME) ponds and biogas / biomass utilisation at Exportadora del Atlántico, Lean/Honduras. Version of the Document: 1 Date: December 18, 2007 A.2. Description of the small-scale project activity: Exportadora del Atlántico Lean is devoted to the extraction and refining of palm oil. Apart from the oil press, its facilities include diverse industrial processes: Refining, fractionation, interesterification process, biodiesel production and a fat and oil production plant. The Palm Oil Extraction Plant consumes approx. 2,500 MWh/yr of electricity from the grid. The liquid effluents generated due to the fruit processing amount to approx. 123,000 m 3 /year (year 2008), with a Chemical Oxygen Demand (COD) load of approx. 8,000 t/year 1. These effluents are presently led to a treatment system that consists of a set of fat traps and 15 open lagoons. In these lagoons, anaerobic processes take place, which generate biogas that is currently being emitted to the atmosphere. After passing the lagoons, the waste water is discharged to a nearby river. The planned CDM project activity will optimise the existing treatment system. The biogas will be collected and used to generate electricity, which will partially be exported to the grid and partially be used in the Palm Oil Extraction Plant. For doing so, a new biogas generator (two container units of 750 kw each) will be constructed. To summarize, the project reduces greenhouse gas emissions (GHG) in the following ways: by preventing methane emission through biogas capture, by replacing electricity consumption from the grid by utilizing biogas, and by replacing electricity consumption from the grid by utilizing biogas. Contribution to sustainable development: Besides reducing GHG emissions and helping to reduce Honduras dependence on fossil fuels, the planned CDM project activity will improve the quality of the discharged water significantly by removing organic matter from the effluent and by minimizing water pollutants such as oils, greases and particles. Honduras has defined several indicators for sustainable development contributions 2, which are summarised in the following table. 1 Information on relative COD-load in (mg/l) is given in section B.4. 2 Information obtained from DNA of Honduras per in October

4 Type of SD Criteria Indicators Contribution of proposed CDM project Social Sustainability Job generation (training, use of local working force) Environmental Sustainability Economic Sustainability Improvement of the populations quality of life Natural resource protection and environment Local and national economic development Training of personnel how to operate new plants, Operation of new installations by local staff Social responsibility Improvement of waste water characteristics (discharge to the river) Formulation of education -- assistance programmes Formulation of environmental -- education programmes or strategies New education and health centres -- Reforestation programmes -- (watersheds, nurseries), flora and fauna protection Cleaner production technology Implementation of modern transfers waste water treatment system, Use of more efficient technology Import of Belgian technology (energy and water consumption) Greenhouse gas emissions Yes reduction Adequate waste disposal (construction materials, etc) Technology transfer Increase in Gross Domestic Product in the area of influence Oil imports reduction -- Mwh generated by the project and contribution of the energy supply to the community(ies) Improvement of waste water characteristics (discharge to the river) Yes, import of Belgian technology -- Yes, export of renewable electricity to the grid. Hence, the proposed CDM project activity contributes to the sustainable development of the host country in numerous ways. 4

5 A.3. Project participants: The project will be implemented by Exportadora del Atlántico with its administrative office in Tegicigalpa, Honduras. Name of Party involved (*) ((host) indicates a host Party) Honduras United Kingdom Private and/or public entity(ies) project participants (*) (as applicable) Private entity: Exportadora del Atlántico Private entity: EDF Trading Kindly indicate if the Party involved wishes to be considered as project participant (Yes/No) No No Honduras has ratified the Kyoto Protocol on 19/07/2000 The United Kingdom has ratified the Kyoto Protocol on 31/05/2002. A.4. Technical description of the small-scale project activity: A.4.1. Location of the small-scale project activity: The project site is located in the region El Astillero/Arizona, district Atlántida, approximately 20 km southeast of the city of Téla (Honduras). Honduras A Host Party(ies): A Region/State/Province etc.: Region of El Astillero/Arizona, District Atlántida Tela A City/Town/Community etc: A Details of physical location, including information allowing the unique identification of this small-scale project activity : The coordinates of the project site are: 15 35'50.70'' N; 87 23'32.38'' W. 5

6 Source: Source: Google Earth (also: Suche&rl=1) 6

7 A.4.2. Type and category(ies) and technology/measure of the small-scale project activity: Categories and type of the planned CDM project activity: The project activity belongs to the following categories as listed in the sectoral scopes for accreditation of the operational entities ( Sectoral scope 13: Sectoral scope 1: Waste handling and disposal. Energy industries (renewable- / non-renewable sources) The project activity includes Type III (methane recovery) and Type I (electricity generation) elements of the Small Scale CDM project categorisation. Technology / measure of the planned CDM project activity: 1. Methane capture: Currently, Lean s wastewater treatment system consists of: a 5-tank-recovery system for palm oil from the effluents from the centrifuges, grease traps, and a set of 15 open lagoons, whose characteristics are shown in Figure 1. Without considering the grease traps, the system has a total lagoon volume of approximately 56,000 m 3. The average depth of the anaerobic lagoons 1-8 is 2.66 m; the average depth of the whole system is 2 m. Figure 1: Current lagoon system at Lean. By implementing the planned CDM project activity, two of the existing lagoons will be redesigned and covered by plastic sheets to collect the biogas, and will be covered sealed with impermeabilization 7

8 incompacted clay and high density polyethylene geomembrane. The covered lagoons will have a volume of 2 x 7,500 m 3 and are expected to remove approximately 90% of the COD-load in the effluents. Besides this, the following technical components will be constructed: Component Cooling towers Lagoon impermeabilisation Sludge agitation and drainage system Auxiliary transformers and electric system for pumps and engines Lagoon covering Biogas blowers Biogas conduction Biogas purification filters Emergency generator Flare Monitoring equipment and instrumentation (SCADA system) Function and description Two operating units in parallel, used for reducing the temperature of the affluent from 70 C to 40 C. With vertical flux, fed by encased centrifugal pumps and stainless steel impeller. HDPE geomembrane to avoid infiltrations (organic load losses), phreatic water dilution, and pollution of possible subsurface water bodies. To mix and recirculate the sedimented sludge in both anaerobic lagoons. Recirculating the sludges helps to digest them, and mixing them prevents the filling up of the lagoons through sedimented sludge compactation. Two units (approx. 150 kva and 50 kva) for feeding two engine load centres in the anaerobic and facultative lagoons, respectively. The cover for the lagoons will be made in flexible plastic material, resistant to gas and weathering, and equipped with a system for evacuating the rainwater that deposits in the surface. The cover surface for each lagoon is approx. 4,000 m 3. Transport of biogas; for a capacity of 900 m 3 /hour. For a maximum daily flow of 900 m 3 /h, a conduction of 150 m is projected, in PVC of 6 or 8 diameter. The system includes water traps for the condensed water and various sampling points. The crude biogas contains approximately 0.2% (2,000 ppm) H 2 S. The system considers a biologic depuration of this H 2 S, by means of Thiobacillus bacteria. The depuration system consists of two parallel sets for reducing H 2 S from 2,000 ppm (when leaving the lagoons) to 200 ppm. It also acts as humidity condenser. 50 kva diesel unit for the operation and starting of the system in case of grid energy failures. It is used for burning the excess biogas that cannot be used in any of the components of the system, either for over-production or during maintenance operations. The flare is open, with a flame trap and a temperature flame detector. Pressure meters (in U and electronic), biogas caudal meter, thermometers (for effluents and biogas), ph-meters for the effluent, contact sensors for the valves, biogas analyser (CH 4, CO 2, O 2, H 2 S), time meter in the press (extractor), blowers, compressors, cooling tower vents, pumps, temperature flame detector. Includes PLC and monitoring and reporting software located in control shack. The technology will be provided Bio-Tech, a Belgium technology provider (also see section B.5 of this document). 8

9 CDM Executive Board 2. Renewable electricity generation: A generator-system will be installed as an enclosed unit (40 feet container). This unit will comprise a piston engine-generator, electric displays, radiators, oil tanks, electric control and power displays and PLC. The new system will have an installed capacity of 1,500 kw (two units with 750 kw each). In addition, a transformator (100kVA) and necessary interconnections to the electricity grid and on-site demand point will be installed. A.4.3 Estimated amount of emission reductions over the chosen crediting period: Year Annual estim ation of emission reductions [tons CO 2e ] 1 (2008/2009) 26,855 2 (2009/2010) 26,588 3 (2010/2011) 26,052 4 (2011/2012) 25,660 5 (2012/2013) 25,071 6 (2013/2014) 24,750 7 (2014/2015) 23,644 Total estimated reductions [tons CO 2e ] 178,620 Total number of crediting years 7 Annual average over the crediting period of estimated reductions [tons CO 2e ] 25,517 It may be noted that the decrease of emission reductions over time is due to increased production in the Palm Oil Plant (due to increased harvest from palms according to the natural growth cycle) and responding increase of wastewater volumes. A.4.4. Public funding of the small-scale project activity: Neither public funding nor official development assistance are used in the project activity. No loans from international financial institutions (IFIs) are included. The financing will be realized by Exportadora del Atlántico with a bank loan and the sale of generated CERs. 9

10 A.4.5. Confirmation that the small-scale project activity is not a debundled component of a large scale project activity: According to the CDM-regulations, a small-scale project activity shall be deemed to be a debundled component of a large project activity if there is a registered small-scale CDM project activity or an application to register another small-scale CDM project activity if all of the below conditions are fulfilled: Same project participants; Same project category and technology/measure; Registered within the previous 2 years; and Project boundary is within 1 km of the project boundary of the proposed small-scale activity at the closest point. While there is another project seeking registration as a Small Scale CDM project by the same project participants 3, the project cannot be considered as a debundled component of a larger project because the project is located 165 km from the proposed project boundaries and thus is not within the above mentioned range. SECTION B. Application of a baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the small-scale project activity: 1. Methane capture: Approved Small Scale Methodology AMS III.H Methane recovery in waste water treatment, Version 08, as of December 14 th, 2007 is applied. 2. Renewable electricity generation: Approved Small Scale Methodology AMS I.D Renewable Energy Generation for the Grid, Version 13 as of December 14 th, 2007 is applied. It refers to the Tool to calculate the emission factor for an electricity system (Version 01). B.2 Justification of the choice of the project category: 1. Methane capture: The project activity fulfils the eligibility criteria of AMS III.H, as it complies with option (iv): Introduction of methane recovery and combustion to an existing anaerobic wastewater treatment system such as anaerobic reactor, lagoon, septic tank or an on site industrial plant. The adaptation of some of the existing lagoons as described in section A.4.3 has a similar purpose and effect as the 3 Aguan biogas recovery from Palm Oil Mill Effluent (POME) ponds and biogas / biomass utilisation at Exportadora del Atlántico, Aguan/Honduras. 10

11 construction of an anaerobic tank digester, as biogas emitted from the wastewater system will be captured. In addition, resulting emission reductions are less than 60kt of CO 2 per annum. AMS III.H also specifies that a project activity can use a corresponding category under type I, if the recovered methane is used for heat and or electricity generation. The latter is the case, and hence AMS I.D will be applied in combination with the Tool to calculate the emission factor for an electricity system. 2. Renewable electricity generation: The project activity fulfils the eligibility criteria of AMS I.D, as a new renewable biomass plant will supply electricity to and/or displace electricity from an electricity distribution system that is or would have been supplied by at least one fossil fuel fired generating unit: the system will be connected to the interconnected system of Honduras (managed by the national electricity provider ENEE) that is fed by several fossil-fuel fired plants also see Annex 3 of this document. In addition, the units added by the CDM project activity are lower than 15 MW and are physically distinct from the existing units at the project site. B.3. Description of the project boundary: 1. Methane capture: AMS III.H specifies the project boundary as the physical, geographical site where the wastewater and sludge treatment takes place. Included gases are CO 2 and CH 4. Emission sources are the untreated and treated wastewater, final sludge, power consuming project activity facilities, the flare system, and treated waste water effluent. 2. Renewable electricity generation: AMS I.D specifies the project boundary as The physical, geographical site of the renewable energy generation. The included gas is CO 2. Emission sources are the technologies and/or fuels that would have been used for power generation in the absence of the CDM project activity. The project boundary is visualised in Figure 2. 11

12 CDM Executive Board Figure 2: Project boundaries of the planned CDM project activity. B.4. Description of baseline and its development: 1. Methane capture (AMS III.H) Honduran legislation does not require the capture of biogas from industrial waste water treatment systems, nor is there any such legislation concerning the treatment of liquid or sludge by-products produced through industrial activities. On the contrary, open lagoons have a low operational risk and are the cheapest solution for the treatment of wastewater with regard to initial investments and operating costs. Since there is no applicable legislation for the capture of biogas, the baseline scenario can be identified as continued operation of the existing wastewater treatment system i.e. a situation in which methane emissions from anaerobic processes are released to the atmosphere. The project activity will reduce greenhouse gas emissions through the collection of biogas and thermal destruction of methane. Project activity emissions consist of: CO2 emissions on account of power used by the project activity facilities. Methane emissions on account of inefficiency of the wastewater treatment and presence of degradable organic carbon in treated wastewater; Methane emissions from the decay of the final sludge generated by the treatment systems; Methane fugitive emissions on account of inefficiencies in capture and flare systems; Methane emissions resulting from dissolved methane in the treated wastewater effluent. As no bottling of upgraded biogas occurs, these sections of AMS III.H do not apply and are neglected. 12

13 2. Renewable electricity generation (AMS I.D) The baseline scenario - both for on-site electricity consumption and electricity export to the grid - is that the respective amount of electricity would have been generated by power plants connected to the national electricity grid. Hence, the baseline is the amount of electricity produced by the renewable generating unit (MWh) multiplied by an emission coefficient (kg CO2e/MWh). This grid emissions factor is calculated in a transparent and conservative manner as the combined margin as specified in the Tool to calculate the emission factor for an electricity system. Again, there is no legislation in Honduras that prescribes using renewable energy sources for electricity generation 4. The following table provides an overview of the relevant parameters and figures: Parameter Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Component 1: Methane avoidance Fresh Fruit Production (TFF) kt Electricity consumption MWh/yr Fuel consumption TJ/yr Qy,ww m3/yr 123, , , , , , ,289 CODy,ww,treated t/m Sy,final t/yr MCFs,final 1 CODy,ww,untreated t/m Sy,untreated t 4,126 4,084 4,002 3,942 3,851 3,802 3,632 Component 2: Renewable electricity generation from biogas Produced electricity MWh/yr 6,791 6,723 6,587 6,488 6,339 6,258 5,978 Data has been taken from the installations planning (technical feasibility study conducted by Biotech) and production forecasts of the Palm Oil Mill (data provided by the project owner). Values for COD are based on measurements (external lab-test); done in November As a conservative estimate, the lowest measurement result has been taken as the basis for emission reduction calculations. - The production of fresh fruit decreases over time due to the natural growth of the palm plants. B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered small-scale CDM project activity: Attachment A to Annex B of the simplified modalities and procedures for CDM small-scale project activities specifies that a project activity would not have occurred anyway if it faces at least one of the following barriers: investment barrier, technological barrier, barrier due to prevailing practice, or other barriers. The project activity faces several barriers, which are summarised in the following paragraphs: 1) Investment barrier: The financial implementation of the planned CDM project activity is a challenging task both in terms of the project s economics and the financing of the installations. 4 There are some financial incentives for renewable electricity generation (specified in Decree 85-98, Incentives for the generation of renewable energy; Decree for the use of renewable and natural resources to generate electricity; Decree and Decree from the Law of Renewable Incentives; Decree concerning municipalities support for renewable energy incentive), resulting in a guaranteed sales price of approx USD/kWh. However, these incentives are insufficient as shown in section B.5. 13

14 1a) Economic attractiveness of the investment: Honduras suffers from weak local economy and local banks charge high interest rates. From January 2006 to February 2007, i.e. the period in which the initial feasibility study was conducted and the investment decision was made, average interest rates for loans based in Lempiras ranged from 16.4% to 18.4 %, with an average of 17.4% ( The maximum allowable interest rates during the same period were even 27.6% to 33.7% 5. Hence, any investment financed by bank loans needs to have an IRR higher than at least 17.4% (conservative estimate) in order to be economically attractive to an investor. This does not even consider risks associated with a project activity. Without considering revenues from CER-sales, the project-irr without considering revenues from CERsales is significantly below these levels. The IRR has been calculated for several scenarios: a standard scenario with constant electricity prices, a scenario in which electricity prices increase by 10% a scenario in which prices for electricity decrease by 10% The results of the calculations are summarised in the following table; detailed calculations and figures are provided in Annex 5 and have been submitted to the DOE. Scenario IRR Proje ct [%] Payback Period Projec t [years] Standard scenario (actual energy prices) Increase of electricity prices by 10 % Decrease of electricity prices by 10 % The results clearly show that the return on investment for the project activity is not economically attractive if no CERs can be generated and sold. This situation changes when revenues from CER-sales are considered. Again, the project s IRR has been calculated for different scenarios. In the standard scenario, a constant CER-price of 15 US$/CER has been assumed both for the period before 2012 and the period afterwards. This means an additional income of 382,757 US$ per year (average of crediting period). As sensitivity analysis, a CER-price increase and decrease of 20% has been assumed for all CERs generated after 2012 due to the current price uncertainty. Results are summarised in the following table: Scenario Name CER-Price IRR Proje ct [%] Payback Period Projec t [years] Standard scenario - Constant CER-prices post US$/CER High price scenario - Increase of CER-prices by 20% post Low price scenario - Decrease of CER-prices by 20% post The results show that the CER-revenues make the project economically feasible

15 1b) Financing of the installations: Another challenge has been the financing of the installations via dept capital. Honduras currency, the Lempira, bears a significant rate of devaluation against the USD: since the acquisition of Company's Honduran subsidiary in 1989, the Lempira has continually devalued against the USD: from 2.0 Lempira to the USD in 1989 to Lempira to the USD at January 31, and to 18.9 by the end of Without CER-revenues, all income generated by the project will be in Lempira, while the installations have to be paid in USD. Hence, the expected income in hard currency through CER-sales allows Exportadora del Atlántico to hedge against the devaluation of the Lempira. 2) Barriers due to prevailing practice Methane recovery Methane recovery facilities are rarely found in Honduras. The predominant technology for wastewater treatment is an open anaerobic lagoon system. Besides CDM revenues, there are almost no incentives for companies to invest in a more expensive and complicated waste water treatment system with biogas capture. There are three similar projects in Honduras, and all of them are also being developed as CDM project activities: EECOPALSA CDM Project Number 492: biogas recovery and electricity generation from Palm Oil Mill Effluent ponds. The technology provider for this CDM project activity is also BIOTEC. Cervecería Hondureña Methane Capture Project, located in San Pedro Sula CDM Project Number 896. A different technology (UASB tank digester) has been applied by the project. Energeticos Jaremar Biogas recovery from Palm Oil Mill Effluent (POME) ponds. The project is currently in the validation phase; the global stakeholder consultation was conducted in summer Renewable electricity generation from biogas Honduras has undergone efforts to reduce its dependency on fossil fuels, which resulted in a number of laws promoting the use of renewable through fiscal incentives 8. However, the results of these initiatives are very modest. The prevailing practice is electricity generation using fossil fuel. The use of fossil fuels in Honduras even has increased in the past years, especially in energy generation sector, where fossil fuels are responsible for over 61% of all electricity generation in the interconnected electricity grid system. This trend is not expected to change as the expansion plans of the national electricity company include investments in thermal generation capacity in the coming years. Consequently and apart from the CDM initiatives mentioned above, there are no other digesters in Honduras that recover biogas and take advantage of this, as part of any wastewater treatment system in any other industrial context E.g.: Decree 85-98, Incentives for the generation of renewable energy; Decree for the use of renewable and natural resources to generate electricity; Decree and Decree from the Law of Renewable Incentives; Decree concerning municipalities support for renewable energy incentive. 15

16 Conclusion of additionality assessment The identified barriers clearly demonstrate that the project faces several barriers that prevent the implementation of the project. Without the CDM-incentive, these barriers would lead to a continuation of the existing system of open anaerobic lagoons. The expected revenues from CER-sales help to overcome these barriers. B.6. Emission reductions: B.6.1. Explanation of methodological choices: 1. Methane capture: As mentioned above, the project activity falls under option (iv) Introduction of methane recovery and combustion to an existing anaerobic wastewater treatment system such as anaerobic reactor, lagoon, septic tank or an on site industrial plant of AMS III.H. Hence, emission reductions (ER) through the avoidance of methane emissions from the existing waste water treatment system are calculated as follows: As no equipment will be transferred from another activity, and none of the existing equipment will be transferred to another activity, leakage effects do not occur. Hence, Leakage y is set as zero. Project activity emissions are calculated strictly in line with AMS III.H while considering the following items: Emissions from dissolved methane in treated wastewater in year y are calculated as: In doing so, the standard default values of AMS III.H are applied. As the depth of the existing lagoons is more than 2 metres, a MCF of 1.0 is chosen in line with table III.H.1. For COD y,ww,treated it is expected that the new lagoon system will reduce the COD content of the waste water by 90%. 16

17 PE y,s,final: Emissions from anaerobic decay of the final sludge produced in the year y are neglected in line with AMS III.H, because the final sludge is used for soil application (fertilizer). Emissions from methane release in capture and flare systems are calculated as: Where:, and Emissions from dissolved methane in treated wastewater are calculated as: The baseline scenario is the existing anaerobic wastewater treatment system without methane recovery and combustion (option iv of AMS III.H), and hence baseline emissions are calculated as: In line with AMS III.H, baseline emissions are calculated as per the formulas provided for calculating the project emissions, with the exception that MCF lower values in Table III.H.1 are used. 2. Renewable electricity generation: With regard to the generation of electricity from biogas, emission reductions are calculated applying the approved small scale CDM baseline methodology AMS I.D. Grid connected renewable electricity generation. Emission reductions are calculated from the expected amount of displaced grid electricity, multiplied with the calculated emissions factor of the grid. The latter has been calculated as Simple OM (generation weighted average), following the procedures in AMS I.D and the Tool to calculate the emission factor for an electricity system, based on generation data of the years 2004, 2005 and Data has been obtained from the national Electricity Provider ENEE, considering total generation excluding low cost/must run, including approved CDM projects, and including electricity imports. Details of the calculation and its outcome can be found in Annex 3. B.6.2. Data and parameters that are available at validation: Data / Parameter: Bo Data unit: kg CH 4 /kg COD Description: Methane producing capacity of the wastewater Source of data used: IPCC default value for domestic wastewater Value applied: 0.21 Justification of the Following provisions of AMS III.H choice of data or 17

18 description of measurement methods and procedures actually applied : Any comment: - Data / Parameter: MCF ww,final Data unit: - Description: Methane correction factor based on type of treatment and discharge pathway of the wastewater Source of data used: AMS III.H, MCF Higher Value in table III.H.1. Value applied: 1 Justification of the Following provisions of AMS III.H choice of data or description of measurement methods and procedures actually applied : Any comment: - Data / Parameter: GWP_CH 4 Data unit: - Description: Global Warming Potential of Methane Source of data used: AMS III.H; IPCC Value applied: 21 Justification of the Standard GWP for Methane choice of data or description of measurement methods and procedures actually applied : Any comment: - Data / Parameter: CFE ww Data unit: - Description: Capture and flare efficiency of the methane recovery and combustion equipment in the wastewater treatment Source of data used: Standard value as defined AMS III.H Value applied: 0.9 Justification of the Following provisions of AMS III.H choice of data or description of measurement methods and procedures actually applied : Any comment: - 18

19 Data / Parameter: MCF ww, treatment Data unit: - Description: Methane correction factor for the wastewater treatment system that will be equipped with methane recovery and combustion Source of data used: AMS III.H - MCF higher values in table III.H.1 Value applied: 1 Justification of the Following provisions of AMS III.H choice of data or description of measurement methods and procedures actually applied : Any comment: - Data / Parameter: CFEs Data unit: - Description: Capture and flare efficiency of the methane recovery and combustion equipment in the sludge treatment Source of data used: AMS III.H Value applied: 0.9 Justification of the Standard default factor as defined in AMS III.H choice of data or description of measurement methods and procedures actually applied : Any comment: - Data / Parameter: DOC y,s,untreated Data unit: - Description: Degradable organic content of the untreated sludge generated in the year y. Source of data used: AMS III.H Value applied: 0.09 Justification of the Following the provisions of AMS III.H choice of data or description of measurement methods and procedures actually applied : Any comment: Will be monitored ex-post Data / Parameter: MCF s,treatment Data unit: - Description: Methane correction factor for the sludge treatment system that will be equipped with methane recovery and combustion Source of data used: AMS III.H - MCF Higher value of 1.0 as per table III.H.1 Value applied: 1 19

20 Justification of the Following provisions of AMS III.H choice of data or description of measurement methods and procedures actually applied : Any comment: - Data / Parameter: [CH 4 ] y,ww,treated Data unit: t/m 3 Description: Dissolved methane content in the treated wastewater Source of data used: AMS III.H Value applied: Justification of the Standard default value as defined in AMS III.H: choice of data or description of measurement methods and procedures actually applied : Any comment: - Data / Parameter: MCF ww, treatment Data unit: - Description: Methane correction factor for the wastewater treatment system that will be equipped with methane recovery and combustion Source of data used: AMS III.H - MCF lower values in table III.H.1 Value applied: 0.8 Justification of the Following provisions of AMS III.H choice of data or description of measurement methods and procedures actually applied : Any comment: - Data / Parameter: CEF Data unit: t CO 2 /MWh Description: National grid emissions factor Source of data used: Calculation based on AMS I.D/the Tool to calculate the emission factor for an electricity system Value applied: Justification of the Following provisions of AMS I.C, AMS I.D and the Tool to calculate the choice of data or emission factor for an electricity system. description of Data on historical electricity production by plant has been provided by the measurement methods national energy provider ENEE. and procedures actually applied : 20

21 Any comment: - Data / Parameter: η Flare Data unit: - Description: Efficiency of flare Source of data used: AMS III.H Value applied: 0.5 Justification of the Standard default value for open flares as defined in AMS III.H choice of data or description of measurement methods and procedures actually applied : Any comment: - B.6.3 Ex-ante calculation of emission reductions: Emission reductions are calculated as the difference between baseline emissions and project emissions strictly in line with the provisions and formula as defined in AMS III.H, AMS I.D, the Tool to calculate the emission factor for an electricity system and as explained in section B.6.1 of this document. Details of calculation and annual results over the crediting period can be found in Annex 3. The following tables summarise project activity emissions, baseline emissions, leakage and estimated emission reductions for the individual components of the proposed CDM project activity. It may be noted that the decrease of project emissions and baseline emissions over time is due to decreased production in the Palm Oil Plant (due to decreased harvest from palms according to the natural growth cycle) and responding increase of wastewater volumes. Component 1: Methane avoidance (AMS III.H) Year Estimation of project activity emissions (tonnes of CO 2e ) Estimation of baseline emissions (tonnes of CO 2e ) Estimation of leakage (tonnes of CO 2e ) Estimation of emission reductions (tonnes of CO 2e ) 1 10,794 33, , ,686 32, , ,471 32, , ,313 31, , ,076 30, , ,947 30, , ,503 29, ,692 Total 71, , ,766 21

22 Component 2: Renewable electricity generation / utilization of biogas (AMS I.D) Year Estimation of project activity emissions (tonnes of CO 2e ) Estimation of baseline emissions (tonnes of CO 2e ) Estimation of leakage (tonnes of CO 2e ) Estimation of emission reductions (tonnes of CO 2e ) 1 0 4, , , , , , , , , , , , , ,952 Total 0 29, ,854 B.6.4 Summary of the ex-ante estimation of emission reductions: Year Estimation of project activity emissions (tonnes of CO 2e ) Estimation of baseline emissions (tonnes of CO 2e ) Estimation of leakage (tonnes of CO 2e ) Estimation of emission reductions (tonnes of CO 2e ) 1 10,794 37, , ,686 37, , ,471 36, , ,313 35, , ,076 35, , ,947 34, , ,503 33, ,644 Total 71, , ,620 B.7 Application of a monitoring methodology and description of the monitoring plan: The project activity applies the approved monitoring methodologies of AMS III.H and AMS I.D for discussion of applicability of these methodologies please see section B.2 of this document. Details of the monitoring approaches are provided in the following sections. B.7.1 Data and parameters monitored: Data / Parameter: wch 4,y (ID 1) Data unit: % Description: Fraction of methane in the biogas in the year y Source of data to be To be monitored. used: Value of data Approximately 60% (ex-ante estimate) Description of measurement methods and procedures to be The methane fraction will be measured using an electronic gas analyzer which analyses works with an accuracy of 97%. The monitored data will be saved digitally in the computerized monitoring system. applied: 22

23 QA/QC procedures to be applied: Any comment: - Manufacturer: Sewerin Model: SR2-DO Type: Off line portable. Accuracy: +/- 3% in CO 2, CH 4 (thermal conductivity sensors) and H 2 S (electrochemical sensor). The sensors work independent of temperature. Monitoring interval: for operation purposes: every day; for CDM requirements: once per month. QA: The device will be recalibrated according to the instructions (schedules, procedures) for QA of the technology provider. QC: There will be strict compliance to maintenance schedule recommended by the technology provider. The meters must be sealed after checking. Data / Parameter: BG_GEN,y (ID 2) Data unit: Nm 3 Description: Amount of biogas that is utilized in the engine-generator Source of data to be Monitoring System used: Value of data Description of measurement methods and procedures to be applied: QA/QC procedures to be applied: Any comment: - To be monitored Biogas quantities will measured with mass flow meters with an inaccuracy of 1% of the reading + 0.5% of the calibrated full scale. Manufacturer: Magnetrol Model: TA2 for Digester GAS (Biogas) Type: On line (Thermal dispersion sensor) Accuracy: 1% of the reading + 0.5% of the calibrated full scale. Monitoring interval: 30 S. in PLC. (Instant Flow and cumulated). QA: The monitoring device will be recalibrated according to the instructions (schedules, procedures) for QA of the technology provider. A cross-check of the sum of all flow meters will be made with the capacity of the blowers, installed at the capture facility. If significant deviations are observed, an explanation for this will be defined immediately and if necessary recalibration will be considered at more frequent intervals. QC: There will be strict compliance to maintenance schedule recommended by the technology provider. To ensure quality on the operation of the automated system control, regular maintenance is performed. Data / Parameter: BG_Fl,y (ID 3) Data unit: Nm 3 Description: Amount of biogas that is utilized in the emergency flare Source of data to be Monitoring System used: Value of data Description of measurement methods and procedures to be To be monitored Biogas quantities will measured with mass flow meters with an inaccuracy of 1% of the reading + 0.5% of the calibrated full scale. Manufacturer: Magnetrol 23

24 applied: QA/QC procedures to be applied: Any comment: Model: TA2 for Digester GAS (Biogas) Type: On line (Thermal dispersion sensor) Accuracy: 1% of the reading + 0.5% of the calibrated full scale. Monitoring interval: 30 S. in PLC. (Instant Flow and cumulated). QA: The monitoring device will be recalibrated according to the instructions (schedules, procedures) for QA of the technology provider. A cross check of the sum of all flow meters will be made with the capacity of the blowers, installed at the capture facility. If significant deviations are observed, an explanation for this will be defined immediately and if necessary recalibration will be considered at more frequent intervals. QC: There will be strict compliance to maintenance schedule recommended by the technology provider. To ensure quality on the operation of the automated system control, regular maintenance is performed. Please see comment on BG_GEN,y. Data / Parameter: EC_BGS y (ID 4) Data unit: MWh/year Description: Electricity consumption of the biogas recovery equipment in year "y" Source of data to be Monitoring system used: Value of data Approximately 273 MWh/yr (ex-ante estimate) Description of measurement methods The electricity consumption is measured with an accuracy of 99.5%. The data will be stored in the monitoring system. and procedures to be applied: QA/QC procedures to be applied: Any comment: - QA: Initial calibration of the meter is achieved in the labs of the national grid company. QC: The verification and calibration of the meter is routinely performed by technicians from the national grid company. Data / Parameter: EGy (ID 5) Data unit: MWh/yr Description: Net electricity production by the biogas component of the project activity Source of data to be Monitoring system used: Value of data To be monitored. Description of measurement methods The electricity consumption is measured with an accuracy of 99.5%. The data will be stored in the monitoring system. and procedures to be applied: QA/QC procedures to be applied: Any comment: - QA: Initial calibration of the meter is achieved in the labs of the national grid company. QC: The verification and calibration of the meter is routinely performed by technicians from the national grid company. 24

25 Data / Parameter: Sl y (ID 6) Data unit: m 3 /yr Description: End use of the final sludge in year "y" Source of data to be Monitoring System used: Value of data - Description of measurement methods and procedures to be applied: Sludge removed from the system will directly be applied as fertilizer to the surrounding land. This procedure will be recorded by the responsible persons and the information will be included in the monitoring system. Unexpected deviations from this procedure will be recorded and reported as well. QA/QC procedures to - be applied: Any comment: - Data / Parameter: DOC y,s,untreated (ID 7) Data unit: Kg/m 3 Description: Degradable organic content of the untreated sludge generated in the year y. Source of data used: External analysis (lab test) Value applied: Justification of the choice of data or description of measurement methods and procedures actually applied : To be monitored. The parameter will be measured by sampling and analysis of the sludge produced through an external laboratory on a quarterly basis. QA/QC procedures to QS/QA of external laboratory. be applied: Any comment: - B.7.2 Description of the monitoring plan: Emission reductions will be determined by quantifying the amount of methane destroyed and the amount of electricity generated: 1. Methane capture: According to para 26 of AMS III.H which is relevant for baseline option iv) the calculation of emission reductions shall be based on the amount of methane recovered and fuelled or flared, that is monitored ex-post. Also for these cases, the project emissions and leakage will be deducted from the emission reductions calculated from the methane recovered and combusted, except where it can be demonstrated that the technology implemented does not increase the amount of methane produced per unit of COD removed, compared with the technology used in the baseline. In fact, the project activity will not increase the amount of COD removed, because it will simply capture the methane that is released from the wastewater, but it will not enforce the anaerobic processes (as for example in a closed digester). Hence, project emissions regarding methane emissions from wastewater and leakage do not have to be deducted from captured and fuelled/flared methane. 25

26 In summary, emission reductions are calculated as: ER ww,y = w CH4,y * BG_GEN y + w CH4,y * η Flare * BG_Fl, y EC_BGS y * CEF All parameters are defined in section B Renewable electricity generation: Emission reductions due to the replacement of grid supplied electricity will be determined by multiplying the net electricity generation of the biogas system with the grid emissions factor: ER BG,y = EG y * CEF All parameters are defined in sections B.7.1 and B.6.2. of this document. Total emission reductions of the project activity will be determined ex-post by summing up emission reductions from the two components: ER Project, y = ER ww, y + ER BG, y A summary of measurement points of the monitoring plan is given in Figure 3. Project boundary Discharge to river Soil application 3 Emergency flare Water 6; 7 Sludge Post-treatment system Biogas 1 2 Enginegenerator 5 Electricity Electricity grid 4 Lagoon system and biogas collection Electricity Pre-treatment system Wastewater Palm Oil Production Figure 3: Summary of monitoring plan 26

27 Exportadora del Atlantico, the project owner, hired Biotec to operate the biogas plant. Biotech has got the monitoring responsibilities for three years. During this period all data of process will be recorded by a Scada system and stored on a hard disk with a redundant copy on a global database located in the main office (Cali, Colombia). Biotec has developed a training school to provide training to its personnel. Operators has been receiving training in biogas and generating system operation. Also, training in instrumentation and monitoring system has been provided through Biotec experienced engineers. The plant chief performs daily monitoring and control of operating procedures, data collection and daily reports. In addition, the monitoring system can be displayed by Biotec experts anywhere (remote supervision). Biotec performs internal audits each three months through experienced engineers coming regularly from the main engineering office. All data gathered and a description of measures that constitute the monitoring plan will be kept by the management for at least two years after the crediting period, permitting any future auditing of the values. B.8 Date of completion of the application of the baseline and monitoring methodology and the name of the responsible person(s)/entity(ies) The baseline and the monitoring methodology have been prepared by Perspectives GmbH, Germany. Completion date of baseline: 16/12/2007 Company name: Perspectives GmbH Address: Sonnenredder Hamburg, Germany Contact person: Ms. Sonja Butzengeiger-Geyer Telephone number: Fax number: info@perspectives.cc Perspectives GmbH is a not project participant, but the CDM consultant. SECTION C. Duration of the project activity / crediting period C.1 Duration of the project activity: C.1.1. Starting date of the project activity: Start of construction is planned for late spring 2008 Operation is scheduled to start in December 2008 C.1.2. Expected operational lifetime of the project activity: 15 years, 0 months 27

28 C.2 Choice of the crediting period and related information: 7 years C.2.1. Renewable crediting period C st January 2009 Starting date of the first crediting period: 7 years C Length of the first crediting period: C.2.2. Fixed crediting period: C This section does not apply. C This section does not apply. Starting date: Length: SECTION D. Environmental impacts D.1. If required by the host Party, documentation on the analysis of the environmental impacts of the project activity: According to Honduran law, no Environmental Impact Assessment needs to be conducted for this installation. However, an environmental licence needs to be obtained. Exportadora del Atlantico has applied for such in late November D.2. If environmental impacts are considered significant by the project participants or the host Party, please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party: As described in section A.2 of this document, the operation of the new wastewater treatment system will not impact the environment negatively, but will improve the quality of discharged water (COD-load and other parameters, see section A.2). SECTION E. Stakeholders comments >> E.1. Brief description how comments by local stakeholders have been invited and compiled: The planned CDM project activity has been announced to the public by: Advertisements in local/regional newspapers and potentially other relevant information channels to inform about the projects; and 28

29 Personal information of important stakeholders such as local policy makers and local/regional/national environmental (and other) NGOs in writing. The announcements have informed the public of the outlines of the project, including its location and purpose, its technical feature, as well as its CDM component. In addition, the public has been invited to comment on the project directly, through electronic mails, regular mails or phone calls. Finally, the public has been invited to attend the public meeting, which will be held at the project site in January E.2. Summary of the comments received: Comments have not yet been received. E.3. Report on how due account was taken of any comments received: Not yet applicable. 29