Second Regional Workshop on Capacity Development for the Clean Development Mechanism

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Second Regional Workshop on Capacity Development
for the Clean Development Mechanism 23 March
2004 Siem Reap, Cambodia GHG Mitigation and CDM
Project Pipeline in Cambodia Presented by Thy
SUM, Climate Change Office Ministry of
Environment, Cambodia
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Outline

1. Cambodias National GHG Inventory
2. GHG Mitigation Analysis
3. PIN Angkor Prosperous Rice Mill
4. PIN Koh Kong Mini-Hydro Bundling
5. Summary

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I. Cambodias National GHG Inventory (1)

• Base year (1994)
• Based on the Revised 1996 IPCC Guidelines
• Activity Data some are available from concerned
  ministries/agencies
• Emission Factors default data presented in the
  IPCC Guidelines were used mainly
• Greenhouse gases (GHGs) carbon dioxide (CO2),
  methane (CH4) and nitrous oxide (N2O)
• Major sectors Energy, Industrial Processes,
  Agriculture, Waste, and LUCF.

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I. Cmbodias National GHG Inventory (2)
Summary of 1994 GHG inventory
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I. Cambodias National GHG Inventory (3)
Figure 1 Share of the Three Main GHGs (b) Total
CO2 Equivalent Emissions by Sectors
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I. Cambodias National GHG Inventory (4)
Cambodias GHG key source categories (excluding
LULUCF)
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II. GHG Mitigation Analysis (1)
Energy Sector

• Option studied
• Combined cycle gas turbine
• Hydropower
• Phnom Penh city shuttles
• Improve cook stove
• Compact fluorescent
• Mass transit for rural areas
• These options were assessed by government staff
  conducting the National Communication and not by
  project developers.

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II. GHG Mitigation Analysis (2)
Summary of GHG reduction (based on LEAP modeling)
Mitigation Option CO2-Eqv. Reduction (Gg) Reduction (CO2 Eqv.)
Combined Cycle Gas Turbine 19980 33.5
Improved Cook Stove 13060 21.9
Hydropower 12390 20.8
Compact Fluorescent Lamp 7320 12.3
Phnom Penh City Shutles 2300 3.8
Mass Transit (Rural) 4600 7.7
Total GHG Reduction 59650 100
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II. GHG Mitigation Analysis (3)
Forestry Sector

• In this study, mitigation options being
  evaluated were
• Forest protection (FP)
• Reforestation with sort rotation (RSR)
• Reforestation long rotation (RLR)
• Reforestation without rotation using fast (RFG)
  species, and
• Reforestation without rotation slow growing
  species (RLG)

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II. GHG Mitigation Analysis (4)
Comparison of the five mitigation options
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II. GHG Mitigation Analysis (5)

• Agriculture Sector
• The mitigation options evaluated for the
  agriculture sector only covered rice paddies
• Intermittent irrigation applied to dry season
  rice
• Direct seeded applied in both dry and wet
  seasons
• Organic matter management applied for both
  seasons and
• Zero tillage applied in both seasons.

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III. PIN Angkor Prosperous Rice Mill (1)
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III. PIN Angkor Prosperous Rice Mill (2)
Project Description
Objectives of the project Production of electricity and heat using rice husk for internal consumption by the mill
Project description and proposed activities 1.5 MWe rice husk fired cogeneration plant Replacement of currently used diesel generators
Technologies to be employed Traveling grate boiler with 75 rated efficiency Steam impulse turbines
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III. PIN Angkor Prosperous Rice Mill (3)
Project Developer Angkor Prosperous Rice Mill
Project Sponsors EC-Cogen 3 (15 discount from EC suppliers of equipment) Searching for other sponsors
Greenhouse gases targeted CO2 only. CH4 from burning of rice husk is not claimed.
Location of the projects Kandal Province, 23 km south of Phnom Penh
Expected Schedule Project start date Project lifetime ? 20 years
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III. PIN Angkor Prosperous Rice Mill(4)
Social and Environmental Benefits
Estimate of Greenhouse Gases abated (tons of CO2 equivalent) Annual 10.8 kT CO2e Over crediting period of 21 years 226 kT CO2e Calculations based on CO2 from biomass residues considered carbon neutral (IPCC) 12 GWh annual electric output of project 0.9 kg CO2e/kWh emission rate (diesel generation units displaced by project) (12 x 1000) MWh x 0.9 t CO2e/MWh 10.8 kT CO2e
Baseline scenario Replacement of in-house diesel generation units Difficulties in securing financing
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III. PIN Angkor Prosperous Rice Mill (5)
Specific global local environmental benefits greenhouse gas emission reductions sale of ashes as natural fertiliser
Socio-economic aspects Angkor Prosperous specialises in high quality organic rice varieties. The use of ashes as fertilisers within its network of organic farmers will contribute to increasing their productivity. Rice husk may be used as cooking fuel by rural people and cottage industries. There may be negative social impacts.
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III. PIN Angkor Prosperous Rice Mill (6)
Finance
Total project cost estimates US 4.1 million
Sources of financing EC rebate on European equipment (about US 300,000) some 90 not yet secured
Revenues from Certified Emission Reductions Annual Over 10 years Over 21 years US 54,000 (at US 5 per t CO2) US 540,000 US 1,134,000
Forecasted Financial Internal Rate of Return (without CER revenues Discount rate 15) Analysis undertaken by EC Cogen3 21.46
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IV. PIN Koh Kong Mini-Hydro Bundling (1)
Based on Projects identified in Mini-Hydropower
Study by Meritech Ltd
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IV. PIN Koh Kong Mini-Hydro Bundling (2)
Project Description
Objectives of the project Production of electricity from hydro resources in SW Cambodia to feed Phnom Penh electricity grid.
Project description and proposed activities Bundling 4 mini-hydro projects 12.3MW total installed capacity 4.2MW - P. Batau 3.1MW - O Sla 3MW P. Tunsang upstream 2MW downstream Generating 61.7GWh/an Located within 20km radius, feeding into existing 115kV transmission line Displacement of currently used oil and diesel electricity generation in Phnom Penh
Technologies to be employed Francis turbine generating units
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IV. PIN Koh Kong Mini-Hydro Bundling (3)
Project Developer Searching for Project Developer Pre-feasibility/investment study completed
Project Sponsors Searching for Project Sponsors
Greenhouse gases targeted CO2 only
Location of the projects Koh Kong Province (140KM SW Phnom Penh)
Expected Schedule Project start date Devel/Const Project lifetime ? 3 years 30 years
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IV. PIN Koh Kong Mini-Hydro Bundling (4)
Social and Environmental Benefits
Estimate of Greenhouse Gases abated (tons of CO2 equivalent) Annual 47.8 kT CO2e Over crediting period of 10 years 478 kT CO2e Over crediting period of 21 years 1,004 kT CO2e Calculations based on 61.7 GWh annual electric output of project .775 kg CO2e/kWh emission rate (weighted average emission factor of Phnom Penh electricity grid) (61.7 x 1000) MWh x .78 t CO2e/MWh 47.8 kTCO2e
Baseline scenario Small Scale Methodology weighted average emissions of Phnom Penh electricity grid. Barrier - Difficulties in attracting developers and financing
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IV. PIN Koh Kong Mini-Hydro Bundling (5)
Specific global local environmental benefits impacts greenhouse gas emission reductions reduction in air pollution from old fossil fuel generation units reduction in transportation fossil fuels small diversion of river changing flow regime located in areas of secondary forests within protected area
Socio-economic aspects reduction of fossil fuel imports provision electricity increase reliability and decrease cost (can improve health facilities, education, potential for improved industry development)
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IV. PIN Koh Kong Mini-Hydro Bundling (6)
Finance
Total project cost estimates Total US18.1m US6.0m P. Batau US3.4m O Sla US4.3m P. Tunsang upstream US4.4m P. Tunsang dnstream
Sources of financing Not yet secured
Revenues from CERs Annual Over 10 years Over 21 years US 239k (at US 5 per t CO2e) US 2.39m US 5m
Forecasted Financial Internal Rate of Return Discount rate 10 Analysis by Meritech Ltd 32.4 - P. Batau 27.7 - O Sla assumption based on MW cost for P.Batau
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V. Summary

• Cambodias GHG Inventory identified that LULUCF
  is the greatest contributor to the total GHG
  emission/uptake
• Of non-LULUCF sectors the main sources of GHGs
  are from agriculture, energy and waste activities
• Eligible CDM agriculture activities are difficult
  and not yet assessed for CDM potential
• Energy and waste projects more focus for CDM in
  Cambodia
• Limited investors and project developers for CDM
  limited identification of potential CDM projects
• Plenty of barriers to verify additionality!