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Reports of CDM/JI Feasibility Studies: FY2004

Title of the researchFeasibility Study on the Rice Husk-Fired Cogeneration Project at the Angkor Rice Mill in Cambodia
FYFY 2004
Main research organizationMitsubishi Securities Co., Ltd.
Research partner(s)Angkor Bio Cogen Co., Ltd. (ABC)
Location of the projectAngsnul Village, Kandal Province, Cambodia
Summary of the research report (PDF)200414.pdf(39kb)
Description of the projectIn this project, ABC will construct a rice husk-fired cogeneration plant adjacent to the Angkor Rice Mill (Angkor Kasekam Roongroeung Co., Ltd.: AKR), the largest rice mill of fragrant rice in Cambodia. The electricity generated will be sold to AKR to meet its in-house needs, displacing its own diesel-fired plant. The Project will also avoid the generation of methane gas being emitted to the atmosphere through decaying rice husk left outdoors; a common practice in Cambodia. The steam generated by the Project will be used at AKR for the drying process of rice, however, as the rice is currently being dried naturally, the use of steam will not result in any emissions reduction.
GHGCH4, CO2
Sector of the projectBiomass Utilisation
CDM/JICDM
Duration of the project activity/ crediting periodCrediting Period: 7 years (2007~2013 with possibility of renewal)
Baseline methodology/additionalityThe baseline emissions for electricity generation by diesel fuel are 9,088 tCO2/year, calculated based on Type I.A. of Appendix B of the simplified modalities and procedures for small-scale CDM activities. The baseline emissions for avoidance of methane from decaying rice husk are 33,810 tCO2/year, calculated using Type III.E. of the Appendix B, based on the methane emission factor of 0.0616 tonne per tonne of rice husk and the annual quantity of rice husk handled in the project which is 26,136 tonnes. In total, baseline emissions are 42,898 tCO2/year.

The baseline scenario has been determined as such that rice husk is piled up until it is naturally decomposed based on the general rice husk handling in Cambodia while open burning is not a realistic option. Implementing the Project without CDM approval is not the baseline due to the presence of technological barrier and barrier due to prevailing practice. Through these barriers, additionality of the Project is claimed.
Estimation of GHG emissionsGHG emissions reduction is estimated at 39,981 tCO2/year, the difference between the baseline emissions and project emissions of 2,197 tCO2/year.
Monitoring methodologyThe data to be monitored are as follows. Item 1 will be monitored according to Type I.A. of Appendix B while Item 2 will be monitored according to Type III.E. of Appendix B. Item 3 will be monitored voluntarily from the quality control perspective. Item 2 and Item 3 will be used to calculate project emissions according to the
formula provided by Item 5 of Type III.E.
1. Amount of electricity generated (MWh)
2. Amount of rice husk used as fuel (tonne)
3. Energy content of rice husk (TJ/tonne)

According to Item 4 of Type III.E, Appendix B, monitoring will not be conducted to account for leakage.
Environmental impactEnvironmental impact assessment (EIA) is not required as the generation capacity of the Project is below 5 MW where anything above this level is subject to EIA in Cambodia. The Project is not considered to pose any negative impact on the environment.
Stakeholder comments were collected through a hearing session held on September 2004 where 22 people consisting of rice mill workers, neighbouring villagers, etc. The Project was supported by everyone who attended the session.
Issues and tasks for project implementationThe total initial cost of the Project is estimated at 3.5 million USD. The cost benefit ratio is as follows.

3,463,800 (USD) 279,867(tCO2/7years)=12.4(USD/ tCO2

The cost benefit ratio is not attractive enough and needs to be improved by reconsideration of the initial investment cost.

By implementing the Project, ABC will be a pioneer in the renewable energy sector of Cambodia, however, by implementing a project in the sector that has been largely unknown in Cambodia, it will also undertake a high risk. The high country risk of Cambodia compared to other Southeast Asian countries is another discouraging factor for potential overseas investors. The Project IRR required for investment is 25% or higher, according to potential investors approached by ABC.

The Project IRR without CER revenue stands at 17.9%, significantly lower than the 25 % threshold. ABC hopes to increase the Project’s attractiveness by obtaining the CDM status to secure investment.
ValidationComments were given after the desk review conducted by the DOE selected for the Project, Det Norske Veritas Certification(DNV)based on the following.
  • Whether or not the project activity meets the requirements for CDM projects set forth in Article 12 of Kyoto Protocol and the requirements for small-scale CDM projects set forth in Clause 2.
  • Whether the PDD meets the requirements set forth in each section.
  • Points to be clarified during site visit.
Validation is conducted in the following steps. The Project has advanced to Step 5 of the following.
① Submission of draft PDD to DOE
② Receipt of the customized protocol as a result of the desk review
③ Site visit
④ Receipt of the feedback based on the site visit
⑤ Submission for revised PDD to DOE
⑥ Receipt of preliminary validation report from DOE
⑦ PDD is submitted for public comments on UNFCCC website

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