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Reports of CDM/JI Feasibility Studies: FY2007

Title of Feasibility Study (FS)Feasibility Study on Rural Electrification by Utilization of Biomass in Lao P.D.R
FYFY 2007
Main Implementing EntityThe Chugoku Electric Power Co., Inc.
FS Partner(s)SHIMIZU CORPORATION, Ministry of Energy and Mines, National University of Laos
Location of Project ActivityLao People’s Democratic Republic
Summary of FS ReportPDF (472KB)
Description of Project ActivityThe target country of Lao People's Democratic Republic (Laos), a landlocked country in Indochina, is classed as a least developed country (LDC). The Government of Laos has made it a top priority to “break away from least developed country status by 2020,” and as a concrete measure geared to realization of this goal, it is working on increasing the electrification rate from 48% at present to 70% by 2010 and 90% by 2020.
The project intends to promote rural electrification, which is one of the top priority development needs of Laos, through gasifying biomass made from agricultural waste in rural communities and utilizing oil obtained from jatropha, which grows naturally in Laos, as fuel in a diesel generator, and it targets a non-electrified village in Phiang district, Sayaburi prefecture as a pilot project.
In addition, it is intended to disseminate and extend the pilot project as a program (POA) to non-electrified areas comprising some 6,000 villages.
Targeted GHGCO2
Category of Project ActivityBiomass Utilisation
CDM/JICDM
Duration of Project Activity/ Crediting Period2007-2023/ 2010-2023
Baseline Methodology/ AdditionalityBaseline setting:
Since there is currently no separate scenario for the promotion of electrification in approximately 6,000 currently non-electrified villages, it was assumed that off-grid electrification utilizing diesel power generation is advanced in a scenario based on the electrification promotion policy for all of Laos (90% electrification by 2020).
Demonstration of additionality:
Concerning the IRR in the case where revenue cannot be anticipated from the sale of CERs (certified emission reductions), this is around 8% for the pilot project and a negative value for the extension program. Therefore, when the country risk, etc. is taken into account, the project is not attractive for investment and has a low feasibility for realization.
Estimation of GHG Emission ReductionsAssuming the conditions obtained from the study findings, as a result of calculating based on the small-scale CDM methodology AMS-I .A., GHG emission reductions in the pilot project are projected as 10,010t-CO2.
Monitoring MethodologyIn the project, the approved small-scale CDM methodology shall be applied as the monitoring methodology.
Environmental Impact AnalysisSince the project entails the utilization of biomass obtained from so far unused agricultural waste, etc. as energy for generators in rural communities in Laos, it has no environmental impact.
Based on environment-related systems in Laos, since this is a power generation project, an environmental assessment will be conducted based on the Environment Management Standard for Electricity Projects. Since the generation capacity of individual projects in the project is 100kW or less, it is sufficient to only submit a Project Description and not implement environmental impact assessment.
Issues and Tasks for Project RealisationThe project is a “Co-benefit CDM” aiming to promote rural electrification, which is a development need in Laos, through utilizing biomass made from agricultural waste in rural communities as the energy source for generators.
Individual projects (CPAs) only enable small GHG reductions and have little appeal as CDM projects, however, large GHG reductions can be obtained through disseminating and extending these activities as a program. In order to realize this, coordination will need to be advanced with related agencies such as the Water Resource and Environment Agency (WREA) while working on resolution of the following issues:
  • Risk concerning the purchase price of biomass fuel
  • Risk concerning fluctuations in the power sale price
  • Verification of the project technology
  • Promotion of CDM projects in Laos

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