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Reports of CDM/JI Feasibility Studies: FY2007

Title of Feasibility Study (FS)Low Temperature Waste Heat Recovery and Utilization for Power Generation Project at Cement Industry in Jiangsu Province, China
FYFY 2007
Main Implementing EntityMizuho Information & Research Institute Inc.
FS Partner(s)Systech World Co., Ltd., Tongji University
Location of Project ActivityPeople’s Republic of China (Jiangsu Province)
Summary of FS ReportPDF (412KB)
Description of Project ActivityThe Project Activity is a low temperature waste heat recovery and utilization for power generation project located at Gaozi County of Zhenjiang in Jiangsu Province of the People’s Republic of China. The main objectives of the Project Activity are to meet the increasing electrical supply needs of the Project owner and to reduce greenhouse gas emissions through the recovery and use of low temperature waste heat from the kilns of the cement clinker production lines. The waste heat is currently vented to atmosphere but once captured can be used in a power generation plant. The system can reduce heat and powder pollution around the plant as well as bring great benefit to the enterprise. The Project Activity can help to recycle and reclaim waste heat strongly, improve efficiency and dedicate to “Green Consumption” of resources. The power generation plants will be respectively rated at 15MW, and will produce totally 98.14 million kWh of annual electricity generation with no significant associated emissions of CO2.
Targeted GHGCO2
Category of Project ActivityOthers (Waste Heat Recovery)
Duration of Project Activity/ Crediting Period1, Jan., 2009 – 31, Dec., 2018 / 1, Jan., 2009 – 31, Dec., 2012
Baseline Methodology/ AdditionalityThe Alternative scenario of continuance of the current situation to import electricity from East China power grid and to emit waste heat to the atmosphere can be taken as the proposed project’s baseline scenario.
A benchmark analysis (option III) was applied to analyze an additionality of this project and, with reference to Inform on Economic Assessment method and parameter of Construction Projects by SDPC and MOC, the financial benchmark rate of return (after tax) of Chinese building materials industries accounts for 12% of the total investment IRR. When there is no credit profit, IRR of this project has only 9.7% and cannot say economically preferable enough. However, if CDM is realized and CER is sold off, Project IRR will become 14 to 15%, and will serve as a sufficiently attractive investment as compared with the benchmark.
Estimation of GHG Emission ReductionsThe amounts of GHG reduction are annually about 80,000tCO2 to 90,000tCO2, and the estimation of total emission reductions during first commitment period will become 346,255tCO2e.
Monitoring MethodologyThis project is conducted on an Approved consolidated baseline and monitoring methodology “Consolidated baseline methodology for GHG emission reductions for waste gas or waste heat or waste pressure based energy system”(ACM0012 (version 02)), what also refers to the Approved consolidated baseline and monitoring methodology “Tool to calculate the emission factor for an electricity system” (Version 01, EB 35, Annex 12, 19 October 2007). The emissions from the Project Activity are due to the impact on the consumption of fossil fuel used to generate the required heat for the cement plant’s operation which will increase as a result of the Project. The parameters for calculating this change in fuel consumption are being monitored currently and a year’s worth of data will be available for each kiln connected to the Project Activity by the operation date of the Project when it is implemented.
Environmental Impact AnalysisThe two cement production lines have undergone and passed full Environmental Impact Assessments (EIA) in line with the requirements of the Chinese Government, which are available for the Validator to review. The Project Activity is an internal project to the company and is undergoing a separate EIA, which will be detailed in the final version of this PDD. However, in the interim, the Project Owners have established the assessment of the key environmental impacts for the Project Activity and these are supported by the Feasibility Study and other documents.
In summary the project is expected to have a net environmental benefit in addition to the greenhouse gas emissions reductions.
Issues and Tasks for Project RealisationThe gross investment of this project construction is US$12 million, and the company itself supplies it by investment and loan. Also we conclude that the financial result of Project Activity can be improved obviously by CERs and It is ascertained that the project activity would not have occurred in the absence of the CDM simply because no sufficient financial, policy, or other incentives exist locally to foster its development in China and without the proposed carbon financing for the project would not have taken the investment risks in order to implement the project activity.

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