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Reports of CDM/JI Feasibility Studies: FY2009

Title of Feasibility Study (FS)CDM Feasibility Study for Power Generation using Waste Banana in the Philippines
FYFY 2009
Main Implementing EntityEJ Business Partners Co., Ltd.
FS Partner(s)Celebrate Life Agriventure Philippines Inc.; and Foundation for Agrarian Reform Cooperatives in Mindanao, Inc.(FARMCOOP)
Location of Project ActivityPhilippines (Mindanao Island)
Summary of FS ReportPDF (466KB)
Description of Project ActivityThe Project is a power generation project using waste banana stalks instead of the existing fossil fuel. The Foundation for Agrarian Reform Cooperatives in Mindanao Inc. (FARMCOOP) is composed of banana farmers in Davao del Norte, Southeast Mindanao. The banana stalks, after harvesting the fruits are discarded from the packing houses of the FARMCOOP member farms. The stalks are dumped at open disposal sites in the farms. In this project, the banana stalks will be used as methane fermentation materials and the methane gas produced will be used for power generation. The power generation capacity is about 1MW.
Targeted GHGCO2, CH4
Category of Project ActivityBiomass Utilisation
CDM/JICDM
Duration of Project Activity/ Crediting Period2012–2021/ 2012-2021
Methodology to be appliedIn this project, the banana stalks that are used to be dumped in the open will be effectively fermented to produce methane gas for power generation to be supplied to public grid. The AMS-I.D. (Grid connected renewable electricity generation) and the AMS-III.E. (Avoidance of methane production from decay of biomass through controlled combustion and gasification or mechanical/thermal treatment) will be applied in this project activity.
Since the quantity of emission reduction of this project is less than 60,000tCO2/year, this project is classified as a small-scale CDM project.
Baseline ScenarioNow, all waste banana stalk generated from the packing houses, has been dumped in the open at the farms and the electric power for packing houses is sourced from the public grid.
The baseline scenario is the methane produced from the decay of banana stalks openly dumped at the farms is released into the atmosphere and the packing houses utilize alternative grid power consumption being supplied from this project. In the project scenario, decay of these banana stalks is avoided, electricity is supplied to the public grid and the fossil fuel consumption is reduced.
In the Philippines, there is no case of effective utilization of waste banana stalks and open dumping in the farms is the general disposal method for waste banana stalks. Therefore, it could be considered that setup of the baseline is valid.
Demonstration of AdditionalityThis project is classified into small-scale CDM. To demonstrate its additionality, it needs to hurdle at least one barrier relevant to project implementation. Since the power generation project (CDM project) using waste banana stalk is a pioneering project in the Philippines, the technological barrier and the common practice barrier exist. In the economical efficiency analysis of this project, IRR without CERs profit on sale is estimated at 8.7%, on the other hand, IRR with CERs profit on sale at 10 U.S. dollars/tCO2 is estimated at 11.4%. The investment benchmark for this project is determined to be more than IRR 9.8%, based on the long-term interest rate of the Development Bank of the Philippines. Since IRR (8.1%) without CERs profit on the sale is less than the benchmark, the feasibility of this project is judged to be low if this is not a CDM project. As mentioned above, since it is proven that the technological barrier, the common practice barrier and the investment barrier exist, the additionality of this project is proven.
Estimation of GHG Emission Reductions9,044tCO2/year
Monitoring PlanIn this project, parameters required for verification of the amount of emission reduction are monitored based on the AMS-I.D. and the AMS-III.E.
In monitoring, those values are measured by instrumentation apparatus on the basis of directly measuring the consumption amount of waste banana stalks and production of electricity in each part of the power generation plant and the dynamo, etc.
Environmental Impact AnalysisAs an environmental impact of the project implementation, the air pollution coming from the exhaust gas of the engine, plant noise and the dust at the time of construction, etc. can be considered. However, these influences can be minimized by doing high level exhaust management and operation and maintenance of suitable apparatus.
In addition, according to the standard procedure concerning the environmental impact, this project is classified Non-Coverage of EIA procedure.
Project FeasibilityFor the commercialization of this project, the technical implementability must be high in order to introduce the methane fermentation technology which has many services overseas (especially Europe). The economical implementability should also be high in order that the economical efficiency of this project will exceed the benchmark. In the future, it is necessary to raise economical efficiency by improving the collection efficiency, reduction of the initial investment and operation and maintenance expenses, negotiation of higher electricity-sales-to-utilities price, etc.
Pollutants Emissions ReductionThis project is a power generation project using banana stalks from agricultural waste. Implementation of the project contributes to sanitary improvement, pollution control of groundwater, reduction of the amount of waste and antipollution measures, such as bad smell prevention by decay.
Contribution to Sustainable Development in Host CountryUsing not only the waste banana stalks but substandard banana fruits sold cheaply now, leads to stabilization of the selling price and contributes to the sustainable development of the host country.
The same contribution to sustainable development was also conceived in rice husk power generation project in Isabela that Japan Engineering Consultants Co., Ltd. (Predecessor concern of EJBP) had conducted CDM/JI feasibility study of Global Environment Centre Foundation last fiscal year. The project that will effectively utilize the no cost waste will contribute to the stabilization of the local farmers’ income. Such a contribution to regional economy would be highly regarded by the Department of Environment and Natural Resources (DENR).

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