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Reports of CDM/JI Feasibility Studies: FY2009

Title of Feasibility Study (FS)Feasibility Study regarding CDM Programme of Activities for Waste Heat Recovery and Utilization for Power Generation Project in Shanxi Province, China
FYFY 2009
Main Implementing EntityMizuho Information & Research Institute, Inc.
FS Partner(s)Mizuho Corporate Bank, Ltd.; and Kyushu Electric Power Co. Inc.
Location of Project ActivityChina (Shanxi Province)
Summary of FS ReportPDF (301KB)
Description of Project ActivityThis project is a Program of Activity to promote waste heat recovery for power generation to cement plants in Shanxi Province, China, at the initiative of Shanxi Building Material Industry Administration Office, a local private industrial group that administers cement plants in the region, functioning as the coordinating/managing entity.
Each CPA will be implemented in geographically distinct area of Shanxi Province. Each CPA will be implemented and managed in cement plants within the area, limited to the entities under administration of Shanxi Building Material Industry Administration Office, the coordinating/managing entity.
Shanxi Jigang Cement Co., Ltd., a CPA model site for this PoA, introduces 9 MW facilities in total for waste heat recovery and power generation in the one existing 2,500t/day line and another 2,500t/day line to be installed to generate electricity by approx. 53,000MWh/year, of which approx. 49,000MWh/year is expected to be supplied to cement plants. This will contribute to reduce purchase of electricity from a grid, and is expected to achieve CO2 reduction by approx. 44,000tCO2/year.
Targeted GHGCH4
Category of Project ActivityOthers (Waste Heat Recovery)
CDM/JICDM
Duration of Project Activity/ Crediting Period<POA>
    Duration of Project Activity: 1/1/2011 – 31/12/2038 (28 years)
<CPA (Shanxi Jigang Cement)>
    • Duration of Project Activity: 1/1/2011 – 31/12/2031 (21 years)
    • Crediting period: 1/1/2011 - 31/12/2020 (10 years), or for 10 years starting from the registration date, whichever is later.
Methodology to be appliedACM0012
Baseline ScenarioWith regard to waste heat to be utilized in the cement waste heat recovery power generation project, among realistic and plausible options provided in ACM0012 Version 3.2, the following W1 (W2) is close to actual situation in Shanxi Province and therefore is assumed as the baseline.
  • W1: WECM (Waste Energy Carrying Medium) is directly vented to atmosphere without incineration or waste heat is released to the atmosphere or waste pressure energy is not utilized.
  • W2: WECM is released to the atmosphere after incineration or waste heat is released to the atmosphere (waste pressure energy is not utilized).
In the meantime, electricity consumption in the baseline assumes P6 which reflects actual situation of the project region. This project activity is not attractive for operators without profits from CDM, and P1 is excluded from the baseline.
  • P1: Proposed project activity not undertaken as a CDM project activity
  • P6: Sourced Grid-connected power plants
Demonstration of AdditionalityAs a result of calculation, IRR for CPA in case of without revenue from CER is at 6.50%, lower than the benchmark in China (11%), which is improved to 11.44% taking into consideration CER revenue. One of the reasons is, in Shanxi Province, that the sales price of electricity from waste heat recovery to the power grid is set at a lower level due to the excess-supply of electricity.
Estimation of GHG Emission ReductionsEstimated GHG emission reduction: 43,697tCO2/year
    *This project is assumed to be implemented as a PoA: up to approx. 1.6MtCO2/year can be expected if accumulating .emission reduction potentials of all CPA candidates.
Monitoring PlanMonitoring plan as the PoA:
    Each CPA implements monitoring in accordance with the monitoring methodology ACM0012 Ver. 3.2, with giving cross-checking on validity of data, and report the data to the coordinating/managing entity on a regular basis.
    Coordinating/managing entity prepares a monitoring report that integrates all CPA under the PoA, allowing DoE to verify each CPA.
Monitoring plan as CPA:
    The main item to be monitored in this project is power generation. Three electricity meters are collocated according to the "Technique Management Regulation of Power Measure Equipment" (DL/T448-2000) for measurement of power generation: power generation (M1), in-house power consumption (M2) and power supply (M3). As subtracting M2 (in-house power consumption) from M1 (power generation) equals M3 (power supply), the values of M1 and M2 function for cross-checking.
Environmental Impact AnalysisEnvironmental impact analysis in CPA is implemented in accordance with the standards such as "Environmental Quality Standard for Air" (GB3095-1996) and "Emission Standard of Air Pollutants for Cement Industry" (GB4915-2004), all of which satisfy conditions given in the standards.
Project FeasibilityShanxi Jigang Cement, a CPA model site, expressed its intention to promote this project on commercial basis if it has high potential to be registered as a PoA, taking into consideration the result of this study.
On the other hand, it is also the fact in Shanxi Province where electricity is in excess supply that the power grid has no desire for any power generated from recovered waste heat and that they are often back away from proceeding negotiations to sign a contract. Completion of such sales/purchase contract at an early stage is a need to make progress of this project on commercial basis.
Moreover, considering discussions in the CDM EB, seeking registration as small-scale CDM (e.g., below 2,500t/day) can be another option to ensure the CDM status, although project IRR is lowered in general.
Pollutants Emissions ReductionIn this co-benefit evaluation, as with the case of CO2 emission reduction, emission factors of SO2 and NOx in power plant are estimated to calculate reductions of air pollutant emissions by using electricity generated from recovered waste heat. The external environmental costs of these reductions calculated by using LIME’s conversion factors, the results are 122 million yen/year for SO2, 13 million yen/year for NOx, and 76 million yen/year for CO2. With environmental costs from reducing SO2 and NOx, the total cost becomes three times of external cost of CO2 only. The effect of reducing SO2 is large especially in Shanxi Province where coal is consumed heavily.

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