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Reports of CDM/JI Feasibility Studies: FY2009

Title of Feasibility Study (FS)Programmatic CDM Feasibility Study on the Installation of Efficient Fluorescent Lamp Ballasts in Hanoi and Other Cities, Viet Nam
FYFY 2009
Main Implementing EntityCLEATH Co., Ltd.
FS Partner(s)Government of Hanoi; Hanoi Authority for Planning and Investment; Climate Experts, Ltd.; and PEAR Carbon Offset Initiative, Ltd
Location of Project ActivityViet Nam (Hanoi City, Ho Chi Minh City, and Danan City)
Summary of FS ReportPDF (2.7MB)
Description of Project ActivityThis Programmatic CDM project is to replace conventional ballasts of straight tube fluorescent lamps to efficient electronic ballasts (inverter type) in public facilities in Viet Nam including the cities of Hanoi, Ho Chi Minh and Danang with the aim to reduce CO2 emission as well as to save energy. This project is supported by Ministry of Natural Resources and Environment of Viet Nam and Hanoi City as a part of energy saving policies. A new factory is planned to be built to manufacture inverters used for the project in Hoa Lac High-Tech Park near Hanoi City as requested by the government of Viet Nam.
High efficient and energy saving electronic ballast is not prevalent in Viet Nam. Instead, cheap and energy consuming ballast and glow starter made by SINO (China) and Philips are widely used. This programme is to promote the switch to high performance and most advanced ballasts, without changing the whole lamp system. This programme is expected to reduce electricity consumption by 40%.
Also, this is one of the few technology transfer CDM projects aiming to transfer all the technology know-how to Viet Nam including part manufacturing, procurement and manufacturing, management, and installation.
As the first stage of the Programme of Activities (PoA), electronic ballasts will be installed to the existing fluorescent lamp systems in Hanoi City with the government of Hanoi City as the counterpart (Activity 1). The installation will be expanded in Ho Chi Minh City as the second stage, and in Danang City as the third stage. The outline of Activity 1 includes; project site is Hanoi University, UN registration by the end of 2010, full-scale installation from 2011, installation of 10 million units by the beginning of 2014 and annual greenhouse gas emission reduction of around 1million tCO2.
In Viet Nam, energy demand is rising with high economic growth. Electricity consumption increased from 25,851GWh in 2001 to 44,932GWh in 2005. Electricity of Viet Nam group estimates energy demand in 2010 will increase to 106,724GWh. The increase of electricity consumption triggers construction of new power plants, while containing problems of serious environmental pollution, depletion of natural gas and coal, posing a threat to sustainable development in Viet Nam.
Assuming the installation of 10 million ballasts by this project, annual energy saving will be about 1680GWh (estimation depending on preconditions), 400MW by simple calculation. Thus the programme may avoid installation of one large scale thermal power plant, which contributes to sustainable development in Viet Nam from the viewpoints of energy resource conservation and energy independence.
Targeted GHGCO2
Category of Project ActivityOthers (Energy Efficiency)
CDM/JICDM
Duration of Project Activity/ Crediting Period2010-2020/ 2011-2020
Methodology to be appliedAMS-II.C (Version 13) "Demand-side energy efficiency activities for specific technologies" is applied for the project.
In accordance of the methodology, the grid emission factor of Viet Nam is calculated based on AMS-I.D "Grid connected renewable electricity generation".
Baseline ScenarioFollowing scenarios are considered for identification of the baseline scenario for this PoA.
    A) Voluntary installation or replacement (in existing facilities) of the whole conventional fluorescent lamps to the same or better efficiency ones
    B) Voluntary replacement of only conventional electronic ballasts to efficient ones
    C) Continuation of the current situation to use conventional fluorescent lamps
The option C) is the most plausible scenario which does not have any technical or financial problems for the owner of the facility. Thus, the option C), Continuation of the current situation to use conventional fluorescent lamps, is the baseline scenario for each CPA of this PoA.
Demonstration of AdditionalityAdditionality of PoA will be fully explained by providing internal documents of CLEATH + the CER revenue-dependent business model. The subject will be CLEATH.
Additionality of CPA will be explained by examining the possibility to introduce electronic ballast other than the business model of CLEATH. The subject will be building owners. Currently it is not clear how to apply Prevailing Practice as a barrier, since guidance on first-of-this-kind is not provided from CDM Executive board. But related description is found in ACM0005 agreed in EB50 and guideline of barrier assessment was also released, so additionality is assumed to be clearly demonstrated especially in terms of accessibility. Necessary evidences are under preparation.
Estimation of GHG Emission Reductions853,200tCO2/year
Monitoring PlanEmission reductions = Grid emission factor x Σlighting hour x [(lamp wattage before the project) - (lamp wattage after the project)]
  • Grid emission factor (after correction of grid loss): to be determined in developing Design Documents
  • Wattage before/ after the project: to be determined by measuring in replacement. This value is included in inspection items in construction delivery.
  • Lighting hour: to be measured if possible (in the form of electricity consumption). If not, a sampling method will be applied.
Environmental Impact AnalysisIn this project, a new factory will be built in Hoa Lac Hi-Tec Park (HHTP). HHTP is supervised by Ministry of Science & Technology and managed by Hoa Lac Hi-Tec Park Management Board, which will provide government approval of EIA.
Project FeasibilityIn the case of the credit price of EUR9, IRR will be estimated at 4.2%. CLEATH plans to make an intermediate agreement with a buyer to receive around 90% of secondary CERs price and the amount of difference of ERPA agreement between seller and buyer as a reward.
Taking into account cooperation by Viet Nam counterparts and market environments (prevailing types of fluorescent lamps, local customize prospect of the product, amount of CERs), implementation potential is very high at this moment.
The project will be started, however, after the registration of the project is completed and the framework after 2013 is determined, since CER revenue is the only income source of this project. At the present stage, investment stance after 2013 of financing and business companies is obscure thus the final business implementation will be anticipated to be decided after the negotiation result of COP16.
Pollutants Emissions ReductionThe project (installation of electronic ballast) does not have direct negative impact on the environment at all, and Vietnamese laws and regulations do not require environmental impact assessment (EIA) for projects of this type. Although EIA is required on factory construction, since the factory is for assembly only and its structure is very simple, negative impact is anticipated to be nil.
Contribution to Sustainable Development in Host CountryAssuming the installation of 10 million ballasts by this project, annual energy saving will be about 1680GWh (estimation depending on preconditions), 400MW by simple calculation. Thus the programme may avoid installation of one large scale thermal power plant, which contributes to sustainable development in Viet Nam from the viewpoints of energy resource conservation and energy independence.

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