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Reports of New Mechanisms Feasibility Studies: FY2011

Title of Feasibility Study (FS)New Mechanism Feasibility Study for Energy Saving at Buildings by Utilising Geothermal Heat Pump and Other Technologies in Mongolia
FYFY 2011
Main Implementing EntityShimizu Corporation
FS PartnersNational Renewable Energy Center, Sumitomo Mitsui Banking Corporation, Polytech Add, Inc., and Asano Taiseikiso Engineering Co.,Ltd.
Location of Project ActivityMongolia
Category of Project ActivityEnergy Efficiency
Summary of FS ReportPDF (673KB)
Description of Project/ ActivityThis project aims at energy saving at public buildings of local cities in Mongolia. To be specific, introduction of geothermal heat pump is envisaged (as option 1). In addition to option 1, for the purpose of offsetting emissions from electric power consumed by the heat pump, introduction of solar power generation plant is also envisaged (as option 2).
Reference Scenario and Project/ Activity BoundaryReference scenario is determined through scenario analysis. To be specific, the reference scenario is continuing usage of present low efficient (efficiency is 40%) coal fired boilers. Project boundary includes emissions from each public building and emissions from thermal power plants of the grid. No leakage is envisaged.
Monitoring Methods and PlanThere will be so many project sites that it is necessary to simplify monitoring plan. 4 monitoring plans, including one that is as strict as that for CDM and other simplified three plans, are proposed. Simplified ones can dramatically reduce time and effort of monitoring by applying degree-day theory.
GHG Emissions and ReductionsIf this project is applied to all the local public buildings in Mongolia, emissions of 113 thousands tonCO2/year can be reduced in case of option 1, and emissions of 242 thousands tonCO2/year can be reduced in case of option 2.
MRV System for GHG ReductionsInternationally standardized ISO is the most appropriate MRV system to be applied to BOCM. To be specific, PDD that describes reference scenario, monitoring plan, and calculation formula for emission reduction shall be validated by an auditor and the project shall be registered. After implementing the project, monitoring shall be conducted based on the PDD, monitoring report shall be verified by an auditor, and then credits will be issued. An independent entity organized by Mongolia and Japan will register projects and issue credits. The independent entity will approve methodologies, provide a positive list, provide a validation/verification protocol in collaboration with auditors, and be responsible for preventing issuing credit that results in double counting.
Analysis of Environmental, Socioeconomic and other Impacts (including Securement of Environmental Integrity)Noise, vibration, leakage of refrigerant, and leakage of antifreeze liquids are envisaged as negative environmental impacts. Those impacts can be minimized when planning a project.
Financial PlanningEven in case of option 2, payback period for the initial investment cost will be over one hundred years according to the analysis based on the current economic situation. Therefore, it is difficult to finance this project by commercial loan. This is because coal price in Mongolia is very low compared with international price. This means that virtual subsidy is granted in energy sector. Therefore subsidization by the Government of Mongolia is crucial for implementation of this project. Soft loan such as Yen Loan financed by JICA and Asian Clean Energy Fund financed by ADB will be available as the finance source of this project.
Introduction of Japanese TechnologyJapanese technologies such as heat pump, solar power panel, and power conditioner for grid connection are likely to be introduced. In particular, a Japanese affiliated company named Sankou Solar Mongolia has a factory that produces solar power modules, which is expected to contribute to this project.
(i.e. Improvement of Local Environmental Problems)
Emission reduction of air pollutants is envisaged as a co-benefit effect of this project. Based on emission factor published by World Bank, emission reduction of PM2.5, PM10, SO2 is quantified.
Contribution to Sustainable Development in Host CountryIt is stipulated to gradually implement goal in increasing percentage share of renewable energy production and reach 3-5 percent share in the national energy by the year 2010, 20-25 percent share by 2020 in National Renewable Energy Program. Also it is stipulated to exploit solar, geothermal energies in heating of houses and hot water supply in National Action Program on Climate Change. This Project will contribute to achieve the above mentioned goal and implement the program.

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