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Reports of New Mechanisms Feasibility Studies: FY2011

Title of Feasibility Study (FS)New Mechanism Feasibility Study for Electric Generation based on Low-Level Coal Mine Methane and Integrated Energy Efficiency Improvement in Yunnan Province, China
FYFY 2011
Main Implementing EntityTepia Corporation Japan
FS PartnerYunnan Sun Valley Energy Conservation Industry Development Co., Ltd.
Location of Project ActivityChina
Category of Project ActivityOthers
Summary of FS ReportPDF (425KB)
Description of Project/ ActivityThe project aims to improve the comprehensive energy efficiency at Bailongshan coal mine located in Yunnan province, China through generating electric power with methane gas, saving power consumption of electrical equipment with inverter and reducing the power loss at transformer substation with SVC. As to implement the project, reference and MRV methodology is developed under Bilateral Offset Credit Mechanism (hereafter referred to as BOCM) for creating the projects in Yunnan province, China.
Reference Scenario and Project/ Activity BoundaryReference Scenario:
For obtaining a realistic and appropriate reference scenario, social and economic circumstances should be reconsidered every year as situations around the projects changing so rapidly in the host party, China. The reference scenario is determined based on the policies and regulations related to the project, common technologies in China and common practices in other coal mines following to the new methodology; those circumstances shall be monitored as well as the project emission after implementing the project.

Project Boundary:
The project scheme includes the methane destruction for power generation, power saving of electric equipment and reduction of power loss at transformer substation therefore, the physical extent of project boundary is specified as 1.area from the methane extracted to destroyed, 2.all facilities which generate electric power and originally supply the power to the project site and 3.electric equipment which inverters installed to and output range of transformer substation. The GHG included in the project boundary is CH4 and CO2.
Monitoring Methods and PlanAfter implementing the project, monitoring activity is taken for not only determining the project emission but also specifying the reference scenario in the year. As to specifying the reference scenario, political situation and common practice around the project site is monitored; therefore the monitoring activity of the project requires the cooperation from the government in the host party under BOCM.
GHG Emissions and ReductionsThe GHG emission under the reference scenario is determined flexibly every year. The crediting period of the project is set whichever shorter the project lifetime or the period by the reference and the project scenarios will be the same. As to the project the crediting period is considered as 19 years since the reference and the project emissions will be the same in the 20th year after implementing the project. The total reference emission, project emission and emission reduction during the crediting period is estimated as follows;
  • Reference emission: 6,575,018tCO2e
  • Project emission: 2,823,031tCO2e
  • Emission reduction: 3,751,986tCO2eGHG emission reductions: 1,836,094 to 3,081,000 tCO2 (10 years)
MRV System for GHG ReductionsThe MRV system is designed as follows;

The parameters (e.g. amount and density of methane gas, electricity consumed and so on) to estimate the emission reduction are measured through the electric meters. As to the other values like emission factor of local grid are applied for the default values used under Kyoto mechanism or designed by IPCC.

The measurement result is reported to a verification institute and the related bodies both in Japan and China. The result is better to be submitted through a platform at fixed period every year.

The result reported shall be verified by a verification institute entrusted by both Japanese and Chinese governments; in addition both the measurement result and its verification result should be opened to public.
Analysis of Environmental, Socioeconomic and other Impacts (including Securement of Environmental Integrity)No additional negative impacts on local environment, society and economy are considered after implementing the project. Furthermore the local government in Yunnan province also concluded that the project contributes to the emission reduction of pollutants and energy saving in the region.
Financial PlanningThe project requires 140 million RMB initial investment; the project IRRs with and without BOCM credits revenue are 26.98% and 13.14% and its payback periods are 3 and 7 years respectively.
Introduction of Japanese TechnologyThroughout this survey, although the Japanese technology is more expensive than the common technology in China, it is concluded that the Japanese technology is superior to those in China because of its performance and quality; thus introduction of the Japanese technology is very realistic with credit income under BOCM.
(i.e. Improvement of Local Environmental Problems)
As implementing the project, the part of electricity originally supplied from the coal dominant grid is replaced. Accordingly the considerable amount of SOx, NOx and dust emission are reduced. The estimated emission reductions of those 3 pollutants are 285,654kg, 503,056kg and 273,015kg respectively.
Contribution to Sustainable Development in Host CountryThe implementation of the project contributes to the sustainable development in China from the following aspects; contributing to the power shortage, securing the safety of mining operation and creating the job opportunities.

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