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Preliminary findings of PDD– CDM model project for Thuduc fuel switching plant

Preliminary findings of PDD– CDM model project for Thuduc fuel switching plant. Master Nguyen Thi Kim Lien International Cooperation Department Ministry of Industry. Content. Background Thuduc CDM project and its fact-finding Evaluation by NEDO Conclusion.

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Preliminary findings of PDD– CDM model project for Thuduc fuel switching plant

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  1. Preliminary findings of PDD– CDM model project for Thuduc fuel switching plant Master Nguyen Thi Kim Lien International Cooperation Department Ministry of Industry CDM - PDD- Thu duc Plant Sep., 11, 2003

  2. Content • Background • Thuduc CDM project and its fact-finding • Evaluation by NEDO • Conclusion CDM - PDD- Thu duc Plant Sep., 11, 2003

  3. Project background:Energy demands • Energy consumption have stably increased at the rate of 13-14%/y • Additional increase 800MW/y • Power source configuration by capacity : - From oil: in 2001: 6.9%;in 2020: 0% - From gas: in 2001 : 28.2% In 2020: Gas & Diesel: 36.6% CDM - PDD- Thu duc Plant Sep., 11, 2003

  4. Project background Thu Duc Power Plant • - Is an important power source to supply electricity for Hochiminh City • The power plant consists of: - 03 heavy-oil-fired generator for base-load power (No. Unit: 33 MW; No.2 and 3 Unit: 66 MW) - 04 diesel oil fired gas turbines for peak load power (No.1 unit: 28 MW, No. 3: 22 MW; No, 4 and 5 units: 42 MW) Project: Model project for fuel switch of the heavy-oil-fired boiler CDM - PDD- Thu duc Plant Sep., 11, 2003

  5. Thu Duc Power Plant eligible for CDM project • Meet SDI criteria : GHG reduction • Additionality: without project activity, possibility of stopping of Unit 3 is extremely remote uncertain, most likely to be continued at leas for 10 other years. • On march, 2003, DNA has established at MONRE •  eligible forCDM project CDM - PDD- Thu duc Plant Sep., 11, 2003

  6. Thu Duc Power PlantPreparation for CDM project • Baseline study: • 8 scenarios have been selected based on number of assumptions • Project scenario: project implementation at time when the gaspipline be accessible. • Project major features: • Total investment: 8 Mil. USD • Credit period: CER from April, 2006 to April, 2016 • Total CO2 reduction: 825 000 T • Availability: 67% • Equivalent emission factor: 0.86 T-CO2/MWh CDM - PDD- Thu duc Plant Sep., 11, 2003

  7. Thu Duc Power Plant Scenario analysis • Scenario were evaluated on: • Legislation and institutions • Technological experiences • Economic efficiency • Market barriers • Environmental impacts • Fuel procurement • Comparison between scenario CDM - PDD- Thu duc Plant Sep., 11, 2003

  8. Monitoring and verification Plan • Monitoring plan: • Monitoring method for CO2 reduction calculation and control of monitoring devices • Monitoring SDI • Monitoring baseline adequacy • Calculation method for CO2 emission reduction • Make GHG Report CDM - PDD- Thu duc Plant Sep., 11, 2003

  9. Monitoring and verification Plan Verification plan: Internal audit: 1/y Confirm if monitoring is conducted in keeping with monitoring plan Verification Plan: Carried out by operational entity (third party): 1/y Purpose: Verification of monitoring results and activities to be comply with the requirements Kyoto protocol and host country Project operator should prepare material required by the verifier CDM - PDD- Thu duc Plant Sep., 11, 2003

  10. Potential benefits • GHG emission reduction on CO2 basis: • Annually: 68 300T/y • Total: 825 000 in 10 years • Emission reduction of other gases: • SOx: from 1600 ppm to 2 ppm • NOx: from 240 ppm to 200 ppm • Particle: from 150 mg/m3N to 0 mg/m3N CDM - PDD- Thu duc Plant Sep., 11, 2003

  11. Uncertainties • Technical risk and uncertainties: • change in yearly availability • change in fuel heat power • change in generation efficiency • Financial risk: • EVN vµ NEDO are both government agencies with sound financial states CDM - PDD- Thu duc Plant Sep., 11, 2003

  12. Monitoring and verification Plan • Economic risk and uncertainties: • change in activity level • change in gas price • Social risk and uncertainty • Environmental risk CDM - PDD- Thu duc Plant Sep., 11, 2003

  13. Validation Report done by third party (operational entity) • Validation proposal by Tohoku: 5/2003 • Third party selected: DNV • DNV studied a proposal made by Tohoku • Interview with Tohoku • Interview with stakeholders • Issued validation Report CDM - PDD- Thu duc Plant Sep., 11, 2003

  14. Project milestones • Feb., 2003: Tohoku started to work with MOI and EVN on PIN • Feb., 2003: EVN submitted PIN to MOI • March 2003: MOI send PIN to MONRE • April 2003: EVN submitted PDD to MOI • May 2003: MOI hold public review on PDD • Aug., 2003: the project is not adopted by NEDO CDM - PDD- Thu duc Plant Sep., 11, 2003

  15. NEDO selection criteria for model project • High economic efficiency • Effectiveness of technology(the first instance of technology being applied in host country) • Potential Project Dissemination effect of the Potential to be implemented as a CDM project Activity CDM - PDD- Thu duc Plant Sep., 11, 2003

  16. NEDO evaluation • The project is not adopted by NEDO in 2003 financial year with the given reason: Low Economic Efficiency Critical issues: • Uncertainty of natural gas supply timing • Uncertainty of natural gas supply and profitability • (IRR = minus • No profit CDM - PDD- Thu duc Plant Sep., 11, 2003

  17. Conclusion • Project is eligible for CDM project • Pursuit of standard procedures for CDM • Unfortunately: • - Condition in Vietnam is pre-mature to implement this project • Vietnam should settle all concerns aforementioned e.g gas supply timing and has price CDM - PDD- Thu duc Plant Sep., 11, 2003

  18. Thank you for your attention ! CDM - PDD- Thu duc Plant Sep., 11, 2003

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