1. CD4CDMCD4CDM Estimating CO 2 Emissions Reduction by example

2. CD4CDMCD4CDM On Emissions from Power Plants: Power Generation (MWh) Emission Factor (Tons CO 2 /MWh) X = CO 2 Emissions (tons CO 2 ) = X 44g/moleCO 2 12g/moleC X 1 ton C 1 kgC TJ vol unit of fuel X kgC TJ X vol fuel consumed Mwh output conversion factors Plant based - actual data Carbon emission factor, per fuel type - IPCC Net calorific value, country specific, per fuel type - IPCC Emission Factor (Tons CO 2 /kWh) GHG = EFA X

3. CD4CDMCD4CDM Power Generation (MWh) Emission Factor (Tons CO 2 /MWh) X = CO 2 Emissions (tons CO 2 ) On Emissions from Power Plants : Power Generation (MWh) = Installed Capacity (MW) X Plant Capacity (%) 8760 hours in a year X On Emissions from a Power Grid : Total CO 2 Emissions (tons CO 2 ) =  t Op * P t *CEF t Emission factor for specific technology and or fuel type(tons CO 2 /MWh) Total electricity generation output of grid (MWh) Percentage contribution to grid (%)

4. CD4CDMCD4CDM On Emissions from a Power Grid : Total CO 2 Emissions =  t Op * P t *CEF t = Op tt P t *CEF t = Op* CEF wt.ave

5. CD4CDMCD4CDM

6. CD4CDMCD4CDM Total CO 2 Emissions = Op* CEF wt.ave

7. CD4CDMCD4CDM Conversion Factors 1 kiloton = 1000 tons = 1,000,000 kg 1000 tons = 1 kiloton = 1 Gigagram 1 GWh = 1000 MWh = 1,000,000 kWh 1 ton = 1000 kg = 1,000,000 g Kilo = 10 3 Mega = 10 6 Giga = 10 9

8. CD4CDMCD4CDM Example 1: Aquarius Hydroelectric Project Description of the project activity: Host country: Brazil generate electricity using hydroelectric resources to sell to the power grid. Hydroelectric power with 4.2 MW installed capacity = 25,755 MWh/year categorized as I-D (Renewable Energy Project - renewable electricity for a grid) baseline methodology - baseline is average of “operating margin” and “build margin” crediting period is 7 years - renewable twice

9. CD4CDMCD4CDM Aquarius Hydroelectric Project

10. CD4CDMCD4CDM

11. CD4CDMCD4CDM Step 1. Determine expected annual electricity production of project Step 2. Determine expected project emissions Step 3. Determine baseline emissions i) determine baseline methodology ii) compute for emission factors iii) compute for baseline emissions Step 4. Determine annual emissions reduction

12. CD4CDMCD4CDM Step 1. Determine expected annual electricity production of project X Plant Capacity Factor (%) Annual Plant Electricity Output (MWh/yr) = Installed Plant Capacity (MW) X Hours year X Plant Capacity Factor (%) =4.2 MW X 70% X 8760Hours year = 25,755 MWh/year Annual Plant Electricity Output how much electricity the hydropower project will deliver annually how much amount of electricity will be displaced from the grid by the hydropower

13. CD4CDMCD4CDM Step 2. Determine expected project emissions Power Generation (MWh/year) Emission Factor (Tons CO 2 /MWh) X = Annual CO 2 Emissions (tons CO 2 ) = 25,755 MWh/year X Zero (0) Zero project emissions = Annual CO 2 Emissions (tons CO 2 )

14. CD4CDMCD4CDM “approximate operating margin” - grid mix of all generating sources serving the system, excluding hydro, geothermal, wind, low-cost biomass, nuclear and solar generation “build margin” - grid mix of recent capacity additions (newly installed plants) defined as lower of most recent 20% of plants built or the 5 most recently built plants EF base = (EF operating + EF build )/2 * Baseline and Monitoring Methods Workshop on July 17 Step 3. Determine baseline emissions i) determine baseline methodology

15. CD4CDMCD4CDM GRID Hydro Diesel Coal Wind Geothermal Nat Gas Solar Priority Source Dispatched to Grid Sources most likely to be displaced by Project Back

16. CD4CDMCD4CDM ii) compute for emission factors EF = Calorific value X Carbon EF X Specific consumption X Conversion factors * page 30 of Aquarius PDD (Liter/MWh) - errata

17. CD4CDMCD4CDM ii) compute for emission factors operating margin - mix composed of diesel-fueled (199.3 GWh) and natural gas-fueled (420.5GWh) power plants diesel EF = 1.190 kg CO 2 /kWh (32.16%) nat gas EF = 0.690 kgCO 2 /kWh (67.84%) weighted EF = 0.851 kgCO 2 /kWh build margin mix composed of natural gas-fueled (718.32 GWh) and hydroelectric (883.008GWh) power plants nat gas EF = 0.690 kgCO 2 /kWh (44.85%) hydro EF = 0 kgCO 2 /kWh (55.15%) weighted EF = 0.310 kgCO 2 /kWh * Aquarius PDD typographical error - 883,008GWh

18. CD4CDMCD4CDM EF base = (EF operating + EF build )/2 = (0.851 + 0.310)/2 EF base = 0.580 kgCO 2 /kWh ii) compute for emission factors iii) compute for baseline emissions (annual) 0.580 kgCO 2 /kWh X 25,755 MWh = Annual CO 2 Emissions (tons CO 2 ) X 1000kWh 1MWh X 1tonCO 2 1000kgCO 2 = 14,942 tons CO 2 Annual CO 2 Emissions (tons CO 2 )

19. CD4CDMCD4CDM Step 4. Determine annual emissions reduction E redn = E base - E project =14, 942 tons CO 2 - 0 = 14,942 tons CO 2

20. CD4CDMCD4CDM Example 2: Burgos Wind Farm Project Description of the project activity: Host country: Philippines (Burgos, Ilocos Norte) generate electricity using wind energy to sell to the Luzon power grid. First commercial wind power with approximately 120 MW total capacity * divided into different phases - Phase 1 = 42MW installed capacity = 107GWh/year categorized as I-D (Renewable Energy Project - renewable electricity for a grid) * as per Japan External Trade Organization (JETRO) feasibility study

21. CD4CDMCD4CDM Example 2: Burgos Wind Farm Project Assumption: crediting period: 10 years start of crediting period: 2004 baseline methodology: fossil fuel mix of 2000 will be the same mix as crediting period constant annual emissions reduction for the entire crediting period no leakages considered, no other direct or indirect emissions covered

22. CD4CDMCD4CDM Annual Plant Electricity Output (MWh/yr) = Installed Plant Capacity (MW) X Hours year X Plant Capacity Factor (%) = (42 MW) x (29%) x (8760hours/year) = 107 GWh/year Step 1. Determine expected annual electricity production of project Step 2. Determine expected project emissions Power Generation (MWh/year) Emission Factor (Tons CO 2 /MWh) X = Annual CO 2 Emissions (tons CO 2 ) 107,000 GWh/year X Zero (0) = Annual CO 2 Emissions (tons CO 2 ) = Zero Project Emissions

23. CD4CDMCD4CDM Step 3. Determine baseline emissions i) determine baseline methodology a) operating margin and build margin average b) recent capacity additions c) power generation mix of 2000 d) projected energy mix ii) compute for emission factors - collect data on fuel consumption and power generation per fuel type to get specific consumption (volume consumed/kWh generated) Assumption: table of emission factors on next page:

24. CD4CDMCD4CDM ii) compute for emission factors Greenhouse Gases from Local Communities: An Inventory Manual - Page 14 Source: DOE

25. CD4CDMCD4CDM Final Weighted Emission Factor = 0.6066 kgCO 2 /kWh

26. CD4CDMCD4CDM iii) compute for baseline emissions (annual) 0.6066 kgCO 2 /kWh X 107,000 MWh = Annual CO 2 Emissions (tons CO 2 ) X 1000kWh 1MWh X 1tonCO 2 1000kgCO 2 = 64,906 tonsCO 2 Step 4. Determine annual emissions reduction E redn = E base - E project =64,906 tons CO 2 - 0 E redn =64,906 tons CO 2

27. CD4CDMCD4CDM If at $3 per ton CO 2 $1, 947, 180

28. CD4CDMCD4CDM Exercise: Wigton Wind Farm Project Description of the project activity: Host country: Jamaica generate electricity using wind energy to sell to the grid. First commercial wind power with approximately 20.7 MW capacity = 62.97Million kWh categorized as I-D (Renewable Energy Project - renewable electricity for a grid) baseline methodology - “Recent Additions to the Grid (10 years)” crediting period - 10 years

29. CD4CDMCD4CDM Exercise: Wigton Wind Farm Project

30. CD4CDMCD4CDM

31. CD4CDMCD4CDM Steps in computing for the emissions reduction: 1. Compute for the project activity emission. 2. Compute for the weighted carbon emission factor for baseline scenario. 3. Compute for the baseline emission. 4. Compute for the annual emissions reduction and the cumulative emission reduction for the crediting period. 5. Estimate total sales of CERs based on US$3 per ton of CO 2 for the entire crediting period.

32. CD4CDMCD4CDM Exercise: Wigton Wind Farm Project 1. Compute for the project activity emission. Annual Plant Electricity Output (MWh/yr) = Installed Plant Capacity (MW) X Hours year X Plant Capacity Factor (%) =20.7 MW34.7% X 8760 X = 62.97GWh =62,970MWh Power Generation (MWh/year) Emission Factor (Tons CO 2 /MWh) X = Annual CO 2 Emissions (tons CO 2 ) 62,970MWh X Zero (0) = Annual CO 2 Emissions (tons CO 2 ) = Zero Project Emissions

33. CD4CDMCD4CDM 2. Compute for the weighted carbon emission factor for baseline scenario. 3. Compute for the baseline emission. 4. Compute for the annual emissions reduction and the cumulative emission reduction for the crediting period. 5. Estimate total sales of CERs based on US$3 per ton of CO 2 for the entire crediting period.