PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03

CDM – Executive Board page 1

CLEAN DEVELOPMENT MECHANISM

PROJECT DESIGN DOCUMENT FORM (CDM-PDD)
Version 03 - in effect as of: 28 July 2006

CONTENTS

A. General description of project activity

B. Application of a baseline and monitoring methodology

C. Duration of the project activity / crediting period

D. Environmental impacts

E. Stakeholders’ comments

Annexes

Annex 1: Contact information on participants in the project activity

Annex 2: Information regarding public funding

Annex 3: Baseline information

Annex 4: Monitoring plan

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SECTION A. General description of project activity

A.1. Title of the project activity:

Genyem PLN Hydropower Project

PDD Version 01
Date of Completion : 31 August 2011

A.2. Description of the project activity:

The Genyem PLN Hydropower Project in Indonesia (hereafter simplified as “the Project”) is located in
the Sermo River in the regency of Jayapura, Irian Jaya province. The proposed project will be operated
by PT. PLN (Persero), with total installed capacity of 2 x 10 MW. The project is a run-of-river
hydroelectric power plant with reservoir. The proposed project activity is expected to produce annual
energy of approximately 115 GWh. The project will supply power to the Jayapura grid operated by the
project developer in Irian Jaya, and is expected to result in emission reductions of 85,445 tCO2e annually
by partly displacing electricity from carbon intensive sources.

The Project will generate electricity by using a renewable source and will contribute to sustainable
development of the Host Country. Specifically, the Project will:

• Reduce GHG emissions by avoiding CO2 emission from the business-as-usual scenario of electricity
generation, which consist of fossil fuel-fired power plants connected to the Republic of Indonesia
Power Grid.
• Increase employment opportunities in the area where the Project is located. Locals are expected to be
employed for the project operations and the construction of the project will secure jobs in the
construction sector and contribute to poverty alleviation.
• Contribute towards rural electrification. In 2002, Irian Jaya had the lowest village electrification
ratio, and the second lowest household electrification ratio in Indonesia.1
• Enhances the local investment environment and therefore improves the local economy.
• Diversifies the sources of electricity generation, important for meeting growing energy demands and
the transition away from diesel and coal-supplied electricity generation.

A.3. Project participants:

Kindly indicate if the Party

Name of Party involved (*) Private and/or public entity(ies) project involved wishes to be
((host) indicates a host Party) participants (*) (as applicable) considered as project
participant (Yes/No)
The Republic of Indonesia PT. Perusahaan Listrik Negara (Persero)
No
(host) [PT. PLN (Persero)] – Public entity
United Kingdom of Great EcoSecurities International Limited –
No
Britain and Northern Ireland Private entity

1
Final Report: Outer Islands Electrification project ADB T.A. No. 3481 – INO, dated July 2002
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(*) In accordance with the CDM modalities and procedures, at the time of making the CDM-PDD public at the stage of
validation, a Party involved may or may not have provided its approval. At the time of requesting registration, the approval by the Party(ies)
involved is required.

A.4. Technical description of the project activity:

A.4.1. Location of the project activity:

A.4.1.1. Host Party(ies):

The Republic of Indonesia

A.4.1.2. Region/State/Province etc.:

Irian Jaya province (West Papua)

A.4.1.3. City/Town/Community etc.:

Regency of Jayapura

A.4.1.4. Details of physical location, including information allowing the

unique identification of this project activity (maximum one page):

The Genyem PLN Hydropower project lies 140 km westward from Jayapura, with a GPS coordinate as
follows:

Longitude : 140° 00’03” - 140° 01’41.5 East

Latitude : 2° 15’ 34.5” - 2° 40’ 34.4” South

A.4.2. Category(ies) of project activity:

According to Annex A of the Kyoto Protocol, this project fits in Sectoral Category 1, Energy Industries
(Renewable/ Non Renewable)

A.4.3. Technology to be employed by the project activity:

The project activity is a run-of-river hydroelectric power plant with gated weir. The power plant has a
total installed capacity of 20 MW, which is powered by 2 x 10 MW turbines. The main construction
consists of an intake pond, dam, sand trap basin, headrace tunnel, surge tank, penstock, tailrace,
powerhouse, switchyard and transmission lines. The power plant is expected to have a lifetime of 50
years, although the generating equipment is expected to have a lifetime of 25 years2

2
Source : Genyem HEPP Project Feasibility Study, Volume II.
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The upstream Sermo river forms a natural pondage of 2,200,000 m3 with a maximum water level
fluctuation of 3.5 m. An important safety aspect of a weir of this type is that the gates have to be lifted
during river floods. Some of the water is diverted from the river, and sent through a penstock which feeds
water downhill to a power generation station. The potential energy in the water, when it drops in height
below creates the energy required to spin the turbines that generate electricity. The water then leaves the
generating station and returns to the river.

The project uses well established hydroelectric power generation technology for electricity generation.
The electricity will be transmitted to the PLN Grid System (Jayapura grid)

The main technical parameters of the proposed Project are shown in Table 1 below.
Table 1: Main technical parameters of the proposed Project3
Parameter Specification

Installed capacity 20 MW
Annual power generation 115 GWh
Dam type Gated weir
Civil and Structural Dam height 10.5 m
Net head 175.6 m
Headrace tunnel Concrete line circular tunnel
Penstock type Open air
Penstock diameter 2m
Penstock length 835 m
Gross head 193.1 m
Turbine Type Vertical shaft Francis
Number of units 2
Rpm 750
Generator Origin China
Type 3-phase vertical shaft, revolving
field
Number of units 2
Rated capacity 11,700,000 kVA
Main transformer Type 3-phase, oil immersed, on air,
outdoor use type
Number of units 2
Voltage 150 kV
Capacity 12,000 kVA
Capacity factor 76.2%

The Project will use advanced but recognised technology in electricity generation and transmission. Most
of the technology, equipments and funds are transferred from abroad for this project. The Project
Developer has operated and maintained hydroelectric projects before and has considerable experience.

3
Source : Final Report: Outer Islands Electrification project ADB T.A. No. 3481 – INO, dated July 2002, and
Genyem Hydro Power Project Contract Discussion Agreement dated August 2008
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Nevertheless the contractor will provide the necessary training to the Project Developer to operate and
maintain the project as part of its contract obligation to the Project Developer.

A.4.4. Estimated amount of emission reductions over the chosen crediting period:

The project activity will have a renewable crediting period. The first crediting period for emission
reductions is expected to start on January 2013 and end on December 2019. The total emissions
reductions due to the project activity will be 598,115 tCO2e during the first crediting period.

Annual estimation of emission reductions in

Years
tonnes of CO2e
2013 85,445
2014 85,445
2015 85,445
2016 85,445
2017 85,445
2018 85,445
2019 85,445
Total estimated reductions
598,115
(tonnes of CO2 e)

Total number of crediting years 3x7

Annual average over the crediting period of
estimated reductions 85,445
(tonnes of CO2 e)

A.4.5. Public funding of the project activity:

The Project will not receive any public funding from Parties included in Annex I of the UNFCCC.
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SECTION B. Application of a baseline and monitoring methodology

B.1. Title and reference of the approved baseline and monitoring methodology applied to the
project activity:

The project activity will use the approved baseline methodology ACM0002 version 12.1.0 (EB 58)
“Consolidated baseline methodology for grid-connected electricity generation from renewable sources”.
Based on this methodology, the following Tools are referenced:

• Tool to calculate the emission factor for an electricity system v 2.2.0 (EB 61)
• Tool for the demonstration and assessment of additionality v 5.2 (EB 39)
• Tool to calculate project or leakage CO2 emissions from fossil fuel combustion v 2 (EB 41)

The methodology and tools can be accessed at the following link:

http://cdm.unfccc.int

B.2. Justification of the choice of the methodology and why it is applicable to the project
activity:

The Methodology ACM0002 version 12.1.0 is applicable to the project through the following criteria:

Table 2 : Applicability of project to criteria set in ACM0002 version 12.1.0

Applicability Criteria Project Scenario

Grid-connected renewable power generation The project activity is a newly built and installed
project activities that hydroelectric power plant. It is a Greenfield plant.
(a) install a new power plant at a site where no No renewable power plant was operated at the site
renewable power plant was operated prior to the prior to the implementation of the project activity
implementation of the project activity (greenfield
plant)
(b) Involve a capacity addition
(c) Involve a retrofit of (an) existing plant; or
(d) involve a replacement of (an) existing plant(s)
The project activity is the installation, capacity The project activity is the installation of a hydro
addition, retrofit or replacement of a power plant/ power plant/ unit with a run-of-river reservoir
unit of one of the following types : hydro power
plant/ unit (either with a run-of-river reservoir or
an accumulation reservoir), wind power plant/ unit,
geothermal power plant/ unit, solar power plant/
unit, wave power plant/ unit or tidal power plant/
unit
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In case of hydro power plants, one of the following The project activity will result in a new reservoir
conditions must apply: and the power density4 of the power plant is
• The project activity is implemented in an approximately 21 W/m2.
existing reservoir, with no change in the
volume of reservoir; or
• The project activity is implemented in an
existing reservoir, where the volume of
reservoir is increased and the power
density of the project activity is greater
than 4 W/m2
• The project activity results in new
reservoirs and the power density of the
power plant is greater than 4W/m2
The methodology is not applicable to the The project activity does not involve switching
following: from fossil fuels to renewable energy sources, and
• Project activities that involve switching from is not a biomass fired power plant. The project
fossil fuels to renewable energy sources at the site activity will result in a new reservoir and the power
of the project activity, since in this case the density of the power plant is approximately 21
baseline may be the continued use of fossil fuels at W/m2.
the site;
• Biomass fired power plants;
• Hydro power plants that result in new reservoirs
or in the increase in existing reservoirs where
the power density of the power plant is less than 4
W/m2.

B.3. Description of the sources and gases included in the project boundary:

Methodology ACM0002 version 12.1.0 states that “ the spatial extent of the project boundary includes
the power plant and all power plants connected physically to the electricity system that the CDM power
plant is connected to”. For the project activity, the project boundary includes the proposed hydroelectric
power plant and all powerplants physically connected to the Jayapura grid to which the Project is
connected to. The greenhouse gases and emission sources included in or excluded from the project
boundary are shown in the following table:

Table 3 : GHG and emission sources included or excluded from the project boundary

Source Gas Included? Justification/

Explanation
CO2 emissions from CO2 Yes Main emission source
electricity generation in fossil CH4 No Minor emission source
Baseline fuel fired power plants that N2O No Minor emission source
are displaced due to the
project activity
Project Emissions of CH4 from the CO2 No Minor emission source

4
Based on installed capacity of 20 MW and flooded area of 971,150 m2
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Activity reservoir CH4 Yes Since the power

density of the project is
greater than 10 W/m2,
no GHG emissions
from the project have
to be considered
according to
ACM0002 ver 12.1.0.
N2O No Minor emission source

Sermo River
(Power Density > CH4 emissions from reservoir Project boundary
10 W/m2 ignored in accordance with the
methodology

Turbine –
Generator Set

Electricity supplied to the grid by

the project activity

CO2 emissions from new and

Jayapura Grid existing power plants connected
to the grid, as reflected in the
combined margin (CM) tCO2/
MWh

Figure 2 : Project boundary of the Genyem PLN Hydropower Project

B.4. Description of how the baseline scenario is identified and description of the identified
baseline scenario:

Identification of the baseline scenario

According to ACM 0002 Version 12.1.0, the project activity is the installation of a new grid-connected
renewable power plant, so the baseline scenario is the following:
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Electricity delivered to the grid by the project activity would have otherwise been generated by the
operation of grid-connected power plants and by the addition of new generation sources, as reflected in
the combined margin (CM) calculations described in the “Tool to calculate the emission factor for an
electricity system” version 2.2.

In the absence of the Project, electricity will continue to be generated by the existing generation mix
operating in the Jayapura grid. However, the only realistic alternative to be considered is for the project
activity to not be implemented as a CDM project i.e. the construction of a new hydroelectric power plant
with an installed capacity of 20 MW connected to the local grid, implemented without considering CDM
revenues. This alternative is in compliance with current laws and regulations of the Host Country.
However, according to the investment analysis presented below, the proposed project activity without
CDM financing is economically unattractive and therefore cannot be considered a realistic baseline
scenario

Therefore, the baseline scenario is that electricity will continue to be generated by the existing generation
mix operating in the Jayapura grid.

B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below
those that would have occurred in the absence of the registered CDM project activity (assessment
and demonstration of additionality):

Chronology of Events

Event Date Evidence

Feasibility Study for the PLN September 1998 Vol 1 Laporan Utama Study
Hydropower Projectwas Kelayakan Proyek PLTA
completed by P.T. PLN (Persero) Genyem
Jasa Enjiniring
Completion of the Draft Final December 2001 Draft Final Report Outer Island
Report of the Outer Island Electrification Project prepared
Electrification Project for PT. PLN (Persero)
Initial Environmental December 2001 Environmental Examination
Examination Report (IIE) Report (IIE)
prepared and submitted to ADB
Loan Agreement between the 10 November 2003 Loan Agreement
Republic of Indonesia and Asian
Development Bank, and Project
Implementation Agreement
between the Republic of
Indonesia and PT PLN (Persero)
(Investment Decision)
Meeting to establish the CDM 4 January 2005 Inter-departmental invitation
Team for the project developer letter dated 27 December 2004
Meeting between the State of the 10 August 2005 Minutes of Meeting dated 11
Netherlands, acting through the August 2005
Ministry of Housing, Spatial
Planning and the Environment
("VROM"), and the CDM Team
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of the project developer to

discuss the development of CDM
projects
Bid advertisement for the 28 December 2005 Advertisement in the major
construction of the project newspapers
activity was published and bid
documents made available to
prospective bidders
EIA Approval given 21 February 2007 Approval letter from the EIA
commission of the Jayapura
regency
CDM Emission Reductions
Purchase Agreement signed 10 July 2007 ERPA
between PT.PLN (Persero) and
EcoSecurities
Permit for use of the project land 31 October 2007 Permit from the Ministry of
was received Forestry
PLN issued the Notice of 25 March 2008 Notice of Contract Award
Contract Award to Waskita –
GXED/ TKL Consortium for the
construction of the project
activity (Project Start Date)
Project is submitted for August 2011 Validation work order and
validation global stakeholder consultation
webhosting
Project is expected to be 1st January 2012 Estimated
commissioned

Additionality

As per the methodology ACM0002 version 12.1.0, the additionality of the project activity shall be
demonstrated and assessed using the “Tool for the demonstration and assessment of additionality”

Investment Analysis

Sub-step (a) : Determine appropriate analysis method

The ‘Tool for the Demonstration and Assessment of Additionality’ recommends three analysis methods,
which include the simple cost analysis (Option I), the investment comparison analysis (Option II) and the
benchmark analysis (Option III).

The project will generate economic benefits other than CDM-related income, through the sale of
electricity. Therefore, the simple cost analysis (Option I) is not applicable.

According to the Additionality Tool, if the alternative to the CDM project activity does not include
investments of comparable scale to the project, then Option III must be used. Given that the alternative is
the continuation of supply of electricity from the grid, then the benchmark analysis (Option III) is used to
assess the financial attractiveness of the project activity.
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Sub-step (b): Option III – Application of benchmark analysis

The internal rate of return (IRR) will be used as the most appropriate financial indicator for the analysis.
The feasibility of this project, as opposed to the continuation of the baseline will be determined by
comparing the project IRR (without CDM revenue) with an appropriate benchmark.

As per para 12 of Guidelines on Assessment of Investment Analysis (GAIA), version 5, EB62, WACC
has been used as a benchmark and has been compared with project IRR to demonstrate the additionality
of the project.

AS per para 13 of GAIA, as the project can be developed by an entity other than the project participant
the benchmark shall be based on parameters that are standard in the market, considering the specific
characteristics of the project type, but not linked to the subjective profitability expectation or risk profile
of a particular project developer. All financial information used for benchmark determination is publicly
available and can be clearly validated by a DOE.

The values used in benchmark determination for the financial analysis are summarised in the table below:

Parameter Value Source

Market premium 6.54% US Market Return Data (1928 -2003)5
Risk free rate (Real) 2.16% US Risk Free Rate for 2003
Country risk 4.13% Using Moody’s rating for Indonesia
premium
Beta (Power) 0.92 Calculated using data from Stern School of Business, New
York University
Tax rate 30% Corporate tax rate in Indonesia6
Cost of equity (post- 12.33% Calculated
tax)
Debt equity ratio 50:50 Guidelines on the Assessment of Investment Analysis’
Version 5
Cost of debt 17.29% Average interest rate for 2003 (up to October) as given by
Central Bank of Indonesia webpage7
WACC (post-tax) 12.22% Calculated
WACC(Pre Tax) 17.45% Calculated

The formula applied to calculate the WACC is as follows:

Post Tax WACC = Cost of equity (%) x (equity part (%)) + Cost of debt (%) x debt part (%) x (1-tax
rate)

Pre Tax WACC = Post Tax WACC/(1- tax rate)

5
http://www.stern.nyu.edu/~adamodar/
6
KPMG’s Corporate Tax Rate Survey – January 2003
7
http://www.bi.go.id/sdds/series/inr/index_inr.asp
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Determination of ‘Cost of equity’

As per para 15 of GAIA, the cost of equity has been calculated as best using information that are
available on public domain and are verifiable by DoE. The expected return on equity is composed of four
elements:
a) a risk free rate of return;
b) an equity risk premium;
c) a risk premium for the host country; and

All values are expressed in real terms

The cost of equity is determined using CAPM model by the following formula:

Cost of equity = Risk Free Rate + Beta x Market Premium + Country Risk Premium

US Risk Free Rate: 2.16%

Sovereign bonds are usually the least risky investment in a given country, and are frequently used as a
proxy for risk free rate. However, this does not apply to a country with a risk of default. The US Treasury
bond has a long history of data, is a global liquid asset, and its risk of default is minimal (since the US
dollar is the world’s reserve currency). The risk free rate is determined as the three months average
returns of US Treasury Bonds prior to the investment decision date.

US Market Premium: 6.54%

While CAPM is frequently used in companies in mature markets to determine market premium, it is not
suited in many developing countries (CDM host countries) where stock markets are small and do not
have a history to derive a reliable figure. The US stock returns over a long term provides the most ideal
figure since this is by far the largest and most liquid market and one which provides data over the longest
term to calculate market premium. The Market Premium is determined as the risk premium in real terms
for investing into US Markets, over the US treasury Bonds, using long term data from 1928-2003.

Βeta (re-levered): 0.92

The Beta value has been calculated based on sector information as compiled by the Stern School of
Business, New York University and provided by Bloomberg Finance L.P. The beta of the power
generation sector in US economy for the year 2003 has been chosen. The betas are computed using 5
years of monthly returns for each stock and then averaged (simple). The unlevered betas are estimated
using the average market debt/equity ratios by industrial sector in this case power and are corrected for
cash. The corrected beta value has been taken as 0.54 (unlevered) for the power sector in the US
economy in 2003 referring to the values as provided by Financial Expert professor Damodaran of New
York Stern University (http://www.stern.nyu.edu/~adamodar/). Finally, the re-levered beta value was
calculated as 0.92 based on the debt to equity ratio and the applicable tax rate.

As the data on the debt equity ratio is the relevant sector in the host country is not available, 50% debt
and 50% equity financing has been assumed as a default as per para 18 of GAIA for calculation of
relevered beta.

Country (Indonesia) Risk Premium: 4.13%

The Country Risk Premium is based on the country credit rating assigned by Moody’s. The rating
assigned to Indonesia is Ba2, which corresponds to a Sovereign risk premium of 4.13%
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Thus, cost of equity is

Cost of equity = US Risk Free Rate + Beta x US Market Return + Indonesia Risk Premium
= 2.16% + 0.92 * 6.54% + 4.13%
= 12.33%

The cost of debt is determined in accordance with para 16 of the GAIA as the commercial lending rate of
the central bank of Indonesia for investments as 17.29% (taken as the average of month ly values in 2003
prior to investment decision)

Therefore,

Post Tax WACC = Equity cost (%) x (equity part (%)) + Debt cost (%) x debt part (%) x (1-tax rate)
= 12.33% x 50% + 17.29% x 50% x 70%
= 12.22%
The Pre Tax WACC is obtained by correcting the same for tax

Pre Tax WACC = 12.22/91-30%)

= 17.45%

The Pre Tax WACC was calculated to be 17.45% and is used as the project IRR benchmark.

Sub-step 2c: Calculation and comparison of financial indicators

A financial analysis was carried out following the benchmark determination. The following information
has been used to conduct the financial analysis.
PROJECT DATA source

Expected Commissioning yr 2007 OIEP DR Dec 2001

Emission Reduction tCO2/ year 85,445 CER calculator
Energy generated MWh/yr '000 115 Feasibility Study
Tariff Applicable to Primary Energy Rp /kwh 425 OIEP DR Dec 2001(projected)
Tariff Applicable to Primary Energy US$ /kwh 0.0425 Calculated

FINANCIAL PARAMETERS source

Lifetime years 25
Rate of increase of tariff (on Component B and D) % p.a. 0.0% PPA
Income Taxes % 30% National tax regulation

http://www.gocurrency.com/v2/historic-
exchange-
rates.php?ccode2=USD&ccode=IDR&fr
Exchange rate Rp/ US$ 10000 Month=0&frDay=1&frYear=2001
Depreciation % p.a. 5.00% National tax regulation

COSTS AND EQUIPMENT (US$) source

a) Investment cost
Base cost - generation US$ (Mn) 35.31 OIEP DR Dec 2001
Base cost - distribution US$ (Mn) 7.28 Genyem HEPP FS Oct 1998
Total Base Cost US$ (Mn) 42.59 OIEP DR Dec 2001
Contingencies(16.8%) US$ (Mn) 7.15 OIEP DR Dec 2001
Land acquisition US$ (Mn) 0.32 OIEP DR Dec 2001

b) operating cost
Annual operating costs US $ (Mn) 0.64 feasibility study

Benchmark source
Pre-tax Project benchmark (WACC) 17.45% Calculated
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Every input value used for the financial analysis had a reasonable and reliable source, showing the
reasonableness of the numbers applied, as follows:

Electricity tariff

The tariff was taken from the Draft Final Report of the Outer Island Electrification Project dated
December 2001. It was referenced before the date of investment decision and therefore a suitable input
value to be used in the financial analysis. The rate of tariff used is an overall tariff rate for household and
industries; therefore it is higher than the tariff rate applied for household alone. Furthermore, the tariff
rate is a projected one from the actual rate applicable during the time the report was completed. The
applicable tariff rate at the time when the report was completed was USD 0.031 per kWh whereas the
tariff rate applied for this financial analysis is USD 0.0425 per kWh, and is therefore highly conservative.

Total Investment Cost

The investment cost is taken from the Draft Final Report of the Outer Island Electrification Project
completed in December 2001. This Report was used as the basis for preparing the bid documents to
engage the Engineering, Procurement and Construction companies.

Annual Operating Costs

The annual operating cost was taken from the Genyem HEPP Feasibility Study dated October 1998.
Calculation of the IRR is based on the annual cash flow which considered the annual revenue of
produced electricity, yearly operating cost and investment cost. The pre tax IRR without CDM revenue
was calculated to be 5.92% whereas the benchmark rate is 17.45%. Therefore, it can be concluded that
CDM revenue is essential for the viability of the project activity.

Sub-step 2d: Sensitivity analysis

A sensitivity analysis was carried out by altering the following parameters:

1) Project revenue (sale of electricity)
2) Investment costs
3) Operational costs

The table below depicts the result of the sensitivity analysis, and shows the variations needed in these
key parameters in order for the IRR to reach the desired benchmark

SENSITIVITY

Change PIRR Project Benchm ark

increase in revenue % 172% 17.45% 17.45%
reduction in investment costs % -63% 17.45% 17.45%
reduction in operational costs % -100% 7.22% 17.45%

Such variations, are unlikely to occur and are discussed in detail below:

i) Increase in electricity generation/ project revenue

In the absence of CDM, the only source of revenue for the project would be from the sale of electricity to
the grid. The project developer is the main electric utility in the Host Country, therefore, it is the
electricity producer and buyer at the same time. Furthermore, the project developer is a state owned
entity, tasked as the sole distributor of electricity in the Host Country and heavily subsidized by the
government to provide electricity at affordable rates to the public even at the extent of selling electricity
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below production costs8. Any increase in tariff can only be decided through a Government Regulation
and such increases are usually to cover up its losses9. It should be noted that when the electricity tariff
was increased in 2010, there was no effect on tariff for the usage for power limits below 900 VA as such
a move would affect the poorer users which form a vast majority of impoverished users10. Therefore, a
major increase (upto an extent of 172%) in tariff that could increase the project revenue to above the
benchmark is not envisaged.

ii) Reduction in Investment Costs

A reduction of more than 63% of the investment costs is unlikely to occur, since construction and
material prices have been steadily increasing in recent years, along with prices in the wider economy t
reflected in annual inflation rates11. Therefore, with rising costs observed during the time of decision
making, a reduction in construction cost was not envisaged.

iii) Reduction in Operational Costs

Even with over 100% reduction in operational expenses, the IRR still does not reach the benchmark.
Furthermore, in 2003 the average inflation rate for Indonesia between January and November was at
6.9%12. This would mean that operational costs would increase, and not decrease which makes the more
than 100% reduction highly unlikely.

The sensitivity analysis carried out has demonstrated that the project is not financially feasible as
unrealistic variations in revenue, investment and operational costs would be needed to realise the
benchmark IRR value of 17.45%. Therefore, it can be concluded that CDM revenue is essential for the
viability of the project.

Step 3: Common Practice Analysis

The utilization of the hydropower energy in the Indonesia is still limited compared to the huge potential
as an archipelago country with many mountains and rivers which actually is a supporting factor to a
decentralized energy system. No official record was found as regards when the hydropower was
first utilized in Indonesia, but there is one operating hydropower power plant (Pelton type) that was
built in 1892 with a generation capacity of 50 kW for processing tealeaves in Patuah Watee, West Java
(Tantangan, 2005). 13
Unfortunately, with a total potential of 7,500 MW throughout the country, only 200 MW has been
utilized.14

According to the US Library of Congress Country Studies15, Indonesia is comprised of five main islands
(Sumatera, Java, Kalimantan, Sulawesi and Irian Jaya or West Papua), two major archipelagos (Nusa

8
http://goliath.ecnext.com/coms2/gi_0199-1389948/PLN-still-posts-losses-despite.html
9
http://in.reuters.com/article/2009/08/28/indonesia-power-tariff-idINJAK51202820090828
10
http://us.nasional.vivanews.com/news/read/157851-tarif-listrik-pelanggan-450-900-va-tak-naik
11
http://www.bi.go.id/web/id/Moneter2/Inflasi_/Inflasi+CPI
12
http://www.bi.go.id/web/id/Moneter2/Inflasi/
13
Overview of Policy Instruments for the Promotion of Renewable Energy and Energy Efficiency in Indonesia
14
Overview of Policy Instruments for the Promotion of Renewable Energy and Energy Efficiency in Indonesia
15
http://lcweb2.loc.gov/frd/cs/idtoc.html
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Tenggara and Maluku islands) and sixty smaller archipelagos. Geographers have conventionally grouped
Sumatera, Java, Kalimantan and Sulawesi in the Greater Sunda Islands, while West Papua Irian Jaya lies
far to the east. Due to difference in topography, climate, society and economy, West Papua should be
considered a region of its own.

West Papua is comprised of 366 isolated grids and the total installed capacity of these grids are 175 MW
primarily made up of diesel power plants (169 MW)16. In the year 2009, hydro power plants only made
up a mere 2% of the total installed capacity in West Papua17. Most of the diesel power plants have been
in operation for many years. Clearly, diesel power plants were favoured over renewable energy power
plants due to certain government policies. Moreover, in the Business Plan for Electricity Supply for
2007-2016, while it was recognized that there needs to be an increase in electricity generation of some
218 MW to overcome the electricity crisis, only some 22% will be from hydro resources. Considering the
hydro potential of the West Papua region18, this is still considered a small figure.

The project activity is classified as a large hydro plant due to its installed capacity of electricity
generation (equal to or more than 20 MW). Therefore, similar activities would be hydro plants with
capacity of equal to or more than 20 MW located in West Papua. Currently, there are only two other
hydro power plants in West Papua, located in Wamena and Fakfak. However, both these hydro power
plants are mini hydro projects, and not connected to the Jayapura isolated grid.

As per Overview of Policy Instruments for the Promotion of Renewable Energy and Energy Efficiency in
Indonesia, the total installed capacity of all hydropower projects in Papua in 2005 was only 2.38 MW.

The aforesaid projects are therefore not comparable to the project activity in terms of scale or output.
Since there are no other large scale hydroelectric power plants in the West Papua region, it can be
concluded that the project activity is the “first of its kind”.

16
Business Plan for Electricity Supply 2007-2016 (RUPTL 2007-2016) by PT. PLN (Persero)
17
Statistics of Electricity and Energy Year 2009 published by the Director General for Electricity and Energy
Utilization (2010)
18
‘Infrastructure Strategies for Papua and West Papua’, p 45.
http://siteresources.worldbank.org/INTINDONESIA/Resources/Publication/280016-1235115695188/5847179-
1263873728984/infrastructure.en.pdf Accessed on 28th June 2011
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B.6. Emission reductions:

B.6.1. Explanation of methodological choices:

The project activity uses methodology ACM0002 version 12.1.0 to estimate the emission reduction
because this methodology is applicable to grid-connected renewable power generation projects that
install a new power plant. The project activity involves the installation of a hydroelectric power plant at a
site where no renewable power plant was operated prior to the implementation of the project activity.

The following table shows the key information used to determine the baseline scenario

Table 4: Key Information and Data Used to Determine the Baseline Scenario

Parameter Unit Value

Operating Margin Emission Factor, EFgrid,OM,y tCO2e/ MWh 0.740
Build Margin Emission Factor, EFgrid,BM,y tCO2e/ MWh 0.744
Combined Margin Emission Factor, EFgrid,CM,y tCO2e/ MWh 0.743
Electricity generated by the project activity, MWh/ year 128,182
EGfacility,y
Electricity exported to the grid by the project MWh/ year 115,000
activity, EGexport,y
Baseline emissions, BEy tCO2e/ year 85,445

Baseline Emissions
According to ACM0002 version 12.1.0, the baseline emissions only include CO2 emissions from
electricity generation in fossil fuel fired power plants which are displaced due to the project activity. All
project electricity generation above baseline levels would have been generated by existing grid-
connected power plants and the addition of new grid-connected power plants.

The baseline emissions are calculated as follows:

BEy = EGPJ,y * EFgrid,CM,y (Equation 1)

Where:
BEy = Baseline emissions in year y (tCO2/ yr)
EGPJ,y = Quantity of net electricity generation that is produced and fed into the grid as a result
of the implementation of the CDM project activity in the year y (MWh/ yr)
EFgrid,CM,y = Combined margin CO2 emission factor for grid connected power generation in year y
calculated using the latest version of the “Tool to calculate emission factor for an
electricity system” (tCO2/ MWh)

Since the project activity is a Greenfield renewable energy power plant, then

EGPJ,y = EGfacility,y

Where:
EGfacility,y = Quantity of net electricity generation supplied by the project plant/ unit to the grid in
the year y (MWh/ yr)
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Grid Emission Factor used in the calculation is the Combined Margin CO2 emission factor for grid
connected power generation for the year 2007-2009. It is calculated using version 02.2 of the ‘Tool to
calculate the emission factor for an electricity system’. Calculation for the combined margin is based on
statistical data provided by PT. PLN (Persero). The fuel consumption data for Independent Power
Producers (IPP) is calculated from the generated electricity and fuel types. This is due the unavailability
of fuel consumption data for IPPs.

According to the Tool to calculate the emission factor for an electricity system (version 02.2), the
following steps shall be carried out:
STEP 1. Identify the relevant electricity systems
STEP 2. Choose whether to include off-grid power plants in the project electricity system (optional)
STEP 3. Select a method to determine the operating margin (OM)
STEP 4. Calculate the operating margin emission factor according to the selected method
STEP 5. Calculate the build margin (BM) emission factor
STEP 6. Calculate the combined margin (CM) emission factor

STEP 1. Identify the relevant electricity system

A project electricity system is defined by the spatial extent of the power plants that are physically
connected through transmission and distribution lines to the project activity (e.g. the renewable power
plant location or the consumers where electricity is being saved) and that can be dispatched without
significant transmission constraints.

The Project Activity is located in Irian Jaya province (West Papua) which is part of the Papua Island.
This province has several isolated grids due to its geographical condition (mountainous and forest area).
This particular project is connected to a local grid system of Jayapura. Thus the relevant electric power
system is Jayapura Power Grid. According to the PLN’s actual grid structure, Jayapura Grid system only
covers area around the city of Jayapura19.

STEP 2. Choose whether to include off-grid power plants in the project electricity system
(optional)

For this grid calculation, Option I of "Only grid power plants are included in the calculation" is chosen,
thus no off-grid power plant is considered in the calculation

STEP 3. Select a method to determine the operating margin (OM)

The "Tool to calculate the emission factor for an electricity system" (version 02.2, EB 61) offers four
methods to calculate the OM, as follows:
(a) Simple OM
(b) Simple adjusted OM
(c) Dispatch data analysis OM
(d) Average OM

19
Business Plan for Electricity Supply 2007-2016 (RUPTL 2007-2016) by PT. PLN (Persero)
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From 2005 to 2009, among the total electricity generation of Jayapura grid that the project is connected
to, the amount of low-cost/must run resources accounted for is zero as the grid has no electricity supply
from the low-cost/must run resources. To calculate the simple OM emission factor of the Jayapura Grid,
the ex-ante option is adopted using the data vintage of a 3-year generation-weighted average, based on
the most recent data available at the time of validation submission.

STEP 4. Calculate the operating margin emission factor according to the selected method

The simple OM emission factor selected in this project is calculated as the generation weighted average
CO2 emission per unit net electricity generation (tCO2/MWh) of all generating power plants serving the
system, not including low-cost/must run plants/units.
It may be calculated:
* Option A: Based on the net electricity generation and a CO2 emission factor of each power unit
* Option B: Based on the total net electricity generation of all power plants serving the system and the
fuel types and total fuel consumption of the project electricity system.
Option B can only be used if:
(a) The necessary data for option A is not available; and
(b) Only nuclear and renewable power generation are considered as low-cost/must-run power sources and
the quantity of electricity supplied to the grid by these sources is known; and
(c) Off-grid power plants are not included in the calculation (i.e., if Option I has been chosen in Step 2)

Out of these options, Option A is selected because the 3 years data for fuel consumption and electricity
generation of each power unit is available from PLN. Therefore, Option A is adopted to calculate the
Simple OM emission factor of the Jayapura Grid.

The simple OM emission factor is calculated based on the net electricity generation of each power unit
and an emission factor for each power unit, as follows:

Where:
EFgrid, OMsimple,y = Simple operating margin CO2 emission factor in year y (tCO2/MWh)
EGm, y = Net quantity of electricity generated and delivered to the grid by power unit m in year
y (MWh)
EFEL,m, y = CO2 emission factor of power unit m in year y (tCO2/MWh)
m = All power units serving the grid in year y except low-cost/must-run power units
y = The relevant year as per the data vintage chosen in Step 3

The emission factor for each power unit m should be determined based on 3 options (Option A1, Option
A2 or Option A3). For this approach, the Option A1 is used to calculate the emission factor for each
power unit since the data for fuel consumption and electricity generation for each power unit is available.
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Where:
EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh)
FCi,m,y = Amount of fossil fuel type i consumed by power unit m in year y (mass or volume unit)
NCVi, y = Net calorific value (energy content) of fossil fuel type i in year y (GJ/mass or volume
unit)
EFCO2, i,y = CO2 emission factor of fossil fuel type i in year y (tCO2/GJ)
EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m in year y
(MWh)
m = All power units serving the grid in year y except low-cost/must-run power units
i = All fossil fuel types combusted in power unit m in year y
y = The relevant year as per the data vintage chosen in Step 3

The data on net electricity generation are obtained from the PT PLN Wilayah Papua Statistics from 2007
to 2009 (published annually). The data on different fuel consumptions for power generation and the net
calorific values of the fuels are obtained from the Bahan Bakar Minyak, LPG dan BBG Untuk
Kendaraan, Rumah Tangga, Industri dan Perkapalan (LPG and Natural Gas Fuel for Vehicles,
Household, Industry and Shipping) (published by Pertamina, May 2003). The emission factors adopted
are obtained from Table 1.3 and Table 1.4 of the 2006 IPCC Guidelines for National Greenhouse Gas
Inventories, Volume 2, Chap. 1, page 1.21 - 1.24.

STEP 5. Calculate the build margin (BM) emission factor

In terms of vintage data, Option 1 is chosen whereby for the first crediting period, the build margin
emission factor is calculated ex ante based on the most recent information available on units already built
for sample group m at the time of CDM-PDD submission to the DOE for validation. For the second
crediting period, the build margin emission factor should be updated based on the most recent
information available on units already built at the time of submission of the request for renewal of the
crediting period to the DOE. For the third crediting period, the build margin emission factor calculated
for the second crediting period should be used. This option does not require monitoring the emission
factor during the crediting period.

Based on the Step 5 of the “tool to calculate the emission factor for an electricity system” version 02.2
and the grid calculator, it was identified that SET5-units comprises the larger annual electricity generation
(SETsample)

The power units which are more than 10 years old were excluded from the set of power units and the
resulting set used to calculate the build margin.

The build margin emission factor is the generation-weighted average emission factor (tCO2/MWh) of all
power units m during the most recent year y for which power generation data is available, calculated as
follows:
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Where:
EFgrid, BM,y = Build margin CO2 emission factor in year y (tCO2/MWh)
EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m in year
y (MWh)
EFEL, m,y = CO2 emission factor of power unit m in year y (tCO2/MWh)
m = Power units included in the build margin
y = Most recent historical year for which power generation data is available

The CO2 emission factor of each power unit m (EFEL,m,y) should be determined as per the guidance in step
4 (a) for the simple OM, using options A1, A2 or A3, using for y the most recent historical year for
which power generation data is available, and using for m the power units included in the build margin.

STEP 6. Calculate the combined margin (CM) emission factor

The combined margin emission factor is calculated as follows:

Where:
EFgrid, BM,y = Build margin CO2 emission factor in year y (tCO2/MWh)
EFgrid, OM,y = Operating margin CO2 emission factor in year y (tCO2/MWh)
WOM = Weighting of operating margin emission factor (%)
WBM = Weighting of build margin emission factor (%)
The following default values should be used for WOM and WBM:
WOM = 0.5 and WBM = 0.5 for the first crediting period, and
WOM = 0.25 and WBM = 0.75 for the second and third crediting period, unless otherwise
specified in the approved methodology which refers to this tool.

Project Emissions

According to ACM0002 ver 12.1.0, for most renewable power generation project activities, PEy = 0.
However, to ensure all project emissions are accounted for, the following equation shall be applied:

PEy = PEFF,y + PEHP,y (Equation 2)

Where:
PEy = Project emission in year y (tCO2e/ yr)
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PEFF,y = Project emissions from fossil fuel consumption in year y (tCO2/ yr)
PEHP,y = Project emissions from water reservoirs of hydro power plants in year y (tCO2e/ yr)

The project activity is not expected to consume fossil fuel, therefore, PEFF,y = 0. However, if fossil fuel
is used, the project emissions will be calculated using the ‘Tool to calculate project or leakage CO2
emissions from fossil fuel combustion’.as

Where,
PEFC,j,y = PEFF,y
FCi,y = amount of fossil fuel i consumed in year y
COEFi,y = CO2 emission coefficient of fuel type i in year y (tCO 2 /mass or volume unit)

The project activity is a hydroelectric power plant resulting in a new reservoir, therefore project
proponent will need to estimate for CH4 and CO2 emissions from the reservoir. But before that, the power
density should be calculated first based on the following equation:
CapPJ – CapBL
PD = APJ - ABL (Equation 3)

Where:
PD = Power density of the project activity (W/m2)
CapPJ = Installed capacity of the hydro power plant after the implementation of the project
activity (W).
CapBL = Installed capacity of the hydro power plant before the implementation of the project
activity (W). For new hydro power plants, this value is zero.
APJ = Area of the reservoir measured in the surface of the water, after the implementation of
the project activity, when the reservoir is full (m2)
ABL = Area of the reservoir measured in the surface of the water, before the implementation
of the project activity, when the reservoir if full (m2). For new reservoirs, this value is
zero.

For the project activity, CapBL = 0 and ABL = 0 , therefore:

PD = 20 MW/ 971150 m2
= 20.59 W/ m2

According to ACM0002 version 12.1.0, if the power density of the project activity is greater than
10W/m2, then PEHP,y = 0

Leakage
According to ACM0002 version 12.1.0, no leakage emissions need to be considered.

Total emission reductions

For the project activity, emission reductions are calculated as follows:
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ERy = BEy – PEy

Where:
ERy = Emission reductions in year y (t CO2e/ yr)
BEy = Baseline emissions in year y (tCO2e/ yr)
PEy = Project emissions in year y (tCO2e/ yr)

B.6.2. Data and parameters that are available at validation:

Data / Parameter: GWPCH4

Data unit: tCO2e/ tCH4
Description: Global warming potential of methane valid for the relevant commitment period
Source of data used: IPCC
Value applied: For the first commitment period : 21tCO2e/ tCH4
Justification of the -
choice of data or
description of
measurement methods
and procedures
actually applied :
Any comment: -

Data / Parameter: EFgrid,OM,y

Data unit: tCO2/ MWh
Description: Operation margin emission factor of the Jayapura grid in West Papua
Source of data used: Calculated from data made available by the PT. PLN (Persero)
Value applied: 0.740
Justification of the The OM was calculated according to the ‘Tool to calculate the emission factor
choice of data or for an electricity system” version 02.2 following the ‘Simple Operating
description of Margin’ approach.
measurement methods
and procedures
actually applied :
Any comment: This value shall be applied on an ex-ante basis and monitored once for each
crediting period

Data / Parameter: EFgrid,BM,y

Data unit: tCO2/ MWh
Description: Build margin emission factor of the Jayapura grid in West Papua
Source of data used: Calculated from data made available by the PT. PLN (Persero)
Value applied: 0.746
Justification of the The BM was calculated according to the ‘Tool to calculate the emission factor
choice of data or for an electricity system” version 02.2
description of
measurement methods
and procedures
actually applied :
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Any comment: This value shall be applied on an ex-ante basis and monitored once for each
crediting period

Data / Parameter: EFgrid,CM,y

Data unit: tCO2/ MWh
Description: Combined margin emission factor of the Jayapura grid in West Papua
Source of data used: Calculated from data made available by the PT. PLN (Persero)
Value applied: 0.743
Justification of the The CM was calculated according to the ‘Tool to calculate the emission factor
choice of data or for an electricity system” version 02.2
description of
measurement methods
and procedures
actually applied :
Any comment: This value shall be applied on an ex-ante basis and monitored once for each
crediting period

Data / Parameter: FCi,y

Data unit: Tonnes, liter
Description: Amount of fossil fuel type i consumed in the project electricity system in the
year y (mass or volume unit)
Source of data used: PT. PLN (Persero)
Value applied: See Annex 3
Justification of the Official released statistics; publicly accessible and reliable data source
choice of data or
description of
measurement methods
and procedures
actually applied :
Any comment: This value shall be applied on an ex-ante basis and monitored once for each
crediting period

Data / Parameter: NCVi,y

Data unit: kJ/ liter
Description: Net calorific value (energy content) of fossil fuel type i in the year y.
Source of data used: Pertamina Data of 2003
Value applied: See Annex 3
Justification of the The data is used by PLN as the national electric utility company since the
choice of data or source of fossil fuel used is from Pertamina, which is the national petroleum
description of company. It is using 2003 data as it is the latest data issued by Pertamina.
measurement methods
and procedures
actually applied :
Any comment: This value shall be applied on an ex-ante basis and monitored once for each
crediting period

Data / Parameter: EGy

Data unit: MWh
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Description: Net electricity generated and delivered to the grid by all power sources in the
project electricity system, excluding the low-cost/ must-run power plants/
units, in the year y.
Source of data used: PT. PLN (Persero)
Value applied: See Annex 3
Justification of the Official released statistics; publicly accessible and reliable data source. This
choice of data or value is used for the ex-ante calculation of the grid emission factor for the
description of project activity.
measurement methods
and procedures
actually applied :
Any comment: This value shall be applied on an ex-ante basis and monitored once for each
crediting period

Data / Parameter: EFCO2,i,y

Data unit: tCO2/ GJ
Description: CO2 emission factor of fossil fuel type i in year the year y.
Source of data used: 2006 IPCC Guidelines for National Greenhouse Gas Inventories
Value applied: See Annex 3
Justification of the Since there is no national data of emission factor in the Host Country, the IPCC
choice of data or default value is used, as provided by Table 1.4 of Chapter 1 of Vol.2 (Energy)
description of of the 2006 IPCC Guidelines on National Greenhouse Gases Inventories.
measurement methods
and procedures
actually applied :
Any comment: This value shall be applied on an ex-ante basis and monitored once for each
crediting period

Data / Parameter: WOM

Data unit: %
Description: Weighting of operating margin emission factor
Source of data used: Tool to calculate the emission factor for an electricity system ver 2.2
Value applied: 50 for first crediting period
Justification of the
choice of data or
description of
measurement methods
and procedures
actually applied :
Any comment:

Data / Parameter: WBM

Data unit: %
Description: Weighting of build margin emission factor ver 2.2
Source of data used: Tool to calculate the emission factor for an electricity system
Value applied: 50 for first crediting period
Justification of the
choice of data or
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description of
measurement methods
and procedures
actually applied :
Any comment:

Data / Parameter: CapBL

Data unit: W
Description: Installed capacity of the new hydro power plant before the implementation of
the project activity. For new hydro power plants, this value is zero.
Source of data used: Project site
Value applied: 0
Justification of the Determine the installed capacity based on recognized standards
choice of data or
description of
measurement methods
and procedures
actually applied :
Any comment: -

Data / Parameter: ABL

Data unit: m2
Description: Area of the reservoir measured in the surface of the water, before the
implementation of the project activity, when the reservoir is full (m2). For new
reservoirs, this value is zero.
Source of data used: Project site
Value applied: 0
Justification of the Measured from topographical surveys, maps, satellite pictures, etc.
choice of data or
description of
measurement methods
and procedures
actually applied :
Any comment:

B.6.3. Ex-ante calculation of emission reductions:

Baseline emissions

ACM 0002 version 12.1.0 states that “baseline emissions include only CO2 emissions from electricity
generation in fossil fuel fired power plants that are displaced due to the project activity”

The baseline emissions are calculated as per the following equation:

BEy = EGfacility,y * EFgrid,CM,y (Equation 1)

Where:
BEy(elec) : Baseline emissions in year “y” ( tCO2)
EGfacility,y : Energy to be exported to the grid in year “y” (MWh)
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EFgrid, CM,y : Grid CO2 Emission Factor in year “y” (tCO2e/ kWh)

Hence, the baseline will be the energy produced by the power plant multiplied by an emission
coefficient, which is the grid emissions factor for the Jayapura grid in West Papua, Indonesia calculated
by the method described.

The baseline CO2 emission factor was calculated from data obtained from PT. PLN (Persero) based on
official, publicly accessible and reliable data source. It was calculated based on the “Tool to calculate the
emission factor for an electricity system” (Version 02.2).

Calculation of Combined Margin Emission Factor (EFgrid,CM,y) includes the calculation for Operating
Margin and Build Margin, as follows:

= 0.740 tCO2/ MWh

= 0.746 tCO2/ MWh

Therefore, the Combined Margin Emission Factor is calculated as follows:

= (0.740 x 0.5) + (0.746 x 0.5)

= 0.743 tCO2/ MWh

For ex-ante calculation of emission reductions,

EGPJ,y = EGfacility,y = 115,000 MWh; and

Therefore
BEy = 115,000 MWh x 0.743 tCO2/ MWh
= 85,445 tCO2e/ year

Project emissions
As mentioned previously in Section B.6.1, the project emissions will be 0 t CO2e.

Leakage
As mentioned previously in Section B.6.1, no leakage emission shall be considered for the project
activity.
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Total emission reductions

The ex-ante emission reduction is estimated as follows:

ERy = BEy - PEy - Leakage

= (85,445 - 0 – 0) tCO2e/ year
= 85,445 tCO2e/ year

B.6.4 Summary of the ex-ante estimation of emission reductions:

Estimation of Estimation of
Estimation of Estimation of
project activity baseline
leakage overall emission
Years emissions emissions
(tonnes of reductions (tonnes
(tonnes of (tonnes of
CO2 e) of CO2 e)
CO2e) CO2e)
2013 0 85,445 0 85,445
2014 0 85,445 0 85,445
2015 0 85,445 0 85,445
2016 0 85,445 0 85,445
2017 0 85,445 0 85,445
2018 0 85,445 0 85,445
2019 0 85,445 0 85,445
Total (tonnes of 0 0
598,115 598,115
CO2e)

B.7. Application of the monitoring methodology and description of the monitoring plan:

B.7.1 Data and parameters monitored:

Data / Parameter: EGfacility,y

Data unit: MWh/ yr
Description: Quantity of net electricity supplied by the project plant to the grid in the year y
Source of data to be Project activity site
used:
Value of data applied 115,000
for the purpose of
calculating expected
emission reductions in
section B.5
Description of Electricity will be measured continuously with an electricity meter and data
measurement methods recorded monthly.
and procedures to be
applied:
QA/QC procedures to Cross check measurement results with records for sold electricity.
be applied:
Any comment: The net electricity generated is the difference between the gross electricity
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exported to the grid and electricity consumed from the grid by the project
activity (if any). In case the electricity meter is out of order, the project
developer’s check meter shall be used to determine the electricity exported to the
grid. Meters will be calibrated periodically according to manufacturer’s
specification.

Data / Parameter: FCi,y

Data unit: Kg/Litres/ year
Description: Quantity of fossil fuel type i combusted (attributable to the project activity)
during the year y.
Source of data to be Measured at the respective meter in the project site
used:
Value of data applied To be measured
for the purpose of
calculating expected
emission reductions in
section B.5
Description of The amount of fuel utilised will be monitored using a flowmeter and will be
measurement methods recorded as and when it is consumed by the project developer .The amount of
and procedures to be fuel will be aggregated annually. In case of solid fuels the same shall be
applied : measured using appropriate mass measurements.
QA/QC procedures to
be applied:
Any comment: No fossil fuel is expected to be consumed, but, if any, consumption will be
monitored.

Data / Parameter: PEFF,y

Data unit: tCO2/yr
Description: Project emissions from fossil fuel consumption in year y
Source of data to be Calculated
used:
Value of data applied N/A
for the purpose of
calculating expected
emission reductions in
section B.5
Description of As per the ‘Tool to calculate project or leakage CO2 emissions from fossil fuel
measurement methods combustion’
and procedures to be
applied :
QA/QC procedures to As per the ‘Tool to calculate project or leakage CO2 emissions from fossil fuel
be applied: Combustion’
Any comment:

Data / Parameter: CapPJ

Data unit: W
Description: Installed capacity of the hydro power plant after the implementation of the
project
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activity
Source of data to be Project site
used:
Value of data applied 20,000,000
for the purpose of
calculating expected
emission reductions in
section B.5
Description of Installed capacity will be determined based on recognized standards. Parameter
measurement methods shall be monitored annually.
and procedures to be
applied :
QA/QC procedures to N/A
be applied:
Any comment: -

Data / Parameter: APJ

Data unit: m2
Description: Area of the reservoir measured in the surface of the water, after the
implementation of the project activity, when the reservoir is full
Source of data to be Project site
used:
Value of data applied 971,150
for the purpose of
calculating expected
emission reductions in
section B.5
Description of Measured from topographical surveys, maps, satellite pictures, etc. Parameter
measurement methods shall be monitored annually.
and procedures to be
applied :
QA/QC procedures to N/A
be applied:
Any comment: -

B.7.2. Description of the monitoring plan:

This section details the steps taken to monitor the GHG emissions reductions from the Genyem PLN
Hydropower Project in Indonesia. The Monitoring Plan for this project has been developed to ensure
that from the start, the project is well organized in terms of the collection and archiving of complete and
reliable data.

The monitoring of this type of project consists of metering the electricity generated by the renewable
technology. Below is the description of monitoring procedures for data measurement, quality assurance
and quality control. All data collected as part of monitoring will be archived electronically and be kept at
least for 2 years after the end of the crediting period.
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PT. PLN (Persero), as project developer and a state-owned company, owns the Jayapura Grid to which
the project activity will be supplying electricity. The project developer is responsible for maintaining
sound electricity monitoring standards for grid connected plants.

Metering of Electricity Supplied to the Grid

The main electricity meter for establishing the electricity delivered to the grid will be installed at the
project site using a Metering System. This primary electricity meter provides the main data for CER
measurement, thus it will be the key part of the verification process. The check meter measurement shall
be used when the measurement of primary meter does not satisfy the applicable accuracy standard. In
case of failure of both primary and check meters, then any remaining metering equipments which is still
accurate and the records for the relevant period of the data processor for the power plant shall be taken
into account.

Quality Control and Quality Assurance

Quality control and quality assurance procedures will guarantee the quality of data collected. The
electricity meter(s) will undergo calibration based on manufacturer’s specification or the minimum
interval set by the CDM Guideline for Calibration throughout the lifetime of the Project Activity

Prior to the start of the crediting period, the organisation of the monitoring team will be established.
Clear roles and responsibilities will be assigned to all relevant staff involved in the monitoring of the
CDM project, and the prospect of nominating a CDM Manager will be considered. The CDM Manager
(or appropriate senior manager) will have the overall responsibility for the monitoring system on this
project. The monitoring will be performed according to documented procedures that will be available at
the verification, which may be separate procedures, or may be part of a larger document.

B.8. Date of completion of the application of the baseline study and monitoring methodology
and the name of the responsible person(s)/entity(ies):
Date of completing the final draft of this baseline and monitoring section (DD/MM/YYYY): 08/08/2011

The baseline and monitoring study was prepared by :

Name Entity Role E-mail

EcoSecurities
Ms. Sabrina Dilini Project Manager sabrina.dilini@ecosecurities.com
International Ltd
EcoSecurities
Ms. Radhika Tomar Technical Reviewer radhika.tomar@ecosecurities.com
International Ltd
Mr. Rohit Lohia EcoSecurities Validation Lead rohit.lohia@ecosecurities.com

EcoSecurities is the CDM advisor to the project and is also a project participant. Full contact details are
provided in Annex 1.
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SECTION C. Duration of the project activity / crediting period

C.1. Duration of the project activity:

C.1.1. Starting date of the project activity:

25 March 200820

C.1.2. Expected operational lifetime of the project activity:

25 years and 0 months21

C.2. Choice of the crediting period and related information:

C.2.1. Renewable crediting period:

C.2.1.1. Starting date of the first crediting period:

01/01/2013 (or the date of registration, whichever is later)

C.2.1.2. Length of the first crediting period:

7 years and 0 months

C.2.2. Fixed crediting period:

C.2.2.1. Starting date:

>>
N/A

C.2.2.2. Length:
>>
N/A

20
This commensurate with the date of the Notice of Contract Award to the EPC Contractor
21
The equipment lifetime based on the Genyem HEPP project Feasibility Study dated October 1998
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SECTION D. Environmental impacts

D.1. Documentation on the analysis of the environmental impacts, including transboundary

impacts:

The Environmental Impact Assessment (EIA) or ‘Analisis Mengenai Dampak Lingkungan (AMDAL)
was carried out in the year 2007. The outcome of the EIA outlined the following significant impacts,
based on the different phases of the construction:

A) Pre-construction phase
No significant environmental impacts were observed

B) Construction phase
Significant environmental impacts were observed in terms of the increase in run-off water due to land
clearing and soil compacting activities which increased the run-off coefficient. This may result in
increased erosion when coupled with land maturation.

C) Operational phase
There are some significant environmental impacts envisaged when the project becomes operational.
Among them are Degraded quality of water due to land clearing activities, causing eutrophication.
However, the water quality that will be affected will mainly be that of the reservoir.

To overcome these impacts, the following environmental management efforts were suggested to be
carried out based on the suggested benchmarks outlined in the EIA:

1) Construction of slope protection from landslides

2) Construct a pipeline to channel water from the reservoir when needed
3) Proper cleaning of the reservoir area before flooding
4) Proper management of rubbish and waste during construction
5) Provide aeration at locations where aquaculture is practised

The environmental management efforts are to be concentrated in areas with the highest potential for
landslides and areas surrounding the reservoir, and are to commence when flooding operations begin.
These efforts will be financed by the project developer and its investors, under the supervision of the
Director General of LPE-DPE and the Jayapura regency government.

D.2. If environmental impacts are considered significant by the project participants or the host
Party, please provide conclusions and all references to support documentation of an environmental
impact assessment undertaken in accordance with the procedures as required by the host Party:

Environmental Approval letter from the EIA approval commission for the district of Jayapura, West
Papua, was received on 21 February 2007

SECTION E. Stakeholders’ comments

>>
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E.1. Brief description how comments by local stakeholders have been invited and compiled:

A stakeholder consultation was hosted by the Jayapura Regency Office and organized by PT. PLN on
February 27, 2008. Stakeholders were invited by letter and through advertisement in the local newspaper.
It was held in the Sentani Regency Office Meeting Hall from 11.25 am to 1.30 pm. The forum aimed to
be a platform where relevant information is disseminated to, and gathered from, the stakeholders of the
Genyem CDM Project. The meeting also served as a forum to address social, environmental and other
issues affecting the stakeholders.

To maintain independency of the process, PEACE was appointed by the CDM consultant to conduct the
consultation. Approximately 92 participants representing the local stakeholders attended the meeting

The stakeholders invited to the forum were representatives of the local authority, the local council, the
Indonesian CDM DNA, local residents, and community organizations.

During stakeholder consultation, the facilitator informed the stakeholders on the following aspects:
a) The objective and procedures of the Genyem PLN Hydropower Project
b) Baseline condition or condition without the Genyem PLN Hydropower Project
c) The short and long term impacts of Genyem PLN Hydropower Project

The consultation meeting was opened with remarks from the Regent Secretary of Jayapura followed by
remarks from Taruna of PLN Pikitring Sulmappa. Then Maulana Fahrurozi of PLN Pikitring Sulmappa
followed up with presentation on the Genyem PLN Hydropower project. Next, Olivia Tanujaya of
PEACE, a consultant for stakeholder consultation to PT EcoSecurities Indonesia delivered her
presentation on Climate Change and Clean Development Mechanism. The structure of her presentation
was as follows:
a. Climate Change and its global impact
b. Impact to Indonesia
c. UNFCCC and Kyoto Protocol
d. Clean Development Mechanism
e. Genyem PLN Hydropower plant as CDM Project.

The last presentation was delivered by Adam of PLN Jayapura regional office. His presentation was on
the community development program of the Genyem PLN Hydropower project.

The presentation session ended at 12.30 pm followed by a discussion session. In the discussion session
the participants were encouraged to forward their questions or inquiries regarding the project or
suggestions towards project development and implementation.

The discussion ended at approximately 1.30 pm, and the meeting was closed with lunch.

E.2. Summary of the comments received:

In general, all the participants of the forum support the development of the Genyem PLN Hydropower
power plant. The surrounding area of project site is not connected to electricity grid (Jayapura grid),
therefore electricity provision will give significant benefit to the local communities.
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The comments received from stakeholders could be categorized into three categories as follows: (1)
expressing commitment to support the Genyem PLN hydropower project; (2) concern on the name of
Genyem; (3) project contribution to local employment and economy; and (4) environmental impact of the
project.

Below are the comments received by stakeholders:

a. Q: Lyndon Pangkali, non-governmental organization PPMA
He voiced his concern over inundation that will happen due to the project development. Also he
would like to know more about the impact of global warming to increased participation in the area.
He commented on deforestation in Papua, which according to him there is a big movement of
converting forest to palm oil plantation for biofuel. He also suggested to really paying attention to
indigenous people when developing the project.
Answer (Olivia Tanujaya):
She confirmed that indeed deforestation is a big challenge, not only in Papua, but in other islands of
Indonesia. However, the Governor of Papua has made a statement in December 2007 that Papua will
set aside approximately 5,000 ha of its forest to mitigate climate change. Hopefully, the commitment
is realized and followed up by real actions in the fields.

b. Q: Demi Wompere, non-governmenal organization

He wanted to know the project developer’s efforts to prepare the communities, and what the effort is
taken to address the indigenous rights (hak ulayat).
Answer (La Ahmadi):
He emphasized that the meeting is aimed at accommodating the communities concerns over the
project and this is part of PLN’s effort to prepare the communities for the project implementation.
Answer (Taruna):
He mentioned that PPMA (a local non- governmental organization) will develop a mapping on who
will get land compensation based on their indigenous rights. The RPJMK will also be incorporated in
the community development design. It is expected that the community development program will
take form in a partnership between communities and PLN, in which both sides will actively
communicate and participate. Taruna also informed the audiences that there will be workshops where
the PPMA will ask input from communities in developing the mapping. He invited the communities
to actively participate in the workshops.

c. Q: I NYoman M, Regency Information and Technology Office

He reminded the project developer that according to the agreement in Sentosa Village meeting, the
name of Orya should be used instead of Genyem. Genyem area is far from Unurum Guay, the
location where the project site is.

d. Q: Edison Robert, non-governmental organization MPMA

He encouraged the project to develop communities not only at the two villages where the power plant
would be constructed, but also the surrounding communities.
Answer (La Ahmadi):
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In response to the local needs, La Ahmadi explained that the villages have a documentation of
Village Mid-term Development Plan which consists of information on infrastructure needs and non
hardware needs. This documentation would be very useful in designing the community development
program.

e. Q: Hans Monim, the Head of Unurum Guay District

He explained that the communities are eagerly waiting for the project to start its implementation.
However, they do not want to be cheated. They had experience many times when companies came to
their villages and promised to build this and that, but nothing was built. The communities demanded
that the project must also bring positive contribution to their human resources and economy
development. They want the project to start construction and implementation, not just socialization.
Answer (La Ahmadi):
He explained that the purpose of the meeting is to accommodate the locals’ aspiration. It was noted
that the communities want the project to start implementation and bring positive development to their
economies. It is expected that the Community Development Program will accommodate these local
aspirations into their program. The meeting also aimed to make the process of project development
transparent to all stakeholders. Other than those, the Regency of Jayapura supports the project and
facilitates the process.

f. Q: Youth leader
He confirmed again the demand from the communities to change the name of Genyem into Orya, as
the power plant is located in Orya tribe area.
Answer (La Ahmadi):
He explained that the name of Genyem was used in loan proposal to the Asian Development Bank.
But as they further knew and acknowledged the communities demand to change the name from
Genyem to Orya, the renaming may be done later when the power begins operation.

g. Q: Lyndon Pangkali, non-governmental organization PPMA

He voiced his concern over flood in the riverside area and other environmental impacts of the
project.
Answer (Maulana Fahrurozi):
He explained that there will be only small area of inundation, which is the riverside area where the
water is collected and channeled into the tunnel to the power house. The water will run back to the
river, so the water volume will not be reduced. In case of increased precipitation, the over-supply will
go into spillway and would be spilled back into the river, so the riverside will not be flooded.

h. Q: Yohanes Kabri, Youth Leader

He expressed his support for the project and hope the project will bring benefits to everyone

E.3. Report on how due account was taken of any comments received:
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The comments received were either questions concerning the project, or broad statements in support of
the activity. Overall, the project activity is well received by the stakeholders.

The main concern of changing the power plant name of Genyem to Orya will be addressed later.
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Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY

Organization: PT. Perusahaan Listrik Negara (Persero) [PT. PLN (Persero)]

Street/P.O.Box: Jl. Trunojoyo Blok M 1/135 Kebayoran Baru
Building:
City: Jakarta Selatan
State/Region: Jakarta
Postfix/ZIP: 12160
Country: Indonesia
Telephone: +062 21 7251234
FAX: +062 21 7204929
E-Mail: Djoko_Pras@pln.co.id
URL: http://www.pln.co.id
Represented by:
Title: Head of System Planning Division
Salutation: Mr.
Last Name: Prasetyo
Middle Name:
First Name: Djoko
Department: System Planning Division
Mobile: +062 816 1134743
Direct FAX: +062 21 7204929
Direct tel: +062 21 7251234
Personal E-Mail: Djoko_Pras@pln.co.id

Annex 1 Project Participant

Organization: EcoSecurities International Limited

Street/P.O.Box: 40 Dawson Street
Building: -
City: Dublin
State/Region: Dublin
Postfix/ZIP: 02
Country: Ireland
Telephone: +353 1613 9814
FAX: +353 1672 4716
E-Mail: info@ecosecurities.com
URL: www.ecosecurities.com
Represented by:
Title: Company Secretary
Salutation: Mr.
Last Name: Browne
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Middle Name: -
First Name: Patrick James
Department: -
Mobile: -
Direct FAX: +353 1672 4716
Direct tel: +353 1613 9814
Personal E-Mail: cdm@ecosecurities.com
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Annex 2

INFORMATION REGARDING PUBLIC FUNDING

The project received no public funding from any Annex 1 party.

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Annex 3

BASELINE INFORMATION

Calculation of Grid Emission Factor for Jayapura Electricity Grid 2005-2009.

The grid emission factor EFgrid is calculated based on the “Tool to calculate the emission factor for an
electricity system” v02.2 (EB 61).

The EFgrid,CM is calculated as a combined margin (CM), consisting of the combination of operating
margin (OM) and build margin (BM) factors. Calculations for the combined margin were based on
official data for the years 2005, 2006, 2007, 2008 and 2009, made available by PT. PLN (Persero) which
is also the Indonesian electric utility company. Electricity exports data were not subtracted from
electricity generation data used for calculating and monitoring the electricity emission factors, as
required by the “Tool to calculate the emission factor for an electricity system” v2.2 (EB 61).

The calculation consists of six steps, presented below.

Step 1. Identification of the relevant electric power system

The scope of this calculation includes the Jayapura electricity grid system only.

Step 2. Inclusion off-grid power plants in the project electricity system (optional)

‘Option I’ is applied where only grid power plants are included in the calculation.

Step 3. Selection of method to determine the operating margin (OM)

The calculation is based on option (a) Simple OM, as the low-cost and must run (includes any hydro,
geothermal, wind, low-cost biomass, and solar generation) resources constitute less than 50% of total
grid generation in average of the five most recent years that data are available (Table A.1).

Total Generation Capacity (2005-2007) excl. Low-Cost/Must-Run

2007 2008 2009
Type of Power Plant Fuel type MWh MWh MWh
Diesel HSD 207,307 237,859 261,994
Total 207,307 237,859 261,994
Total Low Cost Must Run 0 0 0
Total Generation excl. Low-Cost/Must-Run 207,307 237,859 261,994
Internal use rate 3.21% 1.79% 1.80%
Net Electricity 200,662 233,612 257,283

The Simple OM was calculated using the full generation-weighted (ex-ante) average for the most recent
3 years for which data are available (2007, 2008, and 2009).
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Step 4. Calculation of the operating margin emission factor according to the selected method

The Simple OM emission factor (EFOM,simple,y) is calculated as the nett electricity supplied to the grid by
all power plants serving the system, not including low cost / must-run power plants / units, and based on
the net electricity generation of each power unit and CO2 emission factor for each power unit, as follows:

(1-Tool)
where:

EFgrid,OMsimple,y Simple operating margin CO2 emission factor in year y (tCO2/MWh)

EGm,y Net quantity of electricity generated and delivered to the grid by power unit m in
year y (MWh)
EFEL,m,y CO2 emission factor of power unit m in year y (tCO2/MWh)
m All power units serving the grid in year y except low-cost /must-run power units
y Either the three most recent years for which data is available at the time of
submission of the CDM-PDD to the DOE for validation (ex ante option) or the
applicable year during monitoring (ex post option), following the guidance on
data vintage

The emission factors of each power unit m is determined using Option A2. For power unit m where only
data on electricity generation and the fuel types used is available, the emission factor is determined based
on the CO2 emission factor of the fuel type used and the efficiency of the power unit. The plant
efficiencies were based on specific individual plant specific data as provided by the Energy Commission,
and the power generation companies.

The electricity generation system for the Jayapura grid is only using high speed diesel (HSD). The IPCC
default values at the lower limit of the uncertainty at a 95% confidence interval is used for fuel CO2
emission factors. The lower values are applied since the grid emission factor is applied for baseline
emissions calculations, in line with the tool. Therefore, the effective CO2 emission factor was determined
as 74,100 kg CO2/ TJ22.

The operating margin emission factors by year are summarised below:

2007 2008 2009 2007-2009

Total Emissions tCO2e 151,075 172,826 187,611 511,513
Total Generation MWh 200,662 233,612 257,283 691,557
EFOM,y tCO2e/MWh 0.740

The average Operating Margin, EFOMsimple,2007-09 = 0.740 tCO2e/MWh.

22
The gross calorific value and density to calculate the NCV was sourced from “Bahan Bakar Minyak, Elpiji dan
BBG, untuk kenderaan, industry dan rumah tangga, PERTAMINA 2003”, while the default CO2 emission factor to
calculate the effective CO2 emission factor was sourced from the “2006 IPCC Guideline for National GHG
Inventories”
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Step 5. Calculation of the build margin emission factor

In terms of vintage of data, Option 1 is chosen:

Option 1: For the first crediting period, calculate the build margin emission factor ex ante based on the
most recent information available on units already built for sample group m at the time of CDM-PDD
submission to the DOE for validation. For the second crediting period, the build margin emission factor
should be updated based on the most recent information available on units already built at the time of
submission of the request for renewal of the crediting period to the DOE. For the third crediting period,
the build margin emission factor calculated for the second crediting period should be used. This option
does not require monitoring the emission factor during the crediting period.

The sample group of power units m used to calculate the build margin should be determined as per the
following procedure, consistent with the data vintage selected above:

(a) Identify the set of five power units, excluding power units registered as CDM project activities,
that started to supply electricity to the grid most recently (SET5-units) and determine their annual
electricity generation (AEGSET-5-units, in MWh);

Table A.4 - Five most recent power stations connecting to the Jayapura electricity grid.
Year Capacity Total Generation-2009
Power Plants
Operation (MW) (MWh)
1. Arso 5 1998 0.72 3,523
2. Waena 8 1999 2.799 10,575
3. Waena 14 2004 1.2 -2,431
4. Waena 15 2005 19.8 96,443
5. Sentani 6 2007 4 23,306
TOTAL 131,415

(b) Determine the annual electricity generation of the project electricity system, excluding power
units registered as CDM project activities (AEGtotal, in MWh). Identify the set of power units,
excluding power units registered as CDM project activities, that started to supply electricity to
the grid most recently and that comprise 20% of AEGtotal (if 20% falls on part of the generation
of a unit, the generation of that unit is fully included in the calculation) (SET≥20%) and determine
their annual electricity generation (AEGSET-≥20%, in MWh);

Since the set of power units described as (a) in the Jayapura grid comprises the larger annual generation
than that of (b), the sample group (a) should be used for calculating the build margin of Jayapura grid.
2009
Total Generation MWh 261,994
(a) 5-last (SET5-units) MWh 135,741,108
(b) 20% of Total (SET≥20%) MWh 52,399
Generation of SET5-units
(excluding p.u >10 years old) MWh 132,218,644

(c) From SET5-units and SET≥20% select the set of power units that comprises the larger annual
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electricity generation (SETsample); Identify the date when the power units in SETsample started to supply
electricity to the grid. If none of the power units in SETsample started to supply electricity to the grid more
than 10 years ago, then use SETsample to calculate the build margin. Ignore steps (d), (e) and (f).

Since there are power units in SETsample which started to supply to the grid more than 10 years ago, then
steps (d), (e) and (f) shall be followed.

(d) Exclude from SETsample the power units which started to supply electricity to the grid more than
10 years ago. Include in that set the power units registered as CDM project activity, starting with
power units that started to supply electricity to the grid most recently, until the electricity
generation of the new set comprises 20% of the annual electricity generation of the project
electricity system (if 20% falls on part of the generation of a unit, the generation of that unit is
fully included in the calculation) to the extent is possible. Determine for the resulting set
(SETsample-CDM) the annual electricity generation (AEGSET-sample-CDM, in MWh);
If the annual electricity generation of that set is comprises at least 20% of the annual electricity
generation of the project electricity system (i.e. AEGSET-sample-CDM ≥ 0.2 × AEGtotal), then use the
sample group SETsample-CDM to calculate the build margin. Ignore steps (e) and (f).

Since the power units in SETsample-CDM is more than 20% of the annual electricity generation of the project
electricity system, then the following set is used to calculate the build margin:

EGm,y FCi,m,y NCVi,y EFCO2,i,y EFEL,m,y

Name of (tCO2/MWh
Power (MWh) (liter) (GJ/liter) (tCO2/GJ) )
Unit A B C D E=BxCxD F=E/A G=AxF
Waena 8 10,575 2,565,297 0.036542 0.074100 6,946.15 0.657 6,946.15
Waena 14 -2,431 517,790 0.036542 0.074100 1,402.04 (0.577) 1,402.04
Waena 15 96,443 25,838,289 0.036542 0.074100 69,963.33 0.725 69,963.33
Sentani 6 23,306 6,302,032 0.036542 0.074100 17,064.25 0.732 17,064.25
TOTAL 127,892 95,375.78

The build margin emissions factor is the generation-weighted average emission factor (tCO2/MWh) of all
power units m during the most recent year y for which power generation data is available, calculated as
follows:

(13-Tool)
where:

EFgrid,BM,y Build margin CO2 emission factor in year y (tCO2/MWh)

EGm,y Nett quantity of electricity generated and delivered to the grid by power unit m
in year (MWh)
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EFEL,m,y CO2 emission factor of power unit m in year y (tCO2/MWh)

m Power units included in the build margin
y Most recent historical year for which power generation data is available

The CO2 emission factor of each power unit m (EFEL,m,y) is determined as per the guidance in Step 4 (a)
for the simple OM, using option A2. Following the equation above, EFBM,2008 = 0.746 tCO2e/MWh.

Step 6. Calculation of the combined margin emission factor

Finally, the combined margin grid emission factor (EFgrid,CM,y) is expressed as the weighted average of the
operating margin emission factor (EFgrid,OM,y) and the Build Margin emission factor (EFgrid,BM,y):

(14-Tool)
where:

EFgrid,BM,y Build margin CO2 emission factor in year y (tCO2/MWh)

EFgrid,OM,y Operating margin CO2 emission factor in year y (tCO2/MWh)
wOM Weighting of operating margin emissions factor (%)
wBM Weighting of build margin emissions factor (%)

Where the weights wOM and wBM, by default, are 50% (i.e., wOM = wBM = 0.5) for the first crediting period,
and EFgrid,BM,y and EFgrid,OM,y are calculated as described in Steps 3 and 5 above and are expressed in
tCO2/MWh.

Therefore, the combined margin emission factor of the Jayapura grid is EFgrid,,y = 0.743 tCO2e/MWh.

The value of 0.743 tCO2e/MWh for EFgrid,y is used for baseline emissions calculations in this PDD.
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Annex 4

MONITORING INFORMATION

Kindly refer to Section B.7.2

-----