Vcs project description pafe iii final, Proyectos de Ciencias Ambientales. Universidad Privada del Norte
Juan.Martos
Juan.Martos

Vcs project description pafe iii final, Proyectos de Ciencias Ambientales. Universidad Privada del Norte

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PROJECT DESCRIPTION: VCS Version 3

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ELECTRIC FRONTIER EXPANSION

PROGRAM PHASE III – PAFE III

Document Prepared By National Environmental Fund – FONAM PERU

Project Title Electric Frontier Expansion Program Phase III – PAFE III

Version Version II

Date of Issue 12-October-2015

Prepared By National Environmental Fund – FONAM PERU

Contact 2657 Garcilaso de la Vega Street – Lima 14 – Peru, 51 1 7487079,

fonam@fonamperu.org, www.fonamperu.org

PROJECT DESCRIPTION: VCS Version 3

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TABLE OF CONTENTS

1. PROJECT DETAILS .......................................................................................................................................... 3

1.1 SUMMARY DESCRIPTION OF THE PROJECT ................................................................................................................. 3 1.2 SECTORAL SCOPE AND PROJECT TYPE ....................................................................................................................... 5 1.3 PROJECT PROPONENT ........................................................................................................................................... 5 1.4 OTHER ENTITIES INVOLVED IN THE PROJECT ............................................................................................................... 5 1.5 PROJECT START DATE ............................................................................................................................................ 6 1.6 PROJECT CREDITING PERIOD ................................................................................................................................... 7 1.7 PROJECT SCALE AND ESTIMATED GHG EMISSION REDUCTIONS OR REMOVALS ................................................................. 7 1.8 DESCRIPTION OF THE PROJECT ACTIVITY .................................................................................................................... 7 1.9 PROJECT LOCATION .............................................................................................................................................. 9 1.10 CONDITIONS PRIOR TO PROJECT INITIATION ........................................................................................................ 10 1.11 COMPLIANCE WITH LAWS, STATUTES AND OTHER REGULATORY FRAMEWORKS ......................................................... 11 1.12 OWNERSHIP AND OTHER PROGRAMS ................................................................................................................ 11

1.12.1Right of Use ..................................................................................................................................... 111.12.2Emissions Trading Programs and Other Binding Limits .................................................................. 121.12.3Other Forms of Environmental Credit ............................................................................................. 121.12.4Participation under Other GHG Programs....................................................................................... 121.12.5Projects Rejected by Other GHG Programs ..................................................................................... 12

1.13 ADDITIONAL INFORMATION RELEVANT TO THE PROJECT ........................................................................................ 12

2APPLICATION OF METHODOLOGY .............................................................................................................. 13

2.1 TITLE AND REFERENCE OF METHODOLOGY .............................................................................................................. 13 2.2 APPLICABILITY OF METHODOLOGY ......................................................................................................................... 13 2.3 PROJECT BOUNDARY ........................................................................................................................................... 16 2.4 BASELINE SCENARIO ............................................................................................................................................ 18 2.5 ADDITIONALITY .................................................................................................................................................. 19 2.6 METHODOLOGY DEVIATIONS ................................................................................................................................ 19

3QUANTIFICATION OF GHG EMISSION REDUCTIONS AND REMOVALS ......................................................... 20

3.1 BASELINE EMISSIONS .......................................................................................................................................... 20 3.2 PROJECT EMISSIONS ........................................................................................................................................... 23 3.3 LEAKAGE ........................................................................................................................................................... 24 3.4 NET GHG EMISSION REDUCTIONS AND REMOVALS .................................................................................................. 25

4MONITORING ............................................................................................................................................. 28

4.1 DATA AND PARAMETERS AVAILABLE AT VALIDATION ................................................................................................. 28 4.2 DATA AND PARAMETERS MONITORED .................................................................................................................... 29 4.3 MONITORING PLAN ............................................................................................................................................ 32

5ENVIRONMENTAL IMPACT .......................................................................................................................... 33

6STAKEHOLDER COMMENTS ........................................................................................................................ 35

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1. PROJECT DETAILS

1.1 Summary Description of the Project

1. General operating and implementing framework of the Project:

Peru has a great potential for energy production from natural non-renewable resources, e.g. fossil

sources, and renewable resources e.g. hydroelectric power, wind power, biomass, etc. However

rural and isolated areas, faces storage of power supply. Thus, they are restrained their social and

economic development. Therefore, the Ministry of Energy and Mines (hereinafter referred to as

“MINEM”) has carried out promotion campaigns for clean energy use, because Peru is one of the

countries with greatest potential for this type of energy.

In order to do this, and in addition to the dissemination carried out along with the Ministry of

Education, clean energies become less expensive, but are still away from the Peruvian market

affordability, especially the isolated rural areas still unreached by the electricity network. At

present and because of this, solar panels are being relatively used along with power generators

in the most remote areas of the county; however, energy availability hours are minimum as

sunshine hours are relatively short, or, with regard to power generators, their use is restrained

because fuel is expensive and the rural populations are not able to pay for this additional

expense.

According to the rural electrification’s current problem in Peru, MINEM made a decision to

prioritize improving the current situation in the northern part of the country, as this is the least

electrified area, in comparison to the rest of Peru.

In order to achieve this, the implementation of the Electric Frontier Extension Program Phase III

(hereinafter referred to as “PAFE III”), will increase electric coverage in the department of

Cajamarca, as this have the lowest electrification coefficients in Peru 1 .

PAFE III, the project, involves nineteen (19) electrification components from PAFE III 2 . Project

area of PAFE III has been evaluated, and it has been deemed necessary that for the localities to

achieve a socioeconomic and productive development, it must be supplied with an electricity

service from an ongoing, easily available, reliable, less costly, environmentally compatible, and

good quality source.

The project involves rural areas that are far away from the city centre, and are the following:

1 OSINERGMIN - Diagnosis of the problem of rural electrification in Peru - Page 18

2 19 Evaluation projects of PAFE III

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Table N° 1 - Rural Electric Systems – PAFE III

Nº RURAL ELECTRIC SYSTEM

1 ASUNCIÓN II

2 ASUNCIÓN III

3 CAJABAMBA III

4 CAJABAMBA II

5 CELENDIN IV

6 CHILETE IV

7 SAN MARCOS III

8 SAN MARCOS II

9 CUTERVO II

10 CUTERVO III

11 CUTERVO IV

12 JAEN II

13 JAEN III

14 QUEROCOTO - HUAMBOS

15 SANTA ROSA I

16 SANTA ROSA II

17 SAN IGNACIO III

18 SAN IGNACIO IV

19 SAN IGNACIO II

Source: PROREGION The project includes the construction of primary lines; this will allow for supplying electric energy to 65 districts, in the following provinces: Cajabamba, San Marcos, Cajamarca, Celendin, Contumaza, San Miguel, San Pablo, Chota, Cutervo, Santa Cruz, Jaen and San Ignacio. In total there are 217,407 inhabitants that will be beneficiaries through 44,687 electricity connections.

3 These data are current to 2015.

2. Policy/measure or stated goal of the Project

The Project is to develop a strategy to overcome institutional, financial, and structural obstacles, and construct a series of small rural electrification projects in Cajamarca, as all of the rural electrification projects around the country are faced with similar barriers. MINEM pointed out that most non – electrified rural areas are located in the northern area of Peru; therefore, it took PAFE III into consideration to electrify such areas. A special agreement between Japan International Cooperation Agency (hereinafter referred to as “JICA”) and the regional government of Cajamarca set the idea and the commitment to join efforts to register PAFE III in the Carbon Market to get the benefits of it.

3 Electrification Status - PAFE III 2015

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And, due to the small size of the components having the same characteristics, the Project will be applied to small scale. The project will have these characteristics:

 Even though the projects operation and maintenance will be carried out by three (3) electricity concessionaries, namely Hidrandina S.A., Electronorte S.A and Electroriente S.A,

4 the regional government of Cajamarca will be the entity performing as the

developer of all 19 electrification components, and will be in charge of promoting them.

 The regional government of Cajamarca should look for professional advice to develop the Project since the preparation of the Project Description, Local Stakeholders Consultation, the Project validation by VVB (Validation/Verification Body), the Project’s registration at the VCS Standard (hereinafter referred to as “VCS“), the monitoring, checking, leading to the emission and commercialization of the Verified Carbon Units (hereinafter “VCUs”)

 Any additional income from the sale of the VCUs should be used to improve the project’s financial viability, and also, to carry out activities on behalf of social, economic, and environmental development around the Cajamarca region.

1.2 Sectoral Scope and Project Type

The Project is a small scale project.

Sectoral Scope 2: Energy distribution

1.3 Project Proponent

The project proponent is the Regional Government of Cajamarca and will be the unique VCUs

owner.

The Regional Government of Cajamarca, in fulfilment of its exclusive competence, shared and

delegated, contributes to the integrated and sustainable development of the region, organizing

and conducting democratic and decentralized regional governance in the context of national and

sectoral policies.

Organization name Regional Government of Cajamarca

Contact person Porfirio Medina Vásquez

Title Regional President

Address 351 Santa Teresa de Journet Street – Cajamarca - Peru

Telephone +51 076 599004

Email presidencia@regioncajamarca.gob.pe

1.4 Other Entities Involved in the Project

The Implementation Unit of Regional Programs in Cajamarca (hereinafter referred to as

PROREGION), is a decentralized agency of the Regional Government of Cajamarca, with

4 Contracts with concessionaires

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technical and administrative autonomy, designed to implement basic infrastructure in sanitation,

transport, energy and other activities of regional impact.

PRORREGION is the unit responsible for implementing the PAFE III.

In that sense, PROREGION is the unit in charge of providing all the information required for the

development of the project cycle for the VCS.

Organization name Implementation Unit of Regional Programs in Cajamarca - PROREGION

Role in the project Implementation Unit of the project.

Contact person Juan Martos Ugaz

Title Employee of the Unit Investment Sustainability - PROREGION

Address 172 La Justicia Street – Cajamarca - Peru

Telephone +51 076 344364

Email jmartos@regioncajamarca.gob.pe / martosugaz@gmail.com

National Environmental Fund – FONAM PERU, is a private institution, non-profit charged with

promoting public and private investment in developing environmental priority projects in Peru. Its

activities are aimed at promoting investment in plans, programs and projects aimed at improving

environmental quality, sustainable use of natural resources, and capacity building for proper

environmental management.

In this opportunity FONAM is the consultant that is developing all requirements in order to register

the PAFE III in the VCS Standard. In that sense, FONAM develops this Project Description with

the cooperation of PROREGION.

Organization name National Environmental Fund – FONAM

Role in the project Consultant and adviser who prepared the Project Description

Contact person Julia Victoria Justo Soto

Title Executive Director

Address 2657 Garcilaso de la Vega Street – Lima – peru

Telephone +51 1 7487079

Email jjusto@fonamperu.org

1.5 Project Start Date

The Project Start Date for all project activity instances is anticipated to be October 30, 2013 according with the official date of operation of the first rural electric system of Cajabamba III, in the community of Huañimbita.

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1.6 Project Crediting Period

The Project Crediting Period is 10 years 5 . The starting date is January 1, 2016 and will end

December 31, 2025.

1.7 Project Scale and Estimated GHG Emission Reductions or Removals

Table N° 2 – Project Scale

Project X

Large project

Table N° 3 – Estimated GHG Emission Reductions

6

Years Estimated GHG emission

reductions or removals

(tCO2e)

Year 2016 12,113.00

Year 2017 12,113.00

Year 2018 12,113.00

Year 2019 12,113.00

Year 2020 12,113.00

Year 2021 12,113.00

Year 2022 12,113.00

Year 2023 12,113.00

Year 2024 12,113.00

Year 2025 12,113.00

Total estimated ERs 121,130.00

Total number of crediting years 10 years

Average annual ERs 12,113.00

1.8 Description of the Project Activity

Rural communities in Cajamarca, currently used energy sources from Fossil fuels such as

kerosene, diesel, firewood and candles that generate greenhouse gases.

The aim of PAFE III is supply electric energy for 24 hours a day, continuously, permanently and

reliably, to localities included in the 19 rural electric systems SERs from the national electric grid,

and thus expand and ensure the socio-economic and agribusiness in this important area of the

country as is the Cajamarca region.

5 PAFE III lifetime is 20 years according with section 4.3.3 “Evaluation horizon” of each 19 Evaluation projects of

PAFE III. 6 Spread Sheet - Emission Reduction Calculation - PAFE III

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The beneficiaries are 65 districts in total, located in the provinces of Cajabamba, San Marcos,

Cajamarca, Celendin, Contumaza, San Miguel, San Pablo, Chota, Cutervo, Santa Cruz, Jaen

and San Ignacio with a total investment of S/. 219’988,636.00 7

Japan Government loan S/.118’494,318.00 and the Regional Government of Cajamarca will

provide a counterpart of S/. 101’494,318.00.

The people benefiting are people who have never had the elementary electric service which

prevented their socio economic and productive.

The PAFE III is divided into:

1. Group 1:

a. Cajabamba II

b. Cajabamba III

c. San Marcos I

d. San Marcos II

2. Group 2:

a. Cajamarca Eje Asunción II

b. Cajamarca Eje Asunción III

c. Celendín IV

d. Chilete IV.

3. Group 3:

a. Cutervo II

b. Cutervo III

c. Cutervo IV

d. Querocoto – Huambos

4. Group 4:

a. Jaen I

b. Jaen II

c. San Ignacio II

d. San Ignacio III

e. San Ignacio IV

f. Villa Santa Rosa I

g. Villa Santa Rosa II

Emission reductions will be achieved by replacing energy source because the area does not

generate electricity and neither has electricity from the national grid, so residents use other

energy sources, such as: Fossil fuels such as kerosene, diesel, firewood and candles that

generate greenhouse gases, due to its high cost and / or low yield, it is inefficient. But with the

implementation of PAFE III, the area will has energy from the national grid and people will stop

using these energy sources reducing polluting greenhouse gases generated, contributing to the

fight against climate change.

7 Cajamarca Regional Council Agreement N°020-2009-GR.CAJ-CR

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1.9 Project Location

The Project is located in Cajamarca Region. Cajamarca is located in the north part of Peru and

shares a border with Ecuador. It is located in the Andes Mountain Range, the longest mountain

range in the world, and partly in the Amazon Rainforest, the largest in the world.

Table N°4 – Geographical coordinates of PAFE III 8

Latitude Longitude

North - 4.551944 - 78.7075

East - 7.463056 - 77.738889

West - 6.394722 - 79.451667

South - 7.759167 - 78.220556

Figure N°1: Project Location

8 http://proyectos.inei.gob.pe/web/biblioineipub/bancopub/Est/Lib0250/CAP0104.HTM

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The Project sites are scattered in the following figure. There are nineteen (19) components

located in the Cajamarca region, across 65 districts in total, located in the provinces of

Cajabamba, San Marcos, Cajamarca, Celendin, Contumaza, San Miguel, San Pablo, Chota,

Cutervo, Santa Cruz, Jaen and San Ignacio

Figure N° 2 – Work Groups PAFE III

1.10 Conditions Prior to Project Initiation

The initial conditions of the area where PAFE III will be implemented, are those described in

section 1.8 explaining that residents use other energy sources, Such as: Fossil fuels such as

kerosene, diesel, firewood and candles that generate greenhouse gases, due to its high cost and

/ or low yield, it is inefficient.

With the implementation of PAFE III, the area will has energy from the national grid and people

will stop using these energy sources reducing polluting greenhouse gases generated, contributing

to the fight against climate change.

The expansion of the national grid will mean a reduction of GHG emissions to the atmosphere,

while not neutralize these emissions, as the national grid - SEIN not purely renewable energy

sources, emissions will be lower because the 50.8% of the energy comes from renewable

sources. 9

9 COES Annual statics - 2014

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1.11 Compliance with Laws, Statutes and Other Regulatory Frameworks

The project has compliance with the national following laws:

- Rural Electrification Law No. 28749 10

: Aims to promote sustainable and efficient electrification

of rural areas.

- Electricity Concessions Law D.L Nº 25844 11

: The Law regulates activities related to the

generation, transmission, distribution and energy commercialization.

In Article 9: Notes that the State provides for the environment conservation and cultural

heritage of the nation, as well as the rational use of natural resources in the activities

development related to the generation, transmission and distribution of electricity.

- Regulation of Citizen Participation for Energy activities RM No. 535-2004-MEM-DM 12

: This

Ministerial Resolution provides that everyone has the right to participate in policy definition

and actions of appropriate national, regional and local levels concerning the environment and

natural resources and states that everyone has the right to be informed of measures or

activities that may directly or indirectly affect the people´s health or the environmental

integrity and natural resources.

- Supreme Decree No. 029-94-EM 13

, Environmental Protection Regulation for Electrical

activities: The objective of this Regulation is to regulate interaction in electrical activity in the

systems of generation, transmission and distribution, to the environment, under the

sustainable development concept.

1.12 Ownership and Other Programs

1.12.1 Right of Use

The project proponent is the Regional Government of Cajamarca and will be the unique VCUs

owner 14

.

The Regional Government of Cajamarca, in fulfilment of its exclusive competence, shared and

delegated, contributes to the integrated and sustainable development of the region, organizing

and conducting democratic and decentralized regional governance in the context of national and

sectoral policies

Contact Information:

 Mr. Porfirio Medina Vásquez

 Address: 351 Santa Teresa de Journet Street – Cajamarca - Peru

 Phone: +51 076 599004

10

Rural Electrification Law No. 28749 available in: http://www2.osinerg.gob.pe/MarcoLegal/pdf/LEY.28749.pdf 11

Electricity Concessions Law D.L Nº 25844 available in http://www2.osinerg.gob.pe/MarcoLegal/pdf/LEYCE-DL25844.pdf 12

Regulation of Citizen Participation for Energy activities RM No. 535-2004-MEM-DM available in http://www.minem.gob.pe/minem/archivos/file/DGGAE/ARCHIVOS/LEGISLACION/RM-535-2004.pdf 13

Supreme Decree No. 029-94-EM available in http://www.minem.gob.pe/minem/archivos/file/DGGAE/ARCHIVOS/LEGISLACION/DS-029-94.pdf 14

According with Legal Report of PROREGION.

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 E-mail: presidencia@regioncajamarca.gob.pe

Even though the projects operation and maintenance will be carried out by three (3) electricity concessionaires, namely Hidrandina S.A., Electronorte S.A. and Electroriente S.A

15 ., the regional

government of Cajamarca will be the entity performing as the developer of all 19 electrification components, and will be in charge of promoting them.

1.12.2 Emissions Trading Programs and Other Binding Limits16

The GHG emissions reduction of the project will be sold exclusively on the voluntary market, to

private or public organizations willing to voluntarily offset their emissions.

The Project itself does not have any binding limits on GHG emissions, and does not look for any

compliance with an emissions trading program.

1.12.3 Other Forms of Environmental Credit17

The project has not participated in any other program of environmental crediting for GHG

emission removals. The project does not intend to generate any other kind of environmental

credit other than through the VCS Program.

1.12.4 Participation under Other GHG Programs18

The project has not been registered under any other GHG programs and is not seeking

registration under any other GHG programs.

1.12.5 Projects Rejected by Other GHG Programs19

This project has neither applied for or been rejected from any other GHG programs.

1.13 Additional Information Relevant to the Project

Eligibility Criteria

This is a non-grouped project. No new instances are to be included after validation.

Leakage Management

Leaks of the project have been calculated in section 3.3. The calculation of leakage has been

made to estimate the net emission reductions of the project. Such leaks are for emissions from

the area that has been deforested for project implementation. According to the methodology

“AMS-III.BB Electrification of communities through grid extension or construction of new mini-

grids --- Version 2.0” UNFCCC methodology, the leakage on account of construction of new

transmission/distribution lines (e.g. carbon stock loss due to deforestation) shall be calculated

using the method indicated in baseline and monitoring methodology AM0104 “Interconnection of

15

Contracts with concessionaires 16

According with the affidavit of the Regional Government of Cajamarca 17

According with the affidavit of the Regional Government of Cajamarca 18

According with the affidavit of the Regional Government of Cajamarca 19

According with the affidavit of the Regional Government of Cajamarca

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electricity grids in countries with economic merit order dispatch”. If the estimated leakage is within

5% of the estimated emission reductions of the project, then this leakage source may be

neglected, otherwise the leakage shall be deducted from the emissions reductions.

Commercially Sensitive Information

The information produced inside this Project description document (PD) is considered public

information.

Further Information

No further information is provided.

2 APPLICATION OF METHODOLOGY

2.1 Title and Reference of Methodology

The title of the selected methodology is AMS-III.BB Electrification of communities through grid

extension or construction of new mini-grids --- Version 2.0 20

. The reference has been taken from

the list of the approved CDM methodologies for small scale project activities.

2.2 Applicability of Methodology

The project meets the applicability conditions of the AMS-III.BB Electrification of communities through grid extension or construction of new mini-grids --- Version 2.0.

Table N° 5 – Applicability of Methodology

Item Applicability Condition Justification for project activity

1 This methodology is applicable to project activities involving electrification of a community of consumers through either:

a) Extension of a grid (national, regional or mini-grid); or

b) Construction of new mini-grid.

The PAFE III is program of expansion of the national electricity grid that will result in the displacement of fossil fuels being currently used for lighting and power generation purposes by the local beneficiaries of the PAFE III project.

21

2 Such project activities will displace fossil fuel use, such as in fuel-based lighting systems and stand- alone power generators.

PAFE III will displace fossil fuel use. 22

3 Electricity consumers may include households, commercial facilities such as shops, public services/buildings and small, medium and micro enterprises (SMMEs). Applications may include

The PAFE III will provide energy to all types of consumers listed in Item 3.

23

20

AMS-III.BB Electrification of communities through grid extension or construction of new mini-grids –V2 21

19 Evaluation Projects of PAFE III (5.14 Selection of the best alternative) 22

19 Evaluation Projects of PAFE III (3.2.1 Principal problem description) 23

19 Evaluation Projects of PAFE III (4.3 Summary of the demand and supply analysis of electric energy – 4.3.1

Overview

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Item Applicability Condition Justification for project activity

lighting (interior, public street lighting), electrical appliances such as refrigerators, agricultural water pumps

4 At least 75 per cent (by number) of the project consumers shall be households.

The PAFE III is designed to meet the needs of households (household). The household covers the 90% of the project energy consumptions.

24

5 This methodology is applicable in situations where consumers that were not connected to a national/regional grid prior to project implementation are supplied with electricity from the project activity. It is also applicable to situations where a fraction of consumers that are supplied with electricity from a mini-grid prior to the implementation of the project are now supplied with electricity from the project activity (i.e. moving from carbon intensive mini-grid to less carbon intensive regional/national or mini grid).

The PAFE III beneficiaries are not connected to any electric power system at the moment neither national/regional or mini grid.

25

6 This methodology is applicable for project activities associated with national grids, regional grids or mini-grids that utilize either fossil fuels or fossil fuels and renewable energy in the electricity generation system.

The Network of the National Interconnected Electric System of Peru is based on the use of fossil and renewable energy. According to the data from the National Interconnected System Operation Committee - COES the Peruvian network holds a 50.8% effective power delivered from renewable sources.

26

7 Project activities for electrification of a community through the installation of stand-alone renewable electricity generation systems or through the extension/construction of renewable based mini- grid systems shall explore “AMS-I.L.: Electrification of rural communities using renewable energy”.

The PAFE III does not include the installation of stand-alone renewable electricity generation systems or the extension/construction of renewable based mini-grid systems.

27

8 This methodology is not applicable to portable systems, such as portable electricity generating systems

The PAFE III does not include the use of portable power generation systems.

28

9 In this methodology new consumers are those who did not have supply of electricity prior to project implementation. Existing consumers are those who were supplied electricity from the mini-grid system prior to project implementation. The new consumers are designated as either households (Type I consumers) or non-households (Type II consumers). This methodology requires metering of electricity consumption of each Type II

The PAFE III Technical Studies, details the universe of beneficiaries as well as their physical location. It also estimates the connected load and the usage hours of each consumer. Project has:

 Type I consumers

 Type II consumers

24

Spread sheet named “Emission reduction calculation of PAFE III” specific spread sheet named “Data” based on

19 Market Analyses of PAFE III 25

19 Evaluation Projects of PAFE III (3.2.2 Causes analysis – Direct cause: Use of inefficient energy generators

systems and Direct cause: waste of existing electrical distribution systems) 26

COES Annual statics - 2014 27

19 Evaluation Projects of PAFE III (3.2.2 Causes analysis – Direct cause: Use of inefficient energy generators

systems and Direct cause: waste of existing electrical distribution systems) 28

19 Evaluation Projects of PAFE III (3.2.2 Causes analysis – Direct cause: Use of inefficient energy generators

systems and Direct cause: waste of existing electrical distribution systems)

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Item Applicability Condition Justification for project activity

consumers. Each Type I consumer expected to consume more than 1000 kWh per year shall also be metered. Prepaid devices for purchase of electricity is considered equivalent to metering under this methodology. Type I consumers whose consumption is individually required to be metered are designated as Type I-M and Type I consumers whose consumption is not required to be individually metered are designated as Type INM.

All beneficiaries are considered like new consumers and they will use prepaid devices for purchase of electricity.

29

10 This methodology is applicable where the amount of project electricity delivered to consumers can be determined (e.g. through the use of meters that continuously measure electricity delivered by the project activity to consumers or through prepaid devices that enable purchase of electricity by the user). Specifically: (a) A master-meter should be implemented as part of the project activity to measure the gross electricity sent out to all connected consumers (both existing and new consumers) from the main distribution system. However, when consumption of the project consumers is determined through metering or prepaid devices, summation of individual metered consumptions will provide the data for the overall consumption and no master meter is required; (b) Sub-master-meters should be implemented as part of the project activity to measure the gross electricity sent out to existing and/or new consumers who are not metered individually (e.g. consumers who were supplied electricity with an existing mini-grid prior to project implementation). Such sub-master-meters will measure total electricity supply to these existing and/or new consumers (e.g. metering at substation). Sub- master-meter is not required if: (i) The project activity includes only metered consumers (i.e. Type I-M and Type II consumers); or (ii) A master meter is implemented as in Item 10(a) above and consumption of each of the non-metered consumer (new and/or existing) is determined through a sample based survey (e.g. stratified random sampling); (c) Consumption of specific consumers as identified under Item 13 below shall be individually metered.

OPTION C: The PAFE III contemplates the use of prepaid devices that enable purchase of electricity by the user and summation of individual metered consumptions will provide the data for the overall consumption and no master meter is required.

30

11 An ex ante census of project energy consumers that will be supplied with electricity from the project will be carried out to document the physical

The PAFE III Technical Studies details the universe of beneficiaries as well as their physical location. It also estimates the

29

19 Data Sheet (8.3 Secondary grids and domestic connections – Connections) 30

19 Data Sheet (8.3 Secondary grids and domestic connections – Connections)

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Item Applicability Condition Justification for project activity

location of each consumer and the anticipated connected load and usage hours of each consumer. Optionally the anticipated load for individual households may be established based on the type of connection or payment arrangement provided (e.g. load limited, fee for service based connection).

connected load and the usage hours of each consumer.

31

12 For household consumers not metered (Type I- NM), consumption is calculated as specified below: (a) A master-meter is implemented as described in Item 10 (a); and (b) A sub master-meter is implemented as per Item 10 (b)and its reading is divided by the number of connected consumers; or (c) A sample survey (e.g. stratified random sampling) is undertaken as per Item 10(b) to determine the average consumption or tiers/classes of average consumptions

For consumers not metered, the consumption will be calculated by prepaid devices or surveys.

13 For household consumers metered (type I-M) and non-household consumers (Type II), consumption is measured using one of the options below: (a) Option 1 : Measurement is undertaken with standard electricity meters at all consumer locations; (b) Option 2: Billing records from pre-paid connections are used to determine the electricity purchased. Specifically: (i) A record of the electricity purchased by each project activity consumer is maintained; (ii) The total electricity consumed for each consumer is the summation of the pre-paid electricity purchased during the monitoring period, excluding the last purchase during the monitoring period but including the last purchase of the previous monitoring period. The total electricity delivered is the summation of the electricity purchased by consumers under the project activity.

Option 2 is applicable

14 Measures are limited to those that result in emission reductions of less than or equal to 60 kt CO2 equivalent annually.

The GHG emissions reductions projected for the PAFE III is estimated in 12,113.00 tons of CO2 equivalent per year.

32

From the above discussion, it can be concluded that project meets all the applicability criteria set under the selected approved small scale CDM methodology and hence the project category is applicable to the VCS project.

2.3 Project Boundary

According to the baseline methodology selected the project boundary is the spatial extent of the

project boundary includes all power plants within the host country physically connected through

transmission and distribution lines to the national or regional grid which is being extended through

31

19 Evaluation Projects of PAFE III (4.3 Summary of the demand and supply analysis of electric energy – 4.3.2

Information sources) 32

Spread sheet named “Emission reduction calculation of PAFE III”

PROJECT DESCRIPTION: VCS Version 3

v3.2 17

the project activity. It also includes the physical sites of the end-use consumers served by the

project activity.

The geographic project boundary selected for the project activities are the political boundary that

are located in the Cajamarca region. Power line will be constructed in the area where there is no

access to the national or regional power grid or supply through isolated generation. Power will be

distributed to meet domestic electricity needs.

Current situation of domestic energy needs is primarily covered by Fossil fuels such as kerosene,

diesel, firewood and candles that generate greenhouse gases. Accordingly, baselines and project

boundaries are defined below.

Figure N° 3 – Project and Baseline Boundaries

PROJECT DESCRIPTION: VCS Version 3

v3.2 18

Table N° 6 – Type of Emissions

Source Gas Included? Justification/Explanation

B a s e lin

e

Fossil Fuel

CO2 Included Main Emission source due combustion.

CH4 Excluded Excluded for simplification. This is conservative

N2O Excluded Excluded for simplification. This is conservative

P ro

je c t Dispatch of

electricity from the national grid.

CO2 Included According to the data from the National

Interconnected System Operation Committee -

COES the Peruvian network holds a 50.8%

effective power delivered from renewable

sources.

CH4 Excluded Excluded for simplification. This is conservative

N2O Excluded Excluded for simplification. This is conservative

2.4 Baseline Scenario

According with the General Guidelines for SSC CSM Methodologies, the establishment and

description of the baseline scenario must refer to the applicable provisions for all project types in

the Project standard. Then, the paragraph 47 of the Project Standard indicates that the Project

Participant shall describe the established baseline scenario for the proposed CDM project activity

including the technologies that would be employed and/or the activities that would take place in

the absence of the project activity.

Prior to the implementation of the Project Activity, communities within the Project region had no

access to the electricity and in these communities, Fossil fuels such as kerosene, diesel, firewood

and candles that generate greenhouse gases are used for lighting and other purposes that can

be served by electricity.

This baseline scenario is according with AMS III.BB V.02.0 Methodology that indicates that the

project activity will displace fossil fuel use, such as in fuel-based lighting systems and stand-alone

power generators.

The Project considers the extension of the national grid to areas that do not have access to

electricity before. The Project may replace emissions from fossil fuels combustion.

In case that the project is not implemented, the current situation will be continued in the project

area.

PROJECT DESCRIPTION: VCS Version 3

v3.2 19

2.5 Additionality

Additionality has been demonstrated and assessed according to the Methodological tool

Demonstration of additionality of small-scale project activities - Version 10.0, and is presented

below:

a) Investment barrier: According with the description of the Baseline scenario, if the Project

activity will be not implemented, current situation will be continued in the project area

(region of Cajamarca) so the Regional Government does not need invest in any activity.

But if the PAFE III is implemented, the Regional Government will need invest S/.

219’988,636.00 33

. So it’s a barrier because the Regional Government does not have that

total quantity of money to implement the Project and will need loan money to implement

the project. In that sense, the Japan Government loans S/.118’494,318.00 and the

Regional Government of Cajamarca will provide a counterpart of S/. 101’494,318.00 in

order to meet with the requirements of JICA loan to ensure the project sustainability

according with the Loan Agreement 34

. Also, in section "Particular Covenants" of the loan

agreement indicates a specific commitment for the administration of the loan, that

“Should the funds available from the proceeds of the Loan be insufficient for the

implementation of the Project, the Regional Government of Cajamarca shall make

arrangements promptly to provide such funds as shall be needed” (Loan Agreement_

APE33 Section 4.3) and, it’s important to point out that the Regional Government of

Cajamarca will not receive any income through PAFE III operation.

Finally, the agreement between Japan International Cooperation Agency (hereinafter

referred to as “JICA”) and the regional government of Cajamarca set the idea and the

commitment to join efforts to register PAFE III in the Carbon Market to get the benefits of

it and in order to promote the application of the PAFE III to the carbon market; therefore,

JICA, Regional Government of Cajamarca and FONAM signed an agreement 35

to

develop efforts and elaborate the first carbon studies of the PAFE III in order to apply to

the carbon market. In that sense, the Regional Government of Cajamarca needs

additional incomes from the carbon market to comply with the specific commitment for

the administration of the loan in order to ensure the sustainability of the Project due to the

JICA loan is insufficient.

2.6 Methodology Deviations

Not applicable.

33

Cajamarca Regional Council Agreement N°020-2009-GR.CAJ-CR page 40 34

Loan agreement_A PE-P33 35

Agreement JICA-FONAM-CAJAMARCA

PROJECT DESCRIPTION: VCS Version 3

v3.2 20

3 QUANTIFICATION OF GHG EMISSION REDUCTIONS AND REMOVALS

3.1 Baseline Emissions

The procedure for quantification of the Baseline Emissions for the Project is determined for the

“AMS-III.BB Electrification of communities through grid extension or construction of new mini-

grids --- Version 2.0” UNFCCC methodology as follows:

Definitions:

The new consumers will be designated as either households (Type I consumers) or non-

households (Type II consumers). This methodology requires metering of electricity consumption

of each Type II consumer as well as each Type I consumer expected to consume more than 1000

kWh per year. Type I consumers whose consumption is individually required to be metered are

designated as Type I-M and Type I consumers whose consumption is not required to be

individually metered are designated as Type I NM.

Calculations are as follows:

1. Baseline emissions are the sum of emissions associated with new consumers (Type I and Type II consumers) and existing consumers calculated as follows: }

yexistyTyMTyNMTy BEBEBEBEBE ,,2,1,1  (1)

Where:

BEy Baseline emissions in year y (tCO2)

BET1NM,y Baseline emission for Type I-NM consumers in year y (tCO2)

BET1M,y Baseline emissions for Type I-M consumers in year y (tCO2)

BET2,y Baseline emissions for Type II consumers in year y (tCO2)

BEexist,y Baseline emissions of existing consumers i.e. baseline emissions from displacement of electricity from an existing mini-grid (tCO2)

BEexist,y = 0, if there are no existing consumers or if the existing consumers are excluded from the project boundary.

2. Baseline emissions of existing consumers are calculated as:

mgridyexistyexist EFEDBE  ,, (2)

Where:

PROJECT DESCRIPTION: VCS Version 3

v3.2 21

EDexist,y Total electricity delivered to existing consumers Nexist,y consumers (MWh)

EFmgrid Baseline emissions factor for the mini-grid (tCO2/MWh)

For a mini-grid system where all generators use exclusively fuel oil and/or diesel fuel, emission factor can be determined per the procedure provided in “AMS-I.F: Renewable electricity generation for captive use and mini-grid”.

For all other mini-grids it shall be calculated as the weighted average emissions for the current generation mix following the procedure provided in AMS-I.D “Grid connected renewable electricity generation”

3. Baseline emissions of Type II consumers, BET2,y are calculated as:

 

 Ny

i

TCOyiTyT EFECBE 1

2,2,,2,2

(3)

Where:

BET2,y Baseline emissions for Type II consumers in year y (tCO2)

ECT2,i,y Metered annual electricity consumption of Type II consumer i in year y (MWh)

EFCO2,T2 1.0 (tCO2/MWh)

Ny Number of Type II consumers in year y

i Type II consumer (i=1,2,3,…)

4. Baseline emissions of Type I M consumers, BET1M,y are calculated as:

 

 My

j

MTCOyjMTyMT EFECBE 1

1,2,,1,1

(4)

Where:

BET1M,y Baseline emissions for Type I-M consumers in year y (tCO2)

ECT1M,j,y Annual electricity consumption of Type I-M consumer j in year y (MWh)

EFCO2,T1M 1. If ECT1M,j,y is equal to or less than 0.055 MWh/y, then use a default value of 6.8 (tCO2/MWh);

2. If ECT1M,j,y is less or equal to 0.250 MWh/y but greater than 0.055 MWh/y, then:

a) For the portion up to and including 0.055 MWh/y, use a default value of 6.8 (tCO2/MWh);

b) For the portion greater than 0.055 MWh/y, use a default value of 1.3 (tCO2/MWh);

3. If ECT1M,j,y is greater than 0.250 MWh/y but less than or equal to 0.500 MWh/y, then:

a) For the portion up to and including 0.055 MWh/y use a default value of 6.8 (t CO2/MWh);

b) For the portion greater than 0.055 MWh/y and less than 0.25 MWh/y use a default value of 1.3 (t CO2/MWh); and

PROJECT DESCRIPTION: VCS Version 3

v3.2 22

c) For the portion greater than 0.25 MWh/y use a default value of 1.0 (t CO2/MWh);

4. If ECT1M,j,y is greater than 0.500 MWh/y then use a default value of 1.0 (t CO2/MWh) for the entire portion (i.e. default values of 1.3 (t CO2/MWh) or 6.8 (t CO2/MWh) are not eligible for any of the portions)

My Number of Type I-M consumers in year y

j Type I-M consumer (j=1,2,3,…)

5. For Type I-NM consumers, baseline emissions (BET1NM,y) are calculated as a function of electricity consumed by the Type I-NM consumers and a baseline emission factor chosen based on the annual electricity consumption of Type I-NM consumers:

  NMTCOyNMTtotyNMT EFECBE 1,2,1_,1  (5)

Where:

ECtot_T1NM,y Total electricity delivered to all Type I.NM consumers, net of transmission and distribution losses (MWh)

BET1NM,y Baseline emissions for Tytpe I-NM consumers in year y (tCO2)

EFCO2,T1NM (a) If ECT1NM,y is equal to or less than 0.055 MWh/y, then use a default value of 6.8 (tCO2/MWh)

(b) If ECT1NM,y is less than or equal to 0.250 MWh/y but greater than 0.055 MWh/y, then:

(i) For the portion up to and including 0.055 MWh/y, use a default value of 6.8 (tCO2/MWh);

(ii) For the portion greater than 0.055 MWh/y, use a default value of 1.3 (tCO2/MWh)

(c) If ECT1NM,y is greater than 0.250 MWh/y but less than or equal to 0.500 MWh/y, then:

(i) For the portion up to and including 0.055 MWh/y use a default value of 6.8 (t CO2/MWh);

(ii) For the portion greater than 0.055 MWh/y and less than 0.25 MWh/y use a default value of 1.3 (t CO2/MWh);

(iii) For the portion greater than 0.25 MWh/y use a default value of 1.0 (t CO2/MWh);

(d) If ECT1NM,y is greater than 0.500 MWh/y, then use a default value of 1.0 (t CO2/MWh) for the entire portion, i.e. default values of 1.3 (t CO2/MWh) or 6.8 (tCO2/MWh) are not eligible for any of the portions.

When a sample survey is undertaken to determine the consumption:

 

NMy

k

ykNMTyNMTtot ECEC 1

,,1,1_

(6)

PROJECT DESCRIPTION: VCS Version 3

v3.2 23

Where:

ECT1NM,k,y Annual electricity consumption of Type I-NM consumer k in year y (MWh)

NMy Number of Type I-NM consumers in year y

k Type I-NM consumer (k=1,2,3…)

6. EDtot,y is determined as the sum of metered consumption of all consumers. The below equation shall be uded:

    Ny

j

yiTyNMTtot

My

j

yjMTyexistytot ECECECEDED ,,2,1_,,1,, (7)

Where:

ECtot,y Total electricity delivered to new and existing consumers (MWh)

EDexist,y Total electricity delivered to existing consumers (MWh), if there

are any existing consumers included in the project activity

ECT1M,j,y Annual electricity consumption of Type I-M consumer j in year y

(MWh)

My Number of Type I-M consumers in year y

ECT2,i,y Annual electricity consumption of Type II consumer i in year y

(MWh)

Ny Number of Type II consumers in year y

3.2 Project Emissions

The procedure for quantification of the Project Emissions is determined for the “AMS-III.BB

Electrification of communities through grid extension or construction of new mini-grids --- Version

2.0” UNFCCC methodology as follows:

   grid

ytot

y TL

EFED PE

 

1

y, CO2 grid, , (8)

Where:

yPE Project emissions from electricity generation in year y (tCO2)

ytotED , Total electricity delivered to all new and existing consumers (MWh)

y, CO2 grid, EF Emissions factor for the project electricity system in year y (tCO2/MWh)

• If the project activity involves connection to an existing national or regional grid the emissions factor is determined by ranking all the power units in the national or regional grid in the decreasing order of GHG intensity. The emissions factor is the weighted average emissions factor of the top 10% most GHG intensive plants in the grid. The emissions factors of the plants shall be calculated based on default plant efficiency provided in the “Tool to calculate the

PROJECT DESCRIPTION: VCS Version 3

v3.2 24

emission factor for an electricity system”;

• If the project activity involves connection to an existing mini-grid or construction of new mini-grid the emissions factor is determined as either: (a) for a mini-grid system where all generators use exclusively fuel oil and/or diesel fuel per the procedure for such mini- grids provided in AMS-I.F; or (b) for all other mini-grids per the weighted average emissions for the current generation mix following the procedure provided in AMS-I.D

gridTL Transmission and distribution losses in the project electricity system supplying the project activity (%), with 10% as the default value

3.3 Leakage

According with the “AMS-III.BB Electrification of communities through grid extension or

construction of new mini-grids --- Version 2.0” UNFCCC methodology, the leakage on account of

construction of new transmission/distribution lines (e.g. carbon stock loss due to deforestation)

shall be calculated using the method indicated in baseline and monitoring methodology AM0104

“Interconnection of electricity grids in countries with economic merit order dispatch”. If the

estimated leakage is within 5% of the estimated emission reductions of the project, then this

leakage source may be neglected, otherwise the leakage shall be deducted from the emissions

reductions.

In that sense, the procedure for quantification of the Leakage of the Project is determined for the

“AM0104: Interconnection of electricity grids in countries with economic merit order dispatch”

UNFCCC methodology as follows:

a) Divide the transmission line into segments not exceeding 5km, and attribute each

segment the type of vegetation (forest land, grassland, cropland, etc.) and location

(tropical/temperate, wet/dry), according to classifications cited in IPCC 2006 Guidelines,

Volume 4;

b) If the segment can be classified as forest land, then calculate the area of segment

deforested on the basis of the length of segment deforested for segment i (LDEF,i) and

average width of segment deforested for segment i (WDEF,i);

c) Assign a default value for aboveground biomass for segment i (MA,i) to be deforested for

each segment, on the basis of conservative interpretation of tables 4.7 and 4.8 of IPCC

2006 Guidelines, Volume 4, chapter 4;

d) Calculate the total leakage due to deforestation as follows:

  

  

 

i

iAiDEFiDEF MWLLE 12

44 5.0,,,1

(9)

Where:

LE1 = Leakage emissions during the first monitoring period (t CO2)

LDEF,i = Length deforested for segment i (100m)

PROJECT DESCRIPTION: VCS Version 3

v3.2 25

WDEF,i = Width deforested for segment i (100m)

MA,i = Aboveground biomass of land to be deforested for segment i (tonnes d.m./ha)

0.5 = Carbon fraction of dry matter (t-C/tonnes d.m.)

i = Segment of transmission line

3.4 Net GHG Emission Reductions and Removals

A) Base line emissions calculation is as follows:

yexistyTyMTyNMTy BEBEBEBEBE ,,2,1,1 

Step 1: BET1NM,y calculation:

  NMTCOyNMTtotyNMT EFECBE 1,2,1_,1 

But:

 

NMy

k

ykNMTyNMTtot ECEC 1

,,1,1_

So:

NMTCO

NMy

k

ykNMTyNMT EFECBE 1,2 1

,,1,1  

Where, values for the project are as follows:

 

NMy

k

ykNMTEC 1

,,1 = 12,687.21 MWh 36

NMTCOEF 1,2 = 1 tCO2/MWh 37

NMy = 46188 38

So:

yNMTBE ,1 = 12,687.00 tCO2

Step 2: BETIM,y calculation:

36

19 Market Analyses of PAFE III 37

By conservative approach, ECT1NM,k,y = 12,687.21 MWh/46188 = 0.27 MWh, so according with the sentence

above “For the portion greater than 0.25 MWh/y use a default value of 1.0 (t CO2/MWh)” EFCO2,T1M,=1 tCO2/MWh 38

19 Market Analyses of PAFE III

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