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Second Regional Workshop on Capacity Development for the Clean Development

Mechanism

23 March 2004 Siem Reap, Cambodia

GHG Mitigation and CDM Project Pipeline in Cambodia

Presented by Thy SUM, Climate Change Office

Ministry of Environment, Cambodia

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Outline Outline

1.1. Cambodia’s National GHG InventoryCambodia’s National GHG Inventory

2.2. GHG Mitigation AnalysisGHG Mitigation Analysis

3. PIN Angkor Prosperous Rice Mill

4. PIN Koh Kong Mini-Hydro Bundling

5. Summary

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I. Cambodia’s National GHG Inventory (1)

Base year (1994) Based on the Revised 1996 IPCC Guidelines Activity Data: some are available from

concerned ministries/agencies Emission Factors: default data presented in

the IPCC Guidelines were used mainly Greenhouse gases (GHGs): carbon dioxide

(CO2), methane (CH4) and nitrous oxide (N2O) Major sectors: Energy, Industrial Processes,

Agriculture, Waste, and LUCF.

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I. Cmbodia’s National GHG Inventory (2)

CO2 CH4 N2O NOx CO

ENERGY 1,272.08 24.13 0.33 16.69 456.56

INDUSTRIAL PROCESSES 49.85 0.01 0.03

AGRICULTURE 339.25 11.08 2.7 95.76

WASTE 6.77 0.42

LAND USE CHANGE AND FORESTRY 64,850.23 45,214.27 74.77 0.51 18.58 654.2

TOTAL NAT'L GHG EMISSIONS/UPTAKE 64,850.23 46,536.20 444.92 12.35 37.98 1,206.55

Sectors and SinksEmission

CO2 uptake

Summary of 1994 GHG inventory

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I. Cambodia’s National GHG Inventory (3)

Figure 1: Share of the Three Main GHGs; (b) Total CO2

Equivalent Emissions by Sectors

LUCF79%

Energy3% Agriculture

18%

Waste0%

Industry0%

N2O 8%

CH4 18%

CO2 74%

(a) (b)

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I. Cambodia’s National GHG Inventory (4)

A B C D E F

IPCC Source CategoriesDirectGHG

Base Year(Gg CO2

Eqv.)

CurentYear

Estimate

LevelAssess

ment

Cummulativetotal of

Column E

CH4 Emission from Enteric fermentation in Domestic Livestock CH4 3417.69 0.27 0.27

CH4 Emission from Rice Production CH4 3158.36 0.25 0.52

Direct N2O Emission from Agricultural Soils N2O 2097.39 0.16 0.68

N2O Emission from Manure Management N2O 1203.55 0.09 0.77

Mobile Combustion: Road Vehicle, Railway and Other CO2 757.77 0.06 0.83

CH4 Emission from Sationay Combustion CH4 503.83 0.04 0.87

CH4 Emission from Manure Management CH4 462.84 0.04 0.91

CO2 Emission from Stationary Combustion CO2 446.83 0.04 0.94

N2O Emission from Wasterwater Handling N2O 131.16 0.01 0.95

CH4 Emission from Solid Waste Disposal Sites CH4 123.96 0.01 0.96

Direct N2O Emission from Nitrogen Used in Agriculture N2O 111.82 0.01 0.97

N2O Emission from Stationary Combustion N2O 100.05 0.01 0.98

Mobile Combustion: Aircraft CO2 51.32 0.00 0.98

CO2 Emission from Cement Production CO2 49.85 0.00 0.99

Tier 1 Analysis-Level Assessment (Cambodia Inventory)

Cambodia’s GHG key source categories (excluding LULUCF)

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II. GHG Mitigation Analysis (1)

Option studied*:Option studied*:

Combined cycle gas turbine

Hydropower

Phnom Penh city shuttles

Improve cook stove

Compact fluorescent

Mass transit for rural areas*These options were assessed by government staff conducting the National Communication and not by project developers.

Energy Sector

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II. GHG Mitigation Analysis (2)

Summary of GHG reduction (based on LEAP modeling)

Mitigation Option CO2-Eqv. Reduction (Gg)

% Reduction (CO2 Eqv.)

Combined Cycle Gas Turbine

19980 33.5

Improved Cook Stove 13060 21.9

Hydropower 12390 20.8

Compact Fluorescent Lamp 7320 12.3

Phnom Penh City Shutles 2300 3.8

Mass Transit (Rural) 4600 7.7

Total GHG Reduction 59650 100

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II. GHG Mitigation Analysis (3)

In this study, mitigation options being evaluated were Forest protection (FP) Reforestation with sort rotation (RSR) Reforestation long rotation (RLR) Reforestation without rotation using fast

(RFG) species, and Reforestation without rotation slow growing

species (RLG)

Forestry Sector

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II. GHG Mitigation Analysis (4)

Comparison of the five mitigation options

$/tC $/ha $/tC $/ha $/tC $/haRLR 120 0.29 35.4 0.41 48.8 0.05 6.0RSR 43 1.10 47.2 1.78 76.2 6.12 199.8RLG 141 0.18 25.4 0.28 39.2 -0.26 -36.4RFG 92 0.28 25.4 0.43 39.2 -0.32 -29.1FP 137 0.02 2.5 0.51 70.0 -0.77 -105.7

Initial cost PV of cost NPV of benefit

Mitigation Option

Mitigation potential (tC/ha)

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II. GHG Mitigation Analysis (5)

Agriculture Sector

The mitigation options evaluated for the agriculture sector only covered rice paddies:

Intermittent irrigation applied to dry season rice Direct seeded applied in both dry and wet seasons Organic matter management applied for both seasons; and Zero tillage applied in both seasons.

III. PIN Angkor Prosperous Rice Mill (1)

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III. PIN Angkor Prosperous Rice Mill (2)

Objectives of the project

Production of electricity and heat using rice husk for internal consumption by the mill

Project description and proposed activities

1.5 MWe rice husk fired cogeneration plant Replacement of currently used diesel generators

Technologies to be employed

Traveling grate boiler with 75% rated efficiency Steam impulse turbines

Project Description

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III. PIN Angkor Prosperous Rice Mill (3)

Project Developer

Angkor Prosperous Rice Mill

Project Sponsors EC-Cogen 3 (15% discount from EC suppliers of equipment)Searching for other sponsors

Greenhouse gases targeted

CO2 only. CH4 from burning of rice husk is not claimed.

Location of the projects

Kandal Province, 23 km south of Phnom Penh

Expected Schedule

Project start dateProject lifetime

?20 years

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III. PIN Angkor Prosperous Rice Mill(4)

Estimate of Greenhouse Gases abated (tons of CO2 equivalent)

Annual: 10.8 kT CO2eOver crediting period of 21 years: 226 kT CO2eCalculations based on:

CO2 from biomass residues considered carbon neutral (IPCC) 12 GWh annual electric output of project 0.9 kg CO2e/kWh emission rate (diesel generation units displaced by project) (12 x 1000) MWh x 0.9 t CO2e/MWh = 10.8 kT CO2e

Baseline scenario

Replacement of in-house diesel generation units Difficulties in securing financing

Social and Environmental Benefits

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III. PIN Angkor Prosperous Rice Mill (5)

Specific global & local environmental benefits

greenhouse gas emission reductions sale of ashes as natural fertiliser

Socio-economic aspects

Angkor Prosperous specialises in high quality organic rice varieties. The use of ashes as fertilisers within its network of organic farmers will contribute to increasing their productivity. Rice husk may be used as cooking fuel by rural people and cottage industries. There may be negative social impacts.

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III. PIN Angkor Prosperous Rice Mill (6)

Total project cost estimates US$ 4.1 million

Sources of financing EC rebate on European equipment (about US $300,000) some 90% not yet secured

Revenues from Certified Emission Reductions

AnnualOver 10 years

Over 21 years

US $54,000 (at US $5 per t CO2)US $540,000US $1,134,000

Forecasted Financial Internal Rate of Return* (without CER revenues – Discount rate 15%)*Analysis undertaken by EC Cogen3

21.46 %

Finance

IV. PIN Koh Kong Mini-Hydro Bundling (1)

Based on Projects identified in

Mini-Hydropower Study by Meritech Ltd

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IV. PIN Koh Kong Mini-Hydro Bundling (2)

Objectives of the project

Production of electricity from hydro resources in SW Cambodia to feed Phnom Penh electricity grid.

Project description and proposed activities

Bundling 4 mini-hydro projects 12.3MW total installed capacity

4.2MW - P. Batau; 3.1MW - O Sla3MW P. Tunsang upstream; 2MW downstream

Generating 61.7GWh/an Located within 20km radius, feeding into existing 115kV transmission line Displacement of currently used oil and diesel electricity generation in Phnom Penh

Technologies to be employed

Francis turbine generating units

Project Description

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IV. PIN Koh Kong Mini-Hydro Bundling (3)

Project Developer

Searching for Project Developer Pre-feasibility/investment study completed

Project Sponsors Searching for Project Sponsors

Greenhouse gases targeted

CO2 only

Location of the projects

Koh Kong Province (~140KM SW Phnom Penh)

Expected Schedule

Project start date

Devel/Const

Project lifetime

?3 years30 years

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IV. PIN Koh Kong Mini-Hydro Bundling (4)

Estimate of Greenhouse Gases abated (tons of CO2 equivalent)

Annual: 47.8 kT CO2e

Over crediting period of 10 years: 478 kT CO2e

Over crediting period of 21 years: 1,004 kT CO2e

Calculations based on: 61.7 GWh annual electric output of project .775 kg CO2e/kWh emission rate (weighted average emission factor of Phnom Penh electricity grid) (61.7 x 1000) MWh x .78 t CO2e/MWh =47.8 kTCO2e

Baseline scenario

Small Scale Methodology – weighted average emissions of Phnom Penh electricity grid. Barrier - Difficulties in attracting developers and financing

Social and Environmental Benefits

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IV. PIN Koh Kong Mini-Hydro Bundling (5)

Specific global & local environmental benefits & impacts

greenhouse gas emission reductions reduction in air pollution from old fossil fuel generation units reduction in transportation fossil fuels small diversion of river changing flow regime located in areas of secondary forests within protected area

Socio-economic aspects

reduction of fossil fuel imports provision electricity increase reliability and decrease cost (can improve health facilities, education, potential for improved industry development)

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IV. PIN Koh Kong Mini-Hydro Bundling (6)

Total project cost estimates Total US$18.1m US$6.0m – P. Batau*US$3.4m – O Sla*US$4.3m P. Tunsang

upstream+

US$4.4m P. Tunsang dnstream+

Sources of financing Not yet secured

Revenues from CERsAnnualOver 10 years

Over 21 years

US $239k (at US $5 per t CO2e)US $2.39mUS $5m

Forecasted Financial Internal Rate of Return*Discount rate 10%; *Analysis by Meritech Ltd

32.4% - P. Batau27.7% - O Sla +assumption based on MW cost for

P.Batau

Finance

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V. Summary

Cambodia’s GHG Inventory identified that LULUCF is the greatest contributor to the total GHG emission/uptake

Of non-LULUCF sectors; the main sources of GHGs are from agriculture, energy and waste activities

Eligible CDM agriculture activities are difficult and not yet assessed for CDM potential

Energy and waste projects more focus for CDM in Cambodia

Limited investors and project developers for CDM; limited identification of potential CDM projects

Plenty of ‘barriers’ to verify additionality!