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UK ARB VCS 2007 VerificationIssue 1

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VERIFICATION REPORTfor

Triveni Engineering andIndustries LimitedBagasse based Co-

generation Power Project atKhatauli

SGS Climate Change ProgrammeSGS United Kingdom LtdSGS House217-221 London RoadCamberley SurreyGU153EYUnited Kingdom

SGS United Kingdom Ltd SGS House, 217-221 London Road, Camberley, Surrey GU15 3EY Tel +44 (0)1276 697810 Fax +44 (0)1276 697888Registered in England No. 1193985 Rossmore Business Pari<, Ellesmere Port, Cheshire CH65 3EN www.sgs.com

Member of SGS Group (Societe Generale de Surveillance)

http://www.sgs.com

UK AR6 VCS 2007 VerificationIssue 1

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COpy[l-'rOlect NO.:

18tn February 2008 CCP.VOl0149-BINam [;omDanv

Bagasse Based Co-generation Power SGS United Kingdom LimitedProject at Khatauli

Nam ' ••rna"'mVoluntary Carbon Standard Version 2007

IRev I r [;lient:

01 Triveni Engineering & Industrial Limited (TEll)

sumrruorv:

SGS United Kingdom Limited has performed the Voluntary Emission Reduction verification of theCDM projectBaggase based Co-generation Power Plant at Khatauli UNFCCC Ref. Number 0826. The verification includesconfirming the implementation of the monitoring plans of the registered PDD UNFCCC reg. no 0826 and theapplication of the monitoring methodology as per ACM0006, version 03 dated 19/05/2006. A site visit wasconducted to verify the data submitted in the monitoring report.

The project activity has been utilizing the bagasse generated in the sugar mill to generate steam and electricityfor captive consumption and has been exporting the surplus power to the Uttar Pradesh Power CorporationLimited (UPPCl). The project activity involved installation of one number of 120 TPH nominal capacity highpressure boilers with steam outlet pressure of 87 kg/cm2, one number of extractions cum condensing turbogenerator of 23 MW. Steam produced in project plant has been exported to sugar manufacturing unit whereasthe electricity produced in the project plant is partially exported to sugar unit and partially to Uttar PradeshPower Corporation Limited (UPPCl).

SGS confirms that the project is implemented in accordance with the validated and registered Project DesignDocument. The monitoring system is in place and the emission reductions are calculated without materialmisstatements. Our opinion relates to the projects GHG emissions and the resulting GHG emission reductionsreported and related to the valid and registered project baseline and monitoring and its associated documents.Based on the information seen and evaluated we confirm that the implementation of the project has resulted in62,796 tC02e during period 01/0412006up to 18/03/2007.

SUl>ler.l:

ves 2007 Verification Indexing termsmed out bv

Nikunj Agarwal, lead Assessor

Kaviraj Pradhan, local Assessor

rechnical ReView name and datel

Aurea Nardelli (TR Trainee) ~ No Distribution (without permission from theSiddharth Yadav Client or responsible organisational unit)

,Ionatorv (name and datel

Siddharth Yadav D Limited distribution

lJate Of ~Inal DeCISion: INum

114 [J Unrestricted distribution


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COpyAbbreviationsCAR Corrective Action RequestCDM Clean Development MechanismCEA Central Electricity AuthorityCEF Carbon Emission FactorCER Certified Emission ReductionsC02 Carbon dioxideC02e Carbon dioxide equivalentDNA Designated National AuthorityDOE Designated Operational EntityGHG Green House Gas(es)IPCC Intergovernmental Panel on Climate ChangeMP Monitoring PlanMR Monitoring ReportNIR New Information RequestsODA Official Development AssistancePDD Project Design DocumentVCS Voluntary Carbon StandardVCUs Voluntary Carbon UnitsUPPCL Uttar Pradesh Power Cooperation Limited


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Table of Content1. Introduction 5

1.1 Objective : 51.2 Scope and Criteria 51.3 VCS project Description 51.4 Level of assurance 51.5 Project Activity and Period Covered 6

2. Methodology 72.1 General Approach 72.2 Verification Team for this Assessment. 72.3 Means of Verification 7

2.3.1 Review of Project Documentation 72.3.2 Onsite Inspections 82.3.3 Review of Monitoring Results and Verification of the Correct Application of Monitoring Methodology 82.3.4 Determinations of the Reductions in GHG Emissions 92.3.5 Review of Additional Data from other Sources if appropriate 9

2.4 Reporting of Findings 102.5 Intemal Quality Control 10

3. Verification Findings 113.1 Remaining Issues, including any material discrepancy, FAR's from Previous Validation 113.2 Project Implementation 113.3 Completeness of Monitoring 113.4 Accuracy of Emission Reduction Calculations 113.5 Quality of Evidence to Determine Emission Reductions 113.6 Management and Operational System 11

4. Verification Conclusion 125. Document References 14

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1.1 ObjectiveThe client has commissioned an independent verification by SGS United Kingdom Ltd. of its reported greenhousegas emission reductions from the Bagasse based Co-generation Power Project at Khatauli project. The verifiershave reviewed the GHG data collected to date for the period between 01/04/2006 and 18/03/2007

The purposes of this verification exercise are, by review of objective eVidence, to independently review:• Whether the project has resulted in emission reductions as declared by the organisation or GHG

project's GHG assertion• The data reported are accurate, complete, consistent, transparent and free of material error or

omission.

1.2 Scope and CriteriaThis engagement covers verification of emission reductions from anthropogenic sources of greenhouse gasesincluded within the project boundary of the 'Bagasse based Co-generation Power Project at Khatauli.

Our approach is risk-based, drawing on an understanding of the risks associated with reporting GHG emissionsdata and the controls in place to mitigate these. Our examination includes assessment, on a test basis, ofevidence relevant to the amounts and disclosures in relation to the project's GHG emission reductions for thedefined reporting period.

1.3 VCSproject DescriptionThe project activity has been utilizing the bagasse generated in the sugar mill to generate steam and electricity forcaptive consumption and has been exporting the surplus power to the Uttar Pradesh Power Corporation Limited(UPPCL).

Description

Steam generating capacity (tons per hour) 120

Steam pressure (kg/cm2) 87

No. 1

Description 1no. extraction cum condensing turbine

Power (MW) 23

Steam inlet pressure (kg/cm2) 87

1.4 Level of assuranceThe parameters and values presented in the monitoring report were assessed through review of detailed projectdocumentation and production records, interviews with personnel at Triveni Engineering & Industries Limited,


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COpycheck of log book, and collection of fuel analysis report, observation of established monitoring and reportingpractices and assessment of the reliability of measuring equipment.Information which was not available during site visit was reported as New Information Request (NIR), followingsubmission of additional information, monitoring and operational records, and the reconsolidation of all reporteddata was assessed again.

This engagement covers emissions and emission reductions from anthropogenic sources of greenhouse gasesincluded within the project boundary of the following project and period.

Title of Project Activity: Bagasse based Co-generation Power Project at

Khatauli

UNFCCC Registration No:

Monitoring Period Covered in this Report

Project Participants

Location of the Project Activity:

0826

01/04/2006 and 18/03/2007

Triveni Engineering & Industries Limited

Khatuali, District - Muzzafarnagar, UttarPradesh/India, Latitude: 29 ON16'Longitude: 77 OE42'


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2.1 General ApproachSGS's approach to the verification is a two-stage process.

In the first stage, SGS completed a strategic review and risk assessment of the projects activities and processes inorder to gain a full understanding of:

• Activities associated with all the sources contributing to the project emissions and emission reductions,including leakage if relevant;

• Protocols used to estimate or measure GHG emissions from these sources;

• Collection and handling of data;

• Controls on the collection and handling of data;

• Means of verifying reported data; and

• Compilation of the monitoring report.

At the end of this stage. SGS produced a Periodic Verification Checklist which, based on the risk assessment ofthe parameters and data collection and handling processes for each of those parameters, describes theverification approach and the sampling plan.Using the Periodic Verification checklist, SGS verified the implementation of the monitoring plan and the datapresented in the Monitoring Report for the period in question. This involved a site visit and a desk review of themonitoring report. This verification report describes the findings of this assessment.

Name Role SGS Office

Nikunj Agarwal Lead Assessor SGS IndiaKaviraj Pradhan Local Assessor SGS India

2.3.1 Review of Project DocumentationThe validated POD, the monitoring report submitted by the client and additional background documents related tothe project performance were reviewed. A complete list of all documents reviewed is attached in section 5 of thisreport.


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COPT2.3.2 Onsite Inspections

As part of the verification, the following on-site inspections have been performed

Location: Triveni Engineering and IndustriesLimited, Khatuali, U.P.

Date: Ur November 2007

Coverage Source of information / Personsinterviewed

Management Approach to GHG commitment Mr. Ashish Awasthi DGM-CoordinationAssessment of Project Boundary Mr. S. M. Ramesh Head Power PlantCDM monitoring & reporting documentation Mr. Sudharkar RaoMonitoring Plan and QAlQC Procedures Mr. Nitin Arora Sr. Consultant E& YQuality Assurance - Management and operating Mr. Satyanaryana YadavsystemEmergency procedures Mr. K. Hari Krishana,

2.3.3 Review of Monitoring Results and Verification of the Correct Application of MonitoringMethodology

The total quantity of electricity generated EGtotal, v(MWh) was cross checked against the plant log sheets andcalibration certificates of energy meter were also checked for validity. CAR 02 was raised for justification why themonitoring plan mentions that calibration of energy meter will be done annually where as it is done one in a threeyear. The monitoring report version 02 has been revised and mentioned that the calibration will be doneperiodically with reference to the monitoring plan of registered PDD. CAR02 was closed out.

Auxiliary consumption of electricity EGaux, y(MWh) was cross checked against the plant log sheets and calibrationcertificates of energy meter were also checked for validity.

Net Electricity generation at the project plant (MWh) is net power supplied to plant is measured by taking thedifference of the gross power generated and the auxiliary power consumption in the plant. The plant log sheetswere checked for data collection by checking the calibration certificates of two energy meter (gross power andauxiliary power). The calculations in the excel sheet were also checked.

Quantity of biomass combusted in the project (tonnes) was checked against the stock inventory and calibrationcertificate of weigh bridge was also checked for validity. NIR04 was raised with reference to the monitoring reportthat why the parameters related to the bagass and thermal energy have not been linked to emission reductioncalculations. The bagass quantity used in the project activity and thermal efficiency has been included in themonitoring plan as per the monitoring requirement of the ACM0006, version 03. Kindly refer to page 40 of theACM006, version 03. The quantity of bagass and thermal efficiency have been calculated to assess that the thequantity of heat generated in the project plant is not smaller than the quantity of heat that would be generated inthe absence of the project activity. Thus, the project implementation does not lead to diversion of steam generatedfrom other fossil fuel based sources to the project activity. Hence NIR04 was closed out

Net quantity of heat generated by firing biomass in the plant (MWh) is calculated from the parameters viz. SteamQuantity, pressure and temperature are being monitored continuously. Plant log sheets were checked for datacollection and archiving. Calibration certificate of steam flow meter was also checked for its date of validity.

Thermal energy efficiency (%) is calculated from the heat input (from biomass combustion) and the enthalpy of thesteam and not being monitored directly. The calculation was checked in the excel sheet. NIR03 was raised to getmore clarification why thermal efficiency has been calculated when it is not included any how for emissionreduction calculations. The efficiency of heat generation has been included in the monitoring plan as per therequirement of the ACM0006, version 03. This is to assess that the quantity of heat generated in the project plantis not smaller than the quantity of heat that would be generated in the absence of the project activity. Thus, theproject implementation does not lead to diversion of steam generated from other fossil fuel based sources to theproject activity. NIR03 was closed out.

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COpyNet Calorific Value of bagasse MWh I tonne was checked from the lab reports. The NCV of biomass was analysedonly by third party. The lab is approved by National Accredited Board (NABL) (150/IEC17025) and also fromministry of Environment and Forest Govt. of India.

Number of trucks trips for the transportation of biomass is been monitored to account the project emissions due totransportation of biomass from out side the plant premises. Per day trips of trucks transporting the biomass isrecorded in plant log sheet. These values are summarised in MIC. This MIC is prepared by shift in charge andsends to the HOD for approval before it is used for emission reduction calculations. The values given in spreadsheets was cross checked with the MIC and found correct. CAR01 was raised to explain why the parametersrelated to the diesel consumption have not been included in monitoring plan however these are monitored andmentioned in excel sheet. Responding to this the number of trips of trucks and distance travel for thetransportation of biomass have been included in monitoring plan. 50 CAR01 was closed out.

Average return trip distance between biomass fuel supply site and the project site (km) is monitored from thereceipt of biomass provided (Challans). The distances travel by the trucks per trip is recorded in plant log sheets.These values has been recorded in plant log sheets and summarised in the MIC. The values were cross checkedand found correct. The project emissions have been calculated by multiplying the total distance travel for biomasstransportation.

Parameter Reported Value Verified Value

Net Electricity generation from 1,191,841 1,191,841existing unit (KWh)

Net electricity generation in Cogen 34,040,439 34,040,439plant in Year (KWh)

Talai net electricity generation 35,232,280 35,232,280inclUding Cogen plant in Year (KWh)

Baseline Emission factor 0.75087 0.75087(tCOz/MWh)

Quantity of Biomass in tonn from 88,742 88,742April 06 to March 07

Baseline emissions (tonne of 62930 62930CO2) from April 06 to March 07

Project emissions (tonne of CO2) 134 134from April 06 to March 07

Emission reductions (tonne of 62796 62796CO2) from April 06 to March 07

2.3.5 Review of Additional Data from other Sources if appropriateC02 emission factor (Baseline) tC02/kWh was calculated by TElL as per ACM0002 and this was checked againstthe methodology ACM0002 and found correct. The baseline emission factor has been fixed "ex-ante" in theregistered POD.


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C02 emission factor (project emission due to diesel consumption in biomass transportation) tC02/GJ values wastaken from the Central Electricity Authority (CEA) web site. These value was checked from the Baseline CarbonEmission Data Base Version 02, available publicly at CEA web site (www.cea.nic.in), and found correct.

2.4 Reportingof FindingsAs an outcome of the verification process, the team can raise different types of findings

In general, where insufficient or inaccurate information is available and clarification or new information is requiredthe team shall raise a New Information Request (NIR) specifying what additional information is required.

Where a non-conformance arises the team shall raise a Corrective Action Request (CAR). A CAR is issued,where:

I. the verification is not able to obtain sufficient evidence for the reported emission reductions or part of thereported emission reductions. In this case these emission reductions shall not be verified and certified;

II. the verification has identified misstatements in the reported emission reductions. Emission reductions withmisstatements shall be discounted based on the verifiers ex-post determination of the achieved emissionreductions

The verification process may be halted until this information has been made available to the assessors'satisfaction. Failure to address a NIR may result in a CAR. Information or clarifications provided as a result of anNIR may also lead to a CAR.

Observations may be raised which are for the benefit of future projects and future verification actors. These haveno impact upon the completion of the verification activity.

Corrective Action Requests and New Information Requests are detailed in Periodic Verification Checklist. TheProject Developer is given the opportunity to "close" outstanding CARs and respond to NIRs and Observations.

2.5 InternalQualityControlFollowing the completion of the assessment process and a recommendation by the Assessment Team, alldocumentation will be forwarded to a Technical Reviewer. The task of the Technical Reviewer is to check that allprocedures have been followed and all conclusions are justified. The Technical Reviewer will either accept orreject the recommendation made by the assessment team.


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coPy3.1 Remaining Issues, including any material discrepancy, FAR's from Previous ValidationThere are no issues pending from the previous validatiQn report.

3.2 Project ImplementationThe physical components, project boundaries are in conformity with description in the registered PDD andmonitoring report. No additional emission sources used for project activity.

The project was commissioned on 18/10/2005 and this was verified from the minutes of meetings (MoM) held on18/10/2005 between UPPCL and project proponent. The MoM states that the energy is received on UPPCL 132KV substation on 18/10/2005 and the MoM are signed by the UPPCL Executive Enginner and TElL management.However, the crediting period (present monitoring report) starts from 19/10/2005.

3.3 Completeness of MonitoringThe monitoring of the project activity is found to be in conformity with monitoring methodology described inACM0006 version 03 and monitoring plan indicated in the registered PDD of project activity.

The required monitoring systems have been installed and operational. The meters comply with appropriate qualitystandards applicable for the used technology.

The sustaining records were sufficient to enable verification of emission reductions.

3.4 Accuracy of Emission Reduction CalculationsThe calculation of emission reductions is found to be correct. No CARs/NIRs were raised. The details of thereported and the verified values for all parameters are listed above in section 2.3.4.

3.5 Quality of Evidence to Determine Emission ReductionsCritical parameters used for the determination of the Emission Reductions are discussed above in section 2.3.3above. All the data recorded are in compliance with the monitoring report.

3.6 Management and Operational SystemThe company has made the Green House Gas Emission Manual which states management system andmonitoring and reporting procedures. The monitoring team at the shop floor level (comprising of Boiler Operator,Instrumentation Supervisor, Turbine Operator, and Electrician) records the daily observations and report the samein the plant log books. The competency of the operators was checked by interviewing them about theirunderstanding for green house gases and found satisfactory. The daily report generated by the floor level team isthen sent to the Shift In charge. The shift in charge reviews the daily report, transforms it into the soft format andforwards the same to the general manager (cogeneration plant). The reports were checked for the signatures ofthe general manager and precision in the values and all was found in compliance.In order to avoid any kind of discrepancy in the monitoring process, regular internal audits are planned. The auditteam comprise of the in house technical experts and the senior officials from the corporate office.


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COpy14. V••ritication Conclusion

SGS United Kingdom Ltd. has been engaged by Triveni Engineering and Industries Limited to examine thegreenhouse gas (GHG) emission reductions reported from the Bagasse based Co-generation Power Project atKhatauli for the period, equating to 62796 tonnes of C02 equivalents Our opinion relates to the project's GHGemissions and resulting GHG emissions reductions reported for the period 01/04/2006 to 18/0312007 and theverification testing conducted against the GHG Assertion of the Triveni Engineering and Industries Limited and thePDD of Bagasse based Co-generation Power Project at Katauli.

The management of the Triveni Engineering and Industries Limited is responsible for the preparation of the GHGemissions data and the reported GHG emissions reductions on the basis set out within the project Monitoring andVerification Plan. The development and maintenance of records and reporting procedures in accordance with thatplan, induding the calculation and determination of GHG emission reductions from the project is the responsibilityof the management of the Triveni Engineering and Industries Limited.

It is our responsibility to express an independent GHG verification opinion on the GHG emissions from the projectfor the period 01/04/2006 to 18/03/2007 and on the calculation of GHG emission reductions from the project basedon the verified emissions for the same.

The verification approach was based on the requirements as defined in Voluntary Carbon Standard VCS 2007.Our approach is risk-based, drawing on an understanding of the risks associated with reporting GHG emissionsdata and the controls in place to mitigate these. Our examination includes assessment, on a test basis, ofevidence relevant to the amounts and disclosures in relation to the project's GHG emission reductions for theperiod 01/0412006to 18/03/2007. We planned and performed our work to obtain the information and explanationsthat we considered necessary to provide sufficient evidence for us to give reasonable assurance that the amountof GHG emission reductions for the period 01/04/2006 to 18/0312007, prepared on the basis of the MonitoringReport dated 26/12/2007, are fairly stated. We conducted our verification with regard to the client's GHG projectsPDD and monitoring report which included Baggase based Co-generation Power Plant at Khatauli at project plan,baseline applied and baseline GHG emissions or removals, Monitoring and Verification Plan, GHG Emissionreduction, removal enhancements. This assessment included collection of evidence supporting the reported datachecking whether the provisions of the Monitoring and Verification Plan in the PDD were consistently andappropriately applied

We have verified whether the information included in the monitoring report representing the project baseline iscurrent and has been extracted from the project site and the emission reduction achieved has been determined bycorrectly substracting emissions for the monitoring period 01/0412006to 18/0312007 from the baseline figures forthe comparable

Verified emission in the above reporting period:Project emissions 134 tC02equivaientsBaseline emissions 62930 tC02equivaientsEmission reductions 62796 tC02 equivalents

Based on process and procedures conducted, in our opinion, Triveni Engineering and Industries Limited assertionon GHG emission reductions for the Baggase based Co-generation Power Plant at Khatauli Project during thereporting period 01/04/2006 to 18/0312007 is materially correct and is a fair representation of the GHG data andinformation and the emission reductions are fairly stated. The GHG emission reductions were calculated correctlyon the basis of approved monitoring methodology ACM0006 version 03.

SGS confirms that the project is implemented as described in the validated and registered project designdocuments. Based on the information we have seen and evaluated, we confirm the following:


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copyName and Reference Saggase based Co-generation Power Plant at KhatauliNumber of Project UN NO.0826Registered POD and Registered POD version 04 dated 04/12/2006Approved Methodology Methodology ACM0006 version 03 dated 19/05/2006used for VerificationApplicable Period

01/0412006 to 18/03/2007Total GHG Emission

62796 t CO2Reductions Verified

UKAR6VCS2007VerificationIssue 1

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I s. Doe_.m R••.• nc••

/1/ Document "VCS 2007"/2/ Approved monitoring methodology ACM0006 Version 03./3/ Project Design Documents version 04 dated 4th December 2006./4/ Monitoring reports of Bagasse based Co-generation Power Project at Khatauli version

02 dated 26/12/2007 for the period of 01/04/2006to 18/03/2007/5/ Monitoring reports of Bagasse based Co-generation Power Project at Khatauli version

03 dated 30/01/2008 for the period of 01/04/2006to 18/03/2007/6/ Calibration Certificates./7/ Record for Plant Log Book for the period of April 2006 up to March 2007./8/ Calculation Excel sheet/9/ Commissioning Record for the project activity./10/ Validation report (UNFCCC No. 0826)