Common Reasons for Delays and Rejection of CDM Projects

8/4/2019 Common Reasons for Delays and Rejection of CDM Projects

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UNFCCC secretariat, programmeFirstname Lastname, Job Title

Main reasons for delay and rejection ofCDM projects during registration and

issuance

Workshop on Enhancing the Regional Distribution of CDM Projects in

Asia and the Pacific

Kathmandu, Nepal. 7 September 2011

Mr. Miguel NaranjoUNFCCC secretariat, SDM/ OSD


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REGISTRATION


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COMPLETENESS CHECK

Source: Information note on the results of the completeness checks (1 February 2011 30 April 2011)


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Main issues raised during CC

Issues related to Modalities of Communication:

Example 1: Two focal points are appointed with the same sole role.

Example 2: No party is mentioned in the Annex 1 of the MoC.

Use of an expired version of the methodology (please refer to paragraph 14 of EB48

Annex 60 for extensions of the validity period of the methodology)

Replicable spreadsheets: Example 1: Existence of debugs or circular references.

Example 2: Sensitivity analysis is not replicable.

Example 3: Some rows/cells in the spreadsheets provided do not contain formulas (only

typed figures), most of the time in the calculation of the income tax

Inconsistencies (mainly related to PPs and Parties)

Documents submitted without any translation

Bundling form not provided


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INFORMATION AND REPORTING CHECK

Source: Information note on the results of the completeness checks (24 October 2010 31 January 2011)


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Main issues raised during I&R Check

Investment analysis - Validation of input values:

Example 1: No explanation on the application of annual escalation to O&M cost and notto other input values.

Example 2: No validation of each component of the project and/or O&M costs.

Example 3: Validation on why no salvage value was considered is missing.

Example 4: No justification of investment breakdown and electricity schedule is

provided.

Common practice analysis

Example 1: The list of the similar activities considered (including their details) is not

provided in the PDD.


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Main issues raised during I&R Check

Baseline:

Example 1: The Validation Report does not validate the baseline assumptions or doesnot contain the values of such parameters.

Example 2: Evidence of the assessment of the elimination of the alternatives to the

baseline scenario is not provided.

Example 3: Assessment on the increase in capacity for Small Scale projects is not

provided.

Applicability condition of the methodology

Monitoring

Example 1: Monitoring parameters are not in line with the methodology or tools.

Issues related to closure of CARs


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REVIEW STAGE

Registration

142 (66%)

55 (25%)

19 (9%) 1 (0%)

Additionality

Application of baselinemethodology

Application of the

monitoring methodology

Project description

Source: Appendix 2 (Annex 2 to Annotations to the agenda of EB)

Monitoring period from 1 January to 20 June 2010


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Main issues raised during the Review stage

Additionality

114 (80%)

10 (7%)

11 (8%)

7 (5%) Prior consideration

Investment analysis

Barrier analysis

Common practice analysis

Application of baseline methodology

20 (36%)

23 (42%)

4 (7%)8 (15%) Project boundary

Baseline identification

Algorithms and/or formulae to

determine emiss ion reductions

Compliance with applicability

conditions


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Investment analysis:

Example 1: Simple cost analysis is not applicable as there is evidence that the project

activity generate some revenues. Example 2: Suitability of input values at the time of investment decision not validated.

Example 3: Input values not cross-checked against independent sources

(contracts/quotations/purchase orders/price indexes/appropriate literature)

Barrier analysis (project-specific) Example 1 - Investment barrier: The financial situation of the PP and its difficulty to

receive loan is not confirmed.

Example 2 - Technological barrier : Training cost (or other resources) have a direct

impact on the financial returns of the project activity and were not assessed by investment

analysis.

Example 3 - Prevailing practice: No information was provided on whether there are

industries with similar or comparable technologies to the project activity that have installed

similar technologies in the country/region and how the application of the technology differs

between such industries and the projects sector.


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Continuing and real actions:

Example 1: The type of evidence used to justify the gap between the project starting date

and the commencement of validation is not appropriate or has not been justified (i.e.

termination contracts, minutes of meetings).

Example 2: The specific CDM deliverables and/or actions carried out under the different

consultancy agreements is not explained (in cases where more than one consultant is

involved)

Baseline:

Example 1: The baseline scenario does not take into account the projected increase

in (processing) capacity in line with General Guidance forSSCmethodologies

Example 2 Investment comparison: Different construction period, investment

breakdown and schedule and amount of electricity generation is considered for thebaseline and project scenarios but they are not justified.


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ISSUANCE


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COMPLETENESS CHECK


A total of 429 submissions for Issuance were made.

2%

15%65%

17%

Projects Rejected

at CC (step 1) =

40/429 =

9%


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Inconsistency of Information:

The documents submitted are not internally and mutually consistent (EB48 - Annex 68

paragraph 7(b)).Example 1: In the monitoring line diagram for Line II (page 13 of the monitoring report), the

tag number for the monitoring equipment of "P_HNO3" is stated as 322-FT-2-513 whereas

page 43 of the monitoring report states 322-FT-512 inconsistency.

Example 3: The deviation number I-DEV0XXX stated by the DOE in page 5 of verification

report refers to another project activity.Example 4: The default value has only been applied from 01/02/2008 till 01/09/2008 for Site 2

in the Excel spreadsheet whilst the monitoring report Table B5 states that the default value has

been applied from 01/02/2008 till 20/10/2008.

Example 5: The verification report states that the calorific value of Diesel is monitored from

the latest CEA CDM data base and is in line with the registered PDD while the monitoring

report states that the value is taken from IPCC as per registered PDD.

The signed form contains inconsistent number of CERs as compared to the verified value.


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Other issues:

Some spreadsheets are missing Inconsistencies between diagrams and monitoring instruments

Different grid name or grid conection in different documents

Different grid emission factor in different documents


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INFORMATION AND REPORTING CHECK


A total of 429 submissions for Issuance were made.

Projects Rejected

at I&RC (step 2) =

39/429 =

9%

15%

5%

10%

27%

24%

5%


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Main issues raised during the I&RC (step 2)

Calibration information not provided:

The verification report does not contain information on how the DOE verified the calibration of

monitored equipments with the calibration requirements.

Calibration Delay:

The verification report does not contain an assessment on how the DOE verified the

calibration delay of monitoring equipments against the requirements of EB52, Annex 6

The information on calibration of monitoring instruments reported is not in accordance with

that specified by the monitoring methodology/ monitoring plan.

Calibration Frequency Requirement:

The verification report does not contain information on how the DOE verified the calibration

frequency of monitored equipments with the calibration requirements.

Calibration Information not provided and no explanation for increase of ERs:

The monitoring report and excel file provided do not contain clear information on monitoring

instruments and related calibration.


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Incomplete Monitored Parameters:

The verification report does not list each parameter required by the monitoring plan

and clearly state how the DOE verified the information flow (from data generation,

aggregation, to recording, calculation and reporting) for these parameters including the

values in the monitoring reports (VVM 1.2. para 206).

The MR does not contain all parameters required to be monitored as per the monitoring

plan/applied methodology (EB48 - Annex 68 paragraph 10 (a) (iii)).

Compliance with the monitoring plan / revised monitoring plan:

The VR does not have a statement on whether the monitoring has been carried out in

accordance with registered or the accepted revised monitoring plan (VVM v.1.2 para 203).

Cross-checking with other sources: The Verification Report does not indicate how the information provided in the monitoring

report has been cross-checked with other sources (VVM v.1.2 para 208 (b)).


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Inappropriate Calculation of ERs:

The monitoring report does not contain the formulae for Baseline Emissions and/or ProjectEmissions and/or emission reductions calculations, including reference to formulae and

methods used.

The emission reductions spreadsheet does not contain the formulae of calculation.

No sufficient explanation for Increase of ER:

The MR does not contain an explanation of any significant increase of actual emission reduction

claimed in the monitoring period in relation to the estimated in the registered PD.


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Review Stage: Issuance

Reasons for Review of Request for Issuance

Sourced from Appendix 2 (Annex 2 to Annotations to the agenda of EB61)

Monitoring period from 1 Jan- 30 June 2010


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Implementation of Project Activity:

MR & VR does not mention reasons for higher PLF than the one in the registered PDD

The DOE has not requested either approval or notification of changes from project

design, if there is a permanent change in the plant load factor from the PDD.

Turbines model number and capacity are different from those described in the registered

PDD.


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Assessment of data and calculation of greenhouse gas emission reductions:

The DOE to clarify how it verified that there were no leakage emissions due to electricity

consumption from Site A considering that the MR indicated that this site was in operation

during the monitoring period even though there was no gas generation.

How DOE checked that the calibration of the 7 individual meters was done following the

Guidance for SSC project activities.

The DOE shall clarify how it confirmed that the guidelines for small scale project activities

which require recalibration of meters at least once in three years was complied with

considering that after the initial calibration of the meters.

Incorrect IPCC values.

Inconsistent input values.


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Compliance of the monitoring plan with the monitoring methodology:

The DOE is required to clarify how it verified that the calibration of all measurement

instruments, except for the HFC23 flow-meter, was done according with the requirements from

the methodology (i.e., monthly frequency).

The DOE is required to clarify how it verified the reported values of electricity consumed from

the grid by the clinker production and by the blended cement grinding units as the existing

electricity-meter, located in the main feeder, monitors the total electricity imported.

The methodology requires the measurement of the volume of auxiliary fuel Qi used by the

project activity to determine project emissions. Since the project emissions had been calculated

in respect of the steam supplied to de-oxygenation process rather than measured, the DOE is

requested to clarify: 1) how it verified that the monitoring of project emissions is in accordance

with the methodology and, 2) if they were not monitored in accordance with the

methodology why the DOE did not submit a request for deviation.


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SDM programme

UNFCCC secretariat

THANK YOURegional Meeting of the DNA Forum for Asia and the Pacific

Kathmandu, Nepal. 5 September 2011

Mr. Miguel Naranjo