PDD COCASINCLAIR ENGLISH V3 · 2018-02-09 · Coca Codo Sinclair Hydroelectric Project Document: Version 3.1 Date: 30 March 2012 A.2. Description of the project activity: >> The Coca

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 1

CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-PDD)

Version 03 - in effect as of: 28 July 2006

CONTENTS

A. General description of project activity B. Application of a baseline and monitoring methodology C. Duration of the project activity / crediting period D. Environmental impacts E. Stakeholders’ comments

Annexes Annex 1: Contact information on participants in the project activity Annex 2: Information regarding public funding Annex 3: Baseline information

Annex 4: Monitoring plan

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 2 SECTION A. General description of project activity A.1. Title of the project activity: >> Coca Codo Sinclair Hydroelectric Project Document: Version 3.1 Date: 30 March 2012

A.2. Description of the project activity: >> The Coca Codo Sinclair Hydroelectric Project, with a total capacity of 1500 MW, considers the installation of 8 generation units with Pelton turbines in a run-of-river plant in the Coca River, in an area where the river describes a great curve which produces a fall of 620 m, which is used for hydroelectric generation. The project is located between the provinces of Napo (town El Chaco) and Sucumbíos (town Gonzalo Pizarro), in the Republic of Ecuador. The intake complex is located 1km downstream of the confluence of the Quijos River and Salado River. The plant is located at Codo Sinclair. The main structures include the intake complex (which consists of the dam, spillway, sedimentation basin and intake), headrace tunnel, compensating reservoir, penstocks and underground powerhouse. The diverted flow taken from the intake passes through the sedimentation basin, and then through a 24.8 km long headrace tunnel to the compensating reservoir, from which two vertical pressure pipes feed the eight turbines installed in the underground powerhouse and finally delivers the water back to the Coca River through a tailrace tunnel. The project activity will generate a total net energy of 8 631 GWh per year1, with a total rated power of 1500 MW, to be delivered to the National Interconnected System of Ecuador (NIS). The project activity will be implemented by the Empresa Pública Estratégica Hidroeléctrica Coca Codo Sinclair, COCASINCLAIR EP2. The project has a feasibility study conducted in 1992 by the Ecuadorian Institute of Electricity – INECEL3. The first study responded to the situation of the country's generation infrastructure, restrictions regarding the ecological flow and energy values of the national load curve at the time of the study, using the Coca River flows (junction of Quijos River and Salado River), with an installed capacity of almost 900 MW in two phases4. However, the project could not be implemented

1 Coca Codo Sinclair Hydroelectric Project Feasibility Study, Electroconsult June 2009 2 Executive Decree # 370, May 26 of 2010, the President of Ecuador transforms the Compañía HidroeléctricaCoca Codo Sinclair S.A. to Empresa Pública Estratégica Hidroeléctrica Coca Codo Sinclair EP, as a public legal entity, with own equity and financial, administrative and management autonomy. 3 INECEL- Instituto Ecuatoriano de Electrificación. It was created in 1961 as public institution for management and operation of the electricity sector of Ecuador. It was closed in 1999. 4 Feasibility Study 1992, INECEL- Prepared by: Electroconsult, Tractionel, Rodio, Astec, Inelin Ingeconsult and Caminos y Canales.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 3 before, due to lack of financing sources and preference for thermoelectric energy.5 The current proposal is a run-of-river type of water use, with the intake in the Salado and recovery in the Codo Sinclair, with a gross fall of around 620 m and a derived maximum flow of 222 m3/s. The project is expected to be developed in a single phase, with total rated power of 1 500 MW and a total average generation of 8 631 GWh per year. The project activity will be developed through an EPC Contract (Engineering, Procurement and Construction)6 with Sinohydro Corporation of China. The Export-Import Bank of China (EXIMBANK) will finance 85% of this contract7 and has to be payed back in a 10 year period after construction and the rest of the total investment has to be covered by the State of Ecuador during the 66 month construction. Taking this into account, the CDM income represents an important factor for the financial feasibility of the project activity. The baseline scenario is the same as without the implementation of the project, which is the feeding of the Ecuadorian electric system through existing generation plants, additions of other power sources and the electricity imports from Colombia and Peru8. With the project activity implementation, electricity generation through fossil fuels will be replaced, resulting in an estimated greenhouse gases (GHG) emissions reductions of approximately 4.5 million tons of CO2 each year. Both CONELEC9 and the Ministry of Electricity and Renewable Energy, state the following objectives for the Coca Codo Sinclair Hydroelectric Project:

Provide the country with a reliable and efficient electricity supply, thus avoiding the possibility of electricity rationing in the country;

Replace thermal power generation, reducing the high expenditure on fuel imports and subsidies for thermal generation;

Reduce CO2 emissions Replace the import of electricity, achieving energy independence of the country; Ensure the efficient use of renewable resources, promoting environmental protection, Generate energy at competitive prices in the Ecuadorian electricity market to achieve the lowest

national cost of generation, and thus reduce the tariff at the user level.

5 The idea of implementing Coca Codo Sinclair goes back to the year 1981, when a pre-feasibility study was conducted to evaluate the potential of the river. 6 EPC, Engineering, Procurement and Construction Contract, Sinohydro-Coca Codo Sinclair, signed on October 5th 2009 7 Financing Agreement, “Buyer Credit Loan Agreement” signed on June 3rd 2010 between Eximbank (China) and Ministry of Finance (Ecuador) for financing the Coca Codo Sinclair Hydroelectric Project. The financing amount is USD $1 682,745,000.00. 8 CONELEC, Statistic Bulletin of the Electric System 2010. In 2010, 4.28% of the total gross energy nationwide corresponds to electricity imports from Colombia and Perú. 9 CONELEC, Electricity National Council is the regulating entity of the electric sector. It started operations on November 20th 1997. It is created as the controlling and regulating entity, through which the State of Ecuador can delegate the activities of generation, transmission, distribution and commercialization of electricity to concessionaire companies.


Reduce the consumption of fossil fuels, used for energy production in thermoelectric plants, in order to reduce costs and contribute to the reduction of greenhouse gas emissions and other environmental impacts caused by those power plants.

Reduction of imported electricity consumption, thus reducing the national costs of generation. Reduction of energetic dependency of Ecuador. Promote positive social impacts through employment generation during the construction,

operation and maintenance. To give an adequate use of water resources in the country, in order to reduce energy deficit

problems, to improve quality of life of the population and to reduce poverty. A.3. Project participants: >>

Table A3-1. Project Participants

Name of Party involved ((host) indicates a host

Party)

Private and/or public entity(ies Project participants

Kindly indicate if the Party involved wishes to be considered as Project

participant (Yes/No)

Republic of Ecuador (Host Country)

COCASINCLAIR EP

NO

Contact details are shown in Annex 1. A.4. Technical description of the project activity: A.4.1. Location of the project activity: A.4.1.1. Host Party(ies): >> Republic of Ecuador A.4.1.2. Region/State/Province etc.: >> Province of Napo and Province of Sucumbíos. A.4.1.3. City/Town/Community etc.: >> Town of El Chaco (Napo) and Town of Gonzalo Pizarro (Sucumbíos) A.4.1.4. Details of physical location, including information allowing the unique identification of this project activity (maximum one page):

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 5 >> The Coca Codo Sinclair Hydroelectric Project is located in El Chaco and Gonzalo Pizarro, in the provinces of Napo and Sucumbíos, Ecuador, and uses the water of the Quijos and Salado rivers, which together form the Coca River, in a zone where the river has an enormous curve that produces a slope of 620 meters that is useful for hydroelectric generation. The project activity is located around 130 km from Quito at the Coca River with the following coordinates: N 9.978.825/ E 200.775, N 9.978.825/ E 201.677, N 9.977.582/ E 201.677, y, N 9.977.582/ E 200.775 (datum PSAD 56) at the intake complex site and N 9.985.443/ E 226.273, N 9.985.443/ E 226.991, N 9.985.195 / E 226.991, y, N 9.9985.195/ E 226.273 at the restitution site. The exact locations of the most important sites of the project are the following:

Intake Complex 9.978.384 N, 201.242 E, 1280 m.a.s.l Powerhouse: 9.985.303 N, 226.448 E, 620 m.a.s.l Compensating Reservoir: 9.985.308 N, 224.942 E, 1240 m.a.s.l

The project site is accessible by land road from Quito, using the Quito-Lago Agrio Road, which is the main access road. Additionally, there are other minor local roads in the area. The following figures detail the location of the project activity:

Figure A4-1 Location of the project in Ecuador

Source: Ecuadorian Electric Sector Statistics, CONELEC


Figure A4-2 Geographical location of the project

Source: COCASINCLAIR EP

A.4.2. Category(ies) of project activity: >> The Coca Codo Sinclair Hydroelectric Project belongs to the Sectoral Scope 1 Energy Industries (renewable) - Hydroelectric generation. A.4.3. Technology to be employed by the project activity: >> The objective of the project is to generate electricity by means of hydraulic energy, using the natural fall of 620 meters at the Codo Sinclair site. This energy will be delivered to the National Interconnected System (NIS) displacing electric generation from fossil fuels. The baseline scenario is the same as without the implementation of the project, which is the feeding of the Ecuadorian electric system through existing generation plants, addition of new power sources and the electricity imports from Colombia and Peru10. The project activity provides the installation of 8 Pelton type turbines of 187,5 MW each. The main structures consist of an intake complex, headrace tunnel, compensating reservoir, penstocks, underground powerhouse and tailrace tunnel. The intake complex consists of a concrete faced rockfill dam (CFRD),

10 CONELEC, Statistic Bulletin of the Electric System 2010. In 2010, 4.28% of the total gross energy nationwide corresponds to electricity imports from Colombia and Perú.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 7 spillway, sedimentation basin and intake. The intake complex is located on Coca River. The CFRD is built on the existing river channel. Spillway is built at the saddle of the left bank. Sedimentation basin and intake are built between the CFRD and spillway. The diverted flow comes from the intake, passing through the sedimentation basin, and then through a long headrace tunnel to the compensating reservoir on the Quebrada Granadillas (gullies) on the right bank of Coca River. Intake of penstocks is located on the right bank of the compensating reservoir. Two penstocks with vertical shaft feed 8 units installed in the underground powerhouse, downstream of which is the tailrace tunnel, rejoining the Coca River. This type of construction requires tunnel boring technologies that are not available in the country. The Tunnel Boring Machine (TBM) has to be custom made in Germany.

Figure A4-3 Hydropower Station Diversion System Diagram

Source: Basic Design-Design Report Vol.1

The main technical characteristics of the project are the following11:

Table A4-1 Main characteristics of the project

Parameter Value/Specification

Turbines

Model Pelton

Rated output 187,5 MW

Quantity 8

Rated speed 300 r/min

Rated head 604.1 m

Rated flow 34.8 m3/s

Generator

Quantity 8

Capacity 205 MVA

Power factor 0.8 Intake Normal pool level 1275.5 m 11 Basic Design CCS Hydroelectric Project, Design Report Vol.1 Sinohydro February2011

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 8 Complex (Water level)

Reservoir area at normal pool level 1.74 km2

Regulating characteristics Run of River

Reservoir volume 9.122*106m3 revisar! creo que está un cero demás

Intake Complex (Discharge structure)

Weir crest elevation 1275.5 m

Type Concrete spillway

Foundation characteristics Sand gravel/silty clay

Spillway length 267.25 m

Intake complex (Intake)

Dimension of gate 12-3.1x3.3 (Number of orifices-mxm)

Design flow 249 m3/s

Inlet invert elevation 1270 m Intake Complex (Sedimentation Basin)

Number of bays 6

Design sediment particles size 0.25 mm

Length of sedimentation basin 120 m

Intake Complex (Water retaining structure)

Type Concrete faced rockfill dam

Foundation characteristics Sand gravel /sand

Dam crest elevation 1289.8 m

Max. dam height 31.8 m

Crest length 143.2 m

Compensating Reservoir (Water level)

Normal pool level 1229.5 m

Reservoir area at normal pool level 0.07 km2

Storage capacity below normal pool level 117.2 *104m3

Regulating storage capacity 88.6*104m3

Regulating characteristics Daily regulating

Compensating Reservoir (Water retaining structure)

Type Concrete faced rockfill dam

Foundation characteristics Rock

Dam crest elevation 1233.5 m

Max. dam height 58 m

Crest length 135 m

Compensating Reservoir (Spillway)

Type Ungated weir


Weir crest elevation 1229.5 m

Compensating Reservoir (Bottom

Type Pressure tunnel

Inlet invert elevation 1198.00 m

Outlet invert elevation 1188.00 m

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 9 Outlet) Length of tunnel 328 m

Slope 3.04%

Internal diameter 3 m

Headrace tunnel

Max. discharge 222 m3/s

Type of headrace tunnel Free flow tunnel

Length 24.83 km

Slope 0.17%

Internal diameter D=8.2 m

Penstocks

Type Vertical shaft, horizontal reaches

Quantity 2

Total length About 1900 m each one

Internal diameter D=5.8/5.2/2.6 m

Powerhouse Type Underground Powerhouse


Main Powerhouse dimension (L*W*H) 212x26x46.8 m

Switchyard

Type Open

Foundation characteristics Sand gravel

Area (L*W) 127x41 m

A.4.4. Estimated amount of emission reductions over the chosen crediting period: >> A seven year renewable crediting period has been chosen. The project activity is expected to generate an average of 4,799,699 tCO2e emission reductions each year. The emissions reductions estimated during the first crediting period are shown in the next table:

Table A4-2 Estimated annual emissions reduction

Year Annual estimation of emission

reductions in tons of CO2e

01/01/2016 - 31/12/2016 4,799,699 01/01/2017 - 31/12/2017 4,799,699

01/01/2018 - 31/12/2018 4,799,699

01/01/2019 - 31/12/2019 4,799,699

01/01/2020 - 31/12/2020 4,799,699

01/01/2021 - 31/12/2021 4,799,699

01/01/2022 - 31/12/2022 4,799,699

Estimated total reduction (tons of CO2e)

33,597,893

Total number of crediting years 7


Annual average of estimated reductions over the crediting period

(tons of CO2e) 4,799,699

The average emission factor of the system was calculated with the approved version of the “Tool for calculating the emission factor for an electricity system” version 02.2.112, using the technical information of the Ecuadorian electric sector and the generation and consumption data of all the plants of the National Interconnected System (NIS). This information was provided by CENACE13 and CONELEC for the years 2008-2009-2010. A.4.5. Public funding of the project activity: >> There are no public funds of an Annex 1 country in the proposed project activity. SECTION B. Application of a baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the project activity: >> 1.- Baseline and monitoring methodology Consolidated baseline methodology for grid-connected electricity generation from renewable

sources (ACM0002 version 12.2.0)

2.- Tools “Tool to calculate the emission factor for an electric system” version 02.2.1 “Tool for the demonstration and assessment of additionality” version 6.0 “Tool to determine the remaining lifetime of equipment” version 01

The approved methodologies and the tools are available under the following address: http://cdm.unfccc.int/methodologies/PAmethodologies/approved B.2. Justification of the choice of the methodology and why it is applicable to the project activity: >>

12 Emission Factor was published by the Commission for GHG Emission Factors Determination. The published version indicates that the version 02.1.0 of the tool was used. 13 CENACE is Centro Nacional de Control de Energía, created on October 10th 1996 to coordinate the operation of the National Interconnected System (NIS) and to administrate all technical and financial transactions of the electric system. www.cenace.org.ec

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 11 The Coca Codo Sinclair Hydroelectric Project complies with the applicability conditions of the ACM0002 v.12.2 methodology, considering the following: The project activity is the implementation of a new run of river hydroelectric plant. The project activity is a run of river plant and it has a compensating reservoir, which is used to

generate 1500 MW of power during 4 hours each day. The area of the compensating reservoir is 0.07 km2. In addition, a reservoir area is formed at the intake complex site due to the construction of a dam; however this is not a regulating reservoir and is not intended to have a regulating storage capacity. The area of this reservoir is 1.74 km2. Therefore, the power density of the project activity14 is 828 W/m2, which is greater than 4 W/m2.

The project activity will produce electricity that will be delivered to the National Interconnected System of Ecuador, of which the boundaries can be clearly identified.

The project activity does not involve changing from fossil fuels to renewable energy, but the installation of a new power plant connected to the grid.

The project activity is not the installation of a biomass fired power plant. The project activity considers the creation of a compensating reservoir with a power density

greater than 4 W/m2. B.3. Description of the sources and gases included in the project boundary: >> The project boundaries are defined according to the ACM0002 v.12.2 methodology as all the power plants physically connected to a transmission system, including the CDM project activity. In this case, the project boundaries are defined by the National Interconnected System of Ecuador, which also considers international interconnections with Colombia and Peru. The spatial extent of the project is all the Ecuadorian territory. The National Interconnected System distributes the energy throughout the country. New power plants connected to the national Ecuadorian grid can be implemented in any given location within the geographical boundaries of the country, which represent the boundaries of the National Interconnected System.

Figure B3-1 National Interconnected System of Ecuador

14 Power density is calculated according equation 5 (Page 7) of the Approved Consolidated Baseline and Monitoring Methodology ACM0002 version 12.2.0


Source: CONELEC15

The next table shows the emission sources and greenhouse gases included in or excluded from the project boundaries:

Table B3-1 Emission sources included in or excluded from the project boundaries

Source Gas Included Justification/ Explanation

Bas

elin

e

CO2 emissions from electricity generation in fossil fuel fired power plants that are displaced due to the Project activity

CO2 Yes Main emission source

CH4 No Minor emission source

N2O No Minor emission source

Pr oj ect

Ac CO2 No Minor emission source

15 http://www.conelec.gob.ec/archivos_articulo/MapaSisNac.pdf


For hydro power plants, emissions of CH4from the reservoir

CH4 No Minor emission source. The power density es greater tan 10 W/m2.

N2O No Minor emission source

B.4. Description of how the baseline scenario is identified and description of the identified baseline scenario: >> The Coca Codo Sinclair Hydroelectric Project involves the implementation of a new power plant using renewable energy with a connection to the grid (National Interconnected System of Ecuador). Therefore, according to the ACM0002 v.12.2 methodology, the baseline scenario of the project is describe as the scenario where electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources, as reflected in the combined margin (CM) calculations described in the “Tool to calculate the emission factor for an electricity system”. In Ecuador, CENACE applies a merit order when distributing electricity, giving a priority to the operation of power plants with lower marginal costs. According to this concept, hydroelectric power plants are considered as low cost/must-run sources; therefore they have priority before fossil fuel fired power plants at the time of dispatch. Consequently, the implementation of the Coca Codo Sinclair Hydroelectric Project contributes to the reduction of greenhouse gases emissions in the Ecuadorian electric system, given that its activity displaces a part of the fossil fuel energy sources that nowadays feed the national grid (National Interconnected System). In order to calculate the emission factor of the electric system, the Technical Commission for GHG Emission Factors Determination (TCGGEFD) was created. This commission is formed by representatives of the Ministry of Environment (Designated National Authority), Ministry of Electricity and Renewable Energy, National Center for Energy Control CENACE, Electricity National Council CONELEC and the National Secretariat for Planning and Development (SENPLADES). The Technical Commission for GHG Emission Factors Determination (TCGGEFD), with the participation of the Designated National Authority, published the emission factor for the National Interconnected System, using the “Tool to calculate the emission factor for an electric system” v.2.1.0 (as it appears at the time of the publication), later revised to comply with the version 2.2.1, which is the latest version of the tool. The obtained values are the following:

Table B4-1 Emission Factor


Parameter Value (in tCO2/MWh)

Operating Margin 0.7372

Build Margin 0.3751

Combined Margin 0.5561

Source: http://www.cenace.org.ec/documentosgenerales/Factor_Emision_CO2_2011.pdf

B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered CDM project activity (assessment and demonstration of additionality): >> CDM prior consideration The following table shows the chronology of the events related to CDM, including early notifications16 Date Event related to CDM consideration17

February 2008

The Board of Directors, trough Dr. Daniel Casal, member of the Board, declares that the Project should be developed as a CDM Project, considering that the income related to the CDM is part of the resources of the company and it can contribute to the financing of the project. He suggests developing the CDM cycle together with the environmental impact study, hence the Directory agrees to do all necessary measures to conduct the environmental studies.18

May 2008

The Board of Directors makes the resolution, unanimously, to order the Administration to start the CDM development and develop the project as a CDM project.19

September 2008 The first PIN of the project is elaborated. January 2009 Efficacitas Consultora Cia Ltda is hired to conduct the Environmental

Impact Study for the project, along with a Strategy Design for applying CDM.

March 3, 2009 COCASINCLAIR communicates the CDM Designated National Authority the intention to develop the CDM cycle.

March 7, 2009 The CDM Designated National Authority proceeds to consider Coca Codo Sinclair Hydroelectric Project as a CDM Project

March 2009

The company receives offers for the development of the CDM cycle from the following companies:

- DEUMAN - Roberto Urquizo Consultor

16 A detailed list of events related to the Project activity is presented to the DOE 17 The documentation for each event is available to the DOE 18 COCASINCLAIR EP, Board of Directors Session Minute No.2008-005 19 COCASINCLAIR EP, Board of Directors Session Minute No. 2008-021


- Vivanco & Vivanco - Hogan & Hartson - Luis Endara

At that point COCASINCLAIR does not sign any agreement.

May 2009 The stakeholder public hearing is held in El Chaco.

June 2009

A workshop about Clean Development Mechanism was held with international expert Patrick Taylor from Hogan & Hartson.

July 2009 The Ministry of Environment grants the Environmental License for the implementation of the Coca Codo Sinclair Hydroelectric Project.20

August 2009

Through an official letter, the CDM Designated National Authority offers institutional support to COCASINCLAIR S.A. to develop the CDM cycle.

December 2009

Luis Endara Yepez is hired as a consultant to perform the Tool for Demonstration and Assessment of Additionality and to update the PIN.

May 2010 Representing COCASINCLAIR, Pablo Patiño, as CDM Project Manager, attends the 2010 Carbon Expo exhibition in Cologne, Germany, to find potential buyers and CDM project developers.

May-August 2010

COCASINCLAIR receives offers for the purchase of CERs and development of the CDM cycle from the following companies: - Gazprom - Tricorona - Carbonium - Carbon Management Group - Orbeo

June 2010 The Prior Consideration Format is sent to the United Nations, which this time is received and uploaded on the official website of the UNFCCC.

June 2010 The CDM Internal Commission is formed to coordinate the development of the CDM cycle.

July 2010 The updated PIN and the Format of Prior Consideration is sent to the DNA. The DNA responds by giving support to the Coca Codo Sinclair CDM Project.

July 28, 2010 Starting date of project activity. Signing of the Certificate of Commencement of the EPC Contract, this leads to the beginning of construction works and final designs21, i.e. the actual implementation of the project.

August, 2010 The CDM Internal Commission assesses the project and recommended to hire an international consultant to develop the CDM cycle documents without committing a percentage of CERs.

September, 2010

Luis Endara Yepez is hired as an advisor of COCASINCLAIR to supervise the CDM cycle.

20 Environmental License, Resolution No. 214, Ministry of Environment 21 Although the EPC Contract was signed on October 5th, 2009, the contract was conditioned to the successful reach of a financing agreement (Clause 31.19 EPC Contract). Therefore, the enforcement of the contract was only possible after the financing agreement provided by the EXIMBANK of China.


October, 2010 The CDM Internal Commission starts elaboration of Terms of References to hire an international consultant as a project developer.

November, 2010 COCASINCLAIR conducts surveys to stakeholders in the area of influence of the project.

January, 2011 The tender for hiring an international consultant for the development of the CDM cycle is published in the Public Purchase Website22 to verify interest and capacity of national firms.

March, 2011 The National Institute of Public Contracting (INCOP) establishes that there is no national capacity for the development of CDM cycle according to the tender requirements.

March, 2011 International Companies are invited through Public Purchases Website to submit their offers for the development of the CDM cycle. The following companies were invited:

- CO2 Solutions - PriceWaterhouseCoopers - Carbon 350 - Carbonium - Ecoressources

April, 2011 The tender is won by the Association Co2 Solutions-Caspervandertak Consulting-Vattenfall

June, 2011 COCASINCLAIR EP attends to the 2011 CARBON EXPO exhibition in Barcelona, Spain.

June 2011 The contract for consultancy services could not be signed, since the Association Co2 Solutions Caspervandertak Consulting-Vattenfall did not comply with the requirements of the Ecuadorian public contracting regulations.

July, 2011 The Board of Directors approves the direct invitation of international companies to bid for the signing of an ERPA.

August, 2011 Offers are received from the following companies: -Tricorona -Carbon 350 -Shell Environmental Trading -Vattenfall Energy Trading

September, 2011 Carbon 350 is chosen to negotiate an ERPA and the development of the CDM cycle. During this month, the negotiations take place.

September 16, 2011 A Minute of Commitments is signed between Carbon 350 and COCASINCLAIR EP, where they agree the terms of the ERPA and the work plan for the development of the CDM documents.

September, 2011 COCASINCLAIR attends to the Latin American Carbon Forum in San José, Costa Rica.

October, 2011 COCASINCLAIR hires a law firm, Estudio Jurídico Manzano & Asociados to develop the ERPA.

November, 2011 Letters are sent to Stakeholders, so they can express their comments and observations about the Project.

22 www.compraspublicas.gob.ec Enterprises with state funds follow regulations of the National Institute of Public Contracting (INCOP).


January, 2012 Carbon 350 abandons the negotiations and the ERPA is not signed. The technical team of COCASINCLAIR finished the PDD and WCD report.

According to the “Guidelines on the demonstration and assessment of prior consideration of the CDM”, version 04, project activities with a starting date on or after August 2, 2008 must inform a Host Party DNA and the UNFCCC secretariat the intention to seek CDM status within 6 months the starting date. COCASINCLAIR EP notified the UNFCCC secretariat and the Ecuadorian DNA and in writing the intention to seek CDM status on July 9 and July 12, 2010 respectively. The last version of the “Tool for demonstration and assessment of additionality” v. 6.0 was used to perform the additionality analysis. This section describes the steps followed: Step 1: Identification of alternatives to the project activity consistent with current laws and regulations Sub-step 1a: Define alternatives to the project activity In this step, the objective is to identify realistic alternatives to the project developer or similar companies to produce the same electric power generation as the proposed CDM Project. Two alternatives are identified:

1. The proposed project activity undertaken without being registered as a CDM project activity i.e. the construction of a new 1500 MW hydropower plant, grid-connected, implemented without CDM status.

2. Continuation of the current situation i.e. electricity would continue to be generated by the operation of grid-connected power plants and by the addition of new generation sources.

Sub-step 1b: Consistency with mandatory laws and regulations Both presented alternatives meet with the regulatory and legal requirements established by the host country.

(1) The fulfillment of all norms or legal requirements is mandatory for the project activity with or without the benefits from CDM. Consequently, if the CDM project meets all legal requirements to implement the project in Ecuador, so will the project without having CDM status.

(2) There are no legal restrictions for electric power generation for existing companies, either by increasing capacity or imports. Thus, the scenario of continuation of the current situation (not implementing the project) satisfies all legal requirements.

Step 2: Investment analysis The objective of this step is to determine that the proposed project activity is not:


a) The most economically or financially attractive; or b) Economically or financially feasible, without the revenue from the sale of certified emission

reductions (CERs) To conduct the following assessment, the latest version of the “Guidelines on the Assessment of Investment Analysis” version 05 was used. Sub-step 2a: Determine appropriate analysis method To determine the analysis method, the following options are considered: Sub-step 2 b: Option I. Apply simple cost analysis This option does not apply to the project activity, since the project produces other income from the sale of electricity. Sub-step 2b: Option II.- Apply investment comparison analysis No other investment alternative has been considered to supply the same output as the proposed project. The alternative to the project activity is the supply of electricity from the grid; therefore a benchmark approach would be appropriate. Sub-step 2b: Option III Apply benchmark analysis This alternative of analysis is the most suitable for this case. This analysis is based on a benchmark financial indicator, e.g. NPV, and compares the financial feasibility of the project with a financial indicator used in the country or the company for decision making. 28.- Identify the financial/economic indicator, such as IRR, most suitable for the project type and decision context. The Net Present Value (NPV) was the chosen financial indicator. Taking into account that it is a project proposed by a state owned enterprise, the project owner does not seek a return on the investment in terms of dividends. However, such types of projects need external financing. Therefore, the project must generate at least a return on the investment that yields a positive NPV. In this context, the decision to undertake a project activity is made, if the NPV is positive. 30.- Discount rates and benchmarks shall be derived from: (d) Government/official approved benchmark where such benchmarks are used for investment decisions; In this case, the benchmark NPV > 0 is chosen. The criteria NPV>0 is used by the National Secretariat for Planning and Development (SENPLADES)23 to determine the financial feasibility of a project proposal in

23 SENPLADES was created in 2004 and it is responsible for national planning http://www.senplades.gob.ec/web/18607/418

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 19 order to include it in the Annual Plan of Public Investment24. If the assessment of SENPLADES is positive, it enables other state agencies (e.g. Ministry of Finance) to do all necessary efforts to obtain the financing for the project. If the project has a negative NPV, the project would not meet the criteria to be in the Annual Plan of Public Investment25. Economic indicators, such as economic IRR, are also taken into account in the decision making process. Economic IRR is the most relevant indicator for state investments that don´t generate revenue, e.g. schools, roads, etc. Nevertheless, if a state project generates revenues (e.g. electricity sales), it must also meet the minimum financial condition of having a positive NPV. Sub-step 2c: Calculation and comparison of financial indicators: The period of assessment is 30 years, which represents the technical lifetime of the project according to the default values from the “Tool to determine the remaining lifetime of equipment” version 01. The data is from May 2010, since it was the relevant data at the time of the investment decision. The cash flow analysis is made under a real basis. Therefore, inflation and prices index are not taken into account. The project´s revenues come from the energy sales to the National Interconnected System (NIS). All variables and assumptions are taken out from the following sources:

Table B5-2 Investment Analysis Variables Nr. Parameter Value Unit Source 1 Nominal Capacity 1500 MW Feasibility Study

Electroconsult 2009 2 Annual Average Generation 8631 GW/h Feasibility Study

Electroconsult 2009 3 Plant factor 65.68% Calculated 4 Construction period 66 Months EPC Contract 5 Assessment Period 30 Years Technical Lifetime

(Default Value 6 Tariff Fix

charge + Variable costs + Debt

CONELEC Regulación 004/009 , CONELEC Resolución 072/10

7 Residual Value 25 % Memo Nr. GT-10-009 29/01/2010

8 O&M Costs 0.0067 USD/Kwh Benchmark Financial Statements Hidropaute

9 Variable cost 0.002 USD/Kwh CONELEC Regulación 004/009

10 EPC Contract 1.979 Millions EPC Contract

24 The responsibilities and powers of SENPLADES are among others to plan and program the public investment in order to optimize the use of State resources. http://www.senplades.gob.ec/web/senplades-portal/inversion-publica 25 http://www.senplades.gob.ec/web/senplades-portal/direccion-de-analisis-de-proyectos1


USD 11 % Financing 1.682 Millions

USD 85% EPC Contract

12 Interest rate of loan 6.9 % EXIMBANK Buyers-Credit Loan Agreement

13 Cost of Equity 7 % State Bonds a 12 years (May 2010)

14 Debt/Equity Ratio 65:35 % 14 Discount Rate 6.94% WACC (Calculated) 15 Income Tax 0 % Ley Orgánica de

Empresas Públicas Titulo VI Capítulo 1 Art.39 (Public Enterprises Law)

16 Total Investment 2.594 Millions USD

Financial Evaluation May 2010

17 Emission Factor 0.56053 tCO2/MWh DNA Ministry of Environment www.ambiente.gob.ec

18 CER prices 12.51 USD / tCO2

World Bank “State and Trends of Carbon Market 2010”

As stated before, the project´s income comes from the energy sales. However, the tariff only covers the fix costs, variable costs and the debt service, since Mandate 15 from 200826 does not allow state power plants to have profits. Within the fix costs, a replacement fund is also included, which reflects the use of the fixed assets over time. Taking into account the assumptions described above, a negative NPV of 406.6 millions of US dollars is obtained, using the weighted average cost of capital of 6.94% as the discount rate. The SENPLADES’ project selection criteria indicates that projects that generate revenues must have a positive NPV, so existing or future state funds, whether own or borrowed, can be allocated in the project. When adding CDM benefits into the calculation, the project obtains a positive NPV of 46.4 million of US dollars, thus complying with the minimum requirement for being considered under the Annual Plan of Public Investment and enabling the project implementation. Accordingly, CDM revenues were necessary for the project to be implemented and to get a loan agreement. Taking the investment analysis into consideration, following the “Guidelines on the Assessment of Investment Analysis” version 05, the project is not financially feasible without the CDM benefits.

26 Constitutional Mandate No. 15, July 23rd 2008. Available under en : www.pge.gob.ec/es/reglamentos-internos/doc_download/196-mandatos-constituyentes.html

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 21 Having demonstrated that without CDM the project obtains a negative NPV, it can be concluded that the implementation of the project activity without CDM status would not be possible, since is financial feasibility criteria is not met. Sub-step 2d: Sensitivity Analysis The sensitivity analysis was conducted in order to corroborate the conclusions made in the investment analysis. The NPV is affected by the following variables:

Table B5-3 Sensitivity Analysis

Parameter -10% -5% 0 5% 10%

Electricity Sales ($ 641,960,601.89) ($ 524,286,137.17) ($ 406,611,672.45) ($ 288,937,207.74) ($ 171,262,743.02)

O&M Costs ($ 347,164,315.62) ($ 376,887,994.04) ($ 406,611,672.45) ($ 436,335,350.87) ($ 466,059,029.29)

Initial Investment ($ 251,058,289.10) ($ 345,581,042.38) ($ 406,611,672.45) ($ 534,626,548.93) ($ 629,149,302.20)

Residual Value ($ 412,586,562.36) ($ 409,599,117.41) ($ 406,611,672.45) ($ 403,624,227.50) ($ 400,636,782.55)

The sensitivity analysis reflects that the project still obtains a negative NPV without the CDM income, confirming the conclusion that without CDM the project is not financially feasible. It can be observed that the initial investment and electricity sales have the biggest impact (cetaris paribus). In this case, however, it is known that the sales are directly related to the costs, considering the electricity price as an endogenous variable. For example, if the cost of debt service is lower, then the tariff is lower as well.

Figure B5-1 Sensitivity Analysis


($ 700,000,000)

($ 600,000,000)

($ 500,000,000)

($ 400,000,000)

($ 300,000,000)

($ 200,000,000)

($ 100,000,000)

$ 0

100% 200% 300% 400% 500%

Electricity Sales

O&M Costs

Initial Investment

Residual Value

Step 3: Barrier Analysis In this section the project proponent identifies barriers and evaluate how the influence the project implementation an its alternatives. To perform this analysis, the “Guidelines fo objective demonstration and assesment of barriers”version 01, was used. When this step is used, the project proponent must determine if the project faces a barrier that would prevent the implementation of the proposed project activity if it is not registered as a CDM project and determine how CDM can alleviate the identified barrier. Sub-step 3a: Identify barriers that would prevent the implementation of the proposed CDM project activity: The identified barrier is27: “1. Technological barriers, inter alia: (b) Lack of infrastructure for implementation and logistics for maintenance of the technology” At the present moment there is no transmission line that enables the delivery of the electricity generated by the project to the National Interconected System. The studies performed in 1992 and in 2009 included the construction of two 125 km transmission lines of 500kV as part of the project. However, the responsibility to built the transmission lines passed to the transmission company, Unidad de Negocios Transelectric28, property of CELEC EP29. Since the neccesary infrastructure is not available now, the

27 As defined in “Tool for the demostration and assesment of additionality” versión 06.0 28 Transelectric S.A. was created in 1999. In 2010, Transelectric SA became Unidad de Negocios Transelectric. Transelectric is responsible of the operation of the National Interconnected System. Its main objective is the transport of electricity.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 23 project proponent must depend on Transelectric for commisioning. Therefore we conclude that there is a technological barrier for the project implementation, i.e. the project must face the risk of not having the required infrastructure on time to deliver the electricity. Due to the lack of control over the implementation of the transmission lines, the project activity does not have enough information to determine if there are delays in the construction because of technical, environmental or financial difficulties. The project proponent has requested Transelectric more information about the programming of the construction30, in order to coordinate efforts and reduce the risk of not having the transmission lines available. This barrier can not be simply mitigated by additional financial means to the project (Guideline 4, “Guidelines for objective demonstration and assesment of barriers” version 01), since the project proponent does not have the power to buil the transmssion lines. It is evident that the implementation of the project activity has a barrier. The CDM does alleviate this barrier by providing the project proponent with potential income from forward sales of CERs, which would be used to cover expenses of the non operating power plant and interest expenses until the delivery of electricity to the National Interconected System is possible. Sub-step 3b: Show that the identified barriers would not prevent the implementation of at least one of the alternatives (except the proposed project activity): The identified barrier does not affect the alternative of not implementing the project activity, i.e maintaining the current electric system infrastructure (including the imports). The connection to Colombia and Peru already exists31, hence there is no barrier that prevents the continuation of the current situation. It must be concluded, that the project activity meets the criteria of the guidelines of sub step 3a and sub step 3b, therefore, the project activity is additional under a barrier analysis. Step 4: Common practice analysis According to the “Tool for the demonstration and assessment of additionality” version 06.0.0, the common practice analysis evaluates the extent to which the proposed project type (e.g. technology or practice) has already diffused in the relevant sector and region. For the purpose of this analysis, the “Guidelines on Common Practice” version 01.0 was used. Sub-step 4a: Analyze other activities similar to the proposed project activity To identify similar activities, the output range of +/- 50% of the design output or capacity of the proposed project activity is taken into account. According to the design nominal capacity of the project (1500 MW), the applicable range is from 750MW to 2250 MW within the National Interconnected System.

29 Corporación Eléctrica del Ecuador, CELEC EP, was created on January 14, 2010 as the result of the merger of all state owned generation companies (except COCASINCLAIR EP) and the transmission company (Transelectric) 30 Official Letter No. CCS EP-2012-014 31 Interconnection to Colombia (Pasto-Quito) - 4 transmission lines of 230KV each. Interconnection with Peru via one transmission line of 230 KV.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 24 In a second step, we identify the power plants that have the same generation capacity, without including registered CDM project activities and project activities which have been published on the UNFCCC website for global stakeholder consultation as part of the validation process. Within this range, only the Paute Hydroelectric Power Plant is found.

Table B5-4 Power plants connected to the National Interconnected System within the capacity range

Plant Beginning of operation

Technology/Type Installed capacity (MW)

Description

Paute Hydroelectric Power Plant (Business Unit Hidropaute)

1983 Large scale hydroelectric power plant with reservoir

1075 MW The plant was built in two phases of 500 MW (1983) and 575 MW (1991)

The following step identifies the plants that apply different technologies according to the definition of “different technologies” in the “Guidelines on common practice” version 01.0. The Paute Hydroelectric Power Plant uses a different technology according to the following criteria: “(iv) Investment climate in the date of the investment decision, inter alia:

- Legal regulations” Projects implemented before 1996 had a different investment scenario. In 1996 the Electrification Law was modified in order to promote private investment in the electric system. Therefore, the Paute Hydroelectric Power Plant is different technology. If Nall=1 and Ndiff=1, then F= 1- Ndiff/ Nall is equal to zero. The criterion to determine if a project activity is “common practice” indicates that:

a) F > 0.2 and b) Nall- Ndiff > 3

Thus, the project activity cannot be considered common practice, supporting the argument of the investment and barrier analysis, since there are no other similar projects in the relevant geographical area.

B.6. Emission reductions:

B.6.1. Explanation of methodological choices:>> Baseline emissions The baseline emissions are estimated according the latest version of the methodology ACM0002, version 12.2, applicable for this type of projects under CDM methodologies. The baseline emissions are the emissions generated in absence of the proposed project activity.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 25 The process to determine the emissions reductions of the project activity (according to the selected approved methodology) is described below: Project emissions For most renewable power generation project activities, PEy= 0. However, some project activities may involve project emissions that can be significant. According to the methodology ACM0002, version 12.2, the emission value for new run of river hydroelectric power plants is zero. Baseline emissions Baseline emissions include only CO2 from electricity generation in fossil fuel fired power plants that are displaced due to the project activity. The methodology assumes that all project electricity generation above baseline levels would have been generated by existing grid-connected power plants and the addition of new grid-connected power plants. The baseline emissions are calculated according equation (6) of the methodology:

BEy = EGPJ,y . EFgrid,CM,y ( 1)

Where: BEy = Baseline emissions in year y (tCO2/year). EGPJ,y = Quantity of net electricity generation that is produced and fed into the grid as a result of

the implementation of the CDM project activity in year y (MWh/year). EFgrid,CM,y = Combined margin CO2 emission factor for the grid connected power generation in year y

calculated using the latest version of the “Tool to calculate the emission factor for an electricity system”32 (tCO2/MWh).

Calculation of EFgrid,CM,y

According to the “Tool to calculate the emission factor for an electricity system”, version 02.2.1, the project proponent must follow the following six steps: Step 1 – Identify the relevant electricity systems; Step 2 – Choose whether to include off-grid power plants in the project electricity system (optional); Step 3 – Select a method to determine the operating margin (OM) Step 4 – Calculate the operating margin emission factor according to the selected method; Step 5 – Calculate the build margin (BM) emission factor;

32 The last version of the “Tool to calculate the emission factor for an electricity system” is version 2.2.1. However, the last emission factor published by the DNA was calculated using version 2.1.0. The emission factor presented in this PDD meets all the requirements of the last version of the tool.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 26 Step 6 – Calculate the combined margin (CM) emission factor. It is important to mention that the emission factor was officially published by Technical Commission for GHG Emission Factors Determination (TCGGEFD). The DNA is part of this commission. The simple adjusted method was used for the calculation of the operating margin emission factor. For the calculation of the build margin emission factor, the Option 1 was chosen. The Option 1 adapts better to the condition of the national electricity system. The emission factor (EFgrid,CM,y) is calculated as the combination of the operating margin GHG emission factor (EFgrid,OM,y) and the build margin GHG emission factor (EFgrid,BM,y). The calculation of the combined margin for this emission factor is based on official data and it is available to the public. The detailed calculation is presented in Annex 3. Operating margin (OM) emission factor

Build margin (BM) emission factor

Weighted average CM emission factor

Leakage Indirect emissions can result from the construction of the project activity, transport of material and fuel and other preliminary activities. According ACM0002, version 06.0.0, the project proponents don’t have to consider this sources of emissions as leakage when applying this methodology, therefore these sources are neglected. Emission reductions The emission reductions of the project in a given year y (ERy) is the difference between the baseline emissions (BEy) and the project emissions (PEy), according to equation (11) of the applied methodology, as follows:

( 2 )

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 27 Where:

ERy = Emission reductions in year y (t CO2e/ year) BE,y = Baseline emission reductions in year y ( tCO2e/year) PEy = Project emissions in year y (t CO2e/year)

B.6.2. Data and parameters that are available at validation: Data / Parameter: EFgrid,CM,y Data unit: tCO2/MWh Description: Combined margin CO2 emission factor for grid-connected power generation in

year y Source of data used: Published by Technical Commission for GHG Emission Factors Determination

(TCGGEFD) Value applied: 0.5561 Justification of the choice of data or description of measurement methods and procedures actually applied :

The baseline emission factor (EFgrid,CM,y) is calculated as a combined margin. It is the weighted average of the OM emission factor (EFgrid,OM,y) and the BM emission factor (EFgrid,BM,y).

Any comment: The parameter is fixed ex-ante

Data / Parameter: EFgrid,OM,y Data unit: tCO2/MWh Description: Simple adjusted OM CO 2 emission Factor for grid connected power generation

in year y Source of data used: Published by Technical Commission for GHG Emission Factors Determination

(TCGGEFD) Value applied: 0.7372 Justification of the choice of data or description of measurement methods and procedures actually applied :

Calculated according the latest version of the “Tool to calculate the emission factor for an electricity system”, version 2.2.1

Any comment: This parameter has been fixed ex-ante

Data / Parameter: EFgrid,BM,y Data unit: tCO2/MWh Description: Build margin CO2 emission factor for grid connected power generation in year y Source of data used: Published by Technical Commission for GHG Emission Factors Determination

(TCGGEFD)

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 28 Value applied: 0.3751 Justification of the choice of data or description of measurement methods and procedures actually applied :

Calculated according the latest version of the “Tool to calculate the emission factor for an electricity system”, version 2.2.1. The sample used consisted of the last power plants that generate 20% of the total generation of the system, excluding CDM registered power plants.

Any comment: This parameter has been fixed ex-ante

Data / Parameter: λy

Data unit: % Description: Factor expressing the percentage of time when low-cost/must-run power units

are in the margin in year y Source of data used: Published by Technical Commission for GHG Emission Factors Determination

(TCGGEFD) Value applied:

Year Value

2008 0.0

2009 0.0 2010 0.0

Justification of the choice of data or description of measurement methods and procedures actually applied :

Calculated according the latest version of the “Tool to calculate the emission factor for an electricity system”, version 2.2.1.

Any comment: Calculation spread sheets are available to the DOE

Data / Parameter: FCi,m,y Data unit: Mas s or volume unit Description: Amount of fossil fuel type i consumed in power unit m in the project electricity

system in year y Source of data used: Published by Technical Commission for GHG Emission Factors Determination

(TCGGEFD) Value applied: Data is available in EF calculation spread sheet Justification of the choice of data or description of measurement methods and procedures actually applied :

Official data


Data / Parameter: FCi,k,, y

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 29 Data unit: Mass or volumen unit Description: Amount of fossil fuel type i consumed in low cost/must run power unit k in the

project electricity system in year y Source of data used: Published by Technical Commission for GHG Emission Factors Determination


Official data


Data / Parameter: NCVi,y Data unit: GJ / ton Description: Net calorific value (energy content) of fossil fuel type i in year y Source of data used: Published by Technical Commission for GHG Emission Factors Determination


Official data

Any comment: The values are given by the TCGGEFD. The values used are IPCC default values in the lower limit of uncertainty in a confidence interval of 95%, according to Table 1.2 of Chapter 1 Vol. 2 (Energy) of the 2006 IPCC Guidelines on National GHG Inventories.

Data / Parameter: EFCO2,i,y Data unit: tCO2/GJ Description: CO2 emission factor of fossil fuel type i in year y (tCO2/GJ) Source of data used: Published by Technical Commission for GHG Emission Factors Determination


Official data

Any comment: The values are given by the TCGGEFD. The values used are IPCC default values in the lower limit of uncertainty in a confidence interval of 95%, according to Table 1.2 of Chapter 1 Vol. 2 (Energy) of the 2006 IPCC


Guidelines on National GHG Inventories.

Data / Parameter: EGm,y Data unit: MWh Description: Net electricity generated and delivered to the grid by all power sources serving

the system, not including low-cost/must run power plants/units, in year y Source of data used: Published by Technical Commission for GHG Emission Factors Determination


Official data


Data / Parameter: EGk,y Data unit: MWh Description: Net electricity generated and delivered to the grid by all low cost /must run

power units k serving the system in year y Source of data used: Published by Technical Commission for GHG Emission Factors Determination


Official data


Data / Parameter: EFEL,m,y Data unit: tCO2/MWh Description: CO2 emission factor of power unit m in year y Source of data used: Published by Technical Commission for GHG Emission Factors Determination


Official data. For the calculation of EFEL,m,y , options A.1 and A.2 were chosen, because of the availability of information on fuel consumption and electricity generation.


PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 31 Data / Parameter: wOM Data unit: % Description: Weighting of operating margin emissions factor (%) Source of data used: Published by Technical Commission for GHG Emission Factors Determination

(TCGGEFD) Value applied: 50% Justification of the choice of data or description of measurement methods and procedures actually applied :

According to the “Tool to calculate the emission factor for an electricity system” version 02.2.1, the project proponent must use the value 50% for the first crediting period.

Any comment: For the second and third crediting period the default value is 0.25

Data / Parameter: wBM Data unit: % Description: Weighting of the build margin emissions factor (%) Source of data used: Published by Technical Commission for GHG Emission Factors Determination

(TCGGEFD) Value applied: 50% Justification of the choice of data or description of measurement methods and procedures actually applied :

According to the “Tool to calculate the emission factor for an electricity system” version 02.2.1, the project proponent must use the value 50% for the first crediting period.

Any comment: For the second and third crediting period the default value is 0.75 B.6.3. Ex-ante calculation of emission reductions: >>

The calculation of ex ante emission reductions is based on technical estimations of the net generation capacity of the plant. The emission reductions are calculated as follows:

(See equation 2) To determine the emission reductions of the project activity, the project proponent followed the steps and equations of the selected methodology (ACM0002 version 12.2.0) obtaining the following results: Project emissions (PEy)

- PEy = 0 No leakage emissions are considered according ACM0002 version 12.2.0 for this type of project activity. No GHG emissions are expected from the project during its operation. Therefore, the emission reductions

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 32 are equivalent to the baseline emission reductions. Since project emissions are equal to zero, then ERy = BEy Baseline emission (BEy) Baseline emissions include only CO2 emissions from electricity generation in fossil fuel fired power plants that are displaced due to the project activity. Baseline emissions are calculated as follows: BEy=ERy= EG PJ, y * EF gridCM (See equation 1) The estimated annual net generation in GWh is 8.631 for the project activity. The combine margin emission factor for the National Interconnected System is 0.5561 tCO2 / MWh, as derived in Annex 3. Applying these values into the formula above, we obtain: 4´799.699, 10 tCO2 / year = 8’631.000 MWh / year *0.5561 tCO2 / MWh The estimated emission reductions is 4´799.699,10 tCO2 / year .

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

Table B6-1. Ex ante estimation of emission reductions

Year

Estimation of project activity

emissions (tons of CO2e)

Estimation of baseline

emissions (tons of CO2e)

Estimation of leakage (tons of

CO2e)

Estimation of overall emission

reductions (tons of CO2e)

2016 0 4´799.699,10 0 4´799.699,10 2017 0 4´799.699,10 0 4´799.699,10 2018 0 4´799.699,10 0 4´799.699,10 2019 0 4´799.699,10 0 4´799.699,10 2020 0 4´799.699,10 0 4´799.699,10 2021 0 4´799.699,10 0 4´799.699,10 2022 0 4´799.699,10 0 4´799.699,10

Total (tons of CO2e)

0 33,597,893.7 0 33,597,893.7

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

B.7.1 Data and parameters monitored: Data / Parameter: EGfacility,y Data unit: MWh / year

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 33 Description: Quantity of net electricity generation supplied by the project plan/unit to the grid

in year y Source of data to be used:

Measurement on project site, CENACE and CONELEC data

Value of data applied for the purpose of calculating expected emission reductions in section B.5

Year Generation

(MWh)

2016 8,631,000.00

2017 8,631,000.00

2018 8,631,000.00

2019 8,631,000.00

2020 8,631,000.00

2021 8,631,000.00

2022 8,631,000.00

Description of measurement methods and procedures to be applied:

The electricity delivered to the grid will be monitored permanently (hourly in a monthly record) with meters (class 0,2s). Additionally, COCASINCLAIR will measure the electricity generated and delivered to the grid at the plant site by means of measurement equipment. The information of the meters at the plant will be sent to CENACE. These meters must be periodically calibrated in order to guarantee the validity of the data. The information is registered and saved in the company and also in the official information systems of CENACE and CONELEC.

Monitoring frequency Continuous measurement and monthly records QA/QC procedures to be applied:

The meters are calibrated according to the national standard (CONELEC33) every two years. The data registered by the meters are cross checked with the sales documentation and /or official information. CONELEC publishes the generation statistics of each plant in their Statistics Yearbook (www.conelec.gob.ec). CENACE has the obligation to register the electricity delivered to the grid by each plant of the system. The record of the information is automatic when the meters are connected to the information storage system, where the data is kept. Official communications (letters, reports, minutes and others) will be used in case of differences between reported values. According to Ecuadorian legislation, the electricity institutions are the main responsible for the information management

33 Source: Regulation No CONELEC 005/06 (Available at: http://www.conelec.gob.ec/images/normativa/SistemaMedicionComercial.doc) and Board of Directors Session of July 27, 2006. (Available at: http://www.conelec.gob.ec/images/normativa/Resoluciones%2027-Jul-06.doc).


of generation data in case of differences or failures in the meters. Any comment: The data will be kept for two years after the final crediting period or the project´s

last CER emission. B.7.2. Description of the monitoring plan:

>> This section describes the activities that the project proponent must undertake to measure the electricity generation and consequently the emission reductions. The objective of the monitoring plan is to guarantee that all data required for the calculation of the emission reductions are appropriately measured and precise. The monitoring plan consists of all the basic procedures for the collection of data and required control. All the information that is gathered will be archived and saved for a period of at least two years after the final crediting period. The monitoring plan shall include the following:

- Identification of the data to be measured. - Data collecting, storage and maintenance systems. - Implementation of quality systems for the measurement process according to international

standards. - Review of generated data for verification. - Designation of responsibilities to perform the monitoring plan process - Maintenance of equipment. - Continuous improvement based on performance indicators. - Emergency plans.

The generation and delivery information of COCASINCLAIR EP will be supported by CONELEC, CENACE and Transelectric. These entities already have functioning measurement systems. CONELEC and CENEACE report annually the statistics of the National Interconnected Systems.34 The steps of the monitoring plan are described in Annex 4. B.8. Date of completion of the application of the baseline study and monitoring methodology and the name of the responsible person(s)/entity(ies): >> Date of competition: 05/11/2011 Technical Commission for GHG Emission Factors Determination Contact person: Lenin Haro Institution: CENACE Telephone: (593-2) 2992001 Email: [email protected]

34 Reports are available at www.cenace.org and www.conelec.gob.ec

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 35 Contact Person: Pablo Patiño Institution: COCASINCLAIR EP Telephone: (593-2) 3814300 Email: [email protected] SECTION C. Duration of the project activity / crediting period C.1. Duration of the project activity: C.1.1. Starting date of the project activity: >> 28/07/2010 - Starting date of EPC Contract (Certificate of Commencement)

C.1.2. Expected operational lifetime of the project activity: >> 30 years, 0 month C.2. Choice of the crediting period and related information: C.2.1. Renewable crediting period: C.2.1.1. Starting date of the first crediting period: >> 01/01/2016 C.2.1.2. Length of the first crediting period: >> 7 years, 0 months C.2.2. Fixed crediting period: C.2.2.1. Starting date: >> Not applicable C.2.2.2. Length: >> Not applicable

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 36 SECTION D. Environmental impacts >> D.1. Documentation on the analysis of the environmental impacts, including transboundary impacts: >> The activities regarding environmental management of the Coca Codo Sinclar Hydroelectric Project are regulated under the following legal instruments:

- Environmental Management Law - Environmental Pollution Prevention and Control Law - Electricity Sector Regime Law - Environmental Regulation for Electric Activities - Regulation for Concessions, Permits and Licenses of the Electricity Sector - Replacement Regulation of the General Regulation of the Electricity Sector Regime Law - Unified Text of Secondary Environmental Legislation, particularly Book VI and its

annexes/specifications applicable to the electricity sector. Following all relevant environmental legislation, the Coca Codo Sinclair Hydroelectric Project has obtained the following environmental licenses:

- Resolution Nr. 561 Special Forestry License for the construction of the “Access road to the compensating reservoir and the 1062,5 Ha polygon (area for other uses)”

- Resolution Nr. 215 Implementation of the 1500MW Coca Codo Sinclair Hydroelectric Project, located between the Napo and Sucumbíos provinces.

- Resolution Nr. 076 Special Forestry License for the construction of the “Access road to the powerhouse”

- Resolution Nr. 214 Construction and operation of the “Access road to the compensating reservoir”

- Resolution Nr. 141 Construction and operation of the “Access road to the powerhouse” - Resolution Nr. 249 Special Forestry License for 30.000 m3 in 50 Ha in El Chaco parish. -

The scope of the Definitive Environmental Impact Assessment (EIA) and the Environmental Management Plan is defined for the phases of construction, filling of the reservoir, operation and decommissioning. The main objectives are the following:

- Identification and assessment of the significant environmental impacts, direct and indirect, in all phases of the project according to the requirements of the existing national, regional and local legislation.

- Determination of measures for prevention, mitigation and compensation of significant environmental impacts.

The environmental assessment consists of:

- Baseline Environment Description: Physical, Biological, Socio-Economical and Cultural


- Environmental impacts assessment. - Analysis of alternatives - Risk analysis - Stakeholder consultation - Environmental Management Plan.

The environmental legislation establishes: “After the first year of obtaining the Environmental License, and then every two years, environmental audits shall be handed over to the Ministry of Environment, according to the Art. 22 of the Environmental Management Law and Art.60 of title IV chapter IV section I of the Book VI of the Unified Text of Environmental Legislation of the Ministry of Environment”. COCASINCLAIR EP presented the first Environmental Audit, which was approved by the Ministry of Environment on June 2010, in strict compliance with the norms and regulations.35 D.2. If environmental impacts are considered significant by the project participants or the host Party, please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party: >> According to the EIA, positive and negative impacts were identified in each one of the phases of the project activity. Table D2-1 Summary of environmental impacts assessment

PHASE I: CONSTRUCTION AND FILLING OF RESERVOIR

PHYSICAL ENVIRONMENT ENVIRONMENTAL IMPACTS MITIGATION MEASURES

Environmental component Air: Quality of air, noise levels and vibrations. Potential impacts

- Increase level of noise, emission of gasses (CO), (SO2), (NOx), (VOC’s).

Emission Control and Mitigation Program - Emission control from fix and mobile

sources. - Fugitive emission control (machinery). - Mitigation of noise and vibrations in

construction equipment. Environmental component Water: Quality of the hydro resource, quality of water in reservoir, hydrology and drainage patterns, quality of underground water.

Potential impacts:

- Alteration in quality parameters of the normal flow of water in the River Coca.

Management program for liquid discharges Program for prevention of underground water

pollution.

35 Environmental Audit of Compliance of the Environmental Management Plan for the construction of the “Access road to the powerhouse” Coca Codo Sinclair Hydroelectric Project. Elaborated by: David Acosta. Reference: Official Letter CCS EP-2011-284

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 38 - Habitat loss for species due to the decrease of

flow. - Impact on aquatic organisms, affecting the

biological indicators of the quality of the water. - Affectation of the hydrology and patterns of

drainage in the zone.

- Removal of sediments at the reservoir. - Preservation of the ecological flow. - Management and control of aquatic brush and

cyanobacteria. - Management of the planktonic and benthonic

community. Program for solid waste management.

Environmental component Soil: Vegetation and deforestation, geomorphology of the area, stability in slopes and quality of soil. Potential impacts:

- Increased alkalinity of soil, hardening of the

surface, loss of nutrients and capacity to produce vegetation.

. - Unstable conditions in slopes, especially in

abandoned exploitation sites.

Management program for inputs and materials at construction sites.

Management program for liquid discharges.

- Implementation of sediment pool for waste from washing of mixer trucks.

- Management program for quarries areas.

BIOTIC ENVIRONMENT ENVIRONMENTAL IMPACT MITIGATION MEASURES

Environmental components: Land flora, aquatic flora, land fauna and aquatic fauna. Potential impacts:

- Reduction of vegetation area. - Loss of aquatic flora and fauna due to water

pollution. - Migration of species due to loss of natural

environment. - Change in environment for some aquatic

organisms.

Management program for flora and fauna.

- Reforestation of reservoir surroundings. - Flora and fauna rescue. - Elaboration of local flora manual. - Management of poisonous species. - Preservation of flora and fauna.

Monitoring and relocation program for wild

species. SOCIO-ECONOMIC ENVIRONMENT

ENVIRONMENTAL IMPACT MITIGATION MEASURES Environmental components: social relations, use of soil, transportation routes (paths, bridges, etc.), employment, health and labor safety, cultural and archaeological heritage, basic infrastructure, electricity generation, land ownership, landscape and tourism and other general aspects Potential negative impacts:

- Change in use of soil. - Illegal settlement of people in surrounding

areas of the project. - Change of natural landscape due to

construction works. - Biological risk exposure of workers.

Prevention and control program for erosion and sediment transport.

- Protection of soil and natural conditions. - Control of rainwater flow. - Soil stabilization. - Protection of drainage access. - Protection of slopes.


- Damage of archaeological remains in construction sites. .

Potential positive impacts:

- Land revaluation. - Employment generation - Construction of access roads.

Health and occupational safety program

- Labor risks control. - Construction site signaling - Supply of equipment and elements of

personal protection. - Labor safety training. - Comprehensive management of solid

waste.

Compensation and economic development program.

Touristic development program. - Management of identified archaeological

sites.

PHASE II: OPERATION

PHYSICAL ENVIRONMENT MITIGATION MEASURES MITIGATION MEASURES

Environmental component Air: Quality of air, noise levels and vibrations. No significant impacts are identified. N/A Environmental component Water: Quality of the hydro resource, quality of water in reservoir, hydrology and drainage patterns, quality of underground water Potential impacts:

- Alteration in quality parameters of the normal

flow of water in the River Coca. - Habitat loss for species due to the decrease of

flow. - Impact on aquatic organisms, affecting the

biological indicators of the quality of the water. Affectation of the hydrology and patterns of drainage in the zone.

- Eutrophication of the water in the compensating reservoir.

- Change in hydrology and drainage patterns of the area.

Management program for liquid discharges Program for prevention of underground water

pollution.

- Removal of sediments at the reservoir. - Preservation of the ecological flow. - Management and control of aquatic brush and

cyanobacteria. - Management of the planktonic and benthonic

community. Program for solid waste management.

Environmental component Soil: Vegetation and deforestation, geomorphology of the area, stability in slopes and quality of soil. No significant impacts are identified. N/A

BIOTIC ENVIRONMENT ENVIRONMENTAL IMPACTS MITIGATION MEASURES

Potential negative impacts:

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 40 - Reduction of vegetation area. - Loss of aquatic flora and fauna due to water

pollution. - Migration of species due to loss of natural

environment. - Change in environment for some aquatic

organisms Potential positive impacts:

- The presence of water in the reservoir has a

positive impact for flora and fauna.

Management program for flora and fauna.

- Reforestation of reservoir surroundings. - Flora and fauna rescue. - Elaboration of local flora manual. - Management of poisonous species. - Preservation of flora and fauna.

SOCIO-ECONOMIC ENVIRONMENTENVIRONMENTAL IMPACTS MITIGATION MEASURES

Environmental components: social relations, use of soil, transportation routes (paths, bridges, etc.), employment, health and labor safety, cultural and archaeological heritage, basic infrastructure, electricity generation, land ownership, landscape and tourism and other general aspects Potential negative impacts:

- Change in use of land, promoting the extension of the agricultural border and logging.

- Illegal settlement of people in the surrounding area of the project.

- Change in natural landscape. - Change in use of land of the Coca River

channel. - Flow reduction in the San Rafael waterfall.

Prevention and control program for erosion and sediment transport.

- Protection of soil and natural conditions. - Control of rainwater flow. - Soil stabilization. - Protection of drainage access. - Protection of slopes.

Health and occupational safety program

- Labor risks control. - Supply of equipment and elements of

personal protection. - Labor safety training. - Comprehensive management of solid

waste.

Compensation and economic development program.

Touristic development program.

PHASE III:

DECOMMISIONINGPHYSICAL ENVIRONMENT


ENVIRONMENTAL IMPACT MITIGATION MEASURE Environmental component Air: Quality of air, noise levels and vibrations. No significant impacts were identified N/A Environmental component Air: Quality of air, noise levels and vibrations. Positive impact:

- Recovery of flow of river throughout the whole channel.

N/A

Environmental component Soil: Vegetation and deforestation, geomorphology of the area, stability in slopes and quality of soil. No significant impacts were identified

N/A

BIOTIC ENVIRONMENT ENVIRONMENTAL IMPACT MITIGATION MEASURES

No significant impacts were identified N/A

SOCIO-ECONOMICAL ENVIRONMENT ENVIRONMENTAL IMPACT MITIGATION MEASURES

Potential negative impacts:

- Heavy traffic with heavy machinery, trucks

and equipment have a negative impact on the communication roads of the area.

- Loss of electricity generation capacity Potential positive impacts:

- Recovery of natural landscape.

N/A

SECTION E. Stakeholders’ comments >> E.1. Brief description how comments by local stakeholders have been invited and compiled: >> A stakeholder consultation took place according to the requirements of the EIA of the Coca Codo Sinclair Hydroelectric Project 36and of the Decree 104037, which corresponds to the Regulation of Social Application of the Social Participation Mechanisms established in the Environmental Management Law. The objective of the consultation was to inform all the relevant stakeholders about this initiative and most

36 EIA Environmental Impact Assessment of the Coca Codo Sinclair Hydroelectric Project, Efficacitas Consultora Cia Ltda, Guayaquil-Ecuador, May 2009. 37 Available at http://faolex.fao.org/docs/texts/ecu79500.doc

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 42 importantly to attend their concerns, comments or observations. The following information and consultation mechanisms were applied:

- Implementation of 2 Public Information Centers (PIC) in El Chaco and Lumbaqui. - Public hearing with local stakeholders. - Development of a internet webpage

During the implementation of the public participation mechanisms, the project developer interacted constantly with the Ministry of Environment, in order to meet the requirements established in Decree 1040 and Agreement 112. The identification of key stakeholders was done directly by the Environmental and Community Relations Department of the project proponent, after a research of the social dynamics of the area, including government institutions, unions, community organizations and all the population directly affected by the project. The invitation to the public hearing was done by means of a publication in the local newspaper “Seminario Independiente” in the week of May 27th-30th of 2009. In addition, radio spots were broadcasted in radio stations of the area, in which the location and hours of operation of the Public Information Centers (PIC) were also communicated. The public hearing took place on May 27th 2009 at 10 a.m in El Chaco (Province of Napo) at the local auditorium. The Public Information Centers (PIC) operated from May 20th until Jun 3rd 2009. Nowadays COCASINCLAIR EP has 3 permanent PICs in El Chaco, Reventador and Lumbaqui. The purpose of the PICs was to give information about the content of the EIA of the project and to collect comments and suggestions from the community about the draft EIA.

Photo 1: Public hearing in El Chaco Besides the social participation mechanisms established in the EIA and national regulations, the project proponent carried out two additional consultation processes (interviews) with the purpose of informing

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 43 the population about the characteristics of the project and its contribution to climate change mitigation and also obtaining further comments about the project and its affectations. The interviews were performed in all the direct and indirect influence area of the project. The identification of the people to be interviewed was based on the EIA, where the areas of direct and indirect affectation were clearly defined. The capital cities of the provinces where the project is located were also taken into account. Once the area was defined, the stakeholders were identified. The interviews considered the following stakeholders:

- Regional authorities (Napo and Sucumbíos) - Local authorities - Community leaders - Local villagers. - Persons related to the project

The consultation process consisted of a brief presentation of the project, global warming and its implications and Clean Development Mechanism to individuals or small groups, followed by a questionnaire where all comments could be submitted by the stakeholder. The interviews took place in November 2010 and January 2011. As a follow up, in November 2011, the project proponent sent letters to the stakeholders who participated in the consultation process in order to collect additional comments regarding the project activity. Between December 2011 and January 2012 COCASINCLAIR EP published on local and national newspapers press releases inviting all stakeholders to submit their comments. Direct letters to universities and NGOs where also sent to receive comments and observations about the project.

Photo 2: Brief presentation Photo 3: Questionnaire E.2. Summary of the comments received: >> Due to the different phases and methodologies of public consultation, the summary of the comments received can be also disaggregated according to each process.


a) Public hearing May 27th 2009 During the public hearing several questions about the project and requests were received. The public hearing was attended by 160 stakeholders. A report from the event was elaborated by the moderator of the public hearing, who is part of the Ministry of Environment of Ecuador. The comments were included in the Environmental Impact Assessment (EIA). The most relevant topics of the public hearing were the following:

- Consideration of local authorities and local legislation when implementing the project. - Expand and update the studies regarding baseline, hydrology and possible impacts. Expand the

Environmental Management Plan. - Take the touristic development into account and its implications.

All the queries during the hearing were dully answered by COCASINCLAIR, Juan Carlos Blum from Efficacitas and Victor Peres from the Ministry of Environment. The recommendations and observations were taken into account in the definitive Environmental Impact Assessment.

b) Public Information Centers (PIC) The following comments were received at the PICs located in El Chaco and Lumbaqui:

- Local labor force should be preferred. - Respect the environment. - Implementation of effective communication channels between COCASINCLAIR and the

community. - Consideration of compensation packages.

c) Interviews

A total of 237 persons were interviewed. A summary of the answers is shown38:

- 95% of the respondents know about the project and are capable of giving a brief basic description of it.

- Over 97% backs up the decision to implement the project. The majority of the respondents agree that the project will bring various benefits to the community and to the country, e.g. electricity autonomy.

- The majority of the respondents agree with the use of water as a renewable source of energy, but communities should be compensated for it. Furthermore, the respondents are aware that during the construction there might be some negative impacts on the water (sediments, waste, etc.), but also that the plant operation itself does not pollute the water.

38 Taken from “Interview Team Final Report, COCASINCLAIR EP, December 2010 and February 2011”


- The community has a high expectation regarding employment generation and development of infrastructure.

- The project will affect mainly the economic development (positive), but also the increase of noise and immigration (negative).

- The respondents pointed out the following expected benefits from the projects:

o Better utilities infrastructure. o Better roads and communication infrastructure. o Increase job opportunities. o Increase in demand of goods and services. o Increase touristic activities.

- About environmental impacts:

o According to the respondents, the project will have positive and negative effects. Among

the negative effects, the decrease of the river flow after the intake site and the impact on biodiversity stand out. The use of renewable energy and the commitment with climate change are mention as a positive impact.

- About social impacts:

o The respondents expect an improvement of living conditions, specially health and

education, while they are still concerned about the arrival of new people to the area.

- About economical impacts:

o From the economical point of view there is a consensus about the benefits from employment creation and entrepreneurship.

- The following additional comments from the respondents can also be noted:

o The community requests that local workers have priority. o The respondents demand better utilities infrastructure. o Better coordination between COCASINCLAIR and local authorities. o Fulfillment of commitments. o Conservation of the river Quijos and river Alto Coca basin. o Congratulate the government for the implementation of the project.

E.3. Report on how due account was taken of any comments received: >> Once the public participation mechanisms were concluded, all comments and observations were compiled systematically. The department for community relations and social responsibility of COCASINCLAIR EP is in charge of a continuous feedback process in which monthly reports are elaborated about the needs and requests on behalf of the community.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 46 The following aspects are highlighted: 1.- The Community Relations Department serves as a platform to make it easier for the local community to get involved in the project implementation in a permanent manner. 2.- Through this department COCASINCLAR reaffirms the commitment with the community to act transparently. 3.- The companies involved in the project have hired a total of 1209 workers by June 2011, of which 629 are local workers (52%), 306 come from other towns of Napo (25%) and 323 come from other towns of Sucumbíos (27%). The Public Information Centers operate constantly in order to maintain an active information and feedback process. The PICs are also entitled to receive resumes from the people of the community, which are saved in a database so they can be contacted in case of a job opening. The following agreements have been already reached with local authorities and entities for the benefit of the community:

Table E3-1 Agreements

INSTITUTION AGREEMENT Ecuadorian Service for Professional Training (SECAP )

Objective: To educate and train local inhabitants of Napo and Sucumbíos. To give technical and pedagogical advise to promote the local development.

Regional (Napo) Board of Health Inter-institutional Cooperation Agreement Objective: To promote the inter-institutional cooperation in order to coordinate the proper channels for the resources and satisfy the basic health needs of the population.. To build a health center in San Luis (El Chaco) endowed with human and financial resources for operation.

Municipality of El Chaco Objective: To establish cooperation links between the two institutions in order to strengthen capacities of the local authorities for the implementation of public works and services.

Regional (Sucumbíos) Board of Health Inter-institutional Agreement Objective: To supply the health center in Recinto Simon Bolivar with equipment and human resources in order to guarantee free medical care for the population.

Ecuadorian Institute for Educational Objective:

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 47 Loans and Scholarships (IECE) To foster the grant of scholarships and student

loans to members of the community and employees of the project.

Other several agreements are being negotiated with the stakeholders during the construction phase.


Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY Organization: Empresa Pública Estratégica Hidroeléctrica Coca Codo Sinclair, COCASINCLAIR EP Street/P.O.Box: Avenida 6 de Diciembre 2910 y Whymper Building: Edificio Torres Tenerife Piso 12 City: Quito State/Region: Ecuador Postcode/ZIP: Country: Ecuador Telephone: (593) 2 3814300 FAX: (593) 2 3332629 E-Mail: [email protected] URL: www.cocasinclair.com Represented by: Luciano Cepeda Vasco Title: Ingeniero Salutation: Señor Last name: Cepeda Vasco Middle name: First name: Luciano Department: General Manager Mobile: (593) 81078522 Direct FAX: Direct tel: (593) 2 3814300 Ext.104 Personal e-mail: [email protected]


Annex 2

INFORMATION REGARDING PUBLIC FUNDING

The project activity does not have public funding from an Annex 1 country.


Annex 3

BASELINE INFORMATION The Ministry of Electricity and Renewable Energy (MEER) and the Ministry of Environment (MAE) signed an Inter-Ministerial Agreement on December 16th, 2010, in which the Technical Commission for GHG Emission Factors Determination was created. The Commission is responsible for the calculation of the baseline emission factor for the NIS every year. The data for the calculation of the emission factor for the NIS is published by the TECHNICAL COMMISSION FOR GHG EMISSION FACTORS DETERMINATION. The Designated National Authority (DNA) of Ecuador is part of the Commission. A summary of the published document39 is presented. CO2 EMISSION FACTOR OF THE NATIONAL INTERCONNECTED SYSTEM (NIS) OF ECUADOR FOR 2011- REPORT 2011 Elaborated by: Technical Commission for GHG Emission Factors Determination (Ministry of Environment – CDM Designated National Authority, Ministry of Electricity and Renewable Energy, CENACE, CONEEC & SENPLADES). According to the “Tool to calculate the emission factor for an electricity system”, versión 02.2.1, the project proponent must follow the following six steps Step 1 – Identify the relevant electricity systems; Step 2 – Choose whether to include off-grid power plants in the project electricity system (optional); Step 3 – Select a method to determine the operating margin (OM) Step 4 – Calculate the operating margin emission factor according to the selected method; Step 5 – Calculate the build margin (BM) emission factor; Step 6 – Calculate the combined margin (CM) emission factor. STEP 1 – Identify the relevant electricity systems; To determine the relevant emission factors for Ecuador, an electricity system connected to the grid is identify. The relevant system is defined by the geographical extensions of the power plants that physically connected through the transmission and distribution lines of the National Interconnected System (NIS). The NIS is an electricity system that includes imports from Colombia and Peru. For the purpose of determining the CO2 emission factor for net electricity imports from a connected electricity system the value 0 tCO2 /MWh was used. A table with all the generation units that integrate the NIS by December 2010 is shown at the end of this annex.

39 http://www.cenace.org.ec/documentosgenerales/Factor_Emision_CO2_2011.pdf

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 51 STEP 2 – Choose whether to include off-grid power plants in the project electricity system (optional); The project proponents are able to choose between the two following options to calculate the operation margin and build margin:

Option I: Only grid power plants are included in the calculation. Option II: Both grid power plants and off-grid power plants are included in the calculation.

Option I is chosen. STEP 3 – Select a method to determine the operating margin (OM) The calculation of the operating margin emission factor (EFgrid,OM,y) is based in one of the following methods:

(a) Simple OM; or (b) Simple adjusted OM; or (c) Dispatch data analysis OM; or (d) Average OM.

The selection of the calculation method is based, among other factors, on the characteristics of the national electricity grid and the available information. For this project, the operating margin emission factor was calculated using the simple adjusted OM method, due to the following reasons: -The simple OM method (option a) can only be used if low-cost/must-run40 resources constitute less than 50% of total grid generation: 1) average of the five most recent years, or 2) based on long-term averages for hydroelectricity production. In Ecuador (NIS), the low-cost/must-run resources represent 63% on average for the period 2008-2010, therefore, this option can´t be used.

2008 2009 2010 Average %

Low cost/must run 11,677.15 10,199.31 9,571.56 10,482.67 63.2%

No Low cost/must run 4,409.64 6,156.23 7,754.04 6,106.64 36.8%

Total 16,086.79 16,355.54 17,325.61 16,589.31 100%

Source: Spreadsheet “Factor Emisión_CO2_SNI_2011.xlsx” -There is no available information for using option c “Dispatch data analysis OM method”. According to the methodology, this calculation is made ex-post.

40 Low-cost/must-run resources are defined as power plants with low marginal generation costs or power plants that are dispatched independently of the daily or seasonal load of the grid. They typically include hydro, geothermal, wind, low-cost biomass, nuclear and solar generation. If coal is obviously used as must-run, it should also be included in this list, i.e. excluded from the set of plants.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 52 -The average method (option d) is calculated using the average performance of generation in the analysis period of all thermoelectric power plants of the grid. Therefore, the simple adjusted OM method is chosen, then EFOM,adjusted,y = EFgrid,OM,y . The ex-ante option is chosen. This method differentiates the generation sources (including imports) in low-cost/must-run resources and other power sources feeding the national grid. This information is public and available at CONELEC and CENACE. STEP 4 – Calculate the operating margin emission factor according to the selected method;

a) Simple adjusted operating margin emission factor The simple adjusted OM emission factor (EFOM,adjusted,y en tCO2/MWh) is a variation of the simple OM emission factor, where the generation sources (including imports) are separated in low cost/must run (k) and other power sources (m). The EFOM,adjusted,y will be calculated ex – ante using the generation weighted average of the last 3 years of the most recent data (2008-2010). As under Option A of the simple OM, it is calculated based on the net electricity generation of each power unit and an emission factor for each power unit, as follows:

Where: EFgrid,OM-adj,y = Simple adjusted operating margin CO2 emission factor in year y (tCO2/MWh) λy = Factor expressing the percentage of time when low-cost/must-run power units are on the margin in year y EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m in year y

(MWh) EGk,y = Net quantity of electricity generated and delivered to the grid by power unit k in year y (MWh) EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh) EFEL,k,y = CO2 emission factor of power unit k in year y (tCO2/MWh) m = All grid power units serving the grid in year y except low-cost/must-run power units k = All low-cost/must run grid power units serving the grid in year y y = The relevant year as per the data vintage chosen The net electricity imports are considered as low cost/ must run power plants and the emission factor of zero was used. Determination of EFEL,m,y

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 53 If for a power unit m data on fuel consumption and electricity generation is available, the emission factor (EFEL,m,y) should be determined as follows: (option A.1):

(4)

Where: EFEL,m,y = CO2 emission factor of power unit m in year y (t CO2 /MWh). FCi,m,y = Amount of fossil fuel type i consumed by power unit m un year y (Mass sor volumen

unit) NCVi,y = Net calorific value (energy content) of fossil fuel type i in year y (GJ/mas sor vulume

unit) EFCO2,i,y = CO2 emission factor of fossil fuel type i in year y (t CO2e/GJ). EGm,T = Net quantity of electricity generated an delivered to the grid by power unit m in year y y

(MWh). m = All grid power units serving the grid in year y except low-cost/must-run power units i = All fossil fuel types combusted in power unit m in year y y = The relevant year as per the data vintage chosen If for a power unit m only data on electricity generation and the fuel types used is available, the emission factor should be determined based on the CO2 emission factor of the fuel type used and the efficiency of the power unit, as follows: (option A.2)

where: EFEL,m,y = CO2 emission factor of power unit m in year y (t CO2 /MWh). EFCO2,m,i,y = Average CO2 emission factor of fuel type i used in power unit m in year y (t CO2e/GJ). ηm,y = Average net energy conversion efficiency of power unit m in year y (ratio) y = The relevant year as per the data vintage chosen

Where several fuel types are used in the power unit, use the fuel type with the lowest CO2emission factor for EFCO2, m, i, y. Option A.3 does not apply since all power units have sufficient data to implement A.1 or A.2. The results of the OM emission factor are shown in the following tables:


0 1

5.887.025,86 [MWh]

7.760.549,89 [ton CO2]

0 [ton CO2]

8.585.371,67 [MWh]

0,7586 [ton CO2/MWh]

2008 2009 2010

EF OM (t CO2/MWh) = 0,7206 0,7310 0,7586

2008 2009 2010 Total

Annual generation (MWh) 16086791,08 16355405,78 17325605,4 49767802,3

Weight 32,3% 32,9% 34,8%

STEP 5 – Calculate the build margin (BM) emission factor; In terms of vintage data, project participants can choose between one of the following two options: Option 1: For the first crediting period, calculate the build margin emission factor ex ante based on the most recent information available on units already built for sample group m at the time of CDM-PDD submission to the DOE for validation. For the second crediting period, the build margin emission factor should be updated based on the most recent information available on units already built at the time of submission of the request for renewal of the crediting period to the DOE. For the third crediting period, the build margin emission factor calculated for the second crediting period should be used. This option does not require monitoring the emission factor during the crediting period. Option 2: For the first crediting period, the build margin emission factor shall be updated annually, ex post, including those units built up to the year of registration of the project activity or, if information up to the year of registration is not yet available, including those units built up to the latest year for which information is available.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 55 For the second crediting period, the build margin emissions factor shall be calculated ex ante, as described in Option 1 above. For the third crediting period, the build margin emission factor calculated for the second crediting period should be used. The option chosen in this case is option 1. In order to determine the expansion component of the system in the emission factor, the set of units that meet the following characteristics are considered (as indicated in the methodology): The set of five power units that started to supply electricity to the grid most recently, excluding the

power units registered as CDM Project activities. The set of capacity additions in the electricity system that comprises 20% of the total generation

(MWh) and has been build most recently. Due to the characteristics of the National Interconnected System (NIS), the set of power units comprising 20% of the total supplied demand was defined, according to the following considerations: : Each power unit starts operation the day it starts supplying electricity to the grid. The power units registered as CDM are excluded from the simple group m. The power units that were built more than 10 years ago are excluded from the simple group m. The build margin emissions factor is the generation-weighted average emission factor (tCO2/MWh) of all power units m during the most recent year y for which electricity generation data is available, calculated as follows:

(6) Where: EFgrid,BM,y = Build margin CO2 emission factor in year y (tCO2/MWh). EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m in year y

(MWh). EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh). m = Power units included in the build margin. y = Most recent historical year for which electricity generation data is available. The CO2 emission factor of each power unit m (EFEL,m,y) is determined as indicated in step 4 (a) of the “Tool to calculate the emission factor for an electricity system” version 02.2.1 (options A.1 and A.2),

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 56 using for “y” the most recent historical generation data available and using for “m” the power units included in the build margin.

If for a power unit m data on fuel consumption and electricity generation is available, the emission factor (EFEL,m,y) should be determined as follows in equation (4) above. (option A.1): If for a power unit m only data on electricity generation and the fuel types used is available, the emission factor should be determined based on the CO2 emission factor of the fuel type used and the efficiency of the power unit, as follows in equation (5) above: (option A.2) Where several fuel types are used in the power unit, use the fuel type with the lowest CO2emission factor for EFCO2, m, i, y. Option A.3 does not apply since all power units have sufficient data to implement A.1 or A.2.

The calculated BM emission factor is:

STEP 6 – Calculate the combined margin (CM) emission factor. The calculation of the combined margin (CM) emission factor (EFgrid,CM,y) is based on one of the following methods:

(a) Weighted average CM; or (b) Simplified CM

The weighted average CM method (option a) should be used as a preferred option. The combined margin emissions factor is calculated as follows:

(7)

Where: EFgrid,CM,y =Combined margin CO2 emission factor in year y (t CO2/MWh) EFgrid,BM,y = Build margin CO2 emission factor in year y (t CO2/MWh) EFgrid,OM,y = Operating margin CO2 emission factor in year y (tCO2/MWh)

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 57 wOM = Weighting of operating margin emissions factor (%) wBM = Weighting of build margin emissions factor (%)

The default value of 50% for wBM and wOM was used for the calculation. The combined margin CO2 emission factor is:

EFgrid,CM,y= 0,5561 t CO2/MWh Generation facilities connected to the NIS (December 2010)

Power Plant Type of fuel Unit Power (MW) Start of operation

Enrique García Diesel TG-5 96.0 01/10/1997 Gonzalo Zevallos Gas) Diesel TG-4 18.0 01/12/1976 Gonzalo Zevallos (Steam) Diesel - Fuel Oil TV-2 72.0 01/07/1978 Gonzalo Zevallos (Steam) Diesel - Fuel Oil TV-3 72 01/06/1980 Trinitaria Diesel - Fuel Oil TV-1 133.0 01/11/1997 PascualesII Diesel TM1 18.0 01/01/2010 PascualesII Diesel TM2 18.0 01/01/2010 PascualesII Diesel TM3 18.0 01/01/2010 PascualesII Diesel TM4 18.0 01/01/2010 PascualesII Diesel TM5 18.0 01/01/2010 Pascuales II Diesel TM6 18.0 01/12/2009 Termoesmeraldas Diesel - Fuel Oil CTE 130 01/08/1982 Guangopolo Diesel –Oil residuals U1 5.1 01/03/1977 Guangopolo Diesel - Oil residuals U2 5.1 01/03/1977 Guangopolo Diesel - Oil residuals U3 5.1 01/03/1977 Guangopolo Diesel - Oil residuals U4 5.1 01/03/1977 Guangopolo Diesel - Oil residuals U5 5.1 01/03/1977 Guangopolo Diesel - Oil residuals U6 5.1 01/03/1977 Guangopolo Diesel - Oil residuals U7 1.6 01/08/2006 La Propicia Diesel - Oil residuals 1 3.8 01/05/1980 La Propicia Diesel – Oil residuals 2 3.8 01/05/1980 Miraflores Diesel 3 2.0 1970 Miraflores Diesel 7 2.0 1970 Miraflores Diesel 8 2.0 1970 Miraflores Diesel 9 2.0 1970 Miraflores Diesel 10 2.0 1977 Miraflores Diesel 11 5.0 1978


Miraflores Diesel 12 5.0 1978 Miraflores Diesel 13 2.0 1978 Miraflores Diesel 14 2.0 1978 Miraflores Diesel 16 2.0 1978 Miraflores Diesel 18 2.0 1979 Miraflores Diesel 22 2.0 1979 Miraflores Diesel TG1 20.0 25/12/2009 Pedernales Diesel 15 2.0 01/01/1978 PowerBarge II Diesel 1 11.0 11/11/2009 PowerBarge II Diesel 2 11.0 11/11/2009 PowerBarge II Diesel 3 11.0 11/11/2009 PowerBarge II Diesel 4 11.0 11/11/2009 Santa Rosa Diesel TG1 15.0 01/03/1981 Santa Rosa Diesel TG2 15.0 01/03/1981 Santa Rosa Diesel TG3 17.0 01/03/1981 El Descanso Diesel - Oil residuals G1 4.3 1982 El Descanso Diesel - Oil residuals G2 4.3 1982 El Descanso Diesel - Oil residuals G3 4.3 1982 El Descanso Diesel - Oil residuals G4 4.3 1982 Monay Diesel G1 1.0 1971 Monay Diesel G2 1.1 1971 Monay Diesel G3 1.1 1971 Monay Diesel G4 1.0 1971 Monay Diesel G5 1.1 1971 Monay Diesel G6 1.0 1971 Electroquil Diesel U1 47.5 01/05/1996 Electroquil Diesel U2 48.8 01/05/1996 Electroquil Diesel U3 47.6 01/06/1997 Electroquil Diesel U4 48.5 01/06/1997 Rocafuerte Diesel - Oil residuals U1 4.2 08/01/2007 Rocafuerte Diesel - Oil residuals U2 4.2 09/01/2007 Rocafuerte Diesel - Oil residuals U3 4.7 10/01/2007 Rocafuerte Diesel - Oil residuals U4 4.5 11/01/2007 Rocafuerte Diesel - Oil residuals U5 4.2 12/01/2007 Rocafuerte Diesel - Oil residuals U6 4.2 13/01/2007 Rocafuerte Diesel - Oil residuals U7 4.2 14/01/2007 Rocafuerte Diesel - Oil residuals U8 4.2 15/01/2007 Machala Power Natural Gas A 68,8 01/08/2002 Machala Power Natural Gas B 67.6 01/08/2002 Termoguayas Fuel Oil Bloque 1 20.0 01/12/2006 Termoguayas Fuel Oil Bloque 2 40.0 01/12/2006


Termoguayas Fuel Oil Bloque 3 40.0 01/12/2006 Termoguayas Fuel Oil Bloque 4 50.0 01/12/2006 Álvaro Tinajero Diesel G1-CAT 46.5 01/12/1995 Álvaro Tinajero Diesel G2-CAT 35 01/12/1995 Aníbal Santos (Gas) Diesel G1-CAS 20 01/04/1970 Aníbal Santos (Gas) Diesel G2-CAS 20 01/04/1970 Aníbal Santos (Gas) Diesel G3-CAS 20 01/04/1970 Aníbal Santos (Gas) Diesel G5-CAS 18 01/04/1970 Aníbal Santos (Gas) Diesel G6-CAS 18 01/04/1970 Aníbal Santos (Vapor) Diesel - Fuel Oil V1-CAS 32.5 1970 San Francisco Norte Diesel G1 2 01/10/1982 G. Hernández Diesel - Fuel Oil U1 5.2 01/03/1967 G. Hernández Diesel - Fuel Oil U2 5.2 01/03/1967 G. Hernández Diesel - Fuel Oil U3 5.2 01/11/1980 G. Hernández Diesel - Fuel Oil U4 5.2 01/11/1980 G. Hernández Diesel - Fuel Oil U5 5.2 01/11/1980 G. Hernández Diesel - Fuel Oil U6 5.2 01/11/1980 Luluncoto Diesel - Fuel Oil U1 2.70 01/02/1974 Luluncoto Diesel - Fuel Oil U2 2.70 01/02/1974 Luluncoto Diesel - Fuel Oil U3 2.70 01/02/1974 Catamayo Diesel U10 2.20 1974 Catamayo Diesel U2 1.00 1978 Catamayo Diesel U3 1.28 1977 Catamayo Diesel U4 1.20 1985 Catamayo Diesel U5 1.00 1977 Catamayo Diesel U6 2.50 1973 Catamayo Diesel U7 2.50 1976 Catamayo Diesel U8 2.40 1976 Catamayo Diesel U9 2.20 1977 Riobamba Diesel Unique 2 01/06/1978 Victoria II Diesel - Nafta Victoria II 102 01/04/1999 Selva Alegre Diesel - Oil residuals TMC1 13.00 18/07/1900 Lligua Diesel G1 1.80 01/03/1997

Lligua Diesel G2 1.60 01/08/1997 El Cambio U1 3.80 01/06/1980 El Cambio U2 3.60 01/06/1980 Machala Diesel G. M. #4 2.00 01/05/1975 Machala Diesel G. M. #5 2.00 01/02/1976 QUEVEDO Diesel 130.00 01/01/2010

Santa Elena Diesel 70.00 01/02/2010


Agoyán U1 78.00 01/09/1987 Agoyán U2 78.00 01/09/1987 Pucará U1 36.50 01/12/1977 Pucará U2 36.50 01/12/1977 Paute 1 105.00 01/05/1983 Paute 2 105.00 01/05/1983 Paute 3 105.00 01/05/1983 Paute 4 105.00 01/05/1983 Paute 5 105.00 01/05/1983 Paute 6 115.00 01/11/1991 Paute 7 115.00 01/11/1991 Paute 8 115.00 01/11/1991 Paute 9 115.00 01/11/1991 Paute 10 115.00 01/11/1991 Mazar U1 85.00 01/05/2010 Mazar U2 85.00 01/11/2010 Loreto Loreto 2.1 01/06/2002 Saucay G1 6.00 1987 Saucay G2 6.00 1987 Saucay G3 6.00 2002 Saucay G4 6.00 1978 Saymirín G1 2.40 1978 Saymirín G2 2.40 1982 Saymirín G3 2.40 1957 Saymirín G4 2.40 1957 Saymirín G5 2.40 1957 Saymirín G6 2.40 1957 Marcel Laniado U1 71.00 01/08/1999 Marcel Laniado U2 71.00 01/06/1999 Marcel Laniado U3 71.00 01/04/1999 San Francisco U1 106.00 01/06/2007 San Francisco U2 106.00 01/05/2007 Sibimbe 1 7.50 01/05/2006 Sibimbe 2 7.50 01/05/2006 Papallacta G1 3.10 01/01/1965 Papallacta G2 3.10 02/01/1965 Recuperadora N.1 14.7 01/07/1990 El Carmen U1 8.3 01/04/2000 Calope U1 9 01/12/2006 Calope U2 9 01/12/2006 Hidroabanico U1 7.70 01/12/2005


Hidroabanico U2 7.70 01/12/2005 Hidroabanico U3 7.70 01/07/2007 Hidroabanico U4 7.70 01/07/2007 Hidroabanico U5 7.70 01/07/2007 La Esperanza U1 2.90 01/12/2006 La Esperanza U2 2.90 01/12/2006 Poza Honda U1 1.60 01/05/2007 Poza Honda U2 1.60 01/05/2007 Península G1 0.80 01/03/1998 Península G2 0.80 01/10/1998 Península G3 0.80 01/10/1998 Península G4 0.80 01/06/1997 Chimbo U1 0.70 1998 Chimbo U2 0.70 1998 Chimbo U3 0.7 Illuchi No. 1 Grupo 1 1 01/07/1951 Illuchi No. 1 Grupo 2 1 01/07/1951 Illuchi No. 1 Grupo 3 1 01/01/1955 Illuchi No. 1 Grupo 4 1 01/01/1967 Illuchi No. 2 Grupo 1 2.5 01/05/1987 Illuchi No. 2 Grupo 2 2.5 01/05/1987 Ambi G1 4.00 1967 Ambi G2 4.00 1987 La Playa G1 0.40 1987 La Playa G2 0.40 1968 La Playa G3 0.40 1968 San Miguel de Car G1 2.90 01/08/1987 Cumbayá U1 10.00 01/08/1962 Cumbayá U2 10.00 01/08/1962 Cumbayá U3 10.00 01/02/1967 Cumbayá U4 10.00 01/07/1976 Guangopolo_Q U1 3.50 01/07/1980 Guangopolo_Q U2 3.50 01/07/1980 Guangopolo_Q U3 3.50 01/07/1980 Guangopolo_Q U4 3.50 01/05/1956 Guangopolo_Q U5 3.50 01/06/1985 Guangopolo_Q U6 3.50 02/06/1985 Los Chillos U1 0.90 01/05/1953 Los Chillos U2 0.90 01/07/1984 Nayón U1 15.00 01/07/1980 Nayón U2 15.00 01/07/1980


Pasochoa U1 2.30 01/08/1976 Pasochoa U2 2.30 01/08/1976 Alao Grupo 1 2.60 01/06/1966 Alao Grupo 2 2.60 01/06/1966 Alao Grupo 3 2.60 01/06/1977 Alao Grupo 4 2.60 01/06/1978 Río Blanco Única 3.00 01/01/1997 Carlos Mora U1 0.80 1978 Carlos Mora U2 0.80 1967 Carlos Mora U3 0.80 1997 Ecoelectric Bagasse TURBO # 5 36.50 01/08/1977 Ecudos A-G Bagasse TGE-2 34.80 01/06/1968

San Carlos Bagasse Turbo 1 15.00 01/06/1976 Notes:

The EF for the NIS was calculated with information given by CONELEC, CENACE and

Ministry of Environment, obtained from their statistics bulletins and information systems.

The calorific value for each type of fuel, of all the set of power units, was taken from the values determined in the 2006 Report GHG National Inventories from the Inter-Governmental Expert Panel on Climate Change.

Due to the energy deficit in the Ecuadorian electricity system in the last two months of 2009 and

the beginning of 2010, the Ecuadorian Government was forced to increase the generation capacity by leasing 200MW in thermoelectric capacity, which was distributed in the following plants: Energy International, Central Térmica Quevedo (130MW) and APR Energy, LLC Central Térmica Santa Elena (70MW).

For electricity imports from the interconnection with Colombia, the energy recorded in the bar

meters of Ecuador was considered.

The new installed power capacity expansion of 298MW was considered, which consisted of hydroelectric and thermoelectric power sources.

Annex 4

MONITORING INFORMATION Monitoring process

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 63 The Coca Codo Sinclair Hydroelectric Power Plant will connect to the National interconnected System (NIS) through 2 transmission lines of 500 kV each (from the COCASINCLAIR substation to the El Inga substation, which is connected to the rest of the NIS. The commercial measuring system to be implemented to monitor the generated electricity will be performed as follows:

The commercial measuring system consists of gross energy generation meter, net energy generation meter, a local monitoring system and a long distance monitoring system. In addition, el project will be equipped with a System for Control and Acquisition of Data (SCADA) and it will have a Generation Control Center at the plant.

According to the regulations of CONELEC, the implemented commercial measuring system shall have a gross energy generation meter at the end of the generators and net energy generation meters at the border points.

The gross energy meters will be connected through 2 serial networks. Each one of the networks

will connect all the meters. The first one will integrate to the external communication with CENACE through the gross energy meter ethernet getaway point of one of the generators and the second one with the Generation Control Center.

The net energy meters will be installed in remote substations (border points). In each net energy

monitoring point, two meters will be installed, a main one and a backup one. Both will have a communication port with exclusive access to CENACE and another communication port to the Generation Control Center through the remote monitoring management system station, which will be installed in the project´s powerhouse.

Consequently, the gross and net energy generation data will be available at the Generation Control Center and in the management system installed in the powerhouse. The basic information about the energy meters is shown in the following table:

Item Technology Feeding nominal tension 125 V c.c. (+10%,-15%) Measuring nominal tension 115 V a.c. Nominal measuring current 5 A a.c. Permanent current 10 A ef. Operation frequency 60 Hz Synchronism Through GPS communication network

The specific characteristics of the meters are the following: ‐ Observance of the IEC-687 class 0,2 measuring requirements. ‐ Following variables shall be measure and record: active energy, reactive energy, demand, with four

independent records (two for each flow direction. ‐ An information storage system will be created during feeding losses with a non volatile data memory

of at least 100 hours.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 64 ‐ The meters will have auto-diagnosis in all functional modules, with capacity to locate and record

locally through an alarm digital panel and remotely any functional abnormality. Reductions monitoring management

The Technical Department will have the final responsibility over all aspects related to the monitoring of data and recording control and will designate a responsible person of the department for the annual and monthly elaboration of the generation monitoring reports.

The Planning and Management Department will designate a responsible person that will compare the monitoring information from available documents (bills, official data, formal bulletins from the electricity sector and others).

The monitoring process will be integrated to the existent operation procedures of the company. The majority of data required for monitoring the reductions will come from the data obtained in the operation of the plant.

The data will be recorded in regular intervals..

A CDM Commission will be created, which will be responsible for the review of the generation

monitoring information, the elaboration of the annual and monthly emissions reductions report and coordination of the verification process. The commission will be designated by the General Manager and will have a member of the Technical, Environmental and Planning departments.

The CDM Commission will be in charge of the fulfillment of the Monitoring Plan.

Monitoring personnel training The personnel involved in the operation and maintenance of the power plant will be highly qualified and they will receive training about CDM monitoring requirements, including a general vision of the CDM and in particular about all the elements of the monitoring plan. A copy of the monitoring plan will be distributed among all the involved personnel in the process and an additional copy will be accessible in adequate locations at the power plant and in the company´s information system. Calibration of monitoring equipment The calibration of the measuring equipment will meet the standards established in Annex 4 of the Regulation Nr. 005/06 from CONELEC “Commercial Monitoring System of the Electricity Wholesale Market”. This regulation states that the measuring equipment owner has the obligation to participate in the verification process (programmed verification) according to the program established by CENACE. The meters will be then calibrated every two years. The Technical Department will ask for a copy of the calibration certifications in order to include them in the monitoring report.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 65 Monitoring frequency COCASINCLAIR will have measuring equipment at the generators terminals (gross energy). The measurements are recorded continuously through a remote control system, which will enable the automatic storage and processing of the data in the Generation Control Center at the power plant. Adjustment procedures for the monitoring data A quality control procedure will ensure the availability of sufficient and precise information to calculate the emission reductions in a transparent manner. In order to do so, the following procedures should be applied:

‐ The data will be consolidated annually/monthly. ‐ The data will be reviewed and compared with CENACE statistics. ‐ If differences arise, he variation source will be identified. ‐ Once the source of the variation is identified, it will be corrected.

Emission reductions calculation frequency The emission reductions will be calculated on a monthly basis. Baseline emission factor update The baseline emission factor will have to be updated at the end of every crediting period. This baseline emission factor shall be calculated according to the latest version of the “Tool to calculate the baseline emission factor of an electricity system”. The emission factor will be published every year by the Technical Commission for GHG Emission Factors Determination. Internal verification The CDM Commission will be responsible for the emission reductions monitoring and the quality of the reductions by the project. The internal organization for the monitoring plan is shown in the following structure: General Manager


- - - - -

CDM COMMISSION -Member of Technical Department

-Member of Environmental Department -Member of Planning and Management Department

Technical Department -Responsible for generation monitoring

-Responsible for measuring equipment maintenance

Planning and Management Department

-Responsible for information validation

Documents

PDD COCASINCLAIR ENGLISH V3 · 2018-02-09 · Coca Codo Sinclair Hydroelectric Project Document: Version 3.1 Date: 30 March 2012 A.2. Description of the project activity: >> The Coca