SSCPDD

6 MW Somanamaradi Grid-connected SHP in Karnataka, India

September 2004

Narayanapur Power Company Ltd.

Bharat Apartments, Ground Floor, No.44, Race Course Road, Bangalore 560001, Karnataka, India. 10-5-6/B, My Home Plaza, Masab Tank, Hyderabad 500 028, Andhra Pradesh, India

SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

CONTENTS A. B. C. D. E. F. G. General description of project activity Baseline methodology Duration of the project activity / Crediting period Monitoring methodology and plan Calculations of GHG emissions by sources Environmental impacts Stakeholders comments

Annexes Annex 1: Information on participants in the project activity Annex 2: Stakeholders comments

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

A. A.1

General description of project activity Title of the project activity:

6MW Somanamaradi grid-connected SHP in Karnataka, India. A.2. Description of the project activity: (Please include in the description - the purpose of the project activity - the view of the project participants on the contribution of the project activity to sustainable development (max. one page).) A.2.1. Description of the project activity: The project activity is generation of electricity using hydro potential available in an irrigation canal called Narayanapur Right Bank Canal (NRBC) and exporting the generated electricity to the state owned power utility company Karnataka Power Transmission Corporation Ltd. (KPTCL). For this activity it is proposed to construct a small hydroelectric project where the hydro potential is available. The project design comprises a diversion structure, power canal, penstock, powerhouse, power evacuation system and tailrace canal. No storage facility such as dam is envisaged in the project design and hence, the power will be generated whenever water flow is available in the irrigation canal. The irrigation canal originates from a reservoir constructed for irrigation purposes across the River Krishna. The River Krishna is one of the major rivers of Karnataka. Two dams are constructed, mainly for irrigation purposes, across the Krishna River, one at Alamatti and the other at Narayanapur. The Narayanpur dam is 64 km downstream of Alamatti Dam. From Narayanapur dam two canals take-off one from left bank (Narayanapur Left Bank Canal or NLBC) and the other from right bank (Narayanapur Right Bank Canal or NRBC). Development of irrigation system under the river Krishna is being undertaken by Krishna Bhagya Jala Nigam Ltd., a Govt. of Karnataka enterprise. NRBC is envisaged with two schemes viz. Scheme - A and Scheme B. Scheme A comprises construction of NRBC upto 95 km distance from the Narayanapur Dam. Under Scheme B the NRBC will be extended further upto 153 km. After completion of Scheme B, the canal carries about 93 cumecs of water for irrigation purposes. Presently, Scheme - A is completed and work under Scheme B is not started due to low water resources, poor ayakut development in the region and interstate disputes regarding sharing of water resources. Further, the failure of monsoons delayed the execution of NRBC. In view of the above, Scheme - B is not yet approved by the Govt. of Karnataka for implementation and there is a high uncertainty with regard to development of Scheme B. The NRBC after its 55th km has a gradual level drop of around 20 meters and a sudden level drop of around 10 meters. The project participants envisaged construction of a hydroelectric power project to utilize the head drop for power generation. Power potential available at this location is around 12 MW with a flow of 54 cumecs and a head drop of around 30 meters. However, due to the uncertainty of availability of water resources, the project proponents decided to implement the project in two stages. Stage I comprises installation of one unit of 6 MW capacity and when sufficient and sustainable water flow is observed in the canal second unit of 6 MW capacity will be installed under Stage II. However, it is unlikely that the second unit will be taken up for implementation. Hence, the present proposed project activity involves installation of only one unit of 6 MW capacity. Due to the uncertainties with regard to the availability of water in the canal the project proponents anticipated

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

a net generation of 21 GWh per year, which reflects a PLF of 40%. The following are brief technical particulars of the project activity. Hydrology Design flow Gross head Net rated head Energy Expected annual generation Generation voltage level Grid interfacing voltage Plant Equipment Hydro Turbine Type of generator No. of generating units Capacity of generating unit : 24.46 cumecs : 35.74 meters : 32 meters : 20.60 GWh : 11 kV : 33 kV : Vertical shaft full Kaplan : Synchronous : 1 No. : 6000 kW

A.2.2. Purpose of the project activity: The main purpose of the project activity is to generate electrical energy through sustainable means without causing any negative impact on the environment and to contribute to climate change mitigation efforts. Apart from the generation of electrical power, the project also contributes to the following. a) Sustainable development, through utilisation of renewable hydro resources available in the project region b) Rural area development due to the location of the project being in rural area c) Capacity addition to the present installed capacity and increase in the energy availability d) Generation of additional employment A.2.3. View of project participants about the project activitys contribution to sustainable development Ministry of Environment and Forests, Govt. of India has stipulated the following indicators for sustainable development in the interim approval guidelines for CDM projects. Social well being. The CDM project activity should lead to alleviation of poverty by generating additional employment, removal of social disparities and contribution to provision of basic amenities to people leading to improvement in quality of life of people. Economic well being. The CDM project activity should bring in additional investment consistent with the needs of the people. Environmental well being. This should include a discussion of impact of the project activity on resource sustainability and resource degradation, if any, due to proposed activity; bio-diversity friendliness; impact on human health; reduction of levels of pollution in general; Technological well being. The CDM project activity should lead to transfer of environmentally safe and sound technologies with a priority to the renewables sector or energy efficiency projects that are comparable to best practices in order to assist in upgradation of technological base.

Each of the above criteria is studied in the context of the project activity to ensure that the project activity contributes to the sustainable development and meets the above criteria.

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

a) The project activity leads to alleviation of poverty by generating direct and indirect employment during construction of the project as well as during operation. The project creates indirect employment opportunities for about 200 persons during the construction amounting to about 100,000 mandays. The project provides additional source of income for the local poor people by providing employment amounting to an investment of Rs.10,000,000/- (US$217,391) during construction period as salaries / wages for construction workers, mostly rural poor people, which otherwise would not happen in the absence of the project. In addition, the project creates direct permanent employment for about 30 persons during operation of the plant. This translates into an investment of about Rs.2,800,000/- (US$60,870) per year. b) The project is being set up in a rural area which is officially classified as the most underdeveloped area. The area is not having proper roads and other infrastructure. Hence, by setting up the project in this area, the proponents are committed to create infrastructure such as roads and other civic amenities. c) The project will bring in additional investment to the region. Project participants invest in the project about Rs.307 millions (US$6.67 million) which otherwise would not happen in the absence of the project. This is a very significant investment in an underdeveloped area. d) More and more rural industries will be set up and new opportunities for development will be created as a consequence to the hydroelectric project in the area. This will result in infrastructure development, which ultimately lead to the rural development and prevent the migration of rural poor to cities. The above benefits due to the project activity ensure that the project would contribute to the social and economic well being in the region. e) Since, the project utilises hydro potential available in an irrigation canal for power generation, which otherwise is dominated by fossil fuels such as coal, lignite and gas, the project will not result in rise of GHG emissions and cause no negative impact on the environment. The project also does not lead to degradation of any natural resources, health standards, etc. at the project area. Hence, the project contributes to the environmental well being. f) The project proponents transferred 6 hectares of their revenue land to the Forest Department in lieu of the land utilised for setting up the hydroelectric project. Further, the proponents paid Rs.286,241/- (US$6223) to Conservator of Forests in Karnataka to undertake afforestation activities in the transferred land. Hence, the project contributes to the environmental well-being. g) The project lead to utilisation of environmentally safe and sound technologies in small-scale hydroelectric power sector. Further the project demonstrates harnessing hydro potential in irrigation canals and encourages setting up such new projects in future. h) Since, the project feeds the generated power to the nearest KPTCL substation, energy availability and quality of the power improves significantly under the service area of the substation. In fact, the service area of the substation is facing power shortages and project activity would mitigate the power shortage situation to some extent. Hence, the project leads to the technological well being. In view of the above, proposed project activity strongly contributes to the sustainable development. A.3. Project Participants: (Please list Party(ies) and private and/or public entities involved in the project activity and provide contact information in annex 1 of this document.) (Please designate one of the above as the official contact for the CDM project activity.)

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

As yet, the project has only one participant entity, Narayanpur Power Company (P) Ltd., who will bring in the required capital for setting up the project at its own risk and take decisions with regard to the transaction of emissions credits. Contact details of the above project participant are given in Annex 1. Contact information. The above project participant has appointed Zenith Corporate Services (P) Ltd. to deal with the matters of the CDM for the project activity and designated as an official Contact. Contact details are given in Annex 1. A.4. Technical description of the project activity:

A.4.1. Location of the project activity: A.4.1.1 A.4.1.2 State A.4.1.3 A.4.1.4 Host country : India : Karnataka Project location : Somanamaradi Village, Deodurga (Taluk), Raichur District, Karnataka state, India. Detail description of the physical location, including information allowing the unique identification of this project activity (max one page):

The project site is located in Somanamaradi village in Raichur district of Karnataka State. Geographical references of the project site are Latitude 16 18 N and Longitude 76 45 E. The project is proposed on right side of the irrigation canal NRBC between 54.33 and 54.91 km marks. The project site is bearing Revenue survey nos.117, 129 and 89. Total area of land acquired for the project is 21.24 acres. The physical location of the Karnataka state in India and project site in Karnataka state is shown in the maps given below.

Map 1: Location of Karnataka state (Marked in Yellow) in India

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

Map 2: Physical location of the Project in Raichur district of Karnataka State A.4.2. Type and Category(ies) and technology of project activity (Please specify the type and category of the project activity using the categorization of appendix B to the simplified M&P for small-scale CDM project activities, hereafter referred to as appendix B. Note that appendix B may be revised over time and that the most recent version will be available on the UNFCCC CDM web site. In this section you shall justify how the proposed project activity conforms with the project type and category selected (for simplicity, the rest of this document refers to project category rather than project type and category). If your project activity does not fit any of the project categories in appendix B, you may propose additional project categories for consideration by the Executive Board, in accordance with paragraphs 15 and 16 of the simplified M&P for small-scale CDM project activities. The final SSC-PDD project design document shall, however, only be submitted to the Executive Board for consideration after the Board has amended appendix B as necessary.) (This section should include a description of how environmentally safe and sound technology and know-how is transferred to the host Party, if such a transfer is part of the project.) A.4.2.1 Type and Category Since, the capacity of the proposed project is only 6 MW, which is less than the qualifying capacity of 15 MW, the project activity can be regarded as a small scale CDM project activity and UNFCCC indicative simplified modalities and procedures can be applied. The project activity utilises the hydro potential for power generation and exports the generated power to the grid. According to small-scale CDM modalities

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the project activity falls under Type I Renewable Energy Projects and category I-D Renewable Electricity Generation for a grid. A.4.2.2. Technology The technology or power generation process using hydro resources is converting the potential energy available in the water flow into mechanical energy using hydro turbines and then to electrical energy using alternators. The generated power will be transformed to match the nearest grid sub-station for proper interconnection and smooth evacuation of power. The powerhouse comprises one number of synchronous generator of a capacity 6000 KW coupled to a vertical shaft full Kaplan turbine. The generated voltage at the generator terminals will be 11 kV, which will be stepped-up to 33 kV to match the nearest substation voltage level. A.4.2.3. Technology transfer No technology transfer from other countries is involved in the project. A.4.3. Brief explanation on how the anthropogenic emissions of anthropogenic greenhouse gas (GHGs) by sources are to be reduced by the proposed CDM project activity. (Please state briefly how anthropogenic greenhouse gas (GHG) emission reductions are to be achieved (detail to be provided in section B.) and provide the estimate of total anticipated reductions in tonnes of CO2 equivalent as determined in section E. below.) A.4.3.1. Emissions reductions from the project The proposed project generates electrical power using hydro potential and exports the net generated power to the regional grid system. Hence, the generation by the proposed project activity is non-GHG source and it is expected that the proportion of fossil fuel based generation in the grid will be reduced by the project activity leading to lesser carbon intensity in the grid. A.4.3.2 Quantity of emissions reductions out of the project: Emissions reductions due to the project activity mainly depend on the energy fed to the regional grid and the content of fossil fuel based generation in the grid system. Hence, the power fed to the regional grid and the generation mix in the baseline region becomes the basis for estimating emissions reductions. The installed capacity of the project is 6 MW, which exports about 20.60 million kWh every year. Considering the present energy mix in the regional grid system, it is estimated that about 16,977 tons of CO2 will be avoided every year Implementation of the project is scheduled for completion during December 2004. Hence, the project activity starts generating emission reductions from the December 2004. A.4.4. Public funding of the project activity

(Indicate whether public funding from Parties included in Annex I is involved in the proposed project activity. If public funding from one or more Annex I Parties is involved, please provide information on sources of public funding for the project activity in annex 2, including an affirmation that such funding does not result in a diversion of official development assistance and is separate from and is not counted towards the financial obligations of those Parties.)
Total funding required for the project is around Rs.307 millions (US$6.67 millions) which will be met through debt financing and equity capital. Debt portion, which is around 70% of the total investment, will Page 7

SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

be funded by Infrastructure Development Corporation (Karnataka) Ltd. and does not include any public funding from Annex I countries. The equity capital will be mobilised by the project proponents at their own risk out of their resources. Apart from the above, no other funding is involved. Hence, the project participants hereby confirm that public funding from parties included in Annex -I is not involved in the project activity. A.4.5. Confirmation that the small scale project activity is not a debundled component of a larger project activity. (Please refer to appendix C to the simplified M&P for the small-scale CDM project activities for guidance on how to determine whether the proposed project activity is not a debundled component of a larger project activity.) The project participants hereby confirm that the proposed project activity is not a debundled component of a larger project activity. The project participants further confirm that they have not registered any small scale CDM activity or applied to register another small scale CDM project activity within the same project boundary, in the same project category and technology/measure.

B.

BASELINE METHODOLOGY

B.1 Title and reference for the project category applicable to the project activity (Please refer to the UNFCCC CDM web site for the most recent list of the small-scale CDM project activity categories contained in appendix B of the simplified M&P for small-scale CDM project activities.) B.1.1. Title of the project category B.1.2. Reference for the project category : TYPE I RENEWABLE ENERGY PROJECT : I.D. RENEWABLE ELECTRICITY GENERATION FOR A GRID

B.2. Project category applicable to the project activity (Justify the choice of the applicable baseline calculation for the project category as provided for in appendix B of the simplified M&P for small-scale CDM project activities.) The project category is renewable electricity generation for a grid system, which is also fed by both fossil fuel fired generating plants (using fossil fuels such as coal, natural gas, diesel, naphtha etc.) and nonfossil fuel based generating plants (such as hydro, nuclear, biomass and wind). Hence, the applicable baseline, as per Clause 29 of Appendix B, indicative simplified baseline and monitoring methodologies is

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the kWh produced by the renewable generating unit multiplied by an emission coefficient (measured in kgCO2/kWh) calculated in a transparent and conservative manner. Under 29 of Appendix B, two methods of calculating the emission coefficient are given. First method i.e. 29(a) is calculated as the average of the approximate operating margin and the build margin. The second method i.e. 29(b) is the baseline as the weighted average emissions (in kgCO2/kWh) of the current generation mix. Grid system and the baseline methodology for the proposed project activity are described below. B.2.1. Grid System There are three choices available for choosing the grid system for the project activity, viz. national grid, regional grid or state grid. Electricity system in India is one of the large systems in the world with over 112,0581 MW of installed capacity base and annual energy generation of about 558,000 GWh. The electricity system comprises both fossil fuel based generating plants such as coal, lignite, diesel, natural gas etc. and non-fossil fuel based generation plants such as hydro, nuclear, wind etc. The entire electricity network in India is complex with regional grids and state grids having very low interconnection capabilities and wide variations in energy availability and mix. Hence, it is not appropriate to consider the national grid system for estimation of emission coefficient for a very small electricity project such as the proposed one. National grid system is therefore not considered. The electricity system in India is broadly divided into five regional grids viz. Northern, Western, Southern, Eastern and Northeastern regional grids. These regions have independent load dispatch centers that manage the flow of power in their jurisdiction. Karnataka state is situated in the southern part of India and is one of the major constituents of southern regional grid. The southern regional grid managed by Sourthern Region Electricity Board (herein after SREB) comprising Andhra Pradesh, Karnataka, Kerala, Pondichery and Tamilnadu states. These states under the regional grid have their own power generating stations as well as centrally shared power generating stations. While the power generated by own generating stations is fully owned and consumed through the respective states grid systems, the power generated by central generating stations is shared by more than one state depending on their allocated share. SREB facilitates the share of power generated by the central generating stations. Presently the share from central generating stations is a small portion of their own generation. The following table provides detailed information on own power generation as well as share from central generation. Table B.1: Allocated share for states from central generating stations in southern region
State MW Andhra Pradesh Karnataka Kerala Tamilnadu Pondichery Unallocated State level State owned Private owned MW Central Level MW Total MW % of Central

6629 4523 2032 5416 33 18632

1137 739 208 1963 0 4048

SREB Total

2001 674 804 2389 142 610 6620

9767 5936 3043 9768 175 610 29299

20.5 11.4 26.4 24.5 81.4 22.6

Source : Annual Report 2003-2004, Ministry of Power, Govt. of India.

Annual Report 2003-2004, Ministry of Power, Govt. of India.

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

Recently the Electricity Act 2003 has been passed in the Parliament of India, which is expected to bring radical changes in the Indian Power Sector. Principle features of the Act include removal of licensing requirements for power projects except hydro projects, open access system in transmission and distribution, entry of private sector into distribution sector, phasing out cross subsidies, encouraging power trading, defining regulator responsibilities and stringent anti-theft controls. The act would give a fillip to the Indian Power Sector reforms and would result in more private sector participation. The Union Budget 2003, with an objective of creating more conducive environment for investments in power sector and continue power sector reforms, offered incentives for the power sector, which are given below. 1. Extension of the Mega Power Policy to all projects above 1000 MW (thermal) and 500 MW (hydro) capacity. Earlier the Mega Power Policy is applicable to only 18 projects which were planned for the benefit of more than one state. Now, all projects fulfilling the megawatt criterion can qualify for mega power projects status. The features of this policy is waiver of customs duty (normally 21.8%) as well as excise duty on all project imports, relaxation of sales tax, tax holiday for 10 years and quicker clearances. As a result of this, capital costs of projects are likely to decline by a significant 15%, which would translate into lowering the fixed cost component and ultimately reduction in the cost of generation. 2. Reduction in duty of high voltage transmission equipment from the previous 25% to 5%. 3. Reduction in import duty on LNG equipment from previous 25% to 5% 4. Complete exemption in import duty on capital goods for water treatment for power plants. As a result of the above, it is expected that investments in the power sector and more so in transmission and distribution sector would increase significantly in future. Further, all projects, which are presently in planning stage awaiting financial closure would be placed in an encouraging situation. In addition, due to increased flexibility for supplying power to more than one state, more focus would be laid for mega power projects. Naturally, being high capacity projects, fuel for these projects would be either coal or natural gas making the baseline more carbon intensive. In addition, national grid is slowly emerging and the first phase is already completed. Though the national grid plans are long-term plans targeted for completion in 2017, it is certain that the power transmission capacity between regions would increase in the near future. In view of all the above, it is expected that more and more investments would flow into the large power projects rather than into small power projects. Further, it is anticipated that the power exchanges between states and regions would increase in future than the present level. Hence, it can be safely assumed that grid system for the proposed project activity is the entire southern region grid encompassing all five southern states. Due to reasons explained above, and due to the anticipated growth in power exchanges between states the third choice of Karnataka state grid system for the project activity is not considered. B.2.2. Emission Co-efficient Out of the two methodologies specified in the indicative simplified baseline and monitoring methodologies, the second method viz. 29(b), the weighted average emissions (in kgCO2e/kWh), is chosen for the proposed project activity due to the following reasons. The grid system chosen for the proposed activity is presently under deficit situation, as shown in Table : 2 below. The grid system is facing 5.2% energy shortage and about 5.4% peak deficit. Further, as per the 16th Electric Power Survey by Central Electricity Authority, the growth in the energy requirement is around 6.2% till 2017. To meet the present energy demand and growth in the energy requirement during

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the crediting period2 about 20,000MW3 capacity shall be added which means mobilisation of huge financial resources into the power sector. Present planned capacity additions will not be sufficient to meet the energy demand and it is most likely that all power generating plants will be in operation during the crediting period. Hence, the weighted average emissions of the generation mix will represent the carbon intensity of the grid system. Table B.2. Installed capacity mix and Energy supply position in the Southern Region
INSTALLED CAPACITY (MW) (As on 31.03.2004) Thermal State Hydro Wind Nuclear Coal Gas Diesel Total Andhra Pradesh 3572 4810 1112 37 5959 93 144 Karnataka 2954 2274 220 234 2728 124 130 Kerala 1807 398 524 256 1178 2 56 Tamilnadu 1995 5251 762 412 6424 990 358 Pondichery 0 130 33 0 163 0 12 Central Unallocated 0 530 0 0 530 0 80 SREB Total 10328 13393 2650 939 16982 1209 780 INSTALLED CAPACITY (%) Andhra Pradesh 36.6 49.2 11.4 0.4 61.0 0.9 1.5 Karnataka 49.8 38.3 3.7 3.9 46.0 2.1 2.2 Kerala 59.4 13.1 17.2 8.4 38.7 0.1 1.8 Tamilnadu 20.4 53.8 7.8 4.2 65.8 10.1 3.7 Pondichery 0.0 74.5 18.6 0.0 93.1 0.0 6.9 Central Unallocated 0.0 86.9 0.0 0.0 86.9 0.0 13.1 SREB Average 27.7 52.6 9.8 2.8 65.2 2.2 4.9
Source : Insalled Capacity : Annual Report 2003-2004, Ministry of Power, Government of India Energy Supply Position : Central Electricity Authority report for the period 2003-2004

Total 9767 5936 3043 9768 175 610 29299 100 100 100 100 100 100 100

Energy Deficit GWh 1400 5008 497 623 0 7528 % 2.9 13.9 3.8 1.4 0 5.2

Peak Deficit MW 910 768 263 227 0 2168 % 10.5 12.4 9.8 3 0 5.4

Non-fossil fuel energy sources such as hydro, biomass, wind and nuclear are very limited such that the energy development compared to the demand is very low. Ministry of Non-conventional Energy Sources has targeted an addition of 10% of the total installed capacity in the year 2001 i.e. 10,000 MW through renewable energy sources by the year 2012. Southern Region is expected to add about 26004 MW approximately. But, it is unlikely to achieve this target due to limited renewable energy sources. Substantial nuclear capacity addition is not possible during the crediting period. Only two nuclear projects are under construction in the southern region with a total capacity of 2,440 MW5, which are expected to commission during 2007 and 2008. All major hydro sources are already exploited and significant capacity additions to the system are not possible. Hence, the non-fossil fuel based power generation is not expected to contribute significantly such that the carbon intensity of the grid system is reduced.

2 3 4

Length of 1st Crediting period for the project activity is 7 years starting from 2005 Estimated based on the present capacity, deficit and projected growth in energy demand for the region

Total installed capacity in India in the year 2001 is about 100,000 MW. 10% of it is targeted for addition by the year 2012 through renewable energy sources. As per the Annual Report of 2001-2002 of Ministry of Power, installed capacity in Southern Region is 25,985 MW in the year 2001 and 10% of the installed capacity amounts to 2,599 MW which is expected to be added through renewable energy sources. Nuclear Power Corporation of India Ltd. : Kaiga Atomic Power Project in Karnataka Units 3 & 4 of capacity, 2 x 220 MWe, expected to be commissioned during 2007. Kudankulam Atomic Power Project in Tamilnadu Units 1 & 2 of capacity 2 x 1000 MWe, expected to be commissioned during 2007 and 2008.
5

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In view of the above, the dependence will be only on fossil fuel based power generation sources such as coal, lignite and natural gas. This will increase the grid system carbon intensity from the present level. Although the fossil fuel based generation mix in the grid system increases during the crediting period, choice of weighted average emissions of the current generation mix (Option 29.b of simplified baseline methodologies) as the baseline for the proposed project activity makes the estimation of emission reductions conservative over the choice of average of operating and combined margin (Option 29.a of simplified baseline methodologies). Hence, the baseline methodology per 29.b. is appropriate to the proposed project activity. Since, the project capacity is small resulting in a small number of emission reductions, only the current generation mix is projected as the constant baseline during the crediting period. This approach does not call for reviewing the grid emission co-efficient every year ex post and reduces transaction costs to project participants. B.3. Description of how the anthropogenic GHG emissions by sources are reduced below those that would have occurred in the absence of the registered CDM project activity. (i.e. explanation of how and why this project is additional and therefore not the baseline scenario). (Justify that the proposed project activity qualifies to use simplified methodologies and is additional using attachment A to appendix B of the simplified M&P for small-scale CDM project activities.) (National policies and circumstances relevant to the baseline of the proposed project activity shall be summarized here as well.) B.3.1. Justification for application of simplified methodologies to the project activity. The capacity of the project is only 6 MW, which is less than the qualifying capacity of 15 MW to use simplified methodologies. Further, the project activity is generation of electricity for a grid system using hydro potential. Hence, the type and category of the project activity matches with I.D. as specified in Appendix B of the indicative simplified baseline and monitoring methodologies for small scale CDM project activities. B.3.2. Justification for additionality of the project UNFCCC simplified modalities seek to establish additionality of the project activity as per Attachment A to Appendix B, which listed various barriers, out of which, at least one barrier shall be identified due to which the project would not have occurred any way. Project participants identified the following barriers for the proposed project activity. Barrier Analysis Investment Barriers. The project activity faces the following perceived risks and barriers that prevent project proponents investing in the proposed project activity if it were not registered under the CDM. a) Hydrology risks. Uncertainty with respect to the availability of water in irrigation canal on which the proposed project is being constructed is a major concern. The proposed project activity is purely based on irrigation releases from the Narayanpur Dam. NRBC is commissioned only during 2003, hence, the data on irrigation releases is available for only for the year 2003. While the gauged data for only one year is not sufficient for hydrology and power studies, project proponents had to depend on simulation studies for estimating power generation potential. Further, the official hydrology studies are based on the simulated data projected by the concerned irrigation department taking into consideration the planned ayacut development. Requirement / consumption of water for irrigation crops is not uniform and not metered. During the path of NRBC from the dam and upstream of the

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project site there are several branch canals which divert water for irrigation purposes in the region. In case irrigation pattern at the upstream side of the proposed project changes due to local pressures then the water availability at the project site for power generation will be affected. Though sufficient head is available for power generation, due to uncertainty in the hydrology as explained above, the power projections may not represent the true situation, which is a barrier for private investments. b) Geology risks. The project design is contemplated to have approach canal and power canal both located in a hilly terrain. Further, due to the hilly terrain the water before reaching the weir point will continuously carry a lot of silt. This will block the flow of water into the channel and choke intake pipes. Hence, the project operation demands frequent periodical maintenance at a remote place to remove the accumulated silt, reducing the plant availability for power generation. This will damage the power channel, which in turn will effect power generation and unexpected plant outages. The project will generate power only during 3 to 4 months time in a year. Any breakdown within this period will affect operation of the power plant and power generation, since bringing back the plant in operation may take considerable time during monsoon season. c) Capacity risks. The irrigation canal is constructed up to 93 km from the Narayanpur dam and supplying water for agriculture in the region. Presently, since the irrigation project under Narayanpur Dam is partly completed and ayacut is not fully developed, water flows are restricted to a very small portion of its design capacity. Ayacut in the region is expected to be developed over a period of time and till such time full flow of water is not expected in the irrigation canal in the near future. Hence, during the initial years, the proposed project may not generate electricity to its full capacity as envisaged. d) Transmission risks. The nearest electrical sub-station of the KPTCL grid is located at a distance of 12 km from the project site, which requires construction of long transmission system. The long distance and low transmission voltage level results in transmission and distribution losses. Further, long transmission system demands more attention for maintenance. This aspect makes a barrier for conceiving the small-scale hydroelectric project. e) Lack of infrastructure: The area where the project is proposed is an underdeveloped area. No infrastructure such as roads, electricity, communication, transportation and proper civic amenities etc. are available. The project proponents had to develop these facilities before implementation of the project. This adds to the project cost and makes a burden for private investors in the hydroelectric sector. f) Institutional barriers: Often government policies keep changing from time to time in the Karnataka state. As for instance before 2 years the power purchase price was at Rs.3.20 per kWh with 5% annual escalation. The same has been revised twice since then, even a legally valid power purchase agreement is in place. Now the price stands at Rs.2.90 per kWh with 2% annual escalation. This indicates inconsistency in government policies and no guarantee that the project receives the same tariff in future for the power fed to grid. This makes a significant barrier for the private sector investments in the power sector in the Karnataka state. Another critical issue is that the project proponents have to back down the generation whenever required by the utility company, KPTCL. A clear clause is built into the Power Purchase Agreement to this effect (copy of the Undertakings of the PPA is furnished below). Accordingly, a significant risk is existing for the project activity that demands shut down of the project in situations such as an emergency, surplus power situation, off-peak duration etc. This risk is already felt recently by some of the power developers in Karnataka when KPTCL issued orders to some of the power plant operators to stop generating power due to low demand for power across the state during a particular time. For seasonally operating small hydroelectric projects, risk associated with this PPA clause makes a significant barrier.

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

The river Krishna is east flowing river crossing three states Maharashtra, Karnataka and Andhra Pradesh. Hence, the water resources are to be shared in a pre-determined proportion, due to which diversion of water into irrigation canals is restricted and the water availability for power generation is not guaranteed. Hence, power generation is highly influenced by inter-state politics and regulations. A clear indication of investment barriers for small hydroelectric projects in India is that the present installed capacity of small hydroelectric projects6 is only at 1944 MW against the estimated potential of 15,000 MW. Prevailing practice In the Indian power sector, the common practice is investing in only medium or large scale fossil fuel fired power projects, which is evident from a host of planned projects that comprises mostly large-scale fossil fuel based power generation projects. This is mainly due to the assured return on investment, economies of scale and easy availability of finances. This is also true in the Karnataka state also. The share of electricity from small hydroelectric projects in Indias total installed capacity is very small. According to the latest statistics published by the Ministry of Non-conventional Energy Sources (MNES)7 the total installed capacity of small hydroelectric projects is only at 1944 MW including projects under construction where as the Indias total installed capacity is around 112,058 MW8 as on 31 March 2004 excluding small hydro, biomass and wind sources. This translates into a very small share of 1.7% from small hydro sector. Further, as on date only a few comparable9 hydroelectric plants are commissioned in Karnataka state. This shows that the investing in small hydroelectric sector is not a common practice and could not diffuse in the small hydroelectric sector. In view of the above, the proposed project is additional and not the same as the baseline scenario. Evidence for CDM revenues in project planning Construction of the project commenced in June 2003. Additional revenues under the CDM of Kyoto Protocol from sale of emissions reductions were considered during the projects planning stage. Events leading to the development of the project under CDM are furnished below, which will show that CDM revenues are considered before start of the projects construction activities. a) Project proponents i.e. M/s Narayanapur Power Company (P) Ltd. started negotiations with Zenith Corporate Services (P) Ltd. (Zenith) during February 2003 for developing the project under CDM and later appointed Zenith as their consultant for CDM activities during April 2003. Documentary evidence is available for verification. b) Zenith started developing the project as per small scale CDM modalities & procedures and presented10 the project activity to GTZ, an Indo-German Energy Programme, for necessary funding for development of PDD. GTZ has selected the project for funding the development of PDD and other activities during September 2003. The PDD was developed by Zenith with the financial assistance from GTZ. Documentary evidence is available for verification.

6 7

According to MNES, small hydroelectric projects are those which have installed capacity less than 25 MW. Website of Ministry of Non-conventional Energy Sources www.mnes.nic.in 8 Annual Report 2003-04 of Ministry of Power, Govt. of India. 9 Comparable plants to the proposed project are considered to be those hydroelectric plants with capacity between 75% and 125% of the capacity of the proposed project (between 4.5 MW and 7.5MW) and those plants which are commissioned after 1 January 2000. 10 In response to the call for CDM projects by GTZ under capacity building programme

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

c) During negotiations on power purchase tariff with the state owned power utility company Karnataka Power Transmission Corporation Ltd. (KPTCL) for evacuation of the generated power to the KPTCL grid, project proponents had to agree in principle to share the benefits accruing on account of the carbon credits at the ratio 30:70 between the project proponents and the KPTCL. Subsequently, a Power Purchase Agreement was signed on 5 November 2003 between the project proponent and KPTCL, which contains a clause on sharing of CDM revenues. Power Purchase Agreement will be provided for verification. d) The project was presented to the Indian DNA, i.e. Ministry of Environment & Forests (MoEF), Govt. of India during early 2004 for host country approval. MoEF has recently accorded host country approval for the project activity. Documentary evidence is available for verification Impact of CDM revenues Approval and registration of the project as a CDM activity enable the project proponents to access additional revenues by selling CO2e emission reductions. It is estimated that the project would generate around 16,977 CERs per year. Assuming a sale price of 6US$ per CER, additional gross revenues from the sale of CERs account for US$101,862 or Rs.4.69 millions per year. All the barriers described earlier are of perceived risks associated with the project activity and the additional revenue would only alleviate risk factors and act as margin money in the event of occurring any unexpected breakdowns. For instance, additional revenue could compensate financial losses arising out of lack of water resources for power generation or breakdown of the power canal due to silting or reduction of power purchase price by KPTCL etc. The additional revenue is equivalent to an additional generation of 1.21 million units per year11 or around 5.76% increase in the plant load factor. B.3.3. National policies and circumstances relevant to the baseline National policies and circumstances relevant to the baseline are already explained under Section B.2. B.4. Description of the project boundary for the project activity (Define the project boundary for the project activity using the guidance specified in the applicable project category for small-scale CDM project activities contained in appendix B of the simplified M&P for smallscale CDM project activities.) Project boundary specified in the Appendix B of simplified modalities and procedures is that encompasses the physical, geographical site of the renewable generation source. For the project activity under consideration, the project boundary considered encompasses the diversion structure, power canal, penstock, powerhouse, power evacuation system and tailrace canal. B.5. Details of the baseline and its development

B.5.1. Baseline for the proposed project activity Specify the baseline for the proposed project activity using a methodology specified in the applicable project category for small-scale CDM project activities contained in appendix B of the simplified M&P for small-scale CDM project activities: As explained in Section B.2, the project activity is generation of electricity for a grid system which is also served by other fossil and non-fossil fuel based generating units. Hence, the applicable baseline methodology for the proposed project activity is as per Clause 29 of indicative simplified baseline and monitoring methodologies, which states that the baseline is kWh produced by the renewable generating
11

Considering 6 US$ / CER, 25% transaction costs and power purchase tariff at 2.90 Rs. / kWh.

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

unit multiplied by an emission co-efficient (measured in kgCO2e/kWh). The baseline is estimated using the method specified under 29.b. i.e. weighted average emissions of the current generation mix, which is considered appropriate to the project activity. B.5.2. Date of completing the final draft of the baseline: 18 September 2004 B.5.3. Name of the entity determining the baseline : Zenith Corporate Services (P) Ltd. Contact information is provided in the Annexure 1, information on project participants.

C. C.1

Duration of the project activity / Crediting period Duration of the project activity:

C.1.1. Starting date of the project activity (DD/MM/YYYY) : 01.12.2004 (For a definition of the term starting date, please refer to the UNFCCC CDM web site). Starting date: Starting date applied to the project activity is the expected date of recordable export of power to the grid by the project activity, which means that from the starting date, the anthropogenic emissions are considered being reduced by the project activity. C.1.2. Expected operational lifetime of the project activity : 30y-0m

C.2 Choice of the crediting period and related information: (Please underline the selected option (C.2.1 or C.2.2) and provide the necessary information for that option.) (Note that the crediting period may only start after the date of registration of the proposed activity as a CDM project activity. In exceptional cases, the starting date of the crediting period can be prior to the date of registration of the project activity as provided for in paragraphs 12 and 13 of decision 17/CP.7 and in any guidance by the Executive Board, available on the UNFCCC CDM web site.) C.2.1. Renewable crediting period (at most seven (7) years per period) C.2.1.1. Starting date of the first crediting period (DD/MM/YYYY) : 01.12.2004 C.2.1.2. Length of the first crediting period C.2.2. Fixed crediting period (at most ten (10) years): C.2.2.1. Starting date (DD/MM/YYYY) C.2.2.2. Length : : : 7 Years

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

D.

Monitoring methodology and plan

(The monitoring plan shall incorporate a monitoring methodology specified for the applicable project category for small-scale CDM project activities contained in appendix B of the simplified M&P for smallscale CDM project activities and represent good monitoring practice appropriate to the type of project activity. The monitoring plan shall also provide information on the collection and archiving of the data specified in appendix B of the simplified M&P for small-scale CDM project activities to: - Estimate or measure emissions occurring within the project boundary; - Determine the baseline, as applicable; - Estimate leakage, where this needs to be considered. Project participants shall implement the registered monitoring plan and provide data, in accordance with the plan, through their monitoring reports. Operational entities will verify that the monitoring methodology and plan have been implemented correctly and check the information in accordance with the provisions on verification. This section shall provide a detailed description of the monitoring plan, including an identification of the data to be collected, its quality with regard to accuracy, comparability, completeness and validity, taking into consideration any guidance contained in the methodology, and archiving of the data collected. Please note that monitoring data required for verification and issuance are to be kept for two years after the end of the crediting period or the last issuance of CERs for this project activity, whichever occurs later. An overall monitoring plan that monitors performance of the constituent project activities on a sample basis may be proposed for bundled project activities. If bundled project activities are registered with an overall monitoring plan, this monitoring plan shall be implemented and each verification/certification of the emission reductions achieved shall cover all of the bundled project activities.) This monitoring plan is developed in accordance with the modalities and procedures for small-scale CDM project activities and is proposed for the 6MW Somanamaradi grid-connected small hydroelectric project being implemented in Karnataka state, India. The monitoring plan, which will be implemented by the project participants, describes about the monitoring organisation, parameters to be monitored, monitoring practices, QA and QC procedures, data storage and archiving. MONITORING ORGANISATION

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

The authority and responsibility for registration, monitoring, measurement, reporting and reviewing of the data rests with the Board of Directors who may delegate the same to a competent person identified for the purpose. The identified person, in the rank of General Manager, will be the incharge of the GHG monitoring activities within projects functioning. The General Manager will be assisted by a team of experienced personnel in disciplines such as mechanical and electrical with experience in plant operation, measurements and management. The primary responsibility of the team is to measure, monitor, record and report the information on various data items to the General Manager, in accordance with the applicable standards. Periodic calibration of various instruments used in the monitoring of GHG related data and record keeping of the same also will be the responsibility of the team. The responsibility of review, storage and archiving of information in good condition lies with the General Manager. General Manager will undertake periodic verifications and onsite inspections to ensure the quality of the data collected by the team and initiate steps in case of any abnormal conditions. The General Manager will review the data collected by the team and suggest corrective actions wherever required. An internal audit report will be prepared for review by the Board of Directors, which will be later submitted for verification by an independent entity. Board of directors will examine the internal audit reports and will in particular take note of any deviations in data over the norms and monitor that the corrective actions have resulted in adherence to the standards. The team including the General Manager will be appointed by the Board of Directors, in advance before the start of project operations. The General Manager will report to the board of directors and seek guidance in case of conflicts or difficulties in order to maintain the monitoring organisation in good spirit. PARAMETERS REQUIRING MONITORING This monitoring plan requires monitoring of only one parameter i.e. the power exported to the KPTCL grid system. Necessary documents required for verification of the data will be maintained for later archiving. Using the power exported to the grid, emission reductions will be estimated as illustrated in Section E. Emission reductions generated by the project will be monitored at regular intervals and will be reported to the board of directors. QA AND QC PROCEDURES The project employs latest state of art microprocessor based high accuracy monitoring and control equipment that will measure, record, report, monitor and control of various key parameters of the plant. These monitoring and controls will be part of the control system of the hydroelectric plant. Necessary standby meters or check meters will be installed, to operate in standby mode when the main meters are not working. All meters will be calibrated and sealed as per the industry practices at regular intervals. Records of calibration certificates will be maintained for verification. Hence, high quality is ensured with the above parameters. Sales records will be used and kept for checking the consistency of the recorded data. DATA STORAGE AND ARCHIVING All the data items monitored under the monitoring plan will be kept for 2 years after the end of crediting period or till the last issuance of CERs for this project activity whichever occurs later.

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SSC PDD: 6 MW Somanamaradi grid-connected SHP in Karnataka, India

The monitored data will be presented to an independent verification agency or DOE to whom verification of emission reductions is assigned. D.1. Name and reference of the approved methodology applied to the project activity.

(Please refer to the UNFCCC CDM web site for the most recent version of the indicative list of small-scale CDM project activities contained in appendix B of the simplified M&P for small-scale CDM project activities.) (If a national or international monitoring standard has to be applied to monitor certain aspects of the project activity, please identify this standard and provide a reference to the source where a detailed description of the standard can be found.) The name of the methodology applied for the project activity is Metering the Electricity Generated. This is in accordance with the Appendix B of simplified modalities and procedures for small-scale CDM project activities. The reference to the proposed monitoring methodology is Clause 31 of Appendix B of simplified modalities and procedures for small-scale CDM project activities. D.2. Justification of the choice of the methodology and why it is applicable to the project activity:

(Justify the choice of the monitoring methodology applicable to the project category as provided for in appendix B.) The project activity is generation of electricity using hydro potential and exporting the same to the grid system that is also fed by other fossil and non-fossil sources. Emission reductions due to the project activity are considered to be equivalent to the emissions avoided in the baseline scenario by displacing the grid electricity. Hence, emissions reductions are related to the electricity exported by the project and the actual generation mix in the grid system. Since, the baseline emission factor is estimated based on the weighted average emissions of the current generation mix and the same is used as the constant baseline for the project activity during the crediting period, monitoring of actual generation mix in the grid system is not required. Hence, the data to be monitored to ascertain emissions reductions out of the project activity is only the energy generated by the project. No leakage is identified by the project participants due to the project being run-of-the-river hydroelectric scheme. Hence, the proposed methodology well suits to the project activity.

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SSC-PDD : 6 MW Somanamaradi grid-connected SHP in Karnataka, India D.3. Data to be monitored:

(The table below specifies the minimum information to be provided for monitored data. Please complete the table for the monitoring methodology chosen for the proposed project activity from the simplified monitoring methodologies for the applicable small-scale CDM project activity category contained in appendix B of the simplified M&P for small-scale CDM project activities. Please note that for some project categories it may be necessary to monitor the implementation of the project activity and/or activity levels for the calculation of emission reductions achieved. Please add rows or columns to the table below, as needed) The following data is to be monitored to ascertain project emissions and emissions reductions
Measured (m), calculated (c) or estimated (e) m Proportion of data to be monitored Full (100% during the month) How will the data be archived? (electronic/ paper) Paper (Only sales records can be verified) For how long is archived data to be kept? 2 years after verification

ID number D.3.1.

Data type

Data variable

Data unit kWh

Recording Frequency Monthly

Comment The data will be recorded both at the project site as well as at the grid substation, which is under the control of KPTCL. The energy will be measured and recorded using calibrated meters at the KPTCL substation. Records of measurements will be used for verification of emissions reductions. Sales bills / receipts may be compared as an alternative proof of the power exported to the grid.

Power generated by the project

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SSC-PDD : 6 MW Somanamaradi grid-connected SHP in Karnataka, India D.4. Name of person/entity determining the monitoring methodology:

(Please provide contact information and indicate if the person/entity is also a project participant listed in annex 1 of this document.) The contact information of the entity, which has determined the monitoring methodology, is given below. Organization: Street/P.O.Box, Building: City: State/Region: Postfix/ZIP: Country: Telephone: FAX: E-Mail: URL: Represented by: Title: Salutation: Last Name: Middle Name: First Name: ZENITH CORPORATE SERVICES (P) LTD. 10-5-6/B, MYHOME PLAZA, MASABTANK, HYDERABAD ANDHRA PRADESH 500028 INDIA +91 (40) 2337 6630, 2337 6631 +91 (40) 2332 2517 zenithenergy@sancharnet.in www.zenithenergy.com DIRECTOR MR. REDDY MOHAN ATTIPALLI

The above party is designated by the project participant provided in Annex -1 as an official contact for communications regarding the CDM activity of the project.

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SSC-PDD : 6 MW Somanamaradi grid-connected SHP in Karnataka, India E. E.1 Calculation of GHG emission reductions by sources Formulae used

(In E.1.1 please provide the formula used to calculate the GHG emission reductions by sources in accordance with the applicable project category of small-scale CDM project activities contained in appendix B of the simplified M&P for small-scale CDM project activities. In case the applicable project category from appendix B does not indicate a specific formula to calculate the GHG emission reductions by sources, please complete E.1.2 below.) E.1.1. Selected formulae as provided in Appendix B: (Describe the calculation of GHG emission reductions in accordance with the formula specified for the applicable project category of small-scale CDM project activities contained in appendix B of the simplified M&P for small-scale CDM project activities.) No specific formulae are specified for the applicable project category. E.1.2. Description of formulae when not provided in Appendix B: E.1.2.1. Describe the formulae used to estimate anthropogenic emissions by sources of greenhouse gases due to the project within in the project boundary (for each gas, source, formulae/algorithm, emissions in units of CO2 equivalent) Since, the proposed project activity is run-of-the-river type hydroelectric project proposed on an irrigation canal, no anthropogenic emissions by sources of greenhouse gases within the project boundary are identified. Hence, no formulae are applicable. E.1.2.2. Describe the formulae used to estimate leakage due to the project activity, where required for the applicable project category in Appendix B of the simplified modalities and procedures for smallscale CDM project activities. (for each gas, source, formulae/algorithm, emissions in units of CO2 equivalent) The project proponents identified no anthropogenic greenhouse gases by sources outside the project boundary that are significant, measurable and attributable to the project activity. Hence, no leakage is considered from the project activity. In addition, it is confirmed herewith that the renewable energy technology is not equipment transferred from another activity. Hence, no leakage calculation is required. E.1.2.3. The sum of E.1.2.1 and E.1.2.2 representing the project activity emissions The net project emissions from the project activity are given in the table below. Table E.1 : Project emissions Year Project Emissions (as per E.1.2.1) Leakage (as per E.1.2.2) Sum of above E.1.2.1. + E.1.2.2. 2005 0 0 0 2006 0 0 0 2007 0 0 0 2008 0 0 0 2009 0 0 0 2010 0 0 0 2011 0 0 0

E.1.2.4. Describe the formulae used to estimate the anthropogenic emissions by sources of GHGs gases in the baseline using the baseline methodology for the applicable project category in appendix B Page 22

SSC-PDD : 6 MW Somanamaradi grid-connected SHP in Karnataka, India of the simplified modalities and procedures for small-scale CDM project activities: (for each gas, source, formulea/algorithm, emissions in units of CO2 equivalent). As explained in Section B.2, the baseline for the project activity is kWh produced by the hydroelectric project multiplied by an emission co-efficient calculated in a transparent and conservative manner as the weighted average emissions (in kgCO2/kWh) of the current generation mix. For the proposed project activity the current generation mix is taken for the Southern Region grid system. Central Electricity Authority publishes the annual energy generation from all power generating stations in the grid system. The following table provides the actual generation monitored by the CEA from all generating sources in the southern region during the period April 2003 to March 2004. Table E.2. Actual generation and baseline emissions
Fuel Gross Generation GWh Coal Lignite Gas * Hydro Nuclear Total Baseline Emmission Co-efficient * Includes Diesel generation (Inclusion is Conservative) Due to small quantity of generation, wind and biomass sources are not included above. 78873 17791 19408 16670 4700 Auxiliary consumption as per CEA % 8 8 3 0.5 12.29 Net generation GWh 72563 16368 18826 16587 4122 128466 105870735 824.12 tCO2/GWh CEF as per IPCC tC/TJ 25.8 27.6 15.3 Net heat rate as per CEA TJ/GWh 11.357 11.357 8.615 Baseline Emissions tCO2 77960254 18811985 9098497

Source : Central Electricity Authority, Generation data for the period 2003-2004

Formula used for calculation of the baseline is given below. Step 1 : Estimation of emissions from each fuel source Emissions from each fossil fuel source are estimated using the following formula. Emissions tCO2 = Net Generation GWh x CEF x Net Heat Rate for fuel tC/TJ TJ/ GWh x Conversion Factor 44 12 44 / 12

A sample calculation is furnished below. = = 72563 x 25.8 77960254 tCO2 x 11.357 x

In the above calculation, actual generation is obtained from CEA reports. Carbon Emission Factors (CEF) for fuels are taken from IPCC default emission factors. Since, collecting heat rates for all baseline plants is difficult, only heat rates as specified by the Central Electricity Authority are taken. This is reasonable for a small-scale project activity whose generation is negligibly small. Using the above formula, emissions from each type of fossil fuel source are estimated. For non-fossil fuel sources such as hydro and nuclear, GHG emissions are not applicable. Step 2 : Total Baseline emissions Total baseline emissions are estimated by summation of emissions from all fossil fuel sources. Page 23

SSC-PDD : 6 MW Somanamaradi grid-connected SHP in Karnataka, India

Step 3 : Estimation of baseline or Emission Coefficient Baseline emission factor is estimated as the weighted average of all existing generation sources using the following formula. Baseline Emission factor tCO2/GWh = Baseline emissions tCO2 = = 105,870,735 824.12 tCO2/GWh / / Total net energy in the system GWh 128,466

Step 4 : Estimation of baseline emissions Baseline emissions or emissions avoided by the project activity are estimated using the following formula. Baseline Emissions = or avoided emissions tCO2 Emission co-efficient x (From Step 3) tCO2/GWh anticipated generation from project activity GWh

Using the above formula, baseline emissions or emissions avoided by the project activity are estimated as 16,977 tCO2 per annum. This is based on an anticipated net generation of 20.60 GWh from the project. The resulting baseline emissions during the crediting period are tabulated below. Table E.3 : Baseline emissions during the 1st crediting period. Year Emission co-efficient tCO2/GWh Anticipated generation, GWh Baseline emissions, tCO2
2005 824.12 2006 824.12 2007 824.12 2008 824.12 2009 824.12 2010 824.12 2011 824.12

20.60

20.60

20.60

20.60

20.60

20.60

20.60

16,977

16,977

16,977

16,977

16,977

16,977

16,977

E.1.2.5 Difference between E.1.2.4 and E.1.2.3 representing the emission reductions due to the project activity during a given period. Difference between E.1.2.4 and E.1.2.3, which represent the emission reductions of the project activity are given in the table given below.

Table E.4. : Emissions reductions due to the project activity

Year Baseline

2005 2006 2007 2008 2009 2010 2011 16,977 16,977 16,977 16,977 16,977 16,977 16,977 Page 24

SSC-PDD : 6 MW Somanamaradi grid-connected SHP in Karnataka, India

emissions, E.1.2.4, tCO2 Project emissions, E.1.2.3, tCO2 Emissions Reductions, E.1.2.4 E.1.2.3, tCO2

16,977 16,977 16,977 16,977 16,977 16,977 16,977

E.2.

Table providing values obtained when applying formulae above:

Values obtained when applying formulae are already given above in various tables above.

F. F.1.

Environmental impacts If required by the host party, documentation on analysis of the environmental impacts of the project activity. (if applicable, please provide a short summary and attach documentation) Page 25

SSC-PDD : 6 MW Somanamaradi grid-connected SHP in Karnataka, India As per the Ministry of Environment and Forests, Govt. of India, Environmental Impact Assessment is not required to be carried out for small hydro projects involving investment less than US$21.74 millions. Since, the total project cost is only US$ 6.7 millions, the proposed project does not call for an Environmental Impact Assessment. However, the project shall, prior to setting up, shall obtain clearance from Karnataka State Pollution Control Board (KSPCB). The project participants already approached KSPCB and obtained clearance for setting up the project. Further, the proposed project does not result in any negative impacts on the socio-economic environment of the region. Displacement of local populace, disturbance in the local eco systems, deforestation etc. are not involved. Hence, in conclusion, the project does not cause any impacts on the environment or socio-economic situation in the region.

G. G.1.

Stakeholders comments Brief description of the process by which comments by local stakeholders have been invited and compiled:

Details are given in Annex 2: Stakeholders comments. G.2. Summary of the comments received:

No comments are received on the project. G.3. Report on how due account was taken of any comments received:

No comments are received; hence, no action taken report is applicable.

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SSC-PDD : 6 MW Somanamaradi grid-connected SHP in Karnataka, India Annex -1 CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY PROJECT PARTICIPANT 1 Organization: Street/P.O.Box, Building: City: State/Region: Postfix/ZIP: Country: Telephone: FAX: E-Mail: URL: Represented by: Title: Salutation: Last Name: Middle Name: First Name: Department: Mobile: Direct FAX: Direct tel: Personal E-Mail: NARAYANAPUR POWER COMPANY (P) LTD. BHARAT APARTMENTS, GROUND FLOOR, NO.44, RACE COURSE ROAD BANGALORE KARNATAKA 560001 INDIA +91-80-228 2664 +91-80-220 0400

VICE PRESIDENT MR. A. V. BALA KRISHNA

OFFICIAL CONTACT FOR CDM ACTIVITIES Organization: ZENITH CORPORATE SERVICES (P) LTD. Street/P.O.Box, Building: 10-5-6/B, MY HOME PLAZA, MASAB TANK, City: HYDERABAD State/Region: ANDHRA PRADESH Postfix/ZIP: 500028 Country: INDIA Telephone: +91 (40) 2337 6630, 2337 6631 FAX: +91 (40) 2332 2517 E-Mail: zenithenergy@sancharnet.in URL: www.zenithenergy.com Represented by: Title: DIRECTOR Salutation: MR. Last Name: REDDY Middle Name: MOHAN First Name: ATTIPALLI Department: Mobile: Direct FAX: Direct tel: Personal E-Mail:

SSC-PDD : 6 MW Somanamaradi grid-connected SHP in Karnataka, India Annex 2 STAKEHOLDERS COMMENTS IDENTIFICATION OF STAKEHOLDERS The project participants identified the following stakeholders for the project activity. a) b) c) d) e) f) Local Populace represented by the Village Panchayat Karnataka Renewable Energy Development Ltd. (KREDL) Karnataka Power Transmission Corporation Ltd. (KPTCL) Karnataka State Pollution Control Board (KPCB) Energy Department, Govt. of Karnataka Krishna Bhagya Jala Nigam Ltd. (KBJNL)

STAKEHOLDERS INVOLVEMENT All the above identified stakeholders are statutory organizations / governing bodies and need to be consulted and personally approached with necessary documentation to seek their approvals / clearances / licenses before setting up any project. After scrutiny of the documentation, the stakeholders release their consent / licenses / approvals to the project participants. The local populace is represented by the Village Panchayat, which is an elected body for administration of the village. Clearance from the concerned Village Panchayat in the form of No Objection Certificate is mandatory for any project before starting implementation. For this purpose, the project proponents need to conduct a meeting within the village with the Village Panchayat together with the villagers. If the villagers satisfy the project proponents submission, the Village Panchayat issues No Objection Certificate. STAKEHOLDERS COMMENTS The project participants already consulted and approached the above stakeholders for implementation of the project. No negative comments are received from them. Necessary clearances / approvals are already released in favour of the project. Village Panchayat issued No-Objection Certificate to set up the project. In fact, the local populace is welcoming the project due to various benefits like development of infrastructure in the area and improvement in socio-economic standards due to the project activity. KREDL is the policy implementation body in respect of renewable energy projects in the Karnataka State. KREDL reviewed the project documentation about the legal, financial, economical and environmental feasibility and accorded clearance for utilising renewable energy sources. Energy Department, Govt. of Karnataka also endorsed the project for implementation. KSPCB has issued consent to establish the project. KPTCL will give clearance for evacuation and feeding of power to the grid. This will be through proper Power Purchase Agreement. The company had extensive discussions with KPTCL and signed the Power Purchase Agreement. KBJNL is a statutory body set up for managing water flows in the Krishna River. Since for the proposed project water resource is from NRBC, which originates from the River Krishna, the project proponents shall obtain their approval. KBJNL already accorded clearance for the project.