CDM project activity/programme of activities registration request review form (CDM-REGR-FORM) (Version 03.0)

Reference number of the proposed CDM project activity/programme of activities (PoA) submitted for registration	2705
Title of the proposed CDM project activity/PoA submitted for registration	Hangzhou Huadian Banshan Power Generation Co., Ltd.’s Natural Gas Power Generation Project
Please indicate, in accordance with paragraphs 37 and 40 of the CDM modalities and procedures, which validation requirement(s) may require review. A list of requirements is provided below. Please provide reasons in support of the request for review. Including any supporting documentation.
The following are requirements derived from paragraph 37 of the CDM modalities and procedures:
The participation requirements as set out in paragraph 28 to 30 of the CDM modalities and procedures are satisfied; Comments by local stakeholders have been invited, a summary of the comments received has been provided, and a report to the designated operational entity (DOE) on how due account was taken of any comments has been received; Project Participants have submitted to the DOE documentation on the analysis of the environmental impacts of the project activity, including transboundary impacts and, if those impacts are considered significant by the project participants or the host Party, have undertaken an environmental impact assessment in accordance with procedures as required by the host Party; The project activity is expected to result in a reduction in anthropogenic emissions by sources of greenhouse gases that are additional to any that would occur in the absence of the proposed project activity, in accordance with paragraphs 43 to 52 of the CDM modalities and procedures; The baseline and monitoring methodologies comply with requirements pertaining to methodologies previously approved by the Executive Board; Provisions for monitoring, verification and reporting are in accordance with decision 17/CP.7, the CDM modalities and procedures and relevant decisions of the COP/MOP; The project activity conforms to all other requirements for CDM project activities in decision 17/CP.7, the CDM modalities and procedures and relevant decisions by the COP/MOP and the Executive Board.
The following are requirements derived from paragraph 40 of the CDM modalities and procedures:
The DOE shall, prior to the submission of the validation report to the Executive Board, have received from the project participants written approval of voluntary participation from the designated national authority of each Party involved, including confirmation by the host Party that the project activity assists it in achieving sustainable development; In accordance with provisions on confidentiality contained in paragraph 27(h) of the CDM modalities and procedures, the DOE shall make publicly available the project design document; The DOE shall receive, within 30 days, comments on the validation requirements from Parties, stakeholders and UNFCCC accredited non-governmental organizations and make them publicly available; After the deadline for receipt of comments, the DOE shall make a determination as to whether, on the basis of the information provided and taking into account the comments received, the project activity should be validated; The DOE shall inform project participants of its determination on the validation of the project activity. Notification to the project participants will include confirmation of validation and the date of submission of the validation report to the Executive Board; The DOE shall submit to the Executive Board, if it determines the proposed project activity to be valid, a request for registration in the form of a validation report including of the project design document, the written approval of the host Party and an explanation of how it has taken due account of comments received.
There are only minor issues which should be addressed by the DOE/project participants prior to the registration of the project.
Additional information
1. The DOE is requested to explain how it has validated the project start date (20 Oct. 2003) and the prior consideration of the CDM given that the equipment contracts were signed (March 2003) before the development of the FSR (June 2003) and the Board decision to seek CDM for the project activity (28 July 2003). 2. The DOE is requested to further explain how it has validated the input values in the investment analysis, in line with the VVM para. 110 (a) and (b), in particular: (i) the suitability of the gas price, as it was checked only against the gas price from one source (West to East Gas Pipeline) given that there are different sources (pipelines and LNG) projected to supply gas to the province; and (ii) that the investment cost and the tariff are reasonable and conservative, as they are higher and lower, respectively, than the values cited for comparison and thus both would lead to the IRR being lower than what was estimated. 3. The DOE is requested to further explain how it has validated that the variations of the key parameters in the sensitivity analysis that would make the IRR cross the benchmark are unlikely to occur, in line with VVM para 110 (e), in particular, (i) that the electricity tariff is unlikely to increase, as the DOE has only attributed this to the fact that natural gas price increased at a higher rate from 2005 to 2008 compared to the increase in electricity tariff for natural gas combined cycle power plants for the same period; and (ii) that the static investment cost is unlikely to decrease, as this was only explained with the difference between the estimated value in the FSR and the actual investment in the project and not with the trend of historical values or relevant parameters such as price indices. 4. The DOE is requested to confirm the source of input values for the coal plant in the levelized cost comparison of baseline alternatives, as in the spreadsheet submitted, it is noted that except for the fuel consumption per unit electricity, all other input values including investment, O&M costs and fuel price are from "The notice for determining the regional power grid of China issued by the DNA of China on 16/10/2006”", while the project start date is 20 Oct. 2003.
Date	30 Jun 10