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	6242
Title of the proposed CDM project activity/PoA submitted for registration	Yuecheng Coal Mine Methane 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 further substantiate the project start date of 29 April 2011 as an earlier action related to the project activity is observed on 17 December 2009 when the gas purchase agreement was signed according to page 3 of the validation report. In case the project start date is revised, the DOE should ensure that the prior considerations are valid for the revised project start date. Please refer to VVM version 1.2 paragraphs 99-103.. 2) The DOE is requested to further substantiate the input values to the investment analysis, in particular: a) The CMM price of 0.11 RMB/m3, considering that: i) it is supplied to other mines in Jincheng group for free of charge and excess is vented to the atmosphere in the baseline, thus has no financial value in the baseline, ii) pre- treatment of the gas is done by the project activity, and not by the mine, iii) the project activity supplies electricity and heat to the mine for free of charge, and iv) based on the DOE's statement, it appears that the reference used only refers to CMM with methane concentration above 40%. b) The VAT refund and/ or tax exemption, by clarifying: i) which tax exemption and/ or VAT refund policies were considered, and ii) how it was confirmed that the project participant is not eligible for any of them, by providing details of the "nature of the project activity" that made them ineligible for tax exemption, and refund schemes. Please refer to VVM version 1.2 paragraph 111.. 3) The DOE is requested to clarify the baseline scenario and pre-project activities, in particular: a) The leakage due to the displacement of baseline thermal energy uses: whether the calculation was made in a conservative manner, in line with pages 14-17 and 28-29 for the following parameters: i) the projection of the extraction rate for the crediting period, ii) the baseline demand of CMM by the other mines, considering the large difference in the demand of 2009, 2010 and 2011; iii) the baseline demand by the local residence, taking into consideration the seasonal demand by using the daily log rather than an annual total; and iv) whether they are reflected to the motoring plan. Please note according to page 16 of the applied methodology, "even when a project’s average annual VAM/CMM/CBM use for electricity generation or other uses is significantly below baseline VAM/CMM/CBM emissions, there may be times due to daily fluctuations in thermal energy demand or in VAM/CMM/CBM extraction rates – that the project will use VAM/CMM that would have been used for thermal energy under baseline conditions". Where regulations require that local thermal demand is met before all other uses, the DOE shall demonstrate that the regulation is systematically enforced by assessing the compliance rate. b) The electricity of 3,600 MWh supplied to the mine, as it is not clear: i) how they are supplied in the pre-project scenario and  would be supplied in the baseline in the absence of the project activity, and ii) whether it is correctly and conservatively reflected in the emission reduction calculations. Please refer to VVM version 1.2 paragraph 84, 90 and 91.. 4) The DOE is reuqested to further justify the baseline scenario to vent CMM to the atmosphere in line with the existing regulations,  particularly the Emission Standard of Coal Bed Methane/Coal Mine Methane (GB 21522-2008) which was issued on 2nd April 2008, and prohibits venting of CMM with methane concentration above 30% from 1 July 2008 for new mines and 1 Jaunary 2010 for existing mines, as it is not clear how the DOE has concluded that the standard is not enforced based on: a) a disucssion with a local official on 28 June 2009 in response to the request for review of another project activity, considering that at the time of the discussion, the standard was not effective for existing mines, b) a telephone interview in March 2012, as it is not clear whether it was sufficient to examine whether the standard is not systematically enforced and that non-compliance is widespread, and c) various operation permit obtained after the publication of the standard but after the completion of the FSR of the project activity in June 2010. In doing so, please provide a quantitative assessment of the current rate of enforcement of the standard, in line with "Identification of the baseline scenario" Step 2 (page 6) of the applied methodology. Please refer to VVM version 1.2 paragraph 85.. 5) The DOE is requested to further substantiate the baseline identification, in particular, elimination of the alternative scenarios which are economically unattractive. Step 5 of  "Identification of the baseline scenario" (page 8 of ACM0008 version 7) requires that Step 2 (investment analysis) of the latest approved version of the “Tool for the demonstration and assessment of additionality” is used to identify the most plausible baseline scenarios by eliminating options which are clearly economically unattractive. However, the DOE has not validate the investment analysis for the elimination of the following alternative scenarios sufficiently: Scenario v, considering the financial savings made in reduced power purchase from the grid as revenue, providing validation of the power purchase price. Scenario vi, providing validation of the investment comparison analysis, comparing with the continuing use and/or replacement of coal fired boilers. Scenario vii, providing validation of the investment analysis of the hypothetical pipeline project. Please refer to VVM version 1.2 paragraphs 83 and 111..
Date	22 Nov 12