Clean energy generation from wind energy in the state of Rajasthan.
Host party(ies) India
Methodology(ies) ACM0002 ver. 12
Standardised Baselines N/A
Estimated annual reductions* 35,584
Start date of first crediting period. 31 Dec 11
Length of first crediting period. 10 years
DOE/AE RINA Services S.p.A.
Period for comments 26 Jul 11 - 24 Aug 11
PP(s) for which DOE have a contractual obligation Enercon (India) Power Development Private. Limited
The operational/applicant entity working on this project has decided to make the Project Design Document (PDD) publicly available directly on the UNFCCC CDM website.
PDD PDD (716 KB)
Local stakeholder consultation report: N/A
Impact assessment summary: N/A
Submission of comments to the DOE/AE Compilation of submitted inputs:
When the project is financed 70% by debt, how equity IRR is considered correct financial indicator for the project type and decision making context? DOE should not accept equity IRR; it should go by project IRR only. 

The return on equity at more than 18% is very high. RERC has recommended only 16%. The calculations should be disclosed in the web hosted PDD. PP has not explained how Annex 5, EB 62 has been used? If it is default return then the given return is very high and not correct DOE should take it up for validation only after the PDD is re-webhosted with all the calculation for global stakeholder to comment. EB may kindly take note of late this has become a trend and the PPs do not disclose any information and want to share the information only with DOE. In that case, web hosting of PDD can also be stopped. 

Escalation of 6% on O&M charges is high. All projects with Enercon windmills have assumed only 5% escalation 

DOE should take into consideration only purchase order cost and not offer. Validation manual clearly states that the DOE should use its sectoral and local expertise and financial knowledge in accepting evidence. DOE should know that offer letters are always obtained at higher cost to make the project additional. This is sectoral and local expertise expected of DOE.   

The cash inflow should include tax saving due to depreciation (100% not 15% as given in the PDD) and tax holiday. Consultant would have omitted this to make the project additional. The investment is made in 2010-11 and the generation also commences in the same year. Therefore, the cash outflow should be deducted from cash inflow of 2010-11 while calculating the indicator. The project IRR of the project cannot be less than 15%. 

Depreciation is not 15%. If accelerated depreciation is not availed then “Generation Based Incentive” available to such projects should be taken into account. Even then in the first year, the project is eligible for 15% + 20% depreciation.

The project IRR for this project will be more than 13.5%. Even if the given ROE is accepted, the WACC for the project will be less than 11%. This project is not additional. 
Submitted by: Karthikeyan

The comment period is over.
* Emission reductions in metric tonnes of CO2 equivalent per annum that are based on the estimates provided by the project participants in unvalidated PDDs