M-DEV0281: Using an alternative approach to determine the baseline emission factor based on the procedures given in the “Tool to determine the baseline efficiency of thermal or electric energy generation systems”

AMS-III.B. ver. 14: Switching fossil fuels

The proposed CDM project activity encompasses fuel switching from heavy fuel oil (HFO) to natural gas (NG) at Misr Fine Spinning & Weaving factory and Misr Beida Dyers textile producing plants in Kafr El-Dawar, El-Beheira governorate, Egypt. The fuel switch will occur in boilers that are currently generating steam which is used for both electricity generation (to meet internal power electricity demand) and for the production process.

The proposed CDM project activity utilizes the small scale methodology AMS-III.B - Switching Fossil Fuels (version 14). As per AMS III.B, the baseline emission factors for the affected element processes are to be determined using 3-year historical data on the used of HFO and energy output. However this is not possible in the particular case of the proposed project activity due to the following:

1. For some boilers, steam generation has not historically been systematically recorded for the most recent 3 years. Data used in the PDD was thus estimated based on plant experience of amount of steam normally produced during the summer season and those produced during the winter. It is important to note that sufficiently complete and reliable data is not available for more than last 10 years.
2. For some boilers, historical measurement of HFO consumed for the past 10 years including the most recent 3 years is based on a highly uncertain system (reading of floaters in the fuel storage tanks which have not been regularly calibrated and do not represent an accurate and reliable measurement solution).
3. For some boilers, instead of data for individual boilers, only aggregate fuel consumption and steam generation for several existent boilers is recorded (some of these boilers are not even a part of the proposed CDM project activity).

As a result of the conditions above, it is thus not possible to accurately determine the baseline emission factors per element process as required by the related applicability condition of AMS-III.B which establishes that “In case of existing facilities historical information (detailed records) on the use of fossil fuels and the plant output (e.g., heat or electricity) in the baseline captive energy generation plant from at least 3 years prior to project implementation shall be used in the baseline calculations, (...)”

Appropriateness of the proposed Request of Deviation
While taking into account that the examples provided in the procedures for a request of deviation approved by the CDM EB in its 49th meeting for cases that are applicable for submitting a deviation to a methodology includes a case where “(…) a proposed project activity does not have access to the data sources specified by the methodology for a certain parameter; a different source of data can be accessed by the project activity to estimate the parameter with equal reliability and accuracy (…)”, It is thus GLC’s opinion that the particular case of the proposed CDM project activity is very similar to such case since historical data required to estimate the baseline emission factors as required by AMS-III.B is neither complete nor reliable. Furthermore, the Request of Deviation hereby proposed is also justifiable as:

- the lack of complete, accurate and reliable historical data for the determination of baseline emissions is to be regarded as a project specific circumstance vis-à-vis the related applicability condition of AMS-III.B. It is GLC’s opinion that the particular situation of the proposed project activity is not broadly seen in other potential project activities to which the small-scale methodology AMS-III.B may be applicable.

- Emission reductions are not increased or decreased by the acceptance of the Request of Deviation hereby proposed. The proposed approach is to ensure that baseline emissions are determined in an accurate manner as the proposed project activity does not have access to the data sources specified by AMS-III.B for determining the baseline emission factor. Furthermore, a different source of data/approach can be accessed/performed by the project activity to determine the baseline emission factor with equal reliability and accuracy as the approach established by AMS-III.B.

Proposed approach
As a result of this lack of historical data, the project participants propose to determine baseline emisisons for the boilers included in the proposed project activity by performing performance a set of performance/efficiency tests in these equipments before implementing the project activity. This alternative approach which is based on similar approaches already adopted for CDM project activities: The approved “Tool to determine baseline efficiency of thermal and electricity systems” and the approved baseline methodology AM0036 “Fuel switch from fossil fuels to biomass residues in boilers for heat generation” includes similar approaches.

It is important to note that the approach proposed by the project participants is to be considered as reliable as using historical records and, in the particular context of proposed project activity, it would indeed provide even more accurate values for the baseline emission factors since:
- the applicable measurements in the context of a set of boiler efficiency tests are to be conducted by independent experts on the basis of relevant test standards (and in the presence of members of GLC validation team) and with apropriate meters which are calibrated (which might not be the case for historical data made avaiable in the PDD).
- GLC was able to confirm by visual inspection of the boiler and by assessment of historical maintenance log books for the affected boilers that none of such boiler has been retrofit or overhauled during the last five years in a manner that would reduce the efficiency of these boilers. This condition ensures that emissions in the baseline scenario are not increased or decreased by the use of the approach proposed by the project participants when compared to the use of historical data.

As per the procedures given in AMS-III.B Switching fossil fuels, the baseline emission factor is estimated as follows:


(I)
Where:

EFBSL Emission factor for the baseline situation (tCO2/MWh)
FCi,j,BL,y Amount of fuel j consumed by the element process i during the year y operating at the baseline energy scenario (mass or volume unit)
NCVj Net calorific value of the fuel type j (kJ/unit)
EFCO2,j CO2 emission factor of the fuel type j (tCO2/kJ)
QBSL,i Net energy generated in the element process i in the baseline situation during the corresponding period of time for which the total fuel consumption was taken (MWh)
For an element process which uses a single fuel j, EFBSL can be determined in another form as follows (similar to AM0036’s approach):
(II)
Where:

EFBSL Emission factor for the baseline situation (tCO2/MWh)
EFCO2,j CO2 emission factor of the fuel type j (tCO2/kJ)
ηi average net efficiency of heat generation in the element process i (boiler i) when fired with fossil fuel
3.6*106 is a conversion factor to convert values in kJ to MWh

The efficiency of the baseline element process i is the net energy generated in the element process divided by the input energy in the fuel in the element process i.e. the above 2 equations are the same.
Equation (II) is suggested to be used to determine baseline emission factor by measuring the efficiency of the boiler (ηi) before project implementation (similar to AM0036’s approach) for cases where reliable historical records are not available.

It is also proposed that in case more than one boiler are connected to a common header, the highest efficiency determined for all the boilers using one of the options below will be used in estimating the baseline emission factor for those boilers in order to ensure conservativeness.
While taking into account the procedures given in AM0036, the following approach is thus suggested by the project participants to determine the baseline efficiency ηi which is based on the existent guidance of the latest version of the “Tool to determine baseline efficiency of thermal and electricity systems”:
It is important to note that both the project participants and GLC acknowledge the fact that the “Tool to determine baseline efficiency of thermal and electricity systems” is not applicable to determine the efficiency of cogeneration systems and that AM0036 methodology is not applicable to the proposed project activity either. Anyhow, as argued by the project participants, the guidance of such tool is being proposed only to determine the boiler efficiency (and not the efficiency of the cogeneration system as a whole). Furthermore, references to AM0036 methodology are provided just as a mere comparative example to justify the reasonability of the approach hereby proposed.
Although the methodology AM0036 (and other CDM methodologies e.g. AM0055) provide procedures and general guidance to determine boiler efficiency in the baseline scenario, the project participants propose to use the guidance provided in the “Tool to determine baseline efficiency of thermal and electricity systems” as such tool represents an approach which is the most recently one approved by the CDM EB and hence potentially provides a more detailed and systematic guidance than those present in the current approved methodologies.

Applicable options of “Tool to determine baseline efficiency of thermal and electricity systems”:

Option 1 (Option E in the tool):

“Option E: Determine the efficiency based on measurements and use a conservative value”

“This option can be used to determine a constant efficiency. Under this option, the efficiency of the energy generation system shall be measured based on performance tests before implementing the project activity following national/international standards (e.g., ASME PTC-6 or IEC 60953-3, ASME PTC-4.1 or BS 845 or EN 12952-15 or other equivalent international and national standards), at discrete loads within the operation range or over the entire rated capacity, preferably using direct methods (i.e. dividing the net output by the sum of all inputs).

For tests, two successive load points in the load range shall have an increment of at least 5% of the system’s rated capacity. At each load point one set of measurements shall be conducted. All efficiency tests shall be conducted for a same predetermined discrete time interval as specified in standards in the presence of an independent party (e.g. system manufacturer, technical consultant etc.).

All measurements shall be conducted immediately after scheduled preventive maintenance has been undertaken and under favorable operation conditions (optimal operating conditions, representative or favorable ambient conditions for the best efficiency of the energy generation system, including temperature and humidity, etc.). During the measurement campaign, the load is varied over the whole operation range and the efficiency of the energy generation system is determined for different steady-state load levels. Document the measurement procedures and results transparently. A minimum of 10 measurements shall be taken at different loads in the full operation range or rated capacity and among the measurements, the highest efficiency shall be considered as a conservative approach.

Tests shall be conducted for the entire system including auxiliary equipment, such as the fuel conditioning system, preheating systems, etc. All energy inputs and outputs, such as the feed water supply or energy losses through blow down losses, shall be taken into consideration. Measurements shall be done using calibrated equipments as required by the relevant national/international standards.

Alternatively, if the efficiency test was conducted as part of concluding a previous retrofit activity (Not part of the project activity) or energy audits or performance evaluation of the equipment, within 3 years prior to the implementation of the project activity and if the measurements and efficiency determination has already been verified and certified by an independent party, project participants may use the same data without conducting a new measurement campaign. This alternative is not applicable where a retrofit to increase the energy efficiency was done later.

Project participants shall justify and document the chosen optimal operating conditions.”

Option 2 (Option F in the tool):

“Option F: Use a default value”

“This option can be used to determine a constant efficiency. Project participants may use the default values for the applicable technology from Table 1 as constant efficiency (Project participants are encouraged to request for an amendment of this tool and may propose default values for technologies not covered in the table).

Table 1: Default baseline efficiency for different technologies

Technology of the energy generation system Default efficiency
New natural gas fired boiler (w/o condenser) 92%
New oil fired boiler 90%
Old natural gas fired boiler (w/o condenser) 87%
New coal fired boiler 85%
Old oil fired boiler 85%
Old coal fired boiler 80%

The above default values are applicable for thermal energy generating equipment. For electricity generation technologies, default values as provided in the Annex I of the “Tool to calculate the emission factor for an electricity system” may be used. In the table, for the purposes of this tool, “old” refers to equipment with an individual age of at least 10 years. “New” refers to equipment with an individual age of less than 10 years. In situations where a specific technology is not included in the table, project participants may also choose to use a maximum default efficiency of 100%, as simple and very conservative approach”.

Since the project’s non-compliance with the applicability condition of AMS-III.B which establishes that “(…) In case of existing facilities historical information (detailed records) on the use of fossil fuels and the plant output (e.g., heat or electricity) in the baseline captive energy generation plant from at least 3 years prior to project implementation shall be used in the baseline calculations, (...)” is considered as project specific case (the proposed project activity does not have access to reliable and complete historical data as required by the small-scale methodology AMS-III.B for estimating baseline emission factor). While it is GLC’s opinion that the particular lack of historical data condition of the proposed project activity is not broadly seen in other potential project activities to which the small-scale methodology AMS-III.B may be applicable, it is also GLC opinion that proposing this deviation is more suitable than proposing a revision of the small-scale methodology AMS-III.B.

However, if it is seen that this case can broadly occur for other PPs, GLC and the PP both acknowledge that the small-scale methodology AMS-III.B can be simply revised by inserting the following information right after para 17 of the methodology text:

“In case the historical data to estimate the baseline EF is not available or is not reliable EF BSL can be determined using the following equation:

Where:

EFBSL Emission factor for the baseline situation (tCO2/MWh)
EFCO2,j CO2 emission factor of the fuel type j (tCO2/kJ)
ηi average net efficiency of heat generation in the element process i (boiler i) when fired with fossil fuel
3.6*106 is a conversion factor to convert values kJ to MWh

Efficiency (ηi) can be determined using options E or F in the “Tool to determine baseline efficiency of thermal and electricity systems”.”
It is GLC’s opinion that in the case of revising the small-scale methodology AMS-III.B, such revsion should also include as a requirement that it must be demonstrated that the equipment included in the project activity were not previously retrofit or overhauled in a manner that would reduce the efficiency of these boilers (e.g.in the latest five years). This condition ensures that EF BSL is not increased or decreased by the use of the alternative approach when compared to the use of historical data.

The determination of the baseline emissions for the affected boilers by conducting an on-site set of boiler performance/efficiency tests (Option 1 (Option E of the “Tool to determine baseline efficiency of thermal and electricity systems”) potentially represents a more accurate estimative of baseline EFs in the particular context of the proposed project activity. Furthermore, also in the particular context of the proposed project activity, the proposed approach for the determination of baseline EFs has equal reliability and accuracy as the use of complete and accurate historical data. Thus, the proposed approach does not result in increase or decrease in emission reductions vis-à-vis the approach established by AMS-III.B.
It is noteworthy that since such boiler performance measurements have not yet been performed (set of performance/efficiency tests will be carried out only if this request for deviation is approved) the following applies:
1) It is so far not possible for GLC to estimate the quantitative impact of this proposed deviation on the emission reductions vis-à-vis the use of baseline emission factors figures provided by the project participants in the PDD. It should also be noted that it is also unknown how inaccurate or incomplete is the data provided in the PDD. Anyhow, while GLC was able to assess (and will verify once again during the performance tests to be done) by visual inspection of the boiler and by assessment of maintenance log books of the affected boilers that, in the latest five years, none of the boiler encompassed by the project activity has been retrofit or overhauled in a manner that it become less or more fuel efficient, it is thus GLC’s opinion that a set of boiler performance/efficiency tests indeed represents a more accurate method to estimate the baseline emission factor in the particular case of the proposed project activity.
2) The PDD enclosed with this Request of Deviation does not yet include the alternative approach hereby proposed as related performance/efficiency tests will only be carried-out upon acceptance of the Request for Deviation hereby proposed (due to cost related reasons).
3) GLC also highlights that as one of the preliminary findings of the validation, a corrective action request (CAR) was raised concerning the need for determination of remaining lifetime of relevant equipment prior to the implementation of the project activity. While pp ackowledges that remaining lifetime of equipment is a crucial variable under AMS III B, as a response for the raised CAR, the project proponent has declared that the determination of the remaining lifetime of affected equipment will be based on a technical assessment yet to be conducted by an independent expert and in accordance applicable guidance from the recently published “Tool to determine the remaining lifetime of equipment”. While such assessment is planned to be performed only upon acceptance of the Request for Deviation hereby proposed (due to cost related reasons), the PDD version enclosed with this Request for Deviation thus does not include determination of remaining lifetime for relevant equipment.