I-DEV0326: Deviation due to postponement of CMM monitoring system installation

During the verification site visit from 11 to 13 May 2010, ERM CVS verified that the project activity “Jincheng Fengrun CMM Utilisation from Nine Mines in Jincheng City Shanxi Province China” was implemented according to the description in the registered PDD, specifically,
1. No other source of fuel, other than CMM gas from the project activity is used to generate electricity;
During the verification site visit, ERM CVS confirmed that at each power plant, only gas engines were adopted for power generation. There is only one CMM gas pipeline supplying gas to each power plant. ERM CVS confirmed that the gas pipelines are physically laid out in consistence with the Appendix 3 – Layout of the registered PDD, which indicates that the only gas source of fuel is from the CMM pump station of each coal mine and no fuel other than CMM gas could be plausibly used to generate electricity.
2. The CMM is only used for power generation and not for other purposes;
ERM CVS confirmed during the site visit that at each project site, there is no branch in the pipeline between the pump station and the power plant. So the CMM from the CMM pump station is only used for power generation. In addition, the CMM gas monitoring facilities are installed inside each power plant and no other pipeline exists between the gas monitoring facilities and the power units. Therefore the monitored gas is exclusively used to generate electricity. By checking the circuit diagram and by site investigation, ERM CVS also verified that at each project site, there is only one circuit between the power meters and the power plant, thus only electricity generated by this project activity could be monitored by the power meters.
The above information will be reflected in the fortcoming verification report. Nevertheless, ERM CVS identified that a deviation to the monitoring plan should be requested for the monitoring period from 30 April 2009 to 24 January 2010 due to delayed installation of the CMM monitoring system, and that this deviation will also be required for the first portion of the subsequent monitoring period - i.e. from 25 Jaunary 2010 to to 08 Feburary 2010.
The start of the crediting period for this project is 30 April 2009. During the period 30 April 2009 to 24 January 2010 (the first monitoring period) and from 25 January 2010 to 8 February (the first 15 days of the second monitoring period) the CMM monitoring systems were still in the process of installation. This means that parameters CMMELEC and PCCH4 in the registered monitoring plan could not be monitored during this period in full compliance with the monitoring plan.
During this period the monitoring system for monitoring exported electricity resulting from the project activity was found to be fully and appropriately implemented.
The deviation requested is therefore to report emission reductions only from the generation of electricity, but not from combustion of the CMM. This is a conservative approach, as explained in more detail below.
ERM CVS therefore requests that the CDM Executive Board grants a deviation from the monitoring plan regarding the delay in the complete installation of the CMM monitoring system, for the period from 30 April 2009 to 8 February 2010, which covers the first monitoring period and an additional 15 days beyond the first monitoring period.

1. Request for revision of monitoring plan not necessary

According to section VI.E.2 of the CDM Validation and Verification Manual, revision of the monitoring plan is necessary when “the monitoring plan is not in accordance with the monitoring methodology applied to the registered CDM project activity and/or does not reflect the actual monitoring activity based on the registered PDD”.
However, in the case of the Project Activity, ERM CVS verified that the inconsistency of the Project Activity monitoring with the monitoring plan was only applicable for a temporary period, which affects the first monitoring period and the first 15 days of the second monitoring period. The monitoring plan itself and the final installation of the monitoring system on site are fully compliant with the monitoring methodology, and therefore a revision is not required. ERM CVS confirmed during the site visit that the CMM monitoring system installation was complete and operational from 8 February 2010, as evidenced by a report issued by Anshan Yixing Automatic Engineering Co Ltd on 22 June 2010 which states that the CMM concentration meters for all the mines were installed from 2 February (00:13) to 8 February (00:20) 2010, whilst the CMM flow meters for all the mines were installed from 2 February (00:13) to 7 February (11:21) 2010.

Hence, it is considered that the CMM monitoring system, as finally installed, is in accordance with the monitoring plan and monitoring methodology (version 3, ACM0008) and no revision to the monitoring plan is needed.

2. The deviation does not require changes from the Project Activity as described in the registered PDD:
1) No permanent change to the design of the project activity has taken place. The deviation requested is based on a temporary delay in the installation of parts of the monitoring system only.

2) For the period of requesting a deviation, 30 April 2009 to 24 January (the first monitoring period) and 25 January to 8 February 2010 (the first 15 days of the second monitoring period), the emission reduction claimed is only from the power generated by the Project Activity by combustion of CMM extracted from the mines. The power monitoring meters had been installed in line with the monitoring methodology and the registered monitoring plan prior to the first monitoring period (i.e. prior to 30 April 2009). This was verified by reviewing the nine gateway meters’ calibration reports dated 9 February 2009 issued by the licensed calibration institution, Shanxi Jincheng Power Supply Company Electric Energy Metrological Center and the Certificate of the licensed calibration institution issued by Shanxi Province Jincheng City Quality and Technology Supervision Bureau, which is valid until 8 April 2010 and has since been renewed.

3) Monitoring equipment to monitor power generation and monitoring equipment to measure CMM consumption are two separate and independent systems. The delay in installation of the CMM monitoring system does not affect the monitoring of power generation.

4) Since 8 February 2010 the CMM monitoring system has been installed properly according to requirements in the methodology and provisions in the registered monitoring plan.

Therefore, the deviation does not require a revision of the monitoring plan or changes from the project activity as described in the registered project design document.

As shown below, the Project Participants have excluded the emission reductions from methane combustion, which is a conservative approach.

As a result of the deviation, the emission reductions due to destruction of the methane will not be claimed in the requested deviation period. Therefore for the period of this deviation, emisison reductions will include only those emission reductions related to power generation.

According to the approved methodology and the registered PDD, the requested deviation is conservative because the baseline emissions from release of methane in the baseline are not counted, and therefore the total volume of CERs claimed is significantly lower than would otherwise be the case. The project emissions from destruction of methane (PEMD) and from uncombusted methane (PEUM) are also not counted, since the quantity of methane delivered to the power plant cannot be determined, however these project emissions will always be less than the corresponding baseline emissions, meaning the approach of excluding both is conservative. This is illustrated further below:

PEMD should be calculated as follows:

PEMD = MDELEC * (CEFCH4 + r * CEFNMHC)
r= PCNMHC/PCCH4

Where:
MDELEC = Methane destroyed through power generation in year y (tCH4);
CEFCH4 = Carbon emission factor for combusted methane (2.75 tCO2e/tCH4);
CEFNMHC = Carbon emission factor for combusted non methane hydrocarbons (tCO2e/tNMHC);
r = Relative proportion of NMHC compared to methane;
PCNMHC = NMHC concentration (in mass) in coal mine gas (%).
PCCH4 = Concentration of methane (in mass) in extracted gas (%), measured on wet basis;


Since the relative proportion of NMHC compared to methane has been monitored and remains below 1% during the monitoring period, emissions from NMHC can be ignored. The NMHC monitoring reports dated 20 April 2009 and 30 March 2010 for all of the coal mines were provided by the project developer, and the proportion of NMHC in the reports is zero. Therefore PEMD = MDELEC * 2.75

PEUM should be calculated as follows:

PEUM = GWPCH4 * MMELEC * (1-EffELEC)

where:
MMELEC = Methane measured delivered to power plant in year y (tCH4)
EffELEC = Efficiency of methane destruction/oxidation in power plant (taken as 99.5% from IPCC).
GWPCH4 = Global Warming Potential of methane (21 tCO2e/tCH4).
Since the efficiency of methane descruction in the powerplant is 99.5%, as determined by the methodology, project emissions from this source can only ever be 0.05% of methane destroyed in the power plant.

Summing these 2 sources of project emissions PEMD and PEUM, based on the methodology we can see that, per tonne of methane sent to the power plant, total project emissions from these two sources will be 2.75 + (21 * 0.005) = 2.75 + 0.105 = 2.844 tCO2e per tonne of methane sent to the power plant. This is considerably less than the baseline emissions that are forgone as a result of this deviation, which are equal to 21 tCO2e per tonne of methane sent to the power plant.
The conservativeness of the approach can be further illustrated with reference to the projections of emission reductions in the registered PDD. Based on the ex-ante projections, the Project Activity was expected to generate the following emissions reductions from both the methane combustion and power generation:
ERy =BEy - PEy - Ly
=(BEMR,y + BEUSE,y) – (PEMD,y + PEUM,y) – 0
=(401,408 + 120,152 ) – (52,302 + 2,007) - 0
=467,251 ton CO2e

The impact of the deviation for this monitoring period, consisting of only accounting for the power generation, has the following conservative outcome:
ERy =BEy - PEy - Ly =(BEMR,y + BEUSE,y) – (PEMD,y + PEUM,y) – 0
= (0 + 120,152 ) – (0 + 0) - 0
=120,152 ton CO2e

As can be seen from the above comparison, if the Project Activiy is operated as described in the registered PDD, the Project Participants will annually forgo an estimated 347,099 tonnes CO2e (this is calculated as 467,251 tonnes CO2e – 120,152 tonnes CO2e). Therefore it is estimated that the Project Participant will have foregone approximately 269,121 tonnes CO2e of CERs for this period from 30 April 2009 to 8 February 2010 (283 days) (this is calculated as 347,099 tonnes CO2e * 283 days/365 days). Due to the lower volume of emission reductions claimed, the proposed approach is considered to be an appropriate and conservative approach.