clean development mechanism project design … plant of lucky cement limited is at karachi and other...

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 1

CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-PDD)

Version 03 - in effect as of: 28 July 2006

CONTENTS A. General description of project activity B. Application of a baseline and monitoring methodology C. Duration of the project activity / crediting period D. Environmental impacts E. Stakeholders’ comments

Annexes Annex 1: Contact information on participants in the project activity Annex 2: Information regarding public funding Annex 3: Baseline information

Annex 4: Monitoring plan Annex 5: Approval from Environmental Protection Agency Annex 6: Advertisement for Stakeholders’ Consultation Meeting Annex 7: Pictures of Stakeholders’ Consultation Meeting

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 2 SECTION A. General description of project activity A.1. Title of the project activity: Waste Heat Recovery and Utilization for Power Generation at Lucky Cement Limited, Karachi Plant Version: 01 Date: 22/07/2009 A.2. Description of the project activity: Lucky Cement Limited has been sponsored by Yunus Brothers Group (YB) which is one of the largest business groups of Pakistan. The company has grown rapidly to become the leader among Pakistani cement manufacturers with the largest production capacity, highest sales and greatest market share. Lucky Cement Limited operates two plants and manufactures Ordinary Portland Cement (OPC), Sulphate Resistant Cement (SRC) and Slag Cement. One plant of Lucky Cement Limited is at Karachi and other is at Pezu. The project is being implemented at Karachi plant of Lucky Cement which has three kilns; Kiln E, Kiln F and Kiln G. Each kiln has a clinker production capacity of 3000 Tons per Day (TPD). Kiln E and F have been in operation since October 2006 while Kiln G started operation in January 2009. The waste heat generated at the cement plant in the clinker production process is vented to the atmosphere with only a small portion recovered to heat the incoming raw materials. The cement plant has a captive power plant of 80.72 MW which has eleven captive engines. Two of these engines are HFO based while remaining are natural gas based. There is no grid connection for electricity imports/exports. The project activity involves installation of six (two on each kiln) Heat Recovery Steam Generators (HRSGs) of total capacity 63.85 TPH to recover the waste heat from the kilns to generate electricity by a 15 MW steam turbo generator. Details of the project equipment are given in Table A.4.3.2: Project equipment. The hot exhaust of HRSGs will still be utilized to preheat the incoming raw materials. The project activity is expected to be commissioned in September 2009. The electricity generated by the project activity will partially displace the fossil fuel based electricity generated by the captive power plant. The project activity will generate 87,437 MWh per year electricity and will result in 50,548 t CO2 equivalent emission reductions per annum. No fuel will be used at HRSGs for steam production. For detail of the greenhouse gases in the project boundary please refer to Table B.3.1: Overview on emissions sources included in or excluded from the project boundary. The project activity will result in transfer of efficient and modern technology from China to the region. The successful operation of this new efficient technology will also encourage others to adopt similar technologies leading to further conservation of energy and sustainable development. In the absence of project activity, Lucky Cement Limited will continue to get all of its power demand from the dual fuel based captive power plant because this comes out to be the most plausible baseline scenario as identified in section B.4.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 3 The project activity is in compliance with the national laws and results in sustainable development as evaluated by following criteria.

Environmental Development

significant reduction in the emissions of greenhouse gases improvement of the local environment by reduction in temperature of the vented hot air improvement of the local environment by less contamination through replacement of fossil fuel

based electricity by non contaminating electricity source conservation of local fossil fuel resources by avoiding fossil fuel based electricity from the

existing captive power plant Social Development

alleviation of poverty by providing labour employment opportunities to the local community

during construction phase less health impact for the population through less emission of greenhouse gases and particles

Economic Development

creation of new jobs during construction and operation phase of the project cost effective way of generating electricity since no additional fuel is used

Technology Development

introducing modern technology in the country improve technical knowledge of local population through technology transfer of the system by

the supplier setting up an example of sustainable development to be followed by other cement factories

A.3. Project participants: The table below illustrates the participants involved in the project activity. Contact information is provided in Annex 1

Table A.3.1 : Project Participants

Name of Party involved ((host) indicates a host

Party)

Private and/or public entity(ies) project participants

(as applicable)

Kindly indicate if the Party involved

wishes to be considered as

project participant (Yes/No)

Islamic Republic of Pakistan (host)

Lucky Cement Limited. (private entity) No

Islamic Republic of Pakistan (host)

Carbon Services Private Limited. (private entity) No


Switzerland First Climate (Switzerland) AG (private entity) No

A.4. Technical description of the project activity: A.4.1. Location of the project activity: A.4.1.1. Host Party(ies): Islamic Republic of Pakistan A.4.1.2. Region/State/Province etc.: Sindh A.4.1.3. City/Town/Community etc.: Nooriabad, Karachi A.4.1.4. Details of physical location, including information allowing the unique identification of this project activity (maximum one page): The project is located at: Lucky Cement Factory, 58 km Milestone, Super Highway, Nooriabad, Karachi, Sindh, Pakistan. The company is headquartered at: 6 – A, M Ali Housing Society, A. Aziz Hashim Tabba Road, Karachi 75350, Sindh, Pakistan. Lucky Cement Karachi Plant is located at following geographical coordinates1: Latitude: 25.0493691º Longitude: 67.473371º

1 Source: http://wikimapia.org/

http://wikimapia.org/


Fig A.4.1.4.1: Location of Lucky Cement Plants in Pakistan

Fig A.4.1.4.2: Lucky Cement Karachi Plant 2

2 Source: http://wikimapia.org

http://wikimapia.org/

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 6 A.4.2. Category(ies) of project activity: As per the sectoral scope of the project activities mentioned in the list of sectoral scopes or accreditation of DOEs, the project activity falls under

− Sectoral Scope 1 – Energy industries (renewable -/ non-renewable sources); and − Sectoral Scope 4 – Manufacturing industries

A.4.3. Technology to be employed by the project activity: Lucky Cement Karachi Plant has three kilns; Kiln E, Kiln F and Kiln G. Each kiln has a clinker production capacity of 3000 TPD. Kiln E and F have been in operation since October 2006 while Kiln G started operation in January 2009. The plant produces Ordinary Portland Cement (OPC), Sulphate Resistant Cement (SRC), and Slag Cement by dry process. The kilns primarily consume (From historical data of Oct 2006 – Sep 2007, details are provided in Annex 3: Baseline information) sub-bituminous coal (99.7%), and a small amount (0.3%) of HFO is used for elevating temperature at start up. In the baseline situation, almost all the waste heat from the clinker production process is vented to atmosphere; only a small portion of the waste heat from the feed ends of clinker production kilns is recovered and recycled to heat up incoming raw material. All the power demand is met by a captive power plant as there is no grid connection. The current source of electricity is the 80.72 MW captive power plant which has seven Caterpillar engines and four Rolls-Royce engines. The detail of these engines is shown in Table A.4.3.1: Details of engines

Table A.4.3.1: Details of engines Manufacturer Rated Power Fuel

Caterpillar 7680 kW HFO Caterpillar 7540 kW HFO Caterpillar 6100 kW Natural Gas Caterpillar 6100 kW Natural Gas Caterpillar 6100 kW Natural Gas Caterpillar 6100 kW Natural Gas Caterpillar 6100 kW Natural Gas

Rolls-Royce 8750 kW Natural Gas Rolls-Royce 8750 kW Natural Gas Rolls-Royce 8750 kW Natural Gas Rolls-Royce 8750 kW Natural Gas

The project activity involves installation of waste heat recovery systems (HRSGs) and steam turbo-generator for power generation. The project equipment is brand new and uses state of the art technology. The technology is environmentally safe as no additional or secondary fuel is used for power generation by waste heat recovery system. The technology will be transferred from China. A list of major equipment of project activity is given below Table A.4.3.2: Project equipment.

Table A.4.3.2: Project equipment


Specifications of Heat Recovery Steam Generators Equipment Manufacturer Capacity

HRSG 1 At PH end of kiln E

Sinoma

13.95 tph

HRSG 2 At AQC end of kiln E 7.23 tph

HRSG 3 At PH end of kiln F 13.95 tph

HRSG 4 At AQC end of kiln F 7.23 tph

HRSG 5 At PH end of kiln G 13.95 tph

HRSG 6 At AQC end of kiln G 7.23 tph

Specification of Steam Turbine Manufacturer HCTC Type Condensing Rated power output 15 MW Auxiliary consumption 8% Shaft revolution 3000 rpm Turbine inlet temperature 320 ºC Turbine inlet pressure 1.25 MPa

All the waste heat from pre-heater and cooler end of kiln will be recovered for steam generation by six HRSGs (two on each kiln) which will be fed to a 15 MW steam turbo-generator for electricity generation. Hot exhaust of the HRSGs will still be used to preheat the incoming raw material. The net generated electricity 87,437 MWh/yr will displace fossil fuel (natural gas & HFO) based captive electricity and will result in 50,548 tonnes of CO2 e emissions reduction. Following is the schematic of project activity.

Figure A.4.3.1: Schematic of Project Activity

Steam Waste heat Clinker Production at Kilns

Unit II

Raw

Materials

HR

SG

s

Hot exhaust for preheating incoming raw materials

Cement Works

Power Steam Turbo-Generator

In the absence of the project activity, Lucky Cement Limited will continue pre-project scenario as identified in section B.4 because it comes out to be the most plausible baseline scenario.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 8 The project activity will result in transfer of efficient and modern technology from China to the region. The import of new equipments (steam turbo-generator, HRSG, and allied equipments) not merely means technology transfer but skill transfer as well. This kind of innovative and energy efficient technology would serve to demonstrate the operational efficiency of such systems and encourage others to adopt similar technologies leading to further conservation of energy, fuel and environment.

A.4.4. Estimated amount of emission reductions over the chosen crediting period: For the fixed crediting period of 10 years (expected from 01/09/2009 to 31/08/2019) the annual & total estimation of emission reductions is:

Table A.4.4.1: Estimated emission reductions

Years Annual estimation of emission reductions in tonnes of CO2e

2009 (September to December) 16,849

2010 50,548

2011 50,548

2012 50,548

2013 50,548

2014 50,548

2015 50,548

2016 50,548

2017 50,548

2018 50,548

2019 (January to August) 33,699

Total estimated reductions (tonnes of CO2e) 505,480

Total number of crediting years 10

Annual average over the crediting period of estimated reductions (tonnes of CO2e) 50,548

A.4.5. Public funding of the project activity: No public funding is involved in this project activity

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 9 SECTION B. Application of a baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the project activity: Approved Baseline Methodology AM0024 Baseline methodology for greenhouse gas reductions through waste heat recovery and utilization for power generation at cement plants AM0024 / Version 02.1 (valid from Nov 02, 2007 onwards) http://cdm.unfccc.int/UserManagement/FileStorage/EDS6TS9TXOQP14XNXJZKKZVDTIBRH9 Referred Tools

• Tool for the demonstration and assessment of additionality (Version 05.2) Approved Monitoring Methodology AM0024 Monitoring methodology for greenhouse gas reductions through waste heat recovery and utilization for power generation at cement plants AM0024 / Version 02.1 (valid from Nov 02, 2007 onwards) B.2. Justification of the choice of the methodology and why it is applicable to the project activity: AM0024 comprises “project activities that use waste heat gas generated in clinker making process (i.e. in the cement kilns) to produce electricity.” This project activity involves the installation of a waste heat recovery system to use the waste heat gas generation in the clinker making process of Lucky Cement Limited Karachi Plant. As the objective is to produce electricity, AM0024 / Version 02.1 is generally applicable, given that the further conditions, as outlined below Table B.2.1: Applicability conditions, are applicable.

Table B.2.1: Applicability conditions No. Condition Scenario Applicability

1

The electricity produced is used within the cement works where the proposed project activity is located and excess electricity is supplied to the grid; it is assumed that there is no electricity export to the grid in the baseline scenario (in case of existing captive power plant);

The electricity produced by the project activity will be used within the cement works where the proposed activity is located. Since there is no grid connection therefore electricity export to the grid in the baseline situation is zero.

Methodology is applicable to project activity.

2

Electricity generated under the project activity displaces either grid electricity or from an identified specific generation source. Identified specific generation source could be either an existing captive power generation

Electricity generated under the project activity displaces electricity from the identified captive generation source.


http://cdm.unfccc.int/UserManagement/FileStorage/EDS6TS9TXOQP14XNXJZKKZVDTIBRH9


source or new generation source;

3 The grid or identified specific generation source option is clearly identifiable;

The project activity will displace fossil fuel based captive power plant which is clearly identifiable.


4 Waste heat is only to be used in the project activity;

Waste heat is only to be used in the project activity: for electricity production to be consumed within cement works boundary, and for heating of raw material & fuel.


5

In the baseline scenario, the recycling of waste heat is possible only within the boundary of the clinker making process (e.g. clinker production lines in baseline scenario could include some heat recovery systems to capture a portion of the waste heat from the cooler end of the clinker kiln and use this to heat up the incoming raw materials and fuel - so called Type 1 Waste Heat Utilization)

Baseline Scenario for the current project activity is Type 1 Waste Heat Utilization: Waste heat is used in the baseline scenario within the energy balance boundary of the clinker making process which is reflected in the specific fuel consumption of the clinker line per unit output of clinker.


6

The current use of waste heat or the identified alternative business as usual use of waste heat is not located outside of the clinker making process (so called Type 2 Waste heat utilization);

The current use of waste heat or the identified alternative business as usual use of waste heat is located within the clinker making process (so called Type 1 Waste heat utilization)


7 The project activity does not affect process emissions from cement plants.

The project activity does not involve any changes in the cement production process and therefore does not affect process emissions from cement plants.


B.3. Description of the sources and gases included in the project boundary: Description of the sources and gases included in the project boundary as per Table 1: Overview on emissions sources included in or excluded from the project boundary of AM0024 / Version 02.1 is provided below Table B.3.1: Overview on emissions sources included in or excluded from the project boundary.

Table B.3.1: Overview on emissions sources included in or excluded from the project boundary Source Gas Included? Justification / Explanation

Bas

elin

e Identified specific generation source

CO2 Included Main emission source.

CH4 Excluded Excluded for simplification. This is conservative.


N2O Excluded Excluded for simplification. This is conservative.

Proj

ect

Act

ivity

On-site fossil fuel consumption due to the project activity

CO2 Included May be an important emission source.

CH4 Excluded Excluded for simplification. This emission source is assumed to be very small.

N2O Excluded Excluded for simplification. This emission source is assumed to be very small.

The physical boundary of the project is fuel consumption and electricity generation by captive power plant, clinker production process at kilns (Kiln E, F, and G), and electricity generated by the waste heat recovery project. This is illustrated below Figure B.3.1: Project boundary. The baseline emissions for the project activity relate to dual fuel (natural gas & HFO, diesel as auxiliary) based captive generation. Within this system, baseline emission sources are limited to CO2 only. The project emissions for the project activity relate to change in energy consumption per unit output of clinker in the clinker production process. The clinker production process at kiln consumes coal and HFO and hence project emission sources are limited to CO2 only.

Fig B.3.1: Project boundary

Baseline Electricity

Waste Heat Waste Heat Project

Electricity

Kiln E

LUCKY CEMENT KARACHI PLANT

Other Local Loads of Cement Plant

Kiln GKiln F

80.72 MW Captive Power Plant

Waste Heat Recovery and Utilization for 15 MW Power Generation

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 12 B.4. Description of how the baseline scenario is identified and description of the identified baseline scenario: According to AM0024 / Version 02.1, the baseline scenario for the project will be identified through the following steps:

Step 1: Determination of technically feasible alternatives to the project activity Step 2: Compliance with regulatory requirements Step 3: Undertake economic analysis of all options that meet the regulatory requirements

Step 1: Determination of technically feasible alternatives to the project activity 1.A Current business of waste heat at Lucky Cement Karachi Plant is venting it into the atmosphere.

Only a small portion of waste heat is circulated and used for drying & preheating the incoming raw materials & fuel. Similar practice is observed in other cement manufacturing plants of Pakistan. There is no such industrial or commercial facility in the vicinity of Karachi Plant where the waste heat from the cement plant can be utilized efficiently; therefore potential of waste heat utilization in an activity other than the project activity is eliminated. There is no demand of waste heat within the project boundary, that’s why it had been vented into the atmosphere except small portion was used for preheating raw materials & fuel. In the project situation, all the waste heat will be captured by HRSGs for steam generation. Steam will be fed to turbo-generator to generate electricity for cement works. Hot exhaust of the HRSGs will still be used for drying & preheating the incoming raw materials & fuel. Hence it’s clear that use of waste heat in the project situation will be within the energy balance boundary of clinker making process (Type 1 waste heat utilization).

1.B As stated through the Platts Data Base (2007)3, in Pakistani cement sector, the primary source of

electricity is fossil fuel based generator sets at captive power plant. Nevertheless, due to growing electricity demand in Pakistan and insufficient power plant capacities, grid imports exist in a limited volume, and some plants have grid connection as backup. Regular and unscheduled outages because of load shedding are quite common so the grid electricity supply is unstable and risky. Hence, cement companies in Pakistan rather tend to produce the required electricity in their captive power plants and to use grid electricity as a backup option or additional electricity supply source.

Electricity demand of Lucky Cement Karachi Plant is met by captive power plant only, as there is

no grid connection. The captive power plant consumes HFO and natural gas (and diesel as auxiliary fuel) for electricity generation. The electricity generated by the project activity will displace dual fuel (natural gas & HFO) based captive electricity.

Historical data of one year (Oct 2006 to Sep 2007) prior to investment decision (Oct 2007) of

project activity is available with the project proponent. Therefore as per AM0024 / Version 02.1,

3 Document covered by copyright, available at: http://www.platts.com/Analytic%20Solutions/UDI%20Data%20&%20Directories/World%20Electric%20Power%20Plants%20Database/

http://www.platts.com/Analytic%20Solutions/UDI%20Data%20&%20Directories/World%20Electric%20Power%20Plants%20Database/

http://www.platts.com/Analytic%20Solutions/UDI%20Data%20&%20Directories/World%20Electric%20Power%20Plants%20Database/


historical data of one complete year (Oct 2006 to Sep 2007) is selected for the calculation of baseline data. Since kiln G started operation in January 2009, therefore no historical data prior to investment decision is available for kiln G. However, as kiln G is identical to the existing kilns E & F, all the parameters of kiln G (like electricity & fuel consumption and clinker production) have been calculated by taking average of the parameters of kiln E and kiln F. Number of operational days of cement plant depends upon market demand of cement in the local and international market which is variable. In the project situation, Lucky Cement Limited plans to run the cement manufacturing plant for 330 days which is quite realistic and achievable production plan.

Clinker production data of the plant is given below Table B.4.1: Production data (tonnes / year).

Table B.4.1: Clinker production data (tonnes / year)

Source Historical Data Oct 06 – Sep 07 Baseline Project Years

Kiln E 927,750 990,000 990,000 Kiln F 877,880 990,000 990,000 Kiln G - 990,000 990,000 Total 1,805,630 2,970,000 2,970,000

Electricity consumption data of the plant is given below Table B.4.2: Electricity consumption data (MWh / year).

Table B.4.2: Electricity consumption data (MWh / year)

Load Historical Data Oct 06 – Sep 07 Baseline Project

Years Kiln E 56,798.18 60,609 60,609 Kiln F 49,694.28 56,041 56,041 Kiln G - 58,325♦

58,325

ECEMENT (Cement works) 106,492.46 174,975 174,975

ELOAD (Other local loads) 79,585.71 131,096 131,096

Total 186,078.17 306,072 306,072

Electricity generation data of the plant is given below Table B.4.3: Electricity generation data (MWh / year).

Table B.4.3: Electricity generation data (MWh / year)

Source Historical Data Oct 06 – Sep 07 Baseline Project

Years EGATEXIST Captive

HFO 63,362 104,221 74,448 Natural Gas 122,716 201,850 144,187

♦ Average of two running kilns (Kiln E & Kiln F)


Plant Total 186,078 306,072 218,635 WHR steam turbineNet 0 0 87,437

Total 186,078 306,072 306,072

According to AM0024 / Version 02.1, the following broad categories should be analysed to identify baseline electricity options. (i) Supply from grid; (ii) Supply from existing capacity or in case of increase of energy demand expansion of

captive power generation source, if one exists; and (iii) Construction of a captive power plant with different fuel options if electricity demand is

increasing

(i) Supply from grid Lucky Cement Karachi Plant has no grid connection. Grid electricity is not the primary electricity source of cement factories in Pakistan. Some cement factories have grid connection as back up or to meet the peak demand, yet primary source of electricity is captive power plant. This is because national grid in Pakistan is highly unreliable and is not able to meet the national demand. Regular and unscheduled outages because of load shedding are observed which may result in impetus loss of production material. Electricity generated by the proposed CDM project activity will provide uniform and reliable services. For gap in national demand and generation demand, please observe http://www.ppib.gov.pk/SupplyDemand.htm It is evident that grid electricity imports does not provide outputs or services comparable with the proposed CDM project activity hence supply from grid is not a feasible alternative as it is not able to fulfil the power demand of cement plant.

(ii) Supply from existing capacity or in case of increase of energy demand expansion of

captive power generation source

The capacity of existing captive power plant (80.72 MW) is sufficient to meet the projected power demand of the cement plant; therefore expansion of captive power generation source is not required. Supply from existing supply is the scenario which is historically practised by the project proponent, and this scenario will continue in future in the absence of proposed CDM project activity.

(iii) Construction of a captive power plant with different fuel options if electricity

demand is increasing

The existing captive power plant is quite capable to meet the projected demand in the absence of the proposed CDM project activity. Moreover, the existing engines at the captive power plant have a remaining lifetime of more than 15 years. Hence, construction of a captive power plant with different fuel options if electricity demand is increasing is not a feasible alternative to the project activity.

http://www.ppib.gov.pk/SupplyDemand.htm

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 15 It is clear from the context project proponent has only one technically feasible alternative to the proposed CDM project activity i.e. supply from existing capacity (continuation of current practice). Step 2: Compliance with regulatory requirements The identified technically feasible alternative is continuation of current practice by supply from the existing capacity i.e. all the power demand in the project years is met by existing captive power plant which will consume (natural gas, HFO, and diesel). The aforementioned scenario is completely in compliance with all the legal requirements and meets the current NEQS (National Environmental Quality Standards). Moreover, there are no legal, national, or sectoral policies in place which either prohibit the project proponent from the continuation of current practice in the project years or force the project proponent to undertake the project activity. Hence the identified technically feasible alternative is fully in compliance with the regulatory requirements. Step 3: Undertake economic analysis of all options that meet the regulatory requirements Since there is only one technically feasible and legally compliant alternative to the proposed CDM project activity, which is the continuation of the current practice, therefore no further financial analysis is required to identify the baseline scenario. Hence it’s concluded that continuation of the current practice, supply from existing capacity of captive power plant, is the most plausible baseline scenario in the absence of proposed CDM project activity. B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered CDM project activity (assessment and demonstration of additionality): >> The assessment and demonstration of additionality follows the Methodological Tool “Tool for demonstration and assessment of additionality”, Version 05.2, Valid from 26 August 2008 onwards Step 0: CDM consideration before starting date of the project activity The starting date of the project activity is the 13th of May 2008 corresponding to the date of letter of credit. CDM was already considered in April 2007 included in the investment decision taken on the 22nd of October 2007 to implement the project. Discussions with CDM consultants started in February 2007 and during the whole implementation phase before validation, Lucky Cement was accompanied by CDM consultants. The civil works started in September 2008 and the commissioning of the project is previewed by September 2009. In the following table, the key dates of the project timeline are resumed.

Table B.5.1: Project timeline


Milestone Date Source

CDM Awareness Since Feb 2007

Letter from Director of Carbon Services (Private) Limited to Technical Director of Lucky Cement Limited

Contract with CDM Consultant Aug 02, 2007

CDM Service Agreement between Factor Consulting + Management AG (now First Climate) and Lucky Cement Limited

Investment Decision Oct 22, 2007 Extract from the minutes of the Board’s Meeting

Project Start Date May 13, 2008 Letter of Credit Start of Civil Works Nov 2008 Email from the contractor Project Commissioning Sep 2009 Email from the contractor

Step 1: Identification of alternatives to the project activity consistent with current laws and regulations Sub-step 1a: Define alternatives to the project activity: The possible alternatives to the project activity were demonstrated in the section B.4 and are listed below: - Option 1: Supply from grid - Option 2: Supply from existing capacity or in case of increase of energy demand expansion of captive power generation source, if one exists. - Option 3: Construction of a captive plant with different fuel options if electricity demand is increasing. As demonstrated in the above section, the only realistic alternative for the project is the continuation of the current situation. In the present case, this is the electricity supply by the existing captive power plant based on HFO and natural gas. Sub-step 1b: Consistency with mandatory laws and regulations: The realistic alternative as well as the project activity is consistent with the current laws and regulations in Pakistan as IEE and NOC are issued for the project plant. Step 2: Investment Analysis Sub-step 2a: Determine appropriate analysis method As there is no other alternative as the continuation of the current situation, the benchmark analysis seems the most appropriate method to analyse the project. Sub-step 2b: Option III. Apply benchmark analysis

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 17 The benchmark used for the project activity is based on the statement of the Citibank N.A. in Lahore-Pakistan that presents the State Bank of Pakistan’s requirements for local long term loans. This benchmark is based on the Karachi Inter Bank Offer Rates (KIBOR) added by a credit spread depending on size and terms of the loan. For a PKR 100 million loan of 7 years (with 2 years grace period), the applied conditions for a mid-sized corporate borrower is a credit spread between 200 and 350 basis points above 3 or 6 month KIBOR rate. For the present project, the situation of 200 basis points above 3 month KIBOR rate was assumed as benchmark. As the project decision was taken on the 22nd of October 2007, the average value of the 3 month KIBOR rate of September 2007 was considered. With a credit spread of 200 points, the calculated benchmark is 11.73 %. This calculated benchmark will be compared to the IRR of the project savings compared to the current situation. In the Investment Analysis, only the direct costs (investment and electricity costs) of the project are taken into account. Sub-step 2c: Calculation and comparison of financial indicators (only applicable to Options II and III) The following general assumptions have been made to calculate the IRR of the project activity:

Table B.5.2 General assumptions for IRR calculation General Information Value Unit Source of data Exchange rate US $ --> PKR 60.6607 PKR http://www.iccfx.com/history.php Depreciation period 20 years Company Information Technical lifetime of the plant 20 years Company Information

Tax on net income 35% Tax rate document "Rates and Taxes for Companies"

The total investment amount to implement the project is 1,301,778,622 PKR. This includes machinery and material, training, management and technical services, duties, taxes and freight charges as well as local costs. As the analysis period corresponds to the depreciation period of 20 years, the fair value of the project investments will be 0 at the end of the analysis period. Depreciation and financial expenses are only used for tax calculation and added back to net profits for the calculation of the IRR. Concerning the fuel consumption and costs, the calculations were based on the historical values from October 2006 until September 2007. Since kiln G will start operation in January 2009, therefore no historical data is available for kiln G. However, as kiln G is identical to the existing kilns E & F, all the parameters of kiln G (like electricity & fuel consumption and clinker production) have been calculated by taking average of the parameters of kiln E and kiln F. The following table describes the baseline and project fuel costs for the total captive power generation of 306,072 MWh.

Table B.5.3 Fuel Costs for Electricity Generation Baseline Project


HFO HFO consumption tons/yr 21'921 15'659Cost of HFO PKR/yr 454'904'143 324'949'731Natural Gas NG consumption Nm3/yr 62'515'464 44'656'404Cost of NG PKR/yr 490'168'217 350'139'766Diesel Diesel consumption Ltrs/yr 208'449 208'449Cost of Diesel PKR/yr 6'549'173 6'549'173

The Operation and Maintenance Costs considered for the project activity represent 5% of the total investment costs with an annual increase of 10% due to rapidly increasing labour wages and costs associated with technical services. After every 5 years, an overhaul is necessary. This represents 3% of the investment costs indexed by the annual increase of 10% of the Operation and Maintenance Costs. The increase of the fuel costs is evaluated on the basis of the Annual Energy Outlook 2007 (AEO 2007) prepared by the Energy Information Administration4. The results of the future price increase estimated by the AEO 2007 were adjusted by the yearly inflation rate and by the change rate between US Dollars and the Pakistani Rupee. The average price increase (from 2007 to 2030) resulted in 2% for HFO, 1.27% for Diesel and 0.41% for Natural Gas. Detailed calculations are presented in the separate Excel-File. Table B.5.4 resumes the information concerning the Operation and Maintenance Costs as well as the Estimated Cost Increases of fuel costs.

Table B.5.4 Operation and Maintenance Costs & Fuel Cost Increases General Information Value Unit Source of data O&M Cost 65'088'931 PKR Consultants Letter O&M Overhaul 39'053'359 PKR Consultants Letter Price Increase O&M Costs 10.00% per year As per Project Owner Price Increase HFO 2.00% per year Future Price Evolution (AEO 2007) Price Increase Diesel 1.27% per year Future Price Evolution (AEO 2007) Price Increase Natural Gas 0.41% per year Future Price Evolution (AEO 2007)

The resulting IRR of the project saving potential by introducing the project activity is 7.39 %. As the benchmark is determined at 11.73 %, the project activity would not be implemented. Considering the CER revenues of 41,317,760 PKR per year, the IRR would come up to 11.82 % and so gets an economically attractive investment option for Lucky Cement. Sub-step 2d: Sensitivity analysis (only applicable to Options II and III) To show the robustness of the results, a sensitivity analysis is carried out for the variation of the decisive variables of the project activity. These are the initial project investment as well as the HFO cost. The results of the sensitivity analysis are shown in Table B.5.5.

Table B.5.5 Sensitivity Analysis

4 www.eia.doe.gov

http://www.eia.doe.gov/


Project Investment -10% Base Case 10% Net Saving Cash Flow w/o CER 9.66% 7.39% 5.46% Benchmark 11.73% 11.73% 11.73% Break Even Point -17.75%

HFO Cost -10% Base Case 10% Net Saving Cash Flow w/o CER 4.94% 7.39% 9.38% Benchmark 11.73% 11.73% 11.73% Break Even Point 25%

NG Cost -10% Base Case 10% Net Saving Cash Flow w/o CER 5.09% 7.39% 9.33% Benchmark 11.73% 11.73% 11.73% Break Even Point 25.75%

The sensitivity analysis shows that the results are robust. As well for the Project Investment Cost as well as the HFO and Natural Gas Cost, the variation of +/- 10% is not sufficient to make the project economically additional. For the project investment, the limit of additionality is situated at a total investment cost decrease of 17.75 %. This is in the present project highly unlikely. In the same order an initial HFO price of more than 25 % or an initial NG price of more than 25.75 % would turn the project additional. Step 4: Common practice analysis In Pakistan, there are a total of 29 cement factories5. Most of these cement factories tend to produce the required electricity in their captive power plants and use grid electricity as a backup option only or as source of additional electricity supply to meet the peak demand6. Currently, in all the cement factories, the waste heat from the clinker production process is only used for pre-heating the raw materials and the major portion is vented to the atmosphere. The waste heat recovery and utilization system for power generation is, currently, not in operation in any cement factory of the country. However, the system is being implemented in following cement factories (as per knowledge of the project proponent):

1. Askari Cement 2. Bestway Cement 3. Cherat Cement 4. D.G. Cement 5. Fecto Cement 6. Lucky Cement Pezu Plant 7. Maple Leaf Cement

According to the Project Proponent’s knowledge of the cement sector, all of these factories have implemented waste heat recovery project after considering the benefits of CDM. No WHR project has been implemented without prior considering of the revenues generated by carbon credits. Hence it can be 5 http://www.apcma.com/pages/data_productioncapacity.html 6 Platt’s Database 2007

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 20 concluded that the recovery and utilization of waste heat from the clinker production process for power generation is not a common practice in Pakistan cement industry. As explained in the Investment Analysis, the present project would not be economically attractive without the consideration of the CER revenue and would not be realised. For that reason, the CDM income is necessary for the implementation of the project. B.6. Emission reductions:

B.6.1. Explanation of methodological choices: Approved baseline methodology AM0024 / Version 02.1 “Baseline methodology for greenhouse gas reductions through waste heat recovery and utilization for power generation at cement plants” is used to determine emission reductions. The methodology AM0024 / Version 02.1 is fully applicable to the project activity as described in section B.2. Moreover it is the only approved methodology for calculation of emission reductions as a result of waste heat recovery and utilization for power generation at cement plants. In context of the approved baseline methodology AM0024 / Version 02.1, following procedure and equations are used to calculate project emissions, baseline emissions, and net emission reductions. Net Emission Reductions The project activity reduces CO2 emissions from the captive power plant by using waste heat to produce electricity. The emission reduction, ERy, during a given year y is given by:

PEEBER yyy −= Equation (1) of methodology

Where: EBy are the baseline emissions in year y, expressed in tCO2 PEy are the project emissions due to possible fuel consumption changes in the cement kilns,

of the cement works where the proposed project is located, as a result of the project activity in year y, expressed in tCO2

Project Activity Project emission (PEy) is the difference in CO2 emissions from use of fossil fuel in the clinker making process in cement manufacturing unit, where the project is being implemented, before and after the project implementation. Please note that project emissions will be ignored in case of negative emissions, i.e. if energy consumption of each kiln in TJ / ton clinker in the project situation is lower than that in baseline situation; this is conservative.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 21 In case of Lucky Cement Karachi Plant, waste heat recovery system is to be installed on 3 kilns (E, F & G), therefore annual Project Emissions (PEy) are calculated using equation 6 of AM0024 / Version 02.1

COEFOEIPE ifueli

icliniy ,ker,** ][∑Δ= Equation (6) of methodology

Where: i is the index of each clinker production line in the cement plant where the project activity

is being implemented; ΔEIi is the ex-ante design estimate of the change in the energy consumption of each clinker

kiln in TJ / ton Clinker, due to project implementation. Oclinker, y is the clinker output of the cement works on a given fuel in a given year y. COEFfuel,y is the carbon coefficient (tCO2 / TJ of input fuel) of the fuel used in cement works in year

y to raise the necessary heat for clinker production. IPCC values of COEFfuel are used to calculate the project emissions.

EIB is calculated using equation (3) of the methodology:

ker,

BB

clin B

FEI O= Equation (3) of methodology

Where: EIB is the pre-project energy consumption per unit output of clinker in TJ/ton of clinker

produced (i.e. measured before the Project activity goes into operation). FB is the average annual energy consumption, expressed in TJ, of clinker making process

prior to the start of operation of the project activity. One full year of data is used. Oclinker, B is the average annual output, expressed in tonnes, of clinker prior to the start of operation

of the project activity. One full year of data is used. EIP,y is calculated using equation (4) of the methodology:

OFEI

yclin

yPyP

ker,

,, = Equation (4) of methodology

Where:

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 22 EIp,y is the ex-post energy consumption per unit output of clinker for given year, y, in TJ/ton

of clinker produced. FP, y is monitored annual energy consumption in a year y, expressed in TJ, of clinker making

process; Oclinker, y is monitored annual output, expressed in a year y, in tonnes of clinker. Baseline Emissions The baseline emissions are those from electricity generation source(s) that:

(a) would have supplied the cement works and (b) would have been generated by the operation of grid-connected power plants in absence of the

proposed CDM project activity. The baseline emissions during a given year y are calculated as:

EFEGEFEGEB yGridyGridyElecyCPy ,,., ** +=

]

Equation (7) of methodology Where: EGCP,y is the electricity supplied from the project activity to the cement plant, expressed in

MWh; EFElec,y is the emission factor of the baseline electricity supply source, expressed as tCO2 / MWh. EGGrid,y is the electricity supplied from the project activity to the grid, expressed in MWh; EFGrid.y is the emission factor of the electricity grid, expressed as tCO2 / MWh. As the baseline electricity supply source is an identified specific generation source i.e. the captive power plant, its emission factor is calculated using equations (8) and (9) from the methodology. Emission Factor (EF) if the baseline electricity supply source is an identified specific generation source The baseline emission factor EFCaptive,y is estimated ex ante as follows:

, *[Captive y IGS IGSIGSFI COEFEF EF= = Equation (8) of methodology

Where: FIIGS is the fossil fuel consumption rate of the identified generation source (IGS) to supply

EGy, expressed as GJ per MWh.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 23 COEFIGS is the emission coefficient of the fuel used in identified generation source, expressed as

tCO2 / per GJ lower heating value. The EFIGS should be calculated at the start of the crediting period and be fixed for the whole crediting period. If the identified generation source is the existing captive generation plant, FIIGS is estimated using recorded data.

GENFFI

IGS

IGSIGS = Equation (9) of methodology

Where: FIGS is the annual average fossil fuel consumption of the identified generation source (IGS),

expressed as GJ. At least one year’s data prior to start of the project should be used. GENIGS is the annual average generation of the identified generation source, expressed as MWh.

At least one year’s data prior to start of the project should be used. Leakage The project activity could lead to the following leakages: Construction: the main indirect emissions potentially giving rise to leakage in the context of project are emissions arising due to activities such as power plant construction and fuel handling (transport). As per AM0024 / Version 02.1, corresponding emissions are negligible and can therefore be ignored.

B.6.2. Data and parameters that are available at validation: Data / Parameter: NCVHFO Data unit: TJ / t (Tera joule per metric tonne) Description: Net Calorific Value of HFO Source of data used: Laboratory analysis Value applied: 0.040 Justification of the choice of data or description of measurement methods and procedures actually applied :

The value of NCV of HFO 17,148 BTU/lb was taken from laboratory test of HFO sample. For emission reduction calculations this value was converted into TJ/ton using the following formula: NCV in TJ/t = NCV in BTU/lb *0.001055056/(0.0004535924*10^6) The NCV calculated by above formula is 0.040 TJ/t

Any comment: Laboratory test is available with the project proponent

Data / Parameter: NCVNG

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 24 Data unit: MJ/Nm3 (Mega joule per normal cubic meter) Description: Net Calorific Value of natural gas Source of data used: Laboratory analysis Value applied: 31.00 Justification of the choice of data or description of measurement methods and procedures actually applied :

The NCV value of 937.95 BTU/ft3 has been taken from the laboratory test of natural gas sample. For emission reduction calculations, the value was converted to MJ/Nm3 by using following formula: NCV in MJ/Nm3 = NCV in BTU/ft3 *0.001055056 / 0.02831685 The NCV calculated by above formula is 31.00 MJ/Nm3


Data / Parameter: NCVDiesel Data unit: MJ/l (Mega joule per litre) Description: Net Calorific Value of diesel Source of data used: Laboratory analysis Value applied: 35.93 Justification of the choice of data or description of measurement methods and procedures actually applied :

The value of NCV of diesel 18,301 BTU/lb was taken from laboratory test of diesel sample. For emission reduction calculations this value was converted into MJ/Ltr using the following formula: NCV in MJ/l = NCV in BTU/lb*0.001055056/0.4535924*Density of diesel The density of diesel taken from the laboratory test report is 0.8441 kg/l The NCV calculated by above formula is 35.96 MJ/Ltr


Data / Parameter: NCVCoal Data unit: TJ / t (Tera joule per metric tonne) Description: Net Calorific Value of coal Source of data used: Laboratory analysis Value applied: 0.026 Justification of the choice of data or description of measurement methods and procedures actually applied :

The value of NCV of coal 6,289 kCal/kg has been taken from IPCC 2006 guidelines. For emission reduction calculations this value was converted into TJ/ton using the following formula: NCV in TJ/ton = NCV in kCal/kg *1000*0.0041868/10^6 The NCV calculated by above formula is 0.026 TJ/ton


Data / Parameter: Oclinker E, b

Data unit: t (metric tonnes) Description: Total clinker produced by kiln E in baseline situation Source of data used: Calculated by capacity and running days of kiln E Value applied: 990,000.00

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 25 Justification of the choice of data or description of measurement methods and procedures actually applied :

The capacity of kiln E is 3000 TPD and it is in operation for 330 days. So the total clinker production is calculated as 3000*330.

Any comment:

Data / Parameter: HFO kiln E, b

Data unit: t (metric tonnes) Description: HFO consumption of kiln E in baseline situation Source of data used: Calculated using historical specific fuel consumption of kiln E Value applied: 300 Justification of the choice of data or description of measurement methods and procedures actually applied :

Calculated by multiplying Oclinker E, b and average specific HFO consumption at kiln E for one year (Oct 2006 to Sep 07). Specific consumption of HFO at kiln E during this period is 0.0003 tons HFO/ton clinker.

Any comment:

Data / Parameter: Coal kiln E, b

Data unit: t (metric tonnes) Description: Coal consumed by kiln E in baseline situation Source of data used: Calculated using historical specific fuel consumption of kiln E Value applied: 138,464 Justification of the choice of data or description of measurement methods and procedures actually applied :

Calculated by multiplying Oclinker E, b and average specific coal consumption at kiln E for one year (Oct 2006 to Sep 07). Specific consumption of coal at kiln E during this period is 0.140 tons HFO/ton clinker.

Any comment:

Data / Parameter: Oclinker F, b

Data unit: t (metric tonnes) Description: Total clinker produced by kiln F in baseline situation Source of data used: Calculated by capacity and running days of kiln F Value applied: 990,000.00 Justification of the choice of data or description of measurement methods and procedures actually applied :

The capacity of kiln F is 3000 TPD and it is in operation for 330 days. So the total clinker production is calculated as 3000*330.

Any comment:


Data / Parameter: HFO kiln F, b

Data unit: t (metric tonnes) Description: HFO consumption of kiln F in baseline situation Source of data used: Calculated using historical specific fuel consumption of kiln F Value applied: 276 Justification of the choice of data or description of measurement methods and procedures actually applied :

Calculated by multiplying Oclinker F, b and average specific HFO consumption at kiln F for one year (Oct 2006 to Sep 07). Specific consumption of HFO at kiln F during this period is 0.00028 tons HFO/ton clinker.

Any comment:

Data / Parameter: Coal kiln F, b

Data unit: t (metric tonnes) Description: Coal consumed by kiln F in baseline situation Source of data used: Calculated using historical specific fuel consumption of kiln F Value applied: 138,752 Justification of the choice of data or description of measurement methods and procedures actually applied :

Calculated by multiplying Oclinker F, b and average specific coal consumption at kiln F for one year (Oct 2006 to Sep 07). Specific consumption of coal at kiln F during this period is 0.140 tons HFO/ton clinker.

Any comment:

Data / Parameter: Oclinker G, b

Data unit: t (metric tonnes) Description: Total clinker produced by kiln G in baseline situation Source of data used: Calculated by capacity and running days of kiln G Value applied: 990,000.00 Justification of the choice of data or description of measurement methods and procedures actually applied :

The capacity of kiln G is 3000 TPD and its operational days are assumed to be 330 days/year. So the total clinker production is calculated as 3000*330.

Any comment:

Data / Parameter: HFO kiln G, b

Data unit: t (metric tonnes) Description: HFO consumption of kiln G in baseline situation Source of data used: Average of HFO consumption of kiln E & kiln F Value applied: 288 Justification of the choice of data or

Since kiln G started operation in January 09, historical data is not available for kiln G. Kiln G is identical to kiln E & kiln F and therefore HFO consumption is

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 27 description of measurement methods and procedures actually applied :

calculated by taking average of HFO consumption by kiln E and kiln F

Any comment:

Data / Parameter: Coal kiln G, b

Data unit: t (metric tonnes) Description: Coal consumed by kiln G in baseline situation Source of data used: Calculated using historical specific fuel consumption of kiln G Value applied: 138,608 Justification of the choice of data or description of measurement methods and procedures actually applied :

Since kiln G started operation in January 09, historical data is not available for kiln G. Kiln G is identical to kiln E & kiln F and therefore coal consumption is calculated by taking average of coal consumption by kiln E and kiln F

Any comment:

Data / Parameter: E kiln E, b

Data unit: MWh / yr (Megawatt hours per year) Description: Electricity consumed by kiln E in baseline situation Source of data used: Calculated using historical specific electricity consumption by kiln E Value applied: 60,609 Justification of the choice of data or description of measurement methods and procedures actually applied :

Calculated by multiplying Oclinker E, b and specific electricity consumption at kiln E for one year (Oct 2006 to Sep 07). Specific electricity consumption at kiln E during this period is 61.22 kWh/ton clinker.

Any comment:

Data / Parameter: E kiln F, b

Data unit: MWh / yr (Megawatt hours per year) Description: Electricity consumed by kiln F in baseline situation Source of data used: Calculated using historical specific electricity consumption by kiln F Value applied: 56,041 Justification of the choice of data or description of measurement methods and procedures actually applied :

Calculated by multiplying Oclinker F, b and specific electricity consumption at kiln F for one year (Oct 2006 to Sep 07). Specific electricity consumption at kiln F during this period is 56.61 kWh/ton clinker.

Any comment:

Data / Parameter: E kiln G, b

Data unit: MWh / yr (Megawatt hours per year)

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 28 Description: Electricity consumed by kiln G in baseline situation Source of data used: Calculated using historical specific electricity consumption by kiln G Value applied: 58,325 Justification of the choice of data or description of measurement methods and procedures actually applied :

Since kiln G started operation in January 09, historical data is not available for kiln G. Kiln G is identical to kiln E & kiln F and therefore electricity consumption at kiln G is calculated by taking average of electricity consumed at kiln E and kiln F.

Any comment:

Data / Parameter: ELoads

Data unit: MWh / yr (Megawatt hours per year) Description: Electricity consumed by other local loads at cement plant Source of data used: Calculated by total electricity consumption values of kilns and cement plant Value applied: 131,096 Justification of the choice of data or description of measurement methods and procedures actually applied :

Calculated by difference of total electricity consumed at the cement plant and the total electricity consumed at the kiln i.e. E Loads = E Cement – (E kiln E, b + E kiln F, b + E kiln G, b)

Any comment:

Data / Parameter: PHFO, b Data unit: MWh / yr (Megawatt hours per year) Description: Electricity generated on HFO at captive power plant in baseline situation Source of data used: Calculated using historical electricity generation trends Value applied: 104,221.32 Justification of the choice of data or description of measurement methods and procedures actually applied :

The electricity generated on HFO during Oct 06 – Sep 07 is 34% of total electricity generated. This value is used for calculating electricity generation on HFO in baseline situation.

Any comment:

Data / Parameter: EHFO, b Data unit: t/yr (metric tonnes per year) Description: HFO consumption for electricity generation at captive power plant in baseline

situation Source of data used: Calculated using historical specific HFO consumption at captive power plant Value applied: 21,921.13 Justification of the choice of data or description of

Calculated by multiplying PHFO, b and specific HFO consumption at captive power plant for one year (Oct 2006 to Sep 07). Specific consumption of HFO at captive power plant during this period is 0.21 tons/MWh

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 29 measurement methods and procedures actually applied : Any comment:

Data / Parameter: PNatural Gas, b Data unit: MWh / yr (Mega watt hours per year) Description: Electricity generated on natural gas at captive power plant in baseline situation Source of data used: Calculated using historical electricity generation trends Value applied: 104,221.32 Justification of the choice of data or description of measurement methods and procedures actually applied :

The electricity generated on natural gas during Oct 06 – Sep 07 is 66% of total electricity generated. This value is used for calculating electricity generation on natural gas in baseline situation.

Any comment:

Data / Parameter: ENatural Gas, b Data unit: Nm3 / yr (Normalized cubic meter per year) Description: Natural gas consumption for electricity generation at captive power plant in

baseline situation Source of data used: Calculated using historical specific natural gas consumption at captive power

plant Value applied: 62,515,463.17 Justification of the choice of data or description of measurement methods and procedures actually applied :

Calculated by multiplying PNatural Gas, b and specific natural gas consumption at captive power plant for one year (Oct 2006 to Sep 07). Specific consumption of natural gas at captive power plant during this period is 309.71 Nm3/MWh

Any comment:

Data / Parameter: E Diesel, b Data unit: l/yr (litres per year) Description: Diesel consumption at captive power plant in baseline situation Source of data used: Calculated using historical specific diesel consumption at captive power plant Value applied: 208,449.22 Justification of the choice of data or description of measurement methods and procedures actually applied :

Diesel is used as an auxiliary fuel at captive power plant. Its consumption is calculated by historical specific diesel consumption at captive power plant for one year (Oct 2006 to Sep 07) which is 0.68 Ltrs/MWh

Any comment:

Data / Parameter: COEFHFO

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 30 Data unit: t CO2 / TJ (tonnes of Carbon Dioxide per Tera joule) Description: Emission Coefficient of HFO Source of data used: The Carbon emission factor is taken as per “Table 2.3 Default Emission Factors

for Stationary Combustion in Manufacturing Industries and Construction” Chapter 2: Stationary Combustion, 2006 IPCC Guidelines for National Greenhouse Gas Inventories and is available in kg CO2 / TJ.

Value applied: 77.4 Justification of the choice of data or description of measurement methods and procedures actually applied :

As per baseline methodology AM0024 / Version 02.1, if local value is not available then IPCC default value can be used.

Any comment:

Data / Parameter: COEFDiesel

Data unit: t CO2 / TJ (tonnes of Carbon Dioxide per Tera joule) Description: Emission Coefficient of diesel Source of data used: The Carbon emission factor is taken as per “Table 2.3 Default Emission Factors




Any comment:

Data / Parameter: COEFCoal

Data unit: t CO2 / TJ (tonnes of Carbon Dioxide per Tera joule) Description: Emission Coefficient of coal Source of data used: The Carbon emission factor is taken as per “Table 2.3 Default Emission Factors




Any comment:

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 31 Data / Parameter: COEF Natural Gas

Data unit: t CO2 / TJ (tonnes of Carbon Dioxide per Tera joule) Description: Emission Coefficient of natural gas Source of data used: The Carbon emission factor is taken as per “Table 2.3 Default Emission Factors




Any comment: B.6.3. Ex-ante calculation of emission reductions:

Ex-ante calculation of emission reductions is based on approved baseline methodology AM0024 / Version 02.1. The equations involved in ex-ante calculations are enumerated in section B.6.1. For details of parameters and notations, please refer to Annex 3: Details of Emission Reductions Calculations.

Baseline Emissions Calculation Equation (7) of the approved baseline methodology AM0024 / Version 02.1 EBy = EGCP,y * EFElec,y + EGGrid,y * EFGrid = 87,437 * 0.58 + 0 * EFGrid = 50,548 t CO2 / yr

Project Emissions Calculation Equation (3) of the approved baseline methodology AM0024 / Version 02.1 For kiln E EIE, b = FE, b / Oclinker E, b = 3,658 / 990,000 = 0.0037 TJ / ton For kiln F EIF, b = FF, b / Oclinker F, b = 3,664 / 990,000 = 0.0037 TJ / ton


For kiln G EIG, b = FG, b / Oclinker G, b = 3,661 / 990,000 = 0.0037 TJ / ton Now using Equation (4) of the approved baseline methodology AM0024 / Version 02.1 For kiln E EIE, p = FE, p / Oclinker E, p = 3,658 / 990,000 = 0.0037 TJ / ton For kiln F EIF, p = FF, p / Oclinker F, p = 3,664 / 990,000 = 0.0037 TJ / ton For kiln G EIG, p = FG, p / Oclinker G, p = 3,661 / 990,000 = 0.0037 TJ / ton Equation (6) of the approved baseline methodology AM0024 / Version 02.1 PEy = PEy,kiln E + PEy,kiln F + PEy,kiln G = 0 + 0 + 0 = 0 t CO2 / yr Emission Reductions Calculation Equation (1) of the approved baseline methodology AM0024 / Version 02.1 ERy = EBy – PEy = 50,548 – 0 = 50,548 t CO2 / yr B.6.4 Summary of the ex-ante estimation of emission reductions:

Table B.6.4.1: Summary of estimated emission reductions

Year

Estimation of project activity

emissions (tonnes of CO2 e)

Estimation of baseline emissions (tonnes of CO2 e)

Estimation of leakage

(tonnes of CO2 e)

Estimation of overall emission

reductions (tonnes of CO2 e)

2009 (September to December) 0 16,849 0 16,849

2010 0 50,548 0 50,548 2011 0 50,548 0 50,548 2012 0 50,548 0 50,548


2013 0 50,548 0 50,548 2014 0 50,548 0 50,548 2015 0 50,548 0 50,548 2016 0 50,548 0 50,548 2017 0 50,548 0 50,548 2018 0 50,548 0 50,548

2019 (January to August) 0 33,699 0 33,699

Total (tonnes of CO2 e) 0 505,480 0 505,480

B.7. Application of the monitoring methodology and description of the monitoring plan:

B.7.1 Data and parameters monitored: Data / Parameter: NCVHFO Data unit: TJ / t (Tera joule per metric tonne) Description: Net calorific value of HFO Source of data to be used: Laboratory analysis

Value of data applied for the purpose of calculating expected emission reductions in section B.5

0.040

Description of measurement methods and procedures to be applied:

Monitoring method: external data Data type: measured Archiving procedure: Paper and Electronic Recording Frequency: yearly

QA/QC procedures to be applied:

Any direct measurements will be cross-checked with an annual energy balance that is based on purchased quantities and stock exchanges.

Any comment: The NCV was taken from laboratory test of HFO sample. The value mentioned in the test is 17,148 BTU/lb. For emission reduction calculations this value was converted into TJ/ton using the following formula: NCV in TJ/ton = NCV in BTU/lb *0.001055056/(0.0004535924*10^6) The NCV calculated by above formula is 0.0399 TJ/ton

Data / Parameter: NCVCoal Data unit: TJ / t (Tera joule per metric tonne) Description: Net calorific value of coal Source of data to be used: Laboratory analysis

Value of data applied for the purpose of calculating expected

0.026

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 34 emission reductions in section B.5 Description of measurement methods and procedures to be applied:




Any comment: The NCV of coal 6,289 kCal/kg has been taken from IPCC 2006 guidelines. For emission reduction calculations this value was converted into TJ/ton using the following formula: NCV in TJ/ton = NCV in kCal/kg *1000*0.0041868/10^6 The NCV calculated by above formula is 0.026 TJ/ton

Data / Parameter: NCVDiesel Data unit: MJ / l (Mega joule per litre) Description: Net calorific value of diesel Source of data to be used: IPCC Guidelines 2006


35.96





Any comment: The NCV of diesel i.e. 18,301 BTU/lb was taken from laboratory test of diesel sample. For emission reduction calculations this value was converted into MJ/Ltr using the following formula: NCV in MJ/Ltr = NCV in BTU/lb*0.001055056/0.4535924*Density of diesel The density of diesel taken from the laboratory test report is 0.8441 kg/Ltr The NCV calculated by above formula is 35.96 MJ/Ltr

Data / Parameter: NCV NG

Data unit: MJ / Nm3 (Mega joule per normalized cubic meter) Description: Net calorific value of natural gas Source of data to be used: Laboratory analysis

Value of data applied 31.00

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 35 for the purpose of calculating expected emission reductions in section B.5 Description of measurement methods and procedures to be applied:




Any comment: The NCV of 937.95 BTU/ft3 has been taken from the laboratory test of natural gas sample. For emission reduction calculations, the value was converted to MJ/Nm3 by using following formula: NCV in MJ/Nm3 = NCV in BTU/ft3 *0.001055056 / 0.02831685 The NCV calculated by above formula is 31.00 MJ/Nm3

Data / Parameter: HFO kiln E

Data unit: t / yr (Metric tonnes per year)Description: Amount of HFO consumed at kiln E Source of data to be used: Production plan of Lucky Cement


300


Monitoring method: flow measurement Data type: measured Monitoring instrument: flow meter Frequency of calibration: annually Frequency of measurement: continuous Frequency of recording: daily Archiving procedure: Paper and Electronic Responsibility: See “Table B.7.2.2: Designation of personnel involved in monitoring plan” below



Any comment:

Data / Parameter: HFO kiln F

Data unit: t / yr (Metric tonnes per year)Description: Amount of HFO consumed at kiln F Source of data to be used: Production plan of Lucky Cement

Value of data applied 276

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 36 for the purpose of calculating expected emission reductions in section B.5 Description of measurement methods and procedures to be applied:




Any comment:

Data / Parameter: HFO kiln G

Data unit: t / yr (Metric tonnes per year)Description: Amount of HFO consumed at kiln F Source of data to be used: Production plan of Lucky Cement


288





Any comment:

Data / Parameter: Coal kiln E

Data unit: t / yr (Metric tonnes per year)Description: Amount of coal consumed at kiln E Source of data to be used: Production plan of Lucky Cement

Value of data applied for the purpose of 138,464

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 37 calculating expected emission reductions in section B.5 Description of measurement methods and procedures to be applied:

Monitoring method: weight measurement Data type: measured Monitoring instrument: weight feeder Frequency of calibration: annually Frequency of measurement: continuous Frequency of recording: daily Archiving procedure: Paper and Electronic Responsibility: See “Table B.7.2.2: Designation of personnel involved in monitoring plan” below



Any comment:

Data / Parameter: Coal kiln F

Data unit: t / yr (Metric tonnes per year)Description: Amount of coal consumed at kiln F Source of data to be used: Production plan of Lucky Cement


138,752





Any comment:

Data / Parameter: Coal kiln G

Data unit: t / yr (Metric tonnes per year)Description: Amount of coal consumed at kiln G Source of data to be used: Production plan of Lucky Cement

Value of data applied for the purpose of calculating expected

138,608

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 38 emission reductions in section B.5 Description of measurement methods and procedures to be applied:




Any comment:

Data / Parameter: E kiln E

Data unit: MWh / yr (Mega watt hours per year) Description: Electricity consumed by kiln E Source of data to be used: Production plan of Lucky Cement


60,609


Monitoring method: electricity consumption measurement Data type: measured Monitoring instrument: Energy meter Frequency of calibration: annually Frequency of measurement: continuous Frequency of recording: daily Archiving procedure: Electronic and Paper Responsibility: See “Table B.7.2.2: Designation of personnel involved in monitoring plan” below



Any comment:

Data / Parameter: E kiln F

Data unit: MWh / yr (Mega watt hours per year) Description: Electricity consumed by kiln F Source of data to be used: Production plan of Lucky Cement

Value of data applied for the purpose of calculating expected emission reductions in

56,041

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 39 section B.5 Description of measurement methods and procedures to be applied:




Any comment:

Data / Parameter: E kiln G

Data unit: MWh / yr (Mega watt hours per year) Description: Electricity consumed by kiln G Source of data to be used: Production plan of Lucky Cement


58,325





Any comment:

Data / Parameter: ELoads

Data unit: MWh / yr (Mega watt hours per year) Description: Electricity consumed by other local loads for cement works Source of data to be used: Production plan of Lucky Cement


131,096

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 40 Description of measurement methods and procedures to be applied:

Monitoring method: electricity consumption measurement Data type: calculated Monitoring instrument: Energy meter Frequency of calibration: annually Frequency of measurement: continuous Frequency of recording: daily Archiving procedure: Electronic Responsibility: See “Table B.7.2.2: Designation of personnel involved in monitoring plan” below



Any comment:

Data / Parameter: O clinker,E

Data unit: t / yr (Metric tonnes per year) Description: Amount of clinker produced at kiln E Source of data to be used: Production plan of Lucky Cement


990,000


Monitoring Method: weight measurement Data type: measured Monitoring instrument: weight feeder Frequency of calibration: annually Frequency of measurement: continuous Frequency of recording: daily Archiving procedure: Electronic and Paper Responsibility: See “Table B.7.2.2: Designation of personnel involved in monitoring plan” below



Any comment:

Data / Parameter: O clinker,F

Data unit: t / yr (Metric tonnes per year) Description: Amount of clinker produced at kiln F Source of data to be used: Production plan of Lucky Cement


990,000

Description of Monitoring Method: weight measurement

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 41 measurement methods and procedures to be applied:

Data type: measured Monitoring instrument: weight feeder Frequency of calibration: annually Frequency of measurement: continuous Frequency of recording: daily Archiving procedure: Electronic and Paper Responsibility: See “Table B.7.2.2: Designation of personnel involved in monitoring plan” below



Any comment:

Data / Parameter: O clinker,G

Data unit: t / yr (Metric tonnes per year) Description: Amount of clinker produced at kiln G Source of data to be used: Production plan of Lucky Cement


990,000


Monitoring Method: weight measurement Data type: measured Monitoring instrument: weight feeder Frequency of calibration: annually Frequency of measurement: continuous Frequency of recording: daily Archiving procedure: Electronic and Paper Responsibility: See “Table B.7.2.2: Designation of personnel involved in monitoring plan” below



Any comment:

Data / Parameter: PST

Data unit: MWh / yr (Megawatt hours per year) Description: Electricity generated by waste heat recovery based steam turbo-generator Source of data to be used: Production plan of Lucky Cement


87,437

Description of measurement methods

Monitoring Method: Electricity generation measurement Data type: measured

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 42 and procedures to be applied:

Monitoring instrument: Energy meter Frequency of calibration: annually Frequency of measurement: continuous Frequency of recording: daily Archiving procedure: Electronic and Paper Responsibility: See “Table B.7.2.2: Designation of personnel involved in monitoring plan” below



Any comment:

Data / Parameter: ENatural Gas

Data unit: t / yr (Metric tonnes per year) Description: Amount of natural gas consumed at captive power plant for electricity generation Source of data to be used: Production plan of Lucky Cement


0


Monitoring Method: flow measurement Data type: measured Monitoring instrument: flow meter Frequency of calibration: annually Frequency of measurement: continuous Frequency of recording: daily Archiving procedure: Electronic and Paper Responsibility: See “Table B.7.2.2: Designation of personnel involved in monitoring plan” below



Any comment:

Data / Parameter: EDiesel

Data unit: t / yr (Metric tonnes per year) Description: Amount of diesel consumed at captive power plant for electricity generation Source of data to be used: Production plan of Lucky Cement


0

Description of measurement methods and procedures to be

Monitoring Method: flow measurement Data type: measured Monitoring instrument: flow meter & level meter

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 43 applied: Frequency of calibration: annually

Frequency of measurement: continuous Frequency of recording: daily Archiving procedure: Electronic and Paper Responsibility: See “Table B.7.2.2: Designation of personnel involved in monitoring plan” below



Any comment: B.7.2. Description of the monitoring plan:

Data will be collected by the Shift Operator and Shift Supervisor at captive power plant. Shift Incharge at captive power plant will prepare daily log sheets of electricity generation, electricity consumption and fuel consumption for captive power generation. Power Plant Incharge will verify the data. Similarly data will be collected by the Shift Operator at the kiln. Shift Incharge at production plant will prepare daily production log sheet which includes daily clinker production and fuel consumption at kilns. Production Plant Manager will verify the data. Table B.7.2.1 describes the devices used at Lucky Cement to measure different parameters and Table B.7.2.2 shows the designation of the personnel involved in the monitoring plan. All the data is annually audited by 3rd party auditors. In case of erratic data, corrections and trend from the historical data will be sought.

Table B.7.2.1: Data Measuring Devices

Item Parameter Recording Frequency

Description of equipment

used

Calibration Mode Calibration Frequency Internal

Calibration External

Calibration

Kiln

(E

, F &

G) Annual clinker

production Daily Weight feeder

I&C Department - Annually

HFO consumption Daily Flow meter I&C

Department - Annually

Coal consumption Daily Weight

feeder I&C

Department - Annually

Ele

ctri

city

C

onsu

mpt

ion

Electricity consumed by

Kilns (E, F & G)

Daily Energy meter - By third party Annually

Electricity consumed by

other local loads Daily Energy meter - By third

party Annually

Pow

er

Gen

e Electricity generated on Natural Gas



Natural Gas consumption Daily Flow meter - SSGCL -

Electricity generated on

HFO Daily Energy meter - By third

party Annually

HFO consumption Daily Flow meter

Power Generation Department

- Annually

Diesel consumption Daily Flow meter &

Level meter

Power Generation Department

- Annually

Proj

ect

Ele

ctri

city

Electricity generated by steam turbo-

generator


Table B.7.2.2: Designation of Personnel Involved in Monitoring Plan

Parameter Item 12 - Hourly Data Collection

Daily Data Log Preparation

Data Verification

Data Auditing Designation Frequency

Fuel Consumption

Kilns Shift Operator Shift Incharge Production Manager

External Audit Annually

Captive Power Plant

Shift Operator -Shift Supervisor Shift Incharge Incharge

Power Plant External

Audit Annually

Electricity Generation

Captive Power Plant

Shift Operator -Shift Supervisor Shift Incharge Incharge


Audit Annually

Steam Turbo-

generator Shift Operator Shift Incharge Incharge


Audit Annually

Clinker Production Kilns Shift Operator Shift Incharge Production

Manager External

Audit Annually

B.8. Date of completion of the application of the baseline study and monitoring methodology and the name of the responsible person(s)/entity(ies): Date of Completion (DD/MM/YYYY): 02/03/2009

Table B.8.1: Name of Responsible Entities First Climate (Switzerland) AG Stauffacherstrasse 45 CH-8004 Zurich Switzerland URL: www.firstclimate.com Contact person: Mr. Nikolaus Wohlgemuth Email: [email protected]

Carbon Services (Private) Limited 19 Davis Road, 2nd Floor, Al Maalik, Lahore Pakistan URL: www.carbon.com.pk Contact person: Mr. Omar Malik Email: [email protected]

http://www.firstclimate.com/

mailto:[email protected]

http://www.carbon.com.pk/



Both, First Climate (Switzerland) AG and Carbon Services (Private) Limited, are project participants. SECTION C. Duration of the project activity / crediting period C.1. Duration of the project activity: C.1.1. Starting date of the project activity: Starting date of the project activity is May 13, 2008 which is the date of Letter of Credit. Copy of Letter of Credit is available with the project proponent as evidence to support this starting date. C.1.2. Expected operational lifetime of the project activity: 20 years 0 months C.2. Choice of the crediting period and related information: The project activity will use fixed crediting period of ten years. C.2.1. Renewable crediting period: C.2.1.1. Starting date of the first crediting period: Not applicable C.2.1.2. Length of the first crediting period: Not applicable C.2.2. Fixed crediting period: C.2.2.1. Starting date: 01/09/2009 or the date of registration by the CDM EB, whichever is later. C.2.2.2. Length:

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 46 10 Years SECTION D. Environmental impacts D.1. Documentation on the analysis of the environmental impacts, including transboundary impacts: According to the host country regulations, the project activity had to receive an Environmental Approval from the Environment Protection Department of the local government, upon submission of an Initial Environmental Examination (IEE) Report by the project proponent. The IEE points out that the project will be beneficial to the environment as utilization of waste heat and thus lower consumption of fossil fuels are made possible by the new technology. No negative environmental impacts are to be considered, as the technology to be adopted is mature and safe, once appropriate operation and maintenance procedure are in place. The environmental analyses conducted by Lucky Cement Limited for the project are consistent in demonstrating that the project activity is expected to remain fully compliant with NEQS (National Environmental Quality Standards). In fact, it is expected that pollutant emissions (both of local concern and global concern, such as CO2) will reduce from the current levels. D.2. If environmental impacts are considered significant by the project participants or the host Party, please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party: Neither the project participants nor the host Party have any concern about negative environmental impacts associated with the project activity, given that project activity aims at reducing the local and global environmental impacts of the industrial site where the project activity is to be implemented. IEE Report (Initial Environmental Examination Report) and the accompanying approval request letter were submitted on June 01, 2009. Approval letter was issued on 2009. A copy is shown in Annexure 5 as reference to the context. The approval letter does not raise any particular issue with regard to the environmental impact of the project. SECTION E. Stakeholders’ comments E.1. Brief description how comments by local stakeholders have been invited and compiled: Stakeholders were informed about the project activity through specific advertising published by the project owner in the local language. Advertisement is shown in Annex 6. The Stakeholder consultation meeting was held on Apr 08, 2009 at Lucky Cement Limited Karachi Plant and was open to anybody willing to participate (private citizens, representatives of associations, interest groups, unions, public authorities, NGOs, etc.).

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 47 The meeting was introduced by the representative of the project owner who explained in details the project activity and stimulated the debate and the expression of comments. Pictures of the Meeting are shown in Annex 7. E.2. Summary of the comments received: >> Comments from the stakeholders were collected in written form during and after the meeting. These are summarized below Table E.2.1: Summary of the Comments

Table E.2.1: Summary of the Comments Sr. No.

Stakeholder’s Name

Address Comments/Views about the Project

1 Rahim Dad Goth Umer Jamoot, Kathore, Malir Karachi

Our children will get opportunity of learning technical education by installation of this project.

2 Ghulam Nabi Goth Umer Jamoot, Kathore, Malir Karachi

Education will be promoted by installation of this project.

3 Essa Khan Village Walidad Jokio Distt. Jamshoro P.O. Nooriabad Thama Bula Khan

We will get new jobs because of this project.

4 Ghulam Nabi Goth Jokhio, Gattap Town, Kathore

We are very happy that this project is being implemented in our area. It shall be beneficial for our people.

5 Nazir Ahmad Jokhio

P.O. Kathore, Goth Kathore, Superhighway Karachi

Pollution will decrease by installation of this project.

6 Niaz Ahmad Jokhio

Goth Rais Walidad Jokhio, P.O. Nuriabad, Jamshoro Distt.

We had problem of unemployment which we think now will be solved by installation of this project.

7 Abdul Salam Jokhio

Goth Rais Walidad Jokhio, P.O. Nuriabad, Jamshoro Distt.

People will get employment and education by installation of this project.

E.3. Report on how due account was taken of any comments received: All the comments received at the stakeholders meeting were expressing a positive opinion of the project. The personnel at Lucky Cement explained in detail the technical, environmental and social consequences of utilization of waste heat recovery for power generation. The stakeholders were satisfied, and were supportive to the project. In conclusion, no concerns were expressed by the stakeholders, which eventually expressed appreciation for initiative of Lucky Cement.


Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY Organization: Lucky Cement Limited Street/P.O.Box: A. Aziz Hashim Tabba Street Building: 6-A M. Ali Housing Society City: Karachi State/Region: Sindh Postcode/ZIP: Country: Pakistan Telephone: +92-21-111 786 555 FAX: +92-21-4534302 E-Mail: [email protected] URL: www.lucky-cement.com Represented by: Title: Director Power Generation Salutation: Mr. Last name: Haqqi Middle name: First name: Intisar ul Haq Department: Power Generation Mobile: +92-300-8550883 Direct FAX: Direct tel: Personal e-mail: [email protected]


http://www.lucky-cement.com/


PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 49 Organization: Carbon Services Private Limited Street/P.O.Box: 19 Davis Road Building: 2nd Floor, Al Maalik, City: Lahore State/Region: Punjab Postfix/ZIP: Country: Pakistan Telephone: +92-42-6313235 / 6313236 FAX: +92-42-6312959 E-Mail: URL: www.carbon.com.pk Represented by: Mr. Omar Malik Title: Director Salutation: Mr. Last Name: Malik Middle Name: First Name: Omar Department: Mobile: +92-300-8463743 Direct FAX: +92-42-6312959 Direct tel: +92-42-6313235 / 6313236 Personal E-Mail: [email protected]

http://www.carbon.com.pk/


PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 CDM – Executive Board page 50 Organization: First Climate (Switzerland) AG Street/P.O.Box: Stauffacherstr.45 Building: City: Zurich State/Region: Zurich Postcode/ZIP: 8004 Country: Switzerland Telephone: +41-44-298 2800 FAX: +41 44-298 2899 E-Mail: [email protected]

URL: www.firstclimate.com

Represented by: Title: Regional Manager, Pakistan Salutation: Mr Last name: Wohlgemuth Middle name: First name: Nikolaus Department: Mobile: +41 79 303 56 79 Direct FAX: +41 44 298 28 99 Direct tel: +44 44 298 28 66 Personal e-mail: [email protected]


http://www.firstclimate.com/



Annex 2

INFORMATION REGARDING PUBLIC FUNDING No public funding has been sought for this project activity.


Annex 3

BASELINE INFORMATION

NCV of HFO BTU/lb 17,148 Analysis

NCV of NG BTU/ft3 831.95 External analysis

NCV of diesel NCVdiesel BTU/lb 18,301 AnalysisDensity of diesel Denistydiesel kg/Ltr 0.8441 Analysis

GCV of coal GCVcoal kCal/kg 6,620 Company analysisNCV of coal kCal/kg 6,289 IPCC guidelines

NCV of HFO NCVHFO TJ/ton 0.040 ConversionNCV of NG NCVNG MJ/Nm3 31.00 ConversionNCV of diesel NCVdiesel MJ/Ltr 35.93 ConversionNCV of coal NCVcoal TJ/ton 0.026 Conversion

Emission Coefficient of HFO COEFHFO tCO2/TJ 77.4 IPCC defaultEmission Coefficient of NG COEFNG tCO2/TJ 56.1 IPCC defaultEmission Coefficient of diesel COEFdiesel tCO2/TJ 74.1 IPCC defaultEmission Coefficient of coal COEFcoal tCO2/TJ 96.1 IPCC default

Fuel Characteristics


Total clinker production Oclinker tons/yr 1,805,630 Electricity consumption by kilns ECkilns MWh/yr 106,492 Electricity consumption by other local loads ECloads MWh/yr 79,586 Total electricity consumed by cement plant ECplant MWh/yr 186,078

Specific consumption of electricity by cement plant MWh/ton clinker 0.103 Kilns

Kiln E Kiln F TotalClinker production Oclinker tons/yr 927,750 877,880 1,805,630 HFO consumption FCkiln,HFO tons/yr 281 245 526 Coal consumption FCkiln,coal tons/yr 129,758 123,038 252,796 Electricity consumption ECkiln MWh/yr 56,798 49,694 106,492

Specific consumption of HFO tons/ton clinker 0.00030 0.00028 Specific consumption of coal tons/ton clinker 0.140 0.140 Specific consumption of electricity MWh/ton 0.061 0.057 Captive Power PlantElectricity generation on HFO Pcaptive MWh/yr 63,362 Electricity generation on natural gas MWh/yr 122,716 Total electricity generation MWh/yr 186,078 HFO consumption FCcaptive,HFO tons/yr 13,327 Natural gas consumption Nm3/yr 38,006,665 Diesel consumption FCcaptive,diesel Ltrs/yr 126,728

Specific consumption of HFO tons/MWh 0.21 Specific consumption of natural gas Nm3/MWh 309.71 Specific consumption of diesel Ltrs/MWh 0.68

Electricity generation on HFO % 34%Electricity generation on natural gas % 66%

Historical Operation of Karachi Plant (October 2006 to September 2007)


Project emissions PEy tCO2/yr 0Baseline emissions EBy tCO2/yr 50,548

Emissions reduction ERy tCO2/yr 50,548

Kiln E Kiln F Kiln G Kiln E Kiln F Kiln GClinker production Oclinker,i tons/yr 990,000 990,000 990,000 990,000 990,000 990,000 Energy consumption Fi TJ/yr 3,658 3,664 3,661 3,658 3,664 3,661 HFO energy per ton clinker EIi TJ/ton 0.0037 0.0037 0.0037 0.0037 0.0037 0.0037

Kiln E Kiln F Kiln GChange in energy consumption per ton clinker ΔEIi TJ/ton 0 0 0Weighted average of emission coefficient COEFfuel,i tCO2/TJ 96.04 96.04 96.04 Project emissions on each kiln PEi tCO2/yr 0 0 0

Total project emissions PEy tCO2/yr 0

Total captive generation in the baseline GENIGS MWh/yr 306,072 Natural gas energy consumption at captive power plant FIGS,NG GJ/yr 1,937,828 HFO energy consumption at captive power plant FIGS,HFO GJ/yr 874,352 Diesel energy consumption at captive power plant FIGS,diesel GJ/yr 7,490 Total energy consumption at captive power plant FIGS GJ/yr 2,819,670 Fossil fuel consumption rate of captive power plant FIIGS GJ/MWh 9.21 Weighted average coefficient of captive power plant COEFIGS tCO2/GJ 0.063 Baseline emission factor EFy tCO2/MWh 0.58 Project electricity generation by ST EGCP,y MWh/yr 87,437

Baseline emissions EBy tCO2/yr 50,548

Calculation of Baseline Emissions

Emissions Reduction Calculation

Calculation of Project Emissions

Baseline Project


Annex 4

MONITORING INFORMATION All the monitoring information has been provided in Section B.7.2

- - - - -


Annex 5

Approval from Environmental Protection Agency


Annex 6

Advertisement for Stakeholders’ Consultation Meeting


Annex 6

Pictures of Stakeholders’ Consultation Meeting

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