foum el oued wind farm - vcs project description final

PROJECT DESCRIPTION: VCS Version 3

v3.1 1

FOUM EL OUED WIND FARM PROJECT

Project Title Foum El Oued Wind Farm Project

Version 2

Date of Issue 01 April 2013

Prepared By Mr Reda Znaidi

Contact Twin Center, 24th floor, Massira Khadra street

Casablanca - Morocco

Phone : +212 5 29 00 46 59

Email : [email protected]


v3.1 2

Table of Contents

1 Project Details ...................................................................................................................................... 3

1.1 Summary Description of the Project.............................................................................................. 3 1.2 Sectoral Scope and Project Type .................................................................................................. 3 1.3 Project Proponent ......................................................................................................................... 3 1.4 Other Entities Involved in the Project ............................................................................................ 4 1.5 Project Start Date .......................................................................................................................... 4 1.6 Project Crediting Period ................................................................................................................ 4 1.7 Project Scale and Estimated GHG Emission Reductions or Removals ........................................ 4 1.8 Description of the Project Activity .................................................................................................. 5 1.9 Project Location............................................................................................................................. 7 1.10 Conditions Prior to Project Initiation .......................................................................................... 9 1.11 Compliance with Laws, Statutes and Other Regulatory Frameworks ....................................... 9 1.12 Ownership and Other Programs ............................................................................................. 10 1.13 Additional Information Relevant to the Project ........................................................................ 10

2 Application of Methodology ................................................................................................................ 11 2.1 Title and Reference of Methodology ........................................................................................... 11 2.2 Applicability of Methodology ........................................................................................................ 11 2.3 Project Boundary ......................................................................................................................... 13 2.4 Baseline Scenario ....................................................................................................................... 13 2.5 Additionality ................................................................................................................................. 13 2.6 Methodology Deviations .............................................................................................................. 19

3 Quantification of GHG Emission Reductions and Removals ............................................................. 19 3.1 Baseline Emissions ..................................................................................................................... 19 3.2 Project Emissions ........................................................................................................................ 24 3.3 Leakage ....................................................................................................................................... 25 3.4 Summary of GHG Emission Reductions and Removals ............................................................. 25

4 Monitoring ........................................................................................................................................... 27 4.1 Data and Parameters Available at Validation ............................................................................. 27 4.2 Data and Parameters Monitored ................................................................................................. 28 4.3 Description of the Monitoring Plan .............................................................................................. 29

5 Environmental Impact ......................................................................................................................... 33 6 Stakeholder Comments ...................................................................................................................... 34


v3.1 3

1 PROJECT DETAILS

1.1 Summary Description of the Project

Energie Eolienne du Maroc (referred to as E.E.M from here on) is developing Foum El Oued Wind Project (hereafter referred to as “Foum El Oued Project”), a grid-connected wind farm project with an installed capacity of 50.6 MW, which annually feeds an amount of around 202,700 MWh of emission free electricity into the Moroccan national grid.

Foum El Oued Project will achieve greenhouse gas (GHG) emission reductions by avoiding CO2 emissions from the business-as-usual scenario: electricity generation of power plants connected into the Moroccan grid.

Foum El Oued Project thus leads to Greenhouse Gas (GHG) emission reductions which are to be accounted for by verifying and issuing carbon credits under the Verified Carbon Standard Version 3,(in short VCS version 3).

1.2 Sectoral Scope and Project Type

According to guidance from VCS version 3, Foum El Oued Project falls under sectoral scope no. 1 "Energy (renew-able/non-renewable)".1. The project type is Renewable Energy (REN).

Foum El Oued Project is not a grouped project if referring to the relevant VCS version 3 rules.

1.3 Project Proponent

E.E.M as owner and operator of Foum El Oued Project is the project proponent. For detailed contact information refer to:

Contact data project owner:

Organization: Energie Eolienne du Maroc

Street/P.O.Box: Boulevard Massira Al Khadra

Building: Twin Center Tour A – 24ème étage

City: Casablanca

Country: Morocco

Telephone: +212 29 00 46 59

FAX: +212 22 95 80 28

E-Mail: [email protected]


v3.1 4

1.4 Other Entities Involved in the Project

N/A

1.5 Project Start Date

The project start date according to VCS version 3 is defined as the "Date on which the project began generating GHG emission reductions or removals".

For Foum El Oued Project, this is the date of commissioning, expected for March 2013.

1.6 Project Crediting Period

The start date of the crediting period is the project start date as indicated in Section 1.5 above, i.e. 01/03/2013. The expected economic lifetime for Foum El Oued Project is 20 years.

In accordance with VCS version 3 rules4, a 10 year crediting period is chosen for Foum El Oued Project.

The crediting period starts on 01/03/2013 and ends on 29/02/2023.

As in accordance with VCS version 3 rules, the intention is to renew the crediting period.

1.7 Project Scale and Estimated GHG Emission Reductions or Removals

Foum El Oued Projet has an installed capacity of 50.6 MW. With an expected annual electricity generation of around 202,700 MWh/yr, and an emission factor of 0.7005 tCO2/MWh (see Section 3.1 below), expected annual emission reductions amount to 141,991 tCO2/yr. As this is less than 300,000 tCO2e per year, Foum El Oued Project is not a mega project according to VCS version 3 rules.

Project X

Large project

Years Estimated GHG emission reductions or removals (tCO2e)

01/03/2013 – 28/02/2014 141,991

01/03/2014 – 28/02/2015 141,991

01/03/2015 – 29/02/2016 141,991

01/03/2016 – 28/02/2017 141,991

01/03/2017 – 28/02/2018 141,991

01/03/2018 – 28/02/2019 141,991

01/03/2019 – 29/02/2020 141,991

01/0”/2020 – 28/02/2021 141,991


v3.1 5

01/03/2021 – 28/02/2022 141,991

01/03/2022 – 28/02/2023 141,991

Total estimated ERs 1,419,913

Total number of crediting years 10

Average annual ERs 141,991

1.8 Description of the Project Activity

General Overview

Foum El Oued Project is 50.6MW grid-connected wind farm in the municipality of Laâyoune, 9 km south east of the wharf of Laâyoune in the south of Morocco.

The objective of Foum El Oued Project is to use wind resources to generate renewable electricity to supply E.E.M’s clients (both private and public owned companies) in the context of the new regulatory framework in Morocco (the Law 13.09).

In March 2010, the new Law 13.09 was adopted in Morocco to promote large scale renewable electricity generation projects offering the possibility for private players to produce electricity from renewable resources and to sell the produced electricity to a pool of clients.

Within this new framework, a grid connectivity agreement, enabling wheeling of the wind farm production through the national electricity grid, has been signed with ONEE, the Moroccan grid authority.

Foum El Oued Project involves the installation of 22 turbines, each of which has a capacity of 2.3 MW, providing a total installed capacity of around 50.6 MW. Installed in one of the windiest areas of Morocco, with an average wind speed registered at 8 to 8.5 m/s, the project is expected to generate around 202.7 GWh per year.

Contribution to Sustainable Development

Foum El Oued Project is expected to reduce emissions of greenhouse gases (GHG) by an estimated 141,991 tCO2e per year during the first crediting period by displacing electricity from the grid. The baseline scenario is the same as the scenario existing prior to the start of the implementation of the project activity: electricity delivered to the grid by the project would have otherwise been generated by the operation of grid-connected power plants and by the addition of new conventional generation sources.

Foum El Oued Project contributes to sustainable development of the host country as it:

• Achieves GHG emission reductions by avoiding CO2 emissions and reduces local air pollution from the business-as-usual scenario (electricity generation of power plants connected to the grid) ;

• Is in line with the Moroccan government’s objectives to increase the use of renewable energy and reduce reliance on imported fossil fuels. The diversification of energy sources for electricity production is one of the objectives of the new Moroccan energy strategy with an


v3.1 6

objective of 42% of renewable energy capacity in the electricity production and a targeted development of 2 000 MW wind installed capacity by 20201 ;

• Makes greater use of a renewable resource with significant potential in Morocco: wind energy ;

● Strengthens the involvement of Moroccan private sector energy players in the power sector, which is one of the main strategic orientations of the country, as both ONEE and the government face difficulties in financing the necessary increase of electric production in the country ;

● Increases employment opportunities in the area where the project is located, during the construction phase and for the project operation (approximately 15 up to 20 people will be permanently employed) ;

Technical Description

Wind energy technology

In wind energy generation, kinetic energy of wind is converted into mechanical energy and subsequently into electrical energy. The kinetic energy passes through the blades of the wind turbines is converted into mechanical energy and rotates the turbine. When the wind blades rotate, the connected generator rotor also rotates, thereby producing electricity. The technology is a clean technology since there are no GHG emissions associated to the electricity generation during operation phase of the project.

Equipment installed

Foum El Oued Project involves an installed capacity of around 50.6 MW. Each of the wind turbines has a nominal capacity of 2.3 MW.

The wind turbines to be used in the proposed project activity are supplied by the WTG manufacturer SIEMENS as there are no local suppliers in Morocco. Therefore, the proposed project activity will suppose a technology transfer from an Annex I country to Morocco.

The following tables show the wind power farm indicative characteristics:

Indicative Main technical parameters of the Project

Value

Number of wind turbines 22

Nominal power of the wind farm 50.6 MW

Indicative main technical specifications of the wind turbines

Wind turbine capacity 2.3 MW Number of blades 3 Nominal wind speed 12-13 m/s Diameter of the turbine 101 m Hub height 80 m

1 Source : Ministry of Energy and Mines (www.mem.gov.ma)


v3.1 7

Rated voltage 690 V Rated frequency 50 Hz

It was included in the purchase agreement that the manufacturer will provide relevant training course for the staff on maintenance and use of equipment when the equipment will have been installed.

Expected annual production

The following table gives a summary of the results of the energy yield assessment:

Indicative calculation results for the wind farm

Calculation Value

Expected net annual electricity generated ~202.7 GWh

1.9 Project Location

Foum El Oued Project is located 9 km south east the wharf of Laayoune. The exact location of the project is defined using geographic coordinates obtained with a Global Positioning System (GPS) receiver: the project site is located on an extended area defined by four geographical coordinates: P1 (27° 01' 47.5348" N ; 13° 25' 6.0962" W), P2 (27° 01' 54.3148" N ; 13° 21' 51.7595" W), P3 (27° 00' 21.7649" N ; 13° 22' 6.5281" W) & P4 (27° 00' 25.3679" N ; 13° 24' 18.6016" W).


v3.1 8

Figure 1 – Location of Foum El Oued Project

Laayoune (location of the project activity


v3.1 9

Figure 2 – Coordinates of the wind turbines for Foum El Oued Project

1.10 Conditions Prior to Project Initiation

As the project activity is a Greenfield project, the conditions prior to the project initiation is the continuation of the current situation, i.e the equivalent amount of energy would have been produced by other grid-connected units, which are mainly thermal power plants, undertaking business as usual maintenance.

1.11 Compliance with Laws, Statutes and Other Regulatory Frameworks

Foum El Oued Project is in compliance with all applicable laws and regulations, especially with the law 13.09, the regulatory framework for developing renewable under which the project is being developed.


v3.1 10

1.12 Ownership and Other Programs

1.12.1 Right of Use

E..E.M holds all authorization, contracts or all kind of legal documentation related to Foum El Oued Wind Project and owns all equipment and facilities used for the implementation of the project.

1.12.2 Emissions Trading Programs and Other Binding Limits

No GHG emissions trading scheme/emission cap is implemented for the Moroccan power sector.

1.12.3 Participation under Other GHG Programs

Foum El Oued Project does not participate in any GHG program other than the VCS version 3.

1.12.4 Other Forms of Environmental Credit

No GHG related environmental credits are applied to the Moroccan power sector.

1.12.5 Projects Rejected by Other GHG Programs

Foum El Oued Project does not participate in any GHG program other than the VCS version 3.

1.13 Additional Information Relevant to the Project

Eligibility Criteria

Not applicable, since Foum El Oued Project is not a grouped project.

Leakage Management

Not applicable, as leakage is not to be considered, see Section 3.3 below.

Commercially Sensitive Information

Given the fact that some information related to the project are bound by non disclosure agreements, these commercial sensitive information needs to be excluded from the public version of the VCS PD that will be displayed on the VCS Project Database.

Such sensitive information includes the following non-exhaustive list of documents:

• Commercial agreements

• Grid connection agreements

• Financing agreements


v3.1 11

• WTG contracts

• Land lease agreements

Further Information

N/A

2 APPLICATION OF METHODOLOGY

2.1 Title and Reference of Methodology

The UNFCCC Clean Development Mechanism (CDM) is a VCS approved GHG program. Consequently, methodologies and methodology elements approved under the CDM may be used for VCS projects2.

In this VCS PD, the following CDM methodology elements and methodologies are applied:

1. The Approved Consolidated Baseline and Monitoring Methodology “Consolidated baseline methodology for grid-connected electricity generation from renewable sources” (Version 13) is used in combination with the

2. “Tool to Calculate the Emission Factor for an Electricity System” (Version 03.0.0) as well as with the

3. “Tool for the Demonstration and Assessment of Additionality” (Version 7.0.0).

2.2 Applicability of Methodology

The proposed project can meet the applicability criteria of the baseline and monitoring methodology (ACM0002), therefore, the methodology is applicable to the proposed project.

Conditions as specified in methodology ACM0002 Compliance

The project activity is the installation, capacity addition, retrofit or replacement of a power plant/unit of one of the following types: hydro power plant/unit (either with a run-of-river reservoir or an accumulation reservoir), wind power plant/unit, geothermal power plant/unit, solar power plant/unit, wave power plant/unit or tidal power plant/unit;

The proposed project activity is the installation of a new wind power plant and it will be connected to the Moroccan national grid.

2 See http://www.v-c-s.org/how-it-works/linked-programs and http://www.v-c-s.org/methodologies/find


v3.1 12

In the case of capacity additions, retrofits or replacements: the existing plant started commercial operation prior to the start of a minimum historical reference period of five years, used for the calculation of baseline emissions and defined in the baseline emission section, and no capacity expansion or retrofit of the plant has been undertaken between the start of this minimum historical reference period and the implementation of the project activity;

This condition is not applicable. The proposed project corresponds to new electricity production capacity and not to additions, retrofits or replacements of existing electricity production capacity, as there is no existing electricity capacity production at the site of the project activity.

In case of hydro power plants, one of the following conditions must apply: o The project activity is implemented in an existing reservoir, with no change in the volume of reservoir; or o The project activity is implemented in an existing reservoir, where the volume of reservoir is increased and the power density of the project activity, as per definitions given in the Project Emissions section, is greater than 4 W/m2; or o The project activity results in new reservoirs and the power density of the power plant, as per definitions given in the Project Emissions section, is greater than 4 W/m2.

Not Applicable

In the case of retrofits, replacements, or capacity additions, this methodology is only applicable if the most plausible baseline scenario, as a result of the identification of baseline scenario, is “the continuation of the current situation, i.e. to use the power generation equipment that was already in use prior to the implementation of the project activity and undertaking business as usual maintenance”.

Not Applicable

The methodology is not applicable to the following: • Project activities that involve switching from fossil fuels to renewable energy sources at the site of the project activity, since in this case the baseline may be the continued use of fossil fuels at the site; • Biomass fired power plants; • Hydro power plants1 that result in new reservoirs or in the increase in existing reservoirs where the power density of the power plant is less than 4 W/m2.

The proposed project activity is not an activity that involves switching from fossil fuels to renewable energy at the proposed project site, nor does it involve biomass or hydro power type plants.

The Tool for the Demonstration and Assessment of Additionality (Version 07.0.0)

ACM0002 / Version 13 require the use of this tool. The tool mentioned that once it is included with the methodology, the tool shall be used. No other criteria of application are mentioned in the tool. Consequently, the tool for the demonstration and assessment of additionality”, Version 7.0.0 has been used. The Tool to Calculate the Emission Factor for an Electricity System (Version 03.0.0)


v3.1 13

ACM0002 / Version 13 require the use of this tool. It is applied to estimate the OM, BM and/or CM when calculating baseline emissions for a project activity that substitutes grid electricity.

2.3 Project Boundary

According to the methodology ACM0002 (Version 13), since the project is a grid connected wind power project, only CO2 emission from fossil fuels fired power plants in baseline scenario need to be considered as summarized in the following table :

Source Gas Included? Justification/Explanation

Baseline CO2 emissions from electricity generation in fossil fuel fired power plants that are displaced due to the project activity

CO2 Yes Major emission sources CH4 No Excluded for simplification

(conservative) N2O No Excluded for simplification

(conservative)

Spatial boundary:

According to the approved methodology ACM0002, version 13, the spatial extent of the project boundary includes the project wind farm power plant and all power plants connected physically to the electricity system that the VCS project power plant is connected to. Foum El Oued Wind project is within the boundary of the national power grid of ONEE.

2.4 Baseline Scenario

According to the approved methodology ACM0002, if the project activity is the installation of a new grid-connected renewable power plant/unit, the baseline scenario is the following:

Electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources, as reflected in the combined margin (CM) calculations described in the “Tool to calculate the emission factor for an electricity system”.

Thus the baseline scenario is the supply of equivalent annual power output by the national electricity grid.

2.5 Additionality

The following steps are used to demonstrate the additionality of the Project according to the latest version of the “Tool for the demonstration and assessment of additionality” (Version 07.0.0).

Step 1. Identification of alternatives to the project activity consistent with current laws and regulations

Define realistic and credible alternatives to the project activity that can be (part of) the baseline scenario through the following sub-steps:

Sub-step 1a. Define alternatives to the project activity


v3.1 14

To provide the same output or services comparable with the proposed VCS project, the realistic and credible alternatives to the project would be the following:

Alternative a) Provision of equivalent annual power generation by the grid which the proposed project is connected to;

Alternative b) the proposed project not undertaken as a VCS project activity;

Alternative c) Construction of a power plant using other renewable energy with equivalent installed capacity or annual electricity generation; and

Alternative d) Construction of a fossil fuel-fired power plant with equivalent installed capacity or annual electricity generation;

The alternative c) is also not feasible because of the following reasons:

• First, the hydro power option is excluded because of the lack of sizable exploitable hydro resources in the project area. Indeed, Foum El Oued Wind project is located in a Saharan climate and water-deficient area. In addition, hydro generation in Morocco has almost reached its maximum capacity.

Furthermore, the Law 13.09 limits the capacity of hydro generation projects to 12 MW.

• Secondly, due to the technology development status and the high cost of power generation, solar PV or solar CSP is not a feasible option even if the solar resource is not relatively limited in the project’s site. Indeed, cost of solar energy is currently at least 2 to 4 times higher than wind power cost.3

• Thirdly, there is no established biomass or geothermal power plant with an installed capacity (respectively the same output) in Morocco as the same capacity (respectively the same output) as the project. Furthermore, the biomass and geothermal resources in Morocco are scarce.

Therefore, the alternative c) cannot be considered as alternative scenario to the project activity.

In conclusion to Sub-step 1a, the only feasible alternative scenarios to the project activity available to the project participant are the alternatives: a) Provision of equivalent annual power generation by the grid which the proposed project is connected to; b) Carrying the project activity without VCS and d) Construction of a fossil fuel power plant with equivalent amount of installed capacity or annual electricity output.

Sub-step1b. Consistency with mandatory laws and regulations:

The applicable legal and regulatory requirements for the project include laws, governmental regulations and rules applied to electricity generation projects.

Alternative scenario a) supply of equivalent annual power output by the national electricity grid which the proposed project is connected to; is obviously in compliance with all mandatory applicable legal and regulatory requirements.

Equally the alternative scenario b) carrying the project activity without VCS; is in conformity with the local legal and regulatory framework that governs the renewable energy based electricity generation projects.

3 See Annex 2


v3.1 15

As for the alternative d) construction of a fossil fuel power plant with equivalent amount of installed capacity or annual electricity output; it can’t be developed in the context of the regulatory framework under which the project activity is developed. Indeed, the existing legal framework (Law 13.09) prevents private electricity producers to develop fossil fuel-fired power projects since only renewable resources are allowed within this framework.

In fact, the Law 13.09 was adopted in Morocco in March 2010 to promote large scale renewable electricity generation projects offering the possibility for private players to produce electricity from renewable resources and to sell the produced electricity to a pool of clients.

The renewable resources are explicitly defined within this law and include: solar, wind, hydro, biomass, geothermal, biogas, etc.

Fossil fuels are clearly not considered in the Law 13.09 as renewable sources.

Furthermore, it is worth stating that generation projects can only be developed by three means currently in Morocco: (i) projects developed directly by the utility ONEE, (ii) IPP projects launched by ONEE or the Moroccan Agency for Solar Energy (MASEN) within a tender process and (iii) private investors’ projects.

Hence, the alternative d) cannot be considered as an alternative scenario that complies with the laws and regulatory requirements for electricity generation in Morocco.

In conclusion to step 1, the only possible alternative scenarios compatible with the local laws and regulations to the project activity developed as VCS project to be considered by the project participant are: a) Provision of equivalent annual power generation by the grid which the proposed project is connected to and b) Carrying the project without VCS revenues.

Step 2: Investment analysis

The purpose of this step is to determine whether the project activity is economically or financially less attractive than other alternatives without an additional funding that may be derived from the VCS project activities. The investment analysis was conducted in the following steps:

Sub-step 2a: Determine appropriate analysis method

The “Tool for the Demonstration and Assessment of Additionality” suggests three analysis methods. These are Simple cost analysis (Option I), Investment comparison analysis (Option II) and Benchmark analysis (Option III).

Given that the project will earn revenues not only from the VCUs sales but also from electricity sales, the Simple cost analysis (Option I) is not appropriate.

The Investment comparison analysis (Option II) is only applicable to projects whose alternatives are similar investment projects. As the alternative to the project is generation of power from the Moroccan grid as opposed to individual investment alternatives, (Option II) is not appropriate.

Therefore, the Project will use Benchmark analysis method (Option III).

Sub-step 2b.Option III: Benchmark Analysis

The project’s Internal Rate of Return (“IRR”) of total investment after tax is selected as a financial indicator.

As the project could be developed by another entity than the project participant, the benchmark IRR of the project is based on parameters that are standard in the market and considering the


v3.1 16

specific characteristics of the project type, according to the “Guidelines on the assessment of investment analysis”, version 5 and the Tool for the Demonstration and Assessment of Additionality (Version 7.0.0).

Given the fact that there are no publically available studies and information on benchmarks values for electricity generation projects in Morocco, the project participant hired the services of a reputed Investment Bank to establish the reference benchmark for the electricity generation sector.

Based on public available information, this reference benchmark is focused on the electricity generation projects that have been implemented in Morocco during the last years. Six major investment projects spread in the following three categories were analyzed:

1. Projects developed by ONEE under concessional scheme (Jorf Lasfar Energy Company (JLEC), Koudia Al Baida wind farm (CED) and Tahaddart combined cycle power plant ;

2. Projects developed and operated directly by ONEE (Essaouira wind farm and the Thermosolar AinBeni Mathar power plant) and

3. Projects developed by private players for ‘auto production’ (Lafarge wind farm project).

The outcome of the study has shown that the projects of category (1) are less risky than those of category (2). The projects of category (1) and (2) are less risky than the projects of category (3). The other outcome is that the IRR of a generation project in Morocco vary between 10 and 13% (depending of the category).

The study stated also that the project activity is carried out by a private company that will have to bear additional market and commercial risks compared to the three analyzed categories (portfolio risk as the Moroccan market is very limited, overcapacity risk, non payment risk by customers ...).

Then, the study concluded that the required project IRR of a private wind farm project in Morocco should be at least between 12% and 14%.

As a rationale approach, the project participant has considered the 13% benchmark value for the project activity IRR.

This rate is then considered as the benchmark IRR for the Project.

Sub-step 2c. Calculation and comparison of financial indicators

1) Basic parameters for calculation of financial indicators

The basic assumptions used for calculation of the Project’s IRR are shown in the following table:

Parameters Unit Value

Installed capacity MW 50.6

Net plant load factor % 45.7%

Net annual generation GWh 202.700

Total CAPEX MDh 763


v3.1 17

Total O&M cost during the project lifetime MDh 445

Project lifetime Years 20 to be extended

O&M inflation rate % 3

Parity DH/€ 11.2

Tariff escalation % 1

The electricity price used in the investment analysis is the weighted average of the different tariffs agreed with each of the clients of the project participant. It is worth mentioning that the tariffs used are not feed-in tariffs regulated by Moroccan authorities, they are contractual tariffs agreed with each client.

2) Comparison of IRR for the proposed project and the financial benchmark

In accordance with the Benchmark analysis (Option III), the proposed project will not be considered as financially attractive if its financial indicator considered (project IRR) is lower than the benchmark rate.

The financial analysis based on the above parameters shows that the Project’s IRR without VCS is established at 10.1% and is much lower than the benchmark rate of 13%. This therefore indicates that Foum El Oued Project without carbon revenues is not financially attractive to the investors. Sub-step 2d. Sensitivity analysis (only applicable to options II and III):

The objective of sensitivity analysis is to examine whether the conclusion regarding the financial attractiveness of the project is robust to reasonable variations in the critical assumptions. The investment analysis provides a valid argument in favor of additionality only if it consistently supports (for a realistic range of assumptions) the conclusion that the project activity is unlikely to be the most financially attractive or is unlikely to be financially attractive.

For the proposed project, four financial parameters were taken as uncertain factors for sensitive analysis of financial attractiveness:

1) Total investments (Project Capex)

2) Annual output (supplied power)

3) Selling Tariff

4) Annual O&M cost

The impacts of total investments, annual output, selling tariff and the annual O&M are selected to check out the impact of their reasonable variations on the project’s IRR. Assuming these four parameters to change within the range between (-10% +10%), then the outcomes of IRR sensitivities will be presented.

The results of sensitive analysis are shown in Figure 3 below:


v3.1 18

-10% -5% 0% 5% 10%Project Capex 11,39% 10,72% 10,11% 9,54% 9,00%Annual Output 8,64% 9,39% 10,11% 10,81% 11,49%Selling Tarif f 8,64% 9,39% 10,11% 10,81% 11,49%Annual O&M cost 10,33% 10,22% 10,11% 10,00% 9,88%

8,50%

9,00%

9,50%

10,00%

10,50%

11,00%

11,50%

12,00%

Pro

ject

IRR

Figure 3 – Sensitivity analysis results

As shown previously, when the parameters selected varies from -10% to +10%, the project IRR is still always much lower than the benchmark rate of 13%.

The project IRR could reach the benchmark rate of 13% in the following cases:

- Decrease of the Project Capex by -21%, which is not possible as the procurement contracts including wind turbines, civil works and electrical works are already signed and the costs are fixed.

- Increase of the annual output by +22%, which is not realistic as the annual output used in the analysis has been evaluated with wind measurements made on site during a continuous period of 12 monthsand validated by reputed international wind consulting firm.

- Increase of the selling tariff by +22%, which is not possible as the Tariffs agreed with clients are already fixed so the selling price will not vary.

Note that the benchmark is never reached even if the annual O&M costs are null.

Thus, the likelihood for the Project IRR to reach the benchmark rate of 13% is very small.

As a consequence, the conclusion regarding the project additionality is robust and supported by the sensitivity analysis.

Step 3. Barrier Analysis

The “Tool for the demonstration and assessment of additionality” (Version 7.0.0) states that project participants may choose to apply Step 2 (Investment analysis) or Step 3 (Barrier Analysis).


v3.1 19

Step 4. Common Practice Analysis

Sub-step 4a. Analyze other activities similar to the proposed project activity:

The geographical scope considered for the common practice analysis is Morocco as the project activity is based in Morocco and will be connected to the Moroccan grid, like all power generation projects in Morocco. Furthermore, all projects in the country are developed under the same regulatory framework.

With regard to the widespread usual practices, it is worth mentioning that in Morocco the predominant practice of electricity supply for industrial plants is the national ONEE grid.

Only one wind farm has been developed so far in Morocco without the green attributes such as CDM/VCS. All the wind farm projects already developed or under development in Morocco, are seeking green revenues, except the Koudia El Beida project, a 50 MW wind farm that went on production in 2000.

The Koudia El Beida is the first wind farm built in Morocco and was considered as a pilot project. It is located 20 km at the north of Tetouan and 30 km at the east of Tangier. It consists of 84 wind turbines of a 600 kW capacity each. The financing and operation of Koudia al Baïda are insured by a Special Purpose Company, namely Compagnie Eolienne de Detroit (CED). The contract signed between CED and ONEE is of BTO type (Build Transfer and Operate): CED builds, transfers the installations to ONEE and was entitled to operate the wind site for a period of 19 years. During this operating period of 19 years, ONE buys the entire electricity produced.

The major difference between Foum El Oued Project and Koudia El Beida wind farms is that the Foum El Oued Project is an initiative of a private operator while the Koudia El Beida wind farm is an Independent Power Producer (IPP) contracted by ONEE. The latter is a tender launched by ONEE in which the bidder offers a tariff that allows him to make the project profitable.

In the case of the Foum El Oued Project, the price is negotiated with industrial clients who are themselves clients of ONE. As such, the proposed wind tariff must be competitive with the ONEE public tariff.

Furthermore, it is worth mentioning that The Koudia El Beida tariff was not interesting for ONEE. Indeed, ONEE stated that it will not pay similar tariff levels for future projects anymore. Sub-step 4b. Discuss any similar options that are occurring As shown above, no projects that could be considered as similar to the project can be observed. In conclusion, Foum El Oued Wind Project is additional.

2.6 Methodology Deviations

N/A

3 QUANTIFICATION OF GHG EMISSION REDUCTIONS AND REMOVALS

3.1 Baseline Emissions

This Section describes the procedure for quantifying baseline emissions, including the explanation of all methodological choices and the presentation of all relevant equations.


v3.1 20

According to ACM0002, the baseline emissions include only CO2 emissions from electricity generation in fossil fuel fired power plants that are displaced due to the project activity, calculated as follows:

yCMgridyPJy EFEGBE ,,, ×=

Where:

• BEy = Baseline emissions in year y (tCO2/yr).

• EGPJ,y = Quantity of net electricity generation that is produced and fed into the grid as a result of the implementation of the project activity in year y (MWh/yr).

• EFgrid,CM,y = Combined margin CO2 emission factor for grid connected power generation in year y calculated using the latest version of the “Tool to calculate the emission factor for an electricity system” (tCO2/MWh).

Calculation of EGPJ,y

According to the methodology ACM0002, EGPJ,yis calculated using the case (a), of Greenfield renewable energy power plants, because the project activity is the installation of a new grid-connected renewable power plant/unit at a site where no renewable power plant was operated prior to the implementation of the project activity:

yyPJ EGEG =,

Where:

• EGy = Quantity of net electricity generation supplied by the project plant/unit to the grid in year y (MWh/yr)

Calculation of EFgrid,CM,y

The Tool to Calculate the Emission Factor for an Electricity System (version 03.0.0) is applied to calculate the combined margin emission factor. This section describes how the emission factor of Foum El Oued Wind Project has been determined based on the instructions for calculating the emission factors of the operating margin (OM) and build margin (BM).

According to the tool the grid emission factor is calculated as per the following six steps:

STEP 1: Identify the relevant electricity systems.

STEP 2: Choose whether to include off-grid power plants in the project electricity system (optional).

STEP 3: Select a method to determine the operating margin (OM).

STEP 4: Calculate the operating margin emission factor according to the selected method.

STEP 5: Identify the group of power units to be included in the build margin (BM).

STEP 6: Calculate the build margin emission factor.

STEP 7: Calculate the combined margin (CM) emissions factor.

Step 1 - Identify the relevant electricity systems


v3.1 21

The proposed project activity will be connected to the national grid of ONEE. As a public utility ONEE has the monopoly of electricity transport and it manages the unique national grid in Morocco. The national grid is well identified and is referred to in all ONEE official annual report activities. The generated electricity is to be injected into the national grid. Thus the relevant electricity system for the project activity is the national electricity grid. ONEE imports electricity from two connected electricity systems, the Spain national grid and the Algeria national grid. For the purpose of determining the operating margin emission factor, the CO2 emission factor(s) for net electricity imports from the two connected electricity systems is considered 0 tCO2/MWh.

Step 2 - Choose whether to include off-grid power plants in the project electricity system The calculation of the operating margin and build margin emission factor will use the option I of the tool: Only grid power plants are included in the calculation. Step 3 - Select a method to determine the operating margin (OM) The Tool to Calculate the Emission Factor for an Electricity System provides the following four options to determine the operating margin:

(a) Simple OM, or (b) Simple adjusted OM, or (c) Dispatch data analysis OM, or

(d) Average OM.

For the proposed project activity, option (a) (simple OM) has been chosen. This is because undertaking a dispatch data analysis (the preferred methodological option) cannot be done at a reasonable cost, since the data is not readily available from the relevant authorities and ONEE. Since the low-cost/must-run sources for Morocco (hydro and wind) constitute less than 50% of the total generated electricity of the grid, the simple OM can be used4. Step 4 - Calculate the operating margin emission factor according to the selected method

The simple OM emission factor has been calculated based on a 3-year vintage (2006-2008). The OM is calculated as the generation-weighted emissions per electricity unit of all generating units serving the system, excluding low cost and must-run power plants.

The OM is calculated as follows (Option A), using a 3-year average:

∑∑

=

mym

mymELym

yOMsimplegrid EG

EFEGEF

,

,,,

,,

.

4It is shown in annex 1 that the low cost must run sources for Morocco (hydro and wind) have accounted for less than 10% of the total generated electricity


v3.1 22

Where

• EFgrid,OMsimple,y = Simple operating margin CO2 emission factor in year y (tCO2/MWh)

• EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m in year y (MWh)

• EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh)

• m = All power units serving the grid in year y except low-cost / must-run power units

• y = The three most recent years for which data is available (ex ante option).

EFEL,m,y is determined using option A1 of the Tool to Calculate the Emission Factor for an Electricity System :

ym

iyiCOyiymi

ymEL EG

EFNCVFCEF

,

,,2,,,

,,

..∑=

Where

• FCi,m,y = Amount of fossil fuel type i consumed by power plant / unit m in year y (mass or volume unit)

• NCVi,y = Net calorific value (energy content) of fossil fuel type i in year y

(GJ / mass or volume unit)

• EFCO2,i,y = CO2 emission factor of fossil fuel type i in year y (tCO2/GJ)

• i = All fossil fuel types combusted in power plant / unit m in year y

According to the provisions in the monitoring tables of the Tool to Calculate the Emission Factor for an Electricity System, EGm,y is determined once for each crediting period using the most recent three historical years for which data is available (ex-ante option).

The 3-year vintage OM was calculated using the data of all operational power fossil fuel fired plants providing electricity to the grid for the years 2006, 2007 and 2008. The data of the plants used in the Operating Margin calculation were provided by ONEE. They are presented in Annex 1. Step 5 - Identify the group of power units to be included in the build margin (BM)

According to the tool, the sample group of power units used to calculate the build margin consists of either:

(a) Calculate the build margin emission factor based the set of five power units that have been built most recently, or

(b) Consider the set of power capacity additions in the electricity system that comprises 20% of the system generation (in MWh) and that have been built most recently.


v3.1 23

From the above two options, the set of power units that comprises the larger annual generation is to be used.

The set of power capacity additions in the electricity system that comprises at least 20% of the system generation in 2008 comprises the seven most recent power units (see annex 3). These units have generated in 2008, 5,787,873MWh, This represents 24.1% of the overall electricity generated by all power plants in 2008. An overview of the data on the electricity generation and fuel consumptions of the power plants is presented in Annex 3. None of these power plants is older than 10 years.

Accordingly, option b) that comprises the largest generated electricity has thus been used.

In terms of the grid EF, the project participants have chosen option 1 of the tool consisting of for the first crediting period, calculate the build margin emission factor ex-ante based on the most recent information available on units already built for sample group m at the time of PDD submission to the DOE for validation. For the second crediting period, the build margin emission factor should be updated based on the most recent information available on units already built at the time of submission of the request for renewal of the crediting period to the DOE. For the third crediting period, the build margin emission factor calculated for the second crediting period should be used. This option does not require monitoring the emission factor during the crediting period. Step 6 - Calculate the build margin emission factor The Build Margin emissions factor (BM) is calculated as the generation-weighted average emission factor of the most recently built plants, using the following formula:

∑∑

=

mym

miymELym

yBMgrid EG

EFEGEF

,

,,,,

,,

.

Where

• EFgrid,BM,y = Build margin CO2 emission factor in year y (tCO2/MWh)

• EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m in year y (MWh)

• EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh)

• m = Power units included in the build margin

• y = Most recent historical year for which power generation data is available

The build margin has been calculated using the electricity data of the most recent year for which the data is available namely 2008. Step 7 - Calculate the combined margin (CM) emissions factor


v3.1 24

The final step in applying the tool is to calculate the combined margin emissions factor. This has been calculated as the weighted average of the emissions factor of the OM and the BM. The formula that has been used to calculate this weighted average emission factor is as follows:

BMyBMgridOMyOMgridyCMgrid wEFwEFEF ×+×= ,,,,,,

Where

• EFgrid,BM,y = Build margin CO2 emission factor in year y (tCO2/MWh)

• EFgrid,OM,y = Operating margin CO2 emission factor in year y (tCO2/MWh)

• wOM = Weighting of operating margin emissions factor (%)

• wBM = Weighting of build margin emissions factor (%)

The default values of weighted factors are:

wOM = 0.75 wBM = 0.25

The official ONEE data for the fuels NCV and the latest default values recommended in the 2006 IPCC Guidelines for National Greenhouse Gas Inventories for the fuels emissions factors were used to derive the OM and the BM emission factors of the grid.

The results of the EF calculation are presented in annex 3 and summarized below:

Designation EF in tCO2/MWh

« Operating Margin » (OM)

2006 0.7980 2007 0.7313 2008 0.6899

Average OM on 2006-2008 0.7371 « Build Margin » (BM) 2008 0.5906

Combined Margin (weighted average OM and BM) 0.7005

3.2 Project Emissions

According to the methodology ACM002, for most renewable power generation project activities, PEy= 0. However, some project activities may involve project emissions that can be significant. These emissions shall be accounted for as project emissions by using the following equation:

PEy = PEFF,y+ PEGP,y+ PEHP,y

Where:

• PEy = Project emissions in year y (tCO2e/yr)

• PEFF,y = Project emissions from fossil fuel consumption in year y (tCO2/yr)


v3.1 25

• PEGP,y = Project emissions from the operation of geothermal power plants due to the release of non-condensable gases in year y (tCO2e/yr)

• PEHP,y = Project emissions from water reservoirs of hydro power plants in year y (tCO2e/yr)

Foum El Oued Project is a wind farm project that generates electricity using wind energy as a renewable energy source. The project activity doesn’t involve any use of fossil fuels, neither geothermal nor hydro energy sources. Thus PEFF,y, PEGP,y and PEHP,y are null and so is the project emissions:

PEy = 0

3.3 Leakage

According to the consolidated baseline methodology ACM0002, the main indirect emissions potentially giving rise to leakage in the context of electric sector projects result from activities such as power plant construction and upstream emissions from fossil fuel use. The project developer does not need to consider such indirect emissions when applying the methodology. Therefore the project can take no account of such leakages, Ly= 0 tCO2e.

3.4 Summary of GHG Emission Reductions and Removals

The project activity will generate GHG emission reductions by avoiding CO2 emissions from electricity generation by fossil fuel power plants. The emission reduction (ERy) during a given year y is calculated as follows:

ERy = BEy − PEy

Where

• ERy = Emission reductions in year y (t CO2e/yr)

• BEy = Baseline emissions in year y (t CO2e/yr)

• PEy = Project emissions in year y (t CO2/yr)

Given the fact that the project emissions are null, the emission reductions are to be derived as:

ERy = BEy = EGPJ,yx EFgrid,CM,y

Where:

• EGPJ,y = Quantity of net electricity generation that is produced and fed into the grid as a result of the implementation of the VCS project activity in year y (MWh/yr)

EFgrid,CM,y = Combined margin CO2 emission factor for grid connected power generation in year y calculated using the latest version of the “Tool to calculate the emission factor for an electricity system” (tCO2/MWh).

Annual generation of the wind farm is estimated at 202,700 MWh.

The calculation equation is as follows:

BEy = 202,700* 0.7005= 141,991 tCO2/year

Results for GHG emission reductions are summarized in the following table:


v3.1 26

Years

Estimated baseline

emissions or removals

(tCO2e)

Estimated project

emissions or removals (tCO2e)

Estimated leakage emissions (tCO2e)

Estimated net GHG emission reductions or

removals (tCO2e)

01/03/2013 –28/02/2014 141,991 0 0 141,991

01/03/2014 – 28/02/2015 141,991 0 0 141,991

01/03/2015 – 29/02/2016 141,991 0 0 141,991

01/03/2016 – 28/02/2017 141,991 0 0 141,991

01/03/2017 – 28/02/2018 141,991 0 0 141,991

01/03/2018 – 28/02/2019 141,991 0 0 141,991

01/03/2019 – 29/02/2020 141,991 0 0 141,991

01/03/2020 – 28/02/2021 141,991 0 0 141,991

01/03/2021 – 28/02/2022 141,991 0 0 141,991

01/03/2022 – 28/02/2023 141,991 0 0 141,991

Total 1,419,910 0 0 1,419,910


v3.1 27

4 MONITORING

4.1 Data and Parameters Available at Validation

Data Unit / Parameter: FCi,m,y

Data unit: Tons

Description: Amount of fossil fuel type i consumed by power plant / unit m feeding the grid, in year y

Source of data:

ONEE official data for all plants except for the JLEC (units 3&4) and Tahaddart plants for which data was not available. Specific requests have been made to the management of these plants to get the data on the amount of fossil fuel they consumed.

Value applied: See Annex 1

Justification of choice of data or description of measurement methods and procedures applied:

-

Any comment: -

Data Unit / Parameter: NCVi,y

Data unit: GJ/T

Description: Net calorific value (energy content) per mass or volume unit of fuel i, in year y

Source of data: - Official Statistical book “Annuaire des Statistiques” - 2007 - 2006 IPCC Guidelines for National Greenhouse Gas Inventories



According to the Tool to Calculate the Emission Factor for an Electricity System (version 03.0.0), the national average default value shall be used if values are reliable and documented in regional or national energy statistics / energy balances. Otherwise IPCC default values at the lower limit of the uncertainty at a 95%confidence interval as provided in Table 1.2 of Chapter 1 of Vol. 2(Energy) of the 2006 IPCC Guidelines on National GHG Inventories shall be used.

Any comment: -


v3.1 28

Data Unit / Parameter: EFCO2,i, y

Data unit: tCO2/TJ

Description: Carbon emission factor per unit of energy of the fuel i , in year y

Source of data: 2006 IPCC Guidelines for National Greenhouse Gas Inventories



According to the Tool to Calculate the Emission Factor for an Electricity System (version 03.0.0), the national average default value shall be used if values are reliable and documented in regional or national energy statistics / energy balances. Otherwise IPCC default values at the lower limit of the uncertainty at a 95%confidence interval as provided in Table 1.4 of Chapter 1 of Vol. 2(Energy) of the 2006 IPCC Guidelines on National GHG Inventories shall be used.

Any comment: -

Data Unit / Parameter: EGm,y

Data unit: MWh

Description: Net electricity generated by power plant/unit m in year y

Source of data: ONEE official data for all plants except for the JLEC (units 3&4) and Tahaddart plants for which data was not available. Specific requests have been made to the management of these plants to get the data on the net electricity they generated.



-

Any comment: -

4.2 Data and Parameters Monitored

Data Unit / Parameter: EGy

Data unit: MWh

Description: Total Net electricity generated by the wind farm

Source of data: Electricity meter reading at Project boundary. The measurement results will be cross checked with records for sold electricity.

Description of measurement methods and procedures to be applied:

Data will be measured on a ten minutes basis and weekly recorded


v3.1 29

Frequency of monitoring/recording:

Data will be measured on a ten minutes basis and weekly recorded

Value applied: 202,700 MWh/year

Monitoring equipment: Refer to 4.3 (Description of the Monitoring Plan)

QA/QC procedures to be applied:

The meters shall undergo testing and/or calibration carried out by project participant. The meters shall be inspected regularly by the project participant. If, during any test, the accuracy of the meters fails to meet the standards specified by the International Electrotechnical Commission, project participant shall repair or recalibrate the meters and if it is necessary to replace a meter. If the error of the main meter is out of the permissible limits or if

the main meter have malfunction, the data of the backup meter will be referenced.

Calculation method: -

Any comment: -

4.3 Description of the Monitoring Plan

a) The aim of the monitoring plan

Monitoring is a key procedure to verify the real and measurable emission reductions from the project. To guarantee the project’s real, measurable and long-term GHG emission reductions, the monitoring plan is established.

b) Data to be monitored

Two main parameters will be subject to an ex-post monitoring:

• The electricity generated by the wind farm

• The electricity imported by the wind farm.

The baseline emission factor: fixed on ex-ante calculation and doesn’t need to be monitored every year as per the latest version of the “Tool to calculate the emission factor for an electricity system” (Version 03.0.0).

According to the baseline study, the key parameter of the emissions’ reductions evaluation is the net electricity generated by the wind farm. The recommended monitoring methodology is based on a specific and continuous measure of both the electricity generated by the wind farm and the electricity imported by the wind farm. The net electricity generated by the wind farm, which constituted the key parameter of the emissions reductions evaluations, will be derived from the difference of these two key monitored parameters as shown in the following equation:

EG = EGy

Where:

• EG = Net generated electricity


v3.1 30

• EGy = Net Electricity generation supplied by the wind farm

c) Monitoring management organization

The monitoring structure consists in a staff familiar with computers and data processing. Staff members will be designated for data collection and management and monthly monitoring reports will be established. The responsible entity for monitoring is the Foum El Oued (FEO) wind plant manager. The VCS monitoring team to be implemented by the project participant will be structured as follows:

The responsibilities of the VCS Monitoring team members are the following:

• Wind plant manager : manage the work of VCS Monitoring team and take charge of all relevant matters with the monitoring activity

• Monitoring manager : monitor, collect and archive the data according to the monitoring plan

• Audit manager: audit the work of Monitoring manager and execute the QC/QA (Quality Control/Quality Assurance) procedures according to the monitoring plan

d) Monitoring equipment, installation and calibration

The proposed project adopts turbine-transformer unit boosting voltage to 30 kV.

All wind turbines are linked to the MV substation located in the wind farm trough 30kV underground cables. The energy produced is then transferred from this MV substation to the OCP substation via two separate 30kV overhead lines.

Two highly accurate bidirectional electricity meters for each 30kV overhead lines arriving from the wind farm to OCP substation are used. Indeed, a main meter and a back-up meter will be installed at 30 KV side allowing to monitor simultaneously both the electricity generated by the wind farm and the electricity imported by the wind farm.

The accuracy of the above mentioned electric meters is 0.2S.

The installation and metering will be in accordance with to the International Electro technical Commission (IEC).

The expected diagram of grid connecting and monitoring points is shown below:

VCS Monitoring team

FEO wind plant manager

Monitoring manager Audit manager


v3.1 31

Diagram of grid connecting and monitoring points

The bi-directional electricity meters will be installed and sealed by the project participant. It will serve as the basis of the electricity supply and electricity imports accounting. Those bi-directional electricity meters will be regularly checked and calibrated according to project participant’ maintenance and calibration procedures.

The meters shall undergo testing and/or calibration carried out by project participant.

The meters shall be inspected regularly by the project participant. If, during any test, the accuracy of the meters fails to meet the standards specified by the International Electrotechnical Commission, project participant shall repair or recalibrate the meters and if it is necessary to replace a meter.


v3.1 32

If the error of the main meter is out of the permissible limits or if the main meter have malfunction, the data of the backup meter will be referenced.

e) Data collection and management

The weekly meter readings data will be processed and stored in a computer system with regular backup copy on a digital basis complemented by printed versions of the monthly electricity imports and exports.

An internal monitoring audit will be undertaken at the crediting period start up and routinely afterward as needed. Following the internal audit, the data would be used in a spreadsheet procedure in order to calculate emissions reductions. The original data, the calculation procedures and the resulting emission reductions will be verified internally before the establishment of the monitoring report and the DOE verification.

f) Training and monitoring procedures

The project participant will entrust the professional engineers and experts to train all the relative staffs. The training contains VCS knowledge, operational regulations, quality control (QC) standard flow, data monitoring requirements and data management regulations etc

The monitoring procedure will be defined in a monitoring manual that include, in particular: (i) staff organisation with job descriptions, (ii) instructions for data transfer and record handling protocols, and (iii) calibration checking procedures for the measuring equipment. This manual will be updated regularly according to the latest applicable EB monitoring recommendations and the recurrent corrective actions undertaken.

An internal audit procedure will ensure the quality control and will check the reliability and security of the monitoring. Following these audits, corrective actions will be decided, if necessary. In addition to periodic meetings, additional technical meetings among the technical team of the wind farm will be held, if necessary, in order to define the monitoring corrective actions to be carried out. Any corrective actions taken will be documented in case of equipment or system malfunction or breakdown.

Regular site audits will be made to ensure that monitoring and operational procedures are being observed in accordance with the monitoring plan. All the data will be archived until two years after the end of the crediting period.


v3.1 33

5 ENVIRONMENTAL IMPACT

Despite the fact that the wind farm projects were not subject to an environmental impact assessment (EIA), at the time of the project concept, according to the Morocco EIA law N°12-03, the project participant has carried an EIA for the Foum El Oued Wind Project, including an ornithological study.

However, according to the new law 13-09 on renewable energies, released on March 2010, the project is subject to an EIA.

The project participant introduced the project’s EIA to the national committee of EIAs (CNEI). The letter of approval of the EIA was provided by CNEI in the 28th of September 2010.

The project participant presented to CNEI specifications, to be signed between the CNEI and the project participant, which includes all the commitments taken into account the environmental constraints identified for the Project.

The site initially chosen by the project developer was in conflict with the Urban Development Plan. As a corrective measure, a new project site had to be planed, taking into account the development zones. This was done so during a stakeholder meeting at the Urban Agency of Laâyoune on the 30th of November 2007, and following a site visit on the 31st of January 2008. The availability of the new site was confirmed by mail on the 5th of March 2008.

The complete EIA was then carried out on the new site and the initial state of the environment was detailed, allowing for a precise definition of project impacts.

The main impacts identified were:

- Physical environment: during the construction phase, the main impacts will be associated with truck traffic. The following actions will be taken into consideration during construction: to avoid any unnecessary destruction of vegetation, use of existing roads, extending site paths on one side preferentially and maximum reuse of excavated soil.

- Collision danger for birds with aero generators: it has been assessed that as low since the layout of the project is not close to the birds’ migration corridor

The project participant has planned the project activity accordingly to the principal conclusions to the EIA:

- The wind park will be open to the surrounding natural environment (non-enclosed), integrated into the surrounding landscape, and will allow all environmental dynamics to take place.

- The overall land used has been optimized during the planning phase, in order to decrease the impacts on the biological environmental on the overall landscape.

The project will be placed within all already industrialised landscape. However, the planning phase will endeavour to integrate the wind park in the surrounding landscape.

- As the project is semi-permanent since the life expectancy of wind farms is limited, the environmental remediation of the site will considerably decrease the overall project impacts.


v3.1 34

Therefore, as the recommendations defined in the environmental specifications are taken into account, the site is appropriate from an environmental perspective for the realization of the Foum El Oued wind farm.

6 STAKEHOLDER COMMENTS

Organisation of consultation workshop

A consultation workshop on the Project activity was held on February 4th, 2010, in Laâyoune, with local stakeholders including national and local public authorities, members of the Parliament, local elected officials, private partners, local people of the project area, local associations, media and regional and national televisions.

The objective of the workshop was to inform the local stakeholders on the Project activity and to gather and discuss their comments and recommendations.

During the workshop, presentations were held on:

• The context of the project (energy context in Morocco, Moroccan government’s strategy regarding sustainable development and renewable energy, achievements and prospects of clean mechanisms in Morocco),

• The general technical characteristics and scope of the project, both in terms of the works and potential impacts and associated clean mechanisms development process.

This workshop aroused the interest of an important audience: approximately 60 people attended the meeting.

Photo of the local stakeholder consultation meeting of Foum El Oued wind farm project

held on February the 4th, 2010


v3.1 35

Summary of comments

All organizations agreed that the project will contribute to sustainable development.

Workshop participants enthusiastically contributed to the discussions on the project activity:

- The project aroused interest from the public, particularly regarding renewable energies, activities of the project, its impacts on the stability and electrification of the region and its associated green development process.

- Stakeholders congratulated themselves for the communication on the Project and the clean mechanism process.

- Public authorities, local elected officials, board of trade, counsellors and members of the Parliament, administration and civil society representatives totally approved the Project.

- The ONEE (National Office for Electricity) and CDER (Renewable Energy Development Center) answered mainly general questions concerning the national energy policy and the renewable energy policy inside the country.

Most of the questions were asked about the social impacts of the project and were not restricted to the clean mechanism process and development itself.

The following topics and questions were raised:

- Some questions were asked about solar panel projects, wind power projects in general, the resale of electricity produced by renewable energies to the grid, the costs of renewable energies and the role of the new Moroccan solar energy Agency.

- A regional counsellor questioned about renewable energies in Morocco, more specifically about the wind power potential of the region.

- Most of the stakeholders wanted to learn more about the type of jobs and training that would be offered by the project developer to local people and more generally about the global benefits for the region (in particular for local companies).

- The technology transfer and the profitability of a wind power project were also at stake in the debate.

- A member of an association for the environment wished to know if the electricity generated by the project would cover the needs of the region.

Report on comments received

The project developer recalled first that the power plant wind project will help to secure the electricity supply of the region.

On the social issue, the project developer recalled the benefits of the project activity for the local stakeholders in terms of employment, capacity building and training development trough the following actions:

- Creation of a road infrastructure around the site which will be of great use to local population and nomads.

- 100 direct jobs will be created during the construction phase. 20 direct jobs will be created for the wind farm operation, which will induce 30 to 50 indirect jobs. The priority will be given to the population living in the region, according to the skills and competencies required by the available positions.

Furthermore, the project developer, as a citizenship company, will also contribute to the development of the region through two other measures:


v3.1 36

- Despite the professional tax exemption in the region (implemented by the government to encourage investments), the project developer is keen to support financially the region through annual subventions

- The project developer is willing to participate to the support of social and educational infrastructure, compliant with the objectives and the constraints of the region development. The project developer has recalled that the parent company and subsidiaries have already implemented such measures.

Concerning the technology transfer, renewable energy contribution, wind power projects profitability, job opportunities in the region and local human resources, the project developer brought the following answers:

- For the technology transfer, the integration rate for national projects would reach 30 to 35% (mainly civil engineering, electric engineering and tower construction). Some firms are interested in renewable energies and the government is eager to develop this field. Thus, this integration rate could significantly increase in the following years.

- In 2020, 17% of the electricity of the country is planned to be produced by renewable energies.

- The project developer stressed that a wind power project is only profitable with clean mechanism revenues.

- The project developer insisted that the project will be completely integrated in the region: priority will be given to local inhabitants and local firms.

At the end of the meeting, the project developer’ representatives thanked all the participants for their interest in the project and their contribution to the workshop.


v3.1 37

Annexe 1

Baseline Information


v3.1 38

Table A1: Morocco's Grid Capacity, electricity generation and consumptions for 2006-2008


v3.1 39

Ss


v3.1 40


v3.1 41


v3.1 42


v3.1 43

Table A2: Calculation of the Build Margin Emission Factor


v3.1 44


v3.1 45

Table A3: Calculation of Combined Margin Emission Factor


v3.1 46

Table A4: Calculation of Combined Margin Emission Factor

Unit Per year

Operating Margin Emissions Factor in 2006 tCO2/MWh 0.7980



Operating Margin Emissions Factor average 2006-2008 tCO2/MWh 0.7371

BuildMargin Emissions Factor tCO2/MWh 0.5906

Baseline Emissions Factor Wind and solar tCO2/MWh 0.7005 = 0.75 x EF(OM) + 0.25 x EF (BM)


v3.1 47

Table A5: Fuel data base


v3.1 48

Annex 2

Comparison of wind and solar energy

Source: E.on; IEA; BTM; California Institute of Technology; World Energy Council, World Energy Assessment; NEF; RBSC; Roland Berger

foum el oued wind farm - vcs project description final

Documents

project description

project scale

project type

project details

project initiation

project activity

project proponent

project location