project design document form (cdm pdd ... a.4.3.1 below shows the details of hfo based wartsila...

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: Details of Stakeholders’ Meeting Annex 6: NOC from EPA Pakistan



SECTION A. General description of project activity

A.1. Title of the project activity:

“Waste Heat Recovery and Utilization for Power Generation at Cherat Cement Company Limited, Nowshera, Pakistan” Version: 01 Date: 13/07/2009

A.2. Description of the project activity: Cherat Cement Company Limited, a subsidiary of Ghulam Faruque Group (GFG), is a premier name in the field of cement manufacturing. It was incorporated in 1981 and started commercial production in 1985. The plant is located about 52 kilometers from Peshawar, near Nowshera. The factory is built on land bordering the Cherat Hills, the factory's source of high quality limestone. It is estimated that the limestone reserves are in excess of 400 million tonnes with more than sufficient quantity of slate. Cherat Cement manufactures high quality grey Portland cement on the most modern and computerized production facilities and has an ISO 9001:2000 certification. It is equipped with the most updated production and quality control systems. Cherat Cement is one of the largest producers and suppliers of cement in North-West Frontier Province (NWFP) & Punjab. Through its exports, Cherat Cement has become Afghanistan’s leading brand1. Cherat cement factory has a single kiln with clinker production capacity of 3200 Tonnes per Day (TPD). The kiln utilizes coal and HFO as fuel. The waste heat from the kiln is currently vented to the atmosphere, with a portion of the heat recovered and recycled to heat up incoming raw material. The factory has no grid connection and the only source of electricity is the captive power plant of capacity 26.74 MW which runs on HFO and Diesel. The project activity involves the installation of three Heat Recovery Steam Generators (HRSGs), having total capacity of 27.1 TPH, on 3200 TPD kiln and utilize the steam for 7 MW electricity generation to displace the fossil fuels based electricity generated in the existing captive power plant. The project will reduce GHG emissions by 32,278 t CO2 per year and will lead to sustainable development. In the absence of the project activity the existing situation will continue i.e. the waste heat from the clinker production process will be vented to the atmosphere with only a small portion recovered to heat the incoming raw materials and the fossil fuel based electricity from the captive power plant will be used at the plant. 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. The project activity will result in:

Environmental Development

• significant reduction in the emissions of greenhouse gases

1 http://www.cheratcement.com



• 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 employment opportunities to the local community during construction phase

• less health impact for the population through less emission of greenhouse gases and particles

• improvement of the skill set for local inhabitants through training and capacity building in order to grow their technical skills

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)

Cherat Cement Company Ltd. (private entity)

No

Islamic Republic of Pakistan (host)

Carbon Services Private Ltd. (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.:

North-West Frontier Province (NWFP)

A.4.1.3. City/Town/Community etc.:

Nowshera

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: Cherat Cement Factory, P.O. Box 28, Village Lakrai, Nowshera, N.W.F.P, Pakistan The company is headquartered at: Modern Motors House Beaumont Road 75530 - Karachi, Sindh, Pakistan. Cherat Cement Factory is located at following geographical coordinates2: Latitude: 33.9063613º Longitude: 71.9103348º

2 Source: http://wikimapia.org/



Fig A4.1.4.1: Map of Pakistan 3

Fig A4.1.4.2: Location of the Project Site

4

3 Source: http://www.wikipedia.org 4 Source: http://maps.google.com

Nowshera



A.4.2. Category(ies) of project activity:

As per the sectoral scope of the project activities enlisted in the list of sectoral scopes, 25 Feb 2009 for 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:

Cherat cement factory has a single kiln of 3200 TPD. The kiln is fossil fuel based and utilizes coal as primary fuel and HFO as secondary fuel. According to the production data of year (July 06 - June 07) 98% of the total clinker was produced on coal while 2% was produced on HFO. Currently, the waste heat from the kiln is vented to the atmosphere with only a small portion of waste heat recovered and recycled to heat up incoming raw material. The factory has no grid connection and the only source of electricity is the 26.74 MW captive power plant which has four HFO based Wartsila engines and four diesel based Caterpillar engines. Table A.4.3.1 below shows the details of HFO based Wartsila engines:

Table A.4.3.1: Detail of Wartsila Engines

Number of Gensets 4

Manufacturer Wartsila Finland Oy Model Wartsila Vasa 32

Engine Type Rated Output 5 Date of Commissioning

VASA 16V32E 5100 kW Feb 1996

VASA 16V32E 5100 kW Feb 1996

VASA 16V32E 5100 kW Feb 1996

VASA 18V32 5609 kW Jul 2006

Table A.4.3.2 below shows the details of diesel based Caterpillar engines:

Table A.4.3.2: Detail of Caterpillar Engines

Number of Gensets 4

Manufacturer Caterpillar Engine Type Rated Output Date of Commissioning

3516 1460 kW 1994

3516 1460 kW 1994

3516 1460 kW 1994

3516 1460 kW 1994

The project activity involves installation of three HRSGs and one steam turbine. Two HRSGs (3.7 TPH each) on pre-heater end and one HRSG (19.7 TPH) on cooler end of 3,200 TPD kiln will be installed. Table A.4.3.3 shows the technical characteristics of HRSGs.

5 At 100% load



Table A.4.3.3: Technical characteristics of HRSGs

Manufacturer National Wanda Boiler Co. Ltd

Quantity 01 01 01

Location Pre-heater end of the kiln Pre-heater end of the kiln Cooler end of the kiln

Capacity 3.7 TPH 3.7 TPH 19.7 TPH

Steam Pressure 1.6 MPa 1.6 MPa 1.6 MPa

Steam Temperature 290 ºC 290 ºC 400 ºC

The combined superheated steam generated by the three HRSGs is fed to 7 MW steam turbine to produce 5.35 MW net electricity. Table A.4.3.4 shows the technical characteristics of steam turbine. The electricity generated by the project activity is fully consumed within the cement works.

Table A.4.3.4: Technical characteristics of steam turbine

Quantity 1

Manufacturer Hangzhou Chinen Steam Turbine Power Co. Ltd

Type Condensing

Capacity 7 MW

Max. temperature 350 ºC

Max. steam pressure 1.5 MPa

The generated electricity will displace 41,730 MWh import from the Captive Power Plant, and will result in 32,278 t CO2 emission reductions per year. In the absence of the project activity the existing situation will continue i.e. the waste heat from the clinker production process will be vented to the atmosphere with only a small portion recovered to heat the incoming raw materials and the fossil fuel based electricity from the captive power plant will be used at the plant. National Wanda Boiler Co. Ltd is the manufacturer of HRSGs and Hangzhou Chinen Steam Turbine Power Co. Ltd is the manufacturer of Steam Turbine. Both of the companies are Chinese. Therefore the project involves the transfer of Chinese technology 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 (from 01/01/2010 to 31/12/2019) 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

2010 32,278

2011 32,278

2012 32,278

2013 32,278

2014 32,278

2015 32,278

2016 32,278

2017 32,278

2018 32,278

2019 32,278

Total estimated reductions (tonnes of CO2e) 322,780

Total number of crediting years 10

Annual average over the crediting period of

estimated reductions (tonnes of CO2e) 32,278

A.4.5. Public funding of the project activity:

No public funding is involved in this project activity.



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 02 Nov 2007 onwards http://cdm.unfccc.int/UserManagement/FileStorage/EDS6TS9TXOQP14XNXJZKKZVDTIBRH9 Referred Tools

• Tool for the demonstration and assessment of additionality (Version 05.2)

• Tool to calculate the emission factor for an electricity system (Version 01.1) 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

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 Cherat Cement. As the objective is to produce electricity, AM0024 is generally applicable, given that the further conditions, as outlined in the Table B.2.1 below, are applicable.

Table B.2.1: Applicability of the methodology AM0024 / Version 02.1

Condition Project Activity/Baseline Scenario Applicability

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 excess electricity generated, so electricity export to the grid in the project as well as baseline situation is zero.

Methodology is applicable to project activity.

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 source or new generation source;

Electricity generated under the project activity displaces the electricity generated by fossil fuel fired captive power plant.




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

The project activity will replace the captive power plant. The captive power plant is clearly identifiable.


Waste heat is only to be used in the project activity; 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 as described in explanatory note below).

Waste heat is used only in the project activity. In the baseline scenario, waste heat from the kiln is used for pre-heating raw materials within the cement works (Type 1 Waste Heat Utilization).


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 from the kiln is for pre-heating raw materials and thus located inside of the clinker making process.


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 plant.


B.3. Description of the sources and gases included in the project boundary: Description of the sources and gases included in the project boundary according to Table 1 of AM0024 / Version 02.1 is provided in Table B.3.1 below.

Table B.3.1: Overview of emissions sources included in or excluded from the project boundary

Source Gas Included? Justification / Explanation

CO2 Included Main emission source

CH4 Excluded Excluded for simplification. This is conservative.

Ba

seli

ne

Captive power plant electricity generation

N2O Excluded Excluded for simplification. This is conservative

CO2 Included May be an important emission source.

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

Pro

ject

Act

ivit

y

On-site fossil fuel consumption due to the project activity

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



The project boundary is illustrated in the figure below:

Fig B.3.1: Project boundary

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 in the local context

Current business of waste heat at Cherat cement factory is venting it into the atmosphere. Only a small portion of waste heat is circulated and used for drying & preheating the incoming raw materials and fuel. Similar practice is observed in other cement manufacturing plants of Pakistan. There is no such industrial or commercial facility in the vicinity of Cherat cement factory 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 and 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 and

3200 TPD

Kiln

Other Loads of the

Cement Works

26.74 MW Captive Power Plant

Waste Heat

Waste Heat Recovery and Utilization

for 7MW Power Generation

Project Electricity



preheating the incoming raw materials and 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 Source of electric energy supply for cement plants in the local context As stated through the Platts Data Base (2007), 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 Cherat cement factory is met by captive power plant only, as there is no grid connection. The captive power plant consumes HFO and diesel for electricity generation. The electricity generated by the project activity will displace dual fuel (HFO and diesel) based captive electricity.

Historical data of three years (July 2004 to June 2007) prior to investment decision (Oct 2007) of project activity is available with the project proponent. The kiln at Cherat cement factory was upgraded from 2300 TPD to 3200 TPD during May-June 2006. In consequence, the data before this moment does not correspond to the actual situation at the cement plant. Therefore, historical data of one complete year (July 2006 to June 2007) is selected for the calculation of baseline data.

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

Table B.4.1: Clinker production data

Year Clinker Production

(tonnes / year)

2004-05 749,100

2005-06 575,000

2006-07 873,045

Baseline 873,045

Under Project Activity 873,045

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

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

2004-05 2005-06 2006-07 Baseline Under Project Activity

Electricity consumed by Kiln 25,900,065 20,609,955 30,243,326 30,243,326 30,243,326

Other Local Loads for Cement Work 45,786,195 37,130,755 58,277,269 58,277,269 58,277,269

Total Consumption 71,686,260 57,740,710 88,520,595 88,520,595 88,520,595

Electricity generation data of the plant is given below Table B.4.3: Electricity generation data

(kWh / year).



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

2004-05 2005-06 2006-07 Baseline Under Project Activity

Electricity Generated on HFO 69,706,480 55,712,090 87,270,995 87,270,995 46,130.08

Electricity Generated on Diesel 1,979,780 2,028,620 1,249,600 1,249,600 660.52

Electricity Generated by Steam Turbine - - - - 41,730.00

Total Electricity Generated 71,686,260 57,740,710 88,520,595 88,520,595 88,520,595

According to AM0024 / Version 02.1, the following options for baseline electricity should be analysed.

(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 Cherat cement factory 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 considerable 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 the following source: 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.

(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 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 practiced 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 20 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.

From the context it is clear that the 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 HFO and diesel. The aforementioned scenario is completely in compliance with all 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 analysis is required to identify the baseline scenario. The baseline scenario consequently can be identified as the continuation of the current practice.

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.

Seriousness of CDM consideration before starting date of the project activity

The starting date of the project activity is the 10th of December 2007, when the first equipment for the project was ordered. The project proponent was aware of the CDM long before the start date of the project activity and CDM income proved to be a decisive factor in the investment decision taken on the 25th of October 2007 to implement the project6. Discussions with CDM consultants started in January 2008 and during the whole implementation phase before validation, Cherat Cement was accompanied by CDM consultants.

6 Proofs for CDM awareness and consideration will be provided to DOE during validation.



Table B.5.1: Project Timeline

Milestone Date Source

CDM Awareness Since Dec 06

Letter from Pakistan Sugar Mill Association (PSMA) to the Chief Executives of all sugar mills including Mirpurkhas Sugar Mill which is also a subsidiary of GFG group along with Cherat Cement Company and some other companies

Investment Decision 25th Oct 07 Extract from Minutes of the Board of Directors Meeting

Starting Date 10th Dec 07 L/C

Proposal from Factor Consulting7/Carbon Services

29th Feb 2008 Email from Mr. Omar Malik, Director Carbon Services to Mr. Azam Faruque, CE Cherat Cement.

Contract with First Climate/Carbon Services

Apr 2008 Email from Mr. Omar Malik, Director Carbon Services to Mr. Azam Faruque, CE Cherat Cement.

LOI for Civil Works 11th Nov 08 Letter from Mr. S. Nasim Ahmad, Resident Director, Cherat Cement to A.S. Enterprises

Project Commissioning Oct 09 Tentative

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. 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 NOC8 on the basis of provided Initial Environmental Examination (IEE) report has been issued for the project plant. Step 2: Investment Analysis

Sub-step 2a: Determine appropriate analysis method

As there is no other alternative than the continuation of the current situation, the benchmark analysis seems the most appropriate method to analyse the project.

7 Factor Consulting merged in April 2008 with 3C Company to First Climate. 8 A copy of NOC from EPA is shown in Annex 6.



Sub-step 2b: Option III. Apply benchmark analysis

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 350 basis points above 6 month KIBOR rate was assumed as benchmark. As the investment decision was taken on the 25th of October 2007, the average value of the 6 month KIBOR rate of September 2007 was considered. With a credit spread of 350 points on the average 6 month KIBOR rate of September 2007 of 10.02%, the calculated benchmark is 13.52%. 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 of the project (investment, operation & maintenance and electricity costs) 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

Decision Moment 25.10.2007

Extracts form the Minutes of the Board of Directors Meeting held on October, 25, 2007

Exchange rate US $ --> PKR 60.697 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"

Export Sales 40%

Company Information (Export Sales are exempted from taxes)

The total project investment is 966,090,433 PKR. This includes machinery and material, training, management and technical services, duties, taxes and freight charges as well as local costs. Depreciation is calculated by the company using proportional depreciation rate, the fair value of the project investments will be 117,332,767.22 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. Cherat cement factory’s export sales of 40% are exempted form tax and are deducted for the tax calculation. Concerning the fuel consumption and costs, the calculations were based on the historical values from July 2006 to June 2007. Only one year was considered for these calculations because the kiln was upgraded from 2300 TPD to 3200 TPD during May-June 2006 and data before this period does not represent the same situation as the baseline situation. The following table describes the baseline and project fuel costs for the total captive power generation of 88,520,595 kWh.



Table B.5.3 Fuel Costs for Electricity Generation

Baseline Project Situation

HFO

Consumption (Tons) 21'799 474'401'191 11'522 250'761'012

Unit Cost (PKR/t) 21'763 21'763

HFO per MWh 0.25 5'435.95 0.25 5'435.95

Diesel

Consumption (Ltr) 386'420 12'249'510.20 204'255 6'474'898.53

Unit Cost (PKR/ltr) 31.70 31.70

Diesel per MWh 309.23 9'802.75 309.23 9'802.75

The Operation and Maintenance Costs considered for the project activity represent 5% of the total investment costs with an annual increase of 13% due to rapidly increasing labour wages and costs associated with technical services. After every 5 years, an overhaul is necessary. This represents 4.5% of the investment costs indexed by the annual increase of 13% 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 Administration available on the www.eia.doe.gov. The results of the future price increase estimated by the AEO 2007 were adjusted by the yearly inflation rate and by the exchange rate from US Dollars to Pakistani Rupee. The average price increase for 20 years (from 2007 to 2026) resulted in 1.92% for HFO and 0.93% for Diesel. Detailed calculations are presented in the separate Excel-File. Table B.5.4 describes 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 48'304'522 PKR Consultants Letter

Major Overhaul Cost Year 5 70'883'323 PKR Consultants Letter



Price Increase O&M Costs 13% per year Company Information

Price Increase HFO 1.92% per year Future Price Evolution (AEO 2007)

Price Increase Diesel 0.93% per year Future Price Evolution (AEO 2007)

The resulting IRR of the project saving potential by introducing the project activity is 8.24 %. As the benchmark is determined at 13.52 %, the project activity would not be implemented. Considering the CER revenues of 41,513,998 PKR per year, the IRR would come up to 14.67 % and so gets an economically attractive investment option for Cherat cement factory.

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

Project Investment -10% Base Case 10%

Net Saving Cash Flow w/o CER 11.47% 8.24% 5.20%

Benchmark 13.52% 13.52% 13.52%

Break Even Point -15.78%



HFO Cost -10% Base Case 10%

Net Saving Cash Flow w/o CER NA 8.24% 13.40%

Benchmark 13.52% 13.52% 13.52%

Break Even Point 10.27%

The sensitivity analysis shows that the results are robust. As well for the Project Investment Cost and the HFO 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 15.78 %. This is in the present project highly unlikely. In the same order an initial HFO price of more than 10.27 % would turn the project additional. Step 4: Common practice analysis: In Pakistan, there are a total of 29 cement factories9. 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 demand10. 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:

1. Askari Cement 2. Bestway Cement 3. D.G. Cement 4. Fecto Cement 5. Lucky Cement Karachi Plant 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 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.

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. In context of the 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

9 http://www.apcma.com/pages/data_productioncapacity.html 10 Platt’s Database 2007



The project activity reduces CO2 emissions from the grid 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 Emissions 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. The ex-ante estimate of the project emissions is calculated using Equation (2) of the methodology.

COEFOEIEIPE yfuelyclinBypy ,ker,,**)( −= Equation (2) 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). EIp,y is the ex-post energy consumption per unit output of clinker for given year, y, in TJ/ton of

clinker produced. 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. Oclinker, y is the clinker output of the cement works in a given year y. EIB is calculated using equation (3) of the methodology:

ker,

B

B

clin B

FEI

O= Equation (3) of methodology


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:

OF

EIyclin

yP

yP

ker,

,

,= Equation (4) of methodology

Where: 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 IGSIGS

FI 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. 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.

GENF

FIIGS

IGS

IGS= 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. Emissions Because of Leakage Emissions because of leakage are negligible and therefore ignored as per guidance provided in the baseline methodology AM0024 / Version 02.1.

B.6.2. Data and parameters that are available at validation:

Data / Parameter: HFOkiln,b

Data unit: t/yr (metric tonnes per year)

Description: HFO consumption of the kiln for a given year in baseline situation

Source of data used: Historical data as provided by Cherat Cement

Value applied: 1249.77

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

The data has been taken from the plant data of 2006 – 2007, QMS procedures are followed in measurement and reporting this value.

Any comment:

Data / Parameter: Coalkiln,b


Description: Coal consumption of the kiln for a given year in baseline situation

Source of data used: Historical data as provided by Cherat Cement

Value applied: 118,600

Justification of the The data has been taken from the plant data of 2006 – 2007, QMS procedures



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

are followed in measurement and reporting this value.

Any comment:

Data / Parameter: Ekiln,b

Data unit: MWh/yr (Mega watt hours per year)

Description: Electricity consumed by the kiln for a given year in baseline situation

Source of data used: Historical data from log sheets

Value applied: 30,243.33



Any comment:

Data / Parameter: ELoads, b


Description: Electricity consumed by other local loads of the cement works in baseline situation.

Source of data used: Calculated by using historical data from log sheets

Value applied 58,277.27


Calculated by the difference of total electricity consumed at the plant and the electricity consumed at the kiln i.e. ELoads = Total electricity consumed at cement plant - Ekiln

The total electricity consumed at the cement plant for the year 2006-07 is 88520.59 MW

Any comment:

Data / Parameter: PHFO,b


Description: Electricity generated on HFO at captive power plant for a given year in baseline situation




The data has been taken from electricity generation log sheets of year 2006 – 07, QMS procedures are followed in measurement and reporting this value.

Any comment:

Data / Parameter: EHFO,b




Description: HFO consumption for electricity generation by Wartsila engines at captive power plant for a given year in baseline situation





Any comment:

Data / Parameter: Pdiesel,b


Description: Electricity generated on diesel by Caterpillar engines at captive power plant for a given year in baseline situation





Any comment:

Data / Parameter: Ediesel,b

Data unit: l/yr (litres per year)

Description: Diesel consumption for electricity generation by Caterpillar engines at captive power plant for a given year in baseline situation





Any comment:

Data / Parameter: NCVHFO

Data unit: TJ/t (Tera joule per metric tonne)

Description: Net Calorific Value of HFO

Source of data used: Laboratory analysis


Justification of the choice of data or description of measurement methods

The value of NCV of HFO 17,702 BTU/lb was taken from laboratory test of HFO sample. For emission reduction calculations this value was converted into TJ/t using the following formula:



and procedures actually applied :

NCV in TJ/t = NCV in BTU/lb *0.001055056/(0.0004535924*10^6) The value of NCV calculated by above formula is 0.03997 TJ/t

Any comment:

Data / Parameter: NCVDiesel


Description: Net Calorific Value of diesel




The value of NCV of diesel 18,634 BTU/lb was taken from laboratory test of diesel sample. For emission reduction calculations this value was converted into TJ/t 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 0.04249 TJ/t

Any comment:

Data / Parameter: NCVCoal


Description: Net Calorific Value of coal




The NCV test for coal is performed on-site on daily basis. The average of NCVs during the month of June 2007 i.e. 11,282 BTU/lb has been used for analysis. For emission reduction calculations this value was converted into TJ/t 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 0.02624 TJ/t

Any comment:

Data / Parameter: Oclinker,b


Description: Total clinker production by the kiln for a given year in baseline situation

Source of data used: Historical plant data as provided by Cherat Cement




Any comment:

Data / Parameter: COEFHFO

Data unit: tCO2/TJ (metric 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


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


Description: Emission Coefficient of diesel


Value applied: 74.1



Any comment:

Data / Parameter: COEFCoal


Description: Emission Coefficient of coal


Value applied: 96.1



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.

Emission Reduction:

The emission reductions, ERy, during a given year y are calculated by using equation (1) of the baseline methodology as follow:

PEEBER yyy−=

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

ERy EBy PEy

tCO2/TJ tCO2/TJ tCO2/TJ

32,278 32,278 0

Project Emission (PEy) Calculation:

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.

PEy is determined using equation (2) of the baseline methodology as follow:

COEFOEIEIPE yfuelyclinBypy ,ker,,**)( −=


produced (i.e. measured before the Project activity goes in operation; EIp,y is the ex-post energy consumption per unit output of clinker for given year, y, in TJ/ton

of clinker produced; COEFfuel,y is the carbon coefficient (tCO2/TJ of input fuel) of the fuel used in the cement works in

year y to raise the necessary heat for clinker production; Oclinker,y is the clinker output of the cement works in a given year y.

PEy EIp,y EIB Oclinker,y COEFfuel,y

tCO2/year TJ/t clinker TJ/t clinker t clinker/year tCO2/TJ

0 0.00362 0.00362 873,045 95.80

Since the project activity only recovers the waste heat which would otherwise be vented, and does not alter the clinker production process, there is no change in energy consumption per unit output of clinker EIB is calculated using equation (3) of the methodology as follow:



OF

EIBclin

B

B

ker,

=

Where: FB is the average annual energy consumption, expressed in TJ, of clinkering process prior to

the start of operation of the project activity. At least one full year of data should be used. If a year’s worth of pre-Project Activity data is not available, then the Project Developer should outline the plan for ensuring conservativeness based on a combination of the ex-

ante design estimate of energy consumption plus available measured data; Oclinker,B is the average annual output, expressed in tonnes, of clinker prior to the start of operation

of the project activity. At least one full year of data should be used.

EIB FB Oclinker,B

TJ/t clinker TJ/year t clinker/year

0.00362 3,162.25 873,045

Similarly EIp,y is calculated using equation (4) of the methodology as follow:

OF

EIyclin

yP

yP

ker,

,

,=

Where: 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.

EIp,y Fp,y Oclinker,y

TJ/t clinker TJ/year t clinker/year

0.00362 3,162.25 873,045

Fp,y is calculated using historical data of year 2006-07. The total amount of coal and HFO consumed at kiln during 2006-07 is multiplied with the respective Net Calorific Values (NCV) to calculate Fp,y as shown below:

Parameter Value Data Source Total clinker production (July 06 – June 07) 873,045 t Production Log Sheets

Coal consumption at kiln 118,600 t Production Log Sheets

HFO consumption at kiln 1,249.77 t Production Log Sheets

Coal Consumption NCV Fp,y

Tonnes TJ/t TJ

118,600 0.0262419 3,112.29

The NCV test for coal is performed on-site on daily basis. The average of NCVs during the month of June 2007 has been used for analysis.



HFO Consumption NCV Fp,y

Tonnes TJ/t TJ

1,249.77 0.03997 49.95

The NCV for HFO has been taken from the laboratory test report of the sample of HFO. COEFfuel,y is calculated as a weighted average of emission factor of each type of fuel weighted by energy generated from that type of fuel as follow:

Fuel COEFfuel,y Fp,y

tCO2/TJ TJ %

Coal 96.1 3,112.29 98.42

HFO 77.4 49.95 1.58

Weighted Average COEFfuel,y 95.80

The values of COEFfuel,y for individual fuels (96.1 for coal & 77.4 for HFO) have been taken from IPCC 2006 guidelines. Baseline Emission (EBy) Calculations:

The baseline emissions during the year are calculated by using equation (7) of methodology:

EFEGEFEGEB yGridyGridyElecyCPy ,,.,** +=

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. If in the baseline scenario electricity is supplied from the grid, then EFElec,y is the

emission factor of the grid – EFGrid,y; if electricity is supplied from the identified specific captive power generation source, then EFEelc,y is the emission factor of it – EFCaptive,y

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 no electricity from the project activity is supplied to grid, the above equation reduces to:

.,*

y Elec yCP yEGEB EF=

The baseline emissions are calculated as:

EBy EGCP,y EFElec,y

tCO2/year MWh tCO2/MWh

32,278 41,730 0.773



As the baseline electricity supply source is an identified specific generation source i.e. captive power plant, the baseline emission factor EFCaptive,y is estimated ex-ante by using equation (8) of the methodology as follow:

,*[ ]Captive y IGS IGSIGS

FI COEFEF EF= =

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

EGy, expressed as GJ per MWh. COEFIGS is the emission coefficient of the fuel used in identified generation source, expressed as

tCO2 / per GJ lower heating value.

EFy = EFIGS FIIGS COEFIGS

tCO2/MWh GJ/MWh tCO2/GJ

0.773 10 0.077353416

COEFIGS is calculated as a weighted average of emission factor of each type of fuel, weighted by electricity generated from that type of fuel as follow:

Fuel COEFIGS Generation

tCO2/GJ MWh %

HFO 0.0774 87,270.99 98.59

Diesel 0.0741 1,249.60 1.41

Weighted Average COEFIGS 0.077353

The emission factors for individual fuels (0.0774 for HFO & 0.0741 for diesel) have been taken from IPCC 2006 guidelines. FIIGS is calculated by using equation (9) of the methodology as follow:

GENF

FIIGS

IGS

IGS=

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.

FIIGS FIGS GENIGS

GJ/MWh GJ MWh

10 885,161.68 88,520.59



The value of GENIGS has been taken from the historical data of one complete year (July 2006 to June 2007).

FIGS is calculated by multiplying the fossil fuel consumption at captive power plant with the NCV of the fuel. As two fuels are being used at the captive power plant i.e. HFO and diesel, FIGS is calculated for each fuel separately and added to calculate total FIGS as shown below:

Fuel Consumption NCV FIGS

HFO 21,798.52 t/y 39.97 GJ/t 871,286.56 GJ

Diesel 386,419.88 l/y 0.03591 GJ/l 13,875.12 GJ

Total 885,161.68 GJ

The NCV for HFO and diesel has been taken from the laboratory test report of the sample of HFO and diesel.

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)

2010 0 32,278 0 32,278

2011 0 32,278 0 32,278

2012 0 32,278 0 32,278

2013 0 32,278 0 32,278

2014 0 32,278 0 32,278

2015 0 32,278 0 32,278

2016 0 32,278 0 32,278

2017 0 32,278 0 32,278

2018 0 32,278 0 32,278

2019 0 32,278 0 32,278

Total (tonnes of

CO2 e) 0 322,780 0 322,780

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

B.7.1 Data and parameters monitored:

Data / Parameter: NCVHFO


Description: Net calorific (lower heating) value of HFO

Source of data to be used:

Laboratory analysis

Value of data applied for the purpose of calculating expected

0.03997



emission reductions in section B.5

Description of measurement methods and procedures to be applied:

Monitoring method: lab test Data type: measured Archiving procedure: Paper and Electronic Recording Frequency: monthly

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 value of NCV of HFO 17,702 BTU/lb was taken from laboratory test of HFO sample. For emission reduction calculations this value was converted into TJ/t using the following formula: NCV in TJ/t = NCV in BTU/lb *0.001055056/(0.0004535924*10^6) The value of NCV calculated by above formula is 0.03997 TJ/t

Data / Parameter: NCVDiesel


Description: Net calorific (lower heating) value of Diesel


Laboratory analysis

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

0.04249


Monitoring method: lab test Data type: measured Archiving procedure: Paper and Electronic Recording Frequency: monthly



Any comment:

The value of NCV of diesel 18,634 BTU/lb was taken from laboratory test of diesel sample. For emission reduction calculations this value was converted into TJ/t 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 0.04249 TJ/t

Data / Parameter: NCVcoal


Description: Net calorific (lower heating) value of coal


On-site measurement


0.02624

Description of Monitoring method: lab test



measurement methods and procedures to be applied:

Data type: measured Archiving procedure: Paper and Electronic Recording Frequency: monthly



Any comment:

The NCV test for coal is performed on-site on daily basis. The average of NCVs during the month of June 2007 i.e. 11,282 BTU/lb has been used for analysis. For emission reduction calculations this value was converted into TJ/t 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 0.02624 TJ/t

Data / Parameter: HFOkiln


Description: Amount of HFO consumed at 3200 TPD kiln per year


Production plan of Cherat Cement


1250


Monitoring method: flow measurement Data type: measured Monitoring instrument: flow meter Frequency of calibration: after every three years 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


QMS procedures will be followed in recording & reporting of parameter.

Any comment:

Data / Parameter: Coalkiln


Description: Amount of coal consumed at 3200 TPD kiln per year




118,600


Monitoring method: weight measurement Data type: measured Monitoring instrument: weight scale 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: Oclinker


Description: Amount of clinker produced at 3200 TPD kiln




873,045


Monitoring method: weight measurement Data type: measured Monitoring instrument: weight scale Frequency of calibration: after every nine months 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: Ekiln


Description: Electricity consumed by 3200 TPD kiln




30,243.33


Monitoring method: electricity consumption measurement Data type: measured Monitoring instrument: energy meter Frequency of calibration: after every three years 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: ELoads


Description: Electricity consumed by other local loads for the cement works




58,277.27


Monitoring method: electricity consumption measurement Data type: calculated Monitoring instrument: energy meter Frequency of calibration: after every three years 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: PHFO


Description: Amount of electricity generated on HFO by Wartsila Engines




46,130.08


Monitoring method: electricity generation measurement Data type: measured Monitoring instrument: energy meter Frequency of calibration: after every three years 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: PDiesel


Description: Amount of electricity generated on Diesel by Caterpillar engines




660.52


Monitoring method: electricity generation measurement Data type: measured Monitoring instrument: energy meter Frequency of calibration: after every three years 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: EHFO


Description: Amount of HFO consumed at captive power plant




11,522


Monitoring method: flow measurement Data type: measured Monitoring instrument: flow meter Frequency of calibration: after every three years 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: EDiesel


Description: Amount of diesel consumed at captive power plant

Source of data to be Production plan of Cherat Cement



used:


204,255


Monitoring method: tank dip measurement Data type: measured Monitoring instrument: tank dip reading 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: PST


Description: Electricity generated by waste heat recovery based steam turbo-generator




41,730


Monitoring method: electricity generation measurement Data type: measured Monitoring instrument: energy meter Frequency of calibration: after every three years 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:

B.7.2. Description of the monitoring plan:

Data will be collected daily by shift engineers at captive power plant and they will also prepare daily log sheets of electricity generation, electricity consumption, electricity import, and fuel consumption for captive power generation. Initially the data will be verified by manager. At final stage, senior manager will verify the data at the end of each month. Similarly shift engineers at production plant will collect data and prepare daily production log sheet which includes daily clinker production, cement production, and fuel consumption at kilns. Initially the



data will be verified by manager. At final stage, senior manager will verify the data at the end of each month. All the data is annually audited by auditors from GFG Group. In case of erratic data, corrections and trend from the historical data will be sought. Table B.7.2.1 describes the devices used at Cherat cement factory to measure different parameters:

Table B.7.2.1: Data Measuring Devices

Calibration Mode

Item Parameter Recording

Frequency

Description of

equipment used Internal

Calibration

External

Calibration

Calibration

Frequency

Annual clinker production

Daily weight scale E & I Department NO After every 9 months

HFO consumption

Daily Flow meter E & I Department NO 3 years

Kil

n

(3,2

00

TP

D)

Coal consumption

Daily weight scale E & I Department NO Annually

Electricity consumed by Kiln

Daily Energy meter WAPDA 3 years

Ele

ctri

city

Co

nsu

mp

tio

n

Electricity consumed by other local loads


Electricity generated on HFO


HFO consumption

Daily Flow meter E & I Department 3 years

Electricity generated on Diesel


Ca

pti

ve

Po

wer

Gen

era

tio

n

Diesel consumption

Daily Tank dip reading E & I Department 3 years

Pro

ject

Ele

ctri

city

Electricity generated by steam turbo-generator


Table B.7.2.2 shows the designation of the personnel involved in the monitoring plan.

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

Data Auditing Parameter Item

Daily Data Log

Preparation

Initial Data

Verification

Final Data

Verification Designation Frequency



Kilns Shift Engineer Manager Sr. Manager, verification every month

Auditors from GFG- Group (Head Office)

Annually

Fuel

Consumption Captive

Power

Plant

Shift Engineer Manager Sr. Manager, verification every month


Annually

Captive

Power

Plant



Annually

Electricity

Generation Steam

Turbo-

generator



Annually

Clinker

Production Kilns Shift Engineer Manager

Sr. Manager, verification every month


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): 19/03/2009

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]

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:

10/12/2007 11

C.1.2. Expected operational lifetime of the project activity:

20 years

11 Date of L/C opening



C.2. Choice of the crediting period and related information:

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:

01/01/2010 or the date of registration by the CDM EB, whichever is later.

C.2.2.2. Length:

10 years, 0 months

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 is 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 procedures are in place. The environmental analyses conducted by Cherat cement factory 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 and the accompanying approval request letter were submitted to EPA on 24th February, 2009. Approval letter was issued on 5th March, 2009. A copy is shown in Annex 6. 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 both in English and in the local language. Advertisement is shown in Annex 5. The Stakeholder consultation meeting was held on 20th November, 2008 at Cherat cement factory and was open to anybody willing to participate (private citizens, representatives of associations, interest groups, unions, public authorities, NGOs, etc.). 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 5.

E.2. Summary of the comments received:

Comments from the stakeholders were collected in written form during and after the meeting. These are summarized in the table below.

Table E.2.1: Translated Summary of the Comments

No Stakeholder’s

Name Qualification Address Comments/Views about the Project

1 Mehboob Khan Matriculation

Speen Kana Village, District Nowshera

1. The local people will get jobs due to the project.

2. We will not have to go outside our village for work.

3. Everything is easily available here due to the plant.

4. Medical facilities are available due to the free dispensary.

2 Wasif Ullah Matriculation

Shakhai Village, District Nowshera

1. Because of the plant, transport facility is available to us due to which our children can easily go to the city for education.

2. Free medical facilities are available to the poor people due to the free dispensary.

3. Job opportunities are available locally due to the project.

4. Our children will have opportunity to get technical education due to the project.



3 Shamroz Khan Matriculation

Shakhai Village, District Nowshera

This is a very important project which will be useful not only for the factory but after its completion the emission of hazardous gases will be reduced which will be useful for the local population. The encouragement of such projects at government level will prove to be useful.

4 Pervez Khan Matriculation

Speen Kana Village, District Nowshera

1. Unemployment has considerably reduced in our area due to the project.

2. Transport is easily available to us due to the plant.

3. Free dispensary is available to us due to the plant, from where we can get all kind of medicines for free.

4. Due to the plant our children have got awareness of higher education.

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 Cherat cement factory 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 Cherat cement factory.

.



Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY

Organization: Cherat Cement Company Limited

Street/P.O.Box: Beaumont Road

Building: Modern Motors House

City: Karachi

State/Region: Sindh

Postcode/ZIP: 75530

Country: Pakistan

Telephone: +92-21-111 000 009

FAX: +92-21-5270536

E-Mail: [email protected]

URL: www.cheratcement.com

Represented by:

Title: Chief Executive

Salutation: Mr.

Last name: Faruque

Middle name:

First name: Azam

Department: C.E.O. Office

Mobile: +92-345-8222000

Direct FAX: +92-21-5683425

Direct tel: +92-21-5672068

Personal e-mail: [email protected]



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]



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 79 887 90 13

Direct FAX: +41 44 298 28 99

Direct tel: +44 44 298 28 66

Personal e-mail: [email protected]



Annex 2

INFORMATION REGARDING PUBLIC FUNDING

No public funding has been sought for this project activity.



Annex 3

BASELINE INFORMATION

GCV of HFO Based on Analysis BTU/lb 18,296

NCV of HFO Based on Analysis BTU/lb 17,184

NCV of Coal Based on Analysis BTU/lb 11,282

GCV of Diesel BTU/lb 19,465

NCV of Diesel BTU/lb 18,271

Diesel Density kg/ltr 0.8449

NCV of HFO TJ/ton 0.0399700

NCV of Coal TJ/ton 0.02624193

NCV of Diesel TJ/ton 0.04249835

Emission Coefficient for HFO tCO2/TJ 77.4

Emission Coefficient for Coal tCO2/TJ 96.1

Emission Coefficient for Diesel tCO2/TJ 74.1

Fuel Characteristics



Annex 4

MONITORING INFORMATION

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



Annex 5

Details of Stakeholders’ Meeting

Advertisements for stakeholders’ consultation meeting are shown below.



Pictures of stakeholders’ consultation meeting are shown below.



Annex 6

NOC from EPA Pakistan

project design document form (cdm pdd ... a.4.3.1 below shows the details of hfo based wartsila...

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