tacr: mongolia

Technical Assistance Consultant’s Report

This report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

Project Number: 43357 October 2011

Mongolia: Ulaanbaatar Low Carbon Energy Supply Project Using a Public-Private Partnership Model (Financed by the Japan Special Fund) Feasibility Report Appendix 4: Environmental Impact Assessment Report

Prepared by: HJI Group Corporation in Association with MonEnergy Consult Co. Ltd.

For: Ministry of Mineral Resources and Energy, Mongolia

ENVIRONMENTAL IMPACT ASSESSMENT REPORT Project Number: 7502-MON June 2011

Ulaanbaatar Low Carbon Energy Supply Project Using Public-Private Partnership Model (CHP5 Project)

Ulaanbaatar Low Carbon Energy Supply Project Final Report Using Public-Private Partnership Model (TA No. 7502-MON) Appendix 4

Appendix 4-i

CURRENCY EQUIVALENTS

(As of 1 May 2011)

Currency Unit - Togrog (MNT)

1.00 MNT = $ 0.0008

$1.00 = 1,255 MNT

ABBREVIATIONS

ACM – Asbestos-Containing Material

ADB – Asian Development Bank

BOD – Biological Oxygen Demand

CBD – Convention on Biological Diversity

CCPs – Coal Combustion Products

CITES – Convention on International Trade in Endangered Species

CES – Central Energy System

CFB – Circulating Fluidized Bed

CHP – Combined Heat and Power

CO – Carbon Monoxide

CO2 – Carbon Dioxide

COD – Chemical Oxygen Demand

CSCs – Construction Supervision Companies

ED – Environmental Department

EES – Eastern Energy System

EHS – Environmental Health and Safety

EIA – Environmental Impact Assessment

EID – Environmental Inspection Department

EIRR – Economic Internal Rate of Return

EML – Environmental Monitoring Laboratory

EMP – Environmental Management Plan

EPA – Environmental Protection Agency

ESP – Electrostatic Precipitator

FBC – Fluidized-bed Combustion

FF – Fabric Filter

FGD – Flue Gas Desulphurization

FGR – Flue Gas Recycling

FS – Feasibility Study


Appendix 4-ii

GDP – Gross Domestic Product

GHG – Greenhouse Gases

GIIP – Good International Industry Practice

GRM – Grievance Redress Mechanism

GSA – Gas Suspension Absorber

HES – Heat Exchange Stations

HOB – Heat Only Boilers

IA – Implementation Agency

ID – Induced Draft

IEE – Initial Environmental Examination

IGCC – Integrated Gasification Combined Cycle

JICA – Japan International Cooperation Agency

L&FS – Life and Fire Safety

LOI – Loss on Ignition

MMRE – Ministry of Mineral Resources and Energy

MNET – Ministry of Nature, Environment and Tourism

NOx – Nitrogen Oxides

OM – Operation Manual

OSH – Occupational Safety and Health

PC – Pulverized Coal

PC – Public Consultation

PFBC – Pressurized Fluidized Bed Combustion

PIU – Project Implementation Unit

PM – Particulate Matters

POPs – Persistent Organic Pollutants

PPCU – Project Public Complaints Unit

PPE – Personal Protective Equipment

RPM – Respirable Particulate Matter

SCR – Selective Catalytic Reduction

SHE – Safety, Health and Environment

SNCR – Selective Non-catalytic Reduction

SO2 – Sulfur Dioxide

SPA – Specially Protected Area

SPS – Safeguard Policy Statement

SR – Stoichiometric Ratio

TA – Technical Assistance

TSP – Total Suspended Particulates


Appendix 4-iii

UB – Ulaanbaatar

UNCCD – UN Convention on Combating Desertification

UNFCCC – UN Framework Convention on Climate Change

WES – Western Energy System

WEIGHTS AND MEASURES

GW (giga watt) – 1,000,000,000 watts

kVA (kilovolt-ampere) – 1,000 volt-amperes

kW (kilowatt) – 1,000 watts

kWh (kilowatt-hour) – 1,000 watts-hour

MW (megawatt) – 1,000,000 watts

W (watt) – unit of active power

Cal (Calorie) – unit of energy

Gcal/h (giga calorie/hr) – 1,000,000,000 calorie/hr

NOTE

In this report, “$” refers to U.S. dollar.


Appendix 4-iv

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY ...........................................................................................................................1

A. INTRODUCTION........................................................................................................................................1

B. BACKGROUND .........................................................................................................................................1

C. ASSESSMENT OF HEATING AND POWER DEMAND............................................................................................2

D. ANALYSIS OF ALTERNATIVES AND SITE SELECTION ............................................................................................2

E. PROPOSED CHP5 PLANT ...........................................................................................................................3

F. EXPECTED ENVIRONMENTAL BENEFITS ..........................................................................................................3

G. ANTICIPATED ENVIRONMENTAL IMPACTS AND PROPOSED MITIGATION MEASURES.................................................4

H. ENVIRONMENTAL MITIGATION COSTS...........................................................................................................5

I. PUBLIC CONSULTATION AND ENVIRONMENTAL MANAGEMENT PLAN...................................................................5

J. CONCLUSION...........................................................................................................................................6

II. POLICY, LEGAL, AND ADMINISTRITIVE FRAMWORK ................................................................................7

A. DOMESTIC ENVIRONMENTAL LAWS, POLICIES AND STANDARDS ..........................................................................7

B. ENVIRONMENTAL IMPACT ASSESSMENT REQUIREMENTS...................................................................................8

C. ADMINISTRATIVE FRAMEWORK .................................................................................................................10

D. APPLICABLE INTERNATIONAL ENVIRONMENTAL AGREEMENTS...........................................................................13

III. DESCRIPTION OF THE PROJECT .............................................................................................................15

A. PROPOSED CAPACITY AND KEY PARAMETERS OF CHP5...................................................................................15

B. DESCRIPTION OF THE SITE FOR THE CHP5......................................................................................................2

C. LAYOUT AND CONSTRUCTION SEQUENCE OF THE CHP5 PLANT...........................................................................2

D. MAIN EQUIPMENT AND FACILITIES TO BE INSTALLED ........................................................................................6

E. AUTOMATIC ENVIRONMENTAL MONITORING INSTRUMENT .............................................................................13

F. CIVIL ENGINEERING.................................................................................................................................13

G. PROPOSED HEATING PIPELINE SYSTEM AND OPERATION PARAMETERS ...............................................................14

H. STAFFING PLAN......................................................................................................................................15

I. COAL SUPPLY AND TRANSPORTATION .........................................................................................................15

J. JUSTIFICATION AND RATIONALE .................................................................................................................22

IV. DESCRIPTION OF ENVIRONMENT..........................................................................................................28

A. PHYSICAL ENVIRONMENT .........................................................................................................................28

B. ECOLOGICAL ENVIRONMENT .....................................................................................................................31

C. CULTURAL HERITAGE ..............................................................................................................................31

D. TRANSPORTATION ..................................................................................................................................32

E. SOCIOECONOMIC CONDITIONS ..................................................................................................................32

F. ENVIRONMENTAL BASELINE ......................................................................................................................33

F. PROJECT IMPACT AREA AND ENVIRONMENTAL PROTECTION SITES ....................................................................47

V. ALTERNATIVE ANALYSIS .......................................................................................................................51


Appendix 4-v

A. WITH AND WITHOUT THE CHP5 PROJECT ...................................................................................................51

B. ALTERNATIVES OF THE CHP5 LOCATION......................................................................................................51

C. ALTERNATIVE BOILER TECHNOLOGIES .........................................................................................................58

D. ALTERNATIVE SO2 EMISSION REDUCTION PROCESS ........................................................................................59

E. ALTERNATIVE NOX EMISSION CONTROL PROCESS ..........................................................................................61

F. ALTERNATIVE ANALYSIS FOR FLUE GAS DUST REMOVAL..................................................................................64

VI. ANTICIPATED IMPACTS AND MITIGATION MEASURES ..........................................................................65

A. EXPECTED ENVIRONMENTAL BENEFITS ........................................................................................................65

B. SCREENING OF POTENTIAL IMPACTS ...........................................................................................................66

C. ASSESSMENT OF ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES DURING CONSTRUCTION .........................66

D. ENVIRONMENTAL IMPACT AND MITIGATION MEASURES DURING OPERATION ......................................................75

VII. ECONOMIC ASSESSMENT .....................................................................................................................93

A. ENVIRONMENTAL MITIGATION COSTS.......................................................................................................93

B. EIRR OF THE PROJECT ...........................................................................................................................93

VIII. INFORMATION DISCLOSURE AND PUBLIC CONSULTATIONS ..................................................................94

A. PUBLIC CONSULTATIONS DURING THE FS STUDY AND EIA STUDY ....................................................................94

B. MAJOR COMMENTS OF PUBLIC CONSULTATION ..........................................................................................96

C. INFORMATION DISCLOSURE ....................................................................................................................96

IX. FRAMEWORK OF GRIEVANCE REDRESS MECHANISM............................................................................97

A. CURRENT PRACTICE OF THE GRM IN MONGOLIA ........................................................................................97

B. PROPOSED GRIEVANCE REDRESS SYSTEM FOR THE PROJECT ...........................................................................97

X. ENVIRONMENTAL MANAGEMENT PLAN...............................................................................................99

A. OBJECTIVE OF THE EMP ........................................................................................................................99

B. IMPLEMENTING ORGANIZATIONS AND THEIR RESPONSIBILITIES.......................................................................99

C. IMPLEMENTATION OF EMP ....................................................................................................................100

D. ENVIRONMENTAL MONITORING AND REPORTING........................................................................................101

E. MECHANISMS FOR FEEDBACK AND ADJUSTMENT.........................................................................................103

XI. CONCLUSION AND RECOMMENDATION .............................................................................................105

ANNEX 1: REFERENCES..........................................................................................................................107

A. DOMESTIC LAWS AND REGULATIONS ........................................................................................................107

B. INTERNATIONAL GUIDELINE ....................................................................................................................107

C. GOVERNMENT POLICY DOCUMENTS, PLANS AND OFFICIAL PUBLICATIONS ........................................................107

D. TECHNICAL STUDIES SPONSORED BY DONOR AGENCIES.................................................................................108

E. OTHER REFERENCES..............................................................................................................................108

ANNEX II: SUMMARY OF POTENTIAL IMPACTS AND MITIGATION MEASURES ........................................109

ANNEX III: OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT............................................................123

ANNEX IV: CDM ASSESSMENT REPORT....................................................................................................129

I. INTRODUCTION..................................................................................................................................130


Appendix 4-vi

II. CDM ELIGIBILITY ................................................................................................................................130

III. ASSISTANCE FROM ADB’S CARBON MARKET INITIATIVE.....................................................................131

IV. CDM ELIGIBILITY CRITERIA.................................................................................................................131

A. INVOLVE GREENHOUSE GASES.................................................................................................................132

B. HOST COUNTRY IS A PARTY TO THE KYOTO PROTOCOL..................................................................................132

C. ADDITIONALITY ....................................................................................................................................133

D. CONTRIBUTE TO SUSTAINABLE DEVELOPMENT ............................................................................................134

E. MEASURABLE EMISSION REDUCTIONS.......................................................................................................134

F. PROJECT TYPE .....................................................................................................................................135

G. ELIGIBLE ORGANIZATION........................................................................................................................136

V. POTENTIAL EMISSION REDUCTIONS ...................................................................................................136

VI. COSTS TO DEVELOP A CDM PROJECT..................................................................................................137

VII. CONCLUSIONS..................................................................................................................................138


Appendix 4-vii

Map 1: Project Area in UB and Mongolia

Map 2: Mongolian Power Energy System


Appendix 4-1

I. EXECUTIVE SUMMARY

A. Introduction

1. This Environmental Impact Assessment (EIA) Report presents the potential environmental impacts and appropriate mitigation and enhancement measures for the Ulaanbaatar Combined Heat and Power Plant (CHP5) Project (Low Carbon Energy Supply Project Using Public-Private Partnership Model). The EIA was prepared in accordance with the requirements of the Asian Development Bank (ADB) Safeguard Policy Statement (SPS, 2009) and the Mongolia Environmental Impact Assessment (EIA) Law (1998 plus amendments), and is based on the Feasibility Study Report (FSR) of the CHP5 Project, site inspections, other technical reports, and public/stakeholder consultations conducted by the technical assistance (TA) Consultants.

2. The ADB SPS provides the primary basis for this EIA. The SPS consists of three operational policies on the environment, indigenous peoples, and involuntary resettlement. With respect to environment, these policies are accompanied by the ADB Operations Manual on Environmental Consideration on ADB Operations (2010). The policy promotes international good practice as reflected in internationally recognized standards such as the World Bank Group’s Environmental, Health and Safety (EHS) Guidelines, etc.

3. The EIA Report provides an assessment of potential environmental impacts and risks associated with the proposed CHP5 Project, which includes i) executive summary; ii) a summary of the international and Mongolian domestic applicable policies, standards, and guidelines; iii) description of the Project; iv) description of the environment, including the environmental baseline); v) alternative analysis; vi) anticipated environmental impacts and mitigation measures during construction and operation; vii) economic analysis; viii) information disclosure, public consultation, and participation, ix) grievance redress mechanism, x) environmental management plan (EMP), including implementation performance indicators, and xi) conclusion and recommendations.

B. Background

4. Mongolia has an extremely harsh winter climate, with winter temperatures ranging from -10ºC to -30ºC in the daytime during mid-winter (late December and January) and can drop to as low as -40ºC at night. The long and harsh winter weather subsequently creates an unusually long heating season, with a total of eight months from the middle of September to the middle of May.

5. Ulaanbaatar (UB) is the coldest capital city in the world and where almost half of the country’s population resides. The UB residents depend on a properly functioning heating system to both survive and make a living. Reliable heating service is not merely a utility for residents and business entities, it is a matter of life and death.

6. Air pollution is a major issue in the city, particularly in the winter due to the pollution from outdated combined heat and power (CHP) plants, coal fired heat only boilers (HOB) and stoves and in the spring from sandstorms. It is estimated that 40% of the air pollution is from the households’ stoves, 30% from vehicle emission, 20% from HOBs in urban buildings and 10% is from the existing coal fired CHP plants1. Thus, a safe, clean, and reliable heating supply during the winter months is a critical need.

1 The World Bank Study in 2007.


Appendix 4-2

7. Due to growing heating and electricity demands from UB and aging existing heat and power generation facilities, there is an urgent need for the implementation of a new CHP plant to address the vulnerability of heat and power supply in the capital city.

8. The Government of Mongolia requested the Asian Development Bank (ADB) to provide technical assistance (TA) for the preparation of the UB Low Carbon Energy Supply Project Using Public-Private Partnership Model (the Project). ADB granted feasibility and environmental impact study to support the construction of a proposed new CHP5 plant in UB. The overall objective of the Project is to improve the security and reliability of energy supply and air quality for UB and Mongolia.

C. Assessment of Heating and Power Demand

9. Heating Supply Demand. Based on the assessment of the current load and heat consumption in UB, the current heat sources and the heat load estimations, the TA Consultants made extensive comparative analysis to calculate the heating load and capacity for the proposed CHP plant (CHP5). The estimations suggest that an additional heating demand of 514 Gcal/h by 2015 and 970 Gcal/h by 2020 would be needed for UB. The total heating capacity for the CHP5 plant is estimated to be 624 Gcal/h by 2015 and 1,509 Gcal/h by 2020 upon the full operation of the CHP5 plant and the retirement of the existing CHP2 and CHP3 plants.

10. To address heat transmission and distribution concerns associated with alternative CHP5 site locations, the current heating network system has been carefully assessed and studied. The new heating network system has been assessed and proposed through detailed hydraulic calculations to ensure a well-maintain hydraulic balance for a stable and reliable heating system operation. The pre-insulation bonded pipe technology was selected for its excellent performance of lower capital cost, reduced heat losses, anti-corrosive and insulation, and longer service life.

11. Power Supply Demand. The existing power supply system in Mongolia was carefully assessed and studied. Totally, there are seven main coal-fired power plants in Mongolia with a total installed capacity of 836.3 MW. Due to the aged, deteriorating, and unreliable equipment, the actual available power capacity is only 615 MW. The three large sized power plants of CHP2, CHP3, and CHP4 located in UB account for 90% of the total installed capacity in the Central Energy System (CES). Electricity is supplied through three centralized power grids and two isolated systems. The total installed transformer capacity (excluding the generator transformers) amounts to nearly 2,200 MVA.

12. The TA Consultants made assessments of the power demand forecasts based on the previous assessment completed by the National Dispatching Center and UB Municipal Governor’s Office. The Consultants applied an integrated econometric and end-use approach to forecast the CES demand growth. As assessed, the demand for power will increase significantly after 2014. The power supply of the CHP5 is proposed to be 70 MW by 2014, 340 MW by 2015, and 680 MW by 2020. Based on the power demand forecast and the power supply capacity of the existing power plants, the Consultants prepared the balance sheet for power supply and demand by 2030.

D. Analysis of Alternatives and Site Selection

13. Though CHP is an efficient, clean, and economical solution to provide heat and electricity supply, other options however should be considered as well to identify the most suitable alternatives with respect to the selection of technology and plant location. Among a number of alternatives evaluated, the following three options were proposed and compared.


Appendix 4-3

14. Option 1 is to build a new CHP5 plant in Uliastai Valley on the eastern outskirts of UB; Option 2 is to build a new condensing power plant at the Baganuur coal mine to produce electricity only, while heat only boiler (HOB) plants are installed in UB for heat supply; Option 3 is to build a new CHP plant at the existing CHP3 site and utilize most of its existing infrastructure. The Consultants conducted extensive studies and comparative analysis of these three options using over 30 parameters under many categories, including geological conditions, technology selection, water supply source, railway access, power transmission, energy efficiency consideration, environmental protection, land acquisition and resettlement, construction works, total capital investment, annual operating cost, and so on.

15. The comparative analyses suggest that Option 3 is the best option for the proposed new CHP plant in UB. Option 3 has a number of significant advantages as compared to Options 1 and 2. These advantages include: i) sufficient land for the new CHP plant; ii) existing infrastructure (railway, road, heating pipelines, etc.) can be used; iii) adequate water supply from existing wells; iv) high energy efficiency; and v) lower costs than the other two options. However, there are some limited disadvantages as well: i) the ash yard may not be large enough; ii) close proximity to UB urban area; and iii) a new main heating pipeline would be required to connect the east part of UB to distribute heat to all parts of the city in a balanced manner.

16. Option 3 can modernize and revitalize the CHP3 plant. Most of the existing infrastructure at CHP3 can be utilized. The build-and-scrap methodology will be applied to build a new CHP plant while the existing CHP3 plant continues to operate until some units of the new CHP plant are operational. Additionally, Option 3 will bring environmental benefits to UB as air emissions will be reduced and water consumption per unit of energy generation will be significantly decreased.

E. Proposed CHP5 Plant

17. The CHP5 Plant is proposed to be constructed in the location of the existing CHP3 site in UB, of which, the specifications for power generation capacity are: 5*150 MW +1*70 MW turbines with total power generation capacity of 820 MW and total heating supply capacity of 1,281 MW (the annual net power generation and heating supply are 3690 million kWh and 12.5 million GJ, respectively). The CHP5 plant is planned to be constructed in two phases, including Phase I with 3*150 MW capacity to be completed by 2015 and Phase II with other 2*150 MW + 1*70 MW capacity to be completed by 2020.

F. Expected Environmental Benefits

18. The proposed CHP5 will significantly improve UB’s air quality by using an environmentally-friendly CHP technology with advanced emission control equipment that consumes less coal and emits fewer pollutants to replace outdated CHP2 and CHP3 plants, as well as hundreds of small, inefficient HOBs and thousands of water heaters. Water and soil pollution will indirectly improve as a result of the reduction of TSP, PM10, SO2, NOx, and other harmful compounds that contribute to acid rain and decreased air and water pollution. The Project will have the following other benefits in the area: (i) increase district heating supply of 9.38 million GJ; (ii) increase power generation capacity of 3,335 million kWh annually; (iii) reduce traffic hazards caused by vehicles transporting coal and slag in the urban areas; and (iv) improve public health and the living environment in areas now affected by emissions, noise, and flue dust from the outdated CHP plants and HOBs, water heaters and family heating stoves.

19. Based on preliminary estimations, the Projected reductions in coal usage and emissions are summarized in Table 1-1 below, assuming CHP5 produces the same amount of heat and electricity as the replaced CHP2, CHP3, and small HOBs:


Appendix 4-4

Table 1-1: Estimated Emission Reductions and Coal Saving (ton/yr.)

Parameter CHP2 CHP32 HOB CHP5 Coal Saving/ Emission Reduction

Coal Consumption (standard coal) 89,700 174,000 640,000 577,1003 327,000

Coal consumption (raw coal) 183,000 350,000 1,445,000 1,353,300 766,800

SO2 emission 1,760 3,360 13,870 2,600 16,390

NOx emission 2,060 3,930 16,240 3,040 19,190

Flue dust emission (TSP) 8,200 8,000 450,000 54 466,146

CO2 emission 250,900 433,800 1,595,500 1,438,700 815,200

Source: TA Consultants

G. Anticipated Environmental Impacts and Proposed Mitigation Measures

20. Environmental Impacts and Mitigation Measures during Construction. The environmental impacts during construction have been assessed in the EIA report, which mainly include: i) soil erosion, soil contamination and surplus soil disposal; ii) water pollution due to inappropriate storage and handling of petroleum products and hazardous materials, or accidental spills, and construction wastewater; iii) noise and vibration due to various construction and transport activities; iv) dust from excavation, concrete mixing, transportation of the construction materials and excavation soil, and dust soil from disturbed and uncovered construction areas and other construction activities, especially in windy days; v) vehicle emission from construction vehicles, especially heavy diesel machineries and equipment; and vi) socioeconomic impacts. Fugitive dust may be caused by excavation, demolition, vehicular movement, and materials handling, particularly downwind from the construction sites. The dust and emission caused by pipeline ditch excavation, backfill, and vehicular movement could affect nearby residential areas, hospitals, and schools; vii) solid wastes from construction and demolition of the existing CHP2 and CHP3 plants, as well as the HOB houses, and the coal-fired water heaters, especially risks caused by asbestos during demolition work. The comprehensive corresponding mitigation measures have been proposed in the EIA report.

21. Environmental Impact and Mitigation Measures during Operation. The environmental impacts of the CHP5 Project will take place during operation. The potential impacts during operation will be noise from the generators and cooling towers; risk from oil spills and fire; air pollution from flue gas emissions, specifically SO2, NOx, and PM10, water pollution, and solid waste (mainly ash). The main impact during decommissioning is the disposal of soil that might be contaminated with spilled chemicals and lubricants. The CHP5 plant will not use any polychlorinated biphenyls or asbestos, which were typically used in power plants built before the 1980s.

22. Expected pollutant emissions. After calculations, the estimated emission concentrations of SO2, flue dust, and NOx from the CHP5 plant will be 120 milligrams per cubic meter (mg/m3), 30.0 mg/m3, and 130 mg/m3, respectively, which meet the World Bank standards.

2 The low pressure part only, the high pressure part will be retained. 3 Not include coal consumption for increased power supply.


Appendix 4-5

23. Solid waste disposal and ash utilization. The CHP5 will use lignite as fuel and generate about 0.4 million tons of coal ash as a by-product. With coal having 10% ash content, the amount of ash generated is becoming very large and poses some ecological problems.

24. Ash utilization is desirable to avoid the environmental impacts that can result from ash disposal. It is proposed that most of the ash produced by the CHP plant will be utilized for road bed filling material, and raw materials for brick and cement production, or similar uses. Since the construction material industry is less developed in UB and Mongolia, the potential utilization of the coal ash from the CHP5 will be mainly focused on highway construction.

25. Radiation of the coal ash. According to the monitoring data, the fly ash and the bottom ash from the existing CHP plants contain low level radioactive isotopes -- e.g., 40K, 232Th and 238U and their decay products (222Rn, 228Ra, 220Rn with their radioactive progenies). Since the radioactive intensities are low, it’s concluded that the ash from the coal of Baganuur coal mines can be used as construction materials for any purposes without restrictions; the ash from the coal of Shivee-Ovoo coal mine can be mixed with other construction materials, such as local soil, and then be used as construction material; for the ashes from both Baganuur and Shivee-Ovoo coal nines can be utilized as refill material in infrastructure (road and railway) construction and as constituents of many types of outdoor building products based on the current domestic standard.

26. Summary of the major mitigation measures. The proposed pollution mitigation measures are summarized as follows: i) building a 250 m high boiler stack to disperse and minimize the direct impact of emissions on adjacent areas; ii) using ESP with a dust removal efficiency of at least 99.6%; iii) using desulfurization inside the CFB boiler that is about 80% efficient; iv) using CFB plus SNCR equipment with a total denitrification rate of about 80%, with which the emission concentration will be lower than 150 mg/m3; v) installing an online automatic monitor on the smokestack of the CHP5 plant to monitor sulfur dioxide and flue dust; coal ash will be utilized as material for highway construction; and vi) mufflers will be installed on vents of the boiler and air blowers and sound-proof shields will be installed on the power generators to mitigate the noise impact.

H. Environmental Mitigation Costs

27. The total Project cost for both Phase I and II is estimated at $1,361.9 million ($688 million for Phase I only). The environmental protection related costs amount to $67.66 million, or 4.97% of the total estimated budget of the Project. The major environmental protection costs are summarized in the economic analysis chapter of this EIA Report.

I. Public Consultation and Environmental Management Plan

28. The two rounds of public consultation in UB indicated that the majority of the stakeholders had a positive attitude toward the CHP5 Project and believed that the Project and the proposed scheme would benefit the local economy, raise the quality of life, improve local environmental conditions, and that it contributes to global climate change mitigation. Any adverse environmental impacts associated with the Project will be prevented, reduced, minimized, or otherwise compensated.

29. Furthermore, an environmental management system involving environmental management and supervision organizations, environmental monitoring, and institutional strengthening has been established to ensure the environmental performance of the Project. To ensure successful implementation of these measures, the EMP covers major relevant aspects such as institutional arrangement for environmental management and supervision, and environmental monitoring and training. With implementation of the mitigation measures defined in the EIA and EMP, the adverse impacts will be reduced to acceptable levels. The


Appendix 4-6

Project is environmentally sound, and will promote balanced and environmentally sustainable urbanization in UB and Mongolia.

J. Conclusion

30. This EIA concludes that the Project will have substantial environmental and socioeconomic benefits. To ensure successful and environmental friendly implementation of the CHP5, the EMP covers all the relevant aspects such as institutional arrangements for environmental management and supervision, inspection and audit, and environmental monitoring and reporting. As long as the mitigation measures defined in the EIA, and the EMP are faithfully implemented, all adverse environmental impacts associated with the Project will be prevented, eliminated, or minimized to an environmentally acceptable level.


Appendix 4-7

II. POLICY, LEGAL AND ADMINISTRITIVE FRAMWORK

A. Domestic Environmental Laws, Policies and Standards

31. Mongolia has enacted a comprehensive policy and legal framework for environmental assessment and management. The country has policies, legislation, and strategies in place to manage the protected facilities, to satisfy its international obligations, and to protect the quality of the environment for the health and well-being of its citizens. The hierarchy of policies and legislative provisions for environmental management in Mongolia is comprised of five layers ranging from the Constitution to international treaties, and to environment and resource protection laws.

32. The main domestic environmental laws, policies and regulations are: i) National Environmental Action Plan (1996); ii) the State Environmental Policy (1997); iii) the National Action Plan to Combat Desertification; iv) the Biodiversity Conservation Action Plan; and v) the National Action Plan for Protected Areas, which were all developed under the Ministry of Nature Environment and Tourism (MNET) auspices, as well as the Mongolian Action Program for the 21st Century with subordinated aimag development plans developed by the National Council for Sustainable Development. The National Environmental Action Plan was updated in 2000 and the National Action Plan for Climate Change was added in the same year. Several program documents (e.g., National Water Program, National Forestry Program, Program of Protection of Air, Environmental Education, Special Protected Areas, and Protection of Ozone Layer) were also completed at the turn of the decade. The State policy on Environmental Impact Assessment was in place in 1998. In addition, other guidance documents with important environmental repercussions were developed under the auspices of other ministries and these include the Road Master Plan, the Power Sector Master Plan, the Tourism Master Plan, and the Renewable Energy Master Plan. Other documents, such as the annual Human Development Reports have increasingly incorporated environmental aspects.

33. A fundamental principle of the Mongolian environmental policy is that economic development must be in harmony with the extraction and utilization of natural resources and that air, water, and soil pollution will be controlled. In April 1996, Mongolia’s National Council for Sustainable Development was established to manage and organize activities related to sustainable development in the country. The country’s strategy is designed for environmentally-friendly, economically stable, and socially wealthy development, which emphasizes people as the determining factor for long-term sustainable development.

34. The applicable Domestic environmental laws and regulations are as follows:

1) Law on Environmental Protection 1995, revised in 2006 and 2008

2) Law of Land, Jun 2002

3) Law on Land Cadastre and Mapping, Dec. 1999

4) Law on Land Fees, Apr 1997

5) Law on Land Possession, Jun 2002

6) Law on implementation of regulations related to Land Possession Law, Jun 2002

7) Law on Geodesy and Cartography, Oct 1997

8) Law on Special Protected Areas, Nov 1994

9) Law on Buffer Zones, Oct 1997

10) Law on Water, Apr 2004


Appendix 4-8

11) Law on Water and Mineral Water Resource Fee, May 1995

12) Law on Forests, Mar 1995

13) Law on Fees for Timber and Fuel Wood Harvesting, May 1995

14) Law on Prevention of Steppe and Forest Fires, May 1996

15) Law on Reinvestment of Natural Resource Use Fees for Conservation, Jan 2000

16) Law on Natural Plants, Apr 1995

17) Law on Natural Plant Use Fees, May 1995

18) Law on Protection of Plants, Mar 1996

19) Law on Fauna, 2000

20) Law on Hunting Reserve Use Payments and on Hunting and Trapping Authorization Fees, May 1995

21) Law on Underground Resources, Dec 1994

22) Law on Minerals, revised in 2006

23) Petroleum Law, 1991

24) Law on Hydrometeorology, Nov 1997

25) Law on Protection from Toxic Chemicals, Apr 1995

26) Law on Environmental Impact Assessment 1998, revised in 2002

27) Law on Tourism, 1998

28) Law on Solid Waste, Nov 2003

29) Law on prohibiting export and transportation of Hazardous Waste, Nov 2000

B. Environmental Impact Assessment Requirements

35. The Project will be subject to the environmental requirements of both Mongolia and those of ADB.

36. The Environmental Impact Assessment Requirements of ADB. If the proposed Project considered for loans and investments by ADB are subject to classification for the purposes of determining environmental assessment requirements, the determination of the environment category is to be based on the most environmentally sensitive component of the Project. Within this system, projects are screened for their expected environmental impacts and assigned to one of the following four categories:

1) Category A: Projects with potential for significant adverse environmental impacts. An environmental impact assessment (EIA) is required to address significant impacts.

2) Category B: Projects judged to have some adverse environmental impacts, but of a lesser degree and/or significance than those of Category A projects. An initial environmental examination (IEE) is required to determine whether or not significant environmental impacts warranting an EIA are likely. If an EIA is not needed, the IEE is regarded as the final environmental assessment report.

3) Category C: Projects unlikely to have adverse environmental impacts. No EIA or IEE is required, although environmental implications are still reviewed.

4) Category FI: Projects are classified as category FI if they involve a credit line through a financial intermediary or an equity investment in a financial


Appendix 4-9

intermediary. The financial intermediary must apply an environmental management system, unless all subprojects will result in insignificant impacts.

37. EIA Requirements in Mongolia. Stipulates the EIA requirements of Mongolia. The purpose of this law is environmental protection, the prevention of ecological imbalance, the regulation of natural resource use, and the assessment of environmental impacts of projects and procedures for decision-making regarding the implementation of projects.

38. The terms of the law apply to all new projects, as well as rehabilitation and expansion of existing industrial, service, or construction activities and projects that use natural resources. Type and size of the planned activity define responsibility which may be either MNET or aimag government (provincial government).

39. There are two types of EIAs defined in the Law: General EIA and Detailed EIA. To initiate a General EIA, the project implementer submits a brief description of the project, including the feasibility study, technical details, drawings, and other information to MNET (or aimag government). The General EIA may lead to one of four conclusions: (i) no Detailed EIA is necessary; (ii) the project may be completed pursuant to specific conditions; (iii) a Detailed EIA is necessary; or (iv) cancellation of the project. The General EIA is free and usually takes up to 12 days.

40. The scope of the Detailed EIA is defined by the General EIA. The Detailed EIA report must be produced by an authorized Mongolian company which is approved by the MNET by means of a special procedure. The developer of the Detailed EIA should submit it to the MNET (or aimag government). An expert from the organization who was involved in conducting the General EIA should make a review of the Detailed EIA within 18 days and present it to MNET (or aimag government). Based on the conclusion of the expert, the MNET (or aimag government) makes a decision about approval or disapproval of the Project.

41. Figure 2-1 on the following page presents a simplified diagram of the EIA procedure in Mongolia.


Appendix 4-10

Figure 2-1: EIA Procedure in Mongolia

C. Administrative Framework

42. The Ministry of Nature, Environment and Tourism (MNET) is the agency primarily responsible for the implementation of environmental policy in Mongolia. The organization chart of the MNET is shown in Figure 2-2. Under MNET, there are several government agencies involved in the protection of the environment in Mongolia, as outlined on the following page.

43. The Department of Sustainable Development and Strategic Planning is responsible for the elaboration of strategic and sustainable development policies, plans, programs, and projects in areas within the mandate of the Minister of Nature, Environment and Tourism. The department’s functions include developing principles and policies and creating a positive legal environment for the preservation of ecological balance, in accordance with sustainable development objectives, by conducting policy research and developing policy options, designing projects and programs, offering policy leadership, and planning and initiating Mongolia's participation and actions with regard to major ecological issues at regional and international levels.


Appendix 4-11

Figure 2-2: Organization Chart of the MNET

44. The Department of State Administration and Management is responsible for administration and leadership in the Ministry. Its functions include addressing human resource management and development issues, providing legal advice, introducing best practices for administration in the Ministry, developing systems of reporting and accountability, resolving appeals and complaints, and improving organizational management. The department focuses on ensuring the continuity and stability of Ministry operations by way of professional and disciplined departments staffed with capable public servants, and on developing human resource policies and improving the effectiveness of their implementation, guidelines and recommendations on required future courses of action.

45. The Department of Environment and Natural Resources is responsible for the planning and implementation of actions to reduce environmental degradation and adverse environmental impacts, and ensuring the appropriate use of natural resources. Its functions include implementing laws and regulations, policy, programs, and activities related to the conservation and appropriate use of natural resources; restoring areas that have suffered from degradation; organizing and coordinating biological conservation activities; conducting environmental assessments and maintaining the Environmental Information Databank; and


Appendix 4-12

organizing training and public awareness activities related to environmental conservation. Activities undertaken in this context include:

1) Organizing EIAs;

2) Monitoring the implementation of environmental monitoring programs, environmental protection plans, and rehabilitation programs of mines; receiving and reviewing annual reports on the above activities; and issuing professional guidelines and recommendations on required future courses of action;

3) Conducting environmental assessments and maintaining the State Environmental Information Databank;

4) Maintaining a unified registry of very toxic, toxic, and harmful chemicals, and issuing authorizations for their manufacture and import;

5) Coordinating household and industrial waste management policy; and managing air pollution.

46. The Department of Specially Protected Areas Administration and Management has been entrusted with the responsibility of implementing the laws and regulations concerning Specially Protected Areas (SPAs). Its functions include coordinating activities related to the expansion of the SPA network and the implementation of associated programs, projects, and actions, as well as providing professional and practical assistance to the administrative authorities of SPAs. It focuses on ensuring the integration of policies and actions promoting sustainable natural resource use and ecological balance. These responsibilities are carried out by developing partnerships with all organizations engaged in policy implementation, ensuring the effective allocation of resources, and organizing and coordinating their activities in line with government policy, programs, and plans.

47. The Ecologically Clean Technologies and Science Division is responsible for developing and promoting clean technologies in Mongolia by introducing cleaner production technology to all aspects of production and services.

48. National Agency for Meteorology, Hydrology and Environmental Monitoring is responsible for managing a national, integrated hydrological, meteorological, and environmental monitoring network; ensuring preparedness for potential natural disasters or major pollution incidents; establishing conditions to permit the full and complete use of meteorological and hydrological resources; continuously monitoring radioactivity, air and water pollution, and soil contamination levels; and providing essential hydrological, meteorological, and environmental data to state and government officials, businesses, and individuals.

49. The Water Authority is the state organization responsible for implementing government policy and decisions related to the sustainable use, protection and restoration of water resources in Mongolia; signing and monitoring the implementation of contracts and agreements, in the name of the Ministry of Nature and Environment, with relevant foreign and domestic organizations, companies, and individuals; collecting fees and payments for the use of water resources and allocating these according to the appropriate procedures; and allocating and reporting on the use of funds for their conservation and restoration of water resources.

50. The Forest Authority is responsible for the implementation of the National Forests Policy and the "Green Wall" Program, as well as policies concerning forest conservation, reforestation, appropriate forest resource use, the mitigation of insect and disease infestations, and the prevention of forest and steppe fires. Its functions include developing and improving forestry policy coordination.


Appendix 4-13

D. Applicable International Environmental Agreements

51. Applicable ADB EIA Policies and Requirements. The major applicable ADB policies, regulations, requirements, and procedures for the EIA are i) Environmental Assessment Guidelines of ADB (2003) and ii) Safeguard Policy Statement (SPS, June 2009). The SPS provides a basis for EIA process and contents. With respect to the environment, these policies are accompanied by ADB Operations Manual, Bank Policy (OM F1, 2010).

52. Complying with ADB’s SPS. The purpose of the SPS is to establish an environmental review process to ensure that projects undertaken as part of programs funded under ADB loans are environmentally sound, are designed to operate in compliance with applicable regulatory requirements, and are not likely to cause significant environmental, health, or safety hazards.

53. The SPS is generally understood to be operational policies that seek to avoid, minimize, or mitigate adverse environmental and social impacts, including protecting the rights of those likely to be affected or marginalized by the development process.

54. The World Bank Group’s Environmental, Health, and Safety (EHS) Guidelines are technical reference documents with general and industry-specific examples of Good International Industry Practice (GIIP). The EHS Guidelines are provided in a General Set in four major categories, supplemented by relevant Industry Sector specific EHS guidelines. The General EHS Guidelines apply as follows:

1) Environmental 2) Air Emissions and Ambient Air Quality 3) Energy Conservation 4) Wastewater and Ambient Water Quality 5) Water Conservation 6) Hazardous Materials Management 7) Waste Management 8) Noise 9) Contaminated Land 10) Occupational Health and Safety 11) General Facility Design and Operation 12) Communication and Training 13) Physical Hazards 14) Chemical Hazards 15) Biological Hazards 16) Radiological Hazards 17) Personal Protective Equipment (PPE) 18) Special Hazard Environments 19) Monitoring 20) Community Health and Safety 21) Water Quality and Availability 22) Structural Safety of Project Infrastructure 23) Life and Fire Safety (L&FS) 24) Traffic Safety 25) Transport of Hazardous Materials


Appendix 4-14

26) Disease Prevention 27) Emergency Preparedness and Response 28) Construction and Decommissioning 29) Environment 30) Occupational Health & Safety 31) Community Health & Safety

55. Other International Environmental Conventions. The health of Mongolia's natural ecosystems and populations of wild species is of both national and global importance. The country forms an important part of the global ecosystem in the ecological transition zone in Central Asia, where the great Siberian taiga, the Central Asian steppe, the high Altai Mountains, and the Gobi desert converge. In recognition of its global responsibilities, Mongolia has acceded to a number of international environmental conventions and the key ones are tabulated below (Table 2-1).

56. Each of these conventions places obligations on signatory governments ranging from the provision of a legislative basis for implementation, to adherence to the requirements and conditions of each convention, to monitoring implementation performance on a regular basis, to reporting on a regular basis and to the conference of parties.

57. The Government of Mongolia undertook a major environmental law reform in 1990 including the law of the land, protected areas, water, forest, wildlife, and native flora resources. The legislation base is extensive as evidenced by the following table of key environmental legislation.

Table 2-1: International Environmental Conventions Signed by Mongolia

Convention Year of Accession

Convention on Biological Diversity (CBD) 1993

UN Framework Convention on Climate Change (UNFCCC) 1994

Kyoto Protocol 1999

UN Convention on Combating Desertification (UNCCD) 1996

Convention on the Protection of Wetlands of International Importance (Ramsar) 1998

Vienna Convention for the Protection of the Ozone Layer 1996

Montreal Protocol (regulating substances that deplete the ozone layer) 1996

Convention on International Trade in Endangered Species of Fauna and Flora (CITES) 1996

Convention on the Tran-boundary Movement of Hazardous Waste (Basel) 1997

Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous; Chemicals and Pesticides in International Trade 2000

Stockholm Convention on Persistent Organic Pollutants (POPs) 2004

World Heritage Convention 1990


Appendix 4-15

III. DESCRIPTION OF THE PROJECT

A. Proposed Capacity and Key Parameters of CHP5

58. Proposed Capacity of the CHP5. Based on the heating and power demand forecasts during the FS and following the principle of “Power Generation Determined by Heat Supply,” five 150 MW steam extracting turbines plus a 70 MW back-pressure turbine are proposed. According to the detailed calculations, the maximum combined heating capacity of the six turbines will be 1,281 MW (1,101Gcal/h) and the power generation will be 820 MW under the maximum heating capacity. The Project is planned to be implemented in two phases. During the Phase I, three 150 MW steam extracting turbines, with total heating capacity of 587 MW (505 Gcal/h) will be installed before 2015, and another two 150 MW steam extracting turbines and a 70 MW back-pressure turbine will be installed during the Phase II (from 2016 to 2020).

59. Proposed Major Equipment, Civil Structures and Key Technical Parameters of the CHP5. Table 3-1 below lists key technical parameters of the proposed CHP5 Plant, including designed power generation and heat supply capacities, power and heat generation efficiencies, yearly net power and heat supplies, and annual coal consumptions, etc. And proposed major equipment and civil structures of the CHP5 are listed in Tables 3-2 and 3-3, respectively.

Table 3-1: Key Technical Parameters of the CHP5

Items Unit Total Installed Power Generation Capacity MW 820

MW 1,281 Installed Heat Supply Capacity Gcal/h 1,101 MW 1,281 Heat Demand

Gcal/h 1,101 Yearly Power Generation million kWh 4,100 Internal consumption million kWh 410 Transmission Loss million kWh 41 Net Power Supply million kWh 3,690

million GJ 0.2 Internal heat consumption million Gcal 0.05 million GJ 12.5 Yearly Net Heat supply

million Gcal 3.0 Average Annual Ratio of Heat to Power 0.84

Power Generation % 46.7 Heat Generation % 89 Efficiency Total Thermal efficiency % 59.7 Standard Coal Consumption Per kWh g/kWh 263 Standard Coal Consumption Per GJ kg/GJ 38.3 Stand Coal Consumption million (standard) 1.56 Baganuur Coal million ton (raw) 0.99 Shivee-Ovoo Coal million ton (raw) 2.63

Fuel consumption

Raw Coal or LPG million ton (raw) 3.62

Source: TA Team estimates.


Appendix 4-1

Table 3-2: Major Proposed Equipment of the CHP5

No. Items Specification Unit Quantity. Note

1 Boiler CFB 525 t/h 13.7 Mpa Piece 5 3 for Phase I and 2 for Phase II

CFB 526 t/h 10 Mpa Piece 1 for Phase II

2 Fans

Induced Fan Piece 12 6 for Phase I and 6 for Phase II

Primary Blower Piece 12 6 for Phase I and 6 for Phase II

Secondary Blower Piece 12 6 for Phase I and 6 for Phase II

3 ESP Three Electric Field Set 6 3 for Phase I and 3 for Phase II

4 limestone System Set 6 3 for Phase I and 3 for Phase II

5 SNCR 150MW Steam Set 6 3 for Phase I and 3 for Phase II

6 Other Auxiliary Equipment for Boiler 70MW Backpressure Set 6 3 for Phase I and 3 for Phase II

7 Turbine 150MW Steam Extraction Piece 5 3 for Phase I and 2 for Phase II

70MW Backpressure Piece 1 for Phase II

8 Generator 150MW 3000r/min 50HZ Piece 5 3 for Phase I and 2 for Phase II

70MW 3000r/mim 50Hz Piece 1 for Phase II

9 Deaerator for Steam System Piece 12 6 for Phase I and 6 for Phase II

for Heating System Piece 2 1 for Phase I and 1 for Phase II

10 Pumps

Feeding Pumps for Boilers: Flow Rate: 525 t/h,

Available Water Head: 1400 mWC Piece 12 6 for Phase I and 6 for Phase II

Circulating Pumps: Flow Rate: 2623 t/h,

Available Water Head: 140 mWC Piece 12 6 for Phase I and 6 for Phase II

11 Main Heat Exchangers 122MW Set 6 3 for Phase I and 3 for Phase II

12 Peak Load Heat Exchangers 62MW Set 6 3 for Phase I and 3 for Phase II

13 Coal Conveying System Belt width: 800mm Set 2 1 for Phase I and 1 for Phase II

14 Fuel Supply System Set 2 1 for Phase I and 1 for Phase II


Appendix 4-2

No Items Specification Unit Quantity. Note

16 Neumatic Fly Ash Transferring System Set 2 1 for Phase I and 1 for Phase II

17 Boiler Refilling Water Treatment System Set 1

18 Circulating Water Treatment System Set 1

19 Feeding and Boiler Water Retreatment System Set 1

20 Condenser Cooling System Set 2 1 for Phase I and 1 for Phase II

21 Water Refilling System in the Plant Set 1

22 Electric and Outgoing Line System of Generator Set 6 3 for Phase I and 3 for Phase II

23 Main Transformer 190 MVA Set 6 3 for Phase I and 3 for Phase II

24 Electric Distribution Apparatus Set 6 3 for Phase I and 3 for Phase II

25 Main Control and DC System DCS Set 1

26 Communication System Set 1

27 Plant-level Control System Set 1

28 Boiler Turbine and Generator Control System Set 6 3 for Phase I and 3 for Phase II

29 Individual Control Panel Set 1

30 Local Instrument and Actuator Set 1

31 MIS System Set 1

32 Water Discharging Pump Station Set 1

33 Ash Yard Equipment Set 1


Appendix 4-1

Table 3-3: Major Proposed Civil Structures of the CHP5

No. Items Specification Un it Quantity Remarks

1 Boiler House Steel Structure m2 16,184 8,092 m 2 for each

phase

2 Turbine House Steel Structure m2 9,180 4,590 m 2 for each

phase

3 Deaerator and Coal

Storage Room Steel Structure m2 4,590

2,295 m 2 for each phase

4 Chimney Reinforced concrete structures

Piece 2 1 for each phase,

250 m height

5 Coal Yard Open yard w ith anti-wind fence

m2 80,000 40,000 m 2 for each

phase 6 Rai lway m 1,000

7 Warehouse and

Unloading Facili ty Concrete structures

m2 3,000

8 Wastewater

Treatment for Coal Yard

concrete structures

m2 600

9 Fuel Transportation

Corridor

reinforced concrete structures

m2 8,400 4,400 m 2 for each phase I and 4000

m2 for each phase

10 Fly Ash Si lo Steel Structure m3 3x4000=12,000

11 Switchyard

m2 2x6000=1200060,000 m 2 for each

phase

12 Office Reinforced concrete structures

m2 18,000

13 Chemical Water

Treatment Station Concrete structures

m2 2,500

14 Wastewater

Treatment Facil ity Concrete structures

m2 1,500

15 Cooling Tower Reinforced concrete structure

m2 2 X

4500=9,000 for Phase I

m2 6,000 for Phase II

17 Cooling Water

Circulating Pump Station

Concrete structures

m2 1,800 900 m 2 for each

phase

18 Limestone Station Concrete structures

m2 2,600

19 Warehouse Concrete structures

m2 2,400

20 Mechanical Concrete m2 2,000


Appendix 4-2

B. Description of the Site for the CHP5

60. The CHP5 Plant is proposed to be constructed in the location of the existing CHP3 Plant in UB. The CHP3 plant covers an area of about 88 ha with two main buildings and several auxiliary buildings. There is a branch linking railway from the site to the UB train station and a road access to the plant is available. Some of the existing facilities and structures of the CHP3 Plant, such as facilities of water supply, sewer, and telecommunication, etc. will be renovated into new structures and facilities for the CHP5 Plant.

61. Geotechnical Conditions. The foundation of the CHP3 site consists of a thick alluvium deposit of quaternary age and is geologically stable. There is not any observed active fault near the site. Seasonal freezing depth is 2.5 m without any permafrost at the site. Seismic intensity is magnitude 8, and there are not any engineering geological phenomena and processes observed in the area.

62. Available Water Source. It is estimated that the total annual water consumption of the CHP5 will be 8.1 million m3, about 0.9 million m3 less than that of the existing CHP3, which is about 9 million m3 annually. Hydrogeologically, the site is in a favorable condition of being on the terrace of the Tuul River with the ground water level of 1.5 m. There is existing water supply system with 41,300 m3/day reserve including 36,122 m3/day of category A and 31,097 m3/day of category C2 in 2007. Approximately 16,000 m3 of water is produced daily from this reserve. In addition, with the implementation of the CHP5, the low pressure part of CHP3 will be decommissioned. Consequently, the existing CHP3 water supply system is sufficient for the new CHP5 use.

63. Ash Pond. The existing ash pond is situated 500 m west of the Project site with the storage capacity of approximately 1.5 million m3 and 11m in depth. In order to conserve water, dry ash removal technology is proposed for CHP5. The capacity of the ash pond can match the ash quantity accumulatively produced by CHP5 before 2024, even if the ash is not recycled and utilized.

64. Anti-disaster Ability. In the process of selection of plant site and layout arrangement, the regional stability and site stability of plant site have been considered. The construction site is at regional crust stable block, away from regional active fault zone, and it is not likely to suffer from major landslide, collapse, mudslide, and other geological disasters. The stabilization and safety of the plant site are acceptable. The Project will be designed according to international practices as well as power plant design criteria and specifications. Relevant design criteria and principled design alternatives meet corresponding counter-disaster requirements of power plants construction.

65. Arrangement for the Site. The CHP5 is proposed to be constructed in two phases at the location within the existing CHP3 Plant, where its high pressure system is to be maintained and its low pressure system is to be demolished. The high pressure system is located in the center and the low pressure system in the east part of the site. CHP5 is to be constructed on both sides of the high pressure system (see Figure 3-1).

C. Layout and Construction Sequence of the CHP5 Plant

66. Two water cooling towers and circulating pump house for the Phase I will be installed in the northwest corner of the site, and another water cooling tower and circulating pump house for the Phase II will be installed on the northeast corner of the site. Thus, the cooling towers for both phases are installed close to the main plant.

67. The 220kV switch yard for the Phase I will occupy the space currently used by the existing spray cooling pool. The space currently used by the existing switch yard of low


Appendix 4-3

pressure part will be used by the switch yard of the Phase II. The 220kV transmission lines for the Phase I will be easily connected with 220kV overhead transmission lines of UB with no need to cross over the 110kV lines. For the Phase II, the 220kV lines will be connected to the 220kV switch yard internally.

68. Construction of the Phase I will not require relocation of the office building. The spray cooling pool of the low pressure part will be dismantled, while the boilers of low pressure part will be remained. During the construction of the Phase I, the boilers of low pressure part will still remain in operation to provide heating for the connected customers until the Phase I is put into service. The site of the spray cooling pool will be used for switch yard for the Phase I. The 35kV substation will be relocated to the north of the 110kV switchyard to ensure power supply for the existing customers.

69. The main plant of the Phase I can be constructed easily as it’s located in an open area in the west side. Switch yard can be constructed on the site of the existing spray cooling pool. Civil work for water treatment facilities, wastewater treatment facilities, and other auxiliary will be completed during the Phase I. The related equipment can be installed by phases.

70. The coal yard proposed for the Phase I will be constructed on the area close to the existing coal yard. Other systems and facilities to be installed include one new bucket wheel stacker and reclaimer and auxiliary facilities for coal conveying. The coal is transported from the coal yard, through the belt conveyor, transfer stations, and coal crusher room, the fixed end of main power house, then fed to the coal bunkers of each boiler. Under the Phase II, the coal yard is to be extended further east, and the storage capacity of the coal yard needs to be increased to meet the demand of both phases. The existing coal yard for the CHP3 is to be upgraded and one additional bucket wheel stacker and auxiliary equipment are to be installed. Coal for the Phase II will be transported by other conveying system in the west side.

71. Once the Phase I is put into operation, the low pressure system and its auxiliary facilities will be fully decommissioned and the remaining two boilers and turbines, generators and other equipments and facilities will be installed on the site previously occupied by the low pressure system. At the same time switch yard proposed for the Phase II will be installed at east side of the switch yard of the high pressure system. In addition, one cooling tower is to be constructed on the northeast corner of the site (the Project layout is shown in Figure 3-2).


Appendix 4-4

Figure 3-1: Design Sketch of the Proposed CHP5 Plant


Appendix 4-5

Figure 3-2: Layout of the Proposed CHP5 Plant

Note: The main components of Phase I are in the red dashed line box; and those of Phase II are in the blue dashed line box.

Source: PPTA Consultant (in the FS).


Appendix 4-6

D. Description of the Main Equipment and Facilities to be Installed

(1) Boiler

72. Three 525 t/h super high pressure boilers will be installed under Phase I, while three 525 t/h super high pressure and one 525 t/h high pressure ones will be installed under Phase II. The boiler is of design of high temperature, super-high pressure, drum-type natural circulation, single furnace, one-time reheating balanced-draft, circulating fluidized bed (CFB) technology, indoor arrangement, dry bottom and full-steel frame, and complete suspended structure. Light diesel is to be used for boiler ignition and combustion. The lowest non-combustion-aid rate is 30% of Boiler Maximum Continuous Rating (BMCR). The boiler’s main technical parameters are shown in Table 3-4.

Table 3-4: Boiler’s Main Technical Parameters

Item Unit BMCR

Steam flow at maximum continuous rating t/h 525

Superheater outlet pressure MPa(g) 13.7

Superheater outlet temperature � 540

Feet water temperature ℃ 248.9

Primary air temperature at AH outlet ℃ 244

Sec air temperature at AH outlet ℃ 244

Gas air temperature at AH outlet ℃ 140

Consumption of coal t/h 71.9

Calculated boiler efficiency(calculated by LHV) % 91.45

Guaranteed boiler efficiency(calculated by LHV) % 91 Source: TA Team estimates.

(2) Steam Turbine

73. Under condensing mode and rated steam extracting condition, each steam-extracting turbine will have 135 MW of power generation capacity and steam-extracting capacity of 280 t/h. Based on the detailed calculations, under rated steam-extracting condition, the rated heating capacity of three turbines under Phase I will be 587MW (1,281 MW for both phases). Under the rated heating capacity the rated power generation of three turbines for Phase I will be 405 MW (745 MW for both phases).

74. The extracting and condensing steam turbine will have the configuration of high pressure, double cylinders, seven stage heaters, water cooling extracting and condensing steam turbine. The detailed working parameters under turbine maximum continuous rating (TMCR) conditions are shown in Table 3-5. The back-pressure turbine will have the configuration of high pressure, single cylinder, and three stage heaters. The detailed parameters of the back-pressure turbine are shown in Table 3-6.


Appendix 4-7

Table 3-5: Working Parameters of Extracting and Condensing Steam Turbine

Items Description

Rated power (TMCR) 150 MW

Rated inlet steam flow (TMCR) 500 t/h

Steam pressure at the main stop valve (TMCR) 13.24 MPa (a)

Steam temperature at the main stop valve 535 ºC

Extraction steam pressure of high pressure 0.98 MPa(a)

Extraction steam volume of high pressure 100 t/h

Extraction steam pressure of low pressure 0.19 MPa(a)

Extraction steam volume of low pressure 180 t/h

Feed water temperature 235 ºC

Designed back pressure 4.9 kPa (a)

Regenerative system 7 stages (two high pressure heaters, four low) pressure heaters, one deaerator)

Driving means of feed pump Electric-driven, hydraulic coupling speed control


Table 3-6: Working Parameters of Back-pressure Steam Turbine

Items Description

Rated power (TMCR) 70 MW

Rated inlet steam flow (TMCR) 410t/h

Steam pressure at the main stop valve (TMCR) 8.8 MPa (a)

Steam temperature at the main stop valve 535 ºC

Exhausting steam pressure of cylinder 0.4 MPa(a)

Exhausting steam temperature of cylinder 162 ºC

Feed water temperature 216 ºC

Designed back pressure 0.4 MPa(a)

Regenerative system 3 stages (two high) temperature heaters, one deaerator)

Driving means of feed pump Electric-driven, hydraulic coupling speed control



Appendix 4-8

(3) Generator

75. In accordance with the turbine capacity and local electric system requirement, suitable generator is selected. The detailed parameters of the generator are shown in the Table 3-7.

Table 3-7: Parameters of Generator

Items Description

Type Three-phase AC synchronous alternator

Rated power 150 MW (rated power-factor, rated hydrogen pressure)

Rated power factor 0.85 lagging

Rated voltage 15.75 kV

Type of cooling Stator winding water-cooling, rotor winding and stator-core hydrogen-cooling

Source: TA Team

(4) Thermodynamic System

76. The thermodynamic system primarily involves seven sub-systems, including (i) extracting steam system; (ii) water supply system; (iii) condensate system; (iv) drainage and steam releasing system; (v) vacuum-pump system; (vi) auxiliary steam system; and (vii) steam system for district heating. The extracting steam for district heating is adjustable, which is extracted from a middle pressure cylinder. The water supply system is to adopt an individual system. Three motor-driven variable speed feed water pumps are designed for each unit. The condensate system is equipped with four-stage surface type low-pressure heater with full capacity. Under normal operation, condensate water in the high-pressure heater cascades finally into the deaerator, while condensate water in the low-pressure heaters cascades into the expansion tank of drained water from the steam turbine. The vacuum-pumping system of the steam condenser has three 100% capacity water ring vacuum pumps. The start-up steam for the first unit will be supplied by the existing high pressure system. It is not necessary to install start-up boilers. The primary heat exchanging station of the heating network under the Project will provide hot water with supply water temperature of 135ºC and return water temperature of 70ºC to secondary heat exchanging stations distributed in the urban areas.

(5) Combustion System

77. The combustion system is designed according to properties of coal and firing system. Fuel is fed into the CFB and burning at a relatively low temperature to minimize the production of NOx. For the flue gas desulfurization, fine grain limestone is introduced into the furnace where it is calcined and oxidized.

78. The firing system includes six sub-systems of coal feeding system, limestone system, combustion air system, flue gas system, stack, and diesel system. The coal feeding system is designed to distribute coal from a bunker via six conveyers to boiler. The limestone system is to transport limestone from limestone handing house to boiler house by two pneumatic tanks then distribute limestone from limestone silo via two conveyers to boiler. The combustion air system will supply the CFB furnace during start-up and normal operation with required air for sealing, cooling, fluidizing, transportation, and combustion. The purpose of the flue gas system is to transfer heat to the water/steam cycle in the downstream heating surface section and to the primary and secondary air in the tubular air pre-heater. There is one single tube


Appendix 4-9

taper stack for three boiler units for the Phase I, and one stack for the Phase II. Outlet diameter of stacks will be Φ5.5m and the height will be 250 m. The diesel system will be used during start-up and stabilization of combustion (under-30% BMCR-part operation) of the CFB boilers.

(6) Coal Convey System

79. The coal is unloaded by a “C” type turning forward-backward machine. In addition, due to the extreme cold winter in UB, it is necessary to construct a warm house to defrost the coal. The coal storage capacity is designed to provide more than 30 days usage. The coal conveying system from turning unloading room to coal yard will utilize a belt conveyor. The ferrous metal removing equipment is used for separating magnetic metal substances from coal by using a tramp iron separator with a suspending draper-type and discharging iron automatically (Figure 3-4).

(7) Ash Handling

80. Ash handing system is designed to consider ash quantity produced by each boiler; fly ash conveying system; bottom ash conveying system; and ash transportation off the site. The dust emission concentration of ESP is 50 mg/Nm3. The fly ash content is approximately 50% in total ash while the remaining 50% is bottom ash. The positive pressure dense phase pneumatic ash-handling system is one of the most internationally advanced air transport technologies and is recommended for CHP5 Project.

81. The bottom ash handling system will be used to collect and transport bottom ash from the furnace of boiler. The bottom ash from the furnace will be removed continuously by bottom ash coolers, after cooled, then discharged to bottom ash bin through two chain bucket conveyors in series, it will further be transported to the ash disposal yard by truck (Figure 3-6).

(8) Water Treatment Process

82. The proposed water treatment process is designed in terms of water quality; water treatment system for boiler feed water; and auxiliary water treatment processes. The CHP5 will use the existing water source for CHP3. Detailed water quality is presented in Appendix III. In order to meet the required water quality, the following water treatment system will be used. The underground water will go through the following treatment processes: heating by raw water heater in the turbine shop→ raw water tank→ raw water pump→ mechanical filter

with activated carbon bed→ anti-scaling dosing system→ reverse osmoses system with three

stages→ permeate tank→ water pump →mixed ion exchanger→demineralization water tank→

demineralization water pump→the main powerhouse (Figure 3-3).

83. Additionally, auxiliary water treatment systems are designed to ensure water quality, including cooling water for auxiliary facilities; treatment system for condensed water; chemical dosing system for feed water; water and steam sampling; integrated treatment station for treating industrial wastewater; water treatment system for cooling of auxiliary machines; drainage system of the plant; make-up water system; and fire sprinkler system.

(9) Electrical System

84. In accordance with the perspective of the entire allocation of the power system, the following electrical system was proposed: 220 kV primary voltage interconnection system, the four outgoing lines going back to the 220 kV substation, with the plant equipped with 220 kV


Appendix 4-10

power distribution unit. The Project will install five 150 MW units and one 70 MW unit, each of which will be connected to 220 kV power system through its own 190 MVA double-winding transformer. A generator circuit breaker (GCB) will be installed on each unit between its generator outlet terminals and the generator transformer.

85. The rated capacity of transformers will be selected according to the average temperature rise of transformer winding in normal ambient temperature, not exceeding 65K after the maximum continuous volume of generators deducting the service power calculated capacity of units. According to the installation program, the rated output of the CHP5 is designed to be 820 MW on the basis of 5x150 MW turbines plus 1x70 MW backpressure turbine, in which the rated capacity of the main transformer is 190 MVA, and adopts three-phase transformers.

86. The main transformers, high-voltage local transformers, high-voltage start/spare transformers and other electric facilities will be arranged behind Row A of the power house. The Project will adopt a 220V DC system. One bank of batteries and two sets of 100% high frequency switch rectifying charging equipment (battery charger) will be provided for each unit. The electrical system control and protection will be designed for the Project involving relay protection and security system.

87. The communication within the plant includes: production management communication system, production dispatching communication system (including production dispatching system, coal handling amplification/paging system), and wireless talk back communication system. The three parts are mutually back-upped and complemented, so as to form a safe and reliable plant wide communication network of administration, production dispatching, and overhaul maintenance.

88. 220 kV circuit is adopted from the CHP5 plant to CHP4/Erdenet. Each line is to be equipped with two sets of full line and quick action main protection as well as back-up function. Both sets adopt Optical Ground Wire (OPGW) fiber channel and dedicated optical fiber core. The distance skip and main protection share a common tunnel.

89. Each circuit breaker will have a protection screen. Each 220 kV bus is equipped with two sets of microcomputer bus protection. One fault recorder device is configured for the 220 kV wayside housing. An information substation for protection and fault recorder is designed for the power plant, which can communicate with the dispatching center. The security and stability control device needs to be studied separately. The place for a control device screen will be reserved.

90. The CHP5 power plant is under dispatching management by NDC. The telecontrol system will be designed as a remote transmission unit.

(10) Plant Control System

91. The control system of the CHP5 plant shall be completely integrated based on modern distributed control systems (DCS) which will provide the safe, reliable, and efficient operation of all units and the main station/common plant. The control system will include the coordinated integrated control of the turbine and boiler, boiler controls, boiler auxiliaries controls, turbine controls, turbine auxiliary controls, boiler and turbine protection, electrical system controls, ash and coal plant controls, flue gas desulfurization, water treatment plant controls, distribution heating system, and other common/station plant control systems.

92. The plant shall be controlled and monitored from a centralized plant control room (PCR) located in the control building. The centralized plant control room will be staffed 24 hours per day.


Appendix 4-11

93. Plant control system should be equipped with training simulators for training plant operators and new staff. Flue gas monitoring system will be connected to the DCS with adequate data bus or interface and make available to continuously monitor and create data base measurement. The boiler soot-blowing control system will be interfaced with DCS. Turbine manufacturer will provide DEH control cabinet, control oil system, local instrument and control equipment for turbine control and it will be interfaced with the DCS. The turbine by-pass system control functions will be implemented in the DCS. The emergency trip system (ETS) is a part of DCS. The logic system performing the safety functions of protection system for the plant major equipment like boiler, turbine, and generator. The turbine supervisor instrument (TSI) is located in the electronic equipment room. TSI will monitor vibration, thrust bearing axial displacement, eccentricity, speed monitor, and differential expansion, etc. Additionally, the Electric Control System (ECS); SOE Recording System; Limestone Handling Control System; and flying ash and bottom ash handling control system should be included in the design; Specifically, the ESP, FGD and SNCR with alarm functions will be wired as part of the control system.

94. The DCS systems will provide comprehensive process monitoring, control functions, displays, alarming, calculations, data logging, data display, data storage and retrieval, and other functions for each generating unit and its associated auxiliaries and all station plant described above. Additionally, the control processors subsystem; system redundancy requirements; data highways; bridges and gateways; functional requirements and cross monitoring; DCS to other control systems; information system networks and Ethernet bridges; installed and system expansion requirements; and spare inputs and outputs are to be considered in the design of the plant control system.

(11) Water Supply and Drainage System, Cooling Facility

95. Water supply and drainage system and cooling facility will be designed in relation to water source; circulating water system; make-up water system; service water system; water supply and drainage of the entire plant; hydraulic design; and water conservation measures. Tow circulating pumps will be designed for each turbine, each pump with 50% of designed circulating flow rate for each turbine, total ten circulating pumps will be installed, of which six pumps will be installed for Phase I and four pumps for Phase II. Two cooling tower will be constructed for Phase I, with 4,500 m2 cooling surface each. One additional cooling tower will be constructed for Phase II, with 6,000 m2 cooling surface (Figure 3-3).

96. The water will be refilled for cooling tower make-up water, boiler and heating system, industry water system, domestic water system, and firefighting water system. The water consumption will be 1,456 m3/h in summer and 1,344 m3/h in winter. The annual total water consumption will be 8.1 million m3/a.

97. The existing water supply system can serve as the water source of the industrial service water system. Water for chemical water treatment and make up water for cooling tower are provided by the service water pump that meets the requirement of the CHP5. Domestic water supply system is fed from city water supply system. Water supply and drainage systems include: domestic water supply; storm water drainage, domestic sewage, wastewater drainage; and domestic sewage treatment.

98. A comprehensive water pump house will be constructed. The domestic sewage treatment station includes two wastewater treatment facilities, one wastewater regulating tank, and one clean water tank. The system should also include the wastewater treatment facility; the clean water tank; the oily wastewater treatment station; oil-water separator room; oily wastewater regulating tank; and two industrial fire cisterns with a capacity of 1,000 m3, a reclaimed water tank with a capacity of 400 m3, a domestic water tank with a capacity of 200 m3 and two oil tanks against accidents with capacity of 100 m3. All facilities are designed to be


Appendix 4-12

cast-in-place reinforced concrete underground structures.

99. The effective water conservation measures will be taken including installation of dehydrator; recycling of treated wastewater; dry mechanical slag removal; use of pneumatic conveyors; domestic sewage; coal-contained wastewater; and management of domestic water usage.

(12) Ash Yard

100. The ash ponds of the existing CHP3 Plant are situated at 0.5 km west of the project site with hydraulic convey ash system. The proposed ash yard for CHP5 is a new land next to the existing ash pond and it is reserved land for future ash pond for CHP3. The available storage capacity of the ash yard is approximately 1.5 million m3. In case the ash will not be reused as a highway road bed and construction materials4, the capacity of the ash yard will be enough for storage of ash accumulatively produced by CHP5 before 2024 and a new ash yard must be constructed for CHP5 after 2024 (there is enough space for a new ash yard around the site).

101. For the CHP5, trucks will be used for transporting ash. The external ash transport road will be a concrete pavement road with the width of 7 m and sub-grade with the width of 8.5 m. The internal ash transport road will be of clay-bound macadam pavement with the length of 0.5 km, pavement width of 6.5 m and sub-grade width of 8m. In addition, ash dam and drainage measures; seepage control; ash yard O&M; and environmental protection measures should be fully considered in the design of the ash yard.

(13) Firefighting System

102. The firefighting system includes water firefighting system, gas firefighting system, foam firefighting system, as well as fire extinguishers installations, construction of firefighting pond, fire pumps and fire pipeline network. Water firefighting system is responsible for the firefighting of the main plant, auxiliary and associated buildings, oil tank area, as well as firefighting water of cooling water and transformer water spray, automatic spraying or spraying system of the equipment in the main plant, automatic spraying system of coal transport system.

(14) Emissions Control Facilities

103. Electrostatic Precipitator. Each generator unit will be provided with an ESP with parallel gas paths. Each path will consist of four electric fields in a series for the collection of fly ash. The ESPs will have a dust collection efficiency of not less than 99.6%, while firing coal with the ash content of 10%.

104. ESP removes particulate matters (PM) from the flue gas stream. Six activities typically take place: i) Ionization - charging of particles; ii) Migration - transporting the charged particles to the collecting surfaces; iii) Collection - precipitation of the charged particles onto the collecting surfaces; iv) Charge Dissipation - neutralizing the charged particles on the collecting surfaces; v) Particle Dislodging - removing the particles from the collecting surface to the hopper; and vi) Particle Removal - conveying the particles from the hopper to a disposal point.

1. 4 Fortunately, the coal ash utilization in Mongolia developed very fast, the survey for coal ash utilization market in Mongolia conducted by Mongolian Building Materials Manufacture Association of Mongolia in 2011 shows that coal ash demand in 2015 will be 1.145 million t/yr. See Chapter VI and Table 6-11 in detail.


Appendix 4-13

105. Designing a precipitator for optimum performance requires proper sizing of the precipitator in addition to optimizing precipitator efficiency. Precipitator performance depends on its size and collecting efficiency. Important parameters include the collecting area and the gas volume to be treated. Other key factors in precipitator performance include the electrical power input and dust chemistry.

106. SO2 Removal Facility. CFB boilers will be utilized for the CHP5 plant. CFB boiler has been widely adopted in power plants for its characteristics of saving coal, high efficiency and high reliability. It is well known that desulfurization in the boiler using limestone is an outstanding advantage of a CFB boiler. Generally, the combustion temperature of CFB boiler keeps between 800°C and 1000°C and it is the right temperature range for the activity of limestone decomposing into lime. The desulphurization efficiency is also high at this temperature range. Therefore, with appropriate Ca/S and particle size of limestone, the desulphurization efficiency of 80% or more can be reached when Ca/S ratio is about 2.0. Thus a CFB boiler is comparatively fit for middle and low sulfur fuel. Limestone powder is utilized as the desulfurization absorbent. The quality requirements of limestone are: CaO>50％; MgO≤2

％ , SiO2≤2%, fineness is: 250 mesh, sieving residue <10%. The annual limestone consumption is estimated at 152,000 tons.

107. NOx Control Equipment. In additional to low NOx generation from CFB technology, selective non-catalytic reduction (SNCR) system will also be used for additional control of NOx. A reagent is injected into the flue gas in the furnace within an appropriate temperature window. Emissions of NOx alone can be reduced by 30% to 50% (together with CFB technology, the total NOx emission reduction rate can be 80%). The NOx and reagent (urea was proposed) react to form nitrogen and water. A typical SNCR system consists of reagent storage, multi-level reagent-injection equipment, and associated control instrumentation. The SNCR reagent storage and handling systems are similar to those for SCR systems. However, because of higher stoichiometric ratios, both the ammonia and urea SNCR processes require three or four times as much reagent as SCR systems to achieve similar NOx reductions.

108. The reagent injection system must be able to place the reagent where it is most effective within the boiler because NOx distribution varies within the cross section. An injection system that has too few injection control points or injects a uniform amount of ammonia across the entire section of the boiler will almost certainly lead to a poor distribution ratio and high ammonia slip. Distribution of the reagent can be especially difficult in larger coal-fired boilers because of the long injection distance required to cover the relatively large cross-section of the boiler. Multiple layers of reagent injection as well as individual injection zones in cross-section of each injection level are commonly used to follow the temperature changes caused by boiler load changes.

E. Automatic Environmental Monitoring Instrument

109. Online automatic monitoring instruments will be installed on the smokestacks of the CHP5 plant, the monitoring parameters include SO2, NOx and flue dust. The monitoring data will be transmitted to the local environmental authority for supervision.

F. Civil Engineering

110. The three-row layout of the turbine room, combined deaerator, and coal storage room and boiler room is designed for the main power house. The central control room is located between the turbine room and the boiler room. The operating floor for the boiler room is located at level 9 m and one elevator for each boiler is installed for transportation of goods and people. Transportation within the main power house including horizontal and vertical will be designed to ensure well organized operation within the main power house.


Appendix 4-14

111. In addition, fire prevention and evacuation; sanitary facilities; water prevention and drainage of floors and roofs; lighting and ventilation; heat supply; decoration and finishing requirements; and auxiliary buildings need to be considered in the designs.

112. Civil engineering designs will be completed in full consideration of the major technical parameters; safety standards; seismic fortification intensity; flue gas pipe and chimney; coal yard, transfer station and conveying corridor; bottom ash storage and fly ash silo; water treatment buildings; warehouse, mechanical workshop, as well as office and complex and guard house will be designed.

G. Heating Pipeline System and Operation Parameters5

(1) Pipeline System

113. Pre-insulation bonded pipe is by far the most commonly used technology for both new district heating and cooling systems as well as for rehabilitation of existing systems. Steel pipes, insulation materials made of polyurethane foam (PUR), and high-density polyethylene (HDPE) are bonded into one piece in a sandwich-like structure. Compared to on-site insulation pipe buried in a tunnel, a direct-buried pre-insulation bonded pipe has many advantages, such as lower capital cost; reduced heat losses; improved energy efficiency; better anti-corrosive and insulation performance; longer service life; limited land acquisition requirement; and shorter installation cycles, which are conducive to environmental protection and offer great conditions for construction of municipal facilities.

(2) Working Parameters

114. Working Temperatures. Upon completion of the CHP5, about 820 MW of power generation capacity and 1,281 MW (1,101Gcal/h) of heating capacity are expected. The calculation suggests that the 135°C feed water temperature and 70°C return water temperature are suitable for the heating system of CHP5.

115. Heating Capacity and Flow Rate. The total heating demand of the CHP5 is estimated to be 1,281 MW (1,101 Gcal/h). The size of the new heating pipeline is to be designed to accommodate a heating capacity of 506 MW (435 Gcal/h). The flow rate of the main pipeline from the CHP5 is calculated at 6,690 t/h.

116. Working Pressure. In line with international design specification, a nominal pressure of 1.6 MPa is selected for the primary circuit of the district heating system. To best fit the existing heating system, the nominal pressure of the primary circuit to be connected with the CHP5 should be selected at 1.6 MPa.

(3) Proposed Route of Primary Heating Pipeline

117. To reduce the capital cost and minimize potential social and environmental impacts likely brought about by the Project, the TA Team recommends that the existing pipeline system of CHP3 is fully utilized for CHP5 after these aged, deteriorated, and unreliable pipelines are upgraded. On top of that, an additional new primary circuit is to be installed to form the new pipeline system for CHP5.

5 Currently, the properties of the existing CHPs and the district heating pipeline system in UB are owned by different owners. According to the TOR, the TA mainly focused on the CHP5 Plant, and the CHP5 developer/investor to be selected under private partnership participation mode will invest the CHP5 only. The heating pipeline will be invested and constructed by other investors and contractors.


Appendix 4-15

118. The TA Team conducted a preliminary survey and identified a new pipeline route suitable for CHP5. The new route starts at the industrial district area near CHP3, via 5A Primary Pipeline, the EA building, Dundgol River Dam, and Peace Bridge, then returns back to Sun Road and finally ends at Narantuul Market, being hooked up to the existing pipelines. The heating circuit is to be divided into two branch networks at Narantuul Market: one is to be connected with customers in the Amgalan area and another is to connect customers residing in the Altan-Ulgii area and the further east area of UB. The index circuit is designed at 16.7 km in length.

H. Staffing Plan

119. The CHP5 power plant should be designed with appropriate staff numbers. A standardized staffing supervision procedure, an efficient and well-structured organization with a clear definition of departmental and post responsibilities, and an equipment overhaul system must be considered when considering human resources need at the plant. The staff numbers of the entire plant is recommended to be 684.

I. Coal Supply and Transportation

(1) Coal Resource and Estimated Consumption

120. It is estimated that Mongolia’s total proven coal reserves are approximately 12 billion tons and productive resources are 6.2 billion tons. At present, more than 200 coal deposits within 12 coal basins and three regions are known in Mongolia. There are approximately 40 licensed coal mines with different capacity around the country. Most coals are sub-bituminous to lignite in the east and bituminous in the west. In 2009, total coal production was 7.7 million tons per year, of which 5.23 million tons were used for power generation. However, the infrastructures for mass production of many mines are not in place yet.

121. There are two big coal mines at Baganuur and Shivee-Ovoo coal deposits that can supply coal the CHP5 plant. The TA Team recommends that 70% of the coal consumption can come from Shivee-Ovoo coal mine while the remaining 30% will come from Baganuur coal mine. It is estimated that the CHP5 plant will need approximately 3.62 million tons of coal for both Phase I and II (2.63 million tons from Shivee-Ovoo and 0.99 million tons from Baganuur coal mine) based on the heating contents of the coal from these two mines. Phase I will need 1.83 million tons (1.33 million tons from Shivee-Ovoo and 0.5 million tons from Baganuur). The coal qualities from the two mines are listed in Table 3-8.

122. The TA Team visited both mines and discussed with the managers of the mines. Both mines do not have enough spare capacities to provide the coal to CHP5 plant without significant expansion of the mining operations. In order to meet the coal demand by Phase I of CHP5 plant in 2015, the mines will likely need to start the removal of some overburdens in 2012. Thus, it is urgent to start the feasibility study for the mine expansion of these two mines in 2011.

Table 3-8: Coal Contents of Baganuur and Shivee-Ovoo Coal Mines

Heating Value Coal Mine Moisture (%) Ash (%) Volatile (%) Sulfur (%)

MJ/kg kcal/kg

Baganuur 33 9.5 43.9 0.36 14.4 3,400

Shivee-Ovoo 40.7 8.9 42.7 0.9 11.7 2,900

Source: TA Team collected.

(3) Coal Transportation


Appendix 4-16

123. The Mongolian railway is comprised of two separate railways: the Trans-Mongolian main line of 1,110 km long and the Bayantumen Railway of 239 km long. The total length of the Mongolia Railway, including branch lines is 1,815 km. Total railway distance from Baganuur mine to current CHP3 power plant site is approximately 191 km. The railway distance between Shivee-Ovoo mine and CHP3 power plant site in UB is approximately 259 km. Coal is transported by the railway system from both mines to UB power plants.

124. Regarding the coal transportation by railway, TA Team has consulted Mongolian-Russian Joint Stock Ulaanbaatar Railway. The railway authority has issued an official letter concerning the requirement and improvement on the existing railway to transport coal for CHP5.

.


Appendix 4-17

Figure 3-3: Chemical Water Treatment Process


Appendix 4-18

Figure 3-4: Water Supply Facilities


Appendix 4-19

Figure 3-5: Coal Conveying System


Appendix 4-20

Figure 3-6: Bottom Ash Removing System


Appendix 4-21

Figure 3-7: Fly Ash Removing Syst


Appendix 4-22

J. Justification and Rationale

125. Ulaanbaatar (UB) is the coldest capital city in the world with a total of eight months heating season annually, and where almost half of the country’s population resides. UB residents depend on a reliable heating system to both survive and make a living. Reliable heating service is a matter of life and death. Thus, a safe, clean, and reliable heating supply in winter is a critical need.

126. Due to the aging existing heat and power generation facilities in UB, the heat and power supply system in the capital city is quite vulnerable. There is a general consensus that it is an urgent need to build a new combined heat and power (CHP) plant to meet the increased demands of heat and power.

(1) Current Situation of Energy Supply

127. Coal-fired power plants provide the majority of power generation for Mongolia. There are seven main coal-fired power plants in Mongolia with total installed capacity of 856.3 MW, as shown in Table 3-9. The CES, the largest energy supply system in Mongolia, consists of five CHP plants, one transmission network, and four distribution networks, and supplies power to the cities of UB, Darkhan, and Erdenet, as well as the centers of 13 provinces. There are three existing CHP plants (CHP2, CHP3, and CHP4) in UB. The total installed capacity is 814 MW in the CES. Due to aged, deteriorated, and unreliable equipment, the actual available power capacity is only 615 MW in the CES. In 2009, the peak power load in the CES reached 695 MW.

Table 3-9: Summary of Coal-Fired Power Plants in Mongolia (installed capacity)

No. Coal-fired Power Plants

Capacity (MW)

Available(MW)

Share in CES (%) Location Year

Installed Efficiency(in 2009)

1 CHP2 21.5 18 2.7% UB 1961 21.0

2 CHP3 136 105 17.5% UB 1968 38.6

3 CHP4 580 452 70.2% UB 1983 40.1

4 Erdenet Plant 28.8 21 3.6% Erdenet city 1987 40.8

5 Darkhan Plant 48 39 6% Darkhan city 1965 28.5

CES Subtotal 814.3 615 100% --

6 Dornod Plant 36 -- -- Dornod aimag 1969 19.4

7 Umnugobi Plant 6 -- -- Umnugobi aimag 2001 --

Total 856.3

Source: Energy Statistics of Mongolia (2009).

128. The present available heating capacity of the three existing CHP plants in UB is 1,585 GWth, while the actual heating demand in 2009 was 1,555 GWth. In other words, there is essentially no backup heating capacity in UB. This is a very undesirable situation for the coldest capital in the world. The consequences are unimaginable should one of the aging CHP plants in UB become unavailable during the middle of winter.

129. CHP2 is over 40 years old, while CHP3 has been operating for close to 40 years. It is generally agreed by experts that most parts of the heat production systems in these two plants


Appendix 4-23

are nearing end of their life. The original expected retirement periods of CHP2 and CHP3 were 2005 and 2011, respectively.6 However, due to the lack of new replacement heating sources, these two plants have to be kept in operation.

130. CHP4 is the largest coal-fired CHP plant in Mongolia, with a design capacity of 540 MW and later modified to 580 MW. It covers 70% of total electricity demand of the CES and 64% of total heat of the district heating system in UB. The plant was built over 27 years ago and many upgrades and repairs have been made in recent years.

131. Due to various reasons including low boiler efficiencies, low steam/water cycle efficiencies, excessive internal consumption of heat and power, low condensate return, and high-energy (radiation, leakage, etc.) losses, the fuel utilization efficiency7 of the existing CHP plants is in the range of 20-40%. In comparison, a modern coal-fired CHP plant can achieve 50-80% fuel utilization efficiencies depending on the technologies and heat load profiles.

132. In addition to the CHPs, hundreds of small coal-fired heat-only boilers (HOBs) and thousands of domestic heating stoves are widely used in UB for space heating. According to a survey8, 89 HOB houses and 1,005 coal-fired water heaters are being used for public buildings and apartments in the ger areas of UB. HOBs typically have a capacity ranging from 250 kW to 1,000 kW and average efficiencies from 45% to 55%, and were designed to provide hot water and heating service to one or several buildings such as schools and kindergartens as their central heat location. In addition, domestic stoves (with average efficiency is about 40%) are widely used in ger households. According to a World Bank survey, there were approximately 104,000 heating stoves in UB in 2008.9

133. Due to lack of efficient pollutant emission control devices, emissions of SO2, NOx, CO, and particulate matters (PM) from UB energy generating facilities including CHPs, HOBs and domestic stoves are major contributors to air pollution. The CHP4 plant is equipped with electrostatic precipitators (ESP), but emission control systems for SO2, NOx, and CO are not in place. Other heat and power generators, including CHP2, CHP3, HOBs, and domestic heating stoves, do not have any emission control devices. They are the largest contributor to the air pollution during the long winter heating season. During the past few years, complaints about air pollution in the city have increased dramatically, especially during the winter months. It was reported that UB is one of the most-polluted capital cities in the world.10

(2) Heat Demand Estimations

134. It was estimated by the Energy Authority that an additional heat load will reach 242.3 GCal/h11 by 2012 and over 1,000 Gcal/h by 2020. Total heat load will reach 2,176.3 Gcal/h by 2015. However the total heating capacity in UB is only 1,585 Gcal/h, which then leaves a demand and supply gap of 591 Gcal/h. The gap will increase to 970 Gcal/h by 2020. Figure 3-8 illustrates the increasing heat demand in the past 10 years as well as Projections for the next 10 years.

6 Source: Feasibility Study on a Thermal Power Plant for Oyu Tolgoi Copper/Gold Mine Project, Japan Bank For International Cooperation, 2006. 7 Fuel utilization efficiency is a ratio of the net energy (electricity and heat) production to the total fuel input to the boiler. 8 Market Study of Heat-only Boilers and Coal-fired Water Heaters in UB, 2008, MNET 9 Source: Heating in Poor, Peri-urban Ger Areas of Ulaanbaatar, Mongolia, the World Bank, 2009. 10 World Bank, 2009, Initial Assessment of Current Situation and Effects of Abatement Measures, Air Pollution in Ulaanbaatar 11 The differences between the estimated heat demands in 2012 and in 2010 (1797.3-1555=243.3 GCal/h).


Appendix 4-24

Figure 3-8: Heat Load Estimates by Energy Authority

Source: Energy Authority, MMRE, Mongolia

135. Another heat load estimation made by Japan International Cooperation Agency (JICA) team suggests that additional heat load will reach 287 Gcal/h by 2010, 744 Gcal/h by 2015, and 1,178 Gcal/h by 2020. The total heat capacity was 246.3 Gcal/h in 2007, which then leaves a demand and supply gap of about 30 Gcal/h to make up the additional heat demand of 2010. The gaps are expected to increase at 496 Gcal/h by 2015, 932 Gcal/h by 2020, and 1,733 Gcal/h by 2030. Figure 3-9 presents the estimation results.

Figure 3-9: Heat Load Estimation by JICA Team

246. 3 287

744

1178

1590

1979

0200400600800

1000120014001600180020002200

2007 2010 2015 2020 2025 2030

Reser ved Heat i ng Capaci t y ( Gcal / h)Addi t i onal Heat Demand ( Gcal / h)

Source: Study on City Master Plan and Urban Development of UB City

136. On average, both estimations suggest an increased heat capacity of over 450 Gcal/h by 2015 and over 900 Gcal/h by 2020, to fill in the gaps.

(3) Power Demand Estimation

137. The UB Municipal Governor’s Office prepared the power demand forecast for UB area based on the analysis made in the capital development plans. By 2020, potential power demand will primarily come from: (i) new apartment buildings; (ii) ger areas remaining until 2020; (iii) ger areas being replaced by new apartment buildings; and (iv) apartment buildings


Appendix 4-25

to be built in the city’s reserved areas. The power demand forecast is shown in Figure 3-10.

Figure 3-10: Power Demand Estimations for UB

Source: UB Municipal Governor Office

138. Due to the fact that CHP5 is mainly designed to meet the heating demand as mentioned previously, it will not fully meet the additional power demand of the CES system. In accordance with the reasonable ratio between heat generation and power generation, the power supply of the CHP5 is proposed to be 450 MW by 2015, and 820 MW by 2020. Based on the power demand forecast above and the power supply capacity of the existing power plants, the balance sheet for power supply and demand by 2030 was prepared by the TA team, as shown in Table 3-10. As the power demand increases, the existing power plants and new CHP5 cannot fully meet the power demand. The difference should be covered by other sources, such as constructing new power plants near coal mines or import from other countries. By 2015, the balance that should be covered by other power sources is 158 MW, and it will reach 173 MW by 2020, and 766 MW by 2030.

Table 3-10: Balance of Power Supply and Demand by 2030 (Available Capacity) 2011 2012 2013 2014 2015* 2016 2017 2018 2019 2020 2025 2030

10 10 10 0 0 0 0 0 0 0 0 0

120 120 120 120 80 80 0 0 0 0 0 0510 510 510 510 510 510 510 510 510 510 510 51015 15 15 15 15 15 15 15 15 15 15 1540 40 60 60 60 60 60 60 60 60 60 60

695 695 715 705 665 665 585 585 585 585 585 585762 819 862 934 1,003 1,074 1,141 1,214 1,290 1,376 1,661 1,933

0 0 0 0 450 450 450 450 450 820 820 82067 124 147 229 -112 -41 106 179 255 -29 256 528

36 36 36 36 40 40 40 40 100 150 150 15024 0 0 0 0 0 0 0 0 0 0 083 128 181 196 270 280 302 290 235 202 219 238

143 164 217 232 310 320 342 330 335 352 369 388

695 695 715 705 705 705 625 625 685 735 735 7350 0 0 0 450 450 450 450 450 820 820 820

Total Balace of CES (MW) 67 124 147 229 158 239 408 469 490 173 475 766762 819 862 934 1,313 1,394 1,483 1,544 1,625 1,728 2,030 2,321

Power BalanceTotal generation of exisitng power

Oyutolgoi diesel plant (MW)

CHP-5 (MW)Import/Other sources (MW)

*- Gobi Mining Area expected to be connected to the Central Grid

Import/Other sources (MW)Gobi area demand (MW)

Years

Total generation (MW)Original CES Demand (MW)

Gobi Mining Area

Central Energy System

Total demand of CES (MW)

CHP-2 (MW)CHP-3 (MW)CHP-4 (MW)Erdenet CHP (MW)Darkhan CHP (MW)

Ukhaahudag CHP (MW)

CHP-5 (MW)


51. 7104. 2

157. 8211. 8

267. 2310. 2

346. 2383. 3

421. 5462

498. 7

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020


Appendix 4-26

(4) Necessity of Additional Heating and Power Capacity

139. As mentioned previously, the existing CHP plants in the CES cannot meet the peak power load, while the available heating capacity is almost fully utilized without backup capacity. In addition, the expected retirement period of CHP2 and CHP3 was 2005 and 2011, respectively. Even if the CHP2 and CHP3 are not decommissioned in the short term, their operation will not be stable and reliable because these plants have worked for over 30 years and their equipment is inefficient and in poor conditions. A failure or temporary outage of CHP2 or CHP3 during heating season will create serious problem to daily life of UB residents and also severely undermine the reliable power supply in the CES.

140. In addition, UB’s heating and electricity demands have increased every year by approximately 6% and 5%, respectively, due to the economic development and influx of population from rural and pastoral areas. Both heating and electricity demands are expected to increase in the range of 4-5% annually between 2010 and 2020. Reliable supply heat and electricity is a prerequisite to sustain economic activities in Mongolia. A draft strategy paper on the energy sector of Mongolia has been prepared and it recognized that the energy sector is essential in supporting the growing economy and sustainable development of Mongolia.12

141. As the existing CHP2, CHP3, HOBs, and domestic heating stoves in UB are the major pollution emission stationary sources, replacing them with a new modern CHP plant with the best available emission control technologies is a very logical and environmentally sound choice. Therefore, it is critical to construct new CHP facilities to serve UB and ensure the reliable supply of heat and electricity and services for the capital city whilst also improving the local environment.

142. In accordance with the energy sector development policy and the Millennium Development Goals-based Comprehensive National Development Strategy of Mongolia, during Phase I (2007-2015), a new CHP plant should be constructed in UB City. In addition, the results of the Study on City Master Plan and Urban Development of UB City financed by JICA indicated that a new power plant is required before 2015.

143. Therefore, the Government placed the new CHP power plant (CHP5) project as one of its top priorities in the Action Plan of the Government of Mongolia for 2008-2012. The proposed capacity of the CHP plant was expected to be able to (i) meet growing energy demand resulting from rapid urbanization in UB and the city’s economic development led housing construction sectors; (ii) reduce urban air pollution by retiring CHP2 and CHP3; and (iii) improve the security of energy supply to the capital city.

(5) Advantages of CHP Technology

144. CHP technologies are reliable and have significantly improved in the last two decades. In its simplest form, it employs a steam turbine to drive a generator for generating electricity, and heat produced after power generation is recovered, usually in a heat recovery device. The heat contained in the steam and hot water can then be used to provide industrial processing and space heating. Because CHP systems make additional use of the heat produced during electricity generation, they can achieve overall efficiencies in excess of 80%. In comparison, the efficiency of a conventional coal-fired power plant, which discharges a significant amount of heat to the atmosphere, is typically about 30-40%.

12 T. Enkhtaivan, Vice Minister of MMRE, 2010, Current Situation, Problematic Issues and Further Implementation Objectives of Energy Sector.


Appendix 4-27

145. Many countries have established policies to encourage the use of CHP when there are demands of heat and power at the same time. For example, in order to further promote CHP technologies and increase the energy efficiency and improve the security of supply of energy, the European Union issued a directive in early 2004. It states that the promotion of high-efficiency CHP based on a useful heat demand is a priority given the potential benefits of CHP with regard to saving primary energy, avoiding network losses and reducing emission, in particular of GHG.13

146. The high level of efficiency achieved for CHPs has important environmental benefits, more specifically in terms of the reduction of greenhouse gases (GHGs). The levels of carbon dioxide (CO2), nitrogen oxide (NOx), and sulfur dioxide (SO2) emitted from CHP plants are much less than those from a conventional coal-fired power station and HOBs. The CHP technology can provide the benefit of energy efficiency improvement and emissions reductions. The use of a CHP is highly advantageous in UB due to the eight-month long heating season with a stable heating load and domestic hot water demand. Therefore, CHP is the logical preferred choice to meet the heat and power demands of UB.

13 Directive 2004/8/EC of the European Parliament and of the Council, 11 February 2004, On the Promotion of Cogeneration Based on a Useful Heat Demand in the Internal Energy Market.


Appendix 4-28

IV. DESCRIPTION OF ENVIRONMENT

147. Mongolia is a land-locked country, located in the central part of Asia between 41º35’’-52º06’’ latitude and 87º47’’-110º57’’ longitudes. The population of Mongolia reached 2.7 million in 2009, a 5% increase since 2006. Mongolia has staged an impressive recovery from the steep recession of late 2008 and early 2009. Moreover, the economic recovery is becoming broad-based. Strong demand for copper and coal from China are fuelling the recovery. Fiscal balances have improved strongly in step with mineral-related revenues. The gross domestic product (GDP) of Mongolia increased from 3 trillion MNT in 2006 to 3.6 trillion MNT in 2009, with a 5.7% annual average increase rate from 2006 to 200914. The real GDP growth for 2010 is estimated to be 8.5% year-on-year.15 Along with population growth and economic development, demand for both heating and power have also continually increased in Mongolia, especially in UB.

148. Ulaanbaatar (UB), the capital city of Mongolia, is the coldest capital city in the world. It is the political, economic, and culture center of Mongolia. Since the reform of Mongolia, the population of UB has grown rapidly mainly due to the migration stream into UB. The population of UB increased from 650,000 in 1998 to 1.1 million in 2009 at an annual average growth rate of 5% during the period. The population of UB accounted for 40.4% of the country’s population in 200916. As the economic center of Mongolia, UB has more than 70% of the total registered business entities in Mongolia and also accounts for 50-60% of the GDP of all of Mongolia. Due to development of the economy and influx of population into UB from rural areas, the energy supply of UB, especially heating, is facing severe challenges.

A. Physical Environment

A.1 Topography and Geography

149. The topography of UB is flat, steppe, rolling, and hilly. The vegetation is predominately steppe grassland and some of the hills around the City are covered with coniferous forest. UB is located on the foothills of the Khentein Mountain with an average elevation of 1,350 meters above sea level and is surrounded by the following four mountains: Bogd Mountain (2,268 m) and Songino Khairkhan (1,652 m) to the south, Chingelte Mountain (1,949 m) to the north, and Bayan Zurkh Mountain (1,834 m) to the east.

A.2 Geology

150. From a geological perspective, the City mainly consists of metamorphic, magmatic, and clastic complexes of all the geological ages. The surface of the mountain structures usually has Precambrian and Paleozoic Geosynclinal complexes, characterized to a significant extent by deformations and metamorphic changes. Mesozoic rocks and Cenozoic sediments cover the folded and faulted foundations. Small masses of granitic rocks also occur at various locations.

A.3 Soil Distribution

151. UB Municipality is part of the mountain forest-steppe belt. The territory of the City belongs to the category of the southwest part of Khangai and the central part of Khentii region by its soil formation. According to the soil geography, it is divided into three main parts, viz.

14 Source: Mongolia Yearbook 2009. 15 Mongolia Quarterly Economic Update, October 2010, World Bank. 16 Source: Mongolia Yearbook 2009.


Appendix 4-29

crumbled stones and light clay in the small and low mountain area, thin black brown soil in the Middle Mountain and light clayish brown soil in the wide and narrow valley between mountains. The soil distribution in the City consists of shallow stony dark chestnut soil, alluvial meadow soil, alluvial weakly developed soil, ordinary dark chestnut soil, dark chestnut soil and dark chestnut. The pH value ranges from 7.4 to 8.7 and humus values range from 0.6% to 3.8%. Soil contamination through solid waste disposal is clearly visible throughout all areas of UB. The soil is low in organic matter and has difficulty in retaining water.

A.4 Soil Erosion

152. At present, several footpaths/pathways in UB have been converted into resembling seasonal drain lines. During the rainy season, these drain lines carry away the topsoil of the area, finally creating deposition problems in nearby watercourses, particularly in the Tuul River. In addition, some of the connecting pathways/footpaths have been converted into gullies.

A.5 Seismic

153. The Project area is located in an earthquake probability zone of 6-7 MSK on the earth tremor scale. The territory of the city is far away from the Mongol Altai Nuruu and Khuvsgul Darkhad Khotgor zone, which is a dangerous region of earthquakes in Asia. However, there remains a high probability of a middle-powered earthquake in the Project area.

A.6 Climate

154. Air temperature. Consequent to its geographical situation, surface relief and the height above the mean sea level, the climate of UB is distinctly continental. The climate of the Project area is characterized by four seasons: (i) the summer period from June to August when the average maximum temperature reaches up to 37.3°C; (ii) the autumn and dry seasons from September to November when there is little variation between minimum and maximum temperatures; (iii) the winter period from December to the end of February when minimum temperature reaches -49°C; and (iv) the spring season from March to May when temperature variation between minimum and maximum is in the range of -35.1°C to 32.2°C (the detailed average air temperature is shown in Figure 4-1).

Figure 4-1: Average Air Temperature (оC)

Source: Institute of Meterology and Hydrology

155. Precipitation. The average annual precipitation in UB ranges from 249 to 261 mm, in which 180-190 mm falls during the warm season, including 75-80% in the summer, especially in July and August. In winter, 5-7 mm precipitation falls. It rains for 40-70 days each year, snows 25-30 days, and 140-170 days are observed as having snow coverage. The detailed precipitation in 2005 per month is shown in Table 4-1.


Appendix 4-30

156. Relative Humidity. During the spring from April to May, it is dry and windy, and the relative humidity is only 47% and 45% in April and May, respectively. The yearly average relative humidity is 62%. The detailed average monthly humidity is shown in Table 4-2.

Table 4-1: Precipitation and Relative Humidity by Month

Months Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total/average

Precipitation (mm) 1.9 2.3 2.5 7.1 20.6 35.6 61.9 63.7 33.2 7.1 5.7 3.3 242.5 (total)

Relative Humidity (%) 74 65 61 47 45 52 60 64 62 62 72 75 62 (average)


Figure 4-2: Days for Precipitation (day)


157. Wind Speed. The yearly average wind speed is 2.5 m/s, and April, May, and June are the windy months. May is the windiest month when the average wind speed is a high 4.0 m/s and the number of days with strong wind is 9.8. However, in December and January, the two coldest months, the wind is weak and the wind speed is less than 1 m/s. The detailed wind speed and windy days are shown in Tables 4.2 and 4.3. The dominant wind direction is north.

Table 4-2: Monthly Average Wind Speed (m/s)

Months Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average

Wind Speed 0.8 1.3 2.6 3.9 4.0 3.7 3.1 2.8 2.8 2.3 1.5 0.9 2.5

Source: Institute of Meterology and Hydrology, 2005

Table 4-3: Days with Strong Wind

Months Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Days 2 1.5 1.5 4.2 9.8 3.6 4.2 2.0 3.0 1.6 1.2 1.5


158. Snow Cover. On average, stable snow coverage formation starts in the last 10 days of November and melts in the last 10 days of March; however, the period of snow coverage is different for each year. The earliest date when snow begins to cover the land is October 15th and the latest date when snow begins to melt is May 20th. The thickness of snow coverage in the beginning of winter and the end of winter is 2-5 cm and it reaches 5-7 cm in the middle of winter. There is stable 2-5 cm of snow coverage which continues for 110-120 days (the maximum snow coverage in January is 3-19 cm) and the mean snow density reported is 0.15 - 0.18 g/cm3.


Appendix 4-31

B. Ecological Environment

B.1 Flora

159. Vegetation coverage around the UB Mountain and its surrounding area consists of a forest zone commonly called the Mountain Forest Steppe, which is a kind of coniferous forest, with Larchs (Larix siberica), Pines (Pinus sylvestrs), etc. According to the General Dendrologist of UB city, the total area of the city’s forest resources is 266,900 hectares (ha), 70% of which (188,900 ha) are covered by forests. These forests are comprised of various species, including: i) Larch (Larix sibirica) 91,600 ha; ii) Stone Pine (Pinus sibirica) 37,500 ha; iii) Spruce (Picea ovobata) 25,000 ha, iv) Pine (Pinussylvestris) 12,100 ha, v) Aspen (Populus tremula) 800 ha; vi) White Birch (Betula platyphylla) 19,900 ha; vii) Poplar (Populus diversifolia) 100 ha; and viii) Willow (Salix spp.) 3,800 ha.

160. The other major kinds of flora reported in the territory of UB are Chenopodium album, C. aristatum, Iris dichotoma, Potentilla anserinea, Artemisia commutata, A. scaeporia, Urtica anguistifolia, Festuca lenensis, Silene repens, S. glareosa, Korshinskyi, Stenophylloides, Leontopodium, Thymus dahuricus., Schizonepeta sp., Elytrigia repens., Taraxacum sp., S. Klementzii, S. salicifolia, Plantago sp., Astralaqus. galactites etc.

B.2 Fauna

161. The main animals reported in and around the City are: a) Mammalai: Tolai Hare (Lopus tolai), House Mouse (Mus musculus), Brandt's Vole (Microtus brandtii), Narrow-skulled Vole (Microtus gregalis), Daurian Pica (Ochotna daurica); b) Amphibia: Mongolian Toad (Bufo raddei), Siberian Salamander (Hynobius keyserlingi), Japanese Treefrog (Hyla japonica), Amur Frog (Rana amurensis); and c) Insect: House Fly (Musca domestica), Siberian Moth (Dendrilimus superans), Gypsy Moth (Lymanthria dispar), Moth (Orgya antiqua), Moth (Erannis jacobsoni), Longicorn Beetle (Monochamus sutor), Longicorn Beetle (Acanthocinus carinulatus), Larch Bark Beetle (Ips subelongatus), Siberian Bark Beetle (Scolytus morawitzi).

162. The major bird species reported in the area are the Black Kite (Milvus migrans), Horned Lark (Eremophila alpestris), Carrion Crow (Corvus corone), Raven (C. corax), Rook (C. frgilegus), Magpie (Pica pica), Pigeon (Columba livia), House Sparrow (Passer domesticus), Trees Srarrow (Passer mnotanus), Red-billed Chough (Pyrrhocorax pyrrhocorax), Northern Sparrow (Accipiter nisus), Daurian Jackdaw (Corvus daurica), etc.

163. The main fish species enlisted in the Tuul River are the Siberian Grayling or Umber (Thymallus arcticus), Siberian Loach (Nemacheilus barbatus toni), Northern Pike (Erox lucius), Lenok (Brachmystax lenok), Spiny Loach-Siberian (Cobitus teania), Burbot (Lota Iota), and River Perch (Perca fulviatilis). Occasionally, a few rare fish species are reported in the Tuul River, viz. Taimen (Hucho taimen), Siberian Roach (Rutilis rutilis), Mirror (Cyprinus carpio), and Amur Catfish (Parasilurus asotus).

C. Cultural Heritage

164. Mongolia is famous for its heritage of ancient history in the world. The historic heritage of the country is most famous for Chinggis (Genghis) Khan, the warrior-statesman, who in the 13th century united the Mongolian people into a strong nation and conquered a swath of the world from modern-day Korea to southern Russia, and invaded deep into Europe; the cultural achievements of his grandson, Khubilai Khan, are well-known in world history as well.


Appendix 4-32

165. UB was founded in 1639 as Urguu, a mobile monastery-town. It was often moved to various places along the Selenge, Orkhon, and Tuul Rivers. In 1778, the city settled at its current location near the confluence of the Selbe and Tuul Rivers and beneath Bogd Khan Uul, which was at the time also on the caravan route from Beijing to Kyakhta. The major culture and historic relics in UB include:

1) Choijin Lama Monastery, a Buddhist monastery that was completed in 1908. It escaped the destruction of Mongolian monasteries when it was turned into a museum in 1942;

2) Gandan Monastery, which dates to the 19th century. Its most famous attraction is a 26.5 meter high golden statute of Migjid Janraisig. These monasteries are among the very few in Mongolia to escape destruction (the location is 4.6 km northeast of the CHP5 site); and

3) Winter Palace of Bogd Khaan, one of the first museums in Mongolia, built in 1924. It was once a winter residence of the last Bogd Khaan of Mongolia, Javzandamba. The palace compound was built between 1893 and 1903 and is well known for the Gate of Peace, Temple, and personal library of Bogd Khaan. Among the museum's exhibits are sculptures by Mongolia's first Bogd Khaan Zanabazar. The museum has 21 invaluable sculptures of the Buddhist-deity Tara (the location of the relics are 3.5 km southwest of the CHP5 site).

D. Transportation

166. Airport: Chinggis Khaan International Airport is located 18 km to the southwest of UB, which was reconstructed in 1990. Mongolian Airlines offers direct international flights between UB and the cities of Berlin, Moscow, Irkutsk, Seoul, Beijing, and Tokyo, and domestic flights from UB to Dalanzadgad, Moron, Khovd, Bulgan Khovd, Altai, and Arvaikheer as well. Korean Air flies daily between Seoul and UB; Air China flies daily to and from Beijing; and Russian Aeroflot flies daily between Moscow and UB.

167. Railway: Direct, but long journeys are possible from Moscow, Russia, and Beijing, China to UB on the Trans-Mongolian line of the Trans-Siberian Railway. Trains also run to the Chinese border towns of Erlian 3-4 times a week. There's also a daily train to/from Irkutsk in Russia, and trains from Beijing run once a week with the journey of about 30 hours.

168. Highway: As there are barely any paved roads in Mongolia, the few ones that exist and lead to UB, such as one from the north starts at the Russian Border; and one coming from the south (the Gobi) starts at Choir; and one coming from the north-east the paved road starts at Bulgan.

E. Socioeconomic Conditions

169. The key social indicators of the City are summarized on the following page:


Appendix 4-33

Table 4-4: Key Social and Economic Indicators of UB (2009)

Item Indicator

Population Total population in UB: 1,120,300 (total population of Mongolia: 2,735,800) Population density in Mongolia : 1.75 person/km2

Land Total area: 1564,9 km2 with the urban area of 46 km2

Administrative divisions 9 districts in UB; 329 soums, 1,568 bags and 132 khoroos

Economy • Gross Domestic Product (GDP): 6 055 794.3 million tug in 2009 (Per Capita 2,234.5)

• Major industrial products: wool, cigarettes, pharmaceutical • Major crops: wheat, barley, corn, oats, potato, vegetables, fodder

crops, technical crops • Major mineral resources: coal, gold, molybdenum, copper

Education and medical service

• General educational schools in Mongolia: 755 (736,800 students) • General educational schools in UB: 115 (3,400 students) • Vocational schools: 44 (33,400 students) • Higher educational institutions, colleges and universities: 142 • State hospitals: 364 • Private hospitals: 1,082 • Family hospitals: 226

Source: Mongolian Economic Yearbook 2009

F. Environmental Baseline

F.1 Surface Water in Mongolia and UB

170. Mongolia is a water shortage country compared with other countries. The country's environmental conditions present some challenges in development and management of water resources. The average annual precipitation in the country is 250 mm, ranging from 400 mm in the north to less than 100 mm in the southern Gobi region. Approximately 90.1% evaporates; 3.6% infiltrates into the soil; and only 6.3% forms surface runoff, which is transformed into available water resources in surface water bodies (in most cases, the steams and reservoirs are completely frozen for a considerable portion of the year). Water resources in Mongolia are limited, highly vulnerable to climatic conditions, and unevenly distributed within the country. There are three main hydrological basins such as the Arctic and Pacific Oceans and Central Asian Endo-Archaic Basins. Rainfall is the principal source of water for the rivers of the region, while water from melting snow makes up 15-20% of the annual runoff. About two-thirds of the surface runoff leaves Mongolia.

171. The Tuul River is one of the biggest rivers in the country and flows along the north side of the capital. The Tuul River flows from the confluence of the Namya and Nergui Rivers which have their sources from Chisaalai peak and Shorootiin dava, situated 2,000 m ASL. The primary source of water for the Tuul River is rainwater during summer and autumn. Annual river runoff in UB is 627 million m3, out of which 1.4% flows for the period from October to March, 14% flows in April and May, and 84.5% flows in summer and autumn. Therefore, it is clear that the basic source of water for the Tuul River is rainwater. The catchment area to UB is 6,300 km2 covering the forest and steppe area (Figure 4-3). Average channel width, depth, and velocity along the river are 35-75 m, 0.8-3.5 m, and 0.5-1.5 m/s respectively.


Appendix 4-34

Figure 4-3: Location and Geographical Features of the Tuul River

172. There are three components that form the composition of runoff from the Tuul River, such as the contribution of precipitation, snowmelt, and groundwater. The estimated annual composition of runoff from the Tuul River has a portion of about 69% from rainfall, 6% from snowfall and snow melting, and 25% from groundwater discharge on average. Annual mean river flow of the Tuul River at UB is 25.8m3/s (Figure 4-4). Inter-annual and inter-seasonal variations of water flow of the Tuul and Uliastai Rivers are very high. Ninety percent of the annual flow forms in the period between May-September in a normal or average year. Forty-three percent of annual flow in the Uliastai River and 50.7% of annual flow in the Tuul River form in the July-August period on average.

Figure 4-4: Runoff Components in the Tuul River flow at Ulaanbaatar

Note: Yellow - spring flood; dark blue - groundwater discharge; and light blue - rainfall flood

173. Total water resources of Mongolia are estimated to be 609.6 km2. Surface water accounts for 20% of the country’s water consumption; 80% originates from groundwater sources. Groundwater is currently the main source of supply for household and drinking use, watering points for pastures, and industrial consumption.

174. Water is not currently recycled, and 70% of urban sewage goes untreated. Domestic wastewater in rural areas is mostly discharged into the environment without any treatment. The coverage of sanitation service is about 25%. Only 9.4% of water used by industries is recycled in UB.

175. The latest study of water sources of UB was made in 2009 by JICA under the UB


Appendix 4-35

Water Supply Development Project in Gachuurt (see Table 4-5 in detail).

Table 4-5: Water Sources in UB

Potential Water Source*

Available Water Amount in 1995*

Available Water Amount in 2009*

Estimated Water Reserve** Water

Source (m3/day) (m3/day) (m3/day) (m3/day)

Upper 90,000 24,000 90,000, Wells: 55 89,700

Central 114,300 97,000 110,000, Wells: 93 114,000

Industrial 25,000 25,000 25,000, Wells: 16 40,000

Meat Complex 15,000 15,000 15,000, Wells: 11 22,000

Gachuurt 40,000 or less 0 0 -

Total 284,300 161,100 240,000, Total № of Wells: 175 265,700

Source: JICA 1995 MP & JICA Survey Team; ** According to official letter received from WA in July 29, 2009.

176. In 2010, the actual water production by the Water Supply and Sewerage Authority of UB was 160,000m3/day17 . Therefore, the estimated water reserves are 105,700m3/day (265,700m3/day-160,000m3/day) in the UB area, excluding Gachuurt reserve. From this reserve, 60,000m3/day of water right is given to housing companies. The balance is 45,700m3/day. The new CHP5 water consumption will be about 24,000m3/day. Therefore, there will be sufficient water resources for the proposed CHP5 Plant.

177. In addition, water research studies were conducted around the confluences of the Ovor gorkhi (25-26 km upstream) and Terelj (60km upstream) rivers. Their proven water reserves under the industrial category are 11,750.4m3/day and 40061.95m3/day, respectively.

178. The comprehensive survey for the entities within 2 km radium of the CHP3 site has been conducted by the domestic consultants in May 2011. The survey shows: i) all the entities within 2 km radium of the CHP3 site are small factories, shops, and institutes; ii) there are no environmental sensitive spots, such as schools, hospitals, and residential communities within the radium, except the two listed in Table 4-13; iii) all the entities use tap water provided by UB’s municipal water supply system, so there will be no conflicts and impact by the CHP5 Project.. The surveyed entities are listed in Table 4-6.

Table 4-6 Survey for Water Balance within 2km Radium of the CHP3 Site

Name of Entity Sector Water Source

1. Complex shop Construction material store Tap water 2. Gurvaljin market Construction material store Tap water 3. Iron material market Sell metal materials and products Tap water

4. Wooden material market Timber store Tap water 5. Akuma shop Import vehicle batteries Tap water 6. Nera center Construction material production Tap water 7. Technical Import Co.ltd Trade Tap water

17 Source: USUG


Appendix 4-36


8. Us Oyu Co.ltd Drill & build water wells Tap water 9. Shunkhlai Gasoline station Tap water 10. Shooting center Shooting club Tap water 11. Khusug Trade Co.ltd Vehicle repair Tap water 12. Gobi 2 Cashmere production Tap water 13. Niislel Urguu Co.ltd Construction Tap water 14. Zasagt Khaan Stone Co.ltd Stone processing Tap water 15. Matitsi Co.ltd Computer hardware shore Tap water 16. Gangar Invest Co.ltd Real estate Tap water 17. Bazalt Wool Co.ltd Insulation material production Tap water

18. Mongol Camico Co.ltd Production of cigars and cigarettes Tap water

19. Warehouses Tap water 20. Metro Express Dry cleaning and laundry Tap water 21. Gobi factory and shop Cashmere production and sale Tap water 22. Petrovis Gasoline station Tap water 23. MT Deko Glass and mirror production Tap water 24. Foam factory Construction material production Tap water 25. SMGFST Co.ltd Civil construction Tap water 26. Dalain Buyan Co.ltd Civil construction Tap water 27. Battery Doctor Mongolia Co.ltd Batteries repair Tap water 28. OB plastic Plastic bag production Tap water 29. Shinest Co.ltd Manufacturing of wooden product Tap water 30. Khungun beton Co.ltd Construction material production Tap water 31. Esen Trading Oil Baaz Import of vehicles fuels Tap water 32. Mon Chemistry Co.ltd Supply of chemicals Tap water 33. 011 Military base Tap water 34. Khairkhan Co.ltd Market Tap water 35. City taxi Taxi service Tap water 36. Khaan Khuns Food production Tap water 37. Bitafit Co.ltd Beverage production Tap water 38. Erel Group Construction and mining Tap water 39. Erel Bank Banking Tap water 40. MonFresh Food production Tap water 41. Furniture factory Furniture production Tap water 42. UB electricity distribution network Energy Tap water 43. Bus company Transportation Tap water 44. Automobile service shop Automobile Service Tap water 45. Gasoline station Gasoline station Tap water 46. Gegeen Urd Co.ltd Food production Tap water 47. Munkh Dardas Co.ltd New agency Tap water 48. Global Heavy machinery Tap water 49. Bambuush Co.ltd Food production Tap water 50. Altai cashmere Cashmere production and sale Tap water 51. Sod Mongol Gasoline station Tap water 52. Tavan Bogd Co.ltd Trade Tap water 53. Barmaash Co.ltd Vehicle repair Tap water 54. ZiteMine Co.ltd Mining Tap water


Appendix 4-37


55. VW dealer Car sales Tap water 56. Megawatt Co.ltd Boilers and heating supplies Tap water

57. UB electricity distribution network Power supply Tap water

58. Misheel Center Exhibition Tap water

59. Environmental research laboratory Research Tap water

60. HKB International Holdings Mining Tap water 61. Shoko Trade Trade Tap water 62. Armana Research institute Tap water 63. Former shoe factory Office rental Tap water 64. Petrovis Gasoline station Tap water 65. Sam Won Co.ltd Gravel pit Tap water 66. Teever Zuuch Co.ltd Logistics Tap water 67. Mongol Deever Civil construction Tap water 68. Altan Dornod Co.ltd Construction material Tap water 69. Altain Nutgiin Khuchten Co.ltd Construction material Tap water 70. Zolotok Vostok Mongolia Co.ltd Mining Tap water 71. Vostok neftegaz Co.ltd Construction material and mining Tap water

179. The Tuul River flood plain in the UB and Gachuurt areas was proclaimed a water source protected area and sanitary zone for water supply under Ministry Ordinance No. 51/57 in March 2009 from the Ministry of Nature, Environment and Tourism on the basis of the Action Plan of UB City, 2009-2012. Only the development of domestic water is permitted, and there are no private wells or permanent structures in the area.

180. The rate of groundwater recharge or groundwater potential at the Gachuurt Water Source is set at 9% (Appendix 5) based on the cases of water balance at Zaisan Bridge at the south of the center of UB City and the water balance of Altai City.

181. The water quality is suffering in both the urban and suburb districts of UB. With the shift to a market-based economy, many small businesses are springing up and are discharging their wastewater directly into the Tuul River and its tributaries. These new industries are difficult to supervise and have resulted in enforcement problems. In addition, some ger districts have been built on low lying land, resulting in groundwater contamination from latrines. At present, surface water pollution is an environmental issue. Both the Project FS and EIA have considered these issues and recommended suitable measures to avoid problems.

182. The water quality of the Tuul River is shown in Table 4-7. A water quality standard of Mongolia is presented in Table 4-8 for reference. Both Tables are on page 9-53.

F.2 Flood Control

183. UB has a flood history. Serious flooding occurred in 1966, which caused 13,000 families to lose their homes, 40 state organizations to stop their work for nearly 30 days, with total direct economic damages of 300 million tugrik (at the 1966 rate); in 1982, a rare flood killed 87 people, and 200 families lost their homes, causing direct property loss of 14 million tugrik ($11,300). To

Figure 4-5: Existing Flood Control Levee along Northern Bank of the Tuul Rover


Appendix 4-38

increase flood protection in UB, a flood control levee was built along the northern bank of the Tuul River in 1996. However, almost the same size flood occurred in 1997, but UB was safe due to the structure (Figure 4-5).

184. The location of the proposed CHP5 is on the flood plain area between the downstream of the Selbe River and the Tuul River. Fortunately, the existing flood levees nearby the Project site along the southern bank of the Selbe River and northern bank of the Tuul River are in good condition (Figure 4-4). However in recent years, some sections of the levee in UB have eroded and were cut by crossing roads. Therefore, the UB government should prepare and maintain the existing levee to keep its flood control functions. In general, the likelihood of a flood in the Project area is weak in this flood plain area.


Appendix 4-39

Table 4-7: Water Quality of Tuul River in UB (November 2009)

Mineral ization

Hardness DO BOD T Cond TDS TN TP

Suspended

Sol ids/Cr6+

mg/l mg-ekv /l mg/l mg/l C° µs/cm mg/l mg/l mg/l mg/l

Standard (MNS4586-98)

6.5-8.5 300 100 0.02 9 0.5 6>4 3

0.0 265.4 81.7 60.0 0.05 6.0 35.9 100.2 17.0 0.0 0.0 0.70

0.00 4.35 2.30 1.25 0.00 0.10 1.56 5.00 1.40 0.00 0.00 0.04 2 780 0.90

0.00 54.39 28.76 15.63 0.01 1.21 19.49 62.52 17.50 0.00 0.00 0.49

3.0 271.5 67.5 70.0 0.00 0.0 103.6 40.1 10.3 0.0 0.0 10.0

0.10 4.45 1.90 1.46 0.00 0.00 4.50 2.00 0.85 0.00 0.00 0.56 30 730 9.69

1.26 56.27 1.90 18.44 0.00 0.00 56.94 25.29 10.75 0.00 0.00 7.02

0.0 268.4 74.6 60.0 0.02 0.8 74.0 54.1 17.0 0.0 0.0 8.0

0.00 4.40 2.10 1.25 0.00 0.01 3.22 2.70 1.40 0.00 0.00 0.44 22 750 5.98

0.00 56.68 27.05 16.10 0.01 0.17 41.46 34.78 18.03 0.00 0.00 5.72

0.0 51.9 3.6 10.0 0.00 0.0 4.7 16.0 1.8 0.0 0.05 0.0

0.00 0.85 0.10 0.21 0.00 0.00 0.21 0.80 0.15 0.00 0.00 0.00 0.3 121 0.35

0.00 73.38 8.63 17.99 0.00 0.00 17.75 69.06 12.95 0.00 0.23 0.00

0.0 228.8 56.8 55.0 0.00 0.0 69.4 46.1 10.9 0.0 0.05 5.0

0.00 3.75 1.60 1.15 0.00 0.00 3.02 2.30 0.90 0.00 0.00 0.28 9.9 560 4.94

0.00 57.73 24.63 17.64 0.00 0.00 46.42 35.41 13.86 0.00 0.04 4.28

0.0 213.5 53.3 54.0 0.05 0.0 56.1 50.1 10.9 0.0 0.20 5.0

0.00 3.50 1.50 1.13 0.00 0.00 2.44 2.50 0.90 0.00 0.01 0.28 7.8 580 4.30

0.00 57.13 24.49 18.36 0.02 0.00 39.79 40.81 14.69 0.00 0.18 4.53

0.0 180.0 39.1 50.0 0.00 0.2 48.5 41.1 8.5 0.0 0.25 4.0

0.00 2.95 1.10 1.04 0.00 0.00 2.11 2.05 0.70 0.00 0.01 0.22 6.2 470 2.43

0.00 57.90 21.59 20.45 0.00 0.06 41.40 40.24 13.74 0.00 0.26 4.36

0.0 195.2 46.2 53.0 0.00 0.4 54.6 45.1 9.1 0.0 0.25 4.0

0.00 3.20 1.30 1.10 0.00 0.01 2.37 2.25 0.75 0.00 0.01 0.22 5.9 470 2.31

0.00 57.03 23.17 19.68 0.00 0.11 42.33 40.10 13.37 0.00 0.24 3.96

8.09

/0.027

6.509

/0.031

6.506

/0.022

12.044

/0.028

0.20

/0.019

10.071

/0.048

3.0 20/0.0

21.577

/0.091

Na++K +

Ca2+ Mg 2+

5.26.40 0.3

Name of Sampl ing

Si tespH CO3

2-HCO

3-Cl -

(mg/l )SO4

2-NO2

-

(mg/l )

1

Spring beforedischarge of

sew age w aterfrom central

7.00

Fe 2+ Fe 3+NH4

+

(mg/l )

NO3-

(μg/l )

385

2

Sew age WaterCentral Treatmentbefore stream to

Spring

8.40 575.9 2.85 4.4 353

566.8

5.6

4.10 4.43

Sew age Water ofCentral Treatmentafter streaming in

Spring

7.40 3.7 359

4Tuul river before

discharge ofSew age Water

7.50 88.0 0.95 6.5 62

556.9

1.9

3.20 5.15Tuul river, low er

Songino7.80 1.9 297

6Tuul river, bird

factory7.40 443.1 3.40 1.1 288

472.0

0.0

2.75 5.507Tuul river, low er

clip7.51 0.4 238

8Tuul river in

Altanbulag Soum7.45 407.8 3.00 6.10 226

371.6

0.0

Source: Geoecological Institute of Science Academy, Mongolia


Appendix 4-40

Table: 4-8: Surface Water Quality Standards of Mongolia (MNS 4586-98)

F.3 Available Water Source for CHP5

185. Available water sources for the CHP5 can be obtained from the existing CHP3 water source. It is estimated that the total water consumption of the CHP5 will be 8.79 million tons/annum. The actual water consumption of the CHP2 and CHP3 are about 2.2 million and 9 million tons/annum, respectively. The estimated water consumption for the CHP5 is less than current water consumption of the CHP3.

186. Hydro-geologically, CHP5 is in a favorable condition of being on the terrace of the Tuul River. The ground water level is 1.5 m. There is an existing water supply system with 41,300 m3/day reserve, including 36,122 m3/day by A Category and 31,097 m3/day by C2 Category in 2007. Each day, 16,000 m3 of water is produced from this reserve.

187. It is estimated that the total water consumption of the CHP5 will be 8.1 million tons/year, according to the FSR. The actual water consumption of the CHP3 is 9.0 million tons/year, 50% of which is estimated to be consumed by low pressure part of the CHP3 Plant. Once the low pressure part is dismantled, 4.5 million tons/year water will be saved, which will be enough for the first phase of the CHP5. Moreover, there are 20 wells available in the existing CHP3 Plant, of which three are not working, seven are used in winter, four are used in summer, and ten wells are as backup. The average water yield of each backup well is about 150 m3/hr, and the total daily water yield of the ten backup wells is about 36,000 m3/day (the annual water yield is more than 10 million tons/year) according to the survey in 2007. Therefore the existing water supply system of the CHP3 will be enough for the new CHP5 even if the two phases of the CHP5 and the high pressure part of the CHP3 operating together and there is no need to establish a new water supply system. The domestic water of the CHP5 will be supplied from the municipal tap water system.

188. With the implementation of the CHP5, the CHP2 and CHP3 will be decommissioned. Consequently, a total of 11.2 million tons/annum of water will be conserved, which is higher than the water consumption of the CHP5. Therefore, once the CHP5 is put into service, it will not increase the total water consumption, but decrease the total water consumption of the power sector. This is another benefit of the CHP5.

189. The water quality of the existing ground water in the existing CHP3 plant is shown in


Appendix 4-41

Table 4-9.


Appendix 4-42

Table 4-9: Ground Water Quality from CHP3 Wells

Water Quality Parameter Value

Hardness (0H) 0,8

Alkalinity 0,7

Calcium (Ca2+, mg/L) 12

Magnesium (Mg2+, mg/L) 2

Sodium (Na+, mg/L) 10

Potassium (K+ , mg/L) 0,1

Chloride (CL-, mg/L) 8

Sulfate (SO42-, mg/L) 16

Nitrate (NO3-, mg/L) 0

Silica (SiO2, mg/L) 8

pH 6.5

Source: TA Team

F.4 Ambient Air Quality

190. UB is situated in an area that is sunk beneath its surrounding area. It is bordered by Chingeltei mountain in the north, Bogd mountain in the south, Songinokhairkhan mountain in the west, and Bayzurk mountain in the east. Due to this landscape shape, a screen of smoke and dust usually covers the city.

191. Air quality is a major problem in the city, particularly in the winter due to the pollution from coal fired stoves in gers and in the spring from sandstorms. There is also growing air pollution from increasing vehicular traffic and from individual building boilers. Air pollution from the city plants is said to be negligible and the plants have had air pollution control devices, including scrubbers, retrofitted in the last ten years. Environmental officials have stated that 40% of the air pollution in UB is from heating and cooking stoves used in ger areas, 30% is from vehicle emission, 20% is from boilers from urban buildings, and 10% is from the coal fired thermal plants.

192. Additionally, according to the World Bank’s research jointly with the National University of Mongolia and the Norwegian Air Research Institute, one of the worst sources of the pollution is dust. The dust originates from the ger heating appliances, the desert, the dry ground condition, and the ash ponds emanating from the power plants. With few trees and hardly any parks in UB, the regularity and severity of windstorms in the city is increasing, creating dangerous levels of airborne dust. Strong winds, particularly in spring, bring dust from the Gobi desert and other arid regions of Mongolia into the city. The major sources of air pollution in UB are:

1) Outdated Power Plant/CHP without high efficiency emission reduction equipment - There are three power plants in UB, which operate on coal and which consume about five million tons of coal per year;

2) Heat only small boilers and family stoves - There are more than 200 heat only boilers for heating various individual buildings and industrial purposes. They consume about 400,000 tons of coal per year;

3) Transportation - More than 50,000 cars are considered as moving sources of pollution;

4) Households - There are about 750,000 households/gers which consume nearly


Appendix 4-43

200,000 tons of coal per year for cooking and heating the house;

5) Arial Sources - Dust from solid waste, power station's ash, and degraded land. The open disposal areas to the east of the city have been closed and most of the ash which was dumped there has long since blown away;

6) Disposal Sites - The new disposal site is unlined and uncovered, but it is to the west of the city, and as the prevailing wind direction is towards the west, the main recipient of waste is now the grasslands to the west of the city; and

7) Sandstorms - Sandstorms bring particulate matter into Ulaanbaatar from outside the city. Due to the lack of green cover in most of the city, particularly in ger areas, the wind is able to pick up urban soil/dust which adds to the storm. The normal wind conditions also contribute to the loss of topsoil.


Appendix 4-44

Table 4-10: Ambient Air Quality Monitoring Data (Annual Average, mg/m3)

Monitoring location NOx- Standard

(MNS4585-98)

SO2 Standard

(MNS4585-98)

PM10 Standard

(MNS4585-98)

PM2.5 Standard

(MNS4585-98)2009 2010 2009 2010 2009 2010 2009 2010

Baruun 4 zam 0.0523 0.1077

0.03

0.046 0.0573

0.01

0.192 0.176

0.05

0.0736 0.0716

0.025

RTHEG 0.035 0.0476 0.0545 0.0473 0.21 0.224 0.1046 0.125

Second hospital 0.034 0.0378 0.0307 0.0257 0.054 0.036 0.0727 0.065

Airport 0.021 0.0233 0.0212 0.0263 0.1607 0.1404 0.0483 0.0593

Average 0.0356 0.0541 0.0381 0.03915 0.1542 0.1441 0.0748 0.0802


Appendix 4-45

F.5 Acoustic Environment

193. The noise sources in UB arise mainly from travelling motor vehicles, ongoing construction, and commercial activities. The Mongolian national noise standard (MNS-4585-2007) is below 60dB (A) at day time and below 45dB (A) at night. These values, given in dB (A), approximate the way in which the human ear perceives air-borne sound.

194. The noise survey has been carried out during the EIA Study by the Consultants to establish a baseline for the analysis of the potential additional noise that will be generated by the construction as well as operation of the CHP5 Project. Samples have been carried out in good weather with light wind, as indicated in Table 4-7. The monitoring data was taken at two bridges18 at three hour intervals, which is the representative baseline data for the urban area of UB. The monitoring result shows that the noise levels during both days and nights exceeded the national standard, the noise sources were mainly traffic, especially from heavy trucks. The construction activities will be within the CHP3 site; therefore, the noise impact to the urban area from the CHP5 Project will be limited.

Figure 4-8: Noise Measurement Data on the Bridges

Table 4-11 Noise Monitoring Data in UB dB(A) (L60)

Date Monitoring Point Time Noise Average Noise

National Standards

8:00 82-84 11:00 76-79 14:00 74-76 17:00 74-78 20:00 76-79 23:00 71-75

77 60

2:00 70-74

June 3, 2008

Gurvaljingiin Bridge (1.44 km north of the

CHP5 site)

5:00 64-69 69 45

8:00 80-84 11:00 76-79

June 4, 2008

Peace Bridge (3.6 km northeast of the CHP5

site) 14:00 76-80

80 60

18 The Gurvaljin Bridge is located less than 1km from the CHP3 Plant. So the noise at this point is sourced mainly from the traffic noise since the bridge is the main route of the heavy vehicles of the city.


Appendix 4-46

17:00 80-82 20:00 80-82 23:00 74-78 2:00 72-76 5:00 72-76

74 45

195. Another monitoring was conducted along the boundary of the existing CHP3 plant in February 2011, of which the sampling location and the monitoring result are shown in Figure 4-10 and Table 4-12, respectively.

Figure 4-9: Monitoring Locations of Noise along Boundary of the CHP3 Plant

Table 4-12: Monitoring Result of Noise along Boundary of CHP3 Plant

(Monitoring date: 1 Feb 2011)

No. Time Location Direction and Distance from CHP3

Noise dB(A) (L60)

Standard dB(A)

54 55 1 11:21 N 47°53’45.66”

E 6°52’17.33” SE 493 54

60

55 57 2 11:30 N 7°53’52.76”

E 06°52’6.83” E 385 52

60

63 3 11:38 N 47°53’59.28” E 06°51’56.40”

NE 412 62

60


Appendix 4-47

No. Time Location Direction and Distance from CHP3

Noise dB(A) (L60)

Standard dB(A)

60 64 66 4 11:45 N 47°53’53.02”

E 06°51’46.59” N 303 64

60

61 60 5 11:56 N 47°53’43.80”

E 06°51’35.46” NW 410 62

60

54 52 6 12:03 N 47°53’36.29”

E 06°51’45.12” W 335 52

60

58 62 7 12:11 N 7°53’25.98”

E 06°51’51.14” SW 612 58

60

56 58 8 12:17 N 7°53’36.18”

E 106°52’6.52” S 391 56

60

9 22:05 N 47°53’45.66” E 106°52’17.33” SE493

39 45 42

48

10 22:45 N 47°53’52.76” E 106°52’6.83” E385

46 45 49

42

11 23:25 N 47°53’59.28” E 106°51’56.40” NE412

51 45 49

46

12 00:15 N 47°53’53.02” E 106°51’46.59” N303

47 45 40

42

13 00:45 N 47°53’43.80” E 106°51’35.46” NW410

38 45 35

34

14 01:25 N 47°53’36.29” E 106°51’45.12” W335

39 45 41

43

15 02:05 N 47°53’25.98” E 106°51’51.14” SW612

47 45 39

36

15 02:55 N 47°53’36.18” E 106°52’6.52” S391

37 45 38

41

F. Project Impact Area and Environmental Protection Sites

196. A pragmatic approach was chosen to delineate the Project’s area of influence. The area within a 5-km radius of the existing CHP3 plant was defined as the area of influence.


Appendix 4-48

Based on the characteristics of the proposed CHP5 equipment and facilities, the environmental features of construction sites, as well as site investigations and surveys, the sensitive areas within the Project’s area of influence were identified, which will need special consideration during construction and operation (see Table 4-13 in detail).

Table 4-13: Environmental Protection Sites Within a 5 km Radium of the Project Site

No. Protection Site Direction to the Project Site

Distance to the Project site (km)

Hospital Bayangol District Hospital 1 North 2.84 Bayangol District Healthy Center North 2.86 Bayangol District Family Hospital 1 Khoroo North 2.37 Bayangol District Family Hospital 10 Khoroo North 3.45 Bayangol District Family Hospital 12 Khoroo North 3.15 Bayangol District Family Hospital 13 Khoroo North 3.75 Bayangol District Family Hospital 14 Khoroo North 3.21 Bayangol District Family Hospital 15 Khoroo North 3.25 Bayangol District Family Hospital 16 Khoroo North 3.43 Bayangol District Family Hospital 17 Khoroo North 3.38 Bayangol District Family Hospital 2 Khoroo North 2.48 Bayangol District Family Hospital 20 Khoroo North 2.98 Bayangol District Family Hospital 3 Khoroo North 2.53 Bayangol District Family Hospital 8 Khoroo North 2.86 Bayangol District Family Hospital 9 Khoroo North 2.69 Khay-uul District Healthy Center East 2.06 Cinder Hospital North 2.41 P.N. Shastin 3rd Hospital North 2.24 Sukhbaatar District Dispensary -1 Northeast 3.7 Sukhbaatar District Family Hospital 1 Khoroo Northeast 3.9 Sukhbaatar District Family Hospital 2 Khoroo Northeast 3.5 Sukhbaatar District Family Hospital 3 Khoroo Northeast 3.3 Sukhbaatar District Family Hospital 4 Khoroo Northeast 3 Sukhbaatar District Family Hospital 5 Khoroo Northeast 2.86 Sukhbaatar District Family Hospital 6 Khoroo Northeast 2.65 Songino-Khairkhan District dispensary -2 North 2

Songino-Khairkhan District Family Hospital 15 Khroo Northwest 2.96

Songino-Khairkhan District Family Hospital 18 Khoroo Northeast 2.72

Khan-uul District Health Center East 2.28 University

Champion University East 1.87 Construction College Northeast 3.11 Agricultural University Southeast 3.26


Appendix 4-49



Mechanical School of University for Science and Technology East 2.15

Cinder University Northeast 2.73 Secondary School

15-st School East 2.1 18- st School East 2 20- st School Northeast 2.41 11- st School Northeast 2.81 6- st School Northeast 2.72 No. 3 Russian and Mongolian Joint School Northeast 3.36 1- st School Northeast 4.09 32- st School Southeast 3.34 38- st School North 2.04 43- st School North 2.58 45- st School Northeast 3.47 23- st School Northeast 4.23 24- st School Northeast 3.68 52- st School East 2.6 75- st School East 2.8 82- st School Northwest 3.5 86 st School Northwest 3.7 83- st School Northwest 3.4

Kindergarten 1-st kindergarten Northeast 3.3 13- st kindergarten Northeast 3.8 16- st kindergarten Northeast 4 19- st kindergarten Northeast 4.4 28- st kindergarten Northeast 3.25 41- st kindergarten Northeast 3.18 72- st kindergarten Northeast 2.75 65- st kindergarten Northeast 2.8 67- st kindergarten Northeast 2.95 No. 4 kindergarten East 2.15 100- st kindergarten East 2.27 107- st kindergarten Northwest 2.56 101- st kindergarten Northwest 2.54 99- st kindergarten Northwest 2.68 106- st kindergarten Northwest 2.59 105- st kindergarten Northwest 2.45 104- st kindergarten Northwest 2.65 110- st kindergarten Northwest 3.1


Appendix 4-50



112- st kindergarten Northwest 3.3 113- st kindergarten Northwest 3.2 118- st kindergarten Northwest 3.5 119- st kindergarten Northwest 3.6 137- st kindergarten Northwest 1.07 97- st kindergarten North 2.89 95- st kindergarten North 2.85 93- st kindergarten North 2.92 96- st kindergarten North 2.95 94- st kindergarten North 2.97 87- st kindergarten North 3 88- st kindergarten North 3.6 161- st kindergarten North 3.6 162- st kindergarten North 3.34 164- st kindergarten North 2.29


Appendix 4-51

V. ALTERNATIVE ANALYSIS

197. During the EIA and FS studies, various alternatives for the CHP5 were proposed, screened, and studied against the power and heating demands, technical, economic, social, energy efficiency, and environmental criteria. The primary objective with respect to the environmental criteria was to identify and adopt options with the least adverse environmental impacts and maximum environmental benefits. The following key environmental factors were used in comparing alternatives: (i) location of the CHP5; (ii) the amount of earthwork (related to vegetation disturbance, potential soil erosion); (iii) land occupation; (iv) coal saving and emission reduction; (v) degree of community disturbance; and (vi) resettlement and economic displacement, etc.

A. With and Without the CHP5 Project

198. Without the CHP5 Project, the urban residents of UB would still have to rely on the outdated CHP plants and 116 inefficient and high polluting HOBs and 1,005 coal-fired water heaters. In addition to the existing CHP plants, due to lack of dust removal and flue gas cleaning equipment, the HOBs and water heaters cause severe air pollution, and contribute to respiratory disease from inhaling coal dust and smoke. Without the Project, UB’s environmental conditions would deteriorate further along with rapid urbanization, economic development and population growth. The CHP5 Project will improve both indoor and outdoor air quality as well as significantly reduce coal consumption, which will have a positive impact on the residents’ health and air quality, as well as GHG emission reduction, and global climate change mitigation.

B. Alternatives of the CHP5 Location

199. CHP is an efficient, clean, and economical solution to provide heat and electricity supply for urban areas in UB. However, other options must be considered as well to identify the most suitable alternative with respect to environmental protection, and location and design parameter selections. Among a number of alternatives evaluated during the EIA and the FS studies, the TA Consultants identified and agreed upon three options for the CHP5 location with MMRE and ADB, which are believed to both represent the views and the common concerns of local stakeholders, including various Government departments. These options, described below, are summarized in Table 5.1:

i) Option 1 – A new CHP plant to be built in Uliastai Valley on the eastern outskirts of UB;

ii) Option 2 – A new condensing power plant to be constructed at the Baganuur coal mine to produce electricity only, while new HOBs are installed in UB for heat supply; and

iii) Option 3 – A new CHP plant to be built at the existing CHP3 site with the low-pressure system removed and utilize most of the existing infrastructure.

Table 5.1: Summary of Three Options for Comparisons

Parameter Option 1 Option 2 Option 3

Technology CHP Coal-fired HOB and Condensing Power Plant CHP

Site Uliastai HOB in urban areas of UB Baganuur Power Plant CHP3 Plant

Location Eastern outskirts of UB

5 plants in different parts of UB

Near coal mine, 130 km east of UB

South West suburb of UB


Appendix 4-52

Source: TA Consultants.

200. Each of the three options has its own advantages and disadvantages. For example, Option 1 raises environmental concerns associated with underground water sources, and its geological conditions are not ideal. Option 2 involves large land acquisition issues and its overall energy efficiency is low. Option 3 makes the best use of existing land and supporting infrastructure as no land acquisition is required, as existing water supply sources, railway, and roads infrastructure, etc. can be used. However, this option would be somewhat more complex to implement, because the heat output from the existing CHP3 plant needs to be maintained throughout the construction of the new CHP5 plant. More detailed analyses of these three options are presented below, including a technical assessment on the technical viability of implementing Option 3 whilst retaining the operational capability of the existing CHP3 plant.

201. Table 5.2 lists key technical parameters of the three proposed options, including designed power generation capacity, power demand,designed heat supply capacity, heat demand, yearly power generation, internal power consumption, transmission loss, net power supply, and yearly net heat supply, etc.

Table 5.2: Key Technical Parameters of the Three Options

Items Option 1 Option 2 Option 3

Location Unit

Uliastai HOB Baganuur CHP3

Power Generation Unit MW 6x90+2x70 =680 0 2x150+2x200

=700 5x150+1x70

=820

Heat Supply Unit Gcal/h 6x135+2x198+2x99+105

=1,510

5x5x60=1,500 0 CHP

Designed Power Capacity MW 680 700 820

Power Demand MW 653 653 653

Designed Heat Supply Capacity Gcal/h 1,509 1,500 1,530

Heat Demand Gcal/h 1,509 1,509 1,509

Yearly Power Generation million kWh 3,889 – 4,219 4,680

Internal Consumption million kWh 350 53 338 350

Transmission Loss million kWh 39 – 253 47

Net Power Supply million kWh 3,500 – 3,500 4,212

Yearly Net Heat Supply million Gcal 4.1 4.1 4.1

Source: TA Consultants estimates.

202. It should be noted that total demands for heat and power by 2020 are equal to the additional demand forecasted plus the retired capacities from CHP2 and CHP3. The total heat demand is estimated to be 1,509 Gcal/h, including 970 Gcal/h of new heat demand forecasted by 2020, 54 Gcal/h from the retired CHP2, and 485 Gcal/h from retired CHP3. Similarly, the total power demand is estimated to be 653 MW including 499 MW of forecasted new demand by 2020, 18 MW from the retired CHP2, and 136 MW from the retired CHP3.

203. One of the advantages of CHP is its high level of fuel utilization efficiency. The overall energy efficiency of a conventional electric-only plant is about 33%, the remaining two-thirds of energy is wasted through the stack gas and cooling system. In contrast, a CHP process


Appendix 4-53

can operate at an overall efficiency as high as 50-80%. A coal-fired hot water stoker boiler normally has an average thermal efficiency of 70%, whereas the efficiency of a gas-fired HOB plant could reach 90%. Based on the conceptual design and detailed calculations, the overall thermal efficiency for the proposed CHP options could reach 61.3%.

204. CHP technology has much higher power generation and heat generation efficiencies as compared with the combination scenario of a condensing power plant in the mine mouth plus a number of HOB plants in urban areas, that is, Option 2. As a result, the coal consumption for Option 1 and Option 3 (CHP options) is much lower than Option 2. Specifically, the CHP options will save up to 30% of fuel consumption per kWh electricity generated in comparison with the conventional electric-only plant. Further, a CHP scenario will consume 20~30% less fuel per GJ heat produced in comparison with HOB plants. Totally, a CHP plant solution could save 1.11 million tons of raw coal19 each year, as compared to a condensing power plant and coal-fired HOB under Option 2. Table 5.3 below lists the detailed comparison data of energy efficiency under the three options. Table 5.4 presents specific coal and water consumption information for the three options.

205. The ash watering and spraying cooling systems that have been applied in CHP3 result in extremely high water consumption. Since 2000, the yearly average water consumption for CHP3 has remained at about nine million tons. The proposed new CHP plant should be designed to use a dry ash removing system and more efficient modern water cooling towers, which would conserve much more water when compared with CHP3. Based on a preliminary estimation, the water consumption of the new CHP plant is approximately 8.7 million tons per year while it has five times the power generation capacity and three times the heating capacity compared to that of CHP3. The new CHP plant would conserve more than 2 million tons of water each year in comparison with the current consumption of CHP3 and CHP2 combined.

Table 5.3: Energy Efficiency Comparisons

Option 1 Option 2 Option 3Item Unit CHP at

Uliastai HOB in UB

Baganuur Power Plant

CHP at CHP3

Power Generation % 43.9 – 33 46.7

Heat Generation % 87 70 – 88

Total Thermal Efficiency % 61.3 – – 59.5

Specific Fuel Equivalent Consumption for Power

Generation g/kWh 280 – 370 263

Efficiency

Specific Fuel Equivalent Consumption for Heat

Generation kg/GJ 39.2 48.7 38.7


19 Roughly 0.63 million tons standard coal equivalent.


Appendix 4-54

Table 6.4: Coal and Water Consumption Comparisons

Option 1 Option 2 Option 3Item Unit CHP in

Uliastai HOB in

UB Baganuur

Power Plant CHP at CHP3

0.83 1.56 Total Fuel Equivalent Consumption

million tce/a 1.76

2.39 1.76

Baganuur Coal million ton/a 1.07 – 3.18 1.07

Shivee-Ovoo Coal million ton/a 3.08 2.09 – 3.08

Yearly Fuel Consump-

tion

Total Raw Coal Consumption

million ton/a 4.16 5.26 4.16

1.71 7.56 Water Consumption (Water Cooling) million

ton/a 8.90 9.27

8.90


206. Geological Conditions and Safety. Option 1. The geological conditions around the site for Option 1 are complicated featuring various types of rocks of different ages. The earthquake grade is a seven degree and a few active faults have been identified on the eastern outskirts of UB and not far from the proposed CHP5 site in the Ulasitai Valley. The TA Consultants engaged the Research Center of Astronomy and Geophysics of the Mongolian Academy of Sciences under contractual agreement to perform the detailed geological assessment of the specific Project site. The seismic hazard assessment report was submitted to the TA Consultants on 25 November 2010 and it concluded that the Gunjiin fault is active and it passes Uliastai Valley approximately 1 km north of the proposed site. The Gunjiin fault presents a serious seismic hazard to the proposed CHP5 Plant.

207. In addition to the active fault already identified, the proposed site under Option 1 is bordered by the mountain area in the northeast and by the river in the southwest. The site is therefore facing potential risks of flooding and permafrost with a reported flooding volume of 22.4 m3/sec. In addition, the specific site is located on the downstream reaches of a large dry wash/gully. Necessary measures must be taken to mitigate these risks should this site be chosen for the CHP5 Project.

208. Option 2. The geological conditions of this site are moderately complicated. Old faults have been identified 18~20 km to the southwest of the site in Baganuur. The earthquake grade is a 7 degree and there are potential risks of flooding and permafrost near the site.

209. Option 3. The existing CHP3 site has relatively reliable geological conditions featuring alluvium of quaternary age. No evidence of active faults has been identified. The earthquake grade is an eight degree and thus the earthquake risk must be mitigated by special technical measures should this site be chosen for the CHP5 Project.

210. Based on preliminary analyses of the three sites, a summary of the geological conditions of the three options is shown in Table 5.5.


Appendix 4-55

Table 5.5: Geological Conditions and Safety

Option 1 Option 2 Option 3 Item CHP at

Uliastai HOB in UB Baganuur Power Plant CHP at CHP3

General Geological Conditions Complicated Maybe Not complicated Not

complicated

Active Faults Yes Maybe Old faults 18-20 km from southwest of the site No

Flood and Permafrost Yes Yes Yes No

Earthquake Grade Classification 7 7 7 8

Source: TA Consultants.

211. Land, Resettlement, and Site Preparation. Option 1. It is estimated that a total land area of 51 ha is needed for the construction of the new CHP plant based on international practices and the TA Consultants’ assessment. The government has approved 30 ha of land in Uliastai Valley for the proposed CHP5 plant. As the 30 ha of land is required to meet the power generation capacity of 340 MW designed for Phase I of the CHP5 plant, additional land area is required to complete Phase II of the plant. Due to the typical geological conditions that feature in the Uliastai Valley, more earthwork will be required for site preparation, including leveling the land.

212. The ash yard for the new CHP plant would require an area of 35 ha to provide an ash storage capacity of 10 years. The ash yard should be enclosed with a dam and lined with water-tight materials to protect underground water from being polluted by the ash.

213. There is no access road to the site in Uliastai. There is also no railway to the site for transporting coal. It is estimated that 3 km of access road to the plant and a 5 km road for transporting ash will need to be constructed. Additionally, an approximately 2 km-long link railway will need to be constructed to connect the main railway and the plant.

214. Our understanding is that although the proposed site in Uliastai is very close to one of the main drinking water sources of UB, the CHP plant will not be allowed to take water directly from the water source. Therefore, an additional 14 km of water supply pipeline from the water pump station to the new CHP plant will need to be constructed.

215. The new CHP plant at the Uliastai site would be connected to the existing district heating system in UB. As the new CHP plant is to be constructed in two phases, two heating pipelines are to be installed. One should be sized DN1400 and would have a length of 7.2 km, running along the southern part of the heating area and another, also sized DN1400, with a length of 8.9 km would run along the northern part of the heating area.

216. Option 2. Under this option, the total land area of 45 ha would be required for construction of the proposed condensing power plant near the Baganuur mine. Ash yard for the proposed condensing power plant would require an area of 35 ha to provide an ash storage capacity for 10 years. The ash yard should be lined with water-tight materials to protect underground water from being polluted by the ash.

217. It is estimated that a 5 km-long road for transporting ash will need to be constructed and a 3 km-long railway is to be constructed for the power plant. In addition, an 8 km-long water pipeline will also need to be installed.


Appendix 4-56

218. A total land area of 25 ha is required for construction of the proposed five HOB plants. The ash yard for the proposed HOB plants would require an additional area of 30 ha to provide an ash storage capacity of 10 years. The ash yard should be lined with water-tight materials to protect underground water from being polluted by the ash.

219. Site survey and selection might involve a complicated process and it would be wise to look at some of the available sites or sites already surveyed and/or studied. The candidate sites for construction of the five proposed HOB plants are the sites in Uliastai and CHP2 or CHP3. However, to have a better hydraulic balance of the heating network, the HOB plants should be constructed in the east and north parts of UB as the existing heating sources are located in the south and southwest of UB. The Uliastai site and the US-15 HOB plant site could be considered for HOB plant sites. The specific conditions for the Uliastai site have been explained under Option 1.

220. The TA Consultants visited the US-15 HOB plant site and performed a preliminary assessment. The site is located in the east part of UB and west of Uliastai Valley. The existing fenced area is very small (roughly only a few hectares). The US-15 site is surrounded by enterprises, ger households, and a school. Thus, to convert this site to a new HOB plant site, there would be a large amount of land acquisition needed and the resettlement of many ger households and other entities. Since the proposed CHP plant would require more land than the HOB plant, the land acquisition and resettlement would be even more challenging. In addition, there is an active fault crossing the Uliastai Valley close to the US-15 HOB plant site.

221. Option 3. Under this option, a total land area of 50 ha is required for construction of the new CHP plant. There are no land issues associated with the proposed CHP plant; the existing CHP3 site has plenty of land area totaling about 80 ha.

222. The ash yard for the new CHP plant would require an area of 60 ha to provide 10 years of ash storage capacity. The existing ash yard has some remaining capacity but not enough for the new CHP5 plant. Therefore, new land will need to be identified or the existing ash yard will need to be rehabilitated through the construction of dams to gain additional storage capacity. Similar to the other two options, the ash yard should be lined with water-tight materials to protect underground water from being polluted by the ash.

223. The CHP3 site has existing infrastructures that can be utilized by the new CHP plant. There are roads accessible to the CHP3; however, the pavement is not in good condition. CHP3 has railway links to the plant which could be used for the new CHP plant for transporting coal.

224. There are three existing heating pipelines with sizes of DN800, DN800, and DN1000 that serve the CHP3 site. Normally, the CHP3 provides hot water to the two DN800 heating pipelines. The DN1000 connects CHP3 and CHP4 and its purpose is for backup in the event that any accident causes the emergency shutdown of CHP3 or CHP4, they can back each other up. Rehabilitation has been completed recently to improve the pipeline system. These existing heating pipelines are highly suitable for use by the proposed CHP5 Plant. In addition, to meet the full capacity of the new CHP plant, an additional 14 km-long heating pipeline with DN1400 in diameter is estimated to be required under Option 3.

225. The existing 220 kV transmission lines in the CHP3 could also be utilized in the proposed CHP plant. To meet the requirement of the new plant, 9 km of 220 kV overhead line would need to be rehabilitated.

226. Table 5.6 on the following page presents the comparative analysis of the land and resettlement works needed under the three options. Table 5.7 is a summary of site-related engineering works likely required under the three options.


Appendix 4-57

Table 5.6: Land and Resettlement Comparisons

Option 1 Option 2 Option 3 Item

CHP at Uliastai HOB in UB Baganuur Power Plant CHP at CHP3

Land for Power Plant Required: 51 ha Available: 30 ha

Required: 25 No land given to

5 HOBs

Required: 45 Available: 45


Land for Ash Yard Required: 35 not available

Required: 16 not available


Required: 35 Available: 0.34

million m3

Land for External Road 5.1 ha 5.1 ha 5 ha Not required

Land for External Anti-flood Area 1 ha 0 N/A Not required

220 kV Transmission Line Land 19.2 ha 0 840 ha Not required

Land for Railway to the Plant 10 ha 10ha 15 ha Not required

Subtotal 34.3 ha 875.1 ha 0


Table 5.7: Comparisons of Site-Related Engineering Works

Option 1 Option 2 Option 3 Item Unit CHP at

Uliastai Site HOBs in UB Power Plant Baganuur CHP at CHP3 Site

Earthwork million m3 2.5 0.6 0 0

220 kV Transmission Line km 3.2 – 140 9 (rehabilitated)

Length of Access Road to the Plant km 3 3 0 No additional

Length of Road for Transporting Ash km 5 5 5 No additional

Length of Link Railway km 2 2 3 Available and no additional

Length of Heating Pipeline km 16 16 – 14

Water Source Availability Need water

from UB city Need water from UB city

10 newly-built wells

Available from existing wells

Length of Water Supply Pipeline km 14 14 12 Available and no

additional

Anti-flood Facility Outside of Plant km 1.1 0.5 N/A Available



Appendix 4-58

C. Alternative Boiler Technologies

227. Extensive alternative analysis was also conducted by the TA Consultants to select technically feasible and operationally reliable boilers suitable for the CHP5. Five basic coal utilization technologies were assessed and the characteristics of each of the coal-firing configurations were summarized, including i) stoker-fired; ii) pulverized coal (PC); iii) cyclone-fired; iv) fluidized-bed combustion (FBC); and v) coal gasification or integrated gasification combined cycle (IGCC).

C.1 FBC Boiler

228. The FBC and PC boilers are the most commonly applied technologies for new power plants. FBC are inherently suited for various fuels, including low-grade coal. Even though FBC boilers do not constitute a large percentage of the total boiler stock, they have gained popularity in recent years, due primarily to their capabilities to burn a wide range of solid fuels and lower NOx and SO2 emission characteristics. Because the combustion temperature of an FBC boiler (800~900°C) is significantly lower than a PC-fired boiler (1,300~1,500°C), this results in lower NOx formation and the ability to capture SO2 with limestone injection in the furnace.

C.2 PC Boiler

229. PC boilers have been predominately used in the existing power plants of many countries around the world. Currently, PC combustion has been the predominant choice for design of new large coal-fired power plants (>400 MWe) built in the U.S. because it is technically mature, operationally reliable, commercially available, and economically viable. But the TA Consultants have observed some concerns about the frequent maintenance brought about by the pulverizers of the existing CHP plants in UB.

230. PC boiler power plants are subcritical, supercritical, and ultra-supercritical. Supercritical technology is becoming standard practice in the power industry in developed economies for large coal-fired power plants due to a higher efficiency than subcritical technology. The lifecycle costs of supercritical plants are lower than those of subcritical plants. A supercritical plant costs about 2% more than a subcritical plant to install, while fuel costs are considerably lower due to the increased efficiency and operating costs. Supercritical plants have lower emissions than subcritical plants per unit of electricity generated. A 1% increase in efficiency reduces the specific emissions of NOx, SO2, and flue dust by 2.5%–3.0%.

231. The use of ultra-supercritical technology is also an option for the Project and would provide the highest coal combustion efficiency and lowest emission rate of the alternative boiler technologies. Ultra-supercritical plants have been constructed in countries such as Denmark, Germany, Japan, and the U.S. to utilize high-quality coal. But the installation of ultra-supercritical plants has not been widespread in developing countries, and as yet no such plants operate on low-quality coal similar to those found in developed countries. The use of this technology is constrained by: (i) higher capital costs; (ii) limited suppliers for the boiler-turbine generator package, which restricts multi-company sourcing and the availability of spare parts; (iii) lack of local experience with the required technology; and (iv) reliability issues with respect to using Indian coal with a very high ash content.

232. Based on the above analysis, the FBC boiler design is recommended by the TA Consultants for the proposed CHP5 Plant mainly because of low costs for desulfuration and denitration.


Appendix 4-59

D. Alternative SO2 Emission Reduction Process

233. There are many technologies for SO2 emission control which are classified as desulfurization inside the bed of CFB, wet, semi-dry, and dry FGD processes. New generations of desulfurization technologies have overcome many early disadvantages. They are more efficient, clean, and cost-effective. These technologies are commercially mature and are offered by a number of suppliers in the world.

D.1 Limestone Desulfurization inside CFB

234. In recent years, CFB boiler technology has developed greatly. It has been widely adopted in power plants for its characteristics of saving water, high efficiency, and reliability and small. It is well known that desulfurization in the boiler using limestone is an outstanding advantage of a CFB boiler. Generally, the combustion temperature of CFB boiler keeps between 800°C-1000°C and it is the temperature section at which the activity of limestone decomposing into lime is great and the desulphurization efficiency is high. Therefore, with appropriate Ca/S and particle size of limestone, the desulphurization efficiency of 80% is able to be reached when Ca/S is about 2.2, thus a CFB boiler is comparatively fit for middle and low sulfur fuel.

D.2 CFB-FGD

235. For high-sulfur fuel (for example, when S≥3% and the corresponding SO2 concentration is above 6,000 mg/Nm3), the boiler desulphurization efficiency should reach above 95% to achieve the emission requirement. Then the inside CFB process will not satisfy the demand even if excess limestone is added. Besides, it may bring a negative influence, one being the decrease of combustion efficiency and the other the increase of combustion temperature, causing increased NOx emission. In order to resolve the problem, the advanced way is to adopt CFB-FGD technology after the CFB Boiler.

236. In the CFB process, the flue gas passes through a dense mixture of lime (calcium hydroxide), reaction products, and sometimes fly ash, which removes the SO2, SO3, and HCl. The final product is a dry powdered mixture of calcium compounds. The process has been commercially available for over 10 years, and is an expanding technology, particularly for retrofitting small- to medium-sized power plants. Due to its simplicity, high performance, low spatial requirement, and in some case low cost, the process nowadays has been chosen for FGD instead of the more widely-established spray dry process in certain applications.

237. Flue gas from the air heater carried through the inlet venture throat of the CFB reactor passes upwards through a fluidized bed of lime, reaction products, and fly ash particles contained within the vertical reactor tower. This removes up to 99% of the SO2 and all of the SO3 and HCl from the flue gas. From here the gas is carried through the dust arrestor and the ID fan to the stack.

238. A large quantity of the particulate matter in the CFB reactor is carried with the flue gas into the ESP or fabric filter (FF) located downstream. Most of the solids collected in the pre-collector and ESP are returned to the reactor, so as to achieve a high dust loading within the fluidized bed. The normal sorbent is quicklime, which is hydrated on site to make calcium hydroxide powder (hydrated lime). This is injected into the base of the reactor. Water is also added to humidify the flue gas so as to improve SO2 and particulate removal. The water flow is controlled to achieve a temperature ~20ºC above the adiabatic saturation temperature of the gas.

239. The solid by-product from the process, including fly ash, is transported from the bottom of the ESP to a silo, prior to dispatch from the site. CFB-FGD plants have been fitted


Appendix 4-60

to a total of over 3,000 MW of power plants, as well as units fitted to a variety of industrial processes (such as hydrogen fluoride removal), at sizes of up to 300 MW. Major suppliers of the technology are LLB (Germany), Wulff (Germany), FLS Miljø of Denmark (gas suspension absorber or GSA process), and ABB (new integrated desulphurization or NID technology).

240. The CFB-FGD process is capable of very high SO2-removal efficiency, even with very high inlet SO2 concentrations. For example, one German plant achieved 97% SO2 removal with an inlet SO2 concentration of 13,000 mg Nm-3. Several CFB/GSA plant have achieved >99% SO2 removal. The process can also achieve complete removal of SO3.

D.3 Ammonia Scrubbing

241. The ammonia/ammonium sulphate or ammonium scrubbing process works in a similar way to the limestone gypsum process except that aqueous ammonia is used as the scrubbing agent. SO2 is removed from the flue gas by reaction with ammonia, and the final product is ammonium sulfate.

242. Ammonia scrubbing has been used intermittently since the 1950s. The only plant currently operational is installed on a 350 MW oil-fired boiler system at Dakota Gas Company’s Great Plains plant. This has been designed for 93% SO2 removal, treating gas from high-sulfur oil. The plant is operating successfully. FGD plant manufacturers indicate that SO2 removal efficiencies in the region of 98-99% can be achieved within the absorber systems, although commercial plants have been designed for 91-93% removal. There are two known suppliers with successful commercial experience: LLB and Marsulex.

243. Flue gas from the ESP and ID fan is passed through a booster fan before entering the gas/gas reheater. The gas then enters a prescrubber, where it comes into contact with recirculating ammonium sulfate slurry. The gas is cooled and becomes saturated with water vapor. The saturated gas leaves the pre-scrubber through a mist eliminator, and then enters the absorber, where it is scrubbed with subsaturated ammonium sulfate solution, which removes the required amount of SO2 from the flue gas. At the top of the absorber, the gas passes through two stages of de-misters to remove suspended water droplets.

244. The aqueous solution leaving the absorber is processed to produce ammonium sulfate, which is a relatively high-value product that can be used in fertilizers. The high value of this by-product is the principal advantage of this process. With high-sulfur fuels, the receipts from the sale of the sulfate can exceed the costs of operating the FGD plant.

245. However, there could be commercial risks associated with this, because the price of ammonium sulfate and ammonia are both very volatile. A potential risk arises from the need to store ammonia onsite, either in anhydrous form, or as a concentrated aqueous solution. This might cause serious difficulties in the planning stage at certain sites. These plants are expensive to build, and require a large “footprint” similar to a limestone gypsum plant. The process has the advantage that there is no wastewater discharge, and there are unlikely to be problems of scaling and blockage. At certain sites, particularly those burning high-sulfur fuels, or with the potential to do so, this process could be a very attractive one. However, it is unlikely to achieve widespread use because very few plants are needed to satisfy the market for ammonium sulfate fertilizer in a particular country or region.

D.4 Spray-dry Process

246. In the spray-dry process, concentrated lime (calcium hydroxide) slurry is injected into the flue gas, to react with and remove acidic compounds such as SO2, SO3, and HCl. The final product is a dry powdered mixture of calcium compounds. The spray-dry process is supplied by several vendors, whose designs vary significantly – although the process chemistries are


Appendix 4-61

the same.

247. The flue gas from the air heater is carried into the spray-dryer vessel, where it comes into contact with a finely atomized spray of lime and by-product slurry, delivered from a single high-speed rotary atomizer. This removes up to ~95% of the SO2 and most if not all of the SO3 and HCl from the flue gas. From here the gas is carried through the dust arrestor and the ID fan before being discharged through the stack.

248. The normal sorbent fed to this process is quicklime. This is slaked on-site, with excess water, to produce a calcium hydroxide slurry (slaked lime).

249. This is mixed with the recycled by-product before being pumped to the rotary atomizer. The water in the slurry will humidify the flue gas and so improve both SO2 and particulate removal. The water flow rate is controlled so as to achieve a temperature approximately 20ºC above the adiabatic saturation temperature of the gas. When firing bituminous coal, the humidified gas temperature would be ~70ºC.

250. The solid by-product from the process, including fly ash, is transported from the bottom of the ESP to a silo, prior to dispatch from site. As with other semi-dry systems producing a throw-away by-product, the spray-dry process is relatively cheap to install, typically being ~70% of the cost of the equivalent limestone gypsum system. However, the variable operating costs are among the highest of the major FGD processes, due to both the high lime usage and the costs of by-product disposal. The lower sorbent utilization of the spray-dry process, compared with the CFB, means that additional costs are incurred twice: extra lime has to be bought and then a portion of this is dumped at a cost.

251. The process is very similar in many respects to the CFB process and the two are in competition. Approximately 85-90% SO2 removal with moderately high-sulfur fuels can be achieved by employing the process.

252. The spray-dry process is cheaper to install than a limestone gypsum plant, and similar to or slightly more expensive than a CFB-type plant. However, like the CFB, it can be relatively expensive to operate, depending on the relative costs of labor, power, lime, and limestone. The disposal cost of the residues produced also adds to the overall operating cost.

E. Alternative NOx Emission Control Process

253. There are three ways of NOx generation from coal combustion in a boiler: fuel-NOx generated from the fuel, thermal NOx from the reaction of nitrogen and oxygen as well as a trace of prompt NOx. The main factors that affect the generation of NOx are oxygen concentration, flame temperature, nitrogen content of fuel, volatile content, fuel ratio, etc. In order to control NO2 generation, in addition to the regular low nitrogen combustion technique, such as FBC, flue gas de-nitrification device will be installed. Main characterizations of the alternative processes are as follows:

E.1 Low NOx Burner

254. The Low NOx combustion technique is simple and economical. It is applicable to gas fuel combustion since the flame of segmental fuel loading is relatively short; the air deficiency of the primary combustion and the low temperature of the flame will result in N2 generation instead of NOx generation. This combustion technique consists of various types, such as overheated air passes through nozzle, or only air passes upper nozzle and the rest of fuel will be in the condition of superfluous. The super low NOx burner will load the fuel in a segmental manner. By combining loading fuel segmentally and recycling combustion products in the furnace, NOx generation will be further reduced.


Appendix 4-62

255. Staged Low NOx Combustion. Combustion is well known to reduce NOx emissions in coal fired boilers. Oxygen has been shown to enhance the benefits of staged combustion producing even lower NOx emissions. Further, oxygen reduces or eliminates other problems associated with deeply staged combustion including higher LOI, reduced combustion stability and waterwall corrosion. This paper discusses the impact of staging on waterwall corrosion. Model results are presented showing that it is possible to go from a system that is unstaged to an oxygen-enhanced deeply staged system without increasing corrosion potential. These results are consistent with performance test results, which have shown that oxygen-enhanced combustion reduces LOI and reduces rear wall impingement by shortening the flames. Both of these factors are consistent with reduced corrosion potential.

256. The basic configuration of an overfire air staged combustion system for NOx control is illustrated in Figure 5-1. In an air staged combustion system, a portion of the combustion air is diverted from the burners to overfire air ports above the burners. The objective is to form a fuel rich flame zone followed by a region where the residual char is burned out. The effect of fuel rich conditions on NOx formation is shown schematically in Figure 5-2. This figure shows the competition between the formation of NOx and the formation of molecular N2 from nitrogenous species in the coal. Upon heating, coal pyrolizes and forms volatiles and char, each containing bound nitrogen. Oxygen rich conditions drive the competition towards NOx formation. Fuel rich conditions, such as those created in staged combustion, drive the reactions to form N2. Thus, as shown in Figure 5-3, by reducing the burner zone stoichiometric ratio, the formation of NOx from volatiles is significantly reduced.

Figure 5-2: NOx Production Pathways in coal combustion

Figure 5-3: Typical Effect of Main Burner Zone SR on NOx

E.2 Flue Gas Recycling (FGR)

257. The technique entails mixing part of flue gas with fuel or air, then sending the mixture into combustion room. The technique can lower flame temperature and reduce oxygen

Figure 5-1: Schematic of Staged

Combustion


Appendix 4-63

content in the air, thus preventing NOx from generating. Approximately 20% of flue gas will be recycled, and this technique is applicable for gas fuel with low nitrogen content. However, the technique cannot efficiently suppress the generation of fuel base NOx.

E.3 Selective Non-catalytic Reduction (SNCR) for NOx Control

258. In SNCR systems, a reagent is injected into the flue gas in the furnace within an appropriate temperature window. Emissions of NOx can be reduced by 30% to 50%. The NOx and reagent (ammonia or urea) react to form nitrogen and water. A typical SNCR system consists of reagent storage, multi-level reagent-injection equipment, and associated control instrumentation. The SNCR reagent storage and handling systems are similar to those for SCR systems. However, because of higher stoichiometric ratios, both the ammonia and urea SNCR processes require three or four times as much reagent as SCR systems to achieve similar NOx reductions.

259. The temperature window for efficient SNCR operation typically occurs between 900°C and 1,100°C depending on the reagent and condition of SNCR operation. When the reaction temperature increases over 1,000°C, the NOx removal rate decreases due to thermal decomposition of ammonia. On the other hand, the NOx reduction rate decreases below 1000°C and ammonia slip may increase. The optimum temperature window generally occurs somewhere in the steam generator and convective heat transfer areas. The longer the reagent is in the optimum temperature window, the better the NOx reduction. Residence times in excess of one-second yield optimum NOx reductions. However, a minimum residence time of 0.3 seconds is desirable to achieve moderate SNCR effectiveness.

260. Ammonia slip from SNCR systems occurs either from injection at temperatures too low for effective reaction with NOx or from over-injection of reagent leading to uneven distribution. Controlling ammonia slip in SNCR systems is difficult since there is no opportunity for effective feedback to control reagent injection. The reagent injection system must be able to place the reagent where it is most effective within the boiler because NOx distribution varies within the cross section. An injection system that has too few injection control points or injects a uniform amount of ammonia across the entire section of the boiler will almost certainly lead to a poor distribution ratio and high ammonia slip. Distribution of the reagent can be especially difficult in larger coal-fired boilers because of the long injection distance required to cover the relatively large cross-section of the boiler. Multiple layers of reagent injection as well as individual injection zones in cross-section of each injection level are commonly used to follow the temperature changes caused by boiler load changes. However, it is difficult to make fine adjustments due to the complexity of these injection levels and zones.

E.4 Selective Catalytic Reduction (SCR) for NOx Control

261. The SCR system is proposed for de-nitrification process of the proposed CHP5. The technique is applicable for a continuous emission source of a large exhaust capacity with the advantages of having low secondary pollution and a well-developed technique; with high investment of the equipment and advanced technology, the de-nitrification efficiency will reach 80-90%. The process of the technique is as follows: (i) liquid ammonia will be sent to the storage tank from the truck by an unloading compressor and (ii) be vaporized into ammonia through an evaporator tank, then ammonia will be sent to the boiler area via buffering tank and supply pipeline; (iii) after completely mixing with air, ammonia will enter the SCR reactor for internal reaction via the distribution pilot valve; the SCR reactor will be placed in front of the air preheater while ammonia will be above the SCR reactor. Ammonia will be completely mixed with flue gas by a specific kind of spray device. After mixing, flue gas will conduct reduction reaction in the catalyst of the reactor. After de-nitrification, flue gas will pass the air preheater for recycling and then enter ESP. After installing an SCR reactor to each boiler (two reactors with two air pre-heaters), two boilers will share a liquid ammonia storage


Appendix 4-64

tank and a supply system. The designed de-nitrification rate is ≥60%.

262. After considering the available technologies, their advantages and disadvantages, the CFB boiler in combination with the SNCR process is proposed for the CHP5.

F. Alternative Analysis for Flue Gas Dust Removal

263. Coal combustion inevitably produces small particles and, as with other major pollutants, numerous national and international limits are in force, limiting the levels emitted into the atmosphere. Several main types of technology are used to control particulate emissions from coal-fired power plants, which are described below:

F.1 Electrostatic Precipitator (ESP)

264. These units rely on the transfer of an electric charge to particles suspended in a gas stream and their subsequent removal via an electric field to a suitable collecting electrode. They are widely applied in power plants and are capable of achieving collection efficiencies of more than 99.5%.

F.2 Fabric Filters

265. With fabric filters, particles carried in a gas stream are retained as the stream passes through multiple filter bags manufactured from high-temperature synthetic fibers, usually at temperatures of up to some 300°C. Fabric filtration has found growing application for both utility and industrial uses.

F.3 Wet Particles Scrubbers

266. A large number of variants (foam, film, spray columns, etc.) are available, most based on the use of a liquid medium to collect flue gas particulates. They are used widely for industrial coal-fired applications, but have also been used in high-temperature and pressure applications, as in IGCC and pressurized fluidized bed combustion (PFBC) plant. In some cases, particulate control may be combined with the removal of other species such as SO2, HF, and HCl.

F.4 Hot Gas Cleanup Systems

267. This technology is considered to have significant potential for application in some forms of advanced power generation. Particles in the gas stream are trapped as the gas passes through a series of porous filters (tubes, candles and other configurations) operating at 250-400°C. These offer potential for significantly enhanced overall plant efficiency. Several coal-fired plants have demonstrated treatment of their gas streams using either porous ceramic or metallic hot gas filter units.

268. The ESP method is proposed to be used for the CHP5 project.


Appendix 4-65

VI. ANTICIPATED IMPACTS AND MITIGATION MEASURES

A. Expected Environmental Benefits

269. The proposed CHP5 will significantly improve the air quality in UB by using environmentally-friendly CHP technology with advanced emission control equipment that consumes less coal and emits fewer pollutants. The proposed CHP5 will replace outdated CHP2 and CHP3 plants, as well as hundreds of small, inefficient HOBs and thousands of water heaters. Water and soil pollution will indirectly be mitigated as a result of the reduction of TSP, PM10, SO2, NOx, and other harmful compounds that contribute to acid rain, decreased air, and water pollution. The Project will have the following other benefits in the area: (i) increase district heating supply of 9.38 million GJ; (ii) increase power generation capacity of 3,335 million kWh annually; (iii) reduce traffic hazards caused by coal and slag transport vehicles in the urban areas; and (iv) improve public health and the living environment in areas now affected by emissions, noise, and flue dust from the outdated CHP plants and HOB houses, water heaters, and family heating stoves.

270. A comparison between the projected CHP5 and the existing CHP2, the low pressure part of the CHP3, and the small HOBs to be replaced in coal usage and pollutants emissions of equivalent power and heat generations are summarized in Table 6-1 below:

Table 6-1: Estimated Emission Reductions and Coal Saving (t/a)

Parameter CHP2 CHP320 Small HOB CHP5 Coal Saving/ Emission Reduction



SO2 emission 1,760 3,360 13,870 2,600 16,390

NOx emission 2,060 3,930 16,240 3,040 19,190


CO2 emission 250,900 433,800 1,595,500 1,438,700 841,500


271. After CHP5 Plant starts operation, the existing CHP2, the low pressure part of the CHP3, and hundreds of small coal-fired HOBs will be replaced, and additional 3,335 million kWh of power generation will be increased annually. Compared with the current emissions including those from CHP2, CHP3, and the HOBs, it is expected that only coal consumption and the CO2 emission will increase by about 1.642 million t/a and 6.772 million t/a, respectively due to increased coal consumption (3.62 million – 0.577milliont/a) to produce additional power (3,335 million kWh) as shown in Table 6-2 below. However, the emission loads of SO2, NOx, and flue dust will be significantly reduced even with increased coal consumption because of utilization of advanced emission control technologies in the CHP5. Therefore, the overall environmental impact to UB from the CHP plant is positive.

20 The low pressure part only, the high pressure part will be maintained 21 Not include coal consumption for increased power supply.


Appendix 4-66

Table 6-2: Increase and Decrease in Coal Consumption and Emission Load After CHP5’s Operation (t/a)

Parameter Current Coal

Consumption & Emission22

Expected CHP5 Coal Consumption & Emission

Increase or Decrease

Coal Consumption (raw coal) 1,978,000 3,620,000 +1,642,000

SO2 emission 18,990 6,950 -12,040

NOx emission 22,230 8,130 -14,100

Flue dust emission (TSP) 557,000 145 -556,850

CO2 emission 2,280,200 9,025,000 +6,744,800


B. Screening of Potential Impacts

272. The potential impacts have been screened during the EIA process in order to (i) identify the relative significance of potential impacts from the activities of the proposed CHP5; (ii) establish the scope of the assessment which assists in focusing on major, critical, and specific impacts; and (iii) enable flexibility in regard to consideration of new issues, such as those that reflect the requirements by ADB’s SPS and Mongolian national regulation and standard, if any.

273. The Impacts during construction and operation phases will be considered separately. Some potential impacts from the Project not required by Mongolian EIA regulation but required by ADB SPS as well as the corresponding mitigation measures will be assessed and proposed, including: (i) wastes disposal during small HOBs demolishing, especially for safe disposal of asbestos; (ii) community health and safety; (iii) occupational health and safety, and iv) coal ash utilization, etc.

C. Assessment of Environmental Impacts and Mitigation Measures during Construction

C.1 Soil

274. Impacts on soil. The Project could affect the soil in the construction area (existing CHP3 plant area) through erosion and contamination. Soil erosion may be caused by foundation construction, excavation of pipe trenches, stockpiles and spoils from earthwork during construction of CHP structures; as well as demolition of existing HOB houses and site preparation for heat exchange stations (HESs). Soil contamination may result from the inappropriate transfer, storage, and disposal of petroleum products, chemicals, hazardous materials, liquids, and solid waste during construction activities.

275. Soil erosion. Soil erosion will occur during the construction when surface soil and vegetation are disturbed. The primary area of potentially increased soil erosion includes foundation construction, borrow pits, spoil sites, temporary construction sites, special geological conditions, and other areas where surface soil and vegetation are disturbed.

276. The construction of the CHP structures will generate surplus spoil after maximizing

22 Include coal consumptions of and emissions from the CHP2, CHP3, and small HOBs to be replaced.


Appendix 4-67

reuse of spoil on-site. Surplus spoil can be used off-site by coordinating construction. Such as spoil produced from the heating pipeline construction can be used for building foundation filling and earthworks. The remaining surplus spoil should be transported to suitable spoil disposal sites approved by the ED of UB. All spoil disposal sites must be identified, designed, and operated to minimize impacts and maximize land stability. Approved spoil disposal sites will be identified during detail Project design, and defined in the construction contractors’ tender documents. The spoil disposal site will be shaped and re-vegetated at the conclusion of disposal activity. The final height and shape of each disposal area will be determined by survey during the detailed design phase and will be based upon the resting stability of local spoil material and the surrounding topography.

277. Major mitigation measures for control of soil erosion, soil contamination, and other geologic hazards due to construction activities are as follows:

1) Minimize active open excavation areas during trenching activities and some foundation works, and use appropriate compaction techniques for those constructions;

2) Construct intercepting ditches and drains to prevent runoff entering construction sites, and divert runoff from sites to existing drainage;

3) Limit construction and material handling during periods of rains and high winds;

4) Stabilize all earthwork disturbance areas within 14 days after earthworks have ceased at the sites;

5) Pay sufficient attention to drainage after land recovery to prevent water accumulation;

6) Plant grass to protect ground, especially on sandy soil and slopes;

7) Appropriately set up temporary construction camps and storage areas to minimize the land area required and impact on soil erosion;

8) Properly store petroleum products, hazardous materials and waste on impermeable surfaces in secured and covered areas, and use the best management practice to avoid soil contamination;

9) Remove all construction wastes from the site to approved waste disposal sites; and

10) Provide spill cleanup measures and equipment at the construction site and require contractors to conduct training in emergency spill response procedures.

C.2 Water

278. Groundwater pollution. Inappropriate storage and handling of petroleum products and hazardous materials, accidental spills, disposal of domestic wastewater from construction camps, and wash down water from construction equipment and vehicles may contaminate adjacent groundwater resources. Contractors will be required to store all toxic, hazardous, or harmful construction materials, including petroleum products on an impermeable surface within a bounded area to manage and prevent spillage or leakage escaping into the environment.

279. Construction wastewater. Wastewater produced during construction will come from washing aggregates, pouring and curing concrete, and oil-containing wastewater from machinery repairs. Tunneling operations for some underground structures will produce a distinctive wastewater with suspended solids as the main pollutant, with a concentration ranging from 800 to 5,000 mg/l. Measures for managing construction wastewater include the following:


Appendix 4-68

LRRLL i

i Δ−−=0

0 lg20

1) All areas where construction equipment is being washed will be equipped with water collection basins and sediment traps; and

2) Septic treatment and disposal systems will be installed at construction camps along with proper maintenance protocols.

C.3 Noise and Vibration

(1) Noise Intensity

280. A significant increase of noise will be expected during construction, due to various construction and transport activities. Construction activities will involve excavators, bulldozers, graders, stabilizers, concrete-mixing plants, drills, stone-crushing and screening plants, rollers, and other heavy machineries. Noise will be generated by the trench excavator, roller, and other compaction machine during heating pipeline construction. Since noise levels may be severe, the operation will be temporary and localized. The major construction machinery noise testing values are shown in Table 6-3.

Table 6-3: Testing Values of Construction Machinery Noise

No. Machine Type Reference Model Distance between

Measuring Site and Construction Machinery (m)

Maximum Sound Level

L max (B)

1 Wheel Loader Model XL40 5 90

2 Wheel Loaders Model XL50 5 90

3 Grader Model PY160A 5 90

4 Vibrating Roller Model YZJ10B 5 86

5 Two-wheeled Two-Vibrating Roller Model CC21 5 81

6 Three-wheeled Roller 5 81

7 Tire Roller Model ZL16 5 76

8 Bulldozer Model T140 5 86

9 Tire Hydraulic Excavator Model W4-60C 5 84

10 Paver (UK) Fifond311ABGCO 5 82

11 Paver (Germany) VOGELE 5 87

12 Generating Set (two sets) FKV-75 1 98

13 Impact Trepan Model 22 1 87

Source: U.S. Federal Highway Administration (FHWA)

(2) Methodology for Prediction of Noise Value during Construction

281. Construction equipment noise source is considered as a point sound source, and the predictive mode is as follows:

1) Where, Li and L0 are equipment noise sound levels at Ri and R0 respectively,


Appendix 4-69

ΔL is additional decrement produced by barriers, vegetation and air.

2) As for the impact of multiple construction machineries on a certain future position, sound level superposition is needed:

iLL ×Σ= 1.010lg10

(3) Prediction Results

282. According to the model, noise levels at different distances are gained after calculating the impact scope of equipment noise during construction as in Table 6-4, and the impact scope of different equipment is in Table 6-5.

Table 6-4: Noise Values of Construction Machineries at Different Distances dB (A)

Distance to Machinery Machinery Name 5 m 10 m 20 m 40 m 60 m 80 m 100 m 150 m 200 m 300 m

Loader 90 84 78 72 68.5 66 64 60.5 58 54.5

Vibratory Road Roller 86 80 74 68 64.5 62 60 56.5 54 50.5

Bulldozer 86 80 74 68 64.5 62 60 56.5 54 50.5

Land Scraper 90 84 78 72 68.5 66 64 60.5 58 54.5

Excavator 84 78 72 66 62.5 60 58 54.5 52 48.8

Roller 87 81 75 69 65.5 63 61 57.5 55 51.5

Mixing Equipment 87 81 75 69 65.5 63 61 57.5 55 51.5


Table 6-5: Construction Equipment Noise Impact Scope

Limit Standard (dB) Impact Scope (m) Construction Stage

Construction Machinery Daytime Nighttime Daytime Nighttime

Excavator 75 55 14.1 118.6

Bulldozer 75 55 17.7 177.4

Loader 75 55 28.1 210.8

Scraper 75 55 39.7 281.2

Land Scraper 75 55 28.1 210.8

Earth and Stone Work

Tamper 75 55 84.4 474.3

Piling Pile Driver 85 Forbidden 126.2 /

Road Roller 70 55 31.5 177.4

Truck 70 55 66.8 266.1

Vibrator 70 55 53.2 224.4

Dump Truck 70 55 19.9 111.9

Blender 70 55 20.0 112.5

Structure

Mixing Machine 70 55 35.4 167.5



Appendix 4-70

283. It is estimated that noise intensity during construction will be in the range of 76-98 decibels in audible scale23. In such cases, they will still meet the World Bank standard of up to 60 m away from the source during the day and 200 m at night. As a result, urban residential areas and villages through which haul roads pass and are adjacent to construction sites will frequently experience noise at 70-80 decibels in the audible scale. Activities with intensive noise levels will not only have an impact on the residents, but also may cause injury to construction workers operating the equipment.

(3) Mitigation Measures for Noise Impact

284. These mitigation measures are essential for construction activities to meet the domestic construction site noise limits and to protect sensitive receptors:

1) Ensure that noise levels from equipment and machinery conform to the Mongolian standard, and properly maintain machinery to minimize noise;

2) Apply noise reduction devices or methods where piling equipment is operating within 500 m of sensitive sites such as schools, hospitals, and residential areas;

3) Locate sites for rock crushing, concrete-mixing, and similar activities at least 1 km away from sensitive areas;

4) To reduce noise at night, restrict the operation of machinery generating high levels of noise, such as piling, and movement of heavy vehicles along urban roads between 8 p.m. and 7 a.m. the next day based on international best/common construction practices;

5) Public notification of construction operations will incorporate noise considerations; information procedure of handling complaints through the Grievance Redress Mechanism will be disseminated;

6) Reach an agreement with nearby schools and residents regarding heavy machinery work to avoid any unnecessary disturbances. If disturbance cannot be avoided, compensate the affected residents;

7) Place temporary hoardings or noise barriers around noise sources during construction, if necessary;

8) Monitor noise at sensitive areas at regular intervals. If noise standards are exceeded, equipment and construction conditions shall be checked, and mitigation measures shall be implemented to rectify the situation; and

9) Conduct monthly interviews with residents living adjacent to the construction sites to identify community complaints about noise, and seek suggestions from community members to reduce noise annoyance. Community suggestions will be used to adjust work hours of noise-generating machinery.

10) As a precautionary measure apply noise reduction devices or methods for piling operation located close to sensitive sites such as schools, hospitals, and residential areas; the closest sensitive site as per Table 4-13 is 137 St Kindergarden.

C.4 Vibration Impact and Mitigation Measures

285. Significant vibrations are expected during structure pilling construction, pipeline trench

23 76-98 dB at 60 and 200 m will be audible within the site boundary.


Appendix 4-71

compaction, etc. On the construction site, different degrees of mechanical vibration will occur during the Project construction procedures. Such vibration is sudden, impassive, and discontinuous, which will annoy people easily. Main construction machineries include vibrating rollers, earth rammer and loader, etc., among which the impact of the vibrating roller is significantly high. People close to the construction site will be affected by the construction machinery vibration. Major mitigation measure includes prohibition of pilling and compaction operations at night will effectively reduce the vibration impact.

C.5 Air Quality

286. The Project could have the following impacts on air quality during construction: (i) dust from excavation, concrete mixing, transportation of the construction materials and excavation spoil, and dust soil from disturbed and uncovered construction areas and other construction activities, especially on windy days and (ii) vehicle emission from construction vehicles, especially heavy diesel machineries, and equipment. Fugitive dust may be caused by excavation, demolition, vehicular movement, and materials handling, particularly downwind from the construction sites. The dust and emission caused by pipeline ditch excavation, backfill, and vehicular movement could affect nearby residential areas, hospitals, and schools.

287. Mitigation measures will include:

1) Spray water on construction sites and material handling routes where fugitive dust generated;

2) Pay particular attention to dust suppression near sensitive receptors such as schools, hospitals, or residential areas;

3) Store and cover petroleum or other harmful materials in designated places to minimize fugitive dust and emission;

4) Cover materials during truck transportation, in particular, the fine material, to avoid spillage or dust generation;

5) Ensure vehicle emissions are in compliance with Mongolian standards; and

6) Maintain vehicles and construction machinery to a high standard to ensure efficient running and fuel-burning and compliance with the domestic emission standards.

C.6 Solid Waste

288. Construction and domestic solid wastes. Construction wastes could have adverse impacts on the surroundings. Work forces of contractors will generate solid wastes of 0.2-0.5 ton per day in each camp. Inappropriate waste storage and disposal could affect soil, groundwater, and surface water resources, and hence, public health and sanitation.

289. Mitigation measures will include the followings:

1) Establish temporary storage for solid wastes away from water bodies or other environmental sensitive areas, and regularly haul to an approved landfill or designated dumping site;

2) Provide appropriate waste storage containers and reach agreement with local villages or residential communities for disposal of worker’s camp domestic waste through appropriate local facilities. These arrangements will be made prior to commencing construction;

3) Hire a contractor with proper credentials to remove all wastes from sites to


Appendix 4-72

approved waste disposal sites, according to appropriate domestic standards;

4) Hold contractors responsible for proper removal and disposal of any significant residual materials, wastes, and contaminated soils that remain on the ground after construction. Any planned paving or vegetating of the area shall be done as soon as the materials are removed to protect and stabilize the soil; and

5) Prohibit waste incineration.

290. Wastes from demolishing work. Demolition of the existing CHP2 and CHP3 plants, as well as the 89 HOB houses and the 1,005 coal-fired water heaters24, will generate large quantities of solid wastes and debris, including ferrous waste, waste concrete, bricks, glass, rubble, and roofing materials, etc. Inappropriate disposal and storage of deconstruction waste could have impact on soil, underground water, and surface water resources, as well as consequently, public health.

291. The mitigation measures for disposal of non-hazardous wastes during deconstructions include the following:

1) Ferrous wastes generated by the demolition will be sold to local wastes recycling stations for recycling. The rest demolition debris will be transported to UB ED-approved municipal solid waste landfills or special construction and demolition debris landfills;

2) Maximizing reuse/recycling of deconstruction wastes generated during demolition (e.g. iron, bricks, windows, doors, steel bars, etc.) This includes selling them to local waste recycling stations or disposing of other demolition debris in municipal solid waste landfills or special construction and demolition debris landfills, subject to approval by ED of UB;

3) Removal of all wastes (hazardous and non-hazardous) from demolition sites to approved waste disposal sites by an authorized contractor with the proper credentials following appropriate standards. There will be no on-site landfills permitted at the construction site; and

4) If significant residual materials remain on the ground after demolishing work, the contractor will be held responsible for and make arrangements to properly remove and dispose all the materials and contaminated soils. If the area is to be paved or vegetated, pave or vegetate as soon as the materials are removed to stabilize soil.

292. Measures to minimize health risks caused by asbestos. Some structures/facilities of the existing CHP3 Plant, HOBs, and water heaters may contain asbestos material so that caution and careful attention should be paid to avoid adverse impacts to public health. The mitigation measures include the followings:

1) Asbestos Risk Assessment. At the beginning of the CHP5 Project implementation, an asbestos risk assessment will be conducted by a licensed professional unit (the unit) for disposal of dangerous and hazardous waste (including asbestos). The unit will inspect the CHP2 and CHP3, as well as the HOBs and the water heaters, and assess the potential risks of asbestos during the demolishing. The assessment will identify the presence, absence, and amount of asbestos and asbestos-containing materials (ACM) in each of facilities, HOBs, and water heaters, and define an action plan, including labeling

24 The HOBs and the water heaters distribute all over UB, this FS is mainly focus on the CHP plant not including the location for each of the HOBs and water heaters.


Appendix 4-73

requirements, control mechanism (from elimination, removal or isolation to safe working practices), health and safety requirements, as well as a plan of action and procedures for disposal of the asbestos and ACM. The plan will be based on the World Bank EHS standards (April 2007) and the Good Practice Note Asbestos: Occupational and Community Health Issues (May 2009). The risk assessment will be shared with the ED, MMRE, and MNET.

2) Removal, transport, and disposal of asbestos. The unit will be responsible for the removal, transport, and disposal of the asbestos and ACM. The unit shall identify, properly label, and pack asbestos as well as demolishing debris contaminated with asbestos during the deconstruction. Asbestos and ACM will be transported by the unit in sealed vehicles to the hazardous waste landfill;

3) Qualified demolishing contractor(s) will be selected through competitive bidding. The risk assessment, the asbestos management plan, the mitigation measures, the environmental, health, and safety requirements during disposal of asbestos, and the supervision requirements will be included in the bidding document(s). The bidding process, including the bidding evaluation and the contract signing, will be managed and supervised by ED of UB.

4) Supervision. ED of UB will supervise the deconstruction and transport process. The applicable international law and regulation for the demolishing and disposal of asbestos and ACM are: (i) the World Bank EHS (Good Practice Note: Asbestos: Occupational and Community Health Issues); (ii) WHO Policy and Guidelines; and (iii) ISO/FDIS 16000-7: Indoor Air – Part 7: Sampling Strategy for Determination of Airborne Asbestos Fiber Concentrations;

5) Occupational Health and Safety. Proper protective clothing and specific equipment shall be provided by the unit to its trained team and demolishing contractors’ workers involved in demolishing and disposing of asbestos during the deconstruction;

6) Training. Training on handling and managing asbestos and ACM will be provided to deconstruction contractors. The training has been included in the training plan of the EMP and budgeted accordingly; and

7) Monitoring. Asbestos and ACM will be monitored after deconstruction of the facilities, the HOBs, and the water heaters where asbestos has been identified during the risk assessment. The monitoring will consist of a visual inspection to confirm that all identified ACM have been removed, and a clearance monitoring of airborne asbestos to confirm safe working environment. The unit will conduct the visual inspection; a licensed laboratory will be selected to conduct the clearance monitoring.

C.7 Flora and Fauna

293. Potential impacts. Since construction activities will be mainly within the existing CHP3 plant, there are no rare, threatened, or endangered species within the construction boundaries. But special precautions shall be taken place during and after construction for the protection of small animals, reptiles, and birds of common species that live in vegetated plant areas. The potential impacts of the Project on flora and fauna include the removal of vegetation and disruption of the ecosystem during construction. In particular, the construction activities will alter the original landscape and vegetation. Mitigation measures will include the following activities:

1) Preserve existing vegetation where no construction activity is planned, or temporarily preserve vegetation where activity is planned for a later date;

2) Increase green space ratio from about 5% to 14% in the CHP5 plant according


Appendix 4-74

to the FSR;

3) Properly backfill, compact, and re-vegetate pipeline trenches after heating pipeline installation;

4) Protect existing trees and grassland during constructions; when a tree has to be removed or an area of grassland disturbed, replant trees and re-vegetate the area after construction;

5) Remove trees or shrubs only as a last resort if they impinge directly on permanent structures; and

6) In compliance with the Mongolia’s forestry law, undertake compensatory planting of an equivalent or larger area of affected trees and vegetation.

C.8 Socioeconomic Impacts

294. Potential socioeconomic impacts. Since the existing CHP3 will still be operating during the construction of the new CHP5 plant, a build-and-scrap methodology will be needed to ensure a smooth transition from the CHP3 to the CHP5. The CHP3 has two systems, a high pressure system and a low pressure system, with up to 136 MW (48 MW of high pressure and 88 of low pressure) of power generation capacity and 485 Gcal/h (450 t/h boiler capacity of low pressure and 1,540 t/h of high pressure) of heating capacity. The high pressure part will be retained after the CHP5 putting into operation. However, part of the low pressure operating activities, are likely to be suspended and/or decommissioned once the new CHP plant is constructed and commissioned. A well-designed implementation program needs to be developed to coordinate all involved activities and ensure uninterrupted and stable heating and power supply to UB. The so-called build-and-scrap technology can be applied to build a new CHP plant while the existing CHP3 plant continues to operate.

295. The potential socioeconomic impacts of the Project during construction include unexpected interruptions in municipal services and utilities because of damage to power supply, heating supply, pipelines for water supply, drainage, and gas, as well as to underground communication cables (including optical fiber cables). Any of these disruptions in service can affect the economy, industries, businesses, and residents’ daily life seriously. Heating pipeline and power transmission grid constructions may require relocation of municipal utilities such as sewer, gas, water supplies, communication cables, and power supplies, and hence the temporary suspension of services to adjacent communities.

296. Mitigation measures include:

1) Demand contractors to consider the impact on traffic in construction schedule. A traffic control and operation plan will be prepared and it shall be approved by the local traffic management administration before construction;

2) Plan construction activities to minimize disturbances to utility services;

3) Contractor and the Project developer shall notify the surrounding communities, factories and other stakeholders at least a week before shutting down any public utilities and facilities; and

4) Implement safety measures around the construction sites to protect the public, including warning signs to alert the public to potential safety hazards, and barriers to prevent public access to construction sites.

C.9 Community, Occupational Health and Safety

297. Contractors shall be required by the PIU and the Project developer to ensure that their workers and other staff working on the proposed CHP5 constructions are in a safe


Appendix 4-75

environment. Contractors shall ensure that: (i) all reasonable steps are taken to protect every person on the site from health and safety risks; (ii) the construction site is a safe and healthy workplace; (iii) machineries and equipment are safe; (iv) adequate training or instruction for occupational health and safety is provided; (v) adequate supervision of safe work systems is implemented; and (vi) means of access to and egress from the site are without health and safety risk.

298. All contractors shall be required to implement effective occupational health and safety measures for their workers within the construction sites, including efficient sanitation, adequate health services and protection clothing and equipment, especially specific clothing and equipment, as well as training and supervision for asbestors handling and disposal during demilishing works (including decomminssioning the CHP3 and HOBs). The contractors’ performance and activities for occupational health and safety shall be incorporated in their Project progress reports.

D. Environmental Impact and Mitigation Measures during Operation

299. The environmental impacts of the CHP5 Project will take place during operation and decommissioning. The potential impacts during operation will be noise from the generators and cooling towers; risk from oil spill and fire; air pollution from flue gas emissions, specifically SO2, NOx, TSP, and particulates smaller than 10 microns (PM10), water pollution, solid waste (mainly fly ash and bottom ash). The main impact during decommissioning is the disposal of soil that might be contaminated with spilled chemicals and lubricants. The CHP5 plant will not use any polychlorinated biphenyls or asbestos, which were typically used in power plants built before 1980s.

D.1 Pollutant Emissions

300. Coal combustion produces emissions of the following major pollutants: SO2; NOX; TSP, including PM10 that are referred to as respirable particulate matter (RPM); and CO2, which is a major greenhouse gas. The Project will minimize the emission of these pollutants by using advanced technology and control measures, including using ESP with a dust removal efficiency of at least 99.6%; using desulfurization within the CFB boiler that is about 80% efficient; and using CFB plus SNCR equipment with a total de-nitrification rate of about 80%, with which the emission concentration will be lower than 150 mg/m3.

301. Sulfur Dioxide (SO2). SO2 is an irritating gas that is absorbed in the nose and aqueous surfaces of the upper respiratory tract, and is associated with reduced lung function and increased risk of mortality and morbidity. Adverse health effects of SO2 include coughing, phlegm, chest discomfort, and bronchitis. Ambient air quality guidelines and standards issued by the World Bank for SO2 are given in Table 6-6.

302. Oxides of Nitrogen (NOx). NOx, primarily in the form of NO, is one of the primary pollutants emitted during coal combustion of CHP Plants. NO2 is formed through oxidation of these oxides once released in the air. NO2 is an irritating gas that is absorbed into the mucous membrane of the respiratory tract. The most adverse health effect occurs at the junction of the conducting airway and the gas exchange region of the lungs. The upper airways are less affected because NO2 is not very soluble in aqueous surfaces. Exposure to NO2 is linked with increased susceptibility to respiratory infection, increased airway resistance in asthmatics and decreased pulmonary function. The World Bank standards and guidelines of NOx are given in Table 6-6.

303. Total Suspended Particulate (TSP). The impact of particles on human health largely depends on (i) particle characteristics, particularly particle size and chemical composition and


Appendix 4-76

(ii) the duration, frequency, and magnitude of exposure. The potential of particles to be inhaled and deposited in the lung is a function of the aerodynamic characteristics of particles in flow streams. The aerodynamic properties of particles are related to their size, shape, and density. The deposition of particles in different regions of the respiratory system depends on their size.

304. The nasal openings allow dust particles to enter the nasal region, along with much finer airborne particulates. Larger particles are deposited in the nasal region by impaction on the hairs of the nose or at the bends of the nasal passages. Smaller particles (PM10) pass through the nasal region and are deposited in the tracheobronchial and pulmonary regions. Particles are removed by impacting with the wall of the bronchi when they are unable to follow the gaseous streamline flow through subsequent bifurcations of Hydrographic and Meteorological Condition the bronchial tree. As the airflow decreases near the terminal bronchi, the smallest particles are removed by Brownian motion, which pushes them to the alveolar membrane.

Air quality guidelines for particulates are given for various particle size fractions, including TSP, inhalable particulates or PM10, and particulates of PM2.5 (i.e., particulates with an aerodynamic diameter of less than 2.5 μm). Although TSP is defined as all particulates with an aerodynamic diameter of less than 100 μm, an effective upper limit of 30 μm aerodynamic diameter is frequently assigned. PM10 and PM2.5 are of concern due to their health impact potentials. As indicated previously, such fine particles are able to be deposited in, and damaging to, the lower airways and gas-exchanging portions of the lung. The PM10 standards of the World Bank are listed in Table 6-6.

D.2 Applicable International Ambient Air Quality Guidelines and Standards

305. The quality guidelines and standards are fundamental to effective air quality management, providing the link between the source of atmospheric emissions and the user of that air at the downstream receptor site. The ambient air quality limits are intended to indicate safe daily exposure levels for the majority of the population, including the very young and the elderly, throughout an individual’s lifetime. Such limits are given for one or more specific averaging periods, typically 10 minutes, one-hour average, 24-hour average, one-month average, and/or annual average. Since Mongolian standards for ambient air are mainly based on the old existing facilities, the pollution emission standards of the World Bank are adopted for this EIA study. (See Table 6-5 in detail.)

Table 6-6: World Bank Ambient Air Quality Standards

Item Pollutant Maximum 24-hour Average (μg/m³)

Annual Average Concentration (μg/m³)

PM10 70 50

SO2 125 50 General Environmental Guidelines

NOx 150

PM10 150 50

SO2 150 80 Thermal Power Guidelines

NOx 150 100

D.3 Pollutants Dispersion and Expected Emission Concentration

306. The computer dispersion modeling has been undertaken to assess the impact of stack emissions on air quality from the CHP5 plant. In addition, the potential for cumulative air


Appendix 4-77

quality impacts as a result of emissions from the proposed power plant and from the neighboring CEB power plant has been assessed.

307. UB is surrounded by a range of mountains and inversed atmospheric temperature distribution, in which situation the local air temperature will increase as its altitude increases. This is formed in the air layer above the valley of the Tuul River in wintertime. Under normal atmospheric conditions, the local air temperature will decrease as its altitude increases. Thanks to the inversed atmospheric temperature distribution, atmospheric pressure is 2-3 Pa (gauge pressure) higher and atmospheric temperature is relatively lower in the Tuul river valley than in the city center. Temperature inversions play a major role in the air quality, especially during the winter when these inversions are the strongest.

308. During winter, the warm air above cool air acts like a lid, suppressing vertical natural air convection and limiting air exchange at the surface. As a result, the dispersal of waste particle matters in the air is limited, which leads to poor air quality. In the warm season, the inversion formed is relatively weak and the mountain-hollow wind dominates.

309. Wind speed and direction. The yearly average wind speed is 2.5 m/s in UB, and the April, May, and June are the windy months. May is the windiest month when the average wind speed is high to 4 m/s and the number of days with strong wind is 9.8. However, in December and January, the two coldest months, the wind is weak and the wind speed is less than 1 m/s. The dominant wind direction of UB is from north, as shown in Figure 6-7.

Figure 6-7: Dominant Wind Direction of UB (24-hr average)


310. After calculation, the estimated 24-hour average emission concentrations of SO2, flue dust, and NOx from the CHP5 plant will be 120 mg/m3, 50.0 mg/m3 and 130 mg/m3, respectively, which meet the World Bank Guideline for New Thermal Power Plants (Table 6-6).

Jan, Still 72.3%

3. 010 20 30 40

N

EN

E

ES

13. S

WS

W

WN

Frequency,%Speed/s

April, Still 36.6%.

0

22. 10

20

30N

EN

E

ES

30. S

32. WS

W

WN

Frequency,% Speed/s

0 39. 5

10152025

N

EN

E

ES

S

WS

W

WN

July, Still 39.5%

Frequency,%Speed/s

October, Still 55.8%

57. 0

59. 10

20

30N

EN

E

EN

S

WS

W

WN

Frequency,% Speed/s


Appendix 4-78

Table 6-8: Expected Pollutant Emissions from the CHP5 Plant (24-hr Average)25

Pollutant Item Expected Emission Concentration

World Bank Standard Concentration

Expected emission concentration (mg/m3) 120.0 150

SO2 Expected hourly emission rate

(t/h) 0.4

Expected emission concentration (mg/m3) 50.0 230

TSP Expected hourly emission rate

(t/h) 0.1

Expected emission concentration (mg/m3) 130 150

NOx Expected hour emission rate

(t/h) 2.0

D.4 Liquid Waste Generation

311. Effluents will be generated from cooling tower blowdown, wash water, and wastewater from sanitary facilities. Sanitary effluent will be discharged into in sewage treatment plant. The cooling water blowdown will be treated and reused in the ash conduction, disposal system, and dust suppression system. Blowdown from cooling towers will be the main sources of the wastewater. In addition, plant waste and domestic waste from canteen and toilets will be another wastes generated. The cooling tower blowdown will be reused in dust suppression, ash/coal handling, fly ash conditioning, ash disposal, and service water.

D.5 Solid Waste Generation

312. The CHP5 Plant using lignite as fuel generates large quantities of coal ash as a by-product. With the coals having about 10% ash content, the amount of generation of ash is becoming very large. This poses some ecological problems.

313. The coals used for the CHP3 are supplied by two coal mines of Baganuur and Shivee-Ovoo, those will also provide coals for the CHP5. According to the FSR, Baganuur will provide 30% of the coal while Shivee-Ovoo will provide 70%. The composition analysis of the coals and ashes from the two mines are shown in Table 6-9 and Table 6-10 respectively.

Table 6-9: Characteristic of Coal

Baganuur Shivee-Ovoo Coal mine

Mean Range Mean Range

Proximate Analysis

Volatile matter % 42 39~45 45 36~48

Fixed carbon % 32 30~40 31 28~36

Ash % 12.1 8.5

25 The World Bank Group, Thermal Power: Guidelines for New Plants, 1998


Appendix 4-79

Baganuur Shivee-Ovoo Coal mine


Moisture (Inherent) % 11 8~13 8 3~12

Total 100% 100%

Total moisture as-received basis % 33 30~40 39 37~44

Calorific value as-received basis (dry) Kcal/kg 3,250 2,600~3,500 2,900 2,700~3,400

Grindability-Hardgrove*2) - 50 40~60 64 62~66

Ultimate Analysis

Carbon % 73.2 72.89

Sulfur % 0.6 0.4~0.8 0.61 0.6~0.9

Hydrogen % 4.7 4.19

Oxygen % 20.6 21.38

Nitrogen % 0.9 0.93

Total 100% 100%


Appendix 4-80

Table 6-10: Ash Composition of Coal

Coal mine Baganuur Shivee-Ovoo


Ash Analysis

SiO2 % 54.8 44.44

Al2O3 % 12.5 14.51

Fe2O3 % 10 8.03

CaO % 12 15.24

TiO2 % 0.6 0.64

MgO % 1.8 3.96

MnO % - -

SO3 % 6.4 10.87

P2O5 % - -

Na2O % 0.6 0.81

K2O % 1.3 1.5

100% 100%

314. Fortunately, the ash does not contain any of arsenic, selenium, and other chemicals that can cause health problems in wildlife and people, resulting in fewer negative impacts for the ash disposal.

D.6 Utilization of Coal Ash

315. Properly disposal of about 400,000 tons of coal ash annually from the CHP5 plant is a critical environmental problem, but coal ash and slag can be used as raw materials for construction material industry and highway construction. These materials are known as coal combustion products (CCPs). Power plants/CHP plants generate a variety of CCPs, namely bottom ash, fly ash, and FGD residue.

316. In most developed countries and some developing countries in the world, coal ash and slag from coal-fired power plants is used as products in such beneficial applications as concrete, roofing tiles and shingles, bricks and blocks for building construction, wallboard, and specialty uses such as filler in carpet, bowling balls, and highway construction filling materials. Figure 6-1 and Figure 6-2 show the utilization status of CCP in Europe and the U.S., respectively.


Appendix 4-81

Figure 6-1: Utilization of Coal Ash in Europe in 2007

Source: NCAB Workshop Environmental. Aspects on Coal Ash Utilization, December 15/16, 2009

Figure 6-2 Utilization of Coal Ash in USA in 2003

Source: American Coal Ash Association, 2004.

317. Since construction material industry is less developed in UB and Mongolia, the potential utilization of the coal ash from the CHP5 will be mainly focus on highway and local road constructions.


Appendix 4-82

(1) Survey and Forecasting for Utilization of Coal Ash in Industrial Sectors in Mongolia

318. A survey for coal ash utilization market in Mongolia conducted by Mongolian Building Materials Manufacture Association of Mongolia in 2011 shows that coal ash demand in 2015 will be 1.145million t/yr. Table 6-11 below is the forecasting for coal ash utilization in different sectors in the country.


Appendix 4-83

Table 6-11: Survey of Coal Ash Utilization in Industrial Sectors in Mongolia

№ Ash utilization industry Unit

Average cost, mil. №-121231

Application Total production and ash utilization 2011 2012 2013 2014 2015 2016 Total

Cement , 1000 t 420 480 980 1980 2650 2650 9160 1 Cement industry ton 120

Raw material and clinker

additive Ash, 1000 t 84 96 196 396 530 530 1832 Concrete mixture,

1000 m3 1802.2 1982.4 2072.5 2162.6 2252.8 2342.9 12615.42 Ready mix concrete

plants m3 95 Mineral additive

Ash, 1000 t 350.8 385.8 403.4 420.9 438.5 456.0 2455.4

Light weighted concrete, 1000 m3 238.6 262.4 274.3 286.3 298.2 310.1 1669.9

3 Autoclaved light weight concrete

plants m3 85 Mineral

additive Ash, 1000 t 81.1 89.2 93.3 97.3 101.4 105.4 567.7

Agloporite , 1000 m3 31.5 63 94.5

4

Expanded agloporite lightweight aggregate

/ash gravel / plant

m3 55 Main raw material

Ash, 1000 t 13.5 27 40.5

Ceramsite , 1000 m3 90 99 103.5 108 112.5 117 630

5 Ceramsite lightweight

aggregate plant m3 55 Mineral

additive Ash, 1000 t 3.9 4.3 4.5 4.7 4.8 5.0 27.2 Light weight

concrete block , 1000 m3

54.2 59.6 62.3 65.0 67.8 70.5 379.4 6

Light weight concrete block

plants m3 80 Mineral

additive Ash,1000 t 9.8 10.7 11.2 11.7 12.2 12.7 68.3

Road, 1000 km 1.23 1.01 1.1 0.9 0.85 0.7 5.8 7

Utilization of highway

construction Ton 75 Mineral

additive Ash, 1000 t 64.6 53.0 57.8 47.3 44.6 36.8 304.0

Total Ash, 1000 t 594.1 639.1 766.1 977.9 1145.0 1172.9 5295.1

Source: Building Materials Manufacture Association


Appendix 4-84

(2) Utilization of Coal Ash in Highway Construction

319. The concentrations of naturally occurring elements found in many coal ashes are similar to those found in naturally occurring soil. A U.S. mineral analysis of CCPs from coal-fired power plants indicated that they are composed of 95% iron oxides, aluminum, and silica. They also contain oxidized forms of other naturally occurring elements found in coal, such as arsenic, barium, cadmium, chromium, copper, lead, mercury, selenium, and zinc. Some coal contains naturally occurring radioactive elements. After combustion, these elements and their decay products can remain in CCPs. The exact chemical composition of CCPs varies depending on the type of coal burned, the extent to which the coal is prepared before it is burned, and the operating conditions for combustion.

320. Two types of coal combustion products used in highway construction the most are fly ash and bottom ash. Fly ash can be used as a replacement for cement in concrete and grout, as a fill material in embankments as aggregate for highway subgrades and road base. Bottom ash can be used as aggregate in concrete and in cold mixed asphalt, and as a structural fill for embankments and cement stabilized bases for highway construction.

(3) Performance and Cost Benefits of Coal ash Utilization

321. Using CCPs in highway construction yields a number of performance and cost benefits, which can lead to environmental benefits as well. Performance benefits can be realized from the use of coal ash in concrete mixtures, embankment, in flowable fill, as a stabilized base course, in asphalt pavements, and in grouts for pavement subsealing.

322. Fly ash in concrete. Coal ash can be used to create superior products because of its inherent cementitious properties. Mixing fly ash with Portland cement mixtures can produce stronger and longer lasting roads and bridges than concrete made with only Portland cement as the binder (glue). The following are notable performance benefits from using coal fly ash in concrete: i) improved workability of concrete due to the nature and shape of the ash particles; ii) reduced water demand; iii) reduced bleeding at the edges of pavement; iv) increased ultimate strength of the concrete; v) reduced permeability to moisture, improving long-term durability of the concrete; vi) decreased heat of hydration during concrete curing; vii) greater concrete resistance to various forms of deterioration; and viii) reduced concrete shrinkage.

Figure 6-3: Strength Gain of Fly Ash Concrete

323. In embankment. Coal ash can be used as a borrow material for highway embankments. When fly ash is compacted, a structural fill can be constructed that can support highways. The performance benefits associated with this use include: i) elimination of the need to purchase, permit, and operate a borrow pit; ii) placement over


Appendix 4-85

low-bearing-strength soils; and iii) ease of handling and compaction, which reduces construction time and equipment costs.

324. In flowable fill. Flowable fill made with coal ash can be used in place of conventional backfill materials and alleviates problems and restrictions generally associated with the placement of those materials. The benefits include: i) placement in any weather, including under freezing conditions; ii) 100% density with no compactive effort; iii) ability to fill around and under structures inaccessible; iv) to conventional fill placement techniques; v) increased soil-bearing capacity; vi) prevention of post-fill settlement problems; vii) increased speed and ease of backfilling operations; viii) decreased variability in the density of backfilled materials; ix) improved on-the-job safety and reduced labor and excavation costs; x) easy excavation later when properly designed.

325. In stabilized base course. Fly ash and lime can be combined with aggregate to produce a quality stabilized base course. These road bases are referred to as pozzolanic-stabilized mixtures and are advantageous over other base materials because they provide: i) a strong durable mixture; ii) reduced costs; iii) autogenous healing; and iv) increased energy efficiency.

326. In asphalt pavements. Coal ash also can be used as mineral filler in asphalt pavements. Mineral fillers increase the stiffness of the asphalt mortar mix, improve the rutting resistance of pavements, and improve the durability of the mix. Other benefits include reduced potential for asphalt stripping and reduced cost compared to other mineral fillers.

327. In grouts for pavement subsealing. Grouts for pavement subsealing are proportioned mixtures of fly ash, water, and other materials used to fill voids under a pavement system without raising the slabs by drilling and injecting grout under specified areas of the pavement. In these applications, the performance benefits include: i) quick correction of concrete pavements; ii) minimal traffic disturbance; and iii) development of high ultimate strength.

328. In addition to these performance benefits, many CCPs are less costly to use than the materials they replace. At the same time, the durability benefits from using coal ash concrete can reduce the cost of maintaining road systems. This enhanced performance also provides additional environmental benefits by reducing the need for new concrete to replace aging roads and bridges, thereby significantly reducing future energy consumption and greenhouse gas emissions.

(4) Environmental Benefits of Coal Ash Utilization

329. Use of CCPs in highway construction provides significant short- and long-term environmental benefits. Specifically, using CCPs in lieu of other materials reduces energy use and greenhouse gas emissions and conserves natural resources. In addition, it prevents the disposal of a valuable resource, reducing the need for landfills and surface impoundments. Finally, the inherent performance benefits of concrete made from coal ash actually leads to additional environmental benefits. Highways and bridges made with coal ash concrete are more durable than those made without it and therefore do not need to be repaired and replaced as often.

330. Greenhouse gas emissions and energy saving. Cement production involves many steps, including grinding and blending raw ingredients (such as limestone, shells, or chalk, and shale, clay, sand, or iron ore); heating those ingredients to very high temperatures in a kiln; cooling and mixing those ingredients with gypsum, then grinding down the mixture to form cement powder. This energy-intensive process typically emits nearly one ton of greenhouse gases for each ton of cement created and requires the equivalent of a barrel of oil


Appendix 4-86

per ton. Using coal ash (which would otherwise be disposed of) in concrete has the potential to significantly reduce the quantity of greenhouse gases emitted and the amount of fuel used. Typically, between 15 to 30 percent of Portland cement in concrete can be replaced with coal ash.

331. The U.S. Federal Highway Administration reports that roads and bridges made with high-performance coal ash concrete can last years longer than those made with Portland cement as the only binding agent. Thus, using coal ash concrete reduces the need to produce new concrete, which consequently means further reductions in future greenhouse gas emissions, energy use, and natural resources. For some locations, coal combustion products are a locally available construction material that requires less in transportation costs and fuel usage for trucking the material to the construction site.

332. Resource conservation. Because coal ash can be used as a replacement for many materials in highway construction, its use reduces the need to quarry or excavate virgin materials and therefore helps to reduce the environmental impacts associated with these activities. Reducing these operations helps prevent habitat destruction, protect scenic waterways, reduce water runoff and air emissions, and reduce energy use. In addition, each ton of coal ash used beneficially reduces the need for one ton of virgin resources.

333. Solid waste reduction. Using coal ash as a substitute for cement in highway construction and other applications could reduce this waste. Typically, a ton of coal ash compacted to 70 pounds per cubic foot takes up approximately 2.6m3 of landfill space.

(5) Environmental and Health Impacts and Mitigation Measures Associated with Uses of Coal Ash

334. Impact to Ambient Air and Mitigation Measures. Air inhalation of coal ash dust is primarily an environmental issue. Nevertheless, proper precautions should be taken to protect the public from dusting during delivery and construction, when coal ash is first laid down. Dust is not an issue when coal ash is used in concrete or in a slurry form.

335. Coal ash can become airborne during storage and processing of ash due to traffic on roads and through wind erosion during ash placement. Like other nuisance dust, however, specific controls and mitigation measures can address these exposure methods to prevent air pollution and inhalation:

1) High-calcium, self-hardening ash should be stored dry in silos, while low-calcium ash can be stockpiled on-site if the ash is kept moist and covered to prevent dusting and erosion;

2) Dry fly ash should be transported in covered or pneumatic tanker trucks;

3) Wind erosion of coal ash should be mitigated in highway construction application by moistening the ash during the construction phase or by using the material in slurry form; and

4) Coal ash used in road construction should be compacted and covered to minimize dusting.

336. Impact to Water Quality and Mitigation Measures. Several studies26 over the past 10 years have shown that the use of coal ash in highway construction projects has resulted in little to no impact on groundwater and surface water quality, but some precautions are

26 EPRI. May 1990, December 1990, February 1991, November 1993, June 1995, March 1998, 1998; Hassett, David J., et al 2001; Pflughoseft-Hassett, D.F., et al. 1993; U.S. Environmental Protection Agency, August 9, 1993.


Appendix 4-87

necessary.

337. Coal ash used as a fill for road beds and embankments, unlike that used in concrete, requires greater care to ensure its safe use. The use of engineering standards and guidelines pertaining to coal ash will help ensure that the use of these materials will not negatively impact the environment.

338. Environmental issues in these cases are largely determined by local circumstances, such as groundwater depth and proximity to drinking water wells. The studies mentioned above show that while leaching of coal ash constituents is possible from unencapsulated uses, it does not occur in practice at high concentrations and has not been shown to migrate far from the site when appropriate engineering practices are followed.

339. Despite the relative safety of using coal combustion products in unencapsulated highway construction Projects, the following mitigation measures should be taken:

1) Conduct an evaluation of local groundwater conditions prior to using coal combustion products as a fill material;

2) Consult with MNET for information on the applicable test procedures, water quality standards, and other requirements;

3) Once a site is determine appropriate for coal ash use, mitigate the leaching of coal ash constituents by assuring adequate compaction and grading to promote surface water runoff, and daily proof-rolling of the finished subgrade to impede infiltration. When construction is finished, a properly seeded soil cover will also help.

340. Vegetation and Food Chain Issues. The U.S. EPA determined that the use of coal ash as a highway fill material or even as a substitute for lime in agricultural applications did not pose a risk of concern27. In addition, several studies28 have shown that the use of coal ash in highway construction projects poses limited risk to roadside vegetation. Studies of road construction projects in the states of Arizona, Arkansas, Georgia, Illinois, and Kansas in the U.S. indicate that while metal constituents from coal fly ash and bottom ash might enter plant tissues through absorption, the concentrations of these elements are found to be well below the toxic limits.

341. In addition, studies examining the effects of ingestion of fly ash constituents by animals have not suggested any associated health problems.29 Some tests showed slightly elevated levels of some elements in blood and various organs, while other tests found no constituent increases. These results indicate little potential for coal ash elements from highway construction projects to accumulate in soil and increase in concentration by food chain biomagnification (the process by which animals feeding on affected plants can, in turn, accumulate the same constituents and build up these constituents in their tissues).

342. International studies and practices indicate that the beneficial uses of CCPs in highway construction have not been shown to present significant risks to human health or the environment. 30 But, as with many other common substances, precautions and sound management practices should be applied when using coal ash in unencapsulated uses.

27 The USEPA, Using Coal Ash in Highway Construction, A Guide to Benefit and Impact, 2005. 28 The US Electric Power Research Institute. June 1995. 29 Electric Power Research Institute. 1998. 30 EPRI. May 1990, December 1990, February 1991, November 1993, June 1995, March; 1998, and 1998; Hassett, David J., et al 2001; Pflughoseft-Hassett, D.F., et al. 1993; U.S. Environmental Protection Agency, August 9, 1993.


Appendix 4-88

Water and air are the two media most likely to be affected by coal ash or coal ash constituents.

343. When coal ash is used in concrete for building roads and bridges, its constituents — such as heavy metals — are bound (encapsulated) in the matrix of the concrete and are very stable. Leaching of these constituents for all practical purposes does not occur. Occupational issues associated with coal ash use in concrete include the handling of dry coal ash prior to or during its inclusion in a concrete mix or exposures during demolition of concrete structures. In these cases, work inhalation and skin contact precautions should be observed as outlined in the following paragraphs.

344. Inhalation. Workers involved with dry ash handling, concrete grinding, or demolition activities can come in contact with fugitive dust containing coal ash. Health risks associated with the inhalation of these fugitive dusts in occupational settings can be limited by following Occupational Health and Safety of World Bank EHS. Contractors should provide their workers through education and equipment to minimize inhalation by the following actions:

1) Cleaning work areas regularly by wet sweeping or vacuuming;

2) Wearing basic personal protection such as safety goggles with side shields to protect the eyes from dust;

3) Wearing a suitable particulate respirator to prevent particulate inhalation;

4) Adding water to the ash to prevent fly ash from blowing during handling;

5) Using standard dust filters on vehicles and silos;

6) Using mechanical ventilation or extraction in areas where dust could escape into the work environment; and

7) Using closed pumping systems for bulk deliveries.

345. Skin Contact. Power plant workers and people involved in producing cement, concrete, or other ash-based products can have skin contact with coal fly ash. In highway applications, skin contact is likely limited to construction workers working with dry ash. When construction is finished, the road bed and a properly seeded soil cover will reduce any chance of skin contact. While most contact with coal ash can be controlled by proper handling and construction safety practices, if contact does occur, coal ash can cause skin irritation or contact dermatitis. Workers can minimize skin contact through a number of specific actions:

1) Wear gloves or apply a barrier hand cream;

2) Wear loose, comfortable clothing that protects the skin and wash work clothes regularly;

3) Wash any exposed skin thoroughly with mild soap and water prior to eat and at the end of work activities; and

4) Others exposed to coal ash should wash exposed skin with mild soap and water and launder soiled clothing.

(6) Radiation of the coal ash

346. The Mongolian construction and building material sectors have a desire to utilize ash generated from the power/CHP plants. Actually only small quantity of ash has been utilized in UB. However, the existing CHP plants in UB use wet method to handle ash which makes it difficult for the utilization. The dry method of handling ash has been proposed from the CHP5 Plant which makes it easy for the sectors to utilize ash as raw materials for road and building constructions.


Appendix 4-89

347. However, the fly ash and the bottom ash from the existing CHP plants contain low level radioactive isotopes, e.g., 40K, 232Th, and 238U, and their decay products (222Rn, 228Ra, 220Rn with their radioactive progenies), which is a critical concern. In order to assess whether the ash can be beneficially used as raw materials for the sectors, the Radiation Lab of the University of Science and Technology in UB was engaged for monitoring radiation levels of 38 coal, ash and slag sampled from the existing CHP Plants in UB in February 2011. The monitoring data are summarized in Table 6-12 below.

Table 6-12: Radioactivity of Coal, Ash and Other Construction Materials Isotope Activity (Bq/kg)

No. Sample ID 226Ra 232Th 40K

Radium Equivalent (Bq/kg)

1 Baganuur coal 27 3 < 29.4 28.3

2 Shivee-Ovoo coal 19 6 - 23.8

3 CHP3 ash and slag 135 38 526 228

4 CHP4 Baganuur ash 168 61 268 268

5 CHP4 Shivee-Ovoo ash 267 142 268 468

6 CHP4 Baganuur slag 145 39 229 214

7 CHP4 Shivee-Ovoo slag 236 104 326 394

8 Sand 23.3 20.5 1124 146

9 Gravel 21.7 17.0 1015 131

10 Limestone 23.2 5.7 422.9 67

348. Based on the above results, it’s concluded that the ash from the coal of Baganuur coal mines can be used as construction materials for any purposes without restrictions; the ash from the coal of Shivee-Ovoo coal mine can be mixed with other construction materials, such as local soil, and then can be used as construction material; for the ashes from both Baganuur and Shivee-Ovoo coal nines can be utilized as refill material in infrastructure (road and railway) construction and as constituents of many types of outdoor building products based on the current domestic standard (Table 6-12).


Appendix 4-90

Table 6-12: Mongolian Standard of Limit of Radioactive Materials for Building and Construction (MNS 5072-2001)

№ Radium

equivalent (Bq/kg)

Gamma ray dose

(mcР/h) Type of building/construction

I. ≤370 ≤20 Living house, all kind of public buildings

II. ≤740 ≤40 Only for industrial building and road construction

III. ≤2220 ≤120 Road, building far from populated area and underground construction with 0.5 m depth

IV. ≤3700 ≤200 Only road and underground construction with 0.5 m depth far from populated area.

V. >3700 >200 Shall not be used for any kind of buildings.

349. Any ash that cannot be utilized will be pumped to the ash disposal area. This area is approximately 0.5 km west of the existing CHP3 plant site. The ash disposal site is divided into two phases, which is sufficient to store the ash from the proposed CHP5 plant for ten years. The ash is proposed to be pumped to the ash disposal site, with a consistency in the form of a paste, through a pipeline from the pant utilizing treated sewage and industrial wastewater, including cooling tower blowdown water. The ash disposal site and ash sluicing system are designed so that there will be no discharge of ash site water to surface water bodies. For the reduction of groundwater contamination by the ash, the ash disposal site will be properly compacted to achieve a low permeability. A dike will also be built with sufficient clay thickness to reduce the percolation and seepage of the wastewater to the surroundings. A greenbelt will be provided which will envelope the ash pond to arrest fugitive dust emissions. Ash pond will also be provided with the ED of UB’s liner to prevent leaching of contaminants into groundwater.

D.7 Occupational Health and Safety Management

350. The project developer(s) of the CHP5 will develop a site-specific occupational safety and health (OSH) regulation and procedure to ensure that the management of OSH issues will have priority during the plant operation.

351. The specific OSH Department will be headed by a qualified and experienced manager who shall report to the vice general manager of the CHP5 Plant every week. The vice general manager will participate in all major SHE activities and meetings to demonstrate to ensure progress in this area.

352. A comprehensive OSH management system will be progressively developed. During project operation, management control procedures and work instructions or equivalent controlled documents shall guide OSH management associated with major activities. And a registry for legal requirements and compliance procedures shall be maintained.

353. During bidding, the OSH clauses will be included in all bidding documents. During construction, an OSH team (which may be combined with an environmental team under the Project developer) will work closely with all major contractors. Also, major contracts will have the provision of health safety management team to ensure that work at the site is conducted as per the OSH regulation of the CHP5 plant.

354. Rigorous checks and corrective action will be undertaken, as required, to ensure that


Appendix 4-91

erected equipment is safe for long-term operation. Mandatory safety clearance certification will be implemented to ensure that installed plant components handed over by the contractor for Project operation meet all Mongolian safety standards required for safe operation.

355. As the Project moves towards the operation phase, major activities will be identified, a comprehensive risk assessment will be carried out, and a mitigation plan will be prepared and agreed to prior to the commencement of construction. The personnel protective equipment such as eye and ear protection devices, dust protection devices, safety shoes, aprons and gloves for handling chemicals, boiler suits, and isolation devices for electrical safety will be provided and made compulsory for different types of work. These will be additional or complementary measures taken to make the work place safe and healthy.

356. Technical staff will be trained in specific competencies and shall have defined safety roles. Training will be provided in specialist areas of expertise, including risk assessment, inspection of confined spaces, noise monitoring, scaffold inspection, tools and tackles inspection, dealing with radioactivity, and control of hazardous substances. All staff and contractors shall be provided with general SHE management training to ensure that an OSH culture develops among the staff.

357. A computer-based maintenance management system will be developed and the activities of work planning, issuing of permits, release of equipment of safe use, and procurement of material and services will be integrated so that full management control is exercised and SHE goals are achieved. Wherever necessary, a manual system will complement an automated system to achieve comprehensive management.

358. The OSH Department will be responsible for first aid and emergency treatment in the event of an accident. It will be headed by a doctor and supported by a trained nurse and other paramedics. The OSH head will lead occupational health issues as they related to Project operation. All job applicants being considered for Project staff positions shall undergo a detailed medical examination before commencing work. Annual medical tests will be carried out to ensure that staff is maintaining good health. Arrangements will be made to ensure that contractor staff undergoes medical tests to ensure that they are healthy and fit for work.

359. A number of health and safety issues such as ergonomics, traffic management, safe drinking water, housekeeping and hygiene, manual handling, and waste segregation and disposal will be dealt with at site through proper procedures and systems.

360. Appendix III describes some potential physical, mechanical, electrical, and health safety hazards of the Project and the mitigation measures proposed to counter these hazards.

D.8 Noise Pollution

361. The noise levels expected from various noise generating sources in the proposed plant vary from 65-85 dB(A). Acoustic enclosures will be provided wherever required to control the noise level below 85 dB(A). Anywhere not possible technically to meet the required noise levels, personal protection equipment will be provided to the workers. The proposed greening area in the CHP5 plant is 6.65 ha (14% share in the total site area), which around the plant will work as green mufflers to attenuate the noise level dissemination outside the plant boundary.

362. The following sound-proof equipment is proposed to be installed in CHP5 to mitigate the noise impact.


Appendix 4-92

Table 6-13: Noise Mitigation Measures for Major Equipment dB (A)

No. Equipment Original Noise Mitigation Measure Reduced Noise

1 Boiler steam relief 110 Muffler 20-25

2 Steam turbine generator 95 Sound-proof shield 20

3 Coal crusher 95 Factory workshop sound insulation 20

4 Coal mill 100 Sound-proof shield 20

5 Draft fan 85 Muffler 20

6 Primary air fan 95 Muffler 20

7 Secondary air fan 95 Muffler 20

8 Air compressor 90 Sound-proof shield 20

9 Water feed pump 91 Factory workshop sound insulation 20

Source: TA Team

D.9 Summary of the major mitigation measures

363. The proposed pollution mitigation measures are summarized as follows: i) building a 250 m high boiler stack to disperse and minimize the direct impact of emissions on adjacent areas; ii) using ESP with a dust removal efficiency of at least 99.6%; iii) using desulfurization inside the CFB boiler that is about 80% efficient; iv) using CFB plus SNCR equipment with a total denitrification rate of about 80%, with which the emission concentration will be lower than 150 mg/m3; v) installing an online automatic monitor on the smokestack of the CHP5 plant to monitor sulfur dioxide and flue dust; vi) coal ash will be utilized as material of highway construction; and vii) mufflers will be installed on vents of the boiler and air blowers and sound-proof shields will be installed on the power generators to mitigate the noise impact.


Appendix 4-93

VII. ECONOMIC ASSESSMENT

A. Environmental Mitigation Costs

364. The total Project cost is estimated at $1361.9 million. The environmental protection related costs amount to $67.666 million, or 4.97% of the total estimated budget of the Project. The major environmental protection costs for the Project are summarized in Table 7-1 below.

Table 7-1: Estimated Costs of Pollution Control Facilities (Million $)

Facility/Equipment Cost

Electrostatic precipitator (ESP) 13.07

Flue gas desulfurization system (inside the bed of CFB) 4.62

Flue gas denitration system (SNCR) 18.636

Ash handling system 9.177

Circulating water system 0.56

Ash storage facilities 13.95

Environmental monitoring instruments 1.653

Landscaping 1.0

Noise control measures 5.0

Total environmental protection investment 67.666 (4.97%)

B. EIRR of the Project

365. The economic internal rate of return (EIRR) is calculated for the Project. The calculation takes into account the main quantifiable economic benefits from the Project and includes all related Project costs. The EIRR for the Project is estimated at 17%, exceeding the economic opportunity cost of capital, which is assumed to be no less than 12%.


Appendix 4-94

VIII. INFORMATION DISCLOSURE AND PUBLIC CONSULTATIONS

A. Public Consultations during the FS Study and EIA study

A.1 Public Consultation

366. First round of public consultations (PC) was conducted by the TA Consultants during the FS and EIA process, which was conducted through questionnaire survey on 17 December 2010 for the CHP5 Plant. The PC provided an opportunity for the stakeholders to, on the one hand, understand the Project and its various aspects, including the location and the size of the proposed CHP5, construction methods to be conducted, as well as benefits and potential environmental impacts from the Project; and on the other hand, to voice their views, concerns, and suggestions. The stakeholders who attended the first round of PC included representatives of the government departments and potentially stakeholders. The first round of PC is summarized in Table 8-1.

367. The first round of PC focused on the public attitudes toward the location and the size and the technical scheme of the CHP5. The multiple choice questionnaires were distributed to 28 potentially stakeholders; 100% of the questionnaires were returned. Of the respondents, 67.8% gave positive responses to the CHP5 Project, while the remaining 32.2% expressed an acceptable (but not support) response.

368. Regarding the current local environment condition, four percent of the respondents expressed satisfactory feelings while 46% and 50%, respectively, rated it unsatisfactory and unacceptable. Regarding the potential benefits from the proposed CHP5 Project, 75.7% of respondents believed that the Project will improve the social-economic development; 15.5% believed that the Project will improve the residents’ living standard; and 8.8% believed the Project will have benefit to households’ income and reduction of jobless rate. And 71.4% of the respondents supported construction of the new CHP plant in the existing CHP3 Plant while 28.6% expressed a negative response.

Table 8-1: Summary of the First Round of Public Consultation

Approach – Questionnaire Survey

Item Result

Date of questionnaire distribution 17 December 2010

Questionnaires distributed 28

Questionnaires responded 28 (100%)

Age group distribution 20-35 (10/28, 35.7%), 35-45 (8/28, 28.6%), 46-60 (10/28, 35.7%)

Male-female ratio Male 21 – female 7

Occupation Governmental officials - 22/28 (78%); Other stakeholders - 6/28 (22%)

People supporting the Project 19/28 (67.8%)

People expressing negative attitude 0/28 (0.0%)

People accepting (but not support) the Project 9/28 (32.2%)


Appendix 4-95

369. The second round of PC was conducted by the TA Consultants on 19 March 2011, which provided an opportunity for the Consultants and the MMRE to present the findings and proposed environmental mitigation measures, and to respond to the views, concerns, and suggestions raised by the public and the stakeholders in the first round PC. The second round of PC is summarized in Table 8-2.

Table 8-2: Summary of the Second Round of Public Consultation

Approach – Public hearing + Questionnaire Survey

Item Result

Date of activities 20 February 2011

Questionnaires distributed 73

Questionnaires responded 73 (100%)

Age group distribution 25-35 (16%), 36-44 (64%), 45-60(20%)

Male-female ratio 31 female and 42 male

Occupation

Governmental officials (48%); workers (25%); businessmen(23%); Private business owners (4%), of which 96% of the respondents live or work in the surrounding area of the existing CHP3 Plant.

People supporting the Project 100% (76% firmly support while 24% partially support)

People expressing negative attitude 0%

People with no idea 0%

370. Regarding the proposed CHP5 location, 76% of respondents expressed support attitude that the site will be located in the existing CHP3 plant while 18% rated opposition and 5% had no idea; 97% of the respondents believed that the Project will bring significant benefit to UB’s social economy development and environment improvement while 2% thought the benefit will be low and 1% had no idea. Regarding the impacts to the local environment during both construction and operation, the attitudes of the respondents are shown in the figures below:


Appendix 4-96

B. Major Comments of Public Consultation

371. The major comments expressed during the public consultation are summarized below:

1) Most of the respondents believed that the CHP5 will improve UB’s social-economic development and environment condition;

2) The CHP5 plants should be constructed as soon as possible to improve the local social economy and environment;

3) The international up-to-date technologies of emission reduction and efficiency improvement should be utilized for the CHP5 plant;

4) Hydraulic balance research and ash disposal and reuse scheme should be further conducted; and

5) More local people should be employed, to reduce UB’s jobless rate.

C. Information Disclosure

372. Environmental information on the Project was and will be disclosed as follows:

1) The EIA Reports are available for review in the MNET and MMRE and

2) The English EIA will be available for review at www.adb.org.


Appendix 4-97

IX. FRAMEWORK OF GRIEVANCE REDRESS MECHANISM

373. Residents and/or organizations affected by the Project activities were encouraged to participate in preparation of the EIAs/CEIA and EMP. However, environmental issues and concerns are most likely to occur during both Project construction and operation. In order to solve the problems timely and effectively, as well as guarantee that the Project will be implemented smoothly and successfully, a Project-level Grievance Redress Mechanisms (GRM) system has been developed. Through the mechanism, the grievances of potentially affected people and organizations will be recorded and the complaints will also be addressed and solved efficiently and quickly.

A. Current Practice of the GRM in Mongolia

374. Under the current system (Figure 9-1), when people are affected by Project activities they can complain to the contractor, UB Government office, Environmental Department (ED) of UB, the PIU, MMRE, or court of law. Among the agencies involved, UB Environmental Department is the most accessible and has a leading coordination role in dealing with environmental complaints.

Figure 9-1: Current Practice for GRM

B. Proposed Grievance Redress System for the Project

375. A GRM has been prepared at Project level to deal with possible complaints during implementation and operation of the CHP5. A guideline for the GRM will be prepared by the PIU and it will be disseminated and discussed with the participating communities prior to the start of the Project activities, as well as to the contractors. The GRM will be updated following the CHP5 detailed design, if necessary.

376. The GRM has been designed to prevent and address community concerns, reduce risks, and assist the Project to maximize environmental and social benefits. The GRM will be accessible to diverse members of the community, including more vulnerable groups such as women and youth. Opportunities for confidentiality and privacy for complainants will be honored where this is seen as important.

377. In consultation with the PIU, it is agreed that the PIU will, under the supervision of ED of UB, establish a Project Public Complaints Unit (PPCU) in the PIU’s office. The PPCU will consist of three members. The contact persons for the different GRM entry points (community leaders, neighborhood organizations, local authorities, ED of UB, contractors) will be defined prior to construction. Organizational charts of the GRM, including the contact persons of the entry points and the PPCU, will be disclosed at the construction site. Phone numbers, addresses, and email addresses of all access points and the PPCU will be disclosed to the public through the UB Government’s website and on information boards at the construction site. Before the Project implementation, training will be provided to the members of the PPCU and the contact persons of the GRM entry points to ensure that responsibilities and procedures are clear.

Affected People

Court of Law

Contractor ED& EID of UB UB City Government

MMRE


Appendix 4-98

378. Grievances will be tracked and monitored as they proceed through the system by the PIU. Effective tracking and documentation will accomplish the following objectives: i) document the severity of a complaint (high, medium, or low; the PPCU will be responsible for the classification). The level of severity guides requirements for alerting senior management and determines the seniority of management oversight needed; ii) provide assurance that a specific person is responsible for overseeing each grievance — from receipt and registration to implementation; iii) promote timely resolution (one week for low and medium severity complaints; three weeks for high severity complaints); iv) inform all concerned (the complainant and appropriate Project personnel) about the status of the case and progress being made toward resolution; (v) document the responses and outcome(s) to promote fairness and consistency; vi) record stakeholders’ responses and whether additional research or consultation is needed; vii) provide a record of settlements and help develop standards and criteria for use in the resolution of comparable issues in the future; viii) monitor the implementation of any settlement to ensure that it is timely and comprehensive; and ix) provide data needed for quality control measures, to assess the effectiveness of the process and action(s) to resolve complaints.

379. A fundamental goal of the GRM is to solve problems early at the lowest level. A summary of GRM activities will be reported by the PIU in the annual Project progress reports sent to ADB. The GRM will be operational during the entire construction phase and during the first year of operation. During the first year of operation, a mechanism will be established to hand over grievance redress responsibilities to the CHP5 developer, in consultation with the PIU.

Figure 9-2: Concept of GRM for the CHP5

Affected people

Supervision Company Contractor

ED of UB UB City Office PPCU under the PIU


Appendix 4-99

X. ENVIRONMENTAL MANAGEMENT PLAN

A. Objective of the EMP

380. The objective of establishing the EMP is not only to identify the environmental impact and to propose appropriate mitigation measures, but also to recommend the establishment of institutions and mechanisms to monitor and ensure compliance with Mongolia’s environmental laws, standards, and regulations and ADB’s Safeguard Policy Statement (SPS, June 2009), as well as the effective implementation of proposed mitigation measures. Such institutions and mechanisms will also seek to ensure continuously improving environmental protection activities during design, construction, and operation of the CHP5 plant in order to prevent, reduce, or eliminate adverse environmental impacts, and to ensure and maximize social, economic and environmental benefits by the Project.

B. Implementing Organizations and Their Responsibilities

381. The MMRE is the EA for the CHP5 Project. The Project Implementation Unit (PIU) has been set up under the MMRM and is responsible for coordinating the implementation of Project activities on behalf of the MMRM. The PIU will: (i) be responsible for overall management of Project implementation; (ii) ensure adequate inter-division and inter-agency coordination; (iii) monitor the progress of Project implementation; and (iv) coordinate communication with other Mongolia state agencies concerned.

382. The PIU will be responsible for implementing this EMP, consisting of inspection, monitoring, reporting, and initiating corrective actions or mitigation measures. In the design stage, the PIU will pass the EMP to design institute(s) to incorporate all environmental mitigation measures in the detailed designs of the CHP. The EMP will be updated at the end of the detailed design phase, and then passed on to construction contractors. To ensure that the contractors comply with the EMP’s provisions, the PIU will prepare and provide the following specification clauses for incorporation into the bidding procedures: (i) a list of environmental management requirements to be budgeted by the bidders in their tendering document; (ii) environmental clauses for contractual terms and conditions; and (iii) major items in this EIA reports.

383. The PIU will nominate two dedicated, trained, and qualified environment officers to undertake environmental management activities, and to ensure effective EMP implementation. Environmental engineers of construction supervision companies (CSCs) contracted by the CHP Project developer will be responsible for the daily inspection, monitoring, and evaluation of mitigation measures’ implementation.

384. Construction contractors will be responsible for implementing relevant mitigation measures and internal monitoring during construction with the help of CSCs and under the supervision of the Environmental Department (ED) and Environmental Inspection Department (EID) of UB.

385. During the operational stage, the ED, EID, and the PIU will supervise the environmental management and implementation of mitigation measures by Project developer. The cost of mitigation measures will be borne by the Project developer.

386. The ED, EID will ensure compliance with Mongolia’s environmental standards and laws, regulations through regular and random environmental compliance monitoring and inspection during construction and operation. The Environmental Monitoring Laboratory (EML) of UB will conduct the actual environmental compliance monitoring and inspection on behalf of the ED.


Appendix 4-100

387. Figure 10-1 presents the implementing structure for the EMP.

Figure 10-1: Organizational Chart for Implementing the EMP

MMRE – Ministry of Mineral Resource and Energy; MNET – Ministry of Nature, Environment and Tourism; PIU – Project Implementation Unit; CSC – Construction Supervision Company.

388. Institutional Strengthening. Since Mongolia is a less developed country, the PIU, contractors, CSCs, and CHP5 developer might lack a capacity for environmental management. To ensure effective implementation of the EMP, the capacity of the PIU, the CHP5 developer, CSCs, and contractors must be strengthened, and all parties involved in mitigation measures and monitoring of environmental performance of the Project must have an understanding of the goals, methods, and international best practices of Project environmental management. However, the main training emphasis will be to ensure that contractors are well-versed in environmentally sound practices and are able to undertake all construction with the appropriate environmental safeguards.

C. Implementation of EMP

389. The PIU will ensure that copies of this EMP, translated into Mongolian, are made part of the contract documents. The Contractor will be responsible for preparing a more site-specific environmental plan (Contractor’s Environmental Management Plan) based on this EMP prior to the commencement of construction activities. CSC’s environmental engineer will be responsible for reviewing and approving the Contractor’s EMP as well as ensuring that contractors comply with its mandates.

390. Before the construction activities commence, the Contractor will prepare and submit other mitigation plans and method statements consistent with the EMP to the CSC for review and approval. Contract documents shall explicitly indicate the requirement of these plans and also state that all environmental protection measures should be included in the bid price. These other mitigation plans include:

1) Soil Erosion Management Plan, which will include measures to be taken during earthworks to avoid/mitigate erosion arising from cut and fill, stockpiling, and stabilization;

2) Spill Management Plan, which will document the specific requirements, protocols, responsibilities, and materials necessary to implement an emergency spill response during the first few hours of an incident;

3) Construction Camp Management Plan, which will propose preventive/mitigation measures for environmental impacts of construction camp and construction yard, including fuel storage, filling station, and vehicle washing sites;

4) Waste and Toxic Chemicals Management Plan for operation of contractor’s

MNET

Project Developer

UB City Office MMRE

ED & EID of UB

Contractor CSC

PIU


Appendix 4-101

yard/construction camp, which will provide procedures for management of hazardous waste and toxic chemicals, evaluate the type and quantities of waste matter, as well as detail arrangements for disposal storage and transportation of the waste.

D. Environmental Monitoring and Reporting

391. The CHP5 will incorporate online monitoring of flue gases, ambient air quality, and wastewater quality, allowing construction contractors and operations staff of the CHP5 plant to recognize issues and take immediate corrective action.

392. The Environmental Monitoring Laboratory (EML) shall conduct monitoring during both construction and operation, as well as in the event of emergencies. The monitoring shall be conducted quarterly, and semiannual monitoring reports shall be prepared by the EML and the PIU and then submitted to the UB city government, MNET, and MMRE for review. The proposed monitoring framework is included in Table 10-1 and 10-2 on the following pages, including the parameters to be monitored, the numbers and locations of monitoring points, and monitoring frequencies and durations.

393. It is recommended that construction contracts state that the environmental monitoring of air quality, water quality, soil quality, and noise levels should be carried out prior to commencement of construction to establish a baseline against which impacts can be measured. The locations for baseline monitoring should be determined in consultation with the ED and EID, MNET, and MMRE.

394. An automatic continuous emissions monitoring system will be installed on the stack as part of the main plant package, to measure emissions of SO2, NOX, and flue dust. An automatic continuous ambient air quality monitoring station will be installed within the plant site, while periodic air quality monitoring using a high-volume sampler will be conducted at other sites. The installation of additional continuous air monitoring stations in the Project’s airshed will also be undertaken. Pollution control monitoring instrument will be calibrated as per the manufacturer’s recommendation. Any faulty instruments will be repaired on a priority basis and manual sampling and analysis will be conducted until the equipment is repaired and reinstated.

395. Air Monitoring. Air and emissions monitoring will include monitoring ambient air quality, stack gas emissions, occupational exposure, and meteorological conditions as per Table 10-1.

Table 10-1: Air Quality Monitoring Schedule

Parameters Purpose Frequency Instrument Monitoring Locations

Continuous On-line air quality monitor

SPM, SO2 NOx

Ambient air quality monitoring

Twice a month for 24 hours at selected monitoring locations

High volume respirable dust sampler

At least three locations, to be agreed to in consultation with the MNET

SPM, SO2, NOx

Stack emission Continuously In-situ continuous monitors

Installed on suitably-located sampling ports on each flue on the stack

SPM, SO2, NOx

Occupational exposure

Once a month Portable spot detectors

For personnel working in coal handling areas, ash collection


Appendix 4-102

Parameters Purpose Frequency Instrument Monitoring Locations

area, ash dykes, and boiler house

Twice a month Stack monitoring kit

Monitored at the sampling port in the exhaust duct or stack as designed

Noise As above Once a month Portable Noise sampler

For personnel working in areas like coal unloading, boiler house, and turbine house

Noise level Noise Once a week Noise level meter

At least at four selected locations along the periphery and another four schools from the Project site

396. Water Quality Monitoring. The water quality monitoring program consists of monitoring parameters prior to on-site reuse. The monitoring schedule for treated water generated from various sources, and the parameters to be analyzed, are summarized in Table 10-2.

Table 10-2: Water and Wastewater Monitoring Schedule

Wastewater Source

Frequency of Analysis Parameters of Examination

Boiler blowdown Weekly Temperature, suspended solids, oil and grease, totaldissolved solids, copper, and iron

Water effluent treatment plant Daily pH, suspended solids COD, BOD, total dissolved solids

Ash pond effluent Weekly pH, suspended solids; oil and grease; total dissolved solids; metals like chromium, zinc, iron, manganese, aluminum, nickel, and phosphate

Groundwater Six monthly For drinking water parameters for samples to be collected at selected locations in vicinity of ash dykes For irrigation water quality

397. Soil Quality Monitoring. The soil quality monitoring program will include investigation of soil for monitoring of physical and chemical parameters, including organic content and heavy metals. Soil sampling and analysis will be carried out on an annual basis at selected locations near the ash disposal site and on-site hazardous waste storage areas.

398. Monthly Reporting. The PIU’s environmental staff will collect environmental monitoring data and reports from the Project developer, the EML, and CSCs responsible for supervising the contractors’ implementation of mitigation measures. The data will be incorporated into monthly Project progress reports by the contractors and the CSCs during construction and by the Project developer during operation, which will be submitted to the PIU monthly. The monthly Project progress report will present: (i) Project implementation status; (ii) environmental mitigation measures implemented; (iii) monitoring activities; (iv) monitoring data of air, soil, noise, and water; (v) analysis of monitoring data against relevant standards; (vi) violations of environmental regulations; (vii) any additional mitigation measures and corrective actions required; (viii) environmental training conducted; (ix) occupational health and safety reporting (e.g., accidents during construction, etc.); (x) major events or issues that happened during the reporting period and follow-up actions needed; and (xi) complaints received from the public or other stakeholders and how these were resolved through the


Appendix 4-103

GRM.

399. Semi-annual environment performance report and external environment monitoring verification report. To ensure proper and timely implementation of the EMP and adherence to the agreed environmental covenants, the PIU shall submit to the UB City Government, MNET, and MMRE semiannual Project progress reports, including environmental performance based on the monitoring and inspections/audits. The EML will help the PIU to prepare the environment performance report. The report should confirm the Project’s compliance with the EMP and Mongolian legislated standards and identify any environment-related implementation issues and necessary corrective actions.

400. Report of environmental acceptance monitoring and audit. No later than a month after completion of the CHP5 construction work, the Project developer shall collect data/reports from all contractors and CSCs, and submit construction mitigation completion reports to the PIU and the ED. The reports will indicate the timing, extent, and effectiveness of completed mitigation and maintenance, as well as point out the needs for further mitigation measures and monitoring during operations. Moreover, within two months after Project completion, environmental acceptance monitoring and audit reports of Project completions will be (i) prepared by the EML in accordance with the relevant Mongolian laws and regulations; (ii) reviewed for approval by the ED; and (iii) finally reported to UB City Government, MNET, and MMRE by the PIU and the EML.

E. Performance Indicators

401. A series of performance indicators shall be specified for the EMP before construction to describe the desired outcomes as measurable events. These indicators will be responsive to changes in Project design, such as a major change in equipment and facilities layout in the CHP5 Plant, or in technology, unforeseen events, and monitoring results – but primarily they should flag the successful (or unsuccessful) pre-construction positioning of CHP5 developer which show that environmental commitments are being carried through and environmental systems and pre-requisites are in place before construction commences. The following performance indicators before the construction listed in Table 10-3 show how well the EMP is being implemented.

Table 10-3: Performance Indicators before Construction

No. Indicator Description Measurement

i) The EMP has been established, including all proposed personnel/posts; Yes or no

ii) The responsibilities for each job post in the EMP have been well defined; Yes or no 1 Effectiveness of

EMP iii) The environmental monitoring contract has been signed between CHP5 developer and a licensed monitoring lab in UB.

Yes or no

i) The fund for the EMP operation has been allocated; Yes or no

2 Financial Support to EMP ii) The fund for implementation of proposed

mitigation measures has been allocated. Yes or no

i) The points/comments raised during the public consultations have been reflected in the CHP5 detailed design;

Yes or no 3 Effectiveness of

Public Consultation ii) Further continuous public consultation program has been developed. Yes or no

i) The project level GRM has been well established. Yes or no 4 Effectiveness of GRM ii) The public and stakeholders understand the GRM Yes or no


Appendix 4-104

and know how to get the contact point. i) All of the work plans of the Project have been achieved on schedule; Yes or no

5 Project Management Efficiency

ii) All the construction documents/permits have been approved by the Government Authorities on schedule.

Yes or no

402. During the construction and operation of the CHP5, negative impacts assessed in Chapter VI of this EIA Report might occur to the environment; appropriate mitigation measures were defined to avoid or minimize these potential impacts. Performance indicators were defined to measure the effectiveness of mitigation measures, including soil erosion, wastewater recycling rate; water quality, air quality; noise; and greening (landscaping) rate, etc. The indicators that measure the environmental performance of the Project are listed in the Annex II of Summary of Potential Impacts and Mitigation Measures.

F. Mechanisms for Feedback and Adjustment

403. Based on environmental inspection and monitoring reports, the PIU shall decide whether (i) further mitigation measures are required as corrective action or (ii) some improvement is required for environmental management practices.

404. The effectiveness of mitigation measures and monitoring plans will be evaluated by a feedback reporting system. Adjustment to the EMP will be made, if necessary. The PIU will play a critical role in the feedback and adjustment mechanism.

405. If, during inspection, substantial deviation from the EMP is observed or any changes are made to the Project that may cause substantial adverse environmental impacts or increase the number of affected people, then the PIU should consult with the ED and MNET immediately and form an environmental assessment team to conduct additional environmental assessment and, if necessary, further public consultation. The revised EIA reports including the EMP should be submitted to the MNET for approval. The revised EMP will be passed to the contractor(s) and Project developer for implementation.


Appendix 4-105

XI. CONCLUSION AND RECOMMENDATION

406. The CHP5 Plant will use FCB technology, which will provide greater efficiency than conventional coal-fired power plants and require much lower coal consumption. The Project will adopt best technology and design practices to minimize the impact on air quality. This involves: i) building a 250 m high boiler stack to disperse and minimize the direct impact of emissions on adjacent areas; ii) using ESP with a dust removal efficiency of at least 99.6%; iii) using desulfurization process inside the CFB boiler that is about 80% efficient; iv) using CFB plus SNCR equipment with a total denitrification rate of about 80%, with which the emission concentration will be lower than 150 mg/m3; v) installing an online automatic monitor on the stack of the CHP5 plant to monitor SO2, NOx and flue dust; vi) coal ash will be utilized as material of highway construction; and vii) mufflers will be installed on vents of the boiler and air blowers and sound-proof shields will be installed on the power generators to mitigate the noise impact; viii) wastewater treatment that will be based on maximum reuse and recycling, and zero off-site discharge. These measures will limit the Project’s water use. (The provision of this amount of water to the Project site will not affect existing local water users.)

407. The proposed CHP5 will significantly improve UB’s air quality by using an environmentally-friendly CHP technology with advanced emission control equipment that consumes less coal and emits fewer pollutants to replace outdated CHP2 and CHP3 plants, as well as hundreds of small, inefficient HOBs and thousands of water heaters. Water and soil pollution will indirectly improve as a result of the reduction of flue gas dust, SO2, NOx, and other harmful compounds that contribute to acid rain, decreased air quality, and water pollution. The Project will have the following benefits in the area: (i) increase district heating supply of 9.38 million GJ; (ii) increase power generation capacity of 3,335 million kWh annually; (iii) reduce coal consumption of 766,800 tons/a; (iv) reduce emissions of SO2, NOx, and flue gas dust by 16,390 tons/yr., 19,190 tons/a., and 466,146 tons/a., respectively; (v) reduce traffic hazards caused by coal and slag transport vehicles in urban areas; and (vi) improve public health and the living environment in areas now affected by emissions and noise from the HOB houses, water heaters, and family heating stoves.

408. The CHP5 site will be located on the existing CHP3 Plant, which has a number of significant advantages, including: i) enough land for the new CHP plant; ii) existing infrastructure (railway, road, heating pipelines, etc.) can be used; iii) adequate water supply from existing wells; iv) high-energy efficiency; and v) lower costs than the other options. But build-and-scrap methodology will be applied to build a new CHP plant while the existing CHP3 plant continues to operate until some units of the new CHP5 plant are operational.

409. Expected pollutant emissions. After calculation, the estimated emission concentrations of SO2, flue dust, and NOx from the CHP5 plant will be 120 milligrams per cubic meter (mg/m3), 30.0 mg/m3 and 130 mg/m3, respectively, which meet the World Bank standards.

410. Solid waste disposal and ash utilization. The CHP5 will use lignite as fuel that will generate about 0.4 million tons of coal ash as a by-product. With 10% ash contents in the coal, the amount of ash generated from CHP5 will be significant. This poses some ecological problems. Ash utilization is desirable to avoid the environmental impacts that can result from ash disposal. It’s proposed that most of the ash produced by CHP plant will be utilized for road bed filling material, and raw materials for brick and cement production, or similar uses. Since construction material industry is less developed in Mongolia, the potential utilization of the coal ash from the CHP5 will be mainly focusing on highway construction.

411. The primary risk of the CHP5 Project evaluated in the EIA is self-ignition of the coal pile. Because coal is a fossil fuel, it has the potential to spontaneously combust or to ignite if contact is made with an appropriate heat source. To prevent combustion of the coal in the


Appendix 4-106

stockpiles, the following two preventive measures will be taken: (i) installation of safety monitoring equipment to measure the interior temperature inside the coal pile and (ii) installation of a water-spraying system to dampen the surface of the coal stacks which will not only assist in preventing spontaneous combustion but will also control fugitive dust emissions.

412. The other risk is radiation of the coal ash. According to the prior monitoring data, the fly ash and the bottom ash from the existing CHP2 and CHP3 plants contain low level radioactive isotopes, e.g., 40K, 232Th and 238U, and their decay products (222Rn, 228Ra, and 220Rn with their radioactive progenies). Since the radioactive intensities are low (around 200 Bq/kg), they can be utilized as refill material in infrastructure (road and railway) construction and as constituents of many types of outdoor building products based on the current national standard. A further monitoring for the coal ash is being conducted by a licensed domestic radiation examination laboratory and a final assessment and proposal for utilization of the coal ash will be worked out by the consultants based on the monitoring data against the national standard.

413. An EMP involving environmental management and supervision organizations, environmental monitoring, and institutional strengthening has been established to ensure the environmental performance of the Project. To ensure successful implementation of these measures, the EMP covers major relevant aspects such as institutional arrangement for environmental management and supervision and environmental monitoring. With implementation of the mitigation measures defined in the EIA and EMP, all adverse environmental impacts associated with the Project will be prevented, eliminated, or minimized to an environmentally acceptable level. The Project is environmentally sound, and will promote balanced and environmentally sustainable urbanization in UB and Mongolia.


Appendix 4-107

ANNEX 1: REFERENCES

A. Domestic Laws and Regulations

1) Law of Mongolia on Energy (2007)

2) Law of Mongolia on Renewable Energy (2007)

3) Law of Mongolia on Concessions (2010)

4) Law of Mongolia on Fuel and Energy Saving (draft version – not yet enacted)

5) Mongolian Citizens Handbook, Volume 1, a Compendium of Laws

6) Law on Environmental Impact Assessment 1998, revised in 2002

7) Law on Water, Apr 2004

8) Law on Natural Plants, Apr 1995

9) Law on Fauna (2000)

10) Law on Hydrometeorology, Nov 1997

11) Law on Protection from Toxic Chemicals, Apr 1995

12) Law on Solid Waste, Nov 2003

13) Law on prohibiting export and transportation of Hazardous Waste, Nov 2000

B. International Guidelines

1) ADB. 2009. Safeguard Policy Statement. Manila.

2) ADB. 2003. Environmental Assessment Guidelines. Manila.

3) ADB. 2003. Environmental Considerations in ADB Operations. Operations Manual. Section F1. Manila.

4) ADB. 2006. Operations Manual. Section F1/BP. Manila.

5) United Nations Framework Convention on Climate Change (UNFCCC). 2009.

6) United Nations Framework Convention on Climate Change (UNFCCC). 2009.

7) The World Bank. 2003. Environmental Flows: Concepts and Methods. Water Resources and Environment Technical Note C.1. Washington.

8) International Finance Corporation. 2007. World Bank Group Environmental, Health, and Safety Guidelines. 30 April. http://www.ifc.org/ifcext/ sustainability.nsf/ Content/EHS Guidelines

C. Government Policy Documents, Plans and Official Publications

1) Mongolia Energy Sector Development Strategy (2003)

2) Comprehensive National Development Strategy of Mongolia to achieve Millennium Development Goals (2007)

3) Energy Sector Statistics, 2009

4) 2009 Annual Report of the Energy Regulatory Authority of Mongolia

5) Mongolian Statistics Yearbook, 2009


Appendix 4-108

D. Technical Studies Sponsored by Donor Agencies

1) The Study on City Master Plan and Urban Development, ALMEC Corporation et al for the Japan International Cooperation Agency, (March 2009)

2) Proposed retail tariff reform plan for Mongolia’s Central Electricity System, USAID, May 2008

3) EPRC Proposed Two-part Tariff for Purchases of Electricity Capacity and Energy from Generation Licensees, USAID, June 2010

4) Initial Assessment of Current Situation and Effects of Abatement Measures, Air Pollution in Ulaanbaatar, World Bank, 2009

5) Mongolia Quarterly Economic Update, World Bank, October 2010

6) Air Pollution in Ulaanbaatar, World Bank, December 2009

7) Mongolia Quarterly Report, World Bank, October 2010

E. Other References

1) Current Situation, Problematic Issues and Further Implementation Objectives of Energy Sector, T. Enkhtaivan, Vice Minister of the Mongolian Ministry of Mineral Resources and Energy (MMRE) - a 2010 conference paper.

2) The Framework for Setting Energy Tariffs and Prices in Mongolia and its Potential Improvement in the Future, Mr R Ganjuur and Mrs M Ganchimeg, the Energy Regulatory Agency of Mongolia (ERA) - a 2010 conference paper.

3) Heating in Poor, Peri-urban Ger Areas of Ulaanbaatar, Mongolia, The World Bank Asia Sustainable and Alternative Energy Program, 2009.

4) Guidance to MDBs for Engaging with Developing Countries on Coal-Fired Power Generation.pdf.

5) Directive 2004/8/EC of the European Parliament and of the Council, 11 February 2004, On the Promotion of Cogeneration Based on a Useful Heat Demand in the Internal Energy Market.

6) Evaluating Possible Public Private Partnership Modalities for CHP5, Castalia Strategic Advisors, October 2010.

7) Current Situation, Problematic Issues and Further Implementation Objectives of Energy Sector, T. Enkhtaivan, Vice Minister, MMRE, 2010.

8) Guidelines for the Economic Analysis of Projects, p8, paragraph 29, Economics and Development Resource Center, ADB, 1997.

9) Cogeneration Handbook, 2007.

10) District Heating Handbook, European District Heating Pipe Manufacturers Association, 1997.


Appendix 4-109

ANNEX II: SUMMARY OF POTENTIAL IMPACTS AND MITIGATION MEASURES

Responsibility Item Potential Impacts

and Issues Mitigation Measures Who Implements

Who Supervises

Performance Indicator

Estimated Budget (USD)

Source of Fund

A. Construction Phase

Soil Soil erosion, soil contamination and surplus spoil

Minimize active open excavation areas during trenching activities and building foundation works, and use appropriate compaction techniques for those construction;

Construct intercepting ditches and drains to prevent runoff entering construction sites, and divert runoff from sites to existing drainage;

Limit construction and material handling during periods of rains and high winds;

All earthwork disturbance areas shall be stabilized within 20 days after earthworks have ceased at the sites;

Pay sufficient attention to drainage after land recovery to prevent water accumulation;

Plant grass to protect ground, especially on sandy soil and slopes;

Appropriately set up temporary construction camps and storage areas to minimize the land area required and impact on soil erosion;

Properly store petroleum products, hazardous materials and waste on impermeable surfaces in secured and covered areas, and use the best management practice to avoid soil contamination;

Contractor PIU, Project developer, MNET

i) Soil loss (erosion), ii) oil and grease in soil)

1,000,000 GOM,

Project developer


Appendix 4-110



Who Supervises



Source of Fund

Remove all construction wastes from the site to approved waste disposal sites; and

Provide spill cleanup measures and equipment at the construction site and require contractors to conduct training in emergency spill response procedures.

Water Groundwater pollution and construction wastewater discharge

All areas where construction equipment is being washed will be equipped with water collection basins and sediment traps; and

Septic treatment and disposal systems will be installed at construction camps along with proper maintenance protocols.


pH, COD, oil and grease.

800,000 GOM,

Project developer

Noise

Noise impact from construction activities

Ensure that noise levels from equipment and machinery conform to the Mongolian standard, and properly maintain machinery to minimize noise;

Apply noise reduction devices or methods where piling equipment is operating within 500 m of sensitive sites such as schools, hospitals and residential areas;

Locate sites for rock crushing, concrete-mixing, and similar activities at least 1 km away from sensitive areas;

To reduce noise at night, restrict the operation of machinery generating high levels of noise, such as piling, and movement of heavy vehicles along urban roads between 20:00 and 07:00 the next day in accordance with


Noise level dB(A) 1,000,000 GOM,

Project developer


Appendix 4-111



Who Supervises



Source of Fund

Mongolia regulations;

Reach an agreement with nearby schools and residents regarding heavy machinery work to avoid any unnecessary disturbances. If disturbance cannot be avoided, compensate the affected residents;

Place temporary hoardings or noise barriers around noise sources during construction, if necessary;

Monitor noise at sensitive areas at regular intervals. If noise standards are exceeded, equipment and construction conditions shall be checked, and mitigation measures shall be implemented to rectify the situation; and

Conduct monthly interviews with residents living adjacent to the construction sites to identify community complaints about noise, and seek suggestions from community members to reduce noise annoyance. Community suggestions will be used to adjust work hours of noise-generating machinery.

Vibration Vibration impact from construction activities

Prohibition of pilling and compaction operations at night, which will effectively reduce the vibration impact.


100,000 GOM,

Project developer

Ambient Air Construction dust and pollutant emission from construction

Spraying water on construction sites and material handling routes where fugitive dust is being generated;

Paying particular attention to dust suppression


TSP, NOx 700,000 GOM,

Project developer


Appendix 4-112



Who Supervises



Source of Fund

vehicles and machineries

near sensitive receptors such as schools, hospitals, or residential areas;

Storing petroleum or other harmful materials in appropriate places and covering to minimize fugitive dust and emission;

Covering materials during truck transportation, in particular, the fine material, to avoid spillage or dust generation;

Ensure vehicle emissions are in compliance with Mongolian standards; and

Maintain vehicles and construction machinery to a high standard to ensure efficient running and fuel-burning and compliance with the domestic emission standards.

Solid wastes Construction wastes

Establish temporary storage for solid wastes away from water bodies or other environmental sensitive areas, regularly haul to an approved landfill or designated dumping site;

Provide appropriate waste storage containers, and reach agreement with local villages or residential communities for disposal of worker’s camp domestic waste through the local facilities where appropriate. These arrangements are to be made prior to commencing construction;

Hire a contractor with proper credentials to remove all wastes from sites to approved waste disposal sites according to appropriate standards;


400,000 GOM,

Project developer


Appendix 4-113



Who Supervises



Source of Fund

Hold contractors responsible for proper removal and disposal of any significant residual materials, wastes and contaminated soils that remain on the ground after construction. Any planned paving or vegetating of the area shall be done as soon as the materials are removed to protect and stabilize the soil; and

Prohibit burning of waste.

Solid Waste from demolishing works (HOBs and facilities of the CHP3 plant)

Ferrous wastes generated by the demolition will be sold to local wastes recycling stations for recycling; and the other demolition debris will be transported to UB ED-approved municipal solid waste landfills or special construction and demolition debris landfills;

Maximize reuse/recycling of deconstruction wastes generated during demolition (e.g. iron, bricks, windows, doors, steel bars etc.), sell them to local waste recycling stations), dispose other demolition debris in municipal solid waste landfills or special construction and demolition debris landfills subject to approval by ED of UB;

All wastes (hazardous and non-hazardous) will be removed from demolishing sites to approved waste disposal sites by an approved contractor with the proper credentials following appropriate standards. There will be no on-site landfills permitted at the construction site; and

If significant residual materials remain on the ground after demolishing work, the contractor will be held responsible for and make arrangements to properly remove and dispose

Demolishing wastes recycle rate (%)

650,000 GOM,

Project developer


Appendix 4-114



Who Supervises



Source of Fund

all the materials and contaminated soils; if the area is to be paved or vegetated, pave or vegetate as soon as the materials are removed to stabilize soil.

Asbestos Risk during demolishing

Asbestos Risk Assessment. At the beginning of the CHP5 Project implementation, an asbestos risk assessment will be conducted by a licensed professional unit (the unit) for disposal of dangerous and hazardous waste (including asbestos); the unit will inspect the CHP2 and CHP3, as well as the HOBs and the water heaters, and assess the potential risks of asbestos during the demolishing. The assessment will identify presence, absence and amount of asbestos and asbestos-containing materials (ACM) in each of the CHPs, HOBs and define an action plan, including labeling requirements, control mechanism (from elimination, removal or isolation to safe working practices), health and safety requirements, as well as a plan of action and procedures for disposal of the asbestos and ACM. The plan will be based on the World Bank EHS standards (April 2007) and the Good Practice Note “Asbestos: Occupational and Community Health Issues (May 2009)”. The risk assessment will be shared with the ED, MMRE and MNET.

Removal, transport and disposal of asbestos. The unit will be responsible for the removal, transport and disposal of the asbestos and ACM. The unit shall identify, properly label and


Professional disposal of asbestos (yes or no)

500,000 GOM,

Project developer


Appendix 4-115



Who Supervises



Source of Fund

pack asbestos as well as demolishing debris contaminated with asbestos during the deconstruction. Asbestos and ACM will be transported by the unit in sealed vehicles to the hazardous waste landfill;

Qualified demolishing contractor(s) will be selected through competitive bidding. The risk assessment, the asbestos management plan, the mitigation measures, the environmental, health and safety requirements during disposal of asbestos, as well as the supervision requirements, will be included into the bidding document(s). The bidding process including the bidding evaluation and the contract signing will be managed and supervised by ED of UB.

Supervision. ED of UB will supervise the deconstruction and transport process. The applicable international law and regulation for the demolishing and disposal of asbestos and ACM are: (i) the World Bank EHS (Good Practice Note: Asbestos: Occupational and Community Health Issues); (iv) WHO Policy and Guidelines; and (v) ISO/FDIS 16000-7: Indoor air – Part 7: Sampling strategy for determination of airborne asbestos fiber concentrations;

Occupational health and safety. Proper protective clothing and specific equipment shall be provided by the unit to its trained team and demolishing contractors’ workers involved in demolishing and disposing of asbestos during the deconstruction;


Appendix 4-116



Who Supervises



Source of Fund

Training. Training on handling and managing asbestos and ACM will be provided to TEPB and deconstruction contractors. The training has been included in the training plan of the EMP, and budgeted accordingly;

Monitoring. Asbestos and ACM will be monitored after deconstruction of the CHPs, the HOBs where asbestos has been identified during the risk assessment. The monitoring will consist of a visual inspection to confirm that all identified ACM have been removed, and a clearance monitoring of airborne asbestos to confirm safe working environment. The unit will conduct the visual inspection; a licensed laboratory will be identified to conduct the clearance monitoring.

Flora and Fauna

Preserve existing vegetation where no construction activity is planned, or temporarily preserve vegetation where activity is planned for a later date;

Properly backfill, compact and re-vegetate pipeline trenches after heating pipeline installation;

Protect existing trees and grassland during constructions; where a tree has to be removed or an area of grassland disturbed, replant trees and re-vegetate the area after construction;

Remove trees or shrubs only as a last resort if they impinge directly on permanent works; and


Protect existing trees, grass and other vegetations during construction (yes or no)

350,000 GOM,

Project developer


Appendix 4-117



Who Supervises



Source of Fund

In compliance with the Mongolia’s forestry law, undertake compensatory planting of an equivalent or larger area of affected trees and vegetation.

Occupational health and safety

Contractors shall be required by the PIU and the Project developer to ensure that their workers and other staff work on the proposed CHP5 constructions are in a safe environment.

All reasonable steps are taken to protect any person on the site from health and safety risks;

the construction site is a safe and healthy workplace;

machineries and equipment are safe;

Adequate training or instruction for occupational health and safety is provided;

Adequate supervision of safe work systems is implemented; and

Means of access to and egress from the site are without risk to health and safety.

All contractors shall be required to implement effective occupational health and safety measures for their workers within the construction site, including efficient sanitation, adequate health services and protection clothing and equipment. The contractors’ performance and activities for occupational health and safety shall be incorporated in their Project progress reports.


Contractor implement health and safety measures (yes or no)

350,000 GOM,

Project developer


Appendix 4-118



Who Supervises



Source of Fund

Social and economy

Requiring contractors to consider the impact on traffic in construction scheduling. A traffic control and operation plan will be prepared and it shall be approved by the local traffic management administration before construction.

Planning construction activities so as to minimize disturbances to utility services.

Implementing safety measures around the construction sites to protect the public, including warning signs to alert the public to potential safety hazards, and barriers to prevent public access to construction sites.


Contractor implement social safety and traffic control plan (yes or no)

350,000 GOM,

Project developer

B. Operation Phase

Ambient Air Building a 250 m high boiler stack to disperse and minimize the direct impact of emissions on adjacent areas;

Using ESP with a dust removal efficiency of at least 99.6%;

Using Desulfurization inside the CFB boiler that is about 80% efficient;

Using CFB plus SNCR equipment with a total denitrification rate of about 80%, with which the emission concentration will be lower than 150 mg/m3; and

Installing an online automatic monitor on the smokestack of the CHP5 plant to monitor sulfur

Project developer

MNET, MNET

TSP, PM10, SO2, NOx; and GHG emission reduction (tons/a)

800,000 GOM,

Project developer


Appendix 4-119



Who Supervises



Source of Fund

dioxide and flue dust.

Fugitive dust during coal and ash transporting, unloading and storage

Water will be sprayed to suppress dust during transporting and unloading coal;

Water spraying of coal stockpiles will be optimized to minimize air flow through the stockpile;

Coal stockpiles will be mechanically compacted as required to minimize air ingress and the potential for auto ignition and loss of volatiles;

Stockpiled coal will be regularly used and rotated.

A greenbelt will be established along the rail line route and around the coal stockpile yard to reduce wind speeds;

Enclosed conveyor system will be adopted;

Closed pneumatic system will be provided to extract and transfer dry fly ash from ESP to ash silos;

Enclosed trucks will be used for transportation of ash from Project site to secondary user industry;

Ash dykes for temporary storage will be provided; and

Water spraying on top layer of ash in the ash dykes will be conducted.

450,000 GOM,

Project developer

Solid wastes Coal ash will be utilized as material of highway Project MNET, Coal ash utilizing 400,000 GOM,


Appendix 4-120



Who Supervises



Source of Fund

construction. developer MNET rate (tons/a, %) Project developer

Noise Provision of acoustic enclosures, barriers, or shields to reduce noise;

Provision of green belt all along the Project’s boundary for further attenuation of noise;

Implementing restricted access, and provision of protective equipment such as earmuffs and earplugs for personnel working in high noise generating areas;

Mufflers will be installed on vents of the boiler and air blowers and sound-proof shields will be installed on the power generators to mitigate the noise impact.

Project developer

MNET, MNET

Noise level dB(A) 500,000 GOM,

Project developer

Water and subsoil

Ground water pollution by contaminated

leachate and runoff

Wastewater will be treated to achieve maximum reuse and recycling;

Leftover wastewater will be used to irrigate on-site vegetation;

Cooling water will be recycled;

Leachate and drainage from the coal storage yard will be collected and drained into the storage pond for reuse in spraying the coal storage yard and treated to remove the particles before reuse for horticulture;

Impervious lining will be provided for ash dykes with leachate collection and treatment system.

Wastewater will be treated for removal of oil

Project developer

MNET, MNET

Wastewater recycle rate (%); pH, COD, total dissolved solids, oil and grease.

550,000 GOM,

Project developer


Appendix 4-121



Who Supervises



Source of Fund

and grease and it will be re-used on-site for horticulture. Any oil and grease sludge skimmed out from the treatment process will be collected and handed over to recycler as per Mongolian standards.

Ecological improvement

Development and maintenance will help in ecological improvement, attenuation of air pollutants (SPM, SO2 and NOx), reduction of noise (source to receptor pathways) and use of treated cooling water bow down and plant effluent. Greenbelt development will include use of effective mix of local species and support of expert horticulture professionals from the local area.

Project developer

MMR, MNET Greening rate in the CHP5 (%) and vegetation survival rate (%)

400,000 GOM,

Project developer

Public and occupational safety and health

Spontaneous combustion of coal stock will be prevented by continuous compaction of coal stock to avoid the air passage. The coal stock height will be limited to 6 meters. Timely reclaiming and replenishing with new stock;

Security personnel will be briefed on restraining themselves from entering into any argument with local people, not using any influence of armed devices, and, if necessary, solving issues with local people by involving local administration and police

Project developer

MNET, MNET

700,000 GOM,

Project developer

TOTAL 10,000,000

i) PIU-Project Implementing Unit;


Appendix 4-122

ii) MNET-Ministry of Nature, Environment and Tourism;

iii) Project developer- CHP5 investor and owner selected by the Public and Private Partnership;

iv) GOM, -Government of Mongolia


Appendix 4-123

ANNEX III: OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT

1. The Project developer(s) of the CHP5 will develop a site-specific occupational safety and health (OSH) regulation and procedure to ensure that the management of OSH issues will have priority during the plant operation.

2. The specific OSH Department will be headed by a qualified and experienced manager who shall report to vice general manager of the CHP5 Plant every week. The vice general manager will participate in all major SHE activities and meetings to demonstrate to ensure progress in this area.

3. A comprehensive OSH management system will be progressively developed. During Project operation, management control procedures and work instructions or equivalent controlled documents shall guide OSH management associated with major activities. And a registry for legal requirements and compliance procedures shall be maintained.

4. During bidding, the OSH clauses will be included in all bidding documents. During construction, an OSH team (may be combined with an environmental team) under Project developer will work closely with all major contractors. Also, major contracts will have the provision of health safety management team to ensure that work at the site is conducted as per the OSH regulation of the CHP5 Plant.

5. Rigorous checks and corrective action will be undertaken, as required, to ensure that erected equipment is safe for long-term operation. Mandatory Safety clearance certification will be implemented to ensure that installed plant components handed over by the contractor for Project operation meet all Mongolian safety standards required for safe operation.

6. As the Project moves towards the operation phase, major activities will be identified, a comprehensive risk assessment will be carried out, and a mitigation plan will be prepared and agreed to prior to the commencement of construction. The personnel protective equipment such as eye and ear protection devices, dust protection devices, safety shoes, aprons and gloves for handling chemicals, boiler suits, and isolation devices for electrical safety, will be provided and made compulsory for different types of work. These will be additional or complementary measures taken to make the work place safe and healthy.

7. Technical staff will be trained in specific competencies and shall have defined safety roles. Training will be provided in specialist areas of expertise, including risk assessment, inspection of confined spaces, noise monitoring, scaffold inspection, tools and tackles inspection, dealing with radioactivity, and control of hazardous substances. All staff and contractors shall be provided with general SHE management training to ensure that an OSH culture develops among the staff.

8. A computer-based maintenance management system will be developed and the activities of work planning, issuing of permits, release of equipment of safe use, and procurement of material and services will be integrated so that full management control is exercised and SHE goals are achieved. Wherever necessary, a manual system will complement an automated system to achieve comprehensive management.

9. The OSH Department will be responsible for first aid and emergency treatment in the event of an accident. It will be headed by a doctor and supported by a trained nurse and other paramedics. The OSH head will lead occupational health issues as they related to Project operation. All job applicants being considered for Project staff positions shall undergo a detailed medical examination before commencing work. Annual medical tests will be carried out to ensure that staff is maintaining good health. Arrangements will be made to ensure that


Appendix 4-124

contractor staff undergoes medical tests to ensure that they are healthy and fit for work.

10. A number of health and safety issues such as ergonomics, traffic management, safe drinking water, housekeeping and hygiene, manual handling, and waste segregation and disposal, will be dealt with at site through proper procedures and systems.

11. Table A3-1 describes some potential physical, mechanical, electrical, and health safety hazards of the Project and the mitigation measures proposed to counter these hazards.


Appendix 4-125

Table A3-1: Potential Occupational Safety and Health Hazards and Mitigation Measures

Hazard Sub Hazard Location Mitigation Measure

Physical High temperature and pressure

Boiler house, and generator area

Provision of steam pipes with thermal insulation; and Provision of air conditioning system in turbine and other control rooms.

Fire and explosion Storage tanks, boiler house, testing, coal handling area

Training of all the operation and maintenance staffs and associated contractors to achieve safety from the system; Preventing storage of combustible material near electrical equipment and distribution panels; Strict follow up of work permit system for all hot and other hazardous works (including electrical, working at height, working in area of hazardous substances storages and confined spaces); De-energizing and inspection prior to start of any repair and maintenance of the electrical equipment; Proper earthling of electrical equipment and storage of high-speed diesel storage area; Keeping ignition sources and heated surfaces away from coal handling areas. Minimizing coal storage times and storing coal in compacted piles to avoid air pockets in the coal piles to prevent or minimize likelihood of combustion. Using spark-proof electrical equipment and wiring to prevent any short circuiting in coal handling and combustible storage areas. Provision of fire and smoke detectors at potential sources of fire and smoke. Provision of dedicated fire-fighting system that is available at all times to fight any fire as per the disaster management plan, which will be available at times for the security and plant personnel, and local administration.

Accidents due to working at height (i.e. slipping and tripping)

Entire plant area Provision of handrails, toe boards, and non-slip surfaces in all elevated platforms, walkways, stairways, and ramps; Use of fall protection devices, including safety belt to prevent fall hazards for work at height; Working at height subject to prior work permit; and Regular safety training and provision of safety and warning signage near potential location of slip trip hazards.

Road and rail accidents

Receipt and dispatch sections, loading and unloading areas, and outside the plant areas

Regular training of drivers and crew members on road safety; and Provision of road safety signage on roads and loading and unloading areas.

Working in confined spaces

All confined spaces within the plant

Ensure adequate engineering measures to eliminate adverse character of any confined space in the plant. Any unavoidable work in confined area will be dealt with using special care;


Appendix 4-126


Prior risk assessment will be carried out and a safe working plan will be prepared before getting on with the work; Provision of protective equipment, such as self-contained air respirators, will be provided to maintenance workers and cleaners who enter enclosed areas for cleaning fuel, oil residues, or coal ash dust, etc. and Any work in confined space will be subject to strict work permit system and monitoring personnel will be available outside for any needed rescue.

Mechanical Failure of boilers Boiler house Workers responsible for cleaning boilers will be provided with special footwear, masks, and dust-proof clothing.

Failure of safety devices, including pressure relief valves and interlocks

Boiler, turbine, generator and associated areas

Ensuring pressure relief valves and interlocking arrangements as per the standard design of equipment; Regular inspection and periodic safety certification of all safety devices; and Compliance with Mongolian required rules and regulations for safety systems.

Hazards associated with moving and rotating machinery

Pump rooms, workshops, belt conveyors for coal handling

Provision of shield guards and guard railings along belts, pulleys, shafting, gears, or other moving parts; and Guards will be designed and installed in conformance with appropriate machine safety standards.

Hazards due to heavy equipment, including cranes

Mechanical workshops and other maintenance areas

Follow up of standard operating procedures and regular training on electrical safety; and Regular inspection and periodic safety certification of all cranes and lifting equipment.

Electrical Potential exposure to electricity (receiving and distribution)

Entire CHP5 plant, specifically the generator area, distribution panel, and control rooms

Follow up of standard operating procedures and regular training on electrical safety; Ensure suitability and adaptability of electrical equipment with respect to classified hazardous areas and protection against lightening protection and static charges; Adopting preventive maintenance practices as per testing and inspection schedules; Ensure all maintenance and repair jobs with prior work permit system; and Ensure all electrical circuits designed for automatic, remote shut down.

Health Exposure to toxic and corrosive chemicals

Boiler House, water treatment plant, wastewater treatment plant, chlorine dozing

Provision of secondary containment system for all liquid corrosive chemicals, fuel and lubricating oil storages; Constructing storage tanks and pipes for toxic chemicals and fuel oil as per the applicable standards. Inspection and radiography will follow to minimize risk of tank or pipeline failure;


Appendix 4-127


area, chemical storage areas, and laboratories

Provision of protective equipment such as protective clothing and goggles, safety shoes, and breathing masks for workers working in chemical storage and handling areas; and Provision of emergency eyewash and showers in the working area.

Exposure to dust, smoke and other poisonous gases and liquids

Unloading areas, conveyor system, coal handling area, ash dyke area, an spent oils

Installing adequate lateral ventilation in enclosed storage areas to reduce concentration of methane, carbon monoxide and volatile products from coal oxidation by air, and to deal with smoke in case of any fire.

Exposure to noise Turbine, generators, rooms, workshops, and other high noise generating areas

Provision of acoustic enclosures in high noise generating areas to keep noise levels lower than 90 dB[A]; Areas close to equipment generating high noise will be restricted entry. No person will be allowed to enter without appropriate ear protection; and Provision of protective equipment such as ear muffs and ear plugs for all workers working in high noise generating areas.

Housekeeping and general sanitary conditions

Entire plant area Provision of wash rooms and sanitary facilities as per the standard practices; A separate lunchroom will be provided outside the work area; Periodic monitoring of work environment for TSP, SO2, NOx, and CO2 to avoid excessive exposure; and Annual health checkup will be carried out. A medical center with a head nurse and support staff will be established to provide emergency medical care. Arrangements with the nearby well-equipped hospital will be made to provide full medical attention and additional treatment when needed.

General Safety

Entire plant area Periodical OSH training of staff and contractor. Ensuring special training to develop competent persons to manage specific issues such as safety from the system, risk assessment, scaffolding, and fire protection, Training will include the proper use of all equipment operated, safe lifting practices, the location and handling of fire extinguishers, and the use of personal protective equipment; Ensure good housekeeping practices (e.g., keeping all walkways clear of debris, cleaning up oil spots and excess water as soon as they are noticed, and regular inspection and maintenance of all machinery); Daily collection and separate storage of hazardous and non-hazardous waste. Arrangement will be made to collect the waste in a segregated manner at the point of generation; Compliance with mandatory requirements for general safety and health of employees; Provision of adequate signage for all hazardous and risky areas, installation, safety measures, and escape routes, safe working zones; and


Appendix 4-128


Provision of adequate lighting in all working areas. Efforts will be made in most of the areas provided with natural lights supplemented with artificial illumination to promote workers health and safety. Emergency lighting of adequate intensity will be available in the plant to ensure safe shut down and evacuation in case of power outage. Plant will be automatically activated for lighting upon failure of power source.


Appendix 4-129

ANNEX IV: CDM ASSESSMENT REPORT

ABBREVIATION

APCF Asia Pacific Carbon Fund

CDM Clean Development Mechanism

CER Certified Emission Reduction

CMI Carbon Market Initiative

COP Conference of the Parties

DMC Developing Member Country

DNA Designated National Authority

ERPA Emission Reduction Purchase Agreement

GHG Greenhouse Gas

GWP Global Warming Potential

IPCC Intergovernmental Panel on Climate Change

M&P Modalities and Procedures

MOP Meeting of Parties

ODA Office of Development Assistance

PCF Prototype Carbon Fund

PDD Project Design Document

PIU Project Implementation Unit

UNFCCC United Nations Framework Convention on Climate Change


Appendix 4-130

I. INTRODUCTION

1 Ulaanbaatar (UB) is the coldest capital city in the world and where almost half of the country’s population resides. UB residents depend on a properly functioning heating system to both survive and make a living. Reliable heating service is not merely a utility for residents and business entities; it is a matter of life and death. Thus, a safe, clean, and reliable heating supply in eight months heating season is a critical need.

2 Due to the growing heating and electricity demands from UB and aging, polluting and poor efficiency existing heat and power generation facilities and hundreds of heat only boilers (HOB), there is an urgent need for the implementation of a new combined heat and power (CHP) plant to address the vulnerability of heat and power supply in the capital city.

3 A new CHP Plant (CHP5) is proposed to be constructed in the location of the existing CHP3 Plant, of which, the specifications for power generation capacity, major equipment, thermodynamic system, and other auxiliary systems are: 5*150MW +1*70MW turbines with total power generation capacity of 820MW and total heating supply capacity of 1281MW (the annual net power generation and heating supply are 3690 million kWh and 12.5 million GJ, respectively.

4 The high efficiency achieved for CHP has important environmental benefits, more specifically in terms of coal saving and the reduction of greenhouse gases (GHGs). The levels of carbon dioxide (CO2) emitted from CHP are less than those associated with a conventional coal-fired power station and HOBs. The CHP technology can provide the benefit of energy efficiency improvement and emissions reductions. The use of a CHP is highly advantageous in UB due to the eight-month long cold heating season with a stable heating load and domestic hot water demand.

II. CDM ELIGIBILITY

5 The Project was assessed against the key eligibility criteria for CDM Projects and a summary of the results is shown in Table 1 below.

Table 1: Evaluation of Key CDM Eligibility Criteria

Eligibility Criteria Result

Involve GHGs under the Kyoto Protocol Yes

Host country is a Party to the Kyoto Protocol Yes

Additionality Limited

Contribute to Sustainable Development Objectives Yes

Measurable Emission Reductions Yes

Project Type Yes

Eligible Organization Likely

GHG = greenhouse gas

6 The Project is likely to meet all the key CDM criteria, except for CDM additionality which requires further due diligence and study. The CDM aspect will have to be included in the financial analysis to be carried out as a part of the Project while the CHP5 is being designed. There are no technological barriers as such but would need to look in detail during the preparation of Project Design Document (PDD). The additional revenue from CDM can help the CHP5 developer(s) to replace the existing CHP2 and CHP3 plants in UB, as well as


Appendix 4-131

the HOBs with high efficiency environmental friendly modern CHP technologies, to maintain the good operation condition, and to reduce coal consumption and greenhouse gas (GHG) emission.

7 The Project falls under “Energy Conservation,” an eligible Project type. There is already approved methodologies for energy efficiency improvement, i.e., i) AM0058 (Introduction of a new primary district heating system) and ii) AM0048 (New cogeneration facilities supplying electricity and/or steam to multiple customers and displacing). Both the methodologies will be evaluated before deciding a particular one.

8 The most important issue is that a proper institutional arrangement has to be made in order to carry out CDM related activities on behalf of UB municipality or Ministry of Mineral Resources and Energy (MMRE). There also has to be a transparent system for equitable distribution system of carbon revenue to the CHP5 developer and the heating supply enterprises, as well as the associated CDM roles and responsibilities.

III. ASSISTANCE FROM ADB’S CARBON MARKET INITIATIVE

9 Based on assumptions regarding the coal consumption of the CHP5 plant, the Project has a potential to gain annual average coal saving of 766,800 tons (raw coal) by replacement of two existing CHP plants and 89 HOB houses, and tradable certified emission reductions (CERs) in the range of 6,313,000 tons of CO2-equivalent over the period 2015-2024 (or an average of around 815,200 tCO2/year). The estimated carbon revenue from this Project could be around $63.13million within this period. The Project will continue to reduce emissions beyond 2024.

10 The potential financial benefit from carbon credit sales is over the transaction cost of efforts to make the Project CDM eligible. The required CDM documentation for the Project can be developed with fund from the CHP5 Project developer.

11 The project developer will work closely with the Project Implementation Unit (PIU) while establishing appropriate institutional setup for CDM and preparing necessary CDM documentation, such as the PDD and other necessary document. The PIU will also provide CDM related inputs to the project developer while carrying out their technical, financial and environmental analysis. The information obtained through these analyses would be very useful for CDM documentation. Chances of successful CDM registration will depend highly on verifiable data and the availability of information.

IV. CDM ELIGIBILITY CRITERIA

12 Potential CDM Projects have to comply with i) the requirements of the Kyoto Protocol; ii) decisions made by the Conference of the Parties (COP) and Meeting of Parties to the Kyoto Protocol (MOP); iii) rulings from the CDM Executive Board; and iv) any criteria set by the host country and the investor country. The COP and MOP held in Bonn, Germany (12-16 May 2008) provided the latest decisions regarding the CDM Modalities and Procedures (M&P). The CDM M&P and the most recent decisions taken by the CDM Executive Board provide information on how to interpret CDM rules. It may be noted that the requirements under CDM M&P as well as various approved baseline methodologies and tools keep on changing from time to time. This eligibility analysis is based on the most recent decisions from the CDM Executive Board.

13 The sections below present the main criteria against which a Project should be assessed when considering its CDM eligibility. According to the requirements of CDM M&P, the Project must comply with all of the criteria described in the following sections. Results for


Appendix 4-132

each criterion are displayed in the paragraphs highlighted with underline.

A. Involve Greenhouse Gases

14 The six eligible GHGs are: CO2, methane, nitrous oxide, hydro-fluorocarbons, per fluorocarbons, and sulphur hexafluoride. These are the six gases believed to be the main contributors to climate change, which leads to an increase in global temperature and disturbed climatic patterns. The effect of the release of GHGs into the atmosphere is measured by the Global Warming Potential (GWP). The concept of a GWP has been developed to compare the ability of each GHG to trap heat in the atmosphere relative to another gas. CO2 was chosen as the reference gas to be consistent with guidelines of the Intergovernmental Panel on Climate Change (IPCC). The GWP of a GHG is defined as the ratio of the time-integrated radiative forcing from the instantaneous release of 1 kilogram of a trace substance relative to that of 1 kilogram of a reference gas i.e. CO2 (IPCC, 2001). For example, methane has a GWP of 21.3 which means it is 21 times more potent than CO2 in terms of its effect on global warming, and thus one ton of methane is equivalent, in global warming terms, to 21 tons of carbon dioxide. GWP of various GHGs is given in Table 2:

Table 2: GWP of Various GHGs

Greenhouse Gas Symbol Global Warming Potential

Carbon Dioxide CO2 1

Methane CH4 21

Nitrous Oxide N2O 310

Hydro Fluorocarbons HFCs 100–12,000

Per Fluorocarbons PFCs 6,500–9,200

Sulphur Hexafluoride SF6 23,900

15 Result: Yes. The Project involves reducing the coal consumption, which emits CO2, a common GHG covered under the Kyoto Protocol.

B. Host Country is a Party to the Kyoto Protocol

16 To participate in the CDM, the host country should have signed and ratified the Kyoto Protocol, or at the very least, have given an indication that they intend to ratify the Kyoto Protocol in the near term. In addition, participation in the CDM requires that the host country establish an institutional framework for assessing and approving CDM Projects. Specifically, a host country must undertake the following activities:

1) Issue a statement that participation of the country in the CDM is voluntary.

2) Ratify the United Nations Framework Convention on Climate Change (UNFCCC). Most of ADB’s developing member countries have ratified the UNFCCC.

3) Ratify the Kyoto Protocol. Note the UNFCCC website lists the countries that have ratified the Protocol at http://www.unfccc.int/resource/kpstats.pdf.

4) Appoint a focal point for the UNFCCC and Kyoto Protocol (i.e., a department or authority with responsibility for dealing with climate change issues).

5) Establish a Designated National Authority (DNA). This is the authority that is responsible for managing the host country approval process and the authority that should provide the eventual approval for a CDM activity. Specifically, the DNA has the final legal responsibility to approve the transfer of Project-related


Appendix 4-133

credits, or CERs, from a host country to an Annex I country, i.e. the developed country with emission reduction targets under the Kyoto Protocol. It is the DNA’s responsibility to ensure that individual Projects meet the country’s overall sustainable development objectives. It is therefore also incumbent on the DNA to publicly specify any particular Project types that it will not approve, so that Project developers do not get overly enthused about non-translatable assets.

17 The majority of Non-Annex I countries, or developing countries, have ratified the Kyoto Protocol. However, this does not imply that all those countries have also set up institutions, guidelines and procedures to approve a Project that is hosted in their countries. Many developing member countries (DMCs) do not yet have the personnel and expertise in place to assess Projects or decide which institution or authority should be given the mandate to approve Projects.

18 Result: Yes. Mongolia ratified the UNFCCC on 30 September 1993 and ratified the Kyoto Protocol on 15 December 1999. The DNA has been established and is headed by the Ministry of Nature, Environment and Tourism.

C. Additionality

19 By definition, CDM Projects have to generate emission reductions that are additional to any that would have occurred in the absence of the Project activity (art. 12.5c KP). At its 16th Meeting, the CDM Executive Board endorsed a tool to be used as a step-wise approach to demonstrate and assess additionality, which was revised at its 29th meeting. These steps include:

1) Identification of alternatives to the Project activity;

2) Investment analysis to determine that the proposed Project activity is not the most economically or financially attractive;

3) Barriers analysis; and

4) Common practice analysis.

20 The endorsement of this tool effectively means that to prove additionality, Project developers need to conduct two types of analyses. First, a quantitative analysis, to assess whether or not the Project results in net emission reductions compared with a business as usual scenario, and if so by how much. Second, the Project developer should address the more qualitative aspects of additionality to demonstrate that there are barriers to the Project proceeding, that the CDM can help alleviate. These can include investment, technological, regulatory, competitive disadvantage, managerial barriers, etc. For example, if the Project proponent can demonstrate that the Project is subject to a higher level of risk, and that the carbon revenues will assist in achieving financial viability, this could be supporting evidence of a Project being additional. It should be noted that just because a Project has high rates of return, this does not mean that it cannot be additional. New technologies, or the application of technologies in new contexts, are generally viewed by the financial investment community as being high risk and they will expect a high return for investing in such Projects.

21 Result: LIMITED. This requires further due diligence and detailed additionality analysis and baseline estimation to see if the Project is really additional. There are apparently no institutional or technological barriers as such. However, In addition to the existing outdated CHP plants, there are 89 HOB houses with total thermal capacity of 140 Gcal/h and the efficiency rate of 50% to 60%. Moreover, 1,005 coal-fired water heaters with total capacity of 18.6 Gcal/h were in operation. The total coal consumption reached 19,857 tons in 2008. Also, there were about 103,971 heating stoves used to heat the gers and houses.


Appendix 4-134

22 Since the coal price in the country is much cheaper than the international market, and the investment of a CHP plant is really high (more than $800 million), also lending practices from local commercial banks are still weak in Mongolia (the annual interest of loan is more than 20%), the user of the existing heating facilities will continue use the existing facilities rather than change to high efficiency CHP system without the CDM CER help.

23 Mongolia’s current emission standards are based on emission measurements from existing boilers. The measurement amounts are used as emission standards for the specific type of boilers (table 3). There are no certain patterns to follow with boiler type or size (capacity) because each boiler’s age and deterioration is different. Since the current standard lack of mandatory, the heating users would rather continue to use the existing heating facilities than build a new CHP plant without CDM CER income.

Table 3 Emission Standard for Coal-Fired Power Plant in Mongolia

Country Mongolia

SO2 (mg/nm3) 600-2700

NOX (mg/nm3) 300-1900

PM (mg/nm3) 200-20000+

D. Contribute to Sustainable Development

24 One of the purposes of the CDM is to assist developing countries in achieving sustainable development. Therefore the Project must contribute to the host country’s sustainable development objectives, and should satisfy any pre-determined sustainable development criteria. As mentioned previously, Projects will not be able to proceed without a Letter of Approval from the Host Country Government. Many governments are currently drawing up lists of sustainable development criteria or country priorities to measure potential CDM Projects against before issuing a Letter of Approval.

25 Result: YES. The Country Strategy and Program (2006–2008) identified inclusive social development as one of the two strategic pillars; better urban services, environment and housing for the poor are targeted as key outcomes. If successful, the Project will:

1) Reduce the coal consumption by employing highly efficient CHP technology;

2) Reduce considerably health damaging air pollutants; and

3) Demonstrate a highly replicable clean technology CDM Project.

26 The DNA for CDM requires an official request letter, PDD and other Project documents to review and provide the letter of no objection. Getting DNA approval should be straightforward.

E. Measurable Emission Reductions

27 The emission reductions of the Project need to be measurable and need to be validated and verified by an Operational Entity. This is to ensure that any emission reductions claimed have actually occurred.

28 Result: YES. The source of emission reductions for this Project is the reduction of coal consumption based on the baseline scenario. The amount of coal consumed after implementation of the Project can be monitored, which can then be compared with that before replacement of the existing CHP2, CHP3 and HOBs. There are already two approved methodologies of AM0058 (Introduction of a new primary district heating system), and


Appendix 4-135

AM0048 (New cogeneration facilities supplying electricity and/or steam to multiple customers and displacing) available.

29 The Kyoto Protocol and the CDM Executive Board do not explicitly mention Project categories that are eligible under the CDM. However, nuclear energy Projects and Land Use and Land Use Change and Forestry (LULUCF) Projects other than afforestation and reforestation are not eligible under the first commitment period of the Kyoto Protocol (2008-2012). Reforestation refers to planting trees (whether for natural or industrial purposes) in areas that were not forest in the base year 1989. Afforestation refers to planting trees in areas where there were no forests during the past 50 years.

F. Project Type

30 Examples of eligible Project categories for CDM are listed in Table 4 below.

Table 4: Project Activities Eligible under the CDM

Project Type Activity

A.1 Energy generation, supply, transmission and distribution

A.2 Fuel switching A. Energy & Power

A.3 End use energy efficiency

B.1 Fuel switching B. Transportation

B.2 End use energy efficiency

C.1 Production C. Industrial Projects

C.2 Products

D.1 Extraction D. Fugitive Emission Capture D.2 Waste management

E.1 Crops E. Agricultural Projects

E.2 Livestock

F.1 Reforestation F. Carbon Sequestration

F.2 Afforestation

31 While the above table represents an indicative list of possible Projects, a Project developer could propose other Project ideas that would reduce GHG emissions and these would be analyzed on a case-by-case basis. CDM M&P have defined a total of 15 sectoral scopes under which the CDM Projects are categorized. These are indicated in Annex 1.

32 In addition to the Project type, a proposed CDM Project must use an approved baseline and monitoring methodologies that are applicable to that Project. If there are no applicable existing methodologies, then the Project developer/sponsor must submit a new methodology that can be used by all similar future Projects. This is a highly technical and lengthy process, which may take 1.5-2 years.

33 Result: YES. The Project involves reducing CO2 emissions from coal consumption. This is covered under Type A - A.1 Energy generation, supply, transmission and distribution. However, further analysis would be required to determine if the Project would have limit to the methodology because of applicability criteria limitations (e.g. data availability).


Appendix 4-136

G. Eligible Organization

34 The CDM guidelines allow private and/or public entities authorized by the host or investor parties to participate in and implement CDM Projects. This suggests that a wide range of bodies could, if authorized by a Party, develop CDM Projects and acquire CERs. Examples include:

1) Governmental bodies (i.e., department of government);

2) Government agencies (i.e., can be independent from the government);

3) Municipalities;

4) Foundations;

5) Financial institutions;

6) Private sector companies; and

7) Non-government organizations.

35 Organizations acting as an intermediary for any of the above organizations can also submit an application to the CDM Executive Board, on behalf of the Project sponsor.

36 Result: LIKELY. CDM is a market-based mechanism that assists organizations in the developed nations (in Annex I of UNFCCC) to meet their requirement while benefiting organizations in Non-Annex I nations. Since this Project will be managed by both UB Municipal Government and the MMRE, it would be immediate to establish a Project entity (maybe a government agency), which will conduct all CDM activities and carry out regular CDM monitoring and other CDM related activities like validation, registration, and annual verification. In addition to this, a clear and transparent carbon revenue system will have to be in place.

V. POTENTIAL EMISSION REDUCTIONS

37 As discussed in Section F above, the emission reductions from a CDM Project are estimated using the equations in the approved baseline methodology.

A. Assumptions

38 The proposed CHP5 will save up to 30% of fuel consumption per kWh electricity generated in comparison with the conventional electric-only plant. Further, a CHP scenario will consume 25~35% less fuel per GJ heat produced in comparison with HOB plants. Totally, the CHP5 will save 766,800 tons of raw coal each year, as compared to the exiting CHP plants and coal-fired HOBs. The estimated CO2 emission reduction is 447,400 tons/yr after 2015 (first phase, 450MW), and 815,200tons/yr. after 2020 (second phase). UNFCCC default emission factor of 104.74 tons CO2/TJ will be used for the CDM CER calculation.

39 The proposed CHP5 will significantly improve UB’s air quality by using an environmentally-friendly CHP technology with advanced emission control equipment that consumes less coal and emit fewer pollutants to replace outdated CHP2 and CHP3 plants, as well as hundreds of small, inefficient HOBs and thousands of water heaters. Water and soil pollution will indirectly improve as a result of the reduction of TSP, PM10, SO2, NOx and other harmful compounds that contribute to acid rain, decreased air and water pollution. The Project will have the following other benefits in the area: (i) increase district heating supply of 9.38 million GJ; (ii) increase power generation capacity of 3,335 million kWh annually; (iii) reduce traffic hazards caused by coal and slag transport vehicles in the urban areas; and (iv) improve public health and the living environment in areas now affected by emissions, noise, and flue


Appendix 4-137

dust from the outdated CHP plants and HOB houses, water heaters and family heating stoves.

40 Projected reductions in coal usage and emissions are summarized in Table 5 below:

Table 5: Estimated Emission Reductions and Coal Saving (t/a)

Parameter CHP2 CHP331 HOB CHP5 Coal Saving/Emission Reduction



SO2 emission 1,760 3,360 13,870 2,600 16,390

NOx emission 2,060 3,930 16,240 3,040 19,190


CO2 emission 250,900 433,800 1,595,500 1,438,700 815,200

VI. COSTS TO DEVELOP A CDM PROJECT

41 For a Project developer, it is important to have an indication of what the additional costs (i.e., transaction costs) are for developing a Project as a CDM Project. The World Bank Prototype Carbon Fund (PCF) had estimated transaction costs for developing a new CDM Project in the order of $250,000-350,000 (including about $50,000 for PDD preparation). This figure includes activities such as consultancy fees, fees for validation of Project documentation, development of an Emission Reduction Purchase Agreement (ERPA). If the Project is developed in conjunction with ADB's lending operations and the CMI, then transaction costs could be squeezed to less than half, with CDM documentation costs supported by CMI’s TSF on a grant basis.

42 The registration fee levied by the CDM Executive Board shall be the share of proceeds applied to the expected average annual emission reduction for the Project activity over its crediting period as follows: i) no registration fee has to be paid for CDM Project activities with expected average annual emission reduction over the crediting period below 15,000 tons of CO2 equivalent (this Project will be much more than that); ii) $0.10 per CER issued for the first 15,000 tons of CO2 equivalent for which issuance is requested in a given calendar year; iii) $0.20 per CER issued for any amount in excess of 15,000 tons of CO2 equivalent for which issuance is requested in a given calendar year; and iv) the maximum registration fee payable based on this calculation shall be $350,000.

43 The registration fee is designed to cover all the Project-related administrative costs of the Executive Board. The registration fee scale is shown in Table 6 below and it is based on the annual volume of CERs generated by a Project. It is an up-front fee, payable when the Project is submitted for registration. The fee also applies to small-scale Projects, although these Projects pay a lower fee due to the smaller volume of emission reductions they generate. When bundling Projects together, the fee will only have to be paid once (i.e., not for

31 The low pressure part only, the high pressure part will be retained. 32 Not include coal consumption for increased power supply.


Appendix 4-138

each individual Project in the bundle).

Table 6: Registration Fees Charged by the CDM Executive Board

Annual tons of CO2 per Annum Registration fees ($)

Up to 15,000 Nil

15,000 1,500

100,000 18,500

200,000 38,500

300,000 58,500

500,000 98,500

1,000,000 198,500

1,750,000 348,500

1,757,500 350,000

CO2 = carbon dioxide, $ = US dollars.

Source: Annex 35 to the report of the 23rd meeting of Executive Board, February 2007

44 In addition, CDM Projects will be subject to an adaptation fee of 2% of the CERs to be paid to the Executive Board. The proceeds from this levy will be used to fund activities to assist countries to adapt to the impacts of climate change. CDM Projects in the least developed countries will be exempt from this adaptation levy. Also, small-scale CDM Projects are likely to be exempted from this levy, but this remains to be decided by the Executive Board.

45 Based on the above estimate of average annual emission reductions (815,200 tons-CO2 per year), the Project would attract a registration fee of $35,000. In addition to the registration fee, $80,000 for PDD preparation, the CDM validation fee, paid to third-party “auditors” called designated operational entities, should be in the order of $50,000-80,000. All in all, CDM transaction costs may total less than $195,000 by regular CDM Project processing steps.

46 A Project developer will have to weigh the transaction costs against the potential carbon revenues, and other benefits, to decide if it is worth developing a Project as a CDM Project. The prices that the current buyers are prepared to pay vary from $8 to more than $15 per ton of CO2. In the case of the Project, the likely value of the emission reductions should more than offset the transaction costs. It is anticipated that carbon prices will rise. Higher carbon prices will help to make very small CDM Projects much more feasible.

VII. CONCLUSIONS

47 The Project was assessed against the key eligibility criteria for CDM Projects and a summary of the results is shown in Table 7 below.


Appendix 4-139

Table 7: Summary Table on CDM Eligibility and Potential

CDM Eligibility Criteria Result

Involve GHG in the Kyoto Protocol Yes

Host Country is a Party to the Kyoto Protocol Yes

Additionality Limited

Contribute to Sustainable Development Objectives Yes

Measurable Emission Reductions Yes

Project Type Yes

Eligible Organization Likely

Other Criteria Result

Applicable Approved CDM Methodology Yes

Carbon Revenues Likely Exceed Transaction Costs Yes

Note: Further analysis is required to determine whether appropriate additionality arguments can be constructed (see Section IV.C).

Source: ADB