pdd_la cascata san juan ixcoy _gsp

8/13/2019 PDD_La Cascata San Juan Ixcoy _GSP

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PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03

CDM Executive Board

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PROJECT DESIGN DOCUMENT FORM

FOR CDM PROJECT ACTIVITIES (F-CDM-PDD)Version 04.1

PROJECT DESIGN DOCUMENT (PDD)

Title of the project activity La Cascata Hydroelectric Project

Version number of the PDD 02

Completion date of the PDD 25/06/2012

Project participant(s) Enel Guatemala, S.A.

Host Party(ies) Guatemala

Sectoral scope and selected methodology(ies) Sectoral scope: 1 - Energy Industry (renewablesources)Methodology: ACM0002. Consolidated

baseline methodology for grid-connectedelectricity generation from renewable sources(version 13.0.0).

Estimated amount of annual average GHG

emission reductions273,500


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SECTION A.Description of project activityA.1.Purpose and general description of project activity

La Cascata Hydroelectric Project (hereafter, the Project activity or Project) is constructed and operated byEnel Guatemala, S.A. (hereafter, the Project proponent). The project activity is a daily regulation power

plant that utilizes water from the Quisil River. The project is located between the communities BrisasPoxlac and Crinolina from San Juan Ixcoy and San Pedro Soloma municipalities located in theDepartment of Huehuetenango in the Republic of Guatemala (hereafter, the Host Country). The totalinstalled capacity of the project activity will be 137 MW with an expected generation of 566,435 MWh

per annum.

The project activity will be physically connected to the Guatemalan National Interconnected System (SNIaccording to its abbreviation in Spanish). The total energy generation of SNI was 8,276 GWh in 2011.The electricity generation matrix of SNI consists of a mix of different types of power sources such as:hydro (45.5%), geothermal (3.1%), biomass (10.8%), coal (12.5%), fuel oil (23.6%), diesel oil (0.1%) andimports (4.4%). Generation technology includes: hydro, reciprocating engines, steam turbines,cogeneration, geothermal and gas turbines1.

The electricity generated by the implementation of the proposed project activity will displace electricitythat would have been produced with other power plants (fossil-fuel powered) that supply electricity to theSNI. The annual GHG emission reductions are expected to be approximately 273,500 tCO2e per year.

Moreover, the project activity will help to diversify the energy matrix to cover the increased electricity

demand required for the social and economic development of the country based on a renewable energysource. Thus, contributing to the local and national sustainable development goals through the followingactions:

Environment:

Use of a natural and renewable source for clean power generation and optimize the rational use oflocal hydro resources through hydroelectric development;

It will contribute to the reduction of local air pollution by avoiding fossil fuel burning to generateelectricity;

Economic:

It will contribute to mitigate poverty by creating employment during the construction phase andthrough the operation of the hydro power plant; Reduce dependency on fossil fuel imports used for power generation.

Social:

The proposed project activity creates new jobs during construction and operation stages. The non-specialized labour will be sourced in communities surrounding the Project activity and specialistswill come from other parts of the country, even from abroad;

1Annual report 2011. Wholesale Market Administrator. Available at:http://www.cnee.gob.gt/xhtml/memo/Informe%20estadistico%202011.pdf. (Accessed: January 16, 2012).


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The Project will strengthen the interconnected national grid system and improve local electrical

supply by extending the system coverage for neighbouring communities; It provides a very good opportunity to make the community aware of climate change issues and toget it involved in its impacts, consequences and the mitigating measures that can be adopted. Thisis particularly important in small towns where awareness of these issues is not widespread;

No population is displaced as a result of the project implementation.

A.2.Location of project activityA.2.1.Host Party(ies)Guatemala

A.2.2.Region/State/Province etc.Department of Huehuetenango

A.2.3.City/Town/Community etc.Municipality of San Juan Ixcoy and San Pedro Soloma

A.2.4.Physical/Geographical locationThe project activity is located in the Municipality of San Juan Ixcoy and San Pedro Soloma in theDepartment of Huehuetenango in Guatemala (Figure 1).

Table 1. Main coordinates of the project.

CoordinatesPoints

N

W

Dam 1537'2.25" 9116'41.80"Surge Tank 1540'41.98" 9113'17.31"Power House 1541'57.79" 9111'34.59"

Figure 1. Project activity location in Guatemala. Left within the Department of Huehuetenango. Right

Main individual project points.


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CDM Executive Board Page 4

A.3.Technologies and/or measures

The project activity is a daily regulation power plant that utilizes water from the Quisil River. It includesa daily regulation reservoir that allows increased generation during peak hours. The installed capacity will

be 137 MW and the electricity generation approximately 566,435 MWh per year.

In the following some basic information about the individual project components is presented:

Dam

For the daily reservoir, a concrete dam of 114 m crest height will be constructed, allowing an increase inpower generation during peak hours. The dam has a spillway and two bottoms discharges.

The location of the dam axis was determined by the next factors:

- The spillway requirements: crest width is 30 m and two bottom discharges of 4 m-width each ofthem. Their axes have to correspond to the rivers axis.

- The morphological characteristics of the dam location;- Geological-geotechnical conditions of the foundation rock.

The daily reservoir volume is estimated in 230,400 m3.

Intake

The design of the intake has included two main objectives: 1) to obtain a constant flow of water in theway to the turbine area to avoid any cavitations risk, and 2) to allow water flows without debris. Thelocation of the intake has taken into account topographic, hydraulic and geological criteria. This structureis located at the left side margin of the Quisil River, out of the dam body, approximately 40 m upriver ofthe dam axis. The intake has a trash/safety rack and the total dimensions are 10.10 m width in the baseand 5 m height, this is equivalent to a gross collection section of 50.50 m2.

Surge Tank

The surge tank is restricted orifice type, underground and vertical. The vertical well has a circular shapeand it is covered with concrete. The dimensions are 4 m diameter and 102 m height. The restricted orificeis located at the base of the surge tank with an elevation of 1,392 masl, steel 2.00 m in diameter.

Penstock

The penstock is composed for the upper and lower tunnels. The upper tunnel will have a diameter of 4 m,while the hydraulic section will be 3.60 m. The total longitude is 9,134 m and it has a continuous slope of2.1%. The flow level will be 16 m3/s with a mean velocity of 1.57 m/s. The lower tunnel will have adiameter of 4 m, while the diameter of the hydraulic section is 2.20 m/s. Due to the geological conditions,two stretches were considered: 1) First stretch, concrete coated, will have a longitude of 1,584 m with aninternal diameter of 2.20 m, 2) Second stretch, steel coated,will have a length of 2,693 m with an internaldiameter of 2.20 m, too.

Powerhouse

The powerhouse is located in a natural platform immediately adjacent to the right of the Yul San Juan

River and at the left of the Quisil River. This platform is located with an elevation of 500 masl and it was


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designed based on the electromechanical equipment dimensions and the modelling study of the river. Thepowerhouse will contain two 68.5 MW rated power Pelton vertical generating units.

Substation

The electrical output from La Cascata facility will be stepped up from13.8 kV to 230 kV at the LaCascata substation (near to the power house) which will include two 13.8/230-kV transformers. Thesubstation will be connected to the interconnection point through a 21-km transmission line at the SanJuan Ixcoy substation (located in the municipality of Barillas in Huehuetenango).

A.4.Parties and project participants

Table 2. Project Participant

Party involved(host) indicates a host Party

Private and/or publicentity(ies) project participants

(as applicable)

Indicate if the Party involvedwishes to be considered as

project participant (Yes/No)

Guatemala Enel Guatemala, S.A.Private company

No

A.5.Public funding of project activityNo public funding is provided to this project.

SECTION B.Application of selected approved baseline and monitoring methodologyB.1.Reference of methodology1. The approved methodology is ACM0002 Consolidated baseline methodology for grid-connected

electricity generation from renewable sources (version 13.0.0).

2. According to the methodology, the calculation of the electricity system emission factor is done byapplying the latest version of the Tool to calculate the emission factor for an electricity system(version 02.2.1).

3. The additionality of the project activity is demonstrated and assessed using the Tool for thedemonstration and assessment of additionality (version 06.0.0).

4. The Guidelines for Reporting and Validation of Plant Load Factors (version 1) are also used.(Annex 11 of EB 48 report).

5. The Guidelines on the assessment of investment analysis (version 05) are also applied.

More information about the methodologies can be found on the website:

http://cdm.unfccc.int/methodologies/PAmethodologies/approved.html

B.2.Applicability of methodologyThe ACM0002 (version 13.0.0) methodology is applicable to grid-connected renewable power generation

project activities that:


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a) Install a new power plant at a site where no renewable power plant was operated prior to theimplementation of the project activity (Greenfield plant);

b) Involve a capacity addition;c) Involve a retrofit of (an) existing plant(s);d) Involve a replacement of (an) existing plant(s).

In this case, the project activity involves the installation of a new power plant at a site where norenewable plant was operated prior to the implementation of the project activity, i.e. a in the list above.It involves the construction of a new grid-connected hydroelectric unit with a total installed capacity of137 MW.

According to methodology ACM0002 (version 13.0.0), in case of hydro power plants, one of thefollowing conditions must apply:

The project activity is implemented in an existing single or multiple reservoirs, with no change inthe volume of any of reservoirs; or

The project activity is implemented in an existing single or multiple reservoirs, where the volumeof any of reservoirs is increased and the power density of each reservoir, as per the definitions

given in the project emissions section, is greater than 4 W/m2; or

The project activity results in new single or multiple reservoirs and the power density of eachreservoir, as per the definitions given in the project emissions section, is greater than 4 W/m

2.

The Project activity is a daily regulation hydro power plant with new reservoir that does not allow itsvolume to increase due to an emergency spillway crest in case the water levels in the reservoir areexceeding the maximum level.

The methodology is not applicable to the following:

Project activities that involve switching from fossil fuels to renewable energy sources at the siteof the project activity, since in this case the baseline may be the continued use of fossil fuels at

the site;

Biomass fired power plants;

A hydro power plant that results in the creation of a new single reservoir or in the increase in anexisting single reservoir where the power density of the power plant is less than 4 W/m2.

Since the project activity is a new hydroelectric power unit, there will be no switching from fossil fuels torenewable energy.

B.3.Project boundary

According to the guidance specified in the Methodology ACM0002 (version 13.0.0), the spatial extent ofthe project boundary includes the project power plant and all power plants connected physically to theelectricity system that the CDM project power plant is connected to (see Figure 2).


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Figure 2. Project Boundary

Spatial extent of the project boundary includes the project power plant and all power plants connectedphysically to the electricity system that the CDM project power plant is connected to.

The greenhouse gases and emission sources included in or excluded from the project boundary are shownin Table 3.

Table 3. Emission sources included or excluded from the project boundary

Source Gas Included? Justification/Explanation

CO2 YesAccording to ACM0002, main emission sourceof emissions in the baseline.

CH4 NoAccording to ACM0002, minor emissionsource, excluded for simplification.

Baseline

scenario

CO2emissions fromelectricity generation

in fossil fuel firedpower plants that aredisplaced due to the

project activityN2O No

According to ACM0002, minor emission

source, excluded for simplification.CO2 No

According to ACM0002, minor emissionsource.

CH4 NoAccording to ACM0002, since power densityis 3,876 W/m2, larger than 10 W/m2, this can

be neglected.

Projectscenario

For hydro powerplants, emission of

CH4from thereservoir

N2O NoAccording to ACM0002, minor emissionsource.

B.4.Establishment and description of baseline scenario

The approved consolidated methodology applied to the proposed project activity, ACM0002 (version13.0.0), establishes that baseline scenario for project activities consisting of new-grid connectedrenewable power plants is defined as follows:

Electricity delivered to the grid by the project activity would have otherwise been generated by the

operation of grid-connected power plants and by the addition of new generation sources, as reflected in

the combined margin (CM) calculations described in the Tool to calculate the emission factor for an

electricity system.

The proposed project activity involves the installation of a hydropower plant that will be connected anddeliver electricity to the SNI.

B.5.Demonstration of additionality


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The Guidelines on the demonstration and assessment of prior consideration of the CDM (version 04),require thatfor project activities with a starting date on or after 2 August 2008, the project participantmust inform a Host Party designated national authority (DNA) and the UNFCCC secretariat in writing of

the commencement of the project activity and of their intention to seek CDM status. The table below lists

the main events relating to the serious and early consideration of the CDM as well as feasibility ofexecution of the proposed project activity.

In this case, the project has not yet started implementation and is still in preliminary planning phase.Therefore, the starting date of the project activity, i.e. the moment when real action begins, is not yetdefined.

The Project Proponent submitted the Annex 62 Prior consideration of the CDM form to the UNFCCCsecretariat on October 24, 2011 and received an email from the UNFCCC on October 25, 2011 in whichthe Project Proponent was informed about the addition of La Cascata Hydroelectric Project to the PriorConsideration of CDM list.

The Project Proponent submitted the Annex 62 Prior consideration of the CDM form to the DesignedNational Authority (DNA) in Guatemala on October 25, 2011, and received an email confirmation onDecember 2nd, 2011.

Therefore the start date, whatever it may be, is after the submission of the Prior consideration form.Hence the project meets the conditions for Prior Consideration of the CDM.

Date Event Supporting documentation

24/10/2011Prior consideration form sent to the UNFCCC Copy of the e-mail sent to the

UNFCCC by the project proponent.

25/10/2011UNFCCC sent Prior Consideration confirmingpublication of the project in the webpage.

Copy of the e-mail confirming thatthe project was added to the Prior

Consideration of CDM list.25/10/2011 Prior consideration form sent to the Guatemalan DNA Copy of the e-mail sent to the DNA

02/12/2011Prior consideration form sent to the Guatemalan DNAconfirmation receipt

Copy of the e-mail confirmationreceipt from DNA

02/05/2012 Project participant acquired the PEG-2-2012 bid forms Copy of letter delivery bid forms

19/09/2012Investment decision from EGP Copy of e-mail sent to ENEL

Guatemala11/10/2012 Submission of tender offer Binding offer

02/11/2012Selection of winning bid(s) Copy of letter selection of bid

winner

Additionality

The additionality of the project activity is demonstrated and assessed applying the Tool for thedemonstration and assessment of additionality (version 06.0.0), as stated in ACM0002 (version 13.0.0).

The tool provides a step-wise approach to demonstrate and assess additionality:

Step 1. Identification of alternatives to the project activity;

Step 2. Investment analysis to determine that the proposed project activity is either: (1) not themost economically or financially attractive, or (2) not economically or financiallyfeasible;

Step 3. Barriers analysis; and

Step 4. Common practice analysis.


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

regulations

The identification of alternatives to the project activity that can be part of the baseline scenario is definedthrough the following sub-steps:

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

The project activity involves the installation of a new grid-connected renewable power plant/unit.According to the approved methodology ACM0002 Consolidated baseline methodology for grid-connected electricity generation from renewable sources (version 13.0.0), the baseline scenario is thefollowing:

Electricity delivered to the grid by the project activity would have otherwise been generated by the

operation of grid-connected power plants and by the addition of new generation sources, as reflected in

the combined margin (CM) calculations described in the Tool to calculate the emission factor for anelectricity system(version 02.2.1).

For the project proponent, the possible alternatives to the proposed project include:

Alternative 1: The proposed project activity undertaken without being registered as a CDM projectactivity.

Alternative 2: Continuation of the current situation: In this case, the project activity will not beconstructed and the power will be solely supplied by the operation of power plants connected to the SINand by the addition of new power plants.

Sub-step 1b: Consistency with mandatory applicable laws and regulations

Power generation in Guatemala is developed in a free and competitive environment comprising a marketapproach based on short term marginal cost dispatch, and by a contract market in which agents andimportant users freely agree on the conditions of their contracts, regarding the term, amounts and price.Transmission and distribution are regulated activities. The legal framework, on which the electric powersubsector is governed and based on the following2:

The Political Constitution of the Republic; The Electric Power Law, Decree No. 93-96; The Electric Power Law Regulations, Government Agreement No. 256-97, and its modifications;

Wholesale Market Administrator Regulations, Government Agreement No. 299-98 and itsmodifications;

Commercial and Operational Coordination Regulations pertaining to the Wholesale MarketAdministrator.

The Electric Power Law is the basic law in matters of electricity and is sustained through the principlesdetailed below:

The generation of electric power is free and does not require prior authorization or preconditionfrom the State, other than those acknowledged by the Political Constitution of the Republic of

2Available at:http://www.investinguatemala.org/index.php?option=com_content&task=view&id=45&Itemid=46&lang=english


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Guatemala and the national laws. Nonetheless, in order to use State assets for such purposes, theauthorization of the Department will be required when the plant power exceeds 5 MW;

Electric power transmission is free, when the use of public domain assets is not required; Electric power transmission implying the use of public domain assets and the final electric power

distribution service shall be subject to authorization; Electric power buy/sell contracts are freely negotiated among the parties, except for transmission

and distribution services, which are subject to authorization. The transfer of power amonggenerators, marketers, importers and exporters resulting from Wholesale Market operations aresubject to regulation as set out by law.

Guatemalas wholesale power market administrator AMM is a non-profit private agency created by thestate to regulate local power safety and supply. Its key functions include coordinating generation plantoperations, international interconnections, and transport lines, as well as setting power transfer rates forgenerators, marketers, distributors, importers and exporters.

Wholesale Market buying and selling operations are carried out in accordance with the Commercial

Coordination Regulations through3:

The Opportunity Market or Spot Market; The PPA (Power Purchase Agreement) Market or Forward Market. Large users agree on the

terms, amounts and prices of power through a PPA; A market of transactions for daily and monthly imbalances between supply and demand.

Both alternatives given above are fully in compliance with all mandatory laws and regulations. In thefollowing steps, it is shown that the proposed project is not viable without the incentive from the CDM,and therefore is additional.

Step 2: Investment analysis

The purpose of this step is to show that the proposed project activity is economically and financially lessattractive than at least one other alternative, identified in step 1, without the revenue from the sales ofcertified emission reductions (CERs). The analysis is in compliance with the Guidance on theAssessment of Investment Analysis(version 05).

Sub-step 2a: Determine appropriate analysis method

The project activity generates incomes other than CDM related income, so a simple cost analysis (OptionI) cannot be applied. The available alternatives are investment comparison analysis (Option II) and

benchmark analysis (Option III).

As stated in the Guidance on the Assessment of Investment Analysis (version 05): If the proposedbaseline scenario leaves the project participant no other choice than to make an investment to supply the

same (or substitute) products or services, a benchmark analysis is not appropriate and an investment

comparison analysis shall be used. If the alternative to the project activity is the supply of electricity from

a grid this is not to be considered an investment anda benchmark approach is considered appropriate.Thus, benchmark analysis (Option III) is chosen to prove additionality.

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

Note: Guidance on the Assessment of Investment Analysis(version 5) states (paragraph 6):

3Available at:http://www.investinguatemala.org/index.php?option=com_content&task=view&id=45&Itemid=46&lang=english


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Input values used in all investment analysis should be valid and applicable at the time of the

investment decision taken by the project participant.

Since the project has not started yet, the date for the investment decision is in the future. Hence the

investment analysis is being undertaken with current date, and will be updated once the start datebecomes defined.

The financial indicator chosen is the Internal Rate of Return (IRR) and the IRR of the project will becompared against benchmark value published in the Guidance on the Assessment of InvestmentAnalysis(version 5) for Guatemala. In this analysis an equity IRR is calculated in accordance with thecorresponding guidelines indicated above. Taxation is included as an expense in the IRR calculation, i.e.the IRR is determined as a post-tax indicator.

In accordance with the Guidelines on the Assessment of Investment Analysis (version 05) a defaultvalue for the expected return on equity is used for the benchmark. The relevant benchmark for energy

projects in Guatemala (Group 1 with Moodys rating Ba2 as given in the guidelines) is 12.5% in real

terms. As per the guidelines, since the investment analysis is carried out in nominal terms, the real termvalues provided can be converted to nominal values by adding the inflation rate. Since no long-terminflation forecasts or target rates of the Central Bank for the duration of the crediting period exist, theaverage forecasted inflation rate of 4.73% for the next five years after the start of the project activity

published by the IMF (International Monetary Fund World Economic Outlook) is used (based on theforecasts in 2011 for the period from 2012 to 2016).

The benchmark, i.e. the Nominal Return on Equity, is therefore given as 12.50% + 4.73% = 17.23%.

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

For the financial analysis the main cash outflows are given by the investment, the ongoing O&M costsand other expenses, such as fees and taxes. The cash inflows are generated from revenues of electricitysales, which depend on power generation and electricity prices.

Input values for the investment analysis

The financial structure is applied as suggested by the Guidelines on the Assessment of InvestmentAnalysis (version 05). Table 7 lists the parameters and values used for carrying out the investmentanalysis.

Table 4. Input values used in the Investment Analysis available at the moment of decision making (all sources

and calculations are provided in the Investment Analysis spreadsheets4)

GENERAL DESCRIPTION

Basic Parameters

Date of investment analysis (project start date in the future) 19-Sep-12 dateOperational life time 50 yearsExpected operational starting date 1-Jul-16 dateElectricity generation

Total net energy generation for sales 566,435 MWh / yearInstalled Capacity 137 MW

REVENUES

Electricity sales

Electricity tariff 117.5 USD/MWh

4See Excel file Financial_Analysis_Cascata 10 05 12.


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INVESTMENT

Total Capital Costs

Total investment $352,461,594 USD

OPERATING COSTS & EXPENSES

Operational costs

Variable Costs $2,575,034 USD / yearFixed Costs $3,950,802 USD / yearDevelopment (only for the first three years) $1,000,000 USD / yearTaxes

Income tax rate 31 %

FINANCIAL PARAMETERS

Inflation

Inflation rate (forecast) 4.73% %Benchmark

Benchmark Return on Equity (real terms) 12.50% %

Inflation Adjustment 4.73% %Nominal Return on Equity (Ke) 17.23% %

Result of the investment analysis

Based on the parameters above, the Internal Rate of Return (equity IRR) was calculated to be 15.63 %,which is below the benchmark rate of 17.23%. This calculation is detailed in the fileFinancial_Analysis_Cascata 10 05 12.

Sub-step 2d: Sensitivity analysis

A sensitivity analysis was carried out by varying the following key parameters to analyze the impact onthe equity IRR: Total Incomes (USD/year), Investment costs (USD), and O&M costs (USD/year). Table 8shows that the variations do not result in any significant change of the IRR and that in those scenarios theIRR remains clearly below the benchmark.

Table 5. For the sensitivity analysis each parameter is varied by 10%

Variation of net revenues +10%

IRR 16.69%

Variation of investment costs -10%

IRR 16.72%

Variation of O&M costs -10%

IRR 15.72%

Therefore, it can be concluded that the project activity is not financially attractive.

Outcome of Step 2:


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According to the Tool for the demonstration and assessment of additionality (version 06.0.0): If afterthe sensitivity analysis it is concluded that the proposed CDM project activity is unlikely to be

financially/economically attractive, then proceed to Step 4 (Common practice analysis).

Step 3: Barrier analysis

Barrier analysis is not used to demonstrate additionality of the proposed project activity.

Step 4: Common practice analysis

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

Sub step 4a requires providing an analysis of any other activities that are operational and that are similarto the proposed project activity. According to the Tool for the demonstration and assessment ofadditionality (version 06.0.0) the stepwise approach for Common Practice includes the following steps:

Step 1. Calculate applicable output range as +/- 50% of the design output or capacity of the proposed

project activity.

The total capacity of the proposed project activity will be 137 MW. Therefore, common practice analysiswill include projects in a range between 68.5 MW and 205.5 MW.

Step 2. In the applicable geographical area, identify all plants that deliver the same output or capacity,

within the applicable output range calculated in Step 1, as the proposed project activity and have started

commercial operation before the start date of the project. Note their number Nall. Registered CDM

Project activities shall not be included in this step.

Table 5 summarizes the identified operational power plants that match the installed capacity criteriaestablished in Step 1 and started operation before the starting date of the project. Other project activitiesthat have been registered as CDM project activities are excluded from the common practice analysis.

Table 6. Power plants with installed capacity within the output range in the Guatemalan power grid5

Type Plant Capacity (MW) Municipality Implementation date

Hydro Aguacapa 90 Pueblo Nuevo Vias February/22/1982

Thermal San Jos 139 Masagua January/1/2000

Thermal Tampa 80 Escuintla 1995

Thermal Arizona 160 Puerto San Jos April/May 2003Thermal Poliwatt 129.36 Puerto Quetzal May 2000

Thermal Puerto Quetzal Power 118 Puerto Quetzal 1993

Thermal Las Palmas 66.8 Escuintla September 1998

Thermal Generadora del Este 71 Amatitln 1996

Thermal Magdalena 90 La Democracia 1994Source: Ministry of Energy and Mines.

As can be observed, there are 9 power plants that comply with the established selection criteria. ThereforeNall= 9.

5See AMM - Installed Capacity January 2011.pdf. Available at: http://www.amm.org.gt/pdfs/capacidad_instalada.pdf(Accessed: October 26, 2011).


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Step 3. Within plants identified in Step 2, identify those that apply technologies different that the

technology applied in the proposed project activity. Note their number Ndiff.

From the power plants identified in step 2, eight are thermal power plants and only one is hydro power

plants.

Moreover, the Aguacapa hydro power plant was implemented before the enactment of the currentelectricity law in 1996, which means that if had a different regulatory framework than the project.Therefore, given by the tool, this project is considered having a different technology in the context ofcommon practice.

ThereforeNdiff= 9.

Step 4. Calculate factor F=1-Ndiff/Nall representing the share of plants using technology similar to the

technology used in the proposed project activity in all plants that deliver the same output or capacity as

the proposed project activity.

The proposed project activity is a common practice within a sector in the applicable geographical area if

the factor F is greater than 0.2 and Nall-Ndiff is greater than3.

Therefore it is clear that the proposed project activity is not a common practice in Guatemala.

Sub-step 4b: Discuss any similar options that are occurring:

As discussed in the previous section no other similar projects are observed that need to be furtherdiscussed.

B.6.Emission reductionsB.6.1.Explanation of methodological choices

The equations from approved methodology ACM0002 (version 13.0.0) were used to determine the GHGemissions from each scenario.

Project emissions

According to the approved methodology ACM0002 (version 13.0.0), the only project emissions from

hydro power project activities that could be relevant are the CH4and CO2emissions from reservoirs. Thepower density of the project activity (PD) is calculated as follows:


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22

6

876,3343,35

00137

m

W

m

W

AA

CapCapPD

BLPJ

BLPJ =

=

= Equation 1

Where:PD = Power density of the project activity (W/m2)CapPJ = Installed capacity of the hydro power plant after the implementation of the project

activity (W)CapBL = Installed capacity of the hydro power plant before the implementation of the project

activity (W). For new hydro power plants, this value is zero.APJ = Area of the single or multiple reservoirs measured in the surface of the water, after the

implementation of the project activity, when the reservoir is full (m2)ABL = Area of the single or multiple reservoirs measured in the surface of the water, before

the implementation of the project activity, when the reservoir is full (m2). For newreservoirs, this value is zero

Since PD is greater than 10 W/m2, the project emissions are zero:

0, == yHPy PEPE Equation 2

Where:

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

Baseline emissions

Baseline emissions include only CO2 emissions from electricity generation in fossil fuel fired powerplants that are displaced due to the project activity. The methodology assumes that all project electricitygeneration above baseline levels would have been generated by existing grid-connected power plants andthe addition of new grid-connected power plants.

The baseline emissions are to be calculated as follows:

yCMgridyPJy EFEGBE ,,, = Equation 3

Where:BEy = Baseline emissions in yeary(tCO2/yr)

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

EFgrid,CM,y = Combined margin CO2emission factor for grid connected power generation in yearycalculated using the latest version of the Tool to calculate the emission factor for anelectricity system (tCO2/MWh)

Calculation of EGPJ,y

The calculation of EGPJ,y is different for: (a) Greenfield plants, (b) retrofits and replacements; and (c)capacity additions.

For the calculation of EGPJ,y option (a) for greenfield plants is applied, since the project activity is the

installation of a new grid-connected renewable power plant/unit at a site where no renewable power plantwas operated prior to the implementation of the project activity:


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yfacilityyPJ EGEG ,, = Equation 4

Where:EGfacility,y = Quantity of net electricity generation supplied by the project plant/unit to the grid in

yeary(MWh)

Leakage

According to the applied methodology, no leakage emissions are considered.

Emission reductions

Emission reductions obtained during the year y (ERy, in tCO2e) are equal to baseline emissions minusproject emissions:

yyy PEBEER = Equation 5

Where:ER,y = Emission reductions in yeary(tCO2/yr)BE,y = Baseline emissions in yeary(tCO2/yr)PEy = Project emissions in yeary(tCO2/yr)

Since project emissions and leakage are 0, the emission reductions by the implementation of the projectactivity for each year are given by

Calculation of EFgrid,CM,y

According to the Tool to calculate the emission factor for an electricity system (version 02.2.1), thebaseline emission factor (EFgrid,y) is determined as a combined margin (CM), consisting of thecombination of operating margin (OM) and build margin (BM) factors according to the proceduredescribed in the Tool and explained below.

In order to calculate the combined margin CO2 emission factor, the tool establishes the following sixsteps:

STEP 1. Identify the relevant electricity systems.STEP 2. Choose whether to include off-grid power plants in the project electricity system (optional).STEP 3. Select a method to determine the operating margin (OM).STEP 4. Calculate the operating margin emission factor according to the selected method.STEP 5. Calculate the build margin (BM) emission factor.STEP 6. Calculate the combined margin (CM) emission factor.

STEP 1. Identify the relevant electricity systems.

For the proposed project activity, the relevant electric power system is the National InterconnectedSystem (SNI). This choice is justified because:

It is the grid to which the electricity generated by the Project will be sold;

It is the spatial extent of the power plants that are physically connected through transmission anddistribution lines to the project activity;


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It is the grid which serves the whole country without considerable transmission constraints.

For the purpose of determining the operating margin emission factor, the CO 2 emission factor forelectricity imports is 0 tCO2/MWh. Moreover, as per the Tool, electricity exports are notsubtracted from

electricity generation data used for calculating and monitoring the electricity emission factors.

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

(optional).

Under this tool, the emission factor for the project electricity system can be calculated either for gridpower plants only or, as an option, can include off-grid power plants. In Guatemala, electric generationfrom off-grid power units is insignificant compared with the SNI, thus only grid power plants areincluded in the emission factor calculation (Option I).

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

Four different procedures are indicated for determining the operating margin emission factor (EFgrid,OM,y):

(a)Simple Operating Margin.(b)Simple Adjusted Operating Margin.(c)Dispatch Data Analysis Operating Margin.(d)Average Operating Margin.

The tool states that the Simple Operating Margin method can only be used where low-cost/must runresources constitute less than 50% of total grid generation in: 1) average of the five most recent years, or2) based on long-term averages for hydroelectricity production.

In Guatemala, the long-term averages for hydroelectricity production are around 36.1% (see Annex 3),which is clearly below 50%; therefore the Simple Operating Margin method is applied.

The tool states that for the simple OM, the simple adjusted OM and the average OM, the emissionsfactor can be calculated using either of the two following data vintages:

Ex ante option:A 3-year generation-weighted average, based on the most recent data availableat the time of submission of the CDM-PDD to the DOE for validation, without requirement to

monitor and recalculate the emissions factors during the crediting period, or

Ex post option: The emission factor is determined for the year in which project activity displacesgrid electricity, requiring the emissions factor to be updated annually during monitoring. If the

data required to calculate the emission factor for year y is usually only available later than sixmonths after the end of year y, alternatively the emission factor of the previous year (y-1) may be

used. If the data is usually only available 18 months after the end of year y, the emission factor of

the year proceeding the previous year (y-2) may be used. The same data vintage (y, y-1 or y-2)

should be used throughout all crediting periods.

In this PDD, the ex-anteoption is selected. As a consequence, the operating margin emission factor iscalculated ex-anteand will remain constant during the first crediting period.

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

As explained in step 3, the Simple OM (option a) is applied.


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According to the methodological tool, the simple OM emission factor is calculated as the generation-weighted average CO2emissions per unit net electricity generation (tCO2/MWh) of all generating power

plants serving the system, not including low-cost/must-run power plants/units.

Also, the tool gives two different options to calculate OM emission factor, as follows:

- Option A. Based on the net electricity generation and a CO2emission factor of each power unit.- Option B. Based on the total net electricity generation of all power plants serving the system and

the fuel types and total fuel consumption of the project electricity system. Option B can only beused if:

a) The necessary data for Option A is not available; andb) Only nuclear and renewable power generation are considered as low-cost/must-runpower sources and the quantity of electricity supplied to the grid by these sources isknown; andc) Off-grid power plants are not included in the calculation (i.e., if Option I has beenchosen in Step 2).

Since necessary data for Option A is not available, Option B is applied.

Under this option, the simple OM emission factor is calculated based on the net electricity supplied to thegrid by all power plants serving the system, not including low-cost/must-run power plants/units, and

based on the fuel type(s) and total fuel consumption of the project electricity system, as follows:

( )

y

i

yiCOyiyi

yOMsimplegridEG

EFNCVFC

EF

=

,,2,,

,,

Equation 6

Where:EFgrid,OMsimple,y = Simple operating margin CO2emission factor in year y (tCO2/MWh)FCi,y = Amount of fossil fuel type iconsumed in the project electricity system in year

y(mass or volume unit)NCVi,y = Net calorific value (energy content) of fossil fuel type iin year y(GJ/mass or

volume unit)EFCO2,i,y = CO2emission factor of fossil fuel type iin year y (tCO2/GJ)EGy = Net electricity generated and delivered to the grid by all power sources serving

the system, not including low-cost/must-run power plants/units, in year y(MWh)

i = All fossil fuel types combusted in power sources in the project electricitysystem in yeary

y = The relevant year as per the data vintage chosen in Step 3

STEP 5. Calculate the build margin (BM) emission factor

In terms of vintage of data, the project participant has chosen option 1 of the Tool to calculate theemission factor for an electricity system (version 02.2.1):

Option 1: For the first crediting period, calculate the build margin emission factor ex ante based on the

most recent information available on units already built for sample group m at the time of CDM-PDD

submission to the DOE for validation. For the second crediting period, the build margin emission factor

should be updated based on the most recent information available on units already built at the time of

submission of the request for renewal of the crediting period to the DOE. For the third crediting period,the build margin emission factor calculated for the second crediting period should be used. This option

does not require monitoring the emission factor during the crediting period.


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The sample group of power units m used to calculate the build margin is determined as per the procedurepresented in the Tool to calculate the emission factor for an electricity system (version 02.2.1),consistent with the data vintage selected above, as follows:

a) Identify the set of five power units, excluding power units registered as CDM project activities, thatstarted to supply electricity to the grid most recently (SET 5-units) and determine their annualelectricity generation (AEGSET-5-units, in MWh);

b) Determine the annual electricity generation of the project electricity system, excluding power unitsregistered as CDM project activities (AEGtotal, in MWh). Identify the set of power units, excluding

power units registered as CDM project activities, that started to supply electricity to the grid mostrecently and that comprise 20% of AEGtotal (if 20% falls on part of the generation of a unit, thegeneration of that unit is fully included in the calculation) (SET20%) and determine their annualelectricity generation (AEGSET-20%, in MWh);

c) From SET5-units and SET20%select the set of power units that comprises the larger annual electricitygeneration (SETsample);Identify the date when the power units in SETsamplestarted to supply electricity to the grid. If noneof the power units in SETsample started to supply electricity to the grid more than 10 years ago, thenuse SETsampleto calculate the build margin. In this case ignore steps (d), (e) and (f).

Otherwise:

d) Exclude from SETsamplethe power units which started to supply electricity to the grid more than 10years ago. Include in that set the power units registered as CDM project activities, starting with

power units that started to supply electricity to the grid most recently, until the electricitygeneration of the new set comprises 20% of the annual electricity generation of the projectelectricity system (if 20% falls on part of the generation of a unit, the generation of that unit is fullyincluded in the calculation) to the extent is possible. Determine for the resulting set (SETsample-CDM)the annual electricity generation (AEGSET-sample-CDM,in MWh);If the annual electricity generation of that set is comprises at least 20% of the annual electricitygeneration of the project electricity system (i.e. AEGSET-sample-CDM 0.2 AEGtotal), then use thesample group SETsample-CDM to calculate the build margin. Ignore steps (e) and (f).

Otherwise:

e) Include in the sample group SETsample-CDM the power units that started to supply electricity to thegrid more than 10 years ago until the electricity generation of the new set comprises 20% of the

annual electricity generation of the project electricity system (if 20% falls on part of the generationof a unit, the generation of that unit is fully included in the calculation);

f) The sample group of power units m used to calculate the build margin is the resulting set (SETsample-CDM->10yrs).

The build margin emissions factor (EFgrid,BM,y) is the generation-weighted average emission factor(tCO2/MWh) of all power units m during the most recent year y for which electricity generation data isavailable, calculated as follows:

=

m

ym

ymEL

m

ym

yBMgrid EG

EFEG

EF,

,,,

,,

Equation 7


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Where:EFgrid,BM,y = Build margin CO2emission factor in yeary(tCO2/MWh)EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m in yeary

(MWh)EFEL,m,y = CO2emission factor of power unit min yeary(tCO2/MWh)m = Power units included in the build marginy = Most recent historical year for which electricity generation data is available

The CO2emission factor of each power unit mthat is used in the build margin calculation is determinedas per the guidance in Step 4 (a) for the simple OM option A2 proposed by the tool. Since only data onelectricity generation and the fuel types used is available for power unit m, the emission factor of powerunit mis determined based on the CO2emission factor of the fuel type used and default efficiency of the

power unit. Build margin is calculated as per guidance in Step 5 (a), (b),(c) and (d).

STEP 6. Calculate the combined margin (CM) emissions factor

The calculation of the combined margin (CM) emission factor is based on one of the following methods:

a. Weighted average CM; orb. Simplified CM.

In this PDD option A is selected.

Weighted average CM

The tool provides the following formula:

BMyBMgridOMyOMgridyCMgrid wEFwEFEF += ,,,,,, Equation 8

Where:EFgrid,BM,y = Build margin CO2emission factor in year y (tCO2/MWh)EFgrid,OM,y = Operating margin CO2emission factor in year y (tCO2/MWh)wOM = Weighting of operating margin emission factor (%)wBM = Weighting of build margin emissions factor (%)

The default values indicated to be used for wOMand wBMare:

- Wind and solar power generation project activities: wOM= 0.75 and wBM= 0.25 (owing to theirintermittent and non-dispatchable nature) for the first crediting period and for subsequent

crediting periods, or

- All other projects: wOM= 0.5 and wBM= 0.5 for the first crediting period, and wOM= 0.25 andwBM= 0.75 for the second and third crediting period, unless otherwise specified in the approved

methodology refers to this tool.

The weights therefore are wOM= 0.5 and wBM= 0.5.


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B.6.2.Data and parameters fixed ex ante

Data / Parameter EFCO2,i,y

Unit tCO2/TJ

Description CO2emission factor of fossil fuel type i used in power unit m in yeary

Source of data IPCC default values at the lower limit of the uncertainty at a 95%confidence interval as provided in table 1.4 of Chapter 1 of Vol. 2(Energy) of the 2006 IPCC Guidelines on National GHG Inventories

Value(s) applied Fuel oil (Bunker): 75.5Diesel oil: 72.6Coal: 89.5

Choice of data

or

Measurement methods

and procedures

Purpose of data Calculation of baseline emissions

Additional comment -

Data / Parameter EGm,y, EGk,y

Unit MWh

Description Net electricity generated by power plant/unit m or k in year y. Here kstands for low-cost /must-run plant/unit, while mstands for others

Source of data Annual reports 2007-2009. Wholesale Market Administrator. Availableat: http://www.amm.org.gt/pdfs/informes/

Value(s) applied Please see Annex 3

Choice of data

or

Measurement methods

and procedures

Data on electricity generated by the plants is used to calculate theoperating margin and build margin.



B.6.3.Ex ante calculation of emission reductions

Project Emissions

As explained in Section B.6.1, project emissions are zero, since the power density is considerably above10 W/m2.

Baseline Emissions

The calculated CO2combined margin emission factor of the grid for year 2010 (the most recent year forwhich data are available) is 0.4828 tCO2/MWh.

6 Details of calculations are given in Appendix 3 andExcel file EF Guatemala_02-05-12.xls.

6See Excel file EF Guatemala_02-05-12.xls


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Based on equations 1 and 4, and using the expected annual electricity generation for the project activity of566,435 MWh/year, the baseline emissions are estimated as follows:

ERy= BEy= EGPY,yx EFgrid,CM,y= 566,435 MWh/year x 0.4828 tCO2/MWh = 273,500 tCO2/year.

B.6.4.Summary of ex ante estimates of emission reductions

Year

Baseline

emissions

(t CO2e)

Project

emissions

(t CO2e)

Leakage

(t CO2e)

Emission

reductions

(t CO2e)

01/07/2016 30/06/2017 273,500 0 0 273,500

01/07/2017 30/06/2018 273,500 0 0 273,500

01/07/2018 30/06/2019 273,500 0 0 273,500

01/07/2019 30/06/2020 273,500 0 0 273,500

01/07/2020 30/06/2021 273,500 0 0 273,50001/07/2021 30/06/2022 273,500 0 0 273,500

01/07/2022 30/06/2023 273,500 0 0 273,500

Total 1,914,503 0 0 1,914,503

Total number of crediting

years7

Annual

average over the crediting

period

273,500 0 0 273,500

B.7.Monitoring planB.7.1.Data and parameters to be monitored

Data / Parameter EGPJ,y = EGfacility,y

Unit MWh/yr

Description Quantity of net electricity generation supplied by the project plant/unit tothe grid in yeary

Source of data Electricity meters

Value(s) applied 566,435

Measurement methods

and procedures

Measurement of the quantity of electricity supplied by the project plant/unitto the grid

Monitoring frequency Continuous measurement by electricity meters and at least monthlyrecording

QA/QC procedures Sales record of electricity to the grid is used to ensure the consistency.Moreover, the measurement will be cross-checked with generationcertificates issued by the AMM at the request of the project proponent




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Data / Parameter APJ

Unit m2

Description Area of the reservoir measured in the surface of the water, after theimplementation of the project activity, when the reservoir is full

Source of data Project site

Value(s) applied 35,343

Measurement methods

and procedures

Measured from engineering plans and/or map

Monitoring frequency Yearly

QA/QC procedures -

Purpose of data Calculation of project emissions


B.7.2.Sampling plan

No sampling is involved in the project.

B.7.3.Other elements of monitoring plan

The Monitoring Plan of the project specifies the continuous monitoring of electricity generation of theproject activity in order to ensure that the net electricity delivered to the grid is monitored completelywithin the crediting period. In each vintage year, the amount of emission reductions obtained by the

project activity will vary in accordance with the total measured power generation.

A. Monitoring of the emission reductions

A.1 Objective:

The objective of the present plan is to assure the complete, consistent, clear, and accurate monitoring andcalculation of the emission reductions within the project activity boundaries, during the crediting period.

A.2 Methodology

According to the approved consolidated baseline and monitoring methodology ACM0002 (version13.0.0), for the monitoring methodology all data collected as part of monitoring should be archivedelectronically and be kept at least for 2 years after the end of the last crediting period. Moreover, all

measurements should be conducted with calibrated measurement equipment according to relevantindustry standards.

A.3 Boundaries

The boundaries of the project activity will remain constant during the entire crediting period.

A.4 Equipment to be used

Electricity generated by the plant would be measured using a meter which measures the electricity that isproduced within the boundaries of the project activity and exported net to the grid.


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The meter complies with the Commercial Coordination Norm No. 14 of the Wholesale MarketAdministrator (AMM according to its Spanish abbreviation)7and with IEC 687 or ANSI / IEEE 12.20, inregard to metering and taking into account that the kind of accuracy should be 0.2% and number ofelements must be three (3).

According to Norm No. 14, the accuracy of measuring elements should be:

IEC 185/186/044-1 ANSI/IEEE C57.13

Accuracy type (%) Load (Burden) Accuracy type (%) Load (Burden)

PT 0.2 100 VA 0.3 75 VACT 0.2 50 VA 0.3 45 VA

Whilst, the energy data record should be:

The pulses generated by the energy meter may be stored in the same apparatus or be passed on toindependent registrars collect information from different meters located on the same site. In bothcases the pulses must be stored in separate channels for each scale to record, at times adjustablefrom 15 to 60 minutes.

Registrars must have non-volatile memory that allows storing information from the past thirty-seven (37) days at least, for two-way considering the use of six (6) channels and capable ofintegrating the records every 15 minutes, unidirectional considering the use of three (3) channelsand capable of integrating the records every 15 minutes. They should have built-in battery to keepdata stored in memory for at least seven (7) days before the auxiliary power failure.

The meter accuracy will be checked by AMM in periodic verifications at the facilities, at least once a yearand according to the technical procedure8for periodic verifications at the commercial measurement points

of the wholesale market in Guatemala.

The verification is made by the Wholesale Market Manager or qualified companies for this purpose,which shall be approved by the Board of the AMM.

A.5 Installation point of the electricity meter

The electricity meter will be installed in the San Juan Ixcoy substation located the municipality of SantaCruz Barillas in Huehuetenango.9

7Available at: http://www.amm.org.gt/pdfs/normas/ncc-14.pdf(Accessed: April 12, 2012)8Available at: http://www.amm.org.gt/pdfs/proc_tecnicos/Verificaciones_Puntos_Medicion_Comercial_AMM.pdf (Accessed:

April 12, 2012)9The meter will be located following the current regulation Norma de Coordinacin Comercial nmero 14. Art. 14.2 bis.Available at:http://www.comegsa.com.gt/comegsa/files/ncc-14%20actualizada.pdf (Accessed: April 17, 2012).


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A.6 Personnel responsible:

Plant Manager

Collection, review and analysis of the monitoring parametersduring the vintage year;

Responsible for monitoringprocedures;

Data verif ication

CDM Coordinator

Calculation of emission reductions;Development of Monitoring Report

Instrumentation and Control Engineer

Measurement of the energy produced

Figure 3. Operational structure of the monitoring plan

Responsible personnel:

The Plant Manager is responsible for the Monitoring Plan, ensuring its effective functioning, as

well as corrective measures that would be necessary. He is also in charge of the verification ofenergy measurements; checking and verifying meter readings issued by the Instrumentation andControl Engineer and crosschecking with both the monthly measurements from the AMM and theenergy invoices of the allocated energy.

The CDM Coordinator is in charge of calculating the emission reductions of the monitoringperiod and preparing the monitoring report.

The Plant Manager is responsible for verification of energy measurement. It is responsible ofchecking and verifying the meter readings download executed by the Instrumentation and ControlEngineer.

The Instrumentation and Control Engineer is responsible for electricity generation reading and forprocessing the energy produced by La Cascata from the meter installed in the San Juan Ixcoysubstation located in Huehuetenango on a monthly basis. Records of the meter are downloaded ina spreadsheet for measurement control and the data discharged from the meter is storedelectronically.

Personnel who carry out any monitoring function are trained in CDM. New personnel have to undergo atraining program and are trained in the specific skills required to carry out the Monitoring Plan.

A.7 Measuring and calculation procedure

The first step is the measuring process, followed by verification of the measurement, calculation of theemission reductions, and finally, review and analysis of results.


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A.7.1 Measurement

The Plant Manager obtains the information from the meters installed in the San Juan Ixcoy substation

located in Huehuetenango on a monthly basis, recording those readings in the spreadsheet formeasurement control and storing the data electronically discharged from the meter. This process takes

place during the first week of the following month.

A.7.2 Calculation of energy produced and verification

The measurement crosschecking is carried out as shown in the following table which will be the basis forthe electronic spreadsheets used for measurement and control:

La Cascata Hydroelectric Project measurement control Year:

A B C DMonth La Cascata

measurement(MWh)

AMM commercial

measurement(MWh)

La Cascata

validated generation(MWh)

If B=C, measurement is validated. Ifnot, AMM value will be used.

Annual total

In case there is a discrepancy between the La Cascata measurement and the AMM commercialmeasurement, the Plant Manager will determine the cause of the problem. If a calibration error is found,the meter will be recalibrated. Other corrective actions will be undertaken, as needed, depending on the

problem identified.

A.7.3 Calculation of emission reductions

The CDM Coordinator calculates the emission reductions for each year of the crediting period using theemission factor determined by the ex-anteoption, according to Section B.6.3.

SECTION C.Duration and crediting periodC.1.Duration of project activityC.1.1.Start date of project activity

Expected start date: 19/09/12

C.1.2.Expected operational lifetime of project activity

50 years

C.2.Crediting period of project activityC.2.1.Type of crediting period

Renewable

C.2.2.Start date of crediting period

01/07/2016


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C.2.3.Length of crediting period

7 years

SECTION D.Environmental impactsD.1.Analysis of environmental impacts

Guatemalan environmental legislation includes a wide range of legal dispositions related toenvironmental assessment and protection. The dispositions start with the Guatemalan PoliticalConstitution. (1985) and continues with a series of Laws, Decrees, Regulations, Agreements, etc.

Article 97 of the Constitution denominated Environment and Ecological Balance serves as the basis forenvironmental legislation, which has been developed since 1986. In that year the National EnvironmentCommission (CONAMA according to its abbreviation in Spanish) promulgated the Law of Protection

and Enhancement of the Environment by means of Decree No. 68-86, Article 8 states that: "for anyproject, work, industry or any other activity which by its nature can cause damage to renewable or non-renewable natural resources, environment, or changes to landscape and cultural resources of national

heritage, a prior Environmental Impact Assessment (EIA) should be developed and carried out by

technicians in the field and approved by CONAMA.10

In 2002, through Decree No. 90-2000, the Ministry of Environment and Natural Resources (MARN) wascreated as the ultimate authority in environmental matters in the country, acquiring in this way allfunctions that were previously the purview of CONAMA.

The process of Environmental Impact Assessment is regulated by MARN using the Decree 23-2003:Evaluation, Control and Environmental Monitoring Regulation. This Regulation establishes all

procedures for the evaluation, control and follow-up. Article 33 of the Decree requires the proponent andMARN to create a public participation process within the Environmental Impact Assessment. TheEvaluation, Control and Environmental Monitoring Regulation was adapted with minor changes asDecree No. 704-2003, establishing procedures for environmental evaluation. Finally, the last Decree No.431-2007 establishes a unique and coordinated system for previous identification, prevention,supervision, control and correction of negative environmental impacts derived from human activities.11

An Environmental Impact Assessment (EIA) study for the implementation of La Cascata Hydroelectricproject was prepared based on the Terms of Reference Guidelines for the Environmental ImpactAssessment Elaboration12. The company SIGA (Sistemas Integrales de Gestin Ambiental, S.A) wasauthorized to carry out the study following the official guidelines.

This study presents the negative and positive impacts caused by the project in its different stages: finaldesign, construction, operation, maintenance, and abandonment. The methodology consists insuccessively implementing the following tools: 1) Checklist and 2) Effects Identification InteractiveMatrix. The first method considers all the impacts and environmental factors that should be includedinitially in the study. A list was prepared including all the project activities and environmental factors thatcould be affected. Only the most relevant activities and factors were considered in the interactive matrix.As a second step the matrix was implemented, there were identified weighting criteria. From this matrix,the main impacts were found in the following components:

10Decree No. 68-86 Law of Protection and Enhancement of the Environment. Available at:http://www.marn.gob.gt/aplicaciones/normas10g/pdf/377.pdf (Accessed: April 14,2011)

11

Decree No. 431 2007. Available at: http://www.ncenterprise.com/uploads/CalidadAmbientalGuatemala.pdf.(Accessed:January 9, 2012).12Official Guide, MARN. 2004.


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Soil (erosion) Air (particulate matter) Landscape

Noise Socioeconomic

Based on the analysis of the impacts generated by the project, an action plan was proposed to mitigate theimpacts for each of the environmental components.

D.2.Environmental impact assessment

The EIA for La Cascata Hydroelectric Project identified the possible environmental impacts of the Projectin the construction, operation and abandonment of the installation, with the objective of proposingmeasures to mitigate such impacts.

The results of the environmental evaluation showed the necessity of developing and implementing actionsand programs to address negative impacts of the project. The following mitigation actions are a summary

presented in the EIA, taking into account all the environmental components of the project:

Table 7. Potential impacts and mitigation measures

Component Potential impact Mitigation measure

Air quality Impact on air quality

For the emissions from mobile sources:

All mobile sources used during construction

cannot release to the atmosphere particulatematter above the permissible internationallevels.

Vehicles and utilized equipment should beschedule in a maintenance program beforethe works begin.

Vehicles not controlling their emissionswill be separated from their functions forbeing reviewed, fixed and adjusted beforeentering again to the transport service.

All vehicles will have installed silencersequipment.

Soil andgeology

Impact on soil quality and geoforms

Oils and lubricants and waste material from

maintenance and cleaning should be incontainers tightly closed. These containersmust have a label to easy identify thecontent; label must include date and wasteorigin.

Disposal of construction waste will be donein proper places.

At the end of the work/maintenance thecontractor should have a proper disposal ofthe generated waste.

Material excavated will be withdrawnimmediately from the work area and locatedin places previously selected.

The oily liquid waste must be in containerstightly closed.


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Component Potential impact Mitigation measure

Limit strictly the land movement in the landadjacent to the project activity.

Waste from the construction must beseparated in categories.

Superficial water degradation Take measures to ensure the accurate watercaptation

Water qualityWastewater and ground water

Ecological flow for its use downstreamduring drought periods; this will minimizethe conflict with local farmers who usewater for agricultural practices.

Flora Vegetal cover loss

Take measures to avoid damaging theagriculture areas outside of the project.

Use proper techniques for cleaning andclearing.

After construction phase, it will begin therestoration phase. Some conservation plans will be developed

to protect endangered species.

Fauna Alteration of structure and composition

Limit strictly the construction and operationactivities inside the works area in order toavoid the impacts of the wildlife.

Avoid noise intensification Some conservation plans will be developed

to protect wildlife habitat.

Health and hygiene

Health and occupational safety measuresimplemented

Contractors will comply with the WorkSafety Regulations during the electricinstallation works.

Contractors will impose to the employees,sub-contractors, suppliers and relatedagents to the contract execution thecompliance of the health and safetyconditions included in the contract.

Impacts on local groups Determine the fair price for the loss ordamage land due to the works.

Employment generation Employment opportunities during theconstruction stage will be mainly for thelocal inhabitants.

Social

Increase in trade and services Hire local inhabitants in other activities, if itis required.

Landscape Alteration of landscape Protect flora and fauna Develop conservation projects in the area It will be prohibited to hunt and

deforestation

SECTION E.Local stakeholder consultationE.1.Solicitation of comments from local stakeholders

The project proponent has carried out several meetings since 2008 with the local communities in order to

explain and sign agreements with the people directly affected by the project implementation. Thestakeholders were invited to participate following the next steps: 1) The project proponent have an


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interview with the members of the Communal Development Council (Consejo Comunitario deDesarrollo, COCODE) of each community involved. The COCODEs are a government subsidizedcommunity project organization that supports projects ranging from paving roads to starting social

programs. They act based upon majority decisions and are a well-respected board of local men.13During

this meeting, the project is explained to the COCODE members. Then, the COCODE members share theinformation with the rest of the inhabitants of the community. Afterwards, the project participant isinvited to explain the project to the local inhabitants, if needed.

The municipalities involved in the stakeholder consultation were San Pedro Soloma, San Juan Ixcoy andSanta Eulalia. After the entrance of the new municipal board, Santa Eulalia ratified the agreement

previously signed with the project proponent (February 14, 2012). The municipality of San Pedro Solomaand project participant signed a collaboration agreement in 2008; however after the entrance of the newmunicipal board, the agreement was not ratified. Currently, the project proponent is still negotiating withthe municipalities San Juan Ixcoy and San Pedro Soloma.

The project proponent is following all procedures to guarantee a correct and transparent stakeholder

consultation process.

E.2.Summary of comments received

Some comments were received from the San Pedro Soloma community in which the project participantprepared a video to show the project to the communities. Inhabitants were concerned about no receivingthe complete information from Enel in regard to the project activity. On the other side, other opinionsexpressed positive comments about the construction of a highway and new access roads, as well as, theconstruction of the bridge on the Rio Quisil, offered by the project proponent.

E.3.Report on consideration of comments received

The project proponent is still negotiating with San Pedro Soloma and San Juan Ixcoy communities. Theproject proponent has received the ratification of Santa Eulalia municipality to support the project in thearea.

SECTION F.Approval and authorization

Project participant will start the process to obtain the letter of approval.

- - - - -

13Manna Project International. Available at: http://www.mannaproject.org/guatemala-partners. Accessed: April 24,2012).


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Appendix 1:Contact information of project participants

Organization name Enel Guatemala, S.A.

Street/P.O. Box Diagonal 6, 10-65 Zona 10

Building Centro Gerencial Las Margaritas, Torre I, Nivel 8, Oficina 801

City Guatemala

State/Region Guatemala

Postcode 01010

Country Guatemala

Telephone +502 2327-7000

Fax +502 2339-3176

E-mail [email protected]

Website www.enelgreenpower.comContact person

Title General Manager

Salutation Mr.

Last name Smith

Middle name

First name Oswaldo

Department

Mobile +502 5369-5962

Direct fax +502 2339-3176

Direct tel. +502 2327-7000 Ext. 7018Personal e-mail [email protected]


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Appendix 2:Affirmation regarding public funding

No Funding from Annex I parties is available for the project activity.


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Appendix 3:Applicability of selected methodology

The following data corresponds to the power grid of Guatemala. The individual data sources are

indicated in the Excel spreadsheet.14

Table 8. Long-term hydro power production (2001-2010)

Electricity Generation (SEN) Unit 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Hydropower GWh 2,277 2,122 2,187 2,565 2,939 3,303 3,031 3,675 2,942 3,849Total generation (w/out imports) GWh 6,383 6,972 7,284 7,691 8,049 8,165 8,756 8,717 9,046 8,893Long-term hydro average (10 yrs) % 36.1%

Table 9. Power generation by fuel type

Power generation by fuel type Unit 2008 2009 2010

Hydropower GWh 3,675 2,942 3,849Geothermal GWh 294 387 271Bagasse GWh 862 1,114 1,558Coal GWh 1,139 733 1,170Fuel Oil GWh 2,729 3,835 2,039Diesel Oil GWh 19 36 6Imports3 GWh 4.70 37.20 362.30

LC/MR GWh 4,831 4,442 5,678no LC/MR GWh 3,892 4,641 3,577TOTAL GWh 8,722 9,083 9,255

Table 10. Fuel consumption by fuel type

Fuel consumption Unit 2008 2009 2010

Fuel oil barrils 3,965,350 5,884,390 2,870,913Diesel oil gallons 1,360,795 4,521,106 464,912Bagasse tons 3,335,014 4,240,511 6,115,301Coal tons 451,481 294,183 491,391

Table 11. CO2emissions by fuel type

CO2emissions Unit 2008 2009 2010

Fuel oil tCO2 1,827,907 2,712,526 1,323,404Diesel oil tCO2 12,694 42,176 4,337Bagasse tCO2 0 0 0Coal tCO2 804,110 523,955 875,192Total tCO2 2,644,711 3,278,657 2,202,933

14Further information in Excel file EF Guatemala_02-05-12.xls.


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Table 12. New power plants installed

PLANTOp.

start

Generation

(MWh)

BM

order

Accum. MWh (BM

order)

Gen

type1

Fuel

type

Efficie

(%

HIDRO XACBAL (CDM project) 2010 259,556 19 1,755,911 Hydro - - TRINIDAD 2009 38,299 1 38,299 COG Biomass - LA LIBERTAD 2008 41,857 2 80,156 ST Coal 39.0ARIZONA VAPOR 2008 7,797 3 87,953 ST Fuel oil 39.0GECSA 2 2008 12,443 4 100,396 ICE Fuel oil 39.0COENESA 2008 57 5 100,453 ICE Diesel 39.0EL RECREO 2007 140,819 6 241,272 Hydro - - GECSA 2007 8,906 7 250,178 ICE Fuel oil 39.0ORTITLAN 2007 144,879 8 395,057 GEO - - MONTECRISTO 2006 57,306 9 452,364 Hydro - - CANDELARIA (CDM project) 2006 23,708 1,779,620 Hydro - - POZA VERDE 2005 35,213 10 487,577 Hydro - - PALN 2 2005 - 11 487,577 Hydro - -

ELECTRO GENERACIN CRISTAL BUNKER 2005 10,196 12 497,773 ICE Fuel oil 39.0RENACE 2004 310,536 13 808,309 Hydro - - DARSA 2004 - 14 808,309 ST - - SAN DIEGO 2004 1,386 15 809,696 COG Biomass - EL CANAD (CDM project) 2003 233,372 Hydro - - ARIZONA 2003 643,014 16 1,452,709 ICE Fuel oil 39.0ELECTRO GENERACIN 2003 32,383 17 1,485,093 ICE Fuel oil 39.0LAS VACAS (CDM project) 2002 42,324 Hydro - - MATANZAS + SAN ISIDRO (CDM project) 2002 63,734 Hydro - - TULUL 2001 11,263 18 1,496,355 COG Biomass - PASABIEN 2000 53,805SAN JOS 2000 942,539 POLIWATT 2000 454,749ZUNIL 1999 114,429

SECACAO 1998 94,400LAS PALMAS 1998 -


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Table 13. Summary of the CM Emission Factor

2008 2009 2010

EF grid,OMsimple,y 0.6796 0.7065 0.6159Generation 8,722.00 9,083.30 9,255.20

EF OM Simple 08,09,10 0.6668 tCO2/MWh

EF BM 07 0.2989 tCO2/MWh

EFCM(weight 0.5) 0.4828 tCO2/MWh


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Appendix 4:Further background information on ex ante calculation of emission reductions

No additional information presented here. All background information on ex ante calculation of emissionreductions can be found in section B.6.3 of the PDD.


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Appendix 5:Further background information on monitoring plan

No additional information presented here. All monitoring information can be found in section B.7 of thePDD.


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Appendix 6:Summary of post registration changes

- - - - -

History of the document

Version Date Nature of revision

04.1 11 April 2012 Editorial revision to change version 02 line in history box from Annex 06 toAnnex 06b.

04.0 EB 6613 March 2012

Revision required to ensure consistency with the Guidelines for completingthe project design document form for CDM project activities (EB 66, Annex8).

03 EB 25, Annex 1526 July 2006

02 EB 14, Annex 06b14 June 2004

01 EB 05, Paragraph 1203 August 2002

Initial adoption.

Decision Class:RegulatoryDocument Type:FormBusiness Function:Registration

pdd_la cascata san juan ixcoy _gsp

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