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VALIDATION REPORT

for the CDM Project Activity

Greenhouse Gas Emission


Reductions Through Wind
Energy Technology - Reliance
Clean Power Pvt. Ltd.
In

India
Report No. 01 997 9105065200
Version No. 02, 2012-12-25

Designated Operational Entity (DOE)


TV Rheinland (China) Ltd
Unit 707, AVIC Building, No. 10B, Central Road, East 3 rd Ring Road,
Chaoyang District, Beijing 100022,
Peoples Republic of China.
Tel.: +86 10 65 66 66 60 (ext.169)
FAX: +86 1065 66 66 67
E-mail: doe@chn.tuv.com

Validation Report

01 997 9105065200

I. Project description:
Project title:

Greenhouse Gas Emission Reductions Through Wind


Energy Technology - Reliance Clean Power Pvt. Ltd.

Host Country:

India

Report No.: 01 997 9105065200


Current revision No.: 02

ACM0002, Version 13.0.0

Date of current revision: 2012-12-25

Large Scale
Small Scale

Methodology:

Date of first issue: 2012-05-08

Annual average emission reductions (estimate):


74,828 tCO2e/yr
The GHG emission reduction would happen by displacing the fossil fuel dominated grid
GHG reducing
electricity equivalent to the net renewable electricity supplied by the Wind power project.
measure/technology:

Party
India (Host)

Party considered a
project participant

Project Participants

Contract
party

No

Reliance Clean Power Pvt. Ltd.

II. Validation Team:

India

India

India

1.1, 1.2, 3.1, 5.1, 11.1,


12.1
1.2, 3.1, 13.1

India

1.2, 2.1, 2.2, 3.1

India

1.2

X
X

Trainee TR

Expert to TR

Technical Reviewer

Trainee Auditor

Acting Tech. Expert

Technical Expert

Team Member (Auditor)

Team leader

Chetan Swaroop Sharma


(from 24/10/2012)
Sanjay Kumar Agarwalla (till
12/07/2012)
Shivraj Sharma (till
23/10/2012)
Raj Kumar Deka (from
24/10/2012)
Indumathi C

Local Expert

Role
Appointed for
Sectoral Scopes
(Technical Areas)

Acting Team Leader

Validation Team
Affiliation
TV
Rheinland

Full name

X
X

X
X
X

Validation Phases and Validation Status:


Desk Review
Follow up interviews
Corrective Actions / Clarifications Requested

III. Validation Report:


Final approval
Date: 2012-12-26

Released

By: Mr. Praveen Urs

Rev No.: 02 (13/09/2012)

Resolution of outstanding issues


Full Approval and Submission for Registration

Rejected

Distribution

No distribution without permission from the Client


or responsible organizational unit
Unrestricted distribution

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01 997 9105065200

Executive Summary Validation Opinion


The validation team assigned by the DOE (TV Rheinland (China) Ltd.), here after called TRC, is been
assigned by Reliance Clean Power Pvt. Ltd. to perform the validation of their project Greenhouse Gas
Emission Reductions Through Wind Energy Technology - Reliance Clean Power Pvt. Ltd.. The validation was
performed on the basis of UNFCCC criteria for the Clean Development Mechanism. The scope of the validation
is defined as an independent and objective review of the project design document, the projects baseline study
and monitoring plan and other relevant documents. The information in these documents is reviewed against
CDM Validation and Verification Manual (Version 01.2), Kyoto Protocol requirements, CDM Executive
Board/UNFCCC rules.
The report is based on the assessment of the project design document undertaken through stakeholder
consultations, application of standard auditing techniques including but not limited to document reviews, site
visit, stakeholder interviews, review of the applicable methodology and its underlying formulae and
calculations.
Validation methodology and process
The validation has been performed as described in the VVM version 01.2 and constitutes the following steps:
- Publication of the PDD on the UNFCCC website (17/08/2011 15/09/2011)
- Desk review of the PDD and the relevant documents
- On-site assessment (27/03/2012)
- Issuance of Validation Report
Validation criteria
The following CDM requirements have been considered:
- Article 12 of the Kyoto Protocol,
- Modalities and procedures for CDM (Marrakech Accords)
- Subsequent decisions by the COP/MOP and CDM Executive Board
- Host country criteria
- Criteria given to provide for consistent project operations, monitoring and reporting.
The host party is India and the party fulfil the participation criteria and have approved and authorized the project
and the project participants through its letter of approval dated 18/12/2012 (No: 4/6/2012-CCC) /P03/. The
DNA from India confirms that the project assists in achieving sustainable development through its letter of
approval dated 18/12/2012 (No: 4/6/2012-CCC) /P03/.
The project correctly applies the baseline and monitoring methodology ACM 0002, version 13.0.0,
Consolidated baseline methodology for grid-connected electricity generation from renewable sources.
The project results in reductions of CO2 emissions that are real, measurable and give long-term benefits to the
mitigation of climate change. It is demonstrated that the project is not a likely baseline scenario. Emission
reductions attributable to the project are hence additional to any that would occur in the absence of the project
activity.
The validation did not reveal any information that indicates that the project can be seen as a diversion of ODA
funding towards India.
The monitoring arrangements described in the monitoring plan are feasible within the project design and it is
TRCs opinion that the project participants are able to implement the monitoring plan.
By generating renewable electricity which will displace fossil fuel based grid electricity, the project activity will
result in reductions of greenhouse gas (GHG) emissions that are real, measurable and give long-term benefits to
the mitigation of climate change.
The total emission reductions from the project are estimated to be 748,280 t of CO2e over a fixed 10 year
crediting period, averaging 74,828 t of CO2e annually. The emission reduction forecast has been checked and it
is deemed likely that the stated amount is achieved given the underlying assumptions do not alter.
The validation protocol describes a total of 45 findings which include:
13 Corrective Action Requests (CARs);
32 Clarification Requests (CLs) and all findings have been closed satisfactorily. No FAR has been raised.

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TRC concludes that the CDM Project Activity Greenhouse Gas Emission Reductions Through Wind Energy
Technology - Reliance Clean Power Pvt. Ltd. in India, as described in the PDD (version-02, date-24/12/2012),
meets all relevant requirements of the UNFCCC for CDM project activities including article 12 of the Kyoto
Protocol, the modalities and procedures for CDM (Marrakesh Accords) and the subsequent decisions by the
COP/MOP and CDM Executive Board.
The selected baseline and monitoring methodology (ACM0002, Version 13.0.0) is applicable to the project and
correctly applied. The TRC therefore requests the registration of the project as a CDM project activity with
UNFCCC.
Mr. Chetan Swaroop Sharma (Team Leader)

Mr. Praveen Nagaraje Urs (DOE Manager)

TV Rheinland (India) Pvt. Ltd.


Pune, 2012-12-25

TV Rheinland (China) Ltd.


Beijing, 2012-12-26

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Abbreviations
CAR
CDM
CDM EB
CEA
CER
CERC
CL
CO2
CO2e
DNA
DOE
EB
EIA
EPA
EPC
FAR
FY
GHG
IRR
kV
LoA
MEDA
MERC
MoC
MSEDCL
MSETCL
MW
MWh
NEWNE
ODA
OSV
O&M
PDD
PP
PLF
RCCPL
tCO2e
TRC
UNFCCC
VVM
WTG

Corrective Action Request


Clean Development Mechanism
CDM Executive Board
Central Electricity Authority
Certified Emission Reduction(s)
Central Electricity Regulatory Commission
Clarification request
Carbon dioxide
Carbon dioxide equivalent
Designated National Authority
Designated operational entity
CDM Executive Board
Environmental Impact Assessment
Energy Purchase Agreement
Engineering Procurement Construction
Forward Action Request
Financial Year
Greenhouse gas(es)
Internal Rate of Return
kilo Watt
Letter of approval
Maharashtra Energy Development Agency
Maharashtra Electricity Regulatory Commission
Modalities of Communication
Maharashtra State Electricity Distribution Co. Ltd
Maharashtra State Electricity Transmission Co. Ltd.
Megawatt
Megawatt hour
Northern, Eastern, Western and North-Eastern
Official Development Assistance
On site visit
Operation and Maintenance
Project Design Document
Project Participant
Plant Load Factor
Reliance Clean Power Pvt. Ltd.
Tonnes of CO2 equivalents
TV Rheinland (China) Ltd.
United Nations Framework Convention on Climate Change
Validation and Verification Manual
Wind Turbine Generator

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TABLE OF CONTENTS
1
Introduction
1.1
Objective
1.2
Scope
2
Methodology
2.1
Desk Review of the Project Design Documentation
2.2
Follow-up Interviews with Project Stakeholders
2.3
Resolution of Outstanding Issues
2.4
Internal Quality Control
2.5
Validation Team
3
validation Findings
3.1
Approval and Participation
3.2
Project Design Document
3.3
Project Description
3.4
Baseline and Monitoring Methodology
3.5
Additionality
3.6
Monitoring
3.7
Sustainable Development
3.8
Environmental Impacts
3.9
Local Stakeholder Consultation
3.10 Comments by Parties, Stakeholders and NGOs

7
7
7
8
8
11
12
14
14
14
14
15
15
17
26
35
37
37
37
37

Appendix A: Validation Protocol


Appendix B: Certificates of Competence

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1. Introduction:
The organization Reliance Clean Power Pvt. Ltd. has commissioned the DOE TV Rheinland (China) Ltd. to
perform a validation of the CDM Project Activity Greenhouse Gas Emission Reductions Through Wind
Energy Technology - Reliance Clean Power Pvt. Ltd. in India (hereafter called the project). This report
summarises the findings of the validation of the project, performed on the basis of UNFCCC criteria for the
CDM, as well as criteria given to provide for consistent project operations, monitoring and reporting. The term
UNFCCC criteria refers to Article 12 of the Kyoto Protocol, the CDM modalities and procedures or the
simplified modalities and procedures for small-scale CDM project activities (as applicable) and the subsequent
decisions by the CDM Executive Board.

1.1 Objective:
The purpose of a validation is to have an independent third party assess the project design. In particular, the
project's baseline, monitoring plan, and the projects compliance with relevant UNFCCC and host Party criteria
are validated in order to confirm that the project design, as documented, is sound and reasonable and meets the
identified criteria. Validation is a requirement for all CDM projects and is seen as necessary to provide
assurance to stakeholders of the quality of the project and its intended generation of certified emission
reductions (CERs).
1.2 Scope:
The validation scope is defined as an independent and objective review of the project design document (PDD).
The PDD is reviewed against the relevant criteria (see above) and decisions by the CDM Executive Board,
including the approved baseline and monitoring methodology. The validation team has, based on the
recommendations in the Validation and Verification Manual employed (latest version) a risk-based approach,
focusing on the identification of significant risks for project implementation and the generation of CERs.
The validation is not meant to provide any consulting towards the project participants. However, stated requests
for clarifications and/or corrective actions may have provided input for improvement of the project design.
While carrying out the validation, TRC determines if the project activity complies with the requirements of Para
37 of the CDM M&P and also assess the claims and assumptions made in the PDD without limitation on the
information provided by the project participants.
The scope of the validation is:

To apply TRCs own quality management system integrated with the VVM standard along with the
recent decisions and guidance provided by the UNFCCC board to determine if the project activity meets
all applicable CDM requirements, including those specified in the relevant methodologies, tools and
guidelines;
Asses the accuracy, conservativeness, relevance, completeness, consistency and transparency of the
information provided by the project participants;
Determine whether information provided by the project participants are reliable and credible;
Present information in the form of validation report in a factual, neutral, coherent manner and document
all assumptions, provide references to the background material and identify changes made to the
documentation;
Base the findings and conclusions on objective evidence and conduct all validation in accordance with
CDM rules and procedures;
Apply consistent validation criteria in providing expert judgments to the requirements of applicable
approved methodologies, tools and also cross check the same with projects of similar characteristics,
technology, time period and region; and
Safeguard the confidentiality of all informations obtained or created during validation.
Where sampling is involved, the standard for sampling and surveys are applied.

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2. Methodology:
The validation consists of the following four phases:
I A desk review of the project design documents
Publication of PDD in UNFCCC for global stakeholder consultation;
A review of data and information;
Cross checking between information provided in PDD with all necessary means without limitations to
the information provided by the project proponent;
II On-site visit and follow-up interviews with project stakeholders
Interviews with relevant stakeholders in host country with personnels having knowledge with the
project development via telephone, email or direct on-site visits;
Cross checking between information provided by interviewed personnel with all necessary means
without limitations to the information provided by the project proponent;
III Reference to available informations relating to projects or technologies similar projects under validation
and review based on the approved methodology being applied of the appropriateness of formulae and
accuracy of calculations.
IV The resolution of outstanding issues and the issuance of the final validation report and opinion.

The following sections outline each step in more detail.

2.1 Desk Review of the Project Design Documentation:


The following table outlines the documentation reviewed during the validation:
Refere Document
nce
PDD [for global stakeholder commenting] version 01, dated 01/08/2011
/P01/
/P02/

PDD [final version], version 2, dated 24/12/2012

/P03/

Letter of Approval issued by DNA of India, dated 18/12/2012

/P04/

Modalities of Communication dated 06/12/2012

/P05/

Validation contract in between TUV Rheinland Japan Ltd. and RCPPL for the project
activity.

/P06/

Spread sheets for emission reduction calculations and Grid Emission Factor.

/P07/

1. Spread sheet for investment analysis including sensitivity analysis for the project
capacity of 200 MW as investment decision of 23/04/2011.
2. Spread sheet for investment analysis including sensitivity analysis for the project
capacity of 45 MW as investment decision of 16/02/2012
1. Copy of delegation of Authority for CDM benefit for the Renewable Energy Project
dated 08/03/2011.
2. Investment mandate decision dated 23/04/2011 for the project activity of capacity
200 MW.
3. Investment mandate dated 16/02/2012 for the revised Capacity of 45 MW.
Proof of prior consideration of CDM copies of notifications to DNA of India, dated
26/04/2011 and UNFCCC secretariat, dated 26/04/2011 in conformity to Annex 13 of
EB 62.
Self declaration from PP dated 28/02/2012 for non diversion of ODA fund in the
financing of the project activity.
Copy of proof of start date of the project activity:

/P08/

/P09/

/P10/
/P11/

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/P12/

Contract for Wind Power Equipment Supply and Erection, Construction and Services
between Reliance Clean Power Pvt. Ltd., Global Wind Power Limited and Global Wind
Infrastructure and Services Private Limited dated 28/06/2011
Documents related to financial additionality:

1.
2.

3.
4.
5.
6.
7.

/P13/

/P14/

01 997 9105065200

EPC Contract offer for 200 MW Wind power project by Global wind power
limited dated 25/02/2011.
EPC Contract
a. Contract for Wind Power Equipment Supply and Erection,
Construction and Services between Reliance Clean Power Pvt Ltd,
Global Wind Power Limited and Global Wind Infrastructure and
Services Private Limited for 200 MW Wind power project dated
28/06/2011.
b. Revised contract for 45 MW wind power project dated 06/03/2012.
Purchase order issued to EPC contractor for the
Land lease Deed for all the wind turbines of the project activity
Implementation schedule
Technical life time of the project in conformity with Annex 15, EB 50
Term Sheet of Axis Bank

a. Term sheet dated 21/03/2011


b. Revised term sheet dated 22/04/2011
8.
The plant load factor determined by a third party (=Fair Aero Consultant &
Technologist) contracted by the project participants in conformity with Annex
11, EB 48 dated 17/10/2011
9.
Energy Purchase Agreement
a. Signed with Reliance Infrastructure Ltd. dated 08/03/2011 for the
capacity 100 MW.
b. Amended EPA dated 16/03/2011 for the capacity 200 MW.
c. Amended EPA dated 29/03/2012 for the capacity 45 MW.
10. O&M cost
11. Basis for the working capital norms (stocking period assumed)
12. Basis for the salvage value assumed
13. Annual Report of the company (Reliance Clean Power Pvt. Ltd.) for the year
2010-11
14. Letter from EPC contractor (Global Wind Power Ltd.) dated 15/02/2012, stating
that they will be able to commission only 45 MW instead of 200 MW agreed as
of bottlenecks with the land acquisition.
Relevant proofs of local stakeholder consultation process, in particular the following:
a) Copy of media used (copy of news paper advertisement in Saakal dated
19/05/2011 and personal invitations)
b) Copy of Minutes of Meeting of the local stakeholders consultation meeting
dated 30/05/2011
c) Copy of Attendance sheet of the meeting of the local stakeholders
consultation 30/05/2011
d) Photographs of the Local stakeholders consultation meeting dated 30/05/2011
Operational and management structure for implementation, operation and monitoring
of project activity.

/P15/

Copy of certificate of incorporation of RCPPL as per Indian Company Registration


Act.

/P16/

Site lay out drawing

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/P17/

1. Land lease Deed for all the wind turbines of the project activity.
2. Notarised Project Land Details dated 22/11/2012.

/P18/

Statutory clearances for all the wind turbines of the project activity, in particular:
1) Gram Panchayat clearance
2) Infrastructure clearance by MEDA
3) Grid connectivity permission from MSEDCL
4) Clearance for commissioning by MEDA.

/P19/

Footnote references as described in the PDD in soft copy.

/P20/

Single line diagram for electricity generation and export /import to/from the grid.

/P21/

Technical specifications of the WTGs provided by the manufacturer as contained in


PDD.

/P22/

Aerial photographs of the site.

/P23/

Response for Global stakeholders comments

Background investigation and other referred documents/websites:


/B01/

CDM Validation and Verification Manual (Version 01.2)

/B02/

Approved baseline and monitoring methodology ACM0002 Version 13.0.0


Consolidated baseline methodology for grid-connected electricity generation from
renewable sources.
Tool to calculate the emission factor for an electricity system, version 02.2.1

/B03/
/B04/

/B05/

/B06/

/B07/
/B08/

/B09/

1.
2.

CDM Glossary of CDM terms


Relevant CDM requirements (CDM M & P and decisions by the CMP and
documents released by CDM EB) published on the UNFCCC CDM website
3. UNFCCC: Guidelines for Completing the Project Design Document (CDM-PDD)
and the template for the CDM-PDD.
4. Guidelines on the demonstration and assessment of prior consideration of the
CDM (version 04), annex 13, EB 62
5. Tool for the demonstration and assessment of additionality (version 6.0.0), annex
21, EB 65
6. The Guidelines on the Assessment of Investment Analysis (Ver 05), annex 05, EB
62
CERC (Terms and Conditions for Tariff determination from Renewable Energy
Sources) (First Amendment) Regulations, 2010
http://re.indiaenvironmentportal.org.in/files/file/Signed_Order_2562010_RE_Tariff_FY_11-12.pdf
Carbon dioxide database version-06 published by Central Electricity Authority.
http://www.cea.nic.in/planning/c%20and%20e/Government%20of%20India%20websit
e.htm
http://envfor.nic.in/divisions/ccd/cdm_iac.html, Ministry of Environment and Forests
(MoEF) interim approval guidelines for CDM projects
http://envfor.nic.in/legis/eia/so1533.pdf - EIA notification from MoEF dated
14/09/2006.
http://moef.nic.in/downloads/rules-and-regulations/3067.pdf - Amendment of EIA
notification dated 01/12/ 2009
http://www.cea.nic.in/e&c/regulations/notified_regulations/Metering_Regulations.pdf -

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Extract of CERC 2006 for testing of Monitoring requirement.


/B10/

Web research Google Earth for geo-coordinate

/B11/

http://cdm.unfccc.int/Projects/Validation/DB/UBZFC8UFCON0FIFG9EWX9OUTUY
LZJ2/view.html
Website used for the validation of data sources for common practice analysis:
1.
Baseline
Carbon
Dioxide
Emission
Database
Version
6.0
http://www.cea.nic.in/reports/planning/cdm_co2/Database_publishing_ver6.zip

/B12/

2. Table 5.4, Annual Report of Ministry of New and Renewable Energy, 2010-11,
Govt.
of
India.
http://mnre.gov.in/file-manager/annual-report/20102011/EN/Chapter%205/chapter%205.htm
3. Detailed list of private Windfarm owners in India, Directory Indian Wind Power
2010, 10th Edition, published by Consolidated Energy Consultants Ltd.
4. MW Scale Grid Solar Power Plant Commissioned in India (as on 31/07/2011),
http://mnre.gov.in/filemanager/UserFiles/MW_size_Grid_Solar_Power_Plants_in_India.pdf
5. Section 5.16, Annual Report of Ministry of New and Renewable Energy, 2010-11,
Govt.
of
India.
http://mnre.gov.in/file-manager/annual-report/20102011/EN/Chapter%205/chapter%205.htm
6. Section 5.19, Annual Report of Ministry of New and Renewable Energy, 2010-11,
Govt.
of
India.
http://mnre.gov.in/file-manager/annual-report/20102011/EN/Chapter%205/chapter%205.htm
2.2. Follow-up Interviews with Project Stakeholders:
TV Rheinland validation team carried out an on-site visit dated (27/03/2012) and performed interviews with
the project representatives and stakeholders. The site visit was conducted to validate the accuracy and
completeness of the project description as specified under webhosted PDD.
Prior to the interview salient points to be discussed were planned. Date of interview, interviewee and points
discussed are given in the following table.
Date

Name

Organization

Topic

/i/

27/03/2012

Mr. Vipin Singh


Chauhan

Reliance Clean Power


Pvt.
Ltd.Deputy
General Manager

/ii/

27/03/2012

Mr. Hetal Kumar


Shah

Reliance Clean Power


Pvt.
Ltd.Deputy
General Manager

/iii/

27/03/2012

Mr.
Rishi
Raychoudhury

Reliance Clean Power


Pvt. Ltd.- Manager

Discussion on the project. Means of


funding, total project cost, project
implementation status, baseline,
additionality and detailed discussion
on each input parameter considered
in financial analysis.
Plant details and Monitoring Plan
Implementation and Management
Review Training and competency
developments,
Assessment
of
monitoring and QA/QC procedures,
Environmental issues
Discussion
on
the
project
description,
baseline
scenario,
applicability compliance of the
project with the meth, additionality,
monitoring, LSC and environmental
impacts.

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Discussion on the calculation of grid
emission factor.

27/03/2012

/iv/

Mr. Somnath Nale

/v/

27/03/2012

/vi/

27/03/2012

/vii/

27/03/2012

Mr.
Sonmale
Ashish
Mr.Sunil
S.Choudhari
Mr.Anwar Siddiki

/viii/

27/03/2012

Mr Mahadev

SWMPD

SWMPD
SWMPD
ManagerProject(commissioning)
-

Discussion on the project description


including technical specification of
the WTGs (to be implemented) in
the project activity and site specific
PLF.
Discussion
on
the
project
description,
environmental
laws/regulation.
Project
description
and
implementation discussion
Discussion
on
the
technical
specification.
Discussion on commissioning of
project activity
Local Stakeholders consultation

Validation Team considered the views obtained in these interviews while arriving at Validation Opinion.

2.3 Resolution of Outstanding Issues:


The objective of this phase of the validation is to resolve any outstanding issues which need be clarified prior to
TV Rheinlands positive conclusion on the project design. In order to ensure transparency a validation
protocol is customised for the project. The protocol shows in transparent manner criteria (requirements), means
of verification and the results from validating the identified criteria. The validation protocol serves the following
purposes:
It organizes, details and clarifies the requirements a CDM project is expected to meet CDM
requirements;
It ensures a transparent validation process where the validator will document how a particular
requirement has been validated and the result of the validation.
It ensures that the issues are accurately identified, formulated, discussed and concluded in the validation
report.
It ensures the determination of achieving credible emission reductions from the project activity.
The validation protocol consists of three tables. The different columns in these tables are described in the figure
below. The completed validation protocol for this project is enclosed in Appendix A to this report.
Findings established during the validation can either be seen as a non-fulfilment of CDM criteria or where a risk
to the fulfilment of project objectives is identified. Corrective action requests (CAR) are issued, where:

Mistakes have been made with a direct influence the ability of the project activity to achieve on project
results like real, measurable, verifiable and additional emission reductions;
CDM and/or methodology specific requirements have not been met; or
There is a risk that the project would not be accepted as a CDM project or that emission reductions will
not be certified.

A request for clarification (CL) may be used where additional information is needed to fully clarify an issue.
A forward action request (FAR) is raised during validation to highlight issues related to project implementation
that require review during the first verification of the project activity. FARs shall not relate to the CDM
requirements for registration.

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Validation Protocol Table 1: Validation requirements


Checklist Question
Reference
Means of
Validation (MoV)
The various UNFCCC
Gives
Explains how
requirements as
reference to conformance with
specified in the VVM
documents
the checklist
are linked to checklist
where the
question is
questions the project
answer to
investigated.
should meet. The
the checklist Examples of means
checklist is organised in question or
of validation are
different sections,
item is
document review
following the logic of
found.
(DR) or interview
the VVM.
(I). N/A means not
applicable.

Comment
The section is
used to elaborate
and discuss the
checklist question
and/or the
conformance to
the question. It is
further used to
explain the
conclusions
reached.

Draft and/or Final


Conclusion
This is either acceptable
based on evidence
provided (OK), or a
corrective action request
(CAR) due to noncompliance with the
checklist question (See
below). A request for
clarification (CL) is used
when the validation team
has identified a need for
further clarification.

Validation Protocol Table 2: List of Requests for Corrective Action (CAR) and Clarification (CL)
Draft report
Ref. to checklist
Summary of project
Validation conclusion
clarifications and
question in table 2
owner response
corrective action
requests
If the conclusions from
Reference to the
The responses given by
This section should
the draft Validation are
checklist question
the project participants
summarise the validation
either a CAR or a CL,
number in Table 2
during the
teams responses and final
these should be listed in
where the CAR or CL
communications with
conclusions. The conclusions
this section.
is explained.
the validation team
should also be included in
should be summarised in Table 2, under Final
this section.
Conclusion.
Table 3: List of forward action requests (FARs)
FAR number
Forward action request
(FAR) to be raised during
validation to highlight
issues related
To project
implementation that
requires review during the
first verification of the
project activity. FARs
Shall not relate to the
CDM requirements for
registration.

Reference
Reference to the
checklist question
number in Table 2
where the CAR or CL
is explained.

Summary of project
owner response
The responses given by
the project participants
during the
communications with
the validation team
should be summarised in
this section.

Validation team conclusion


This section should
summarise the validation
teams responses and final
conclusions. The conclusions
should also be included in
Table 2, under Final
Conclusion.

Figure 1. Validation protocol tables

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01 997 9105065200

2.4 Internal Quality Control:


The final validation report underwent a technical review by a qualified independent reviewer before
requesting registration of the project activity. The technical review was performed by a technical
reviewer qualified in accordance with TV Rheinlands qualification scheme for CDM validation and
verification that meets the criteria of EB guidelines for qualification.
2.5 Validation Team:

India

1.1, 1.2, 3.1, 5.1, 11.1, 12.1

India

1.2, 3.1, 13.1

India

1.2, 2.1, 2.2, 3.1

India

1.2

Reporting Support

Report and protocol


Writing

Site Visit + Interview

India

Technical Reviewer

Technical Expert Input

Type of Involvement

Desk review

Chetan Swaroop Sharma


(from 24/10/2012)
Sanjay Kumar Agarwalla (till
12/07/2012)
Shivraj Sharma (till
23/10/2012)
Raj Kumar Deka (from
24/10/2012)
Indumathi C

Validation Team
Affiliation
Appointed for Sectoral Scopes
TV
(Technical Areas)
Rheinland

Supervising the work

Full name

X
X

3. Validation Findings:
The findings of the validation are stated in the following sections. The validation criteria (requirements), the
means of validation and the results from validating the identified criteria are documented in more detail in the
validation protocol in Appendix A.
The final validation findings relate to the project design as documented and described in the revised and
resubmitted project design documentation.

3.1 Approval and Participation:


3.1.1 Letter of Approval:
The below table summarizes the project participants and parties involved. The LoA is received from
PP.
The authenticity of the letters of approval has been validated by TV Rheinland validation team.
The letter of approval /P03/ was found to be unconditional with respect to 45 (a) to (d) VVM, ver
01.2 /B01/. The copy of the LoA was verified against the original LoA issued by the host country
DNA. The contents of the LoA and the signature of the authorized issuer were also compared with
those of other approval cases issued by the host country DNA. Thus, validation team considers that the
given one is authentic and thus confirms to the requirement of 47 VVM, ver 01.2 /B01/. In line with
the requirements of 49 and 50 of VVM, ver 01.2 /B01/, the following table summarize the details
of the LoA:
Project participants
Parties involved
Project title
Rev No.: 02 (13/09/2012)

Reliance Clean Power Pvt. Ltd.


India (host)
Greenhouse Gas Emission Reductions Through Wind Energy
Technology - Reliance Clean Power Pvt. Ltd.
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APPROVAL
LoA received
Date of LoA
Reference to document
LoA received from
Validation of authenticity
Validity of LoA
PARTICIPATION
Party is party to Kyoto
Protocol
Voluntary participation
Diversion of official
development aid towards host
country
Project contribution to SD

01 997 9105065200

Yes
18/12/2012
4/6/2012-CCC
PP
It is valid. It is verified with the original LoA issued by the host
country DNA.
Yes
Yes. India ratified the Kyoto protocol in August 2002
Yes in statement 2 of LoA.
No. There is no Annex I country involved.

Yes in statement 3 of LoA.

The validation team confirms that the information related to the letter of approval as mentioned in the
above table is authentic.
The validation of approval and participation has been done on the basis of 44-54 of VVM ver 01.2
and validation team confirms that the proposed project activity by Reliance Clean Power Pvt. Ltd.
meets the requirement of 44 and 51 of VVM Ver 01.2. However CAR-01 was raised and
successfully closed.
Validation of ODA
This project is unilateral and there is no PP from Annex I country involved. The validation team did
not reveal any evidence that this Project activity can be seen as a diversion of ODA. It is also
confirmed by the interview with Mr. Vipin Singh Chauhan /I-01/ during site visit interview. The same
has also been confirmed by the declaration /P10/ provided by PP.
Hence the validation concludes that there is no ODA funding or diversion of ODA is involved in the
project activity.
3.1.2 Modalities of Communications:
The Modalities of Communication (MoC) /P04/, signed on 06/12/2012, was received from the PP
directly. As required in Procedures for Modalities of Communication between Project Participants and
the Executive Board, the Validation Team has verified that the name of Mr. Shrikant Kulkarni as
primary authorised signatory for future communication related to the corresponding scope of authority
with UNFCCC. The alternative signatory from the sole PP is Mr. Pratap Malempati. The MOC has
been checked as per the requirement of EB 45 annex 59 and found correct. The Validation Team
confirms that the signatory and contact details on the MoC /P04/ is authorized and credible.
3.2 Project Design Document:
The Project Design Document is based on the currently valid PDD template and is completed in
accordance with the applicable guidance document /B04/.
3.3 Project Description:

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The project activity is a Grid connected wind power project (=Greenfield project) in the Sangli district,
Maharashtra of India and involves installation and operation of 18 numbers of wind turbines each with
capacity of 2.50 MW aggregating to 45 MW. Currently the WTGs are in different phase of erection,
pre-commissioning & trial run. The purpose of the project activity is to harness the renewable
resources of wind power and thereby displace equivalent electricity from the fossil fuel dominated
NEWNE grid. The PP has contracted Global Wind Power Limited for the EPC of the project. The
exact geographical locations of the WTGs are mentioned in the PDD has been checked during the site
visit. CL-04 was raised in this context and successfully closed.
The Quantity of net electricity generation supplied to be supplied by the project is estimated as 78,883
MWh per year /P02/, /P04/. The PP has carried out the PLF analysis by a third party M/s Fair Aero
Consultant & Technologist, Indore dated 17/10/2011 in line with the requirements of annex 11 of EB
48, which estimated the PLF analysis for the site at 19.06%. As per the CERC (Terms and Conditions
for Tariff determination from Renewable Energy Sources) (First Amendment) Regulations, 2010
(p.39) /B05/ for Wind zone -1 the PLF is 20%. As this was less conservative compared to the estimate
from the technology provider, the PP has used the higher of the two values to determine the expected
generation per annum. This value was hence accepted by the validating team. The generated electricity
will be sold/supplied to the NEWNE grid as per the signed EPA. The project activity will thus reduce
Green house gas (GHG) emissions associated with the NEWNE grid, which is connected with majorly
fossil fuel based power plants. The total emission reduction due to the project activity works out to be
74,828 tCO2e per year.
Reliance Clean Power Pvt. Ltd. is the PP (of host party) for the given project activity and the same is
confirmed by letter of approval /P03/ obtained from the DNA of India. The technology to be used in
the project activity is imported from European majors. The technology to be applied is deemed to be
current good practice and is not expected to be replaced within the crediting period. The project
activity contributes to the sustainable development criteria of the host country in terms of social,
economical, technological and environmental benefits achieved due to the project activity.
The operational lifetime of the project has been determined (by WTG manufacturer) as 20 years which
corresponds to the standard design life time of a wind turbines and has been verified from the technical
specification provided by the WTG supplier /P21/. The operation and maintenance would be done by
the supplier of the WTGs i.e. Global Wind Power Limited and has proper procedures for providing
training to its employees. The project participant has opted for a fixed crediting period of 10 years. The
start date of the crediting period is mentioned as 31/03/2013 or the effective date of registration of the
project with UNFCCC (whichever is later) /P02/. CL-08 has been raised regarding the start date of the
crediting period and successfully closed.
Based on the information furnished by the project participants, no diversion of ODA contributes to the
financing of the project /P10/.
The starting date of project, project duration and crediting period are presented in the table below.

Starting date of project


28/06/2011 /P11/

Rev No.: 02 (13/09/2012)

Expected project operational


lifetime
20 years

Crediting period
10 years (fixed) covering
31/03/2013 or the effective date
of registration of project activity
under UNFCCC whichever is
later.
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Nevertheless, CAR-02, CAR-03, CAR-04, CAR-05, CAR-06, CL-01, CL-02, CL-03, CL-04, CL-05,
CL-06, CL-07 and CL-08 were raised and successfully closed (refer table 2 of the protocol).
Herewith, the Validation Team summarizes major changes between webhosted PDD and final version
of PDD for submission as follows:
Subject

Webhosted PDD

Project title

Greenhouse
Gas
Emission
Reductions Through Wind Energy
Technology - Reliance Clean Power
Pvt. Ltd.
Participants involved Reliance Clean Power Pvt. Ltd.
Project location
The windfarm project is located in
the Sangli District, Maharashtra,
India
Methodologies and ACM0002, version 12.1.0

Correction to webhosted PDD in the final


PDD submission for registration with DOE
assessment and reason of acceptance.

N/A

N/A
N/A

ACM0002, version 13.0

tools applied ( scope


and
version
numbers)

PP has opted to use the latest version of


methodology in the revised PDD /P02/.
Amount of emission 372,756
74,828
reduction/year
Decrease in estimated emission reduction
is attributable due to the decrease of
installed capacity from 200 MW in hosted
PDD /P01/ to 45 MW /P02/. Please refer
to the CAR-05 in table-2 for further
details.
Project staring date 28/06/2011 Date on which the N/A
Order was placed for the wind
turbines
Crediting period ( Fixed crediting period
type / start date)

No change

TV Rheinland validation team considers the project description of the project contained in the PDD to be
complete and accurate. The PDD complies with the relevant methodology, tools, forms and guidance at the time
of PDD submission for registration.

3.4 Baseline and Monitoring Methodology:


3.4.1 Applicability of the selected methodology to the project activity
The project applies the approved baseline and monitoring methodology ACM 0002 Consolidated baseline
methodology for grid-connected electricity generation from renewable sources (version 13.0.0) /B02/ which
also uses the Tool to calculate the emission factor for an electricity system version 02.2.1 /B03/ and Tool for
the demonstration and assessment of additionality version 06.1.0 /B04-5/.
The selected version of the methodology at the time of hosting of PDD (version 01, dated 01/08/2011) /P01/
was ACM0002, version 12.1.0 /B02/ (=latest available at GSP) however PP has opted to use the latest available
version of methodology during the validation i.e. version 13.0.0 in the revised PDD.

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Applicability criteria for the baseline methodology /B02/ are assessed by the validation team by means of
document review and interview. It is agreed in the validation teams opinion that the project activity fully met
the criteria as described below:
Applicability criteria of the methodology (ACM Criteria
0002), Version 13.0.0
fulfilled
This methodology is applicable to grid-connected
Yes
renewable power generation project activities
No
that: (a) install a new power plant at a site where
no renewable power plant was operated prior to
the implementation of the project activity
(greenfield plant); (b) involve a capacity
addition; (c) involve a retrofit of (an) existing
plant(s); or (d) involve a replacement of (an)
existing plant(s).

The project activity is the installation, capacity


addition, retrofit or replacement of a power
plant/unit of one of the following types: hydro
power plant/unit (either with a run-of-river
reservoir or an accumulation reservoir), wind
power plant/unit, geothermal power plant/unit,
solar power plant/unit, wave power plant/unit or
tidal power plant/unit;
In the case of capacity additions, retrofits or
replacements (except for wind, solar, wave or
tidal power capacity addition projects which use
Option 2: on page 10 to calculate the parameter
EGPJ,y): the existing plant started commercial
operation prior to the start of a minimum
historical reference period of five years, used for
the calculation of baseline emissions and defined
in the baseline emission section, and no capacity
expansion or retrofit of the plant has been
undertaken between the start of this minimum
historical
reference
period
and
the
implementation of the project activity.
In case of hydro power plants:
One of the following conditions must apply:
o The project activity is implemented in an
existing single or multiple reservoirs, with no
change in the volume of any of reservoirs; or
o The project activity is implemented in an
existing single or multiple reservoirs, where the
volume of any of reservoirs is increased and the
Rev No.: 02 (13/09/2012)

Yes
No

Determination by the validation team


The project activity is a new Wind power
project of rated installed capacity 45 MW and
has been checked from the document review
of technical specification of the WTGs /P21/
and Purchase order /P11/, hence validation
team confirms that the project activity is a new
power plant at a site where no renewable
power plant was operated prior to the
implementation of the project activity
(Greenfield plant) as verified during OSV.
Furthermore, the electricity generated by the
project activity will be supplied to
MERC/MSETCL grid which is part of
electricity generation system and comes under
NEWNE grid of India as per the delineation of
CEA /B06/ and this has been checked from the
Energy Purchase Agreement /P12-9/ signed
between the PP and MERC/MSETCL which
explicitly mention that the generated
electricity from the project activity will be sold
to the MERC/MSETCL.
The project activity is a Greenfield power
plant, the same has been checked from the
document review of technical specification of
the WTGs /P21/, Purchase order /P11/ and
from the onsite visit.

Yes
No

The project activity is a Greenfield power


plant, the same has been checked from the
document review of technical specification of
the WTGs /P21/, Purchase order /P11/ and
from the onsite visit. Hence this paragraph of
methodology is not applicable for the subject
project.

Yes
No

The present CDM project activity is not a


hydro power plant; hence this paragraph is not
applicable for the subject project case.

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01 997 9105065200

Applicability criteria of the methodology (ACM Criteria


0002), Version 13.0.0
fulfilled
power density of each reservoir, as per the
definitions given in the project emissions section,
is greater than 4 W/m2; or
o The project activity results in new single or
multiple reservoirs and the power density of each
reservoir, as per the definitions given in the
project emissions section, is greater than 4
W/m2.
The methodology is not applicable to the
Yes
following:
No
Project activities that involve switching from
fossil fuels to renewable energy sources at the
site of the project activity, since in this case the
baseline may be the continued use of fossil fuels
at the site;
Biomass fired power plants;
A hydro power plant1 that results in the creation
of a new single reservoir or in the increase in an
existing single reservoir where the power density
of the power plant is less than 4 W/m2.
In the case of retrofits, replacements, or capacity
additions, this methodology is only applicable if
the most plausible baseline scenario, as a result
of the identification of baseline scenario, is .the
continuation of the current situation, i.e. to use
the power generation equipment that was already
in use prior to the implementation of the project
activity and undertaking business as usual
maintenance.

Determination by the validation team

The subject project is a green-field grid


connected Wind power project as verified
from the provided documents /P02/, /P11/,
/P21/. The present CDM project activity
neither involve switching from fossil fuels to
renewable energy sources or biomass fired
power plant or a hydro power plant, hence this
paragraph is not applicable for the subject
project case.

The subject project is a green-field grid


connected Wind power project as verified
from the provided documents /P02/, /P11/,
/P21/. Validation team confirms that it is not a
case of retrofits, replacements or capacity
addition; hence this paragraph is not applicable
for the subject project case.

The assessment of the projects compliance with the applicability criteria of the methodology ACM 0002
(version 13.0.0) as documented in the PDD section B.2, which are evaluated in detail under the validation
protocol in Appendix A to this report based from the webhosted PDD.
Thus the validation team confirms that the project participant correctly applied the approved methodology /B02/
for the project activity.

3.4.2 Project Boundary:


The geographical and physical project boundary of the project activity was determined by the validation team
during the on-site assessment and is adequately described in the PDD /P02/ in Section B.3. The spatial extent of
the project boundary includes the project power plant and all power plants connected physically to the
electricity system that the CDM project power plant is connected to, inline with applied meth /B02/. The
projects system boundary includes WTGs, transformers, metering system, sub-station and NEWNE grid. The
coordinates were correctly documented in the PDD. The sources and sinks of greenhouse gas identified in the
PDD are deemed to be appropriate. The coordinates were confirmed by the validation team through Google
earth and found OK.
The validation team was able to confirm that all the identified emission sources which are impacted by the
project activity are addressed by the approved methodology /B02/ and can be seen in the Table below. Hence a
clarification of revision to or deviation from the approved methodology /B02/ is not requested.
1

Project participants wishing to undertake a hydroelectric project activity that result in a new reservoir or an increase in the
existing reservoir, in particular where reservoirs have no significant vegetative biomass in the catchments area, may
request a revision to the approved consolidated methodology.

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01 997 9105065200

Emissions
Baseline emissions

GHGs involved
CO2

Project emissions

N/A

Leakage

N/A

Description
Major emission source, which is emitted from the
electricity generation by fossil fuel-fired power
plants connected to the NEWNE grid.
As per the applied meth /B02/ project emissions is
only applicable for the geothermal power plants
and hydro power plants (reservoir emission).
Project emission is regarded as zero as the project
is a renewable energy (wind power plant) project.
As per applied version of meth (Cp p6 of 20,
ACM0002, version 13.0.0) the use of fossil fuels
for the back up or emergency purposes (e.g. diesel
generators) can be neglected. however based on
the OSV interview with PP, validation team
confirms that there will be no a back up plant in
the project activity.
As per the applied methodology /B02/, no leakage
emissions are considered.
As per the applied meth /B02/ the main emissions
potentially giving rise to leakage in the context of
electric sector projects are emissions arising due to
activities such as power plant construction and
upstream emissions from fossil fuel use (e.g.
extraction, processing, transport). These emissions
sources are neglected.

In summary, the project boundary was correctly identified in accordance with the methodology ACM0002
(version 13.0.0) and also confirms compliance of para 78 of VVM ver 01.2 /B01/. All greenhouse gas emissions
occurring within the proposed project activity boundary as a result of the implementation of the proposed CDM
project activity have been appropriately addressed in the PDD /P02/.
The identified project boundary and selected sources of emissions are justified for the project activity. The
validation of the project activity did not reveal other greenhouse gas emissions occurring within the proposed
CDM project activity boundary as a result of the implementation of the proposed project activity which are
expected to contribute more than 1% of the overall expected average annual emission reduction, with respect to
the methodology applied.

3.4.3 Baseline Identification:


The identified baseline scenario (since the project activity is an installation of a new grid-connected renewable
power plant):,in line with the methodology ACM0002, version 13.0.0 /B02/, is 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 into the grid, as reflected in the combined margin (CM)
calculations described in the Tool to calculate the emission factor for an electricity system.
= > Validation team therefore confirms that the identified baseline scenario in the PDD /P02/ confirms to the
requirement of applied meth /B02/.
Therefore, the baseline scenario as prescribed in the ACM 0002 (version 13.0.0) is applicable to the proposed
project activity. The validation took cognizance of 105 of VVM (version 01.2).
The approved baseline methodology applicable to the
project explicit criteria implicit criteria (e.g. available
scenarios, applicability of formulas for BE/PE/LE
Rev No.: 02 (13/09/2012)

Yes
No

As per page-4 of 20 under heading


II.BASELINE
METHODOLOGY
PROCEDURE of the ACM0002. /Version
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01 997 9105065200

calculations)
PDD includes all assumptions and data used by
project participants

All the references and documents used are relevant


for establishing the baseline scenario

All the references and documents used are correctly


quoted and conservatively interpreted in the PDD
All relevant policies / regulations considered are
listed in the PDD
Identified potential baseline scenarios reasonably
represent what would/could occur in the absence of
the proposed project activity

Yes
No

Yes
No
Yes
No
Yes
No

Yes
No

The baseline scenario selection is appropriate and


determined according to the methodology

The approved methodology used is applicable to the


identified baseline scenario

Yes
No
Yes
No

13 /B02/, the baseline is prescribed. Please


refer Section 3.4.1 for details.
The baseline scenario has been prescribed
by the applied methodology, hence it not
required to provide assumptions and data
used by project participant for establishing
the baseline.
The baseline scenario has been prescribed
by the applied methodology, hence it not
required to provide references and
documents for establishing the baseline
scenario.
The baseline scenario has been prescribed
by the applied methodology.
The baseline scenario has been prescribed
by the applied methodology.
The baseline scenario has been prescribed
by the applied methodology and since the
subject project fulfils all applicability
criteria of the applied methodology (refer
section 3.4.1 above), validation team
confirms that the identified baseline
scenarios reasonably represent what
would/could occur in the absence of the
proposed project activity.
The baseline scenario has been prescribed
by the applied methodology and hence it
can be confirmed that the baseline scenario
selection is appropriate and determined
according to the methodology.
The baseline scenario has been prescribed
by the applied methodology i.e. ACM0002.
/Version 13 /B02/.

The approved baseline methodology has been correctly applied to identify a realistic and credible baseline
scenario, and the identified baseline scenario most reasonably represents what would occur in the absence of the
proposed CDM project activity.
All the assumption and data used by the project participants are listed in the PDD and/or supporting documents.
All documentation relevant for establishing the baseline scenario and correctly quoted and interpreted in the
PDD. Assumptions and data used in the identification of the baseline scenario are justified appropriately,
supported by evidence and can be deemed reasonable. Relevant national and/or sectoral policies and
circumstances are considered and listed in the PDD.

3.4.4 GHG Emission Reductions:


Determination of Baseline Emission
The electricity baseline under the adopted methodology /B02/ include only CO2 emissions from electricity
generation in fossil fuel fired power plants that are displaced due to the project activity. The methodology
assumes that all project electricity generation above baseline levels would have been generated by existing gridconnected power plants and the addition of new grid-connected power plants.
The baseline emissions are to be calculated as follows:

BE y EG PJ,y EFgrid,CM, y

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(eq. 6 of methodology)

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01 997 9105065200

Where:
BEy

= Baseline emissions in year y (tCO2/yr)

EGPJ,y

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

EFgrid,CM,y

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

As per the methodology if the project activity is the installation of a new grid-connected renewable power
plant/unit (which is the case of subject project) at a site where no renewable power plant was operated prior to
the implementation of the project activity, then:

EG PJ,y EG facility,y
Where:
EGPJ,y
EGfacility,y

(eq. 7 of methodology)

= Quantity of net electricity generation that is produced and fed into the grid as a result
of the implementation of the CDM project activity in year y (MWh/yr)
= Quantity of net electricity generation supplied by the project plant/unit to the grid in
year y (MWh/yr)

The above equations as provided by the applied methodology /B02/ has been transparently provided in the PDD
/P02/, checked and confirmed by the validation team.
A combined margin (CM), consisting of the combination of operating margin (OM) and build margin (BM)
according to the procedures prescribed in the Tool to calculate the Emission Factor for an electricity system.
The combined margin emission factor for NEWNE grid of India has been calculated to be 0.9486 tCO2e/MWh.
PP has calculated combined margin (CM) using the data source from the Central Electricity Authority CO2
Baseline Database /B06/. Central electricity Authority (CEA) (under Ministry of Power, Government of India)
have worked out baseline emission factor for various grids in India and made them publicly available. The data
from CO2 Baseline Database for the Indian Power Sector User Guide - Version 6.0 /B06/ is the most recent data
at the time of submission of CDM-PDD for validation (Cp p5 of tool to calculate emission factor of an
electricity system, version 02.2.1 /B03/). Validation team has checked the calculation of the combined margin
grid emission factor and confirmed that the applied value of the emission factor follows the tool /B03/ and the
values of OM and BM incorporated in the PDD /P02/ is taken from publically available database i.e. by CEA
(Govt of India) /B06/.
Following steps (step numbers correspond to tool to calculate emission factor of an electricity system, version
02.2.1) demonstrate the calculation of combine margin emission factor in accordance with tool to calculate
emission factor of an electricity system, version 02.2.1.

Step 1 - In line with the requirements specified in the tool /B03/, the PP has used a regional grid definition as
applicable for large countries like India having layered electricity dispatch systems. As per CEA, the Indian
power system is divided in two grids, the Northern, Eastern, Western and North- Eastern (NEWNE) Grid and
Southern Grid. The project activity is connected to NEWNE Grid and hence for the purpose of estimation of
baseline emission factor the consideration of NEWNE Grid is appropriate and correct.

Step 2 - this step of the tool gives two options:


Option I: Only grid power plants are included in the calculation.
Option II: Both grid power plants and off-grid power plants are included in the calculation.

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01 997 9105065200

CEA in its database for the Indian Power Sector User Guide - Version 6.0 /B06/ has considered only grid power
plants for the analysis. PP has chosen option I.

Step 3 - Simple OM method, out of the four methods provided in the tool /B03/ for calculating the operating
margin (EFgrid,OM,y) is selected. The tool /B03/ specifies that the simple OM method can only be used if the lowcost/must-run resources constitute less than 50% of total grid generation in :1) average of the five most recent
years, or 2) based on long-term averages for hydroelectricity production. The Simple OM method selected is
justified and appropriate as the average proportion of low-cost/must run resources is less than 50%. The ex-ante
option for determining the simple OM is opted by the PP.

Step 4 - The PP has considered the national published data (CEA database, ver 06 /B06/) for simple OM (This
is in conformation with the 2, section B.6.1 of Specific guidelines for completing CDM-PDD, version 7
/B06/). The simple OM emission factor calculated by the CEA is the generation weighted average CO2
emissions per unit net electricity generation (tCO2/MWh) of all generating power plants serving the system, not
including low-cost/must power plants (Cp page 6, User Guide CO2 Baseline Database, ver-06 for the Indian
power sector /B06/).
The simple OM may be calculated by one of the following two options:
Option A: Based on the net electricity generation and a CO2 emission factor of each power unit;
or
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 A has been used for the calculation of the simple OM.
The value of simple operating margin for each year and the data for the calculation of EF grid, simple OM,y is
published by the CEA /B06/ and is publically available. However, validation team has carried checked the
published value of simple OM from the data available in CEA, version 6 /B06/ and found that PP has rightly
calculated the generation weighted average value and this is in line with the tool /B03/ and arrived at the
following summary:
Year

OM emission factor
(tCO2/MWh)

2007-08
2008-09
2009-10

1.00
1.01
0.98

Net
Generation
including
imports(MWh)
401,641,586
421,802,633
458,043,085

EFgrid,OM,y
=
(1.00*401,641,586+1.01*421,802,633+0.98*458,043,085)
(401,641,586+421,802,633+458,043,085) = 0.9941 tCO2/MWh

Hence validation team confirms that the PP has rightly followed the CEA database version 06 /B06/ and the
EFgrid,OM,y for the NEWNE grid is based on three year generation weighted average is inconformity with the tool
to calculate emission factor, version 02.2.1 /B03/.

Step 5 - Option 1 has been chosen and PP has fixed the Build Margin emission factor as ex-ante for the first
crediting period.
The set of power capacity additions in the electricity system that comprise 20% of the system generation (in
MWh) and that have been built most recently has been considered by CEA and the same has been selected in
the PDD.
Out of the available options, Option (b) and (c) has been used. Validation team checked independently and
confirm that the selection of the options is correct. This conclusion has been made based on the analyzing the
available options and it was found that the set of power as per option (b) comprises of larger annual generation
Rev No.: 02 (13/09/2012)

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01 997 9105065200

and hence confirm the requirement of the tool /B03/. In validating this step, validation team further confirms
that:
(i) The identified power capacity additions comprise 20% of the system generation for the year under
consideration.
(ii) none of the considered power capacity additions considered under (i) above have been built more than ten
years earlier hence the option (c) has been selected for the selection of the power units.
The PP has considered the national published data (CEA database, ver 06 /B06/) for BM (This is in
conformation with the 2, section B.6.1 of Specific guidelines for completing CDM-PDD, version 6 /B06/).
The CEA database /B6/ provides a BM value for the NEWNE grid as 0.8123. As part of validation of Step 5 of
the tool /B03/, Validation team has checked the BM for the year 2009-10 and found the same correct and in line
with the tool.
Step 6 of the tool /B03/ requires calculation of the combined margin emission factor and provides options for
the calculation:
(a) Weighted average CM; or (b) Simplified CM.
PP has correctly opted option (a) for the calculation of combined margin in line with the tool to calculate
emission factor /B02/.
EFgrid,CM,y = EFgrid,OM,y x wOM + EFgrid,BM,y x wBM
According to the tool /B03/ on selecting alternative weights, the default weights applicable for wind power
projects are wOM = 0.75 and wBM = 0.25 for the first and subsequent crediting period have been applied. The
combined margin emission factor has been calculated as: EFgrid,CM,y = 0.9486
tCO2/MWh (The official
published data for simple OM and BM is considered for calculation of CM). The CM for the fixed crediting
period of 10 years is fixed ex-ante. Hence the validation team confirms that the PP has correctly calculated the
combined margin grid emission factor and is in line with the tool to calculate emission factor, version 02.2.1
/B03/.
Table A-3:
Parameter

Assessment of assumptions used in Baseline Emissions


Value
Applied

Unit

Source of
Information

DOE Conclusion

EPC
Contract
/P12-2/,
Statutory
Clearances /P18/
and signed EPA
/P12-9/

Cross checked with technical specification


provided by the manufacturer as mentioned
EPC contract /P12-2/, statutory clearances
/P18/ and signed EPA /P12-9/ and found
correct.

BASELINE EMISSIONS
Rated
Capacity of
the plant

45

Rev No.: 02 (13/09/2012)

MW

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Validation Report
Generation
(in turns the
Plant Load
Factor)

20

Combined
margin for
the NEWNE
grid

0.9486

01 997 9105065200
%

tCO2/MWh

Third
report
/B05/

party The PP has carried out the PLF analysis


/P12-8/, by a third party M/s Fair Aero Consultant

& Technologist, Indore dated 17/10/2011


in line with the requirements of 3(b) of
annex 11 of EB 48, which estimated the
PLF analysis for the site at 19.06% which
was available at the decision making
(16/02/2012) for 45 MW Project. As per
the CERC (Terms and Conditions for
Tariff determination from Renewable
Energy Sources) (First Amendment)
Regulations, 2010 (p.39) for Wind zone 1 the PLF is 20%. As this (20%) was less
conservative compared to the estimate
from the third party, the PP has used the
higher of the two values to determine the
expected generation per annum. This
value was hence accepted by the
validating team.

Baseline Carbon Crosschecked with the Baseline Carbon


Dioxide
Dioxide Emission Database Version 6.0, from
Emission
CEA data base /B06/ and found OK.
Database
Version
6.0,
from CEA data
base / B06/

The GHG emissions reduction calculations are transparently documented and appropriate assumptions regarding
the expected amount of electricity generated have been used to forecast emission reductions.
While the leakage is not applicable for the project as per the applied meth /B02/ and project emission are zero,
the baseline emissions are equal to the emission reductions due to the project activity.
The emissions reductions due to the project activity were estimated ex-ante to be 78,883 (rounded down
average) tCO2e average annual value in the PDD /P02/ and calculated as follows:
ERy = BEy = EGfacility,y * EFgrid,CM,y = 78,883 MWh * 0.9486 tCO2e/MWh = 74,828 tCO2e (rounded down
value)
In summary, the calculation of emission reductions was correctly demonstrated by the PP according to the
methodology ACM0002 (version 13) and its tool Tool to calculate the emission factor for an electricity system
(Version) version 2.2.1. The summary of GHG emission reduction is as follows:
All assumptions made for estimating GHG
are listed in the PDD
All data used by project participants are
listed in the PDD
Their references and sources are also listed in
the PDD
Formulas, parameters, values are complete,
accurate, transparent and conservative
All the references and documents used are
correctly
quoted
and
conservatively
interpreted in the PDD
Methodology has been applied correctly to
Rev No.: 02 (13/09/2012)

Yes
No
Yes
No
Yes
No
Yes
No
Yes
No

As per PDD /P02/ Section B.6

Yes

As

As per PDD /P02/


Section B.6
As per PDD /P02/
Section B.6
As per PDD /P02/
Section B.6
As per PDD /P02/
Section B.6
per

Annex 3 Baseline Information &


Annex 3 Baseline Information &
Annex 3 Baseline Information &
Annex 3 Baseline Information &

ACM0002,

Version

13

/B02/

and

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01 997 9105065200

calculate project
emissions,
baseline
emissions, leakage emissions and emission
reductions
All the emissions of baseline emissions can
be replicated using information provided in
the PDD

No

methodological tool, Tool to calculate the emission


factor for an electricity system/Version 02.2.1/B03/.

Yes
No

As per ACM0002, Version 13 /B02/ and


methodological tool, Tool to calculate the emission
factor for an electricity system/Version 02.2.1/B03/.

Based on the calculations and results presented in the sections above the implementation of the project activity
will result in an average ex-ante estimation of emission reduction conservatively calculated to be 74,828 tCO2e
per year for the selected crediting period.
All assumptions and data used by the project participants are listed in the PDD and/or supporting documents,
including their references and sources. All documentation used by the project participants as the basis for
assumptions and source of data is correctly quoted and interpreted in the PDD. All values used in the PDD are
considered reasonable and conservative in the context of the proposed CDM project activity. The baseline
methodology has been applied correctly to calculate project emissions, baseline emissions, leakage and emission
reductions and thus confirms compliance of para 89 of VVM ver 01.2 /B01/. All estimates of the baseline,
project and leakage emissions can be replicated using the data and parameter values provided in the PDD.

3.5 Additionality:
The project is large scale project. Therefore, in accordance with ACM0002 /B02/, the additionality of the
project has been demonstrated based on the valid version of the Tool for demonstration and assessment of
additionality (Ver 06.0.0). For the above reasons, this approach has been assessed to be appropriate for the
assessment of additionality for this project activity.

3.5.1 CDM consideration:


The project activity was initially conceptualised considering 200 MW with 80 WTGs of 2.5 MW each and
investment was approved by the investment advisory cell vide as investment mandate dated 23/04/2011 /P08-2/.
While, the project activity was still under validation, the EPC contractor on 15/02/2012 /P12-14/ vide a written
communication intimated their inability to install the contracted capacity (200 MW) due to bottlenecks in land
acquisition. In the light of this unforeseen problem, the capacity of the project activity had to be revised to 45
MW comprising of 18 WTGs. The project participant has executed all the relevant contracts (EPC contract,
EPA) with respect to revised capacity. A detailed trail of events is presented in the section B.5 of the PDD. With
the revision in the capacity, investment in the present project activity i.e. 45 MW was duly approved by
Investment Advisory Cell vide an Investment Mandate dated 16/02/2012 /P08-3/.

The table below indicates various mile stone/dates pertaining to the project activity, and gives clarity
on the decision making time and further project execution (actual implementation) as verified by the
validation team based on document review:
Sl. No.

Activity

Date

EPC Offer received for the 200 MW wind project /P12-1/

25/02/2011

Board of resolution on Delegation of Authority for CDM benefit for


Renewable Energy Projects /P08-1/

08/03/2011

Indicative Landing Terms from Axis Bank for Syndication of Loan for
the 200 MW project /P12-7/

21/03/2011

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01 997 9105065200

Sl. No.

Activity

Date

EPC Offer received for the 200 MW wind project /P12-1/

25/02/2011

Revised Indicative Landing Terms from Axis Bank for Syndication of


Loan for the 200 MW project /P12-7/

22/04/2011

5
6
7

Investment Decision/Investment mandate for 200 MW project Plant


23/04/2011
/P08-2/
Prior Consideration of CDM (Communication to EB, UNFCCC
26/04/2011
and DNA) for the 200 MW project activity /P09/
Start Date for the Project Activity (EPC Contract Date for project
28/06/2011
activity i.e. 200 MW /P11/)

Web-hosting the PDD for public commenting on UNFCCC website

17/08/2011

Letter from EPC contractor for reduction in capacity installation

15/02/2012

10

Investment Decision/Investment mandate for 45 MW project Plant


/P08-3/

16/02/2012

Project developer had stated the start date of the project activity (=200 MW capacity) as 28/06/2011 /P11/ and
has submitted a copy of "Supply and Erection, Construction and Services Contract for WTG Equipments /P11/
between Reliance Clean Power Pvt. Ltd. and Global Wind Power Limited (=technology supplier) and Global
Wind Infrastructure and Services Private limited (=technology supplier) as evidence. The project developer has
not undertaken any construction or any real action on the implementation of the project activity prior to this
date. Since the real action of the activity had begun on 28/06/2011, as per Glossary of CDM terms (Version 07)
/B04/ and 67 of EB 41, this date has been treated as the start date of the project activity.
Since the start date of the project activity is after 02 August 2008, the project activity falls under the category of
new project activity as per paragraph 100 of VVM (01.2) /B01/.
The PDD /P01/ was web-hosted for public comments on 17/08/2011, i.e., after the start date of the project
activity. Since the start date of the project activity was after 02/08/2008 and the PDD /P01/ was web-hosted
after the start date, as per paragraph 2 of Annex 13, EB 62 /B04/ [paragraph 101 of VVM (01.2 /B01/], project
participant is required to inform the Host Party DNA and the UNFCCC secretariat in writing of the
commencement of the project activity and of their intention to seek CDM status and such notification must be
made within six months of the project activity start date. Project developer had informed both UNFCCC and
DNA /P09/ on 26/04/2011 about their intention to seek CDM status. Copies of correspondence /P09/ with
UNFCCC and DNA have been submitted to validation team. Besides, validation team also checked the
UNFCCC website2 and satisfied itself that the project developer had informed UNFCCC on the said date.
Furthermore, even though the intimation was for 200 MW, validation team confirms that this intimation is valid
for the project activity i.e. 45 MW project, which was a part of 200 MW project at the time of intimation to
UNFCCC and DNA.
The project fulfils the condition stipulated vide paragraphs (2) of Annex 13 of EB 62 /B04/, [and paragraph 100
and 101 of VVM (01.2) /B01/]. Validation Team concludes that there was a prior consideration of CDM and
CDM was seriously considered in the decision to implement the project activity.
It is TV Rheinland validation team opinion that the proposed CDM project activity complies with the
requirements of the latest version of the guidance on prior consideration of CDM.

http://cdm.unfccc.int/Projects/PriorCDM/notifications/index_html

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01 997 9105065200

3.5.2 Alternatives:
This is a wind power project and is based on the Methodology ACM0002 Ver. 13 /B02/. The methodology
states,
If the project activity is the installation of a new grid-connected renewable power plant/unit, the baseline
scenario is the following:
Electricity delivered to the grid by the project activity would have otherwise been generated by the operation of
grid-connected power plants and by the addition of new generation sources, as reflected in the combined
margin (CM) calculations described in the Tool to calculate the emission factor for an electricity system.
Paragraph 105 of VVM /B01/ states that PDD is required to identify credible alternatives to the project activity
in order to determine the most realistic baseline scenario, unless the approved methodology that is selected by
the proposed CDM project activity prescribes the baseline scenario and no further analysis is required. Since the
approved methodology ACM0002 /B02/ used by the project activity prescribes the baseline scenario, no further
analysis of alternatives is required for the project activity.
Validation Team, therefore, concludes that the PDD and the validation report conforms to the guidance given
by EB vide paragraph 105 of VVM (Ver.01.2).
TV Rheinland validation team considers the selected baseline is credible and complete.

3.5.3 Investment analysis:


3.5.3.1 Choice of approach:
PP has demonstrated that the project activity is not financially viable in the absence of the revenue from the
certified emission reductions (CERs). In order to verify the claim, the validation team analysed the financials
submitted by the PP by verifying the following:
CHOICE OF APPROACH:
Project developer had demonstrated that the financial returns of the proposed CDM project activity would be
unviable and insufficient to justify the required investment [Paragraph 109 (c) of VVM (01.2). The PP has
demonstrated the financial unattractiveness of the project activity through the benchmark approach in the
investment analysis. Since the project activity generates revenue through generation sale of electricity units,
simple cost analysis is not appropriate. Investment comparison analysis is used only in situations wherein the
options - baseline and the project activity can be compared. For this project activity, the baseline is electricity
supply through the electricity grid which is not an investment option for the PP and therefore investment
comparison analysis is not appropriate. The benchmark approach is suited to circumstances where the baseline
does not require investment or is outside the direct control of the project developer, i.e. cases where the choice
of the developer is to invest or not to invest. This is applicable to the project case and hence benchmark analysis
(Option III) is considered appropriate. This is in accordance with the para 19 of the "Guidelines on the
Assessment of Investment Analysis" (version 05, EB62 Annex 5), hereinafter referred to in this section as
'Guidelines' that states, "If the alternative to the project activity is the supply of electricity from a grid this is not
to be considered an investment and a benchmark approach is considered appropriate." Hence the validation
team concluded that the additionality approach adopted by the PP is in accordance with paragraphs 108-110 of
VVM (01.2).
PP has chosen the project IRR as the financial indicator for the analysis which is acceptable as per the guidance.
Considering the fact that the project is financed by a mix of debt and equity and that guidance 12 of Annex 5,
EB 62 permit the use of project IRR as one of the financial indicators to demonstrate additionality, project IRR
has been considered as appropriate financial indicator for the project type and decision making context.
The project activity was initially conceived as a 200 MW project with 80 WTGs of 2.5 MW each and
investment was approved by the investment advisory cell vide a investment mandate dated 23/04/2011 /P08-2/.
While, the project activity was still under validation, the EPC contractor on 15/02/2012 /P12-14/ vide a written
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01 997 9105065200

communication intimated their inability to install the contracted capacity (200 MW) due to bottlenecks in land
acquisition. In the light of this unforeseen problem, the capacity of the project activity had to be revised to 45
MW comprising of 18 WTGs. With the revision in the capacity, investment in the present project activity i.e. 45
MW was duly approved by Investment Advisory Cell vide an Investment Mandate dated 16/02/2012 /P08-3/.
Hence, the PP was requested to prove the additionality in both the scenarios and the calculations were checked.
It was found that in both the scenarios, the project was additional.
Benchmark selection:
According to the guidelines, where a benchmark approach is used the applied benchmark shall be appropriate to
the type of IRR calculated. The project IRR has been evaluated against Commercial Lending Rate which is
appropriate and is in accordance with para 12 of the Guidelines (Annex 5 EB-62).. Axis Bank, which is one of
the largest lending banks in India has issued a term sheet /P12-7(b)/ on 22/04/2011 indicating, inter alia, the
lending rate will be 13.25%. This rate has been considered as the benchmark. In the year 2011, Mumbai-based
Axis Bank, has emerged the most consistent performer over a three-year period in the BT-KPMG Best Banks
study. Key changes in top leadership, a strong brand, durable relationships and a well diversified revenue
portfolio have been its growth drivers since 2008. The bank offers services to corporate clients, SMEs and retail
customers, comprising, respectively, 53 per cent, 27 per cent and 20 per cent of its business. The same approach
has been adopted for the registered project (7103) by the same PP.
Validation team checked the term sheet which was available with PP before investment decision and found the
rate to be correct. Hence the benchmark 13.25% was the commercial Lending Rate at the time of investment
decision. Validation team independently checked the prevailing lending rate of State Bank of India3 at time of
decision making and found the lending rate i.e. 13.25%.
Hence the benchmark of 13.25 % thus chosen is in accordance with the guidance to investment analysis and
conforms to paragraph 112 (a) and (c) of VVM (01.2) is therefore accepted by the validation team.
Internal Rate of Return
TUV Rheinland validated the timings of investment decision taken by the PP (refer the section "Prior
consideration of the Clean Development Mechanism") and the consistency and appropriateness of the input
values with the timing of investment decision. It was found that this was consistent with the para 19 of the
"Guidelines on the Assessment of Investment Analysis" (version 05, EB62 Annex 5), hereinafter referred to in
this section as 'Guidelines' that states, Input values used in all investment analysis should be valid and
applicable at the time of the investment decision taken by the project participant. The DOE is therefore
expected to validate the timing of the investment decision and the consistency and appropriateness of the input
values with this timing. The DOE should also validate that the listed input values have been consistently applied
in all calculations.
The CL 14-x was raised regarding the Accelerated Depreciation, as per the Indian Income Tax 1961, the wind
mills having the accelerated depreciation @ 80%, which was not considered the PP at the time of the web hosted
PDD. The validation team re-assessed the revised IRR sheets and found that the error has been corrected and the
resultant the IRR also increased. Hence it is accepted by the validation team and subsequently CL 14-x has been
closed.
The debt equity ratio for the project has been adopted at 70:30 from the CERC (Terms and Conditions for Tariff
determination from Renewable Energy Sources) (First Amendment) Regulations, 2010 (p.39). This was also
cross checked from the loan syndication letters from the Axis Bank Limited Mumbai, India /P12/ and was found
to be consistent. Besides, the validation team confirmed that 70:30 funding between debt and equity components
is commonly used for project activities in this sector and hence the debt equity ratio adopted to calculate the
IRR is accepted.
Input parameters:

http://in.reuters.com/article/2011/07/07/india-plr-idINL3E7I71K520110707

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01 997 9105065200

The source for various input parameters used in the financial analysis were found to be in conformity with
110(a),(b) and (c) of VVM version 01.2. The validation team also concluded that they conform to guidance 6 of
Annex 05, EB 62. Validation team based on its specific local and sectoral expertise confirms that the input
values are valid and applicable at the time of decision making.
The profitability estimates of the project, which forms the basis for IRR calculation is based on installed
capacity, PLF, power tariff, O&M cost, depreciation and taxation.
The assumptions used in the investment comparison analysis are deemed appropriate and the justification is
shown in the following table.
Inputs
Installed capacity

Assumption
45 MW

Project Cost

INR 3081.79 Mn

Net Power tariff INR 5.67 / unit


per KWH

Justification
The original capacity of the project was 200 MW and
subsequently this was downsized to 45 MW. This capacity (45
MW) is supported by the Investment Mandate dated
16/02/2012 /P08-3/, the capacity is also supported by the
Amended EPC contract /P12-2(b)/ signed on 06/03/2012.
Hence, the value is correct and appropriate for the project.
The project cost has been estimated based upon the EPC offer
dated 25/02/2011 /P12-1/ by the Global Wind Power Limited,
Mumbai as added by the cost of financial charges, interest
during the construction period and the margin for initial
working capital. As per the accepted accounting principles,
these elements are part of the cost of project and hence, this
has been accepted by the validating team. The cost so arrived
was INR 3081.79 million for the total capacity envisaged i.e.,
45 MW. This cost has been cross verified with the EPC
contract dated 06/03/2012 /P12-2(b)/. The variations in the
cost have been suitably dealt with in the sensitivity analysis.
This is adopted from the CERC (Central Electricity Regulatory
commission). Tariff is determined on the basis of the date of
commissioning and the tariff of the wind projects (located in
wind zone 01) for the financial years, as per Section 9.01 of
Energy Purchase Agreement (EPA) /P12-9/ are as follows:
Commissioning Year
FY 2011
FY 2012
FY 2013

Tariff Applicable
(INR/kWh)
5.07
5.37
MERCs order
approved4

Since, the tariff escalation between FY 2011 and FY 2012 is


INR 0.30/kWh; PP has considered INR 0.30/kWh increase in
tariff between FY 2012 and FY 2013. However, such an
escalation in tariff lacked the documentary evidence; it was
considered by the Investment Advisory Cell on 16/02/2012. A
tariff of INR 5.67/kWh was later approved by MERC on
30/03/2012.
The project activity proves to be additional at the estimated
tariff of INR 5.67/kWh. Since, the EPA was signed at INR
5.07/kWh, the projects dependence on the carbon revenue has
increased from the previous levels of higher tariff. Therefore,
at tariff of INR 5.07/kWh and INR 5.37/kWh project activity
4

MERC (Terms and Conditions for Tariff determination from Renewable Energy Tariff) , dated 30/03/2012 (p.40)

Rev No.: 02 (13/09/2012)

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Validation Report

01 997 9105065200
continues to remain additional. Consideration of higher tariff is
conservative approach and therefore considered as appropriate.

The validating team confirmed that the tariff has been taken
from the Energy purchase agreement.
Project Life time 20 years
The PP has been assumed the technical life time of the WTG is
20 years based on the WTG manufactures specifications /P21/.
As per the guidance EB 62 annex 5 para 3, if a shorter period
is chosen for the additionality, the PP included fair value of the
project activity assets as cash inflow for calculation of the IRR
at the end of the assessment period and hence this has been
accepted.
Plant Load Factor 20%
The PP has presented the analysis carried out by a third party
M/s Fair Aero Consultant & Technologist, Indore dated Oct
2011 /P12-8/ in line with the requirements of 3(b) of
annex 11 of EB 48, which estimated the PLF analysis for the
site at 19.06%. The analysis by M/s Fair Aero Consultant &
Technologist, Indore was based on analysis of wind mast data
collected by C-WET for the period November 2003 to August
2006 which was available at the decision making
(16/02/2012) for 45 MW Project. As per the CERC (Terms
and Conditions for Tariff determination from Renewable
Energy Sources) (First Amendment) Regulations, 2010 (p.39)
for Wind zone -1 /B05/ the PLF is 20%. As this (20%) was
less conservative compared to the estimate from the third
party, the PP has used the higher of the two values to
determine the expected generation per annum for the
investment analysis. This value was hence accepted by the
validating team.
O&M cost and O & M costs : INR CERC (Terms and Conditions for Tariff determination from
escalation
of 0.73 Mn / MW
Renewable Energy Sources) (First Amendment) Regulations,
O&M cost
Yearly Increase on 2010 (p.39) /B05/. A value of 7.26 lakhs per MW has been
O & M Cost applied which is conservative and correct based on CERC order
5.72%
available at the time of investment decision.
In the above background, validation team considers the O&M
cost and escalation in O&M cost are correct and appropriate.
Interest
on 13.25%
The lending rate of 13.25% for working capital has been
Working capital
sourced from the information from M/s Axis bank Limited,
Mumbai loan from their syndication offer letter dated
22/04/2011 /P12-7(b)/. This rate has been applied for the
working capital and also for the term loan. The document has
been checked and the value is found to be correct.
Administrative
Rs. 0.10 Mn / MW The PP has referred annual office & administration cost of
Cost
INR 0.10 Million with 5.72% escalation from the financials
analysis considered during the investment decision. The
administrative cost includes expenses related to the
remuneration and travelling expenses of the dedicated
personnel appointed by the bundler to coordinate the activities
related to the operation of WTGs. The O&A cost were crosschecked from the following documents:
1. Investment Mandate of the PP to appoint staff for the
activities related to the project
2. Verification of appointment letters to the staff concerned
3. Interviews with the personnel identified at onsite to
coordinate the activities related to the operation of the project

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01 997 9105065200
The validation team has also assessed the relevancy of the
assumption by making a comparison with publically available
data, i.e., registered wind projects in which O & A expenses
were considered.
UNFCC ref No.
4761

4343

2540

4489

3977

5061

Interest on Term 13.25%


Loan
Term
Loan 15 years
repayment period

Rev No.: 02 (13/09/2012)

Project Title

Cost in INR
million / MW
2.5 MW Wind 0.32
Power Project by
M/s
Marudhar
Fashions, India
4.75
MW
Bundled
Wind
Power Project by
0.21
Associated Stone
Industries (Kotah)
Ltd
10 MW Wind
Power Project in
Maharashtra by
Deepak Fertilizers
0.060
and
Petrochemicals
Corporation
Limited
Wind
Energy
Project
in
Maharashtra by
M/s
Shah 0.083
Promoters
&
Developers -7.2
MW
1.2 MW Wind
Power Project in 0.41
Maharashtra
Grid Connected
Wind
Power
Project by M/s.
0.22
Venkatrama
Poultries Limited3.6 MW

It is evident from the above analysis that the administrative


expenses of 0.10 million/MW is conservative and hence
acceptable as compared to the range of INR 0.06-0.41
million/MW found in registered CDM projects. Also the rate
of escalation is as per the relevant inflation rate prevailing at
the time of investment decision and comparable to registered
CDM projects which are acceptable.
The lending rate of 13.25% p.a. for term loan and Term Loan
repayment period has been sourced from the information from
M/s Axis bank Limited, Mumbai loan from their syndication
offer letter dated 22/04/2011 /P12-7(b)/. This rate has been
applied for the for the term loan. Hence, the considered
interest on term loan and loan repayment period are deemed
conservative. The document has been checked and the value is
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01 997 9105065200
found to be correct.

Depreciation
rates:
Book
Depreciation

@ 5.28%

IT depreciation

@ 80%

Tax Rate

Salvage value

The rate of depreciation has been applied based on Straight


Line Method basis which is as per the Companies Act 1956,
commonly accepted and the appropriate depreciation rates on
all assets and WTGs.
The validating team confirmed that depreciation, being a
noncash item has been added back to the Profit after Tax for
calculating IRR, which is in accordance with guidance 5 of
Guidelines on the Assessment of Investment Analysis.

The rate of Income tax depreciation has been applied u/s. 32 of


the Income Tax Act, 1961 structure of the host country and
thus considered appropriate and correct.
Corporate tax rate In the IRR analysis marginal tax rate of 19.93% for first fifteen
33.22%
years of operation which is as per the provisions of section 115
Minimum Alternate JB of the Indian Income Tax Act 1961 and there after
Tax
(
MAT) corporate tax rate of 33.22% has been applied. This lower
19.93%
taxation is due to the deductions from taxation under section
80 IA of the Indian Income Tax Act for the first set of years.
This is consistent with the taxation laws in India and hence has
been accepted.
INR 308 Mn
The PP has used a 10% salvage value to be added back to the
revenues at the end of the operating life of WTGs. This is in
consonance with the EB guidance given in EB 62, Annex 5 #4
and hence has been accepted by the validating team.

Financial calculation and conclusion


Thus the IRR for the project activity without CDM revenue has been determined to be 11.42%, in comparison
to the PLR of 13.25%. In TUV Rheinlands opinion the assessment of the IRR by the project proponent is
justified and is based on the following facts:

TUV Rheinland was able to confirm the investment analysis and the IRR determined there-in through
the detailed spread sheet calculations forwarded by the project proponent.

The analysis presented also considers all the applicable benefits for the project activity.

3.5.3.2 Sensitivity analysis


The Guidance on Assessment of Investment Analysis requires the robustness of the conclusion arrived at to be
proved through a sensitivity analysis by varying the critical assumptions to a reasonable variation. The PP has
conducted the sensitivity analysis as mandated by para 20 of Investment guidance in EB 62 version 5 based on
the four main factors.
Variation in the
1.
2.
3.
4.

Project Cost
PLF
Tariff
O&M Cost

Guidance 21 of Annex 5 of EB 62 states that as a general point of departure, variations in the sensitivity
analysis should at least cover a range of +10% and 10%, unless this is not deemed appropriate in the context of
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the specific project circumstances. Accordingly the parameters were subject to the variation of +/-10 %. The
highest project IRR i.e. 13.17% for Reliance Clean Power Pvt. Ltd was evaluated for sensitivity analysis. It is
observed that the resultant IRR after applying the sensitivity analysis i.e., 13.17 % is also well below the
calculated benchmark of 13.25%.

Sensitivity Analysis (Project IRR)

Parameter
Project Cost
Plant Load Factor
Base Tariff
O&M Cost / MW

-10%
13.11%
9.50%
9.50%
11.63%

0%

11.42%

10%
9.93%
13.17%
13.17%
11.20%

Cross
over
point
-10.80%
10.60%
10.60%
-90%

Validation Team carried out its own independent assessment, which reveals that the project would become non
additional if
Plant Load Factor up by 10.60 %
Project cost goes down by 10.80 %
O&M cost goes down by 90 %
Base Tariff goes up by 10.6%
Plant Load Factor: Based on above results, it can be concluded that the project IRR of the project activity is
not crossing the benchmark even with 10% increase in the electricity generation i.e., PLF. PLF considered by
the project participant is appropriate and conservative as already discussed above. Project IRR is crossing the
benchmark if PLF is increased by 10.60% and it is very unlikely.
Project cost & O&M Cost: Also even with decrease in the project cost by 10% or O&M cost by 10% of the
project activity is not crossing the benchmark for the project activity. Actual project cost is validated from EPC
contract /P12-2(b)/ raised for the project activity and it is found that actual project cost is reduced by 4.206%
than the project cost as per offer letter /P12-1/. However, PP carried out sensitivity on project cost for +/-10%
conservatively. Hence any reduction in the cost is hypothetical
Moreover O&M cost is based on CERC (Terms and Conditions for Tariff determination from Renewable Energy
Sources) (First Amendment) Regulations, 2010 (p.39) /B05/. With the country experiencing inflation at the rate
of ~5% p.a. any reduction in O&M cost is ruled out.
Tariff: The tariff is governed by signed EPA /P12-09/. The considered Tariff is already conservative and
therefore any increase in tariff is unrealistic.
This is found in line with paragraph 21 Annex 05 of EB 62. Hence, due to the foregoing, it is concluded that the
project activity is additional and it is found to be financially not viable.

3.5.4 Barrier analysis


Project additionality is based on the investment analysis, hence this is not applicable.

3.5.5 Common practice analysis


For the purpose of common practice analysis, project developer has chosen all power generating projects
under operation as on the start date of the project with a capacity ranging from 22.5 MW to 67.5 MW
(installed capacity of the project being 45 MW) in the country i.e. India (geographical region considered as
default), which is in line with the requirement of tool for demonstration and assessment of additionality
(version 06), checked and confirmed by the validation team As per the PDD there were in all 697 power
plants that deliver same output or capacity within the applicable output range as verified from the provided
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references /P02/, /B12/. Furthermore validation team confirms that there are 4 wind projects engaged in
power generation using wind power technology (ranging from 22.5 MW to 67.5 MW). Therefore, number
of plants that applies technology different from the technology proposed for the project activity (N diff) is
concluded as 693 (i.e., 697-4). Therefore F = 1- (693/697) = 0.006. Since F is 0.006 (less than 0.2),
validation team confirms that the project activity is not a common practice in the country. The details of the
projects, the source of data and the calculations are given in the PDD /P02/ and validation team based on
review of PDD /P02/ and used data source /B12/ confirms that demonstration of common practice analysis
in the PDD is appropriate and correct.

3.5.6 Conclusion of assessment of Additionality


The CDM was seriously considered by the PP. The evidences were transparently reviewed by the validation
team and considered to be effective. Investment analysis and sensitivity analysis clearly demonstrate that the
proposed project activity is financially unattractive. Common practice analysis was carried out showing that the
proposed project activity is financially unattractive. Therefore, the proposed project activity is not business-asusual, i.e. the proposed project activity is additional.

3.6 Monitoring
The monitoring plan is included in Section B.7 of the PDD /P02/ based on the approved monitoring
methodology ACM0002/Version 13 /B02/ titled Consolidated baseline methodology for grid-connected
electricity generation from renewable sources and is correctly applied to the CDM project activity. This
methodology /B02/ stipulates that monitoring shall consist of monitoring of Quantity of net electricity
generation supplied by the project plant to the grid in year y. This confirms the requirement of 122 of VVM
ver 01.2 /B01/.
The project monitoring plan is in compliance with the monitoring methodology ACM 0002 (version 13.0.0).
It is DOEs opinion, that the project participant is able to implement the monitoring plan.

3.6.1 Parameters determined ex-ante


The project adopts the ex-ante calculation of emission factor of the grid. The OM and BM are calculated as
fixed factors for the crediting period by choosing data vintage based on ex-ante data published by CEA /B06/.
The parameters for determining the GHG emissions reductions have been clearly demonstrated in section
B.6.2.of the PDD /P02/. The combined margin emission factor for the NEWNE grid of India has been calculated
to be 0.9486 tCO2 / MWh.
The validation team has verified the value used against the sources and conclude that all relevant parameters to
calculate the GHG emissions reductions of the project have been sufficiently considered and the value of the
parameters are real, measureable and conservative.
The validation team confirms that all relevant parameters have been sufficiently considered and the values of the
parameters are real, measureable and conservative.

3.6.2 Parameters monitored ex-post


The data required to be monitored ex-post include:
=> Quantity of net electricity exported to the grid by the project activity in year y (EGexport)
=> Quantity of net electricity imported from the grid by the project activity in year y (EGimport)
=> Quantity of net electricity generated and fed into the grid in year y by the project plant (EGfacility,y)
The PDD have mentioned these monitoring parameters in section B.7.1 accordingly in the PDD /P02/, PP has
defined that Measurement methods and procedures in section B.7.1 of the PDD in line with the requirement of
PDD filling guideline.

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Monitoring plan related to electricity metering consists of two parameters monitoring representing metering of
export and import electricity at the 32 kV side of the sub-station by one main and check meters dedicated to
project activity.
Quantity of net electricity generation supplied by the project plant/unit to the grid in year y will be calculated as
difference of exported and imported electricity which are directly metered in an export-import meter (bidirectional meter). The export and import will be measured continuously and recorded monthly. PDD /P02/
explicitly mentions that measurement results can be cross checked with records for sold electricity, which is in
line with the requirement of applied meth /B02/ and hence acceptable to the validation team.
According to the approved methodology ACM0002 version 13, following parameter will be monitored:
Sl. No.

Parameters

EGfacility,y

Description

Measurement method and


monitoring equipment

Validation team based on review


Quantity of net electricity generation
of PDD /P02/ confirms that
supplied by the project plant/unit to the
EGfacility,y is calculated parameter
grid in year y
and can be obtained by
subtracting EGImport from EGexport.
The Parameters EGImport and
EGexport are measured parameters.
Meters of Accuracy class 0.2S
will
be
used
for
the
measurement.
Continuous
measurement and at least
monthly recording shall be done.

In summary, the validation team is convinced of compliance of the monitoring plan with the requirements of the
monitoring methodology of ACM0002 (version 13). During the on-site assessment, the validation team
interviewed the PP that the monitoring arrangements described in the monitoring plan are feasible within the
project design. The emission reductions resulting from the proposed CDM project activity can be reported ex
post and verified.

3.6.3 Management system and quality assurance


Steps undertaken to assess the monitoring plan
Compliance of the monitoring plan with the approved methodology
According to the PDD /P02/, the projects monitoring plan outlines the followings: Monitoring parameters: the monitoring parameter of the project includes of net electricity generation
supplied by the project plant/unit to the grid in year y (= export import) by the project activity as
described in section B.7.1 of the PDD /P02/.
Operational and management structure: management structure is illustrated for the CDM project
monitoring;
Monitoring Equipment and Relative Location: metering equipment to monitor export and import of
electricity (to calculate of net electricity generation supplied by the project plant/unit to the grid in year
y)
Quality Control and Data Archive: arrangement of meter calibration; archiving of the data collected
during monitoring; and collection of monitored data and report preparation.
Quantity of net electricity generation supplied by the project plant/unit to the grid in year y is monitored as per
the requirement of monitoring methodology (p15 of 19) /B02/ applied for the project activity and hence
confirms compliance of 123(a) of VVM ver 01.2 /B01/.
Implementation of the plan

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According to document review in the PDD /P02/ and on-site interviews with the representatives of the PP,
detailed monitoring procedures, monitoring structure, management team, monitoring items and functions are
clearly demonstrated in the PDD which will enable subsequent verification of the projects emission reductions
in line with the applied methodology. The validation team confirms that as per 24 of EB 23, the specific
uncertainty levels, methods and associated accuracy level of measurement instruments and calibration
procedures used for various parameters and variables are identified in the PDD /P02/, along with quality
assurance and quality control procedures. The accuracy class and the method and frequency of calibration of the
electricity meters have been provided in the PDD /P02/. All the monitored data will be archived until 2 years
after the crediting period to facilitate cross-checking during the crediting period.
Hence the validation team considers that the PP is capable to implement the monitoring plan and hence confirms
compliance of 123(b) of VVM ver 01.2 /B01/.

3.7 Sustainable Development


The host partys DNA, Ministry of Environment and Forests of India has confirmed the contribution of the
project to the sustainable development in India according to the Letter of Approval for the Project /P03/, which
was checked by the validation team to be valid. On the other hand, many local peoples were engaged
temporarily in the project construction and increased their incoming. Also the project will provide clean energy
locally and displace pollutions generated in fossil fuel fired power plants by using wind energy.
In conclusion, the Validation Team is of the opinion that the project activity is in full compliance with all
applicable requirements for the CDM by leading to emission reductions additional to what would have
otherwise occurred, providing for reliable and measurable emission reductions with sustainable development in
India through improvement of environmental condition, reduction of air pollutants.

3.8 Environmental Impacts


The project activity is a 45 MW wind power plant. Referring to 132 of VVM ver 01.2, validation team based
on official memorandum dated 13/05/2011 /B07/ issued by Ministry of Environment and Forests (MoEF),
Government India and using sectoral expertise concluded that the host party i.e. India does not require prior
environmental clearance for grid connected wind project. Hence project activity is in compliance with 131 of
VVM ver 01.2 /B01/.

3.9 Local Stakeholder Consultation


In line with the public notice, meeting was held in Shri Sai Mangal Karyalay, Tal. Jat, Dist. Sangli, Maharashtra
on 30/05/2011. The meetings were attended by the Village administrators (Talathi), Sarpanch, Panchayat Samiti
and Gram Panchayat members, representatives of EPC Contractors, local farmers and Representatives from PP
which was prior to the publication of PDD on the UNFCCC website (17/08/2011 to 15/09/2011).
The validation team noted that all the relevant stakeholders were identified are in line with the definition of
stakeholders as per latest version of CDM Glossary of terms /B04-1/. The local stakeholders identified by the
PP were Village administrators (Talathi), Sarpanch, Panchayat Samiti and Gram Panchayat members,
representatives of EPC Contractors, local farmers and others who get affected by the project activity either
directly or indirectly.
The PP has utilized appropriate media to invite these stakeholders; advertisement was published in the local
Marathi daily Saakal, dated 19/05/2011 and personal invitation to local panchayat offices, school expressing
their plan to develop the proposed 200 MW grid connected wind power project as a CDM project activity in
Vashpet, Sangli District, Maharashtra, India and called for the suggestions/comments of the local stakeholders
/P12-1/. A summary of the comments received and a note on how due account was taken of the concerns raised
in the above public consultation are included in section E of the PDD. This also states that appropriate
immediate responses were provided to them. From the background of the stakeholders, it was reasonably
believed that the general attitude of the local residents, who were likely to be affected by the project, was
positive towards the project and same has been verified from the onsite visit interviews with the local
stakeholders. Validation team reviewed all relevant information of local stakeholder consultation meeting /P12/
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01 997 9105065200

and confirms that the LSC meeting meets to the requirement of 127 of VVM, ver 01.2 /B01/. The validation
team confirms that the process for conducting the local stakeholders meeting is adequate and credible.
During the on site visit, representatives from the local community were interviewed. In general, the interviewees
showed adequate understanding of the nature of the project and felt that there would be no adverse impacts on
the environment arising from the project activity. The interviewees also considered that the local economy
would be benefitted from the project activity.
From the section E.2, E.3 and from document review /P12/ of the PDD, it seems that the all the comments
raised by the stakeholders were addressed by the PP.
TUV Rheinland considers the local stakeholder consultation carried out adequately.

3.10 Comments by Parties, Stakeholders and NGOs


The
PDD
version
01
of
01/08/2011
was
made
publicly
available
(http://cdm.unfccc.int/Projects/Validation/DB/UBZFC8UFCON0FIFG9EWX9OUTUYLZJ2/view.html)
17/08/2011 to 15/09/2011 in order to invite comments from public stakeholders.

on
from

Public comments have been received during that period as provided in the table below.

Comment by: sud, sudcdm1@gmail.com


Accredited NGO

Party

Comment
1)
DOE to ensure that the PDD values are
consistent and ensure that the CDM project is a
genuine project.
2)
DoE to check the Detailed Project
Report and Feasibility Report which is submitted
to the other agencies and Banks by Project
owner and ensure that the values match with the
DPR/FR submitted to DoE also.

Stakeholder
Consideration
DOE has ensured that the PDD values are
consistent and the CDM project is a genuine
project.
As per usual practices, wind turbine projects are
being appraised on the basis of site parameters
provided by the turbine technology supplier, wind
turbine estimation report by third party as well as
past performance data of nearby operational wind
farms. Hence no need to prepare DPR/FR specific
to banks.

It is not mandatory to prepare DPR/FR specific to


the project for the appraisal of the project.
3)
Careful study must be done so that the The project activity has not prepared DPR/FR
DPR/FR is not in different versions made and specific to the project, so the comment is irrelevant.
submitted with different purposes to different
agencies, which is totally unacceptable, illegal
and unethical.
4)
Project owner should show some The project activity has not prepared DPR/FR
undertaking letter from bank manager to DoE specific to the project, so the comment is irrelevant.
stating that both DPRs are same. These kinds of
letters should not be accepted and entertained by
DoE at face value, but must be checked
independently. While collecting the DPR/FR
from banks and other agencies, all DPR/FR
pages should be counter signed by Banks and
other agencies so that the real DPR/FR given to
other parties by the PP/Consultant is same as the
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one submitted to DOE.


5)
DPR/FR values must be probed fully.
DOE must take a written undertaking from the
PP/Consultant about the list of parties to whom
this DPR/FR is submitted and for what purposes.
Then DOE should cross check with all the
parties and confirm that the same DPR/FR is
submitted to all the parties correctly without any
changes. DOE must not accept any reports and
undertakings from PP/Consultant. DOE must
make independent evaluation and use totally
different parties without informing the PP or
Consultant to cross check the facts.
6)
DOE to write to the party who
prepared the DPR/FR which is submitted to the
banks and other agencies and the same is
verified against the one submitted to the DOE by
PP/Consultant.
7)
DOE must not entertain this project
any more if found the DPR/FR is tamprered with
at any point in time. PP can not give different
DPRs and FRs. They must submit only the one
given to Banks and other agencies while
obtaining loans and decision making time.
8)
Has the PP considered the CDM
revenues while envisaging the project? Without
CDM the project was not viable, is it right? This
project is having a debt component? Then how
bankers or lenders gave the loan? Have the
bankers or lenders considered the CDM
revenues while agreeing to give loan to this
projects? If not this project should be rejected
right away by DOE by terminating the contract
forthwith. If yes, where is the proof? What is the
date of the evidence document from bank? Is
this document printed now a days or earlier.
DOE to independently check the same. If the
document is available from Bank it must be
checked from all angles so that it is genuine and
not forged and date changed by putting back
dated. This is normally done, DOE to be aware
of this please. Please check the communication
the PP had during that time with banks, emails
and postal receipts and the weights and dates
mentioned on the receipts. Do not believe in
courier bills and receipts since these can be
cooked up easily. Insist on government owned
postal service receipts only. If the project is fully
equity project then on what basis the PP has
invested full equity in to the project while
considering the CDM revenue? DOE to check
the same in detail and bring out the facts. Is
Rev No.: 02 (13/09/2012)

The project activity has not prepared DPR/FR


specific to the project, so the comment is irrelevant.

The project activity has not prepared DPR/FR


specific to the project, so the comment is irrelevant.

The project activity has not prepared DPR/FR


specific to the project, so the comment is irrelevant.

The consideration of CDM is imperative to this


project and requirement of the same has been
demonstrated in section B.5 of the PDD and in the
section B.5.1 of this report.

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01 997 9105065200

there any past record of this PP to invest or not


to invest at returns what he is talking about in
this project? Proper evidences must be reviewed
and digged out by the DOE and take decision on
the project based on established facts. Do not
ask documents from PP, DOE to collect the
same from different sources to do independent
evaluation.
9)
Is the project equipment purchased
second hand equipment or sourced from cheap
foreign sources? If yes, the issue must be probed
by DOE since invoices will invariably be
inflated and forged. Total project costs
mentioned by PP will not be the same as
originals. Hence no additionality. These facts
must be probed in full by DOE by checking all
documents and money transactions along with
bank statements and certified accounts by a
legally acceptable financial analyst.
10)
From DOE side which auditor has
done marketing and business development for
acquiring this business of validating this project?
With whom he or she was co-ordinating at PP or
CER buyer? The same person who has done the
marketing and business development to acquire
the business do validation or participate in any
manner what so ever in the validation process?
One cannot do like that. It is against the
accreditation rules and norms followed since
ages. DOE should send auditors from different
offices or countries to do this validation audit.
DOE must take care of impartiality and
accreditation rules. Due to the targets set by the
DOE managements auditors are doing marketing
and meeting clients and giving promises that the
project will be taken care. Is it acceptable and
fair? This must be stopped. No auditor should do
marketing. Only non-auditing staff should do
marketing. DOE to ensure the same please.
11)
If applicable only: Is these machines,
equipment was a part of any bundle of CDM
activity envisaged and developed earlier. DOE to
check the same through independent sources
also. Once some bundles are non-additional and
getting negative validation from a DOE, PP is
rolling out the same project as an individual
project which is not a CDM project at all. DOE
to verify the same from independent sources and
also take undertaking in the form of an affidavit
from the PPs that any misrepresentation or false
statement with respect this would attract strict
legal action from UNFCCC and DOE.
Furthermore the registered project must be deRev No.: 02 (13/09/2012)

The purchase order issued to wind turbine


technology supplier has been provided to validator
at the time of validation, which clearly indicates
that the equipments purchased are new. The
manufacturing facility of the equipment supplier is
ISO 9001 certified and the equipments are in
accordance with ISO quality manuals.
The project costs verified with the purchase order
issued to the technology supplier.
The validation has been carried in accordance with
VVM standards and project specific guidelines and
protocols of UNFCCC.
The validation team and their competencies are
mentioned in the FVR.

The project is not a bundle project which is clearly


demonstrated in the PDD, so the comment is
irrelevant.

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01 997 9105065200

registered in case of any future findings


contradicting the submissions made by the
project owner.
12)
DOE to be more careful so that this is a
genuine CDM project. What is the exact project
cost? The project cost is covering what? Each
value considered must be validated with proof.
The machinery is second hand purchased or
fresh and new from an OEM? In either case
DOE to check all the quotations, proposals,
purchase orders, invoices, way bills, transport
bills, proof of payments like bank statements.
DOE to check with banks by way of written
confirmation the amount transacted, to whom
the money is paid, when the money is paid, is
the party paid is the correct party as shown in the
purchase orders. It may so happen that the
values, party names, dates are fabricated and
misrepresented in this project. DOE should
terminate their contract for this project
immediately. This is the only way out to protect
the value of CDM process. If the PP is
purchasing second hand or second quality
equipment and inflating the purchase order
values and invoices, this must be probed
thoroughly and real values to taken for
additionality calculation. Then Im sure the
additionality is not there at all in such a
situation.
13)
How is the base line defined in this
project? Is Base line hypothetically defined with
no proper evidences and proper justification? In
such case, DOE cannot take the base line as
suggested by the PDD. Please check that there
are real emission reductions beyond the real and
factual base line. It may so happen that this
project qualifies for no CERs. DOE cannot
assume values and things as giving by this PP.
Whatever values are considered throughout the
project in all documents including the real DPR
(not the one prepared for CDM, the one given to
the banks and others), they must be validated,
verified and double checked. Do not ask PP for
DPR. Ask the parties who have been given DPR
by the PP. Get directly from the bank and others
by each page of the DPR and Feasibility report
signed. Such document can be considered as a
real DPR or FR. UNFCCC CDM process cannot
be degraded by fabricating and misinterpreting
the project base line and additionality.
14) Page 5 of PDD states, There are no
photovoltaic power generation projects operating
in India. Project activity is the first-of-its kind to
Rev No.: 02 (13/09/2012)

The references for the assumptions and parameters


provided for the additionally check has been
described in the PDD and financial spread sheet,
which is inline with the latest additionality
guidance requirement.

The baseline determination of this project is as per


applicable version of approved methodology
ACM0002.

The project is a wind power project and the error of


stating photovoltaic power project has been
corrected.
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01 997 9105065200

be implemented in India. This is presumably a


wind power project. How is photovoltaic power
generation concerned with wind power project?
15) This project should be eligible for additional The depreciation has been corrected as per
depreciation of 20% in the first year. It is not Schedule XIV of the Companies Act 1956 and
clear why the PP has not taken into standard accounting practices in India.
consideration the additional depreciation
16) DOE should check whether this project is an
IPP as MAT has been provided in the
assumptions. If it is not, then MAT is not
applicable
17) Benchmark is based on expectation of PP.
Guidelines does not permit expectation of PP
as benchmark

Rev No.: 02 (13/09/2012)

The project activity is an Individual Power


Producer (IPP). MAT is considered as per
applicable Finance act and standard accounting
practices in India.
Term loan rate has been considered as a
benchmark, the proof of the same is submitted to
DOE, which is inline with guidance 12, Annex 5
EB 62.

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Appendix A
CDM Validation Protocol
Greenhouse Gas Emission Reductions Through Wind Energy Technology
- Reliance Clean Power Pvt. Ltd.
in
India
Report No. 01 997 9105065200

Rev 02 (13/09/2012) ,

Assessment Version No.:XX

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Table 1:
Validation requirements
(based on 37 of the CDM Modalities and Procedures and on CDM Validation and Verification Manual version 1.2)
Findings, comments,
Checklist question
Ref.
MoV5
references, data sources
1.
Approval(VVM V E.1)

Draft
conclusion

Final
conclusion

1.1 Have Letters of Approval have been provided from


all involved Parties?

/P01/

DR

LoA from the host DNA is pending. In this


context CAR-01 has been raised.

CAR-01

OK

1.2 Are all Parties, who issued the LoA, Parties to the
Kyoto Protocol and are this, stated in the LoA?

/P01/

DR

LoA from the host DNA is pending. In this


context CAR-01 has been raised.

CAR-01

OK

1.3 Is every LoA from the Parties involved issued by an


organisation listed as Designated National
Authority (DNA) on the UNFCCC web site?
1.4 Is the participation in the CDM project activity
voluntary and is this stated in all LoAs?

/P01/

DR

LoA from the host DNA is pending. In this


context CAR-01 has been raised.

CAR-01

OK

/P01/

DR

LoA from the host DNA is pending. In this


context CAR-01 has been raised.

CAR-01

OK

1.5 Is the LoA unconditional with respect to 1.2 to 1.4?

/P01/

DR

LoA from the host DNA is pending. In this


context CAR-01 has been raised.

CAR-01

OK

1.6 Is the title of the CDM project activity as given in


the PDD identical with the title given in all LoAs
and Modalities of Communication?
1.7 If any of provided LoAs contains additional
specification of the CDM project activity (PDD
version number, validation report version number,
amount of ER, etc.) are those specifications valid
and consistent with other documents?

/P01/

DR

LoA from the host DNA is pending. In this


context CAR-01 has been raised.

CAR-01

OK

/P01/

DR

LoA from the host DNA is pending. In this


context CAR-01 has been raised.

CAR-01

OK

MoV = Means of Validation, DR = Document Review, I = Interview, www = internet search.

Rev 02 (13/09/2012) ,

Assessment Version No.:XX

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Validation Report

1.8 Does the project activity involve any public funding


from Annex I Parties? If yes, has Annex I Party
provided a written confirmation that the use of such
funding does not lead to the diversion of the official
development assistance.
1.9 Is the MOC provided in line with the latest template
available from the UNFCCC

01 997 9105065200

/P01/

DR

As per the section A.4.4 and annex 1 of the


PDD there is no public funding from the
annex 1 party for the project activity.

Yes, the MOC provided is in line with the


latest template available on the UNFCCC
website.
Yes, the MOC correctly filled and signed by
authorized signatories identifying the focal
point.
Yes, the written confirmation obtained by the
PP stating the authorization, specimen
signatures and personal details are valid and
accurate.

OK

/P04/

DR

/P04/

DR

/P04/

DR

2.1 Are the Parties and project participants (PP) listed


in the section A.3 of the PDD correctly and is this
information consistent with the contact details
provided in Annex 1 of the PDD?
2.2 Has every Party involved approved the
participation of each corresponding PP, either by
means of a LoA or by a separate written document?

/P01/

DR

Subject to closure of CAR-01.

CAR-01

OK

/P01/

DR

The project is a unilateral project and no


annex 1 party is involved. Subject to closure
of CAR-01

CAR-01

OK

2.3 Do all participating Parties fulfil the participation


requirements as follows:
a) Party has ratified the Kyoto Protocol
b)Party has designated a Designated National
Authority
c) The assigned amount has been determined

/P01/

DR

CAR-01

OK

1.10 Is MOC correctly filled and signed by authorized


signatories identifying the focal point?
1.11 Is the written confirmation obtained by the PPs
stating the authorization, specimen signatures and
personal details are valid and accurate?

2.

OK

OK

OK

Participation (VVM V E.2)

Rev 02 (13/09/2012) ,

The project is a unilateral project and no


annex 1 party is involved. Subject to closure
of CAR-01

Assessment Version No.:XX

Page 45

Validation Report

2.4 Do the letters of approval meet the following


requirements?
a) LoA confirms that Party has ratified the Kyoto
Protocol
b) LoA confirms that participation is voluntary
c) The LoA confirms that the project contributes to
the sustainable development of the host country?
d) The LoA refers to the precise project activity
title in the PDD

3.

01 997 9105065200

/P01/

DR

CAR-01
The project is a unilateral project and no
annex 1 party is involved. Subject to closure
of CAR-01

Project Design Document (VVM V E.3)

3.1 Is the PDD presented for validation based on the


latest template available at the UNFCCC website?

/P01/
/B04/

DR

Yes, PP has used the latest available version


of PDD template available on the UNFCCC
website. This has been checked by the
validation team by referring to the following
website.
http://cdm.unfccc.int/Reference/
PDDs_Forms/PDDs/index.html

OK

3.2 Has the PDD been established in accordance with


the CDM requirements for completing PDDs issued
by the CDM EB?

/P01/
/B04/

DR

No, the PDD has not been established in


accordance with the requirements for
completing the PDD. Hence CAR-02, CAR03 and CAR-04 have been raised.

CAR 02,
CAR 03,
CAR 04

4.

OK

OK

Project Description (VVM V E.4)

Rev 02 (13/09/2012) ,

Assessment Version No.:XX

Page 46

Validation Report

01 997 9105065200

4.1 Does the PDD contain a description, which provides


the reader with a clear understanding of the precise
nature of the project activity and the technical
aspects of its implementation?
4.1b) Is the description (incl. any process flow-charts,
Spreadsheets etc.) complete, coherent and
consistent with the provisions of the monitoring
plan?
4.1c) Is the projects location clearly defined?
4.2 In the case of greenfield project activity, is the
project design described sufficiently by means of
specifications, drawings and manuals?

/P01/

DR

The PDD does not provide a description


CAR-05,
which provides the reader with a clear
CAR-06,
understanding of the precise nature of the
CL-01, CL-02,
project activity and the technical aspects of its
implementation. CAR-05, CAR-06, CL-01, CL-03, CL-04,
CL-02, CL-03, CL04, CL-05, CL-06, CL-07 CL-05, CL-06,
and CL-08 have been raised.
CL-07, CL-08

OK

/P01/

DR
I

Project activity is a green field project


CAR-05,
activity.
CAR-06,
Subject to closure of CAR-05, CAR-06, CL- CL-01, CL-02,
01, CL-02, CL-05, CL-06 and CL-07
CL-05, CL-06,
CL-07

OK

4.3 Does the project activity reflects current good


practices, uses state of the art technology or would
the technology result in a significantly better
performance, than any commonly used technologies
in the host country?

/P01/

DR

The project activity uses state of the art


CAR-05,
technology or would the technology result in
CAR-06,
a significantly better performance, than any
CL-01, CL-02,
commonly used technologies in the host
country and the same has been described in CL-05, CL-06,
CL-07
section A.4.3 of the PDD.
Subject to closure of CAR-05, CAR-06, CL01, CL-02, CL-05, CL-06 and CL-07

OK

4.4 In cases where the project activity involves the


alteration of an existing installation or process, does
the PDD provide a clear description of the
differences between the project and the pre-project
scenario?

/P01/

DR, I

Subject to closure of CAR-05, CAR-06, CL01, CL-02, CL-05, CL-06 and CL-07

OK

Rev 02 (13/09/2012) ,

Assessment Version No.:XX

CAR-05,
CAR-06,
CL-01, CL-02,
CL-05, CL-06,
CL-07

Page 47

Validation Report

4.5 What type is the project?


i) Project in existing facility or utilizing existing
equipment(s)
ii) Project is either a large scale project or a nonbundled small scale project with emission reductions
exceeding 15 000 tCO2e per year. In this case, a site
visit must be performed.
iii) Project is a bundled small scale project, with
each project in the bundle with emission reductions
not exceeding 15,000 tCO2e per year. In such case
the number of physical site visits may be based on
sampling, if the sampling size is appropriately
justified through statistical analysis.
iv) The project is an individual small scale project
activity with emission reductions not exceeding 15
000 tCO2e per year. In this case, DOE may not
conduct a physical site visit as appropriate.
v) Greenfield project
4.6 How was the design of the project assessed?
i) Physical site inspection
ii) Reviewing available designs and feasibility
studies
4.7 Does the project qualify as a small scale CDM
project activity as defined in paragraph 6(c) of
decision 17/CP.7 on the modalities and procedures
for the CDM?
4.8 Is the small scale project activity a debundled
component of a larger project activity in accordance
with the rules defined in appendix C of the
simplified modalities and procedures for smallscale CDM project activities?

5.
5.1

01 997 9105065200

PDD

PDD

DR

DR
OSV

The project activity is a large scale project


activity with emission reductions exceeding
15 000 tCO2e per year.

OK

The project design has been assessed by both


physical site inspection and Reviewing
available designs and feasibility studies.

OK

PDD

DR

The proposed project activity is not a small


scale project activity; hence this check list
question is not applicable.

--

PDD

DR

The proposed project activity is not a small


scale project activity; hence this check list
question is not applicable.

--

Baseline and Monitoring methodology(VVM V E.5)


General requirements

Rev 02 (13/09/2012) ,

Assessment Version No.:XX

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Validation Report

5.1.1 Is the methodology used in the project activity


approved by the CDM EB and is the selected
version still valid?

01 997 9105065200

/P01/
/B02/
UNFCCC
Website

DR

The proposed project activity uses approved


methodology ACM0002, version 12.1.0. The
selected version is still valid however CL-09
has been raised.

CL-09

DR

The proposed project activity is not a small -scale project activity; hence this check list
question is not applicable.

DR

The proposed project activity is not a small -scale project activity; hence this check list
question is not applicable.
Subject to closure of CAR-07 and CL-09
CAR-07,
CL-09

OK

5.2 Applicability of the selected methodology


5.2.1 Does the project activity qualify under the criteria
PDD
for small-scale CDM project activities set out in
6 (c) of decision 17/CP.7 and Annex II of the
Modalities and Procedures for the CDM?
5.2.1a) If the project applies a small-scale methodology,
does the project also comply with the general
guidelines to SSC CDM methodologies, which
provides guidelines on equipment capacity,
equipment
performance/lifetime,
baseline
identification for type-II/III Greenfield project
activities, sampling and other monitoring-related
issues?
5.2.1.1 If yes, does the PDD extensively demonstrates
PDD
and confirms that the small-scale project activity
is not a debundled component of a larger project?
5.2.2 Are all applicability conditions of the selected
PDD
baseline and monitoring methodology and all
tools involved satisfied by the project activity?
5.2.3 Is the selection of the applied baseline and PDD
monitoring methodology justified?
5.2.4 Is the selected methodology correctly quoted in PDD
all related documents?
5.2.5 Does the PDD sufficiently describe all the GHG PDD
emission sources or sinks occurring as a result of
project activity, which have not been accounted
for under the selected methodology and are
expected to contribute more than 1% of the
overall expected average annual emission
reductions?
Rev 02 (13/09/2012) ,

DR

DR
DR
DR

Subject to closure of CAR-07 and CL-09


have been raised.
Subject to closure of CAR-07 and CL-09
have been raised.
OSV interview with the PP and DR of the
project activity does not reveal existence of
any GHG emission source which have not
been accounted for under the selected
methodology and are expected to contribute
more than 1% of the overall expected average
annual emission reductions.

Assessment Version No.:XX

CAR-07,
CL-09
CAR-07,
CL-09
OK

OK
OK
OK

Page 49

Validation Report

5.3

01 997 9105065200

Project boundary

5.3.1 Does the PDD correctly describe the project


boundary? Are they clearly defined and in
accordance with the methodology?

PDD

5.3.2 Does the PDD correctly indicate and describe the


emission sources and sinks of GHG gases that are
included in the project boundary?
5.3.3 In cases where the methodology allows project
participants to choose whether a source or gas is
to be included in the project boundary, is the
choice explained and justified by PPs?
5.3.4 Does the project involve other emissions sources
not foreseen by the methodologies that may
question the applicability of the methodology?
Do these sources contribute with more than 1% of
the estimated emission reductions of the project?

PDD

5.4

DR

DR

No, PDD does not correctly describe the CL-10


project boundary in accordance with the
methodology. In this context CL-10 has been
raised.
Subject to closure of CL-10
CL-10

OK

OK
PDD

DR

Subject to closure of CL-10

CL-10
OK

PDD

DR

No, the project does not involve other OK


emissions sources which is not foreseen by
the methodologies that may question the
applicability of the methodology.

DR

Yes, the procedure contained in the applied


methodology has been correctly applied and
documented in section B.4 of the PDD.
Subject to closure of CL-11
The identified baseline scenario in section
B.4 of the PDD is plausible.
Yes all assumptions stated in the PDD have
been presented in a transparent and
conservative manner.
Yes, the selected methodology requires the
use of tool of to calculate the emission factor.
However CL-09 has been raised in this
context.
Subject to closure of CL-09

Baseline identification

5.4.1 Has the procedure contained in the selected


methodology to identify the most reasonable
baseline scenario been applied correctly and
documented in the PDD?
5.4.1.1 Is the identified baseline scenario plausible?
5.4.1.2Are all assumptions stated in a transparent and
conservative manner?
5.4.2 Does the selected methodology require the use of
tools and does PDD reflects that correctly?

5.4.2.1 Were all the tools applied correctly?

Rev 02 (13/09/2012) ,

PDD

PDD

DR
DR

PDD
DR
PDD
PDD

DR

Assessment Version No.:XX

CL-11
OK
OK
OK

CL-09
OK
CL-09

OK

Page 50

Validation Report

5.4.3 In case the methodology requires several


alternative scenarios to be considered in the
identification of the most reasonable baseline
scenario, have all scenarios been considered and
have no reasonable alternative scenario been
excluded?
5.4.3.1 Has the choice of the baseline scenario been
done using conservative assumptions?
5.4.4 Is the identified baseline scenario reasonable
according to the assumptions, calculations and
rationales used in the PDD and other reference
sources?
5.4.6 Does the PDD describe how the national and
sectoral policies, macro-economic trends and
political aspirations relevant to the baseline
scenario have been identified and considered in
the PDD?
5.4.7 Does the PDD provide a verifiable description of
the identified baseline scenario, including a
description of the technology that would be
employed and/or the activities that would take
place in the absence of the project activity?

5.5

01 997 9105065200

DR

The applied methodology (ACM0002) does OK


not require identification of alternative
scenarios to identify the most reasonable
baseline scenario, however PDD describes
the alternatives.

DR

Yes the choice of the baseline scenario been


done in a transparent and conservative
manner.
Yes the identified baseline scenario is
reasonable according to the assumptions,
calculations and rationales used in the PDD
and other reference sources.
Validation team concluded that the national
and sectoral policies relevant to the baseline
scenario have implemented after November
2001, hence need not to be considered in the
development of baseline.
Yes, the PDD provide a verifiable description
of the identified baseline scenario as per the
applied baseline and monitoring methodology
in section B.4 of the PDD.

PDD

PDD
DR
PDD
DR
PDD

DR
PDD

OK

OK

OK

OK

Algorithm and/or formulae used to determine emission reductions

5.5.1 Are all calculations applied and documented


according to the selected methodology and in a
complete and transparent manner to calculate
emission reductions from the project activity?
5.5.1b) Are correct units applied and consistency
between parameter dimensions and parameter
value ensured?

Rev 02 (13/09/2012) ,

DR

PDD

Yes, PP has correctly presented all formulas CAR-08


given in the applied methodology in the PDD
including the units. Subject to closure of
CAR-08.

Assessment Version No.:XX

OK

Page 51

Validation Report

5.5.2 In case the methodology allows a selection


between different options for equations or
parameters, has adequate justification been given
and have the correct equations and parameters
been used, in accordance with the methodology
selected?
5.5.3 In case some data and parameters will not be
monitored throughout the crediting period, but
have already been determined and fixed, are all
data sources, assumptions and calculations
correct, applicable to the proposed CDM project
activity and conservative?
5.5.4 In case data and parameters will be monitored on
implementation and hence become available only
after validation of the project activity, are the
estimates provided in the PDD for these data and
parameters reasonable?
5.5.5 Have the major risks and uncertainties, which can
influence the emission reduction estimates, been
identified and addressed in the PDD?
5.5.6 Are the calculations documented according to the
approved methodology and in a complete and
transparent manner in calculating the project
emissions? Have conservative assumptions been
used when calculating the project emissions?
5.5.7 Are uncertainties in the project emission estimates
properly addressed?

5.6

01 997 9105065200

DR
PDD

Yes the PDD utilises the correct equations CAR-08


and parameters in accordance with the
methodology selected.
Subject to closure of CAR-08.

DR

Yes, there are some parameters which have OK


been fixed ex-ante and described in section
B.6.2 of the PDD.

DR

Yes, the estimates provided for the CAR-08


monitoring parameters in the PDD are
reasonable.
Subject to closure of CAR-08.

PDD

PDD

DR
PDD

OK

OK

There is no risks and uncertainties, which can OK


influence the emission reduction estimates
from the project activity, hence not addressed
in the PDD.

DR
There is no project emission in the project
-activity as per the applied methodology.

PDD

PDD

DR

There is no project emission in the project


OK
activity as per the applied methodology.

DR

Not applicable for this project activity.

OK

DR

Same as above.

OK

Leakage

5.6.1 Has the leakage been identified and calculated


according to the approved methodology?
5.6.2 Have the leakage been addressed in complete,
conservative and substantiated manner?

Rev 02 (13/09/2012) ,

PDD
PDD

Assessment Version No.:XX

Page 52

Validation Report

5.6.3 Are uncertainties in the leakage emission


estimates properly addressed?

01 997 9105065200

PDD

DR

Same as above.

6.
Methodology-related issues for afforestation or reforestation CDM project activities
Add specific A/R requirements if applicable!
Not applicable for this CDM project
activity
7.
Additionality (VVM V E.6)
7 a) What approach/tool does the project use to assess PDD
additionality? Is this in line with the
methodology? In case of small-scale CDM project
activities, is Attachment A to Appendix B of the
simplified modalities and procedures for smallscale CDM project activities applied considering
also the Non-binding best practice examples to
demonstrate additionality for SSC project
activities.
7 b) Have the regulatory requirements correctly been PDD
taken into account to evaluate the project activity
and the alternatives? Is sufficient evidence
provided to support the relevance of the arguments
made?
PDD

O.K.

DR

The project activity is a large scale project OK


and as per the applied meth, it has utilised
additionality tool to demonstrate the
additionality.

DR

Project activity is in compliance with the OK


regulation. Furthermore, there is no
requirement to evaluate the project activity
and the alternatives as per the applied meth.

DR

Project additionality is based on the Subject to


investment analysis, which is inline with the closure of
applied meth.
CARs and
CLs raised on
investment
analysis.

7 c) What is the project additionality mainly based on


(Investment analysis or barrier analysis)?

7.1

OK

O.K.

OK

Prior consideration of the CDM (VVM V E.6.III.a)

7.1.1 Is there documented evidence provided by the


project participants on how and when the
decision to proceed with the project activity was
taken?

Rev 02 (13/09/2012) ,

/P01/,
CDM
Glossary
of terms.

DR

No, PP has not provided abstract of the MoM


of the investment decision.
CL-12 has been raised in this respect.

Assessment Version No.:XX

CL-12

OK

Page 53

Validation Report

01 997 9105065200

7.1.2 Is the starting date of the project activity, reported


in the PDD, in accordance with the Glossary of
CDM terms and CDM VVM (99)?

/P01/,
Glossary
of terms.

DR

Yes, the starting date of the project activity,


reported in the PDD, in accordance with the
Glossary of CDM terms and CDM VVM
(99)?

OK

7.1.3 Is the date stated in the provided evidence


consistent with other available evidence (e.g.
dates of construction, purchase orders for
equipment)?

/P01/

DR

The starting date of the project activity is


after 02/08/2008, PP has intimated to the
CDM EB and the host DNA regarding the
implementation of the project activity as per
EB 62 annex 13. Validation team has cross
checked the same by referring to CDM EB
website.
http://cdm.unfccc.int/Projects/PriorCDM/
notifications/index_html

OK

7.1.4 If the project was not published and the starting


date is on or after 2nd August 2008, was it
possible to receive from UNFCCC secretariat and
DNA a written confirmation that PPs previously
informed the above entities on commencement of
the project activity and of their intention to seek
CDM status?
7.1.5 For the project activities with a starting date
before 2nd August 2008 and before the actual
publication, was there enough evidence presented
to prove that PPs were previously aware of
CDM?
7.1.6 For the project activities with a starting date
before 2nd August 2008 and before the actual
publication, was there enough evidence presented
to prove that CDM benefits have been a decisive
factor in the decision to proceed with the project
activity?

/P01/,
/P09/

DR

Not applicable as the start date of the project


activity is after 02/08/2008.

OK

/P01/,
/P09/

DR

Not applicable as the start date of the project


activity is after 02/08/2008.

OK

/P01/,
/P09/

DR

Not applicable as the start date of the project


activity is after 02/08/2008.

OK

Rev 02 (13/09/2012) ,

Assessment Version No.:XX

Page 54

Validation Report

01 997 9105065200

7.1.7 Does the individual or body that took the decision


to proceed with the project activity have/had the
authority to do so?

/P01/,
/P09/

DR

Not applicable as the start date of the project


activity is after 02/08/2008.

OK

7.1.8 For the project activities with a starting date


before 2nd August 2008 and before the actual
publication, was there enough evidence presented
to prove that PPs were taking continuing and real
actions to secure CDM status for the project in
parallel with its implementation?
7.1.7 In case there is a significant gap between the start
date of the project activity and the
commencement of validation, how was it possible
for the project participant to commit funds to the
project in advance of receiving a positive
validation opinion?

/P01/,
/P09/

DR

Not applicable as the start date of the project


activity is after 02/08/2008.

OK

/P01/,
/P09/

DR

Not applicable as the start date of the project


activity is after 02/08/2008.

OK

7.2

Identification of alternatives(VVM V E.6.III.b)

7.2.1 Does the PDD identify and list credible


alternatives to the CDM project activity in order
to determine the most realistic baseline scenario,
unless
selected
approved
methodology
prescribes/identifies the baseline scenario and no
further analysis is required?
7.2.2 Does the list of alternatives include as one of the
options that the project activity is undertaken
without being registered as a CDM project
activity?
7.2.3 Does the list contain all realistic/credible
alternatives that the DOE, on the basis of its local
and sectoral knowledge, considers to be viable
means of supplying the outputs or services that
are to be supplied by the project activity?

Rev 02 (13/09/2012) ,

/P01/,
/B02/,

/P01/,
/B02/,

/P01/,
/B02/,

DR

DR

DR

This section is not applicable for the project


as baseline has been described by the applied
OK
baseline and monitoring methodology.

This section is not applicable for the project


as baseline has been described by the applied
OK
baseline and monitoring methodology.
This section is not applicable for the project
as baseline has been described by the applied
OK
baseline and monitoring methodology.

Assessment Version No.:XX

Page 55

Validation Report

7.2.4 Is the exclusion of the alternatives for legal


reasons justified?

7.3

01 997 9105065200

/P01/,
/B02/,

DR

This section is not applicable for the project


as baseline has been described by the applied
OK
baseline and monitoring methodology.

Investment Analysis(VVM V E.6.III.c)

7.3.1 Are all sources of revenues (including savings)


have been considered in the PDD and all
calculations?

/P01/,
/P07/

DR

Subjected to closure of CL-13, CL-14, CL15, CL-16, CL-17, CL-18, CL-19, CL-20, CL
-21, CL-22, CL-23, CL-24, CL -25, CL-26,
CL-27, CL-28, CL-29, CL-30, CAR-09,
CAR-10 and CAR-11.

DR

Subjected to closure of CL-13, CL-14, CL15, CL-16, CL-17, CL-18, CL-19, CL-20, CL
-21, CL-22, CL-23, CL-24, CL -25, CL-26,
CL-27, CL-28, CL-29, CL-30, CAR-09,
CAR-10 and CAR-11.

7.3.2 Is the type of investment analysis selected


correctly in the PDD? Is the choice of benchmark
analysis, investment comparison or simple cost
analysis correct?
/P01/,
/P07/

Rev 02 (13/09/2012) ,

Assessment Version No.:XX

CL-13, CL-14,
CL-15, CL-16,
CL-17, CL-18,
CL-19, CL-20,
CL -21, CL-22,
CL-23, CL-24,
OK
CL -25, CL-26,
CL-27, CL-28,
CL-29, CL-30,
CAR-09, CAR10 and CAR11.
CL-13, CL-14,
CL-15, CL-16,
CL-17, CL-18,
CL-19, CL-20,
CL -21, CL-22,
CL-23, CL-24,
OK
CL -25, CL-26,
CL-27, CL-28,
CL-29, CL-30,
CAR-09, CAR10 and CAR11.

Page 56

Validation Report

01 997 9105065200

7.3.3 Is the selected financial indicator chosen and


applied correctly? Is it on equity/project basis?
Before/after tax? Is the financial indicator in
correspondence with the benchmark?
/P01/,
/P07/

7.3.4 Is the guidance on IRR calculation and


assessment correctly applied?
Note: Means of validation should be recorded.
All input parameters need to be assessed and if possible
compared with the input parameters applied by similar
project activities. Special procedure (ICP-5-8-CDMJIg2) applies for validation of input data derived from
FSR/PDR or other governmentally approved projectspecific study. A similar approach should also be taken
for other project types.
In case the validation team is not able to cross-check
information with other similar projects activities for
one or several of the input parameters, due to limited
number of registered CDM projects being available, the
team is required to determine and describe other
information sources that are used by the validation
team to make an assessment of the reasonableness of
the respective input parameter.

Rev 02 (13/09/2012) ,

/P01/,
/P07/

DR

DR

Subjected to closure of CL-13, CL-14, CL15, CL-16, CL-17, CL-18, CL-19, CL-20, CL
-21, CL-22, CL-23, CL-24, CL -25, CL-26,
CL-27, CL-28, CL-29, CL-30, CAR-09,
CAR-10 and CAR-11.

CL-13, CL-14,
CL-15, CL-16,
CL-17, CL-18,
CL-19, CL-20,
CL -21, CL-22,
CL-23, CL-24,
OK
CL -25, CL-26,
CL-27, CL-28,
CL-29, CL-30,
CAR-09, CAR10 and CAR11.

Subjected to closure of CL-13, CL-14, CL15, CL-16, CL-17, CL-18, CL-19, CL-20, CL
-21, CL-22, CL-23, CL-24, CL -25, CL-26,
CL-27, CL-28, CL-29, CL-30, CAR-09,
CAR-10 and CAR-11.

CL-13, CL-14,
CL-15, CL-16,
CL-17, CL-18,
CL-19, CL-20,
CL -21, CL-22,
CL-23, CL-24,
OK
CL -25, CL-26,
CL-27, CL-28,
CL-29, CL-30,
CAR-09, CAR10 and CAR11.

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01 997 9105065200

7.3.5 In case project participants use values from


Feasibility Study Reports (FSR) is it possible to
verify that the period between the FSR date and
investment decision was reasonably short and
FSR values did not change materially?
/P01/,
/P07/

DR

Subjected to closure of CL-13, CL-14, CL15, CL-16, CL-17, CL-18, CL-19, CL-20, CL
-21, CL-22, CL-23, CL-24, CL -25, CL-26,
CL-27, CL-28, CL-29, CL-30, CAR-09,
CAR-10 and CAR-11.

DR

Subjected to closure of CL-13, CL-14, CL15, CL-16, CL-17, CL-18, CL-19, CL-20, CL
-21, CL-22, CL-23, CL-24, CL -25, CL-26,
CL-27, CL-28, CL-29, CL-30, CAR-09,
CAR-10 and CAR-11.

DR

Subjected to closure of CL-13, CL-14, CL15, CL-16, CL-17, CL-18, CL-19, CL-20, CL
-21, CL-22, CL-23, CL-24, CL -25, CL-26,
CL-27, CL-28, CL-29, CL-30, CAR-09,
CAR-10 and CAR-11.

7.3.6 Are all the values consistent between FSR and


PDD and are inconsistencies properly justified?

/P01/,
/P07/

7.3.7 Were all the values from FSR applicable and


valid at the time of the investment decision?

/P01/,
/P07/

Rev 02 (13/09/2012) ,

Assessment Version No.:XX

CL-13, CL-14,
CL-15, CL-16,
CL-17, CL-18,
CL-19, CL-20,
CL -21, CL-22,
CL-23, CL-24,
OK
CL -25, CL-26,
CL-27, CL-28,
CL-29, CL-30,
CAR-09, CAR10 and CAR11.
CL-13, CL-14,
CL-15, CL-16,
CL-17, CL-18,
CL-19, CL-20,
CL -21, CL-22,
CL-23, CL-24,
OK
CL -25, CL-26,
CL-27, CL-28,
CL-29, CL-30,
CAR-09, CAR10 and CAR11.
CL-13, CL-14,
CL-15, CL-16,
CL-17, CL-18,
CL-19, CL-20,
CL -21, CL-22,
CL-23, CL-24,
OK
CL -25, CL-26,
CL-27, CL-28,
CL-29, CL-30,
CAR-09, CAR10 and CAR11.
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7.3.8 Is it reasonable to assume that no investment


would be made at a rate of return lower than the
benchmark by, for example, assessing previous
investment decisions by the project participants
or some verifiable circumstances that have led to
a change in the benchmark?

01 997 9105065200

/P01/,
/P07/

DR

Subjected to closure of CL-13, CL-14, CL15, CL-16, CL-17, CL-18, CL-19, CL-20, CL
-21, CL-22, CL-23, CL-24, CL -25, CL-26,
CL-27, CL-28, CL-29, CL-30, CAR-09,
CAR-10 and CAR-11.

DR

Subjected to closure of CL-13, CL-14, CL15, CL-16, CL-17, CL-18, CL-19, CL-20, CL
-21, CL-22, CL-23, CL-24, CL -25, CL-26,
CL-27, CL-28, CL-29, CL-30, CAR-09,
CAR-10 and CAR-11.

7.3.9 Is the Investment Analysis prepared in


compliance with the latest version of the
Guidance on the Assessment of Investment
Analysis as provided by the CDM EB?
/P01/,
/P07/

Rev 02 (13/09/2012) ,

Assessment Version No.:XX

CL-13, CL-14,
CL-15, CL-16,
CL-17, CL-18,
CL-19, CL-20,
CL -21, CL-22,
CL-23, CL-24,
OK
CL -25, CL-26,
CL-27, CL-28,
CL-29, CL-30,
CAR-09, CAR10 and CAR11.
CL-13, CL-14,
CL-15, CL-16,
CL-17, CL-18,
CL-19, CL-20,
CL -21, CL-22,
CL-23, CL-24,
OK
CL -25, CL-26,
CL-27, CL-28,
CL-29, CL-30,
CAR-09, CAR10 and CAR11.

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7.3.10 Do the project include all the data sources used


(input & output / loss & profit) and list all the
projects that have been used for cross-checking in
accordance with VVM paragraph 95.
Does the income tax calculation take depreciation
into account? Is the depreciation year in
accordance with normal accounting practice in
the host country?
Has salvage value been taken into account? Is
working capital returned in the last year of
operation?
How are the PLF of the project assessed?
How are output price assessed?
How are O&M cost assessed?
7.3.11Sensitivity analysis: Have the key parameters
contributing to more than 20% of the
revenue/costs during operating or implementation
been identified? Has possible correlation between
the parameters been considered?
Is the range of variations (10% in default) is
reasonable in the project context?
Have the key parameters been vary to reach or
cross the benchmark and have the likelihood of
this to happen been justified?

7.4

01 997 9105065200

/P01/,
/P07/

/P01/,
/P07/

Subjected to closure of CL-13, CL-14, CL15, CL-16, CL-17, CL-18, CL-19, CL-20, CL
-21, CL-22, CL-23, CL-24, CL -25, CL-26,
CL-27, CL-28, CL-29, CL-30, CAR-09,
CAR-10 and CAR-11.

CL-13, CL-14,
CL-15, CL-16,
CL-17, CL-18,
CL-19, CL-20,
CL -21, CL-22,
CL-23, CL-24,
OK
CL -25, CL-26,
CL-27, CL-28,
CL-29, CL-30,
CAR-09, CAR10 and CAR11.

DR

Subjected to closure of CL-13, CL-14, CL15, CL-16, CL-17, CL-18, CL-19, CL-20, CL
-21, CL-22, CL-23, CL-24, CL -25, CL-26,
CL-27, CL-28, CL-29, CL-30, CAR-09,
CAR-10 and CAR-11.

CL-13, CL-14,
CL-15, CL-16,
CL-17, CL-18,
CL-19, CL-20,
CL -21, CL-22,
CL-23, CL-24,
OK
CL -25, CL-26,
CL-27, CL-28,
CL-29, CL-30,
CAR-09, CAR10 and CAR11.

DR

Not Applicable

DR

Barrier analysis(VVM V E.6.III.d)

7.4.1 Are there any issues addressed in the barrier


analysis that have a clear impact on the financial
viability of the project activity and that shall be
assessed by an investment analysis?

Rev 02 (13/09/2012) ,

/P01/

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01 997 9105065200

7.4.2 Do the listed barriers exist and is their existence


substantiated?
Note:
(a) by independent sources of data such as relevant
national legislation, surveys of local conditions and
national or international statistics and/or
(b) by interviews with relevant individuals: including
members of industry associations, government officials
or local experts if necessary?
7.4.3 Would any of the identified barriers prevent the
implementation of the project activity but not
equally prevent the implementation of the
possible
alternatives,
in
particular
the
implementation of the identified baseline
scenario?

7.5

/P01/

DR

Not Applicable

/P01/

DR

Not Applicable

/P01/

DR

Subject to closure of CAR-12

CAR-12

OK

/P01/

DR

Subject to closure of CAR-12

CAR-12

OK

/P01/

DR

Subject to closure of CAR-12

CAR-12

OK

/P01/

DR

Subject to closure of CAR-12

CAR-12

OK

/P01/

DR

Subject to closure of CAR-12

CAR-12

OK

Common practice analysis(VVM V E.6.III.e)

7.5.1 If the PPs claim in the PDD that CDM project


activity is the first of its kind, is it justified?
7.5.2 Are the geographical boundaries of the project
activity identified correctly?
7.5.3 Does the PDD provide an explanation why this
region was selected and deemed more appropriate
and is this explanation traceable and reliable?
7.5.4 Are there similar operational project activities,
other than CDM activities, widely observed and
commonly carried out in the defined region?
Note: Use official sources and local and industry
expertise.
7.5.5 In case there are similar commercially operated
project activities, other than CDM activities,
already widely observed and commonly carried
out in the defined region, are there essential
distinctions between the CDM project activity
and the other similar activities?

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8.
8.1

8.2

01 997 9105065200

Monitoring plan (VVM V E.7)


Are all parameters required by the selected
approved methodology or tool identified and
listed
in
the
PDD?
Note: not all methodologies indicate monitoring
parameters in tabular form or by reference to the
variables used in formulae; Nonetheless, all
parameters indicated in the methodology and
applicable to the project must be listed in the
PDD, omissions due to non-applicability be
justified.
Is the measurement method clearly stated for
each value to be monitored and deemed
appropriate?

/P01/,
/B02

DR

Yes, all parameters required by the selected


approved methodology or tool identified and
listed in the PDD.
OK

/P01/,
/B02/,

DR

Subject to closure of CAR-13

Does the monitoring plan record data in the


original form as generated, providing QA/QC
procedures to be used on the measurement
method?
Note 1: if the measurement unit is different from the
unit to be applied in the methodology, describe the
actual measurement and any according conversion
method to match the unit used in the methodology.
Example: liquid fuels may be monitored as weight or
volume. If measured as volume, the measurement
method and equipment including the according unit
(e.g., litter) shall be described in B.7.1, as well as the
conversion
into
weight
units
as
needed.
Note 2: Data on invoices / delivery slips may be used
for QA/QC purposes, but do not constitute an actual
means of monitoring and thus cannot be applied as a
source of data.

Rev 02 (13/09/2012) ,

CAR-13

Assessment Version No.:XX

OK

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01 997 9105065200

8.3

Are values of the ex-ante parameters / monitoring


parameters selected correctly and conservative in
accordance
to
methodology
or
tools?
See the NOTE in section 3.6.1 above!

/P01/,
/B02/

DR

Yes, PP has correctly mentioned the value of


ex-ante parameter in section B.6.1 of the
PDD according to the tool to calculate
emission factor of an electricity system using OK
the latest available version (6) of database
published by central Electricity Authority
(CEA).

8.4

Is the measurement equipment for each parameter


described
and
deemed
appropriate?

/P01/,
/B02/,

DR

Subject to closure of CAR-13

8.5

8.6

8.7

8.8

8.9

Are the locations of all measurement equipment


clearly identified and consistently described, incl.
process flow-charts contained in the PDD?
Is the measurement accuracy addressed and
deemed appropriate?

/P01/,
/B02/,

DR

Are procedures in place on how to deal with


erroneous measurements and are the corrective
actions identified?

/P01/,
/B02/,

DR

Is the frequency of measurement identified and


deemed appropriate?

/P01/,
/B02/,

DR

Is the monitoring plan documented according to


the approved methodology and in a complete and
transparent manner?

/P01/,
/B02/,

DR

Are the sampling, measurement methods and


procedures defined?

/P01/,
/B02/,

DR

Rev 02 (13/09/2012) ,

CAR-13

OK

CAR-13

OK

CAR-13

OK

CAR-13

OK

CAR-13

OK

CAR-13

OK

Subject to closure of CAR-13

Subject to closure of CAR-13

Subject to closure of CAR-13

Subject to closure of CAR-13

Subject to closure of CAR-13

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01 997 9105065200

8.10 Are procedures identified for maintenance of


monitoring equipment and installations?

/P01/,
/B02/,

DR

8.11 Are the equipment calibration intervals identified


and justified?

/P01/,
/B02/,
UNFCCC
Website

DR

Yes, the equipment calibration intervals


identified and justified.

8.12 Are procedures identified for day-to-day records


handling (including what records to keep, storage
area of records and how to process performance
documentation)?
8.13 Are the monitoring arrangements described in the
monitoring plan feasible within the project
design?

/P01/,
/B02/,

DR

Subject to closure of CAR-13

/P01/,
/B02/,

DR

8.14 Are the means of implementation of the


monitoring plan, including the data management
and quality assurance and quality control
procedures, sufficient to ensure that the emission
reductions achieved by / resulting from the
project activity can be reported ex post and
verified?
8.15 Do the PPs make provisions for personnel
training needs?

/P01/,
/B02/,

DR

/P01/,
/B02/,

DR

8.16 Is the authority and responsibility of overall


project management clearly described?

/P01/,
/B02/,

DR

8.17 Are procedures identified for emergency


preparedness for cases where emergencies can
cause unintended emissions?

/P01/,
/B02/,

DR

Rev 02 (13/09/2012) ,

Subject to closure of CAR-13


CAR-13

OK

OK

CAR-13

OK

CAR-13

OK

CAR-13

OK

Subject to closure of CAR-13

Subject to closure of CAR-13

Yes
OK
Yes
OK
Yes

Assessment Version No.:XX

OK

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01 997 9105065200

8.18 Are procedures identified for review of reported


results/data?

/P01/,
/B02/,

DR

8.19 Is the data archiving period for this project


activity stated in the PDD and appropriate?
Note: All archived monitoring data, required for
verification and issuance, should be kept for at least
two years after the end of the crediting period or the
last issuance of CER.
8.20 Is the monitoring parameters for all project
emissions captured?

/P01/,
/B02/,

DR

/P01/,
/B02/,

DR

8.21 Will all monitored data required for verification


and issuance be kept for two years after the end
of the crediting period or the last issuance of
CERs, for this project activity, whichever occurs
later?
8.22 Are the data management and quality assurance
and quality control procedures sufficient to
ensure that the emission reductions achieved
by/resulting from the project can be reported ex
post and verified?

/P01/,
/B02/,

DR

/P01/,
/B02/,

DR

8.2.1 Does the monitoring plan provide for the


collection and archiving of all relevant data
necessary for determining leakage?

/P01/,
/B02/,

DR

8.2.2 Is the choice of project leakage indicators made


according to selected methodology in a
reasonable and conservative manner?
Note: local knowledge and sectoral expertise shall also
be considered.

/P01/,
/B02/,

DR

8.2

Yes
OK
Yes
OK

Yes
OK
Yes
OK

Yes
OK

Monitoring of the leakage

Rev 02 (13/09/2012) ,

Not applicable for this project activity (Cp p11 of 19 of the applied Methodology).
--

Not applicable for this project activity (Cp p11 of 19 of the applied Methodology).
--

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8.2.3 Is the measurement method clearly stated and


deemed appropriate for each leakage value?

9.
9.1

9.2

10.

01 997 9105065200

/P01/,
/B02/,

DR

/P01/,
/B02/,

DR

/P01/,
/B02/,

DR

Not applicable for this project activity (Cp p11 of 19 of the applied Methodology).
--

Sustainable development(VVM V E.8)


Does the LoA from the Host country DNA
contain the confirmation that the proposed CDM
project activity contributes to the sustainable
development of the host Party?
If PDD indicates any additional environmental
benefits of the project, other than GHG emission
reductions, were those benefits properly
substantiated?

Subjected to closure of CAR-01

CAR-01

OK

The view of the PP on the contribution of the


project activity to sustainable development
demonstrate sustainability criteria as per the OK
interim approval guidelines for CDM projects
of the host country in section A.2 of PDD.

Stakeholders consultation and comments (VVM V E.9)

10.1 Were the stakeholders identified in appropriate


and complete manner?

10.2 Are the identified stakeholders plausible?


10.3 Does PDD describe the means being used to
invite local stakeholders comments?
10.4 Were those means appropriate?
10.5 Was the project presented to the stakeholders in
unbiased manner?
10.6 If a stakeholder consultation process is required
by regulations/laws in the host country, has the
stakeholder consultation process been carried out
in accordance with such regulations/laws?

Rev 02 (13/09/2012) ,

/P01/,
/P13/

DR

/P01/,
/P13/

DR

/P01/,
/P13/

DR

/P01/,
/P13/

DR

/P01/,
/P13/

DR

/P01/,
/P13/

DR

Yes, stakeholders have been identified in an


appropriate and complete manner. The same
has been clearly presented in section E.1 of CL-31
the PDD.
Subject to closure of CL-31.
Yes, the identified are plausible in the context
OK
of this project activity.
Yes, the PDD clearly describes the media
used to invite local stakeholders. The same is OK
found inline and appropriate.
Yes, the media used is appropriate.

OK

OK

Yes, the PDD is clear on the way of


presentation that was used to describe the OK
project to the identified stakeholders.
No, the stakeholders consultation process is
not required by the regulation/laws in the
OK
India, hence this is not applicable.

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01 997 9105065200

10.7 Is a summary of the stakeholder comments


provided in the PDD?
/P01/,
/P13/

DR

/P01/,
/P13/

DR

10.8 Has due account of any stakeholder comments


been taken by PPs and reflected in the PDD?

11.

PP has provided the MoM of the LSC


meeting and the summary of the comments
on the project has been provided in the
section E.2 of the PDD. Stakeholders of this OK
project activity have appreciated the
implementation of the project activity. Hence
this is ok.
There is no negative comment raised on this
project activity and stakeholders has
appreciated the project implementation, hence
OK
no due account on any negative comment is
required to be addressed and needs to be
reflected in the PDD.

Environmental impacts(VVM V E.10)

11.1 Is the documentation supplied by the PPs


regarding environmental impacts relevant and
accurately reflected in the PDD?

11.2 Is an environmental impact assessment (EIA)


required for the CDM project activity?
Note: determine by using a review of relevant
legislation and local expertise.
11.3 In case an EIA is required, has the EIA has been
approved by local authorities and is the outcome
accurately reflected in the PDD?
11.4 Does the PDD include a brief description of the
environmental effects of the project, including
trans boundary?
11.5 Are those effects properly addressed in the design
of the project activity?

Rev 02 (13/09/2012) ,

/P01/

DR

As per Environmental Impact Assessment


Notification 2006 and its subsequent
amendments issued by Ministry of
Environment and Forests, Government of OK
India, no environmental impact assessment
study is required to be carried out for the
present project activity.

/P01/

DR

No EIA is required for the project activity

OK

/P01/

DR

Not applicable

OK

/P01/

DR

/P01/

DR

PP in section D.2 of the PDD has included a


brief description of the environmental effects OK
of the project.
There are no negative environmental impacts
of the project activity which needs to be OK
addressed by the PP.

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11.6 Does the project comply with environmental


legislation in the host country?

Rev 02 (13/09/2012) ,

01 997 9105065200

/P01/

DR

Yes the project comply with environmental


OK
legislation in the host country.

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01 997 9105065200

Table 2:
List of Requests for Corrective Action (CAR) and Clarification (CL)
Validation / Verification Manual
(35) The DOE shall raise a corrective action request (CAR) if one of the following occurs:
(a) The project participants have made mistakes that will influence the ability of the project activity to achieve real, measurable additional emission
reductions;
(b) The CDM requirements have not been met;
(c) There is a risk that emission reductions cannot be monitored or calculated.
(36) The DOE shall raise a clarification request (CL) if information is insufficient or not clear enough to determine whether the applicable CDM
requirements have been met.
The wording of CAR/CL shall clearly address nonconformity or seek clarification, and avoid instructive / consultative language in order to prevent
actual or perceived consultancy.
No.
CAR/CL Observation (CAR/CL)
Reference Summary of project owner Revised
Validation team conclusion
response
section(s)/Annexe(s)
of the PDD
1.
CAR-01 LoAs from the parties involved 1.1, 1.2,
in the project activity is a pre 1.3, 1.4,
The LoA is received from PP
requisite for the project to be 1.5, 1.6,
Copy of LoA is now
and found OK.
registered as a CDM project 1.7, 2.1,
submitted.
activity. PP is requested to 2.2, 2.3,
Hence CAR is closed.
provide copy of the same to the 2.4, 9.1
validation team.
2.
CAR-02 As per CDM PDD completing 3.2
PDD
has
been
section A.2
Validation team has checked
guidelines, section A.2 of the
appropriately revised.
the corrections done in the
PDD should include purpose of
PDD and found OK.
the project activity with a
concise description of the three
Hence CAR is closed.
scenarios. The same is not clear
enough in the PDD. The
numbering of the scenarios need
to be corrected. Also PP needs to
clearly mention in the PDD, how
Rev 02 (13/09/2012) ,

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3.

4.

CAR-03

CAR-04

01 997 9105065200

emission reductions take place


due to the project activity.
As per the CDM PDD 3.2
completing guidelines, in section
B.6.1 of the PDD, PP needs to
clearly state which equations of
the applied meth will be used in
calculating emission reductions.
The same has not been fully
complied with in the PDD.
Compliance of equation 7 of the
meth (as because the project is a
Greenfield project) has not been
demonstrated in section B.6.1
and B.7.1 of the PDD.
Moreover, PP is requested to
clarify the mention of Solar
Energy on page 19 of the PDD.
Section C.1.1 of the PDD has 3.2
not been completed in line with
the CDM PDD completing
guidelines which states The
CDM-PDD should contain not
only the date but also the
description ..........

PDD has been corrected


appropriately.

Section B.6.1

Validation team have checked


the corrections and found OK.
Hence CAR is closed.

Section C.1.1 of the PDD Section C.1.1


has been revised suitably as
to include description of
the start date of the project
activity being the date on
which EPC contract was
executed.

Required corrections has been


done and found OK.
Hence CAR is closed.

The starting date of a CDM


project activity is the earliest of
the date(s) on which the
implementation
or construction or real action of
a project activity begins/has
begun (EB33, Para 76/CDM
Rev 02 (13/09/2012) ,

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5.

CAR-05

Rev 02 (13/09/2012) ,

01 997 9105065200

Glossary of terms/EB41, Para


67).
The CDM-PDD should contain
not only the date, but also a
description of how this start date
has been determined, and a
description of the evidence
available to support this start
date.
During the on site visit and also 4.1, 4.2,
document review, it is revealed 4.3, 4.4
that the capacity of the project
activity being implemented is 45
MW whereas in the web hosted
PDD the capacity is mentioned
as 200 MW. PP needs to
clarify/justify the same with
proper evidences. In this respect,
whole PDD, ER sheet and
financial calculations spread
sheet need to be revised.

We would like to submit that the project activity was


initially
conceptualised
considering 200 MW with
80 WTGs of 2.5 MW each.
The same was also
intimated to UNFCCC vide
Form
F
for
prior
consideration
on
26/04/2011. Engineering,
Procurement
and
Construction
(EPC)
contract
(dated
28/06/2011),
Energy
Purchase
Agreement
(16/03/2011)
were
executed considering the
capacity of 200 MW.
However,
the
EPC
contractor on 15/02/2012
vide
a
written
communication intimated
their inability to install the
contracted capacity due to

Assessment Version No.:XX

Validation team has checked


the communication from EPC
Contractor dated 15/02/2012
/P12-14/
intimated
their
inability
to
install
the
contracted capacity due to
bottlenecks in land acquisition
and also the Investment
mandate by Reliance Clean
Power
Limited
dated
16/02/2012 /P08-03/ for the
revised Capacity of 45 MW
and found the PP response
convincing.
Moreover the revised EPC
contract /P12-2/ and EPA /P1209/ have checked for the revised
project capacity of 45 MW and
found OK.
The required corrections have
been done in the revised PDD.

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01 997 9105065200

bottlenecks
in
land
acquisition.
PP
has
executed all the relevant
contracts (EPC contract,
EPA) with respect to
revised capacity. PP has
submitted the all the
documents
executed
pertaining
to
initially
considered capacity of 200
MW as well as the revised
capacity of 45 MW to DoE
for validation.

Hence CAR is closed.

PDD, financial calculations


spreadsheets,
emission
reduction sheet have been
made
consistent
to
accommodate the revised
capacity.
Copy of letter received
from EPC contractor dated
15/02/2012
has
been
enclosed in the revised
documentation.
Relevant contracts (sale as
well as lease deeds) for
land acquisition, Amended
EPA have been included as
part of land acquisition. PP
would like to submit that
Rev 02 (13/09/2012) ,

Assessment Version No.:XX

Page 72

Validation Report

6.

7.

8.

CAR-06

CAR-07

CAR-08

Rev 02 (13/09/2012) ,

In view of the change in the


capacity of the project activity
(from 200 MW to 45 MW), PP
needs to revised section A.4.4 of
the PDD. Moreover, the
statement Commencement of
implementation
.....by
30/09/2012 while the balance
.....by 31/03/2012 is confusing.
In Annex 3 and section B.6.2 of
the PDD, PP needs to justify the
choice of weightage of OM and
BM in line with the applied
methodological tool.
In this context, the value of the
BM mentioned in the PDD
(=0.812) does not match with
that in the ER spread sheet
(=0.810) and also the values of
the CM differ in between the
PDD and the ER sheet.
In view of the change in the
capacity of the project activity,
PP needs to revise the sections
B.6.3 and B.6.4 of the PDD
appropriately. Also PP needs to

01 997 9105065200

4.1, 4.2,
4.3, 4.4

5.2.2,
5.2.3,
5.2.4

5.5.1,
5.5.2,
5.5.4

despite of revision in the


capacity, conditions for
lending have remained
same as the terms have
been indicated at the time
of decision making.
Section A.4.4 of the PDD
has been revised with
reference to the change in
capacity.

PDD and ER sheet have


made consistent throughout
for OM, BM and CM.
Also,
the
justification
provided in section B.6.2
has also been modified so
as to bring clarity with
respect
to
applied
methodological tool.

Section A.4.4

Hence CAR is closed.

Annex
3
Section B.6.2

Section B.6.3 and B.6.4 of Section B.6.3 and


the PDD have been revised B.6.4
with respect to the revised
capacity. Also, source of
each data has been

Assessment Version No.:XX

The necessary changes have


been done and found OK.

and

Validation team has checked


the corrections in the revised
PDD and found OK.
Hence CAR is closed.

Validation team has checked


the corrections in the revised
PDD and found OK.
Hence CAR is closed.

Page 73

Validation Report

9.

10.

CAR-09

CAR-10

Rev 02 (13/09/2012) ,

mention the source of each data


in this section.
Though CERC order provides
for receivables, clarify the
reasons for providing 60 days
receivables, when the EPA
provides for payment within 30
days from the date of submission
of bill. Moreover, there appears
to be no reason to provide for
receivables, as no capital is
blocked in generation of power.
Refer sub-step 2(b) of B.5 of the
PDD. The PP has stated that the
benchmark has been taken from
the offer letter received for
funding for the project activity.
But as per Annex 5 of EB 62
guidance 13, since this a project
which can be developed by any
other project developer, the
parameters that are standard in
the market should be adopted for
calculating the benchmark.

01 997 9105065200

7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11
7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

appropriately mentioned in
these sections.
As been rightly pointed out by the DoE, as there is no
capital
been
blocked,
receivables have been
made nil in the revised
financial computations.

Since the project is funded


through a combination of
debt and equity, project
participant has selected
Project IRR as financial
indicator to demonstrate
additionality of the project.
As per guidance 12 of
Annex 5, EB 62, Local
commercial lending rates
or weighted average costs
of capital (WACC) are
appropriate benchmarks for
a project IRR. Therefore,
the commercial lending
rate is considered as an
acceptable benchmark for
the project. The interest
rate 13.25% (debt
syndication offers received

Assessment Version No.:XX

Correction has been done and


found OK.
Hence CAR is closed.

The PLR has been chosen from


the Axis Bank Limited, which
is one of the largest lending
banks in India. In the year
2011, Mumbai-based Axis
Bank, has emerged the most
consistent performer over a
three-year period in the BTKPMG Best Banks study. Key
changes in top leadership, a
strong
brand,
durable
relationships and a well
diversified revenue portfolio
have been its growth drivers
since 2008. The bank offers
services to corporate clients,
SMEs and retail customers,
comprising, respectively, 53
per cent, 27 per cent and 20 per
cent of its business. So the PP
Page 74

Validation Report

01 997 9105065200

from a leading lender on


21/03/2011 & 22/04/2011)
is considered as benchmark
for the project activity

11.

CAR-11

The PDD speaks about 200 MW


project activity which was
decided on 24/03/2011. The
attachment also contains the
financial analysis for another
200 MW activity whose decision
date is 03/08/2010. On the same
date there is also a financial
analysis for 45 MW project
activity. It may be demonstrated
as to the difference of decisions
and the respective additionality
factors.

7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

Error in the mentioning of


Decision
date
of
03/08/2010 in the financial
analysis for 200 MW is
highly regretted.
Investment mandate for the
200 MW project was
approved on 23/04/2011.
Moreover the investment
mandate for the revised
capacity i.e. 45 MW project
was
approved
on
16/02/2012.
Financial

Rev 02 (13/09/2012) ,

Assessment Version No.:XX

has been chosen the lending


rate of Axis Bank limited,
Mumbai. The same approach
has been adopted for the
registered project (7103) by the
same PP.

Hence the benchmark of 13.25


% thus chosen is in accordance
with
the
guidance
to
investment
analysis
and
conforms to paragraph 112 (a)
and (c) of VVM (01.2) is
therefore accepted by the
validation team and hence
CAR is closed.
The original capacity of the
project was 200 MW and
subsequently
this
was
downsized to 45 MW. This is
supported by the Investment
Mandate dated 16/02/2012
signed by the PP /P08-3/. This
letter has ratified the decision
of the PP to downsize the
project capacity to 45 MW and
hence this CAR is closed.

analysis
Page 75

Validation Report

01 997 9105065200

spreadsheet for 45 MW has


been revised accordingly.

12.

CAR-12

13.

CAR-13

Rev 02 (13/09/2012) ,

Additionally, in the view of


revision in the capacity,
PDD has been revised to
include various project
milestones to bring in more
clarity on chronology of
events in Section B.5.
Common practice analysis in 7.5.1,
Common practice analysis B.5
section B.5 of the PDD has not 7.5.2,
described in the revised
been demonstrated in line with 7.5.3,
PDD now follows latest
the latest Additionality Tool.
7.5.4,
version of Additionality
7.5.5
Tool.
In regards to the monitoring of 8.2, 8.4,
Section B.7 and Annex 4 of Section B.7 and
the net electricity generated and 8.5, 8.6,
the PDD has been revised Annex 4
fed into the grid, the following 8.7, 8.8,
to
include
measuring
information are missing in 8.9, 8.10, equipment
details,
section B.7 / Annex 4 of the 8.12, 8.13, monitoring and recording
PDD:
8.14
frequency,
measurement
Measuring equipment (type
methods and procedures
details like energy meter,
along with location of
bidirectional, etc.), monitoring
meters.
and
recording
frequency,
measurement
methods
and
PDD has been revised to
procedures, source of EGexport
include latest version of
and EGimport, location of meters,
Central
Electricity
etc.
Authority (Installation and
PP needs to clarify the latest
Operation
of
Meters)
available version of Installation
Regulations,
2010,
and Operation of Meters
published on 04/06/2010
Regulation (Cp p 24 and 39 of
Assessment Version No.:XX

Common practice analysis


section has been revised in the
revised PDD and it conforms
to Additionality Tool (Ver. 6).
Hence CAR is closed.
Validation team has checked
the corrections in the revised
PDD and found OK.
Hence CAR is closed.

Page 76

Validation Report

14.

15.

16.

17.

CL-01

CL-02

CL-03

CL-04

Rev 02 (13/09/2012) ,

01 997 9105065200

the PDD).
The statement in section A.2 of 4.1, 4.2,
the PDD Under the Power 4.3, 4.4
Purchase Agreement .......would
annually displace .... electricity
in the western suburbs of
Mumbai and NEWNE regional
grid thereby, is not clear
enough in the context that the
project activity will displace the
equivalent electricity in the
NEWNE grid.

The
project
activity
is 4.1, 4.2,
installation of wind power 4.3, 4.4
project. But in various sections
of the PDD (like A.2. A.4.3 and
B.6.1) solar photovoltaic power
plant has been referred. PP
needs to clarify the same.
In section A.3 of the PDD, PP 4.1
needs to clarify the name of the
PP (i.e. with *).

PP needs to clarify the 4.1


mentioned GPS coordinates in
section A.4.1.4 of the PDD
represents which part of the

PP has signed a EPA with a


company
that
has
distribution business in
Mumbais
western
suburban
area.
Since,
Mumbai lies in the
NEWNE regional grid, the
same has been considered
for estimating emission
reductions from the present
project activity.
Sentence is rephrased in the
PDD so as to bring more
clarity.
Error is regretted. PDD has
been made consistent with
respect to project activity
technology.

PDD has been corrected


with the requested change.

PP would like to submit


that with revision in the
commissioning
schedule
and capacity, a revised list

Assessment Version No.:XX

section A.2

The justification given by the


PP is convincing.
Moreover the corrections done
in the PDD are also ok.
Hence CL is closed.

PDD

Corrections are done and found


OK.
Hence CL is closed.

section A.3

section A.4.1.4

Validation team has checked


the corrections done in the
PDD and found OK.
Hence CL is closed.
Clarification given by the PP is
ok.
Validation team has checked
the GPS c-ordinates of all the

Page 77

Validation Report

01 997 9105065200

project site. Also objective


evidence for the same needs to
be provided.

of WTGs with their


respective geo-co-ordinates
has been furnished in the
revised PDD.

WTGs of the project activity


with Google earth and found
OK.
Hence CL is closed.

18.

19.

20.

CL-05

CL-06

CL-07

Rev 02 (13/09/2012) ,

PP needs to provide evidence for 4.1, 4.2,


the wind tubines being used in 4.3, 4.4
the
project
activity
are
manufactured by a European
major (Cp section A.4.3 of the
PDD).

PP needs to clarify the statement 4.1, 4.2,


There are no photovoltaic 4.3, 4.4
.......first-of-its-kind .....in India
in context of the project activity.
Also the statement Efficiency
....best-of-the-class
..world
needs to be clarified. (Cp p 5, 9
of the PDD).

Section A.4.3 of the PDD needs 4.1, 4.2,

Latitude and longitude are


provided up to four decimal
points revised PDD.
The EPC dated 25/02/2011
furnished by the contractor,
clearly mentions make (FL2500) of the WTGs. The
same can be cross-verified
from the technical brochure
of the technology provided.
Both EPC offer and
Technical brochure have
been included in the
validation documentation.
Errors crept in are highly
regretted with respect to
mention of photovoltaic
and first of its kind. PDD is
revised
to
omit
words/phrases not relevant
to present project activity.
Information that is not
pertaining to the present
project activity has been
removed.
Section A.4.3 of the PDD

Assessment Version No.:XX

Section A.4.3

Validation team has checked


the offer from EPC Contractor
and Technical Brochure and
found PP response OK.
Hence CL is Closed.

Section A.4.3

Validation team has checked


the corrections and found ok.
Hence CL is closed.

Section A.4.3

Necessary changes have been

Page 78

Validation Report

21.

22.

23.

CL-08

CL-09

CL-10

Rev 02 (13/09/2012) ,

to be revised in the context of


actual capacity of the project
activity being installed. Also the
evacuation system is not clear
enough to understand (like the
name and distance of the
substation, number and capacity
of transformers, feeder system,
etc.).
Start date of the crediting period
as mentioned in section C.2.2.1
(=31/09/2012) does not seems to
match with section A.4.4
(=31/03/2012). PP needs to
clarify the same.
The applied versions of the
methodology
ACM
0002,
Additionality Tool and Grid
emission factor tool may be
updated with the latest ones
available in section B.1 and
other sections of the PDD.
In section B.3 of the PDD, the
project boundary diagram is not
clear enough in line with the
meth requirements. PP is
requested to clearly mention the
number of WTGs involved in
the project activity, the grid
system and the monitoring
equipment location. Moreover,
the identified sources for project

01 997 9105065200

4.3, 4.4

4.1

has been revised to include


description on evacuation
plan
detailing
name,
distance of the substation,
number and capacity of
transformers,
feeder
system.

done and found OK.


Hence CL is closed.

PDD has been made


consistent throughout with
crediting period beginning
from 31/03/2013.

PDD

5.1.1,
5.2.2,
5.2.3,
5.2.4,
5.4.2
5.4.2.1

References to the Tools


used and the applicable
Methodology version has
been updated with latest
ones throughout the PDD.

Section B.1

5.3.1,
5.3.2,
5.3.3

Project boundary diagram


in Section B.3 of the PDD
has been revised as per the
applicable
methodology
including the number of
WTGs involved in the
project activity, the grid
system and the monitoring
equipment location.

Section B.3

Assessment Version No.:XX

Validation team has checked


the corrections and found OK.
Hence CL is closed.

Tool/ methodology have been


revised and found OK.
Hence CL is closed.

The project boundary diagram


has been revised and found OK
as found during the site visit.
Moreover the table for the
project emissions has been
corrected and found OK.
Hence CL is closed.

Page 79

Validation Report

01 997 9105065200

emissions, in the table for in the


same section are incorrect.

24.

25.

CL-11

CL-12

Rev 02 (13/09/2012) ,

A separate appendix has


been included in the PDD
to schematically represent
evacuation plan.

In section B.4 of the PDD, PP 5.4.1


needs to describe the identified
baseline scenario in line with the
applied meth. In this context, PP
is requested to clarify / justify
the paragraph under the heading
Identification of Electricity
System in section B.4 of the
PDD.

PP is requested to furnish 7.1.1


certified copy of the Board
resolution to vouch the exact
date of investment decision.

PDD
has
been
appropriately revised as per
the emission sources table
described
in
the
methodology.
Present project activity
delivers
electricity
to
NEWNE grid in the host
country.
Therefore,
NEWNE
has
been
identified as the baseline
scenario.
Section B.4 of the PDD has
been revised as per the
baseline
scenario
identification description
given in the applicable
methodology
ACM0002
and removing non-relevant
details.
Certified copy of extracts
of minutes of meeting of
Board of Directors of
Reliance Clean Power Pvt
Ltd has been included as a
part
of
validation
documentation.

Assessment Version No.:XX

Section B.4

Validation team has checked


the section B.4 and found OK.
Hence CL is closed.

The copy of the resolution


passed by the investment
advisory committee, which is
authorised by the Board of
Directors of the company has
been perused and hence the date
of investment decision as
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Validation Report

01 997 9105065200

PP would like to clarify


that Board of directors of
the company accorded its
approval on the delegation
of authority for Clean
Development Mechanism
benefit for its various
investments in Renewable
Energy
projects
on
08/03/2012.
With
the
pretext of the resolution
being passed, Investment
Advisory Committee (IAC)
has
approved
an
Investment Mandate to
invest in the project activity
(=200 MW) on 23/04/2011.
Therefore, approval date of
Investment Mandate i.e.
23/04/2011
has
been
considered as the date of
investment decision for the
200 MW project.

mentioned was found to be


acceptable. Hence this CL is
closed.

Moreover
the
project
capacity was downsized
from 200 MW to 45 MW
as supported by the
investment mandate dated
16/02/2012.
A
Rev 02 (13/09/2012) ,

copy

of

Assessment Version No.:XX

Investment
Page 81

Validation Report

26.

CL - 13

01 997 9105065200

Project cost as in the IRR sheet 7.3.1,


does not match with offer letter. 7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

Mandate
has
been
submitted to DoE in
revised documentation.
Project cost in the IRR
sheet is comprised of EPC
costs, Land costs and other
financing costs for the
project. EPC cost of the
project (INR 66.92 Mn per
MW) has been maintained
as per the offer letter
received from the EPC
contractor.

Error crept in the PDD


have been eliminated in the
revised PDD.

27.

CL - 14

Rev 02 (13/09/2012) ,

PP is requested to provide the 7.3.1,


authentic
document
for 7.3.2,
following parameters as on the 7.3.3,
date of investment decision:
7.3.4,
7.3.5,
i.
Administrative Expenses
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

The project cost has been


estimated based upon the EPC
Contract offer dated 25/02/2011
/P12-1/ by the Global Wind
Power Limited, Mumbai as
added by the cost of financial
charges, interest during the
construction period and the
margin for initial working
capital. As per the accepted
accounting principles, these
elements are part of the cost of
project and hence, this has been
accepted by the validating team.
Hence this CL is closed.

Revised
Financial
calculation sheet has been
included in the validation
documentation.
Following documents have been included in the
validation documentation:
i. Administrative Expenses:
Investment in the present
project
activity
was
approved by Investment
Advisory Committee on
23/04/2011. This same date
has been considered as date

Assessment Version No.:XX

i. The investment mandate


passed by the investment
advisory committee, which is
authorised by the Board of
Directors of the company, has
been perused. It was seen that
this was available as on date of
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Validation Report

01 997 9105065200

of investment making.
Consideration
of
administration cost has
been done in accordance
with
the
Investment
Mandate.

investment decision at it was


found to be acceptable. Hence
this part of CL is closed.

The administrative
cost
includes expenses related
to the remuneration and
travelling expenses of the
dedicated personnel

ii.

Rev 02 (13/09/2012) ,

Tariff Rs. 5.37 / unit

ii. As mentioned in the


PDD, the EPA executed
dated 08/03/2011; and its
further amendments section
9.01 clearly tells the
consideration of tariff for
the sale of power from the
present project activity.
This
document
was
available with PP at the
time of decision making. It
may be further noted that
although Tariff value of
INR 5.67 per kWh was not
mentioned in the EPA (as
tariff order for FY 2012
was yet to be released), the
sale tariffs available are
lower than the approved
tariff for FY. The project
Assessment Version No.:XX

ii. This is adopted from the


CERC (Central Electricity
Regulatory
commission).
Tariff is determined on the
basis
of
the
date
of
commissioning and the tariff of
the wind projects (located in
wind zone 01) for the financial
years, as per Section 9.01 of
Energy Purchase Agreement
(EPA) /P12-9/ are as follows:
Commissioning Tariff
Year
Applicable
(INR/kWh)
FY 2011
5.07
FY 2012
5.37
FY 2013
MERCs
order
approved
Page 83

Validation Report

01 997 9105065200

activity
remains
to
additional at this higher
tariff. This approach is
appropriate.

iii.

Rev 02 (13/09/2012) ,

Working capital margin

iii. Working capital margin:


As
per
the
current
industrial
practices
followed under project
financing route, 25% of
working capital margin has
been considered by the PP.
In order to justify the
claim, PP wishes include
project
information
memorandum (PIM) for
one of its group companys
to draw a parallel in the
validation documentation.

Assessment Version No.:XX

Since, the tariff escalation


between FY 2011 and FY 2012
is INR 0.30/kWh; PP has
considered INR 0.30/kWh
increase in tariff between FY
2012 and FY 2013. However,
such an escalation in tariff
lacked
the
documentary
evidence; it was considered by
the Investment Advisory Cell
on 15/02/2012. A tariff of INR
5.67/kWh was later approved
by MERC on 30/03/2012.
Hence this point is closed.

iii. Since this is in line with the


generally accepted business
principles in India and is also
supported by the PIM of the
other group company, and the
same is on the conservative
side, it is accepted. Hence the
issue is closed.

Page 84

Validation Report

iv.

Rev 02 (13/09/2012) ,

Working Capital Interest


Rate

v.

Debt: Equity Ratio

vi.

Upfront Equity Invested

01 997 9105065200

iv.
Consideration
of
working capital has been
done through as per debt
Syndication offer received
from a leading lender dated
21/03/2011 & 22/04/2011.
As stated earlier, decision
to invest in the present
project activity was made
through an Investment
mandate,
which
was
approved on 23/04/2011.
Therefore, these documents
were available at the time
of decision making.

iv. The lending rate of 13.25%


for working capital has been
sourced from the information
from M/s Axis bank Limited,
Mumbai loan from their
syndication offer letter dated
21-03-2011. This rate has been
applied for the working capital
and also for the term loan.
Hence this point is closed.

v. Debt: Equity Ratio:


CERC
(Terms
and
Conditions
for
Tariff
determination
from
Renewable
Energy
Sources)
(First
Amendment) Regulations,
2010 (p.120)

v. The debt equity ratio for the


project has been adopted at
70:30 from the CERC (Terms
and Conditions for Tariff
determination from Renewable
Energy
Sources)
(First
Amendment)
Regulations,
2010 (p.39). This was also
cross checked from the loan
syndication letters from the
Axis Bank Limited Mumbai,
India and was found to be
consistent. Hence this point is
closed.

vi. Project participant has


Assessment Version No.:XX

vi. The investment mandate


passed by the investment
Page 85

Validation Report

vii. Interest Rate on term loan


viii. Loan Period Tenure
ix. Moratorium Period

x.

Rev 02 (13/09/2012) ,

Discount rate

01 997 9105065200

considered an upfront
equity of 20% from
Information Memorandum
(PIM) of a group company
dated 11/07/2008, the
document was available at
the time decision. Such an
upfront
equity
is
a
requirement of the lenders,
commonly observed, in
India

advisory committee, which is


authorised by the Board of
Directors of the company has
been perused and hence this
was available as on date of
investment decision. Hence
this point is closed.

vii, viii, ix. Interest Rate on


term loan, Loan Period
Tenure,
Moratorium
Period: Syndication offer
received from a leading
lender dated 21/03/2011 &
22/04/2011. Since, the
investment in the present
project
activity
was
approved
vide
an
Investment Mandated dated
23/04/2011, the syndication
offers were available for
consideration. Therefore,
such a consideration is
appropriate.

Vii,viii, ix. The lending rate of


13.25% p.a. for term loan and
Term Loan repayment period
has been sourced from the
information from M/s Axis
bank Limited, Mumbai loan
from their syndication offer
letter dated 22/04/2011. This
rate has been applied for the
for the term loan. The
considered interest on term
loan and loan repayment
period
are
deemed
conservative. Hence this point
is closed.

x. Discount rate: Parameter


has been removed in the
revised
financial
calculations

x. This has been checked with


the revised financials and was
confirmed that this has been
removed. Hence this point is

Assessment Version No.:XX

Page 86

Validation Report

xi.

28.

29.

CL -15

CL-16

Rev 02 (13/09/2012) ,

01 997 9105065200

Depreciation Rate (WDV)


for IT Purpose [refer
Assumption sheet cell no.
D52]

Normally the first year O&M


charges are borne by the
machinery manufacturers. Here,
O&M charges assumed for the
first year also. Pl. demonstrate
with evidence.

The PP needs to justify how the


source of all input values used in
the financial analysis meet the
requirement of paragraph 6 of
Annex 5 of EB 62. This may be

xi. This has been corrected


in the revised IRR sheets.

7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,

EPC offer issued by the EPC


contractor
dated
25/02/2011
does
not
mention the O&M charges
to be part of EPC costs.
Therefore, the same has
been considered for the
first year also.
Project Participant has
executed a long term O&M
contract with the EPC
contractor on 06/03/2012
which allows 4 years of
O&M cost holidays. Even
with a consideration of 4
years of O&M charges
holidays, project activity
continues to be additional
with IRR of 12.10%.
Financial spreadsheets are amended so as to provide
source of each assumption
considered for financial
analysis. All the referred

Assessment Version No.:XX

closed.
xi. The revised financials
submitted by the PP after
correction has been checked and
found to be correct. Hence this
point is closed.
Hence CL is closed.
In the revised financials this
has been taken from the CERC
(Terms and Conditions for
Tariff determination from
Renewable Energy Sources)
(First
Amendment)
Regulations, 2010 (p.32) and
hence this has been verified
from the guideline this is found
to be correct.
Hence this CL is closed.

All the input parameters have


been taken before the date of
investment decision and hence
CL is closed.

Page 87

Validation Report

done by adding a column in the


assumption sheet stating clearly
the source of each assumption
considered for financial analysis.

01 997 9105065200

7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11
7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

30.

CL-17

Please demonstrate how the rate


of interest assumed is in line
with Annex 5 of EB guidance 62
para no. 11 - according to the
prevailing commercial interest
rates in the region.

31.

CL-18

The PP is requested to 7.3.1,


demonstrate how the debt equity 7.3.2,
ratio adopted is in line with 7.3.3,

Rev 02 (13/09/2012) ,

documents
have
been
included in the validation
documentation.

The rate of interest as per the debt syndication offer


received from a leading
lender is 13.25%. The offer
was available with the
project participant at the
time of decision and thus,
is consistent with guidance
number 6 of the investment
analysis guidelines. The
company is incorporated on
10/11/2010 and have not
availed any long term loan
so far. The term loan for
the project activity is also
not so far executed. In the
light of the above, PP has
considered the same rate of
interest that was been
offered by the leading debt
arranger. Copy of the offer
has been included as a part
of
validation
documentation.
CERC
(Terms
and Conditions
for
Tariff
determination
from

Assessment Version No.:XX

The lending rate of 13.25%


p.a. for working capital has
been sourced from the
information from M/s Axis
bank Limited, Mumbai loan
from their syndication offer
letter dated 22/04/2011 /P127(b)/. This rate has been
applied for the working capital
and also for the term loan.
Hence this CL is closed.

Validation team has checked


CERC (Terms and Conditions
for Tariff determination from
Page 88

Validation Report

Annex 5 of EB 62.

32.

CL-19

Rev 02 (13/09/2012) ,

It is observed that tax shield


arising out of carried forward
losses has not been considered
for IRR calculations. PP is
requested to clarify the same.

01 997 9105065200

7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

Renewable
Energy
Sources)
(First
Amendment) Regulations,
2010
recommends
to
consider debtequity ratio
of 70:30 for determination
of generic tariff. The
document is from the
authentic
government
publication (order dated
26/04/2010). Additionally,
the debt syndication offer
(dated
21/03/2011
&
22/04/2011) also indicates
debt:equity ratio of 70:30.
Both these documents were
available at the time of
decision
making.
Therefore, it complies with
the investment guidance
issued vide Annex 5 of EB
62.
Only objective of the
Project Participant is to
generate electricity from
renewable energy sources
and supply the same to
utilities. This can be
vouched by the resolution
passed by Hon. Board of
directors of the company
on 08/03/2011. Further, PP
wishes to clarify that the

Assessment Version No.:XX

Renewable Energy Sources)


(First Amendment) Regulations,
2010 (p.32) and also the debt
syndication
offer
(dated
21/03/2011 & 22/04/2011) and
found the response OK.
Hence this CL is closed.

Since it has been made clear


that it is unlikely that there are
any other profits which can be
set off against the losses of this
unit to gain a tax shield, this
CL is closed.

Page 89

Validation Report

33.

CL-20

Accelerated depreciation @ 80%


available for wind generation
machines. Here Depreciation
rate @ 10% has been considered
for the 2nd year onwards. PP is
requested to clarify the same.

01 997 9105065200

7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

present project activity is


not involved in any other
commercial activity than
commissioning
and
operating the wind farm.
Therefore, utilization tax
shield beyond its business
area (objective mentioned)
does not arise.
PP
appreciates
that accelerated depreciation is
a subject matter of Income
tax Act and can be availed
by the PP. However, PP
would like to further clarify
that, consideration of tariff
INR 5.67 per kWh as per as
per Maharashtra Electricity
Regulatory Commissions
(MERCs) order, MERC
RE Tariff Order for FY
2012-13 (pg 41 of 90), is
with the due consideration
of accelerated depreciation
benefit. Therefore, while
considering the same tariff
in the financial calculation
a separate consideration of
accelerated
depreciation
has not been taken into
account.

The IT depreciation rate has


been taken as 80% from the first
year onwards as per the IT Act
1961. This has been verified
from the revised financials and
found to be correct. Hence this
CL is closed.

This has been corrected in


Rev 02 (13/09/2012) ,

Assessment Version No.:XX

Page 90

Validation Report

34.

35.

36.

CL-21

CL-22

CL-23

Rev 02 (13/09/2012) ,

There is a component called


maintenance spares of total INR
1,920.35 mu
in the working
capital calculation sheet. No
expenditure corresponding to
this element is stated as
expenditure in the profitability
statement. The head O & M
includes this as well and by
taking one months expenditure
as working capital requirement,
this is taken care.
As per the COMM-Schedule
sheet
40
windmills
will
commence on 30/09/2012 and
balance WTGs commenced on
31/12/2012. But for calculating
the IT depreciation only 50% of
assets have been considered.

01 997 9105065200

7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11
7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

In IRR cell no. R 42, It is 7.3.1,


observed that the Income tax has 7.3.2,
been calculated. Regular Income 7.3.3,

the revised IRR sheets.


Financial calculation sheets have been revised to
eliminate the error.

It may please be noted that as


per
the
revised
commissioning schedule,
the entire capacity of 45
MW
comprising
of
commissioning of 18 WTG
would be completed on
30/09/2012.
As the capacity has been
revised,
the
financial
spreadsheets
are
also
reworked in accordance
with the revised capacity.
This has been corrected in
the revised IRR sheets.
Financial calculation sheets have been revised to
remove the irregularity.

Assessment Version No.:XX

This has been sourced from the


CERC (Terms and Conditions
for Tariff determination from
Renewable Energy Sources)
(First Amendment) Regulations,
2010 (p.29) and found to be
correct. Hence this CL is closed.

The Income tax depreciation


has been applied as per the
Income Tax Act, 1961. This
has been verified from the
revised financials and found to
be correct. Hence this CL is
closed.

The Income tax has been


applied as per the u/s. 80IA of

Page 91

Validation Report

37.

CL-24

38.

CL-25

39.

CL-26

Rev 02 (13/09/2012) ,

01 997 9105065200

tax is not applicable since 7.3.4,


deduction u/s. 80 IA is available. 7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11
Income tax depreciation has 7.3.1,
been calculated only @ 50% of 7.3.2,
the applicable rate but WTGs 7.3.3,
were functioning for more than 7.3.4,
180 days.
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

Although, regular income


tax is not applicable due to
deduction under section
80IA of Income Tax Act,
1961, Minimum Al

Deduction for Income tax u/s 80


IA of Income tax Act, 1961 has
not
been
considered
for
computing Tax liabilities.

Financial calculation sheets have been revised to


eliminate the error.

The Income tax has been


applied as per the u/s. 80IA of
the Income Tax Act, 1961.
This has been verified from the
revised financials and found to
be correct. Hence this CL is
closed.

Working Capital ceases to

The working capital has been

7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11
It is observed that Land cost and 7.3.1,

In the light of revision in


the capacity, since entire
capacity
is
being
commissioned
on
30/09/2012, income tax
depreciation has
been
appropriately calculated at
50%.

the Income Tax Act, 1961. The


minimum alternate tax has
been
properly
applied
wherever applicable. This has
been verified from the revised
financials and found to be
correct. Hence this CL is
closed.
The Income tax depreciation
has been applied as per the u/s.
32 of the Income Tax Act,
1961. This has been verified
from the revised financials and
found to be correct. Hence this
CL is closed.

This has been corrected in


the revised IRR sheets.

Assessment Version No.:XX

Page 92

Validation Report

01 997 9105065200

working capital margin has not 7.3.2,


been added for salvage value at 7.3.3,
the end of the life of the asset.
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

40.

CL-27

The loan repayment has been


taken for a period of 15 years
whereas CERC / MERC
guidelines do not support this.
Pl. provide authentic document.

7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

41.

CL-28

In section B.5 of the PDD, PP


has used the older versions of
the tools (like on page 13,
Annex 22 of EB 49; Annex 58

7.3.1,
7.3.2,
7.3.3,
7.3.4,

Rev 02 (13/09/2012) ,

exist at the end of the life


of the project and hence
does not become part of the
salvage value.

considered to be repaid to the


system at the end of the useful
life of the asset and the value
of the land is already included
in the salvage value. Hence
this issue is closed.
Hence CL is closed.

Salvage value already


considers land cost and is
provided in cell no IRR
Y32.
This has been corrected in
the revised IRR sheets.
PP has received debt
syndication offers from a
leading lender. These offers
(dated
21/03/2011
&
22/04/2011) were available
with PP at the time of
conceptualisation of the
present project activity.
The offers specify loan
repayment tenure of 15
years. Therefore, the same
has been considered for
financial analysis. Copies
of the offers received have
been included in the
validation documentation.
All the references cited in
the PDD have been revised
as per the latest versions of
guidelines and Tools.

Assessment Version No.:XX

The term loan repayment


period has been sourced from
the information from M/s Axis
bank Limited, Mumbai loan
from their syndication offer
letter dated (dated 21/03/2011
& 22/04/2011). Hence, the
considered loan repayment
period are found to be
appropriate. Hence this CL is
closed.

PDD

Validation team has checked


the revised PDD and found the
PP response ok.

Page 93

Validation Report

42.

CL-29

Rev 02 (13/09/2012) ,

of EB 51 on page 17). Also


wrong
reference
of
the
Investment Analysis guidelines
is stated as Annex 13 of EB 62.
PP needs to adopt the latest
appropriate applicable versions
of the Tools, Guidelines and
clearly mention the same in the
PDD.
The evidence for PLF does not
coincide with the dates of
investment decision for the
projects. PP is requested to
clarify the same.

01 997 9105065200

7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

Hence CL is closed.

EPC contractor vide its


offer to the project
participant
dated
25/02/2011 specified the
PLF of 22.5% available at
the project site. This
document was available at
the time of investment
decision. As per CERC
(Terms and Conditions for
Tariff determination from
Renewable
Energy
Sources)
(First
Amendment) Regulations,
2010 dated 26/04/2010,
capacity utilization factor
prescribed for windzone-1
is 20%. It may also be
noted that PP has entered
into a long term Energy
purchase
agreement,
Article 9 mentions project
activity being located in
wind zone 1 and

Assessment Version No.:XX

The PP has carried out the PLF


analysis by a third party M/s
Fair Aero Consultant &
Technologist, Indore dated Oct
2011 /P12-8/ in line with the
requirements of 3(b) of annex
11 of EB 48, which estimated
the PLF analysis for the site at
19.06% which was available at
the
decision
making
(16/02/2012) for 45 MW
Project. As per the CERC
(Terms and Conditions for
Tariff determination from
Renewable Energy Sources)
(First
Amendment)
Regulations, 2010 (p.39) for
Wind zone -1 the PLF is 20%
and was available at the time
of decision. As this (20%) was
less conservative compared to
the estimate from the third
party, the PP has used the
higher of the two values which
Page 94

Validation Report

01 997 9105065200

therefore the applicable


tariff as prescribed by the
Maharashtra
Electricity
Regulatory Commissions
(MERCs) order. All these
documents were available
at the time of decision
making. Therefore, PLF of
20% has been considered.

is acceptable
Hence CL is closed.

PP has also taken the Third


Party PLF estimation study
in
account.
Revised
documentation
now
contains PLF estimation
carried out by third party
report.

43.

CL-30

Rev 02 (13/09/2012) ,

Pl. refer page no. 15 & 16 of the


PDD, For the parameters
Debt:Equity ratio, Interest on
Term Loan, Loan Period Tenure
& Moratorium Period after COD
of Project the source has been
given as Source: Expectation of
PP. PP needs to clarify this in
line with Annex 5 of EB 62.

7.3.1,
7.3.2,
7.3.3,
7.3.4,
7.3.5,
7.3.6,
7.3.7,
7.3.8,
7.3.9,
7.3.10,
7.3.11

This is in-line with the


guidelines of EB 48 annex
11.
Reference
Source
is
suitably modified in the
revised PDD.
Second Response:
As a part of companys
standard
operating
practices, an Investment
Mandate
has
to
be
approved in the wake of
approval from Hon. Board
of
directors
of
the

Assessment Version No.:XX

The Debt:Equity ratio, Interest


on term loan, Loan repayment
period and Moratorium period
of the project activity has been
sourced from M/s Axis bank
Limited, Mumbai loan from
their syndication offer letter
dated
(21/03/2011
and
22/04/2011) and investment
mandate. This has been
verified and found to be
correct. Hence this CL is
closed.
Page 95

Validation Report

01 997 9105065200

company; an Investment
Advisory Committee (IAC)
comprising of 3 members is
executed. Mandate for a
particular investment is
accorded
by
this
committee.
Investment
Mandate
has
been
approved for investing in
the current project activity
with
consideration
of
availing possible option of
carbon
financing.
Investment mandate was
approved on 23/04/2011.
Therefore, the same date
when has been considered
as the Date of Decision
making for the present
project activity.

44.

CL-31

Rev 02 (13/09/2012) ,

In section B.5 and C.1.1 of the 10.1


PDD, the start date of the project
activity, i.e. EPC contract date is
mentioned as 28/06/2011. In the
local stakeholders meeting held
for the project activity on
30/05/2011, in section E.3 of the
PDD it is stated that the EPC
contract has been signed. PP

References in the financial


sheet have been revised
appropriately.
PP would like to clarify B.5 and C.1.1 of the Validation team has checked
that the EPC offer for the PDD
the correction in the revised
project
activity
was
PDD
and
found
the
received on 25/02/2011. At
justification given by the PP
the
time
of
local
OK.
stakeholders consultation
Hence CL is closed.
meeting
held
on
30/05/2011, the formalities
for signing the contract was

Assessment Version No.:XX

Page 96

Validation Report

needs
to
inconsistency.

45.

CL-32

Rev 02 (13/09/2012) ,

01 997 9105065200

clarify

this

The statement in section D.1 of the PDD As per ......no


environmental
......not
required....activity is confusing.

under progress, The same


has been documented in the
Minutes of Meeting. PDD
has been revised to remove
this inconsistency and
Section E.3 has been
correct with respect to
Minutes of Meeting.
Both Minutes of Meeting
for local stakeholders
consultation and EPC offer
have been included in the
validation documentation.
Sentence has been rephrased appropriately in
the PDD.

Section D.1

Validation team has checked


the corrections and found OK.
Hence CL is closed.

Assessment Version No.:XX

Page 97

Validation Report

01 997 9105065200

Table 3:
List of forward action requests (FARs)
Validation / Verification Manual
(37) The DOE shall raise a forward action request (FAR) during validation to highlight issues related to project implementation that require review
during the first verification of the project activity. FARs shall not relate to the CDM requirements for registration.
FAR number
Reference
Summary of project owner response
Validation team conclusion
No FAR Raised

Rev 02 (13/09/2012) ,

Assessment Version No.:XX

Page 98

Appendix B
Certificates of Competence

Page 99

Page
100

Page
101

Page
102

Page
103

Page
104

Page
105

Page
106

Page
107

Page
108

Page
109