Clean Development Mechanism Simplified Project Design Document For Small-Scale Project Activities (SSC-CDM-PDD)

CDM-SSC-PDD (version 02)
CDM – Executive Board page 1
CLEAN DEVELOPMENT MECHANISM

SIMPLIFIED PROJECT DESIGN DOCUMENT
FOR SMALL-SCALE PROJECT ACTIVITIES (SSC-CDM-PDD)
Version 02
CONTENTS
A. General description of the small-scale project activity
B. Baseline methodology
C. Duration of the project activity / Crediting period
D. Monitoring methodology and plan
E. Calculation of GHG emission reductions by sources
F. Environmental impacts
G. Stakeholders comments
Annexes
Annex 1: Information on participants in the project activity
Annex 2: Information regarding public funding

Revision history of this document
Version Date Description and reason of revision

Number
01 21 January Initial adoption
2003
02 8 July 2005 • The Board agreed to revise the CDM SSC PDD to reflect
guidance and clarifications provided by the Board since version
01 of this document.
• As a consequence, the guidelines for completing CDM SSC
PDD have been revised accordingly to version 2. The latest
version can be found at
<http://cdm.unfccc.int/Reference/Documents>.
SECTION A. General description of the small-scale project activity
A.1. Title of the small-scale project activity:

9.6MW Xiaohe Small Hydropower Project, China
PDD version: 3.3
Date: August 14, 2006.
A.2. Description of the small-scale project activity:
General situation of the project activity:
The Xiaohe Small Hydropower Project (hereafter refers to “XHP” or “the project”), a run-of-river
hydropower project, is located on Daxia River in Gansu Province, China. It does not construct barrage,
and directly utilize the tail water of Toudaohe Hydropower Station, through diversion sluice, penstock,
forebay, pressure pipelines and powerhouse to generate electricity. When XHP is put into operation, it
will be connected to the Northwest Power Grid (NWPG) of China through Gansu Provincial Grid. Total
installed capacity will be 9.6MW, provided by three (3) 3.2MW turbines, and annual output is expected
to 51,030MWh. The project had started construction on April 26, 2005, and would be terminated before
December 31, 2007.
Purpose of the project activity:
The main purpose of XHP is to generate electrical energy through sustainable means without causing any
negative impact on the environment and to contribute to climate change mitigation efforts. Apart from the
generation purposes, the proposed CDM project activity would help its participants conquer some
difficulties met in the construction and operation time, and would promote harmonious development of
economy, society and environment in minority regions.
Contributions of the project activity to sustainable development:
Xiahe County where the proposed project located, had been recognized as one of State Key Poverty
Alleviation Counties (SKPAC) by the Chinese government as early as in 1986, then it had been affirmed
and reaffirmed as one of 592 SKPAC for the second and third time in 1994 and 2002 respectively 1 . Being
a renewable energy project, XHP will produce positive environmental and economic benefits, and
contribute to the local sustainable development in following aspects:
¾ To be consistent with China’s national energy policy and the Western Development Strategy.
¾ To mitigate power shortage. Since the Tenth Five-year Plan, electricity demand has increased rapidly
in China. Followed with the rapid development of economy and continuous promotion of people’s
living standards, such trend will continue. Without doubt, the XHP activity will act as a direct
supplement to local power capacity.
¾ To reduce greenhouse gas emissions (GHG) and protect the environment. The project activity will
displace part electricity from coal-fired power plants, and thus will avoid environmental pollution
caused by coal burning. Therefore the proposed project will play an active role in protecting and
improving regional environment.
¾ To attract investment and increase taxes. On the one hand, the XHP will attract number of external
investment used for the exploitation of renewable energy and construction of the infrastructure; on
1
China Association of Science and Technology Network,
http://new.cast.org.cn/popularization/show/uprear/course/106738819328.shtml
the other hand some tax revenues will be paid to local government during the operation. Therefore,
the project will open up a new point of economic growth for laggard minority areas.
¾ To create new job opportunities for the poor regions. The XHP will bring 30 job opportunities during
the operation time, and these employment opportunities are helpful for the local minority
nationalities to break away from poverty.
A.3. Project participants:
Kindly indicate if
Private and/or public
the Party involved
Name of Party involved (*) entity(ies)
wishes to be
((host) indicates a host Party) project participants (*)
considered as
(as applicable)
project participant
(Yes/No)
People's Republic of China Private entity A: Gansu Xiahe
Yes
(host) Hengfa Hydropower Co.Ltd
Other entities involved to be determined
A.4. Technical description of the small-scale project activity:
A.4.1. Location of the small-scale project activity:

A.4.1.1. Host Party(ies):
People's Republic of China
A.4.1.2. Region/State/Province etc.:
Gansu Province
A.4.1.3. City/Town/Community etc:
Xiahe County
A.4.1.4. Detail of physical location, including information allowing the unique identification of this
small-scale project activity(ies):
XHP will be located in Quao Township, Xiahe County, which lies in the southwest of Gansu Province
and is one of 6 jurisdictions of Gannan Tibetan Autonomous Prefecture. The proposed project activity
area is about 60 Km away from Xiahe County and 220 Km away from Lanzhou City (capital of Gansu
province). Detailed physical location follows as Fig1 and Fig2.
The proposed project will be located on the middle reaches of Daxia River which is a branch of the
Yellow River. The river catchments area above the intake sluice amounts to 5188 Km², annual average
flux is about 19.8m3/s.
Geographic coordinate: 102°54ˊ44〞-102°54ˊ50〞E; 35°22ˊ10〞-35°22ˊ15〞N.
Fig1. Location of Gansu Province in China
Fig2. Physical Location of the project in Gansu Province
A.4.2. Type and category(ies) and technology of the small-scale project activity:
According to Appendix B 2 of the simplified procedures for small-scale activities, the type and category of
XHP as follows:
TYPE I - Renewable Energy Project
CATEGORY I.D. - Grid Connected Renewable Electricity Generation
The proposed project activity falls into the Category I.D. since the capacity of the project is only 9.6 MW
which is less than the qualifying capacity of 15 MW to SSC-CDM, and the generated electricity by XHP
will be connected to NWPG through Gansu Provincial Grid.
The project uses run-of-river hydropower technology which converts mechanical energy available in the
water flow into electrical energy using hydro turbines and alternators. This kind of technology is standard
for the small scale hydropower and widely used in the world for many years.
2
UNFCCC web site, http://cdm.unfccc.int/Projects/pac/ssclistmeth.pdf
The powerhouse of XHP comprises three turbines of capacity 3.2 MW; generated voltage at the alternator
terminals is 10.5 KV, which will be stepped-up to 35 KV to match the nearest substation voltage level.
The turbines and alternators will be supplied by Hangzhou Chunjiang Power Equipment Co.Ltd,
equipments of which are one-upping in Chinese power equipment performance. Moreover, selecting and
using this type of turbine is the first time in the Gannan Autonomous Prefecture, Gansu Province (the key
technical parameters detailed in the following table).
Summary of key equipments in the project 3
Parameter Unit Amount
Turbine
Units 3
Model HLD41-LJ-95
Runner diameter m 0.95
Suction head m +0.65
Max header m 59.2
Rated header m 57
Min header m 51.3
3
Rated flow m /s 6.62
Rated Rotation Speed r/m 600
Rated Model Design Efficiency % 91.6
Rated power KW 3369
Generator
Model SF3200-10/2600
Rated power KW 3200
Rated Voltage KV 10.5
According to the waterpower studies carried out for the project, the net head available has been estimated
as 57 m; the discharge of water in the stream available as 19.86 m3/s. So based on the head available and
discharge of water, the optimum capacity of XHP has been envisaged at 9.6MW; therefore, it has not the
probability for increase during the operation time. In view of above, the project activity will remain under
the limits of SSC throughout the crediting period.
A.4.3. Brief explanation of how the anthropogenic emissions of anthropogenic greenhouse gas
(GHGs) by sources are to be reduced by the proposed small-scale project activity, including why
the emission reductions would not occur in the absence of the proposed small-scale project activity,
taking into account national and/or sectoral policies and circumstances:
The proposed project activity is a renewable energy project, has not any emissions of anthropogenic
greenhouse gas (GHGs) by sources. Generated electricity will be exported to NWPG through Gansu
Provincial Grid. NWPG is dominated by thermal power plants until now, total generation of it was
140,812GWh in 2004, among which 109,187GWh came from thermal power plants, which accounted for
about 77.5% of the total 4 . Under the business as usual scenario, such situation will not be changed in a
3
Source: Xiaohe Preliminary Engineering Design, P74-92
4
China Electric Power Yearbook 2005, China Electric Power Press, 2005, p474
long term.
According to the current structure of energy and practicality of technology, NWPG will mainly depend
on developing thermal power to meet more and more electricity demand. Only run in Gansu Provincial
Grid, installed capacity of thermal power will be added 8 GW in the next five years, and the total installed
capacity of thermal power will reach 13 GW at the end of the Eleventh Five-year Plan 5 .
Without the proposed project activity, the unmet electricity demand possibly will be supplied by new-
built coal-fired power plants or continuous operation of existing plants. Electricity generated by the
project will displace part electricity generated by coal-fired power plants, and thus reduce GHG emissions.
Without the CDM revenues, the proposed project activity is not financially viable. Since the project entity
has no obligation to build it, the proposed project would not in operation. Therefore, the emission
reductions to be achieved by the project are additional.
In view of above, on the one hand the proposed project activity will expand the capacity of NWPG, and
further alleviate the tension of regional electricity supply; on the other hand it will displace part electricity
of coal-based electricity generation, consequently reduce the emissions of anthropogenic greenhouse gas
(GHGs) by sources.
A.4.3.1 Estimated amount of emission reductions over the chosen crediting period:
Annual estimation of emission reductions

Years
in tonnes of CO2e
2008 41,589
2009 41,589
2010 41,589
2011 41,589
2012 41,589
2013 41,589
2014 41,589
Total estimated reductions
291,123
(tonnes of CO2e)
Total number of crediting years 7
Annual average over the crediting period of
41,589
estimated reductions (tonnes of CO2e)
A.4.4. Public funding of the small-scale project activity:

This project has not received any public funding from parties included in Annex Ⅰ to the Convention.
A.4.5. Confirmation that the small-scale project activity is not a debundled component of a larger
project activity:
According to Appendix C 6 of the simplified modalities and procedures for the small-scale CDM project
activities, the proposed project is not a debundled component of any larger scale project. The project
participants further confirm that they have not registered any small scale CDM activity or applied to
5
Zhiwen Wu, China Electric Power News Network, 2005, http://www.cpnn.com.cn/dy/200511030042.htm
6
http://cdm.unfccc.int/Projects/pac/howto/SmallScalePA/sscdebund.pdf
register another small CDM project activity within the same project boundary, in the same project
category and technology/measure.
SECTION B. Application of a baseline methodology:
B.1. Title and reference of the approved baseline methodology applied to the small-scale project
activity:
According to UNFCCC’s most recent list in Appendix B of the simplified M＆P for small scale CDM
project activities, the approved baseline methodology applied to the proposed project as follows:
Title of the methodology: Grid connected renewable electricity generation
Reference of the methodology: AMS-I.D.（Version 08: 03 March 2006） 7
In addition, the project would introduce run-of-river hydropower technology, which does not construct
reservoir, and directly utilize the tail water of Toudaohe hydropower station to generation electricity,
therefore the project would not submerge lands. In view of the definition of power density to renewable
hydropower project in the 23th meeting by EB, the proposed project has an infinite power density, which
is greater than 10W/m2, so it can use current approved methodology (AMS-I.D).
B.2 Project category applicable to the small-scale project activity:
Project category applicable to the small-scale project activity:
The project falls into project category I.D. because it is a hydropower project that will supply renewable
electricity to a grid, hence, the applicable baseline methodology for the project is AMS-I.D, which is
provided in Appendix B.
Under clause 9 of TYPE I.D. in Appendix B, two methods of calculating the emission coefficient are
given. First method i.e. (a) the average of the “approximate operating margin” and the “build margin”,
where: The “approximate operating margin” is the weighted average emissions of all generating sources
serving the system, excluding hydro, geothermal, wind, low-cost biomass, nuclear and solar generation;
The “build margin” is the weighted average emissions (in kgCO2equ/KWh) of recent capacity additions
to the system, based on the most recent information available on plants already built for sample group m
at the time of PDD submission. The sample group m consists of either the five power plants that have
been built most recently or the power plant capacity additions in the electricity system that comprise 20%
of the system generation (in MWh) and that have been built most recently. The second method i.e. (b) the
weighted average emissions (in kgCO2/KWh) of the current generation mix.
Grid system and the baseline methodology for the proposed project activity
Referring to the latest rules on project boundary of version 6 of ACM0002 “1. Use the delineation of grid
boundaries as provided by DNA of the host country if available; or 2. Use, where DNA guidance is not
available, the regional grid definition, in large countries with layered dispatch system”, the regional grid
definition should be used because China is one of large countries with layered dispatch system and also
China’s DNA guidance is not available until now. Therefore the proposed project selects NWPG as the
connected electricity system and the project boundary.
NWPG is composed of Gansu Provincial Grid, Ningxia Provincial Grid, Shaanxi Provincial Grid and
Qinghai Provincial Grid, and has a mix of hydro power and thermal power. Further, NWPG has a narrow
7
http://cdm.unfccc.int/UserManagement/FileStorage/CDMWF_AM_88PZMJZZR5KRJ6L9V7AXGGWHG7W2HH
given significant electricity trade among regional grids that might be affected, directly or indirectly, by a
CDM project activity. From the statistics in China electric power yearbook 2005, at the end of 2004, the
Grid's installed capacity was 27,330.7 MW and annual generation amounted to 140,812,000MWh, among
them 109,187,000 MWh came from thermal power plants and accounted for 77.5% of the total. Therefore,
it can be concluded that NWPG is dominated by coal-based thermal power plants, and be foreseen that this
trend will be continue in a long term.
From the NWPG's analysis above, the geographic and system boundaries for NWPG can be clearly
identified and information on its characteristics is available in transparent way, furthermore the grid is
relatively independent. Therefore the choice of NWPG for the proposed project activity is considered
appropriate.
According to EB suggestions for “clarification on use of approved methodology for several projects in
China” in the 22th meeting 8 , for small-scale project activities the second method (AMS-I.D. clause 9.b: the
weighted average emissions of the current generation mix) is choose as the calculation method for the
proposed project activity's baseline emission coefficient.
In addition, the proposed CDM project activity would select ex-ante calculate emission coefficient, and this
approach does not call for reviewing the grid emission co-efficient every year ex-post.
B.3. Description of how the anthropogenic emissions of GHG by sources are reduced below those
that would have occurred in the absence of the registered small-scale CDM project activity:
Justification for additionality of the project
UNFCCC simplified modalities seek to establish additionality of the project activity as per Attachment A
to Appendix B, which listed various barriers, out of which, at least one barrier shall be identified due to
which the project would not have occurred any way. The main barrier identified by project participants
for the proposed project activity is investment barrier.
The project Internal Rate of Return (IRR) shall not be considered economically attractive without
additional revenue funding, possibly from CDM project activities. Based on the preliminary engineering
design of the proposed project, an investment analysis was done through applying benchmark analysis
method, which mainly based on the IRR as the financial indicator. The analysis was conducted in the
following steps:
a. Apply benchmark analysis
According to the “Economic Evaluation Code for Small Hydropower Projects”, which was issued by
Ministry of Water Resources in 1995 (Document No.SL16-95) and is the most important reference for
small-scale hydropower projects (SHP) assessment in China, a project will be financially acceptable when
IRR is better than the sectoral benchmark IRR. The benchmark IRR on total investment for small hydro
power projects is 10%.
b. Calculation and comparison of financial indicators
Main parameters 9 for the calculation of financial indicators following as:
NO. Parameters Unit Value

1 Annual Export to NWPG MWh 51,030
8
http://cdm.unfccc.int/UserManagement/FileStorage/AM_CLAR_QEJWJEF3CFBP1OZAK6V5YXPQKK7WYJ
9
Data source: key parameters all come from Xiaohe Supplementary Preliminary Engineering Design
2 Power Tariff Rate(including VAT) RMB Yuan /kWh 0.18

3 Project Lifetime years 22
4 Total Investment RMB million Yuan 68.4776
5 VAT % 6
6 Income Tax % 33
7 Additional Tax to VAT % 8
8 Operation and Maintenance Expenses RMB million Yuan 1.34
9 Expected CERs Price RMB Yuan / tCO2 60
10 CERs Crediting Period Year 7*3
The IRRs with and without CDM revenues are listed below. Without CDM revenues, the XHP would not
make the investment viable with IRR 7.24% lower than the financial benchmark rate of return (10%).
Calculated investment over unit KW reaches as high as 7,025 RMB Yuan, which is higher than the
weighted average investment over unit KW of hydropower projects in China (about 6,600RMB Yuan 10 ).
Therefore the proposed project activity is not a financially attractive option. With CDM revenues, the
IRR is increased to above the benchmark rate and is thus financially acceptable.
Without CDM With CDM

Item Benchmark rate
revenues revenues
IRR of total investment 7.24% 10.00% 10.89%
c. Sensitivity analysis
A detailed sensitivity analysis of the project activity was done to test the project feasibility with varying
project parameters. The project activity feasibility is mainly dependent on the following parameters.
ٛ ●Total investment
ٛ ●Annual output
ٛ ●Operation and Maintenance Expenses (OM)
The impact of change for on-grid tariff is not considered as the tariff is approved by related price
department.
When the above three financial indicators where fluctuation within the range of -20% to +20%, the IRR
of total investment varies to different extent, as shown in the table below.
Total investment Annual output OM
Change Benchmark
Basal value Basal value Basal value
rate rate
-20% 10% 10.06% 4.83% 7.60%
-10% 10% 8.52% 6.05% 7.42%
-5% 10% 7.85% 6.65% 7.33%
+5% 10% 6.67% 7.82% 7.14%
+10% 10% 6.14% 8.40% 7.05%
+20% 10% 5.18% 9.53% 6.87%
10
State Power Information Network, http://www.sp.com.cn/dlyw/gndlyw/200311240002.htm
In the case that total investment decreases by 19.6%, the IRR of total investment is equal to benchmark
rate. However, the total investment may not have large fluctuation, especially the decrease because of
various investment barriers. In the case that the annual output increases by 24.1%, the IRR of the
proposed project is equal to benchmark rate. Considering the operating hours in preliminary engineering
design based on the long time series of hydrology information, the annual output may fluctuate within a
small range. Whenever OM decreases some extent, the IRR of total investment may not exceed the
benchmark rate.
Based on above investment analyses, without CDM revenues, the project is not financially viable, even
when the possible variations of the main parameters are considered.
In addition, the proposed project activity has great barriers in investment, mainly as follows:
●Financing barriers-During the constructing stage of XHP, the project entity had confronted difficulty in
financing because of the smaller capacity and other reasons. Several county – level sub branches of banks
don't agree to the loan in the area of the project activity, for instance, China Agriculture Bank, which has
the lowest loan threshold among several state-owned banks, also stipulates ‘don't support small hydro
power projects with unit capacity less than 5MW’ 11 . And thus the project entity faces great difficulty in
access to financing.
●Tariff risks-At present, the tariff of SHP published by Gansu Provincial Price Bureau is only RMB 0.18
Yuan/kWh (including tax) 12 , which is very lower than the RMB 0.28 Yuan /kWh 13 designed in Xiaohe
Supplementary Preliminary Engineering Design. In term of the existing tariff, XHP will not make the
investment viable, and thus the economical attraction obviously declines. This is one of the major barriers
for the feasibility of the project.
●The earlier development achievements of XHP were completed by Xiahe County Ando cement Co.Ltd
(XCAC). Then considering various investment barriers, the IRR of the proposed project is very lower,
which is not considered financially attraction, and thus XCAC gave up the construction of XHP.
In conclusion, without CDM revenues, the project can not be considered as financially viable because of
various barriers described above. Therefore, the proposed project activity is additional and not the same
as the baseline scenario.
Impacts of CDM revenues
Considering the CDM revenues, the IRR of XHP will be increased to about 10.89%, which is higher than
the benchmark rate, and thus the project activity was found attractive for investment. Therefore the
project entity, Xiahe Hengfa Hydropower Co.Ltd (XHHC) took over XHP from XCAC 14 in early year
2005, and then started the construction on April 26, 2005.
Considering the development of the proposed CDM project, Agricultural Bank of China, Gansu Branch
(ABCGB), had agreed with XHHC on the loan of XHP on April 10, 2006 15 , and regarded the future
revenues from CDM as the mortgage for repayment of the loan.
11
Credit regulations for electric industry, China Agriculture Bank: described the regulation of SHP with unit
capacity less than 5MW
12
Notice about the grid-tariff of small hydropower companies, Gansu Provincial Price Bureau, file NO.[2004]352
13
Integrated on-grid price, which is the average on-grid tariff 0.16 Yuan /kWh and out-grid tariff 0.40 Yuan /kWh
in those times of XHP’s engineering design, Xiaohe Preliminary Engineering Design, P.166: according to the
regulations of electric power in Gansu Province, the price can not be realized.
14
The Transfer Agreement of Xiahe County Ando cement Co.Ltd (XCAC) and Xiahe Hengfa Hydropower Co.Ltd
(XHHC), 12/01/2005: described the earlier development achievements completed by XCAC
15
Approval on the loan of XHP of XHHC, Agricultural Bank of China, Gansu Branch, file NO.[2006]46: described
the provision of mortgage loan for CDM revenues
B.4. Description of how the definition of the project boundary related to the baseline methodology
selected is applied to the small-scale project activity:
Project boundary specified in the Appendix B of simplified modalities and procedures is that
encompasses the physical, geographical site of the renewable generation source.
For the project activity under consideration, the gird system of the proposed project is defined as the
NWPG, the project boundary for baseline will include all the direct emissions related to the electricity
produced by the facilities and power plants to be replaced by the proposed project activity, and this
involves emissions from displaced fossil fuel used at power plants. Since there no electricity transaction
between NWPG and other regional grids, so electricity import is not to be considered when calculating
the emission factors. In addition, no leakages or indirect emissions were identified for the project. The
project is connected to Gansu Provincial Grid, and then connected to NWPG (detailed in Fig.3).
Fig3. Connection of the project in NWPG
B.5. Details of the baseline and its development:

As explained in Section B.2, the project activity is generation of electricity for a grid system, which is
also served by other fossil and non-fossil fuel, based generating units. Hence, the applicable baseline
methodology for the proposed project activity is as Appendix B of indicative simplified baseline and
monitoring methodologies, which states that the baseline is kWh produced by the renewable generating
unit multiplied by an emission co-efficient (measured in kgCO2equ /kWh). The baseline is estimated
using the method specified under clause 9 of TYPE I.D in Appendix B. option (b): the weighted average
emissions of the current generation mix, which is considered appropriate to the project activity, and the
method is conservative, transparent.
Date of completing the draft of this baseline section (DD/MM/YYYY):
14/08/2006
Name of person:
Bowen Jin
Junyang Guo
Entity determining the baseline:
The center for Development and Promotion of Science and Technology of Gansu Province
Clean Development Mechanism Joint Office of Gansu Province
Address: Qingyang Road No. 174, Lanzhou city, Gansu Province, China.
Telephone: +86-931-8826221
E-Mail: guojunyang1979@163.com
The entity is not one of the Project Participants listed in Annex 1 of the document
SECTION C. Duration of the project activity / Crediting period:
C.1. Duration of the small-scale project activity:
C.1.1. Starting date of the small-scale project activity:

26/04/2005
C.1.2. Expected operational lifetime of the small-scale project activity:
22y-0m
The finical analysis of the project has been made using a conservative 22-year operation period.
C.2. Choice of crediting period and related information:
The project activity will use a renewable crediting period as detailed in C.2.1.
C.2.1. Renewable crediting period:
C.2.1.1. Starting date of the first crediting period:
01/01/2008
C.2.1.2. Length of the first crediting period:
7y-0m
C.2.2. Fixed crediting period:
Not applicable
C.2.2.1. Starting date:
Not applicable
C.2.2.2. Length:
Not applicable
SECTION D. Application of a monitoring methodology and plan:
D.1. Name and reference of approved monitoring methodology applied to the small-scale project
activity:
According to UNFCCC’s most recent list in Appendix B of the simplified M＆P for small scale CDM
project activities, the approved monitoring methodology applied to the proposed project as follows:
Title of the methodology: Grid connected renewable electricity generation
Reference of the methodology: AMS-I.D.（Version 08: 03 March 2006） 16
D.2. justification of the choice of the methodology and why it is applicable to the small-scale project
activity:
The capacity of the project is only 9.6 MW, which is less than the qualifying capacity of 15 MW to use
simplified methodologies. Further, the project activity is generation of electricity for a grid system using
the potential renewable hydropower resources in Daxia River, then connected to NWPG to operate.
Hence, the monitoring methodology was selected, which specified in Appendix B of the indicative
simplified baseline and monitoring methodologies for small scale CDM project activities.
D.3 Data to be monitored:
Monitoring shall consist of metering the electricity generated by the renewable technology (hydropower),
and the method as described Procedures for SSC projects for Type I.D. In view of the design of run-of-
river hydropower technology, the power density (W/m2) of the proposed project is greater than 10W/m2,
so metering of leakage is not necessary. Therefore data to be monitored only including electricity
delivered to the grid by the proposed project activity.
16
http://cdm.unfccc.int/UserManagement/FileStorage/CDMWF_AM_88PZMJZZR5KRJ6L9V7AXGGWHG7W2HH
Measured(m) Proportion How will the

For how long is
I.D Data Data calculated(c) Recording of data to data be
Data type archived data to Comment
number variable unit or frequency be archived(elec
be kept?
estimated(e) monitored tronic/paper)
D.3.1 Data on Electricity MWh m Hourly for 100% Electronic Proposed The data required for estimation
Electricity delivered metering and paper crediting period of baseline emissions. The
to the grid data. plus two years modern computerized system in
by XHP Monthly the project will allow electricity
for receipt output to be measured accurately.
data And the records would be kept in
electronic form and monthly
generation data would be printed
out for a back up, for the
improbable event of a computer
hazard.
D.4. Qualitative explanation of how quality control (QC) and quality assurance (QA) procedures
are undertaken:
The generated electricity by XHP will be transmitted from its booster station to Wanggeertang switching
station, and then connected to NWPG to operate. Instruments for metering will be installed in all the
booster station and switching station, and the output electricity will be double-checked by both power
bureau and the project entity according to the ammeter at the end of every month. In addition, all the
metering instruments are introduced precision ammeters in term of electric power standard, and regularly
calibrated to ensure accuracy of measurement. Furthermore, such metering method has already had a long
history and rich experience in China, and also is considered standard practice with very low uncertainty.
More importantly, electricity delivered to the grid is the basis of business between the project entity and
Gannan Prefectural Electric Power Company, so the quality of metering data has a good assurance
because of the mutual supervision mechanism.
In addition, the Electricity Sales Invoice is also one of the hard evidences for data quality control.
D.5. Please describe briefly the operational and management structure that the project
3.participant(s) will implement in order to monitor emission reductions and any leakage effects
generated by the project activity:
In order to fit the monitoring of the proposed project activity, the project entity had set up a CDM project
team comprised of three persons, which is in the charge of Shuyuan Ma, the vice-president of XHHC.
The team will assign a qualified person to collect and compile the necessary data of monitoring plan, and
the monitoring data will be compiled in a manner amenable to third party audit and deliverable to the
DOE for verification and certification. In addition, the project entity had trained a recorder so as to ensure
the data quality of the proposed CDM project activity, and also had schemed regulations on the CDM
management of XHP.
XHHC’s CDM project team as follows:
Mr. Ma Shuyuan, vice-president of XHHC, team leader
Mr. Yuan Wen, file clerk
Mr. Ma Ping, technician and recorder
Since there no leakage sources identified in the project, no control over leakage is necessary.
D.6. Name of person/entity determining the monitoring methodology:
Name of person:
Bowen Jin
Junyang Guo
Entity determining the monitoring methodology:
The Center for Development and Promotion of Science and Technology of Gansu Province
Clean Development Mechanism Joint Office of Gansu Province
Address: Qingyang Road No. 174, Lanzhou city, Gansu Province, China.
Telephone: +86-931-8826221
E-Mail: guojunyang1979@163.com
The above person/entity is not a Project Participant for the project activity
SECTION E.: Estimation of GHG emissions by sources:
E.1. Formulae used:
E.1.1 Selected formulae as provided in appendix B:
No specific formulae are specified for the applicable project category.

E.1.2 Description of formulae when not provided in appendix B:
E.1.2.1 Describe the formulae used to estimate anthropogenic emissions by sources of GHGs due to
the project activity within the project boundary:
According to the engineering design of XHP, the power density of the proposed project activity is greater
than 10W/m2, therefore the project emissions from the reservoir may be neglected. Further no
anthropogenic emissions by sources of greenhouse gases within the project boundary are identified.
Hence, no formulae are applicable. Then, PE y =0
E.1.2.2 Describe the formulae used to estimate leakage due to the project activity, where required,
for the applicable project category in appendix B of the simplified modalities and procedures for
small-scale CDM project activities
The project is a run-of-river hydropower project, and no anthropogenic greenhouse gases by sources
outside the project boundary were identified. In addition, according to Paragraph 8 of Appendix B of
small-scale CDM project activity modalities, project proponents confirm that the renewable energy
technology is not equipment transferred from another activity. Hence, no leakage is considered from the
project activity and calculation is not required. Then, Ly =0
E.1.2.3The sum of E.1.2.1 and E.1.2.2 represents the small-scale project activity emissions:
The project emissions from the small-scale project activity are zero.
E.1.2.4 Describe the formulae used to estimate the anthropogenic emissions by sources of GHGs in
the baseline using the baseline methodology for the applicable project category in appendix B of the
simplified modalities and procedures for small-scale CDM project activities:
As explained in Section B.2, the baseline is the kWh produced by the renewable generating unit
multiplied by an emission coefficient (measured in kg CO2equ/kWh) calculated in a transparent and
conservative manner. According to clause 9(c) AMS-I.D 17 （Version 08: 03 March 2006）, the weighted
average emission factor is calculated as option 1) a 3-year average, based on the most recent statistics
available at the time of PDD submission).
In view of no elaborate formulae specified in AMS-I.D, “Consolidated baseline methodology for grid-
connected electricity generation from renewable sources” ACM0002 also can be referred because the
project activity is also a grid-connected renewable project. Therefore, the following formula and steps can
be used to the calculation of emission factor. According to the statistics in China Energy Statistical
Yearbook, the fuel structure of thermal power in NWPG is almost dominated by coal, other sources can
17
http://cdm.unfccc.int/methodologies/SSCmethodologies/approved.html
be neglected because of little consumption (0.75% in total in year 2003 18 ), therefore the following
calculation doesn't distinguish fuel type, and the generation mix is composed by hydropower plants and
coal- based thermal plants.
Detailed calculation step and formulae as follows:
Step 1: Estimation of coal consumption ( Fcoal , y )
The coal consumption Fcoal , y is obtained as:
Fcoal , y = ∑ GEN k ,thermal , y × PGCC k , y

k
Where: GEN k ,thermal , y is the generation by coal-based thermal plants of province k in year y;
k refers to the provincial grid of NWPG, including Gansu, Shanxi, Qinghai and Ningxia Grid;
PGCCk , y is the standard coal (gce/kWh) consumption of power generation in province k in year y.
Step 2: Estimation of Emission Coefficient for standard coal ( COEFcoal )
The CO2 emission coefficient ( COEFcoal ) is obtained as:
COEFcoal = NCVcoal × EFCO 2,coal × OXIDcoal
Where: NCVcoal is the net calorific value (energy content) per mass or volume unit of coal (GJ/tce);
OXIDcoal is the oxidation factor of the coal;
EFCO 2,coal is the CO2 emission factor per unit of energy of the coal (tCO2/GJ).
Referred to description in version 6 of ACM002 again, “Where available, local values of NCVcoal
and EFCO 2,coal should be used. If no such values are available, country-specific values (see e.g. IPCC
Good Practice Guidance) are preferable to IPCC world-wide default values”. Detailed results see E.2
Step 3: Calculation of the weighted average Emission Factor (detailed in E.2)
F coal × COEF
EF = ,y coal
y
∑ k
GEN k , mix , y
Where: GEN k , mix , y is the electricity delivered to the grid by mix power plant of province k in year y
Step 4: Calculation of the Baseline Emission Factor ( EFbaseline ) (detailed in E.2)
18
China Energy Statistical Yearbook 2004, P246-261
∑ EF y
EFbaseline = the most recent three years
3
Where: ∑ EFy
the most recent three years
is the sum of the emission factor of the most recent three years.
Step 5: Estimation of the Baseline Emissions ( BE y )
BE y = GEN y × EF baseline
Where: GEN y is the electricity to be delivered to the grid from the project in year y;
EFbaseline is the Baseline Emission Factor.

E.1.2.5 Difference between E.1.2.4 and E.1.2.3 represents the emission reductions due to the project
activity during a given period:
The emission reductions ( ER y ) by the project activity during a given year y is the difference between
baseline emissions ( BE y ), project emissions ( PE y ) and emissions due to leakage ( L y ), as follows:
ER y = BE y − PE y − L y
The annual project emissions by the project activity are zero, then PE y =0
There no emissions due to leakage can be identified for the project, then L y =0
For the proposed project activity, it is expected to have an annual output 51,03MWh to NWPG, and the
baseline emission factor as calculated in upper E.1.2.4 equals to 0.815 tCO2/MWh. Thus:
BE y = GEN y × EFbaseline = 51,030MWh×0.815 tCO2/MWh = 41,589 tCO2
The emission reductions ( ER y ) by the project activity as follows:
ER y = BE y − PE y − L y = BE y = 41,589 tCO2
E.2 Table providing values obtained when applying formulae above:
In order to calculate the weighted average emission factor of the current generation minx, table providing
values obtained following as:
Calculation of CO2 emission coefficient for standard coal
A B C D E
Net calorific value per Emission factor of Oxidation factor CO2 emission
parameters
tce the coal of the coal coefficient per tce
Data China Energy Statistics IPCC Good Practice IPCC Default
B×C×D
source Yearbook 2004, p 535 Guidance, p 1.29. Value
unit GJ/tce tCO2/GJ - tCO2 /tce
Amount 29.27 0.0946 98% 2.714
Installed Capacity and weighted average Emission Factor of NWPG in 2002
Item Unit Shanxi Gansu Qinghai Ningxia Total
A Total Capacity MW 7527.7 7128.8 3923.6 2253.9 20834.0
B Hydro Capacity MW 1261.2 3238.6 3188.6 307.9 7996.3

C Thermal Capacity MW 6266.5 3881.8 735.0 1946.0 12829.3
D Total Generation MWh 32463860 34280100 13768090 15694680 96206730
E Generation from
MWh 2590900 10758660 9119760 861450 23330770
hydro plants
F Generation from
MWh 29872960 23503520 4648330 14833230 72858040
thermal plants
G PGCC gce/kWh 368 352 412 354
H=F*
Coal consumption tce 10993249 8273239 1915111.9 5250963.4 26432562
G/1000
Emission
I tCO2/tce 2.714
coefficient of coal
J=H*I Emissions t CO2 71737973
Electricity
K delivered to the MWh 32530000 31781000 11935000 16715000 92961000
grid
L=J/K Emission factor t CO2/MWh 0.772
Data source:
1. Installed capacity and generation: China electric power yearbook 2003 p.593
2. PGCC: China electric power yearbook 2003 p.592
3. Electricity delivered to the grid: China electric power yearbook 2003 p.594

A Total Capacity MW 8788.7 8047.2 4246.9 3420.2 24503

C Thermal Capacity MW 7326.4 4745 905.8 3102 16079.2
Generation from
E MWh 4560000 9812000 7136000 822000 22330000
hydro plants
Generation from
F MWh 38144000 29494000 6446000 19175000 93259000
thermal plants
G PGCC gce/kWh 361 351 406 340
H=F*
Coal consumption tce 13769984 10352394 2617076 6519500 33258954
G/1000
Emission
I tCO2/tce 2.714
coefficient of coal
Electricity
grid
Data source:

A Total Capacity MW 9516.9 8679.9 4943.2 4190.7 27330.7
C Thermal Capacity MW 7640.4 4975.6 889.8 3782 17287.8
Generation from
E MWh 7043000 12047000 11071000 984000 31145000
hydro plants
Generation from
F MWh 44439000 33242000 6208000 25298000 109187000
thermal plants
G PGCC gce/kWh 358 348 396 336
H=F*
Coal consumption tce 15909162 11568216 2458368 8500128 38435874
G/1000
Emission
I tCO2/tce 2.714
coefficient of coal
Electricity
grid
Data source:
Calculation of Baseline Emission Coefficient of NWPG
2002 2003 2004 Average

The weighted average
0.772 0.840 0.834 0.815
emission factor(t CO2/MWh)
Estimation of Emission Reductions due to the Project
Estimation of
Estimation of Estimation of Estimation of
Project activity
Year baseline emission leakage Emission reductions
Emission
(tCO2e) (tCO2e) (tCO2e)
(tCO2e)
2008 0 41,589 0 41,589
2009 0 41,589 0 41,589
2010 0 41,589 0 41,589
2011 0 41,589 0 41,589
2012 0 41,589 0 41,589
2013 0 41,589 0 41,589
2014 0 41,589 0 41,589
Total
0 291,123 0 291,123
(tCO2e)
SECTION F.: Environmental impacts:
F.1. If required by the host Party, documentation on the analysis of the environmental impacts of
the project activity:
According to the Clauses 13 and 19 of Environmental Protection Law of the People's Republic of China,
the project entity must analyze the environmental impacts of project activity before exploiting natural
resources and developing project construction. The Environmental Impact Assessment (EIA) for the
project had been carried out by Institute of Environmental and Geology of Gansu Province, and
subsequently approved by Gannan Prefectural Environmental Protection Agency. Therefore the proposed
project complied with national, regional and local environmental regulations.
Conclusions of the EIA report are summarized as follows:
In view of the common practice of China, the environmental impacts of SHP are considered negligible.
The direct influenced area of the project activity is Quao Township, Xiahe County, and there are no
household involving, the resettlement and the movement of building in process of the project's
development, therefore social and environmental influences are not significant.
During the construction phase, the occupied area on ground work is relatively small; pollution of the
sewage which produced by the project activity to Daxia River is not evident; earth-rock excavation will
amount to 191,100 m3，except 41,600 m3 reused by the project construction, the rest are carried to the
waste residue pits, so all these things can not bring significant negative impacts to local environment.
During the operation phase, the reduction of the present water volume can cause changes in water
availability for the maintenance of an ecological flow. In order to sustain a healthy ecology, some
ecological flow would be ensured. Further the project activity would not bring evident influences to the
water quality of Daxia River, the swing of main stream or the change of river morphology. Moreover, it
can improve the ability of preventing flood for lower reaches of Daxia River to some extent.
In a word, the proposed project activity does not have obvious negative effect to the environment on the
whole, and will reduce both GHG emissions and local environmental pollutants caused by coal
combustion. And there are many beneficial effects such as increase in local residents’ living standards,
improvement in infrastructure level etc. Therefore the project will have positive impact on socio-
economic environment.
SECTION G. Stakeholders’ comments:
G.1. Brief description of how comments by local stakeholders have been invited and compiled:
At the opening ceremony of XHP, open public conference was held on April 26, 2005 in Xiahe County to
better understand stakeholders' comments, its attendees included 100 representatives from 60
organizations, such as Gannan Prefectural government, Gannan Prefectural Electric Power Company,
Environmental Protection Bureau of Gannan, Xiahe County Hydropower Administration, Quao Township
People's Government, Xiaohe Project construction team and vicinity Villagers etc., and it initially sought
opinions from stakeholders. The project entity introduced with paper materials, slide show and so on to
present the possible influences by the project activity, and took on-spot records to compile stakeholders'
comments.
In April, 2006, the project entity took questionnaires to better understand stakeholders' comments again.
Investigated stakeholders included representatives from several villages influenced by the project activity
and related institutions. 50 questionnaires were distributed, all of the distributed questionnaires had been
returned. The main investigated issues as follows:
(1) Feelings toward construction of the proposed project;

(2) Attitude, requirement, advice towards the environmental influences;
(3) Views on the contributions of the project activity to sustainable development;
(4) Conclusion, advice of the investigated stakeholders.
G.2. Summary of the comments received:
The project is located in the minority areas of Gannan autonomous prefecture, and the major nationalities
are Tibetan and Islam. In the process of collecting stakeholders' comments, all investigated stakeholders
supported the construction of the project, and no adverse comments were received. However, the
following concerns still need to be seriously considered.
1. After operation, the project activity would influence local residents’ drinking water, livestock’s
drinking water and agricultural irrigation in the section of the Daxia River with the diversion sluice and
the powerhouse;
2. The project entity should compensate the stakeholders on the occupation of the flood beds and
cultivable lands.
G.3. Report on how due account was taken of any comments received:
The following measures have been or will be taken by the project entity to answer the comments of the
stakeholders.
1. Under applied by XHHC, Xiahe County People's Government had invested 1.8 million RMB Yuan in
‘water drink engineering’ to solve drinking water problem. In addition, the project entity had committed
to ensure ecological flow not less than 1m3/s and sluice water four times every year to solve agricultural
irrigation problem;
2. The project entity had signed the agreement of land expropriation with Xiahe County People's
Government on June 22, 2005, and it would compensate Xiahe County Agriculture and Forestry Bureau
48 thousand RMB Yuan, the local villagers 57.6 thousand RMB Yuan, Land and Resources Bureau 72.8
thousand RMB Yuan.
Annex 1
CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY
Project Entity
Organization: Xiahe Hengfa Hydropower Co.Ltd
Street/P.O.Box: Jiuda Road 213, Chengguan district
Building: Colored Geological Prospecting Bureau Building
City: Lanzhou
State/Region: Gansu Province
Postfix/ZIP: 700030
Country: People’s Republic of China
Telephone: + 86 (0) 931 888 2956
FAX: + 86 (0) 931 888 2956
E-Mail: hengfasd@sohu.com
URL:
Represented by: Ma Shuyuan
Title: Deputy General Manager
Salutation: Mr.
Last Name: Ma
Middle Name: /
First Name: Shuyuan
Department: /
Mobile: + 86 139 190 722 79
Direct FAX: /
Direct tel:
Personal E-Mail: Mashuyuan18@sohu.com

Host Country Details

National Development and Reform Commission of the People's Republic of
Organization:
China
Street/P.O.Box: 38 South Yuetan Street, Beijing 100824
Building: /
City: Beijing
State/Region: /
Postfix/ZIP: 100824
Country: People’s Republic of China
Telephone: +86-10-68501715/2957
FAX: +86-10-68501876/2873
E-Mail: /
URL: /
Represented by: Gao Guangsheng
Title: Director General
Salutation: Mr.
Last Name: Gao
Middle Name: /
First Name: Guangsheng
Department: Office to National Climate Change Coordination Committee
Mobile: /
Direct FAX: /
Direct tel: /
Personal E-Mail: gaogs@mx.cei.gov.cn; lily@ccchina.gov.cn

Annex 2
INFORMATION REGARDING PUBLIC FUNDING
There is no public funding from parties included in Annex Ⅰ to the Convention.

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CDM-SSC-PDD (version 02)

CDM – Executive Board page 1

CLEAN DEVELOPMENT MECHANISM

A. General description of the small-scale project activity

C. Duration of the project activity / Crediting period

D. Monitoring methodology and plan

E. Calculation of GHG emission reductions by sources

Annex 1: Information on participants in the project activity

Annex 2: Information regarding public funding

CDM – Executive Board page 2

Revision history of this document

Version Date Description and reason of revision

CDM – Executive Board page 3

SECTION A. General description of the small-scale project activity

A.1. Title of the small-scale project activity:

CDM – Executive Board page 4

A.4.1. Location of the small-scale project activity:

CDM – Executive Board page 5

Fig1. Location of Gansu Province in China

Fig2. Physical Location of the project in Gansu Province

CDM – Executive Board page 6

CDM – Executive Board page 7

Annual estimation of emission reductions

A.4.4. Public funding of the small-scale project activity:

CDM – Executive Board page 8

Project category applicable to the small-scale project activity:

CDM – Executive Board page 9

NO. Parameters Unit Value

CDM – Executive Board page 10

2 Power Tariff Rate(including VAT) RMB Yuan /kWh 0.18

Without CDM With CDM

CDM – Executive Board page 11

CDM – Executive Board page 12

Fig3. Connection of the project in NWPG

B.5. Details of the baseline and its development:

CDM – Executive Board page 13

C.1. Duration of the small-scale project activity:

C.1.1. Starting date of the small-scale project activity:

C.2.1.1. Starting date of the first crediting period:

CDM – Executive Board page 14

CDM – Executive Board page 15

Measured(m) Proportion How will the

CDM – Executive Board page 16

CDM – Executive Board page 17

SECTION E.: Estimation of GHG emissions by sources:

E.1. Formulae used:

E.1.1 Selected formulae as provided in appendix B:

No specific formulae are specified for the applicable project category.

CDM – Executive Board page 18

Detailed calculation step and formulae as follows:

Step 1: Estimation of coal consumption ( Fcoal , y )

The coal consumption Fcoal , y is obtained as:

Fcoal , y = ∑ GEN k ,thermal , y × PGCC k , y

Step 2: Estimation of Emission Coefficient for standard coal ( COEFcoal )

The CO2 emission coefficient ( COEFcoal ) is obtained as:

COEFcoal = NCVcoal × EFCO 2,coal × OXIDcoal

OXIDcoal is the oxidation factor of the coal;

Step 4: Calculation of the Baseline Emission Factor ( EFbaseline ) (detailed in E.2)

CDM – Executive Board page 19

Step 5: Estimation of the Baseline Emissions ( BE y )

EFbaseline is the Baseline Emission Factor.

CDM – Executive Board page 20

B Hydro Capacity MW 1261.2 3238.6 3188.6 307.9 7996.3