Clean Development Mechanism Project Design Document Form (CDM-PDD) Version 02 - in Effect As Of: 1 July 2004)

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 02
CDM – Executive Board page 1
CLEAN DEVELOPMENT MECHANISM

PROJECT DESIGN DOCUMENT FORM (CDM-PDD)
Version 02 - in effect as of: 1 July 2004)
CONTENTS
A. General description of project activity
B. Application of a baseline methodology
C. Duration of the project activity / Crediting period
D. Application of a monitoring methodology and plan
E. Estimation of GHG emissions by sources
F. Environmental impacts
G. Stakeholders’ comments
Annexes
Annex 1: Contact information on participants in the project activity
Annex 2: Information regarding public funding
Annex 3: Baseline information
Annex 4: Monitoring plan
This template shall not be altered. It shall be completed without modifying/adding headings or logo, format or font.
SECTION A. General description of project activity
A.1 Title of the project activity:

>>
Jiaojiping Hydroelectric Project
Version 1: Draft
3 May 2006
A.2. Description of the project activity:

>>
The Jiaojiping Hydroelectric Project (hereafter, the Project) developed by Sichuan Tianquan Jiaojiping
Generation Co., Ltd. (hereafter referred to as the Project Developer) is a large run-of-river hydroelectric
project in Tianquan County, Ya’an City, part of Sichuan Province, the People’s Republic of China
(hereafter referred to as the “Host Country”). The Project Developer has obtained permission to sell
generated electricity to the Huazhong grid (Central China grid). Total installed capacity of the
hydroelectric project will be 72 MW, consisting of three (3) 24MW turbines.
The Project Developer is developing a hydroelectric generation plant to supply electricity to displace the
predominantly coal-fired Huazhong Grid generation thus reducing GHG emissions. The Huazhong
electricity system, to which the proposed project will be connected, is a regional electricity grid system.
Total installed capacity will be 72 MW with a predicted power generation of 333,043 MWh/yr.
The project will meet the needs of China’s East-West Power Transition Project. The electricity currently
generated by the grid is relatively carbon intensive, with an operating margin emission factor of 1.108
tCO2/MWh and a build margin emission factor of 0.473 tCO2/MWh (see section B for further details).
Investment capital for the project funding has been secured from private companies, Sichuan Honyahesen
Power Co. Ltd and Sichuan Gonzui Power Company. There is 70% debt funding and 30% is equity
funding.
The various elements of the Project plant, i.e. the diversion and tunnels, are not multi-functional in that
they are not used for shipping or irrigation, and are designed to divert the river water via the electricity
generators and turbines. The project has 8267m2 of flooded area.
The project is helping the Host Country fulfil its goals of promoting sustainable development.
Specifically, the project:
• Increases employment opportunities in the area where the project is located

• Enhances the local investment environment and therefore improves the local economy
• Diversifies the sources of electricity generation, important for meeting growing energy demands and
the transition away from diesel and coal-supplied electricity generation
• Makes greater use of hydroelectric renewable energy generation resources for sustainable energy
production
• The flooded area, 8267m2 gives a power density of 8710 W/m2
• Contributes to poverty alleviation through income and employment generation: the Project will
employ people during the construction phase and throughout project operation.
Benefits of the project to the project locality also include a reduction in the incidence of flooding suffered
by the state highway and residential buildings in close proximity to the diversion part of the project
during the wet season.
The project is expected to reduce emissions of greenhouse gases by an estimated 263,437 t CO2e per year
during the first crediting period.
A.3. Project participants:

>>
Table A.3: Project participants
Name of party involved (*) Private and/or public Kindly indicate if the Party
((host) indicates a host party) entity(ies) involved wishes to be
Projct participants (*) considered as project
(as applicable) participant
(Yes/No)
P.R.China Sichuan Tianquan Jiaojiping No
Generation Co., Ltd
UK EcoSecurities Ltd. No
(*) In accordance with the CDM modalities and procedures, at the time of making the CDM-PDD public
at the stage of validation, a Party (country) involved may or may not have provided its approval. At the
time requesting registration, the approval by the Party(ies) involved is required.
Further contact information of project participants is provided in Annex 1.
A.4. Technical description of the project activity:
A.4.1. Location of the project activity:
A.4.1.1. Host Party(ies):

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The People’s Republic of China (the “Host Country”)
A.4.1.2. Region/State/Province etc.:

>>
Tianquan County, Ya’an City, Sichuan Province.
A.4.1.3. City/Town/Community etc:

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Qinqshi Town.
A.4.1.4. Detail of physical location, including information allowing the

unique identification of this project activity (maximum one page):
>>
The project will be located on the Tianquan river, 7km away from Tianquan County,
close to the 318 State Highway (Qinghai-Tibet highway) where there is a high natural
drop. The Tianquan river runs from the Liang Hekou estuaries to Xipo. The coordinates
of the project are: 30.1 latitude, 102.7 longitude. The nearest city is Ya’an City.
Figure 1. Geographical location of Jiaojiping hydropower station
Project
location
A.4.2. Category(ies) of project activity:

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This project fits in Sectoral Category 1, Energy Industries (renewable/non renewable).
A.4.3. Technology to be employed by the project activity:
The Project is a diversion-type, run-of-river hydropower project with a total installed capacity of 72MW
(3 * 24MW) and a designed operation life of 50 years. The Project consists of three main parts: the lead-
in section, the tunneling system and the power plant. The lead-in section constitutes one sluicing gate and
five flood gates. The flood gates are each 10m wide and 10m high and together have a width of 65m. The
width of the river course is 85m therefore the flood gates do not form a complete barrage across the river.
The tunneling system consists of a penstock, pressure adjustment well and high pressure pipelines.
Through the penstock, a water head of 99.95m is formed to take advantage of the natural height drop.
Water then enters into the pressure adjustment well, the hydraulic pressure is increased through the high
pressure pipeline; the water then flows into the power plant and drives the generator to generate
electricity. The internal electricity use of the turbines and other equipment installed by the project is
169.95 MWh/yr. Normal pool level is 980m above sea level. The length and diameter of the power
diversion tunnel are 6969.8m and 6.8m respectively. The pool gate height is 989.8m above sea level and
the gate/crest length is 74.5m. The spillway design flood level is 987m above sea level. Backflow length
is 0.2km. The river on which the project is based is 106 km long with an average flow rate of 57m3/s. The
project is connected to the grid via an 8km transmission line.
There is a flooded area of 8267m2, giving a power density of 8710 W/m2.
The total construction period is estimated to be 38 months. The generator is produced by Fuyuan Power
Generation Equipments Co. Ltd., Yibin, Sichuan. All other technologies used in the Project are produced
domestically.
A.4.4. Brief explanation of how the anthropogenic emissions of anthropogenic greenhouse

gas (GHGs) by sources are to be reduced by the proposed CDM project activity, including why the
emission reductions would not occur in the absence of the proposed project activity, taking into
account national and/or sectoral policies and circumstances:
The project activity reduces CO2 emissions by displacing more carbon-intensive, fossil fuel-based
electricity generation (predominately coal-fired) with a renewable energy generation alternative (a 72MW
hydroelectricity plant in this instance). The project has an effective annual generation of 333,043 MWh
and as a run-of-river plant it has no project emissions associated with its operations.
In the absence of the proposed project activity, electricity generation would be produced by the continued
use of fossil-fuel –based electricity generators currently operating in the Huazhong grid. This is the
business-as-usual scenario. The Huazhong grid is currently dominated by coal (62% of the electricity is
generated by thermal power plants)1. With further economic development, demand for electricity will
continue to increase. Thus in the absence of the proposed project activity electricity generation would be
produced by the continued use or expansion of fossil-fuel -based electricity generators currently operating
in the Huazhong grid.
Additionality of the project is demonstrated using both investment analysis and barrier analysis. The
Internal rate of Return (IRR) for the project is shown to be below the benchmark rate of return available
to local investors, therefore the project is considered to be financially additional. Furthermore, a barriers
test is done to demonstrate that even though hydro power has been developed in China since the 1950s,
projects have mostly happened in the most economically attractive and favourable sites from an
engineering perspective, where resources and local demand could be well matched. Whilst in more
remote regions and less attractive sites, e.g. the Project location, investment in hydro remains unattractive.
Despite recognition by the Chinese government that harnessing renewable energy resources is important
for environmental and power benefits, the Chinese power sector favours coal-fired plants since coal
generation has proven domestically available technology and fuel source, shorter construction periods and
lower upfront unit capital.
Furthermore, investment in large scale run-of-river hydro projects in China by private companies remains
subject to many other barriers, especially financial barriers such as: ill-defined PPA and electricity tariffs
combined with uncertainties about electricity sales, reliance for investment on private individuals and
enterprises, high upfront costs, and geological and hydrological resource risks.
Considering the barriers faced (listed above), without the CER revenue, the proposed project activity is
not financially viable. The project developer has no obligation to build a hydroelectric power plant, yet
faces high project risks due to substantial barriers which means that without CER revenue the developer
1
China Electric Power Yearbook 2005 p.474.
will not choose to invest in the project development. Therefore, the emissions reductions achieved by the
Project are additional.
A.4.4.1. Estimated amount of emission reductions over the chosen crediting

period:
>>
The project will displace electricity from a relatively carbon intensive grid, with a combined margin of
0.791 tCO2/MWh. This project is expected to displace about 333, 043 MWh per year of electricity. Thus,
the project will avoid 263,437 tCO2e of emissions per year, 1,844,060 tCO2e during the first 7 years.
Please refer to section E for further details on the quantification of GHG emission reductions associated
with the project.
Annual estimation of
emission reductions in tonnes
Years of CO2e
1 (Aug 2006 – Aug 2007) 263,437
2 ( Aug 2007 – Aug 2008) 263,437
3 (Aug 2008 – Aug 2009) 263,437
4 (Aug 2009 – Aug 2010) 263,437
5 (Aug 2010 – Aug 2011) 263,437
6 (Aug 2011 – Aug 2012 263,437
7 (Aug 2012 – Aug 2013) 263,437
Total estimated reductions (tonnes

of CO2e) 1,844,060
Total number of crediting years 7*3
Annual average over the crediting
period of estimated reductions
(tonnes of CO2e) 263,437
A.4.5. Public funding of the project activity:

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The project will not receive any public funding from Parties included in Annex I of the UNFCCC or from
the Host Country.
SECTION B. Application of a baseline methodology
B.1. Title and reference of the approved baseline methodology applied to the project activity:
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ACM0002 “Consolidated baseline methodology for grid-connected electricity generation from renewable
sources” Version 5, 03 March 2006.
B.1.1. Justification of the choice of the methodology and why it is applicable to the project
activity:
>>
Given that the project is a renewable electricity generation plant, in the form of a run-of-river
hydroelectric plant, and is connected to an electricity grid, the regional Huazhong grid of China,
ACM0002 was considered the most appropriate for this project. Also, the geographic and system
boundaries for the aforementioned grid can be clearly identified and there is available information on the
characteristics of this grid.
Further to this, the power density of the project, (given as capacity / flooded area) is shown to be 8710
W/m2 (to the nearest whole W/m2). According to Annex 5 of EB 23, hydroelectric power plants with
power densities greater than 10 W/m2 can use current approved methodologies and the project emissions
from the reservoir may be neglected, therefore ACM0002 is appropriate for this project activity.
As the project activity is a renewable energy project it is appropriate to follow Paragraph 48 of Marrakech
Accords and use existing actual or historical emissions, since the project activity will serve to reduce
actual emissions. On the basis of this and the above, the conditions for applying ACM0002 are met.
B.2. Description of how the methodology is applied in the context of the project activity:
According to the latest version of applicable methodology ACM0002, the Huazhong grid (Central China
Grid) is selected as the project boundary, as:
• There is no China DNA guideline available.
• The Huazhong grid is the regional grid in a country with layered dispatch system like China
• The Huazhong grid has few transmission connections with other regional grids2.
The baseline emissions factor (EFy) is calculated as the average of the operating margin emissions factor
and the build margin emissions factor. This could be obtained through the following steps:
STEP 1. Calculate the Operating Margin emission factor(s) (EFOM,y)

The methodology will be applied using Option (a) of the Consolidated Methodology for Grid Connected
Projects (Simple Operating Margin). This is because low-cost must run resources constitute less than 50%
of total grid generation (62% of electricity generated in the Huazhong grid comes from thermal power
plants)3. Detailed data to apply option (b) is not available, and detailed data to apply option (c) is also
unavailable. In addition, Option (c) (Dispatch Data Analysis) will not be used because even if data was
2
3
available, the costs of processing the data would be beyond the amount affordable by the project
developer.
Since the Project is using ex ante monitoring, a 3-year data vintage is used based on the most recent
statistics available at the time of PDD submission, which are the statistics from the China Electric
Yearbook 2003 to 2005. Since detailed data on individual plants serving the system is not available in
China, fuel consumption data for each relevant type of generating source, is obtained from the average
generation by included fuel sources in the Huazhong grid multiplied by the average fuel consumption for
each GWh electricity generated. Then, from the fuel consumption from the relevant sources in the
Huazhong grid and the electricity generation by these sources, the average emissions from 2002 to 2004
are obtained; these are divided by the total amount of energy generated, to give the emissions rate per
MWh.
The simple OM emissions factor of Huazhong grid is then calculated as 1.108 tCO2e /MWh (refer to
Annex 3 for details).
STEP 2. Calculate the Build Margin emission factor (EFBM,y)

According to ACM0002, the BM calculation is defined as the generation-weighted average emissions
factor of a sample of power plants. However, the data of power plant generation and fuel consumption is
not available in China currently.
According to the EB’s answer to a recent DNV deviation request relating to methodology AM0005, the
use of capacity additions for estimating the build margin emissions factor for grid electricity and the use
of weights estimated using installed capacity in place of annual electricity generation in China are
accepted. So instead of using data on fuel consumption and generation of individual plants which is not
available in China, the build margin is calculated by using aggregate data by technology type to get the
capacity additions to the grid in the most recent 3 years.
The BM average emissions factor of Huazhong grid is therefore calculated as 0.473 tCO2e /MWh (refer to
Annex 3 for details).
STEP 3. Calculate the baseline emission factor EFy (Combined Margin)

With the weights WOM and WBM 50% by default, the CM is obtained as 0.791 tCO2e /MWh (refer to Annex
3 for details).
The data used for the calculation of combined margins is shown in Annex 3 of this document. The main
source of data is the China Electric Yearbook 2000-2004. The defaults used for the calculation of
calorific values for fuel types and fuel oxidisation, came from the IPCC GHG Gas Inventory Reference
Manual (IPCC 1996).
The baseline scenario for the Project is that the electricity would have been generated, and the electricity
demand met, by the operation of grid-connected thermal power plants and by the addition of new fossil
fuel based generating sources. In the project scenario the same electricity demand is met with the project
generation. Because the project uses a renewable source to produce electricity, there are no additional
emissions from the project.
The following table shows the key information and data used to determine the baseline scenario:
Variable Source
Operating Margin Emissions factor China Grid Yearbook 2003-2005

Build Margin Emissions Factor China Grid Yearbook 2003-2005
Combined Margin Emissions Factor China Grid Yearbook 2003-2005
Generation of the project in year y Project developer
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 CDM project activity:
>>
The following steps are used to demonstrate the additionality of the project according to the latest version
of the “Tool for the demonstration and assessment of additionality” agreed by the Executive Board
(Version 2, 28 November 2005):
Step 1. Identification of alternatives to the project activity consistent

with current laws and regulations
Sub-step 1a. Define alternatives to the project activity:
Alternative 1: The proposed project activity without CDM: construction of a new hydroelectricity
generation plant with installed capacity of 72MW connected to the grid.
Alternative 2: Continuation of the current situation. Electricity will continue to be generated by the
existing generation mix operating in the grid.
Alternative 3: The construction of a new coal-fired electricity plant, as commonly used in this grid. This
is not however considered a viable alternative for the project developer since they are a hydroelectric
company with just three years experience of the hydroelectric power sector and have no expertise or
capacity to develop coal powered generation sources.
Sub-step 1b. Enforcement of applicable laws and regulations:
The applicable legal and regulatory requirements for the proposed project include laws, central
government regulations, local regulations, department rules and disciplines related to electricity and
environmental protection, published by the State Electricity Regulatory Commission (SERC), Ministry of
Water Resources and National Development and Reform Commission (NDRC).
In the context of the Chinese power sector transformation to a market-oriented system, whether to invest
in a power generation project will be more an individual power project developer’s decision based on the
project return and risk profile. There are no laws compelling the project developer to develop
hydroelectric plants, thus all the alternatives identified are in line with all applicable laws and regulations.
The main sectoral policy relevant to this project activity is the promotion of renewable energy in China,
the renewable energy law (the Renewable Energy Law of the People’s Republic of China), which came
into effect 1 January 2006. The Chinese government prioritises the development of renewable energy in
the energy development strategy and encourages grid-connected power generation from renewable
sources. Importantly for the additionality test however, there are no direct incentives such as financial
grants or subsidised loans available for this type of project.
Step 2. Investment Analysis
Sub-step 2a: Determine appropriate analysis method
Since this project will generate financial/economic benefits other than CDM-related income, through sale
of generated electricity to the Chinese national grid, Option I (Simple Cost Analysis) is not applicable.
According to the methodology for determination of additionality, if the alternative to the CDM project
activity does not include investments of comparable scale to the project, then Option III must be used.
Given that the project developer does not have alternative and comparable investment choices (i.e. it is
not probable that the project developer would have the expertise to develop a coal-fired power plant
instead of a hydro project), the benchmark analysis (Option III) is more appropriate over investment
comparison analysis (Option II) for assessing the financial viability of the project activity.
Sub-step 2b: Option III – Application of benchmark analysis
The likelihood of the development of this project, as opposed to the continuation of the purchase of grid
electricity from the current electricity generation mix (i.e. its baseline) will be determined by comparing
its IRR with the benchmark of interest rates available to a local investor, i.e. those provided by local
banks or investment bonds in the Host Country, which is 14%, to the nearest percentage point4. The NPV
of the project with and without carbon finance is also included to support the IRR comparisons.
Sub-step 2c: Calculation and comparison of financial indicators
The table below shows the financial analysis for the project activity with and without carbon finance. As
shown, the project IRR (without carbon: 6%; NPV: -15,893,647US$; with carbon: 9%; NPV:
-7,931,431$), is lower than the benchmark rate of return applicable which is 14% for investment funds in
the Host Country. This therefore indicates that in comparison to other investments, the project would not
be a more financially viable investment option for securing the best returns.
with carbon without C

Net Present Value (US$) -7,931,431 -15,893,647
IRR 8.9% 5.6%
Discount rate 12% 12%
Summary of results of project analysis. Details made available to validators.
Sub-step 2d: Sensitivity analysis
A sensitivity analysis was conducted by altering the following parameters:
• Increase in project revenue (price of electricity sold to the grid);

• Reduction in both project capital and running costs (Operational and Maintenance costs).
4
China MSCI Benchmark Index (2006)
Those parameters were selected as being the most likely to fluctuate over time. Financial analyses were
performed altering each of these parameters by 10 %, and assessing what the impact on the project IRR
would be (see Table below). As it can be seen, the project IRR remains lower than the alternative with
carbon finance (and lower than the benchmark in the Host Country), even in the case where these
parameters change in favour of the project.
Scenario IRR (%) NPV (US$) (optional)

Original 5.60% -15,893,647
Increase in project revenue 7.29% -11,924,085
Reduction in project costs 7.44% -10,449,936
Note: NPV uses 12% discount rate.
Step 3. Barrier Analysis
Sub-step 3a. Identify the barriers that would prevent the implementation of type of the project activity.
The barriers identified with relation to implementation of the alternatives identified in Step 1 are
described below.
With respect to investment barriers:
• The construction of the Jiaojiping plant without CDM revenue (Alternative 1) faces specific
investment barriers due to the fact that the capital costs involved in the project pose a severe barrier,
especially considering the following:
Power Purchase Agreement

The project is permitted only to sell electricity to the Huazhong grid, it cannot supply direct to industry
which means that the price received by the project for electricity sold depends completely on the tariff
agreed by the grid operating company (Mid China Grid Operator) but which may be overridden by
NDRC. The tariff is subject to the regulation and approval of government after completion of the plant
based on NDRC’s assessment of the overall electricity market situation. A tariff has not been agreed
between the project developer and grid operating company.
Also, the amount sold to the grid is subject to the grid operating company responding to demand. The grid
company does not buy 100% of the energy that is generated, and the amount purchased depends on
demand and quality of electricity generated (based on intermittency of supply which is variable according
to the seasonal nature of hydrological resources in the Sichuan Province). This therefore means that the
project cannot guarantee revenue streams from the sale of electricity, which presents a high risk to
potential investors and renders it difficult to meet capital costs. In turn, this heightens the financial risks
associated with the project developer taking a bank loan to support the project development and makes
securing financial investment in the project more difficult. If revenues from sale of electricity cannot be
guaranteed, the ability of the project to make loan repayments is jeopardised.
As an example, the Ertan Hydro Power Project in Sichuan Province failed to sell half its generation
capability after the first year. Local electricity authorities refused to use hydro power from Ertan even
though it was cheaper. Local electricity power authorities have direct or indirect investments in the newly
built thermal plants and therefore preferentially purchase power from thermal plants before hydro plants
in the area 5.
Financial and investment environment

Although the economy is expanding, the national banking authorities have introduced regulations that
leave banks no other option but to ration their credit. Credit rationing effectively sets a cap for interest
rates offered, limiting the scope of projects for which the banks are willing to lend. This favours well-
established businesses, the risks of which are clearly identifiable and would receive loans at lower interest
rates. The known high up-front costs and uncertainties about electricity sales related to large scale run-of-
river hydro projects deter investors. It is therefore difficult for the project developer, as a county-level
private hydro developer with limited funding capability and track record to secure project finance.
The capital costs of the project, estimated in the feasibility study, were based on material prices at the
time the study was completed. Since this time (2003), the prices of project construction materials have
increased. For example, the price of cement has increased from 250 RMB per tonne when the feasibility
study was conducted to 400 RMB per tonne (2006), and gasoline prices have increased from 2000 to
4500 RMB per tonne5. The implication of this is that the loan secured by the development company was
based on the material prices in 2003. Actual current cost calculations for the project are based on current
prices. The loan for the Project was 50% of estimated costs therefore there is a shortfall in the debt
finance needed to complete the project.
Geology and hydrology risk

There are geographical difficulties with the project site as a run-of-river hydro development which
requires a tunnelling component. The developer must tunnel through granite instead of a softer rock
which was the expected geology of the site. This incurs additional costs because of the technology and
time required to work with this geology, such additional costs have not been factored into the project plan
as they were not foreseen by the feasibility study.
The project faces a resource risk as the hydrological flow is variable throughout the year and the run-of-
river technology does not offer the facility to store water (the volume of the flooded area in relation to the
river flow is such that river water will pass through the system within one hour) therefore minimum flows
through the turbines cannot be guaranteed and electricity supplies are subject to the hydrological regime.
In winter and spring the flux and velocity of flow of the river are not enough for optimum generation
whereas in summer and autumn there is sufficient flux and velocity of flow for generation. The
electricity supplies may therefore be seen as unreliable and may affect the grid operator’s demand for
electricity from the project, therefore impacting project revenue from electricity sales.
• The continuation of current practices (Alternative 2) does not pose any investment barrier as it does
not require any additional investment (it is the business as usual scenario).
• Alternative 3 is easier to finance as it is a well-established technology, with well known returns, more
secure fuel supply and lower risks as perceived by investors.
With respect to technical/technological barriers.
5
Wang, T. (2003) Analysis of Real Options in Hydropower Construction Projects -- A Case Study in China, MSc
Thesis, Massachusetts Institute of Technology, USA.
5 The actual commodity purchase price of the Project.
• In the case of Alternative 1 (Project activity), run-of-river hydropower technology of the project size
is less common in Sichuan Province, and therefore it remains uncertain to developers what will be its
long term operational performance. The most lucrative run-of-river hydropower sites have been
developed which automatically renders such projects as Jiaojiping more marginal in terms of
financial revenues as additional costs are incurred through geological problems for example.
• In the case of Alternative 2 (continuation of the use of grid electricity), there are no
technical/technological issues as this simply represents a continuation of current practices and does
not involve any new technology or innovation. Indeed, in this scenario there are no
technical/technological implications as the scenario calls for continued purchases of electricity from
the grid;
• In the case of Alternative 3, there are no technical/technological issues as thermal generation plant
technology is prevalent in the Huazhong grid. Coal-fired plants are proven, have domestically
available technology and fuel sources, a shorter construction period, and lower upfront unit capital
investment.
With respect to the analysis of prevailing business practice:
• The construction of a new renewable energy plant (Alternative1, Project Activity) represents a
deviation from current electricity generation practices in the Host Country, and thus there are barriers
associated with investors and developers perception of the risks related to the types of projects.
• In the case of Alternative 2 (continuation of current practices), there are obviously no business
barriers associated with this alternative, as this is simply the continuation of such practices.
• In the case of Alternative 3, the construction of thermal plants is a common practice in the Huazhong
grid and thus there are no clear barriers for this prevailing business practice.
In summary, Alternative 1 (construction of a new hydropower renewable energy plant) faces the largest
number of barriers than the other alternatives, and therefore is unlikely to be the baseline scenario.
Step 4. Common Practice Analysis
Sub-step 4a. Analyse other activities similar to the proposed activity
A list of some existing hydro power plants with installed capacity above 50 MW in Sichuan Province is
given in the following table:
Name of power Capacity Location Investor

plant (MW)
Caoyutan Hydro 75 Meishan City, Sichuan Sichuan
Province Provincial
Government
Chengdong 84 Meishan City, Sichuan Sichuan
Hydro Province Provincial
Government
Hongyanshi 90 Deyang City, Sichuan Sichuan
Hydro Province Provincial
Government
Yucheng Hydro 60 Ya’an City, Sichuan Sichuan
Province Provincial
Government
Tongtou Hydro 80 Ya’an City, Sichuan Sichuan
Province Provincial
Government
Hongfangzi 90 Ya’an City, Sichuan Sichuan Electric
Hydro Province power Co.
Gongzui Hydro 650 Leshan City, Sichuan Former Electric
Province power Ministry
Yongle Hydro 50 Leshan City, Sichuan Sichuan Electric
Province power Co.
Tongjiezi Hydro 200 Leshan City, Sichuan Former Electric
Xuecheng Hydro 50 Mianyang City, Sichuan Former Electric
It can be seen that the hydro projects other than Jiaojiping (and Ganxipo) in Sichuan Province with
installed capacity of above 50 MW were state-invested as opposed to the Project as a run-of-river hydro
project which is being developed by a county-level private investor. Therefore the development of run-of-
river hydropower privately owned projects with installed capacity of above 50 MW by a small county-
level hydropower specific company is not considered common practice.
Sub-step 4b Discuss any similar options that are occurring
There are essential distinctions between this project and the other already existing hydropower projects
with installed capacity above 50MW in Sichuan Province. The above listed projects are all developed by
state-invested organisations which have larger capital reserves and operational capacity to allow them
better (more and easier) access to project finance. State-invested organisations therefore have stronger
resistance against project risk and stronger negotiating power with the grid operating company, lessening
the barriers described in Step 3. The Jiaojiping project developer is a small, relatively inexperienced
county-level developer, and has very limited financial capacity and thus a weak negotiating power with
the grid operating company and a weak ability to cope with associated project risk.
The barriers discussed in Step 3 further explain how large scale run-of-river hydro projects owned by
county-level developers are not common practice in Sichuan Province.
Step 5. Impact of CDM registration
As shown in Step 2 above, the additional financial support of the CDM makes a significant difference to
the project finance, increasing the IRR from 6 to 9%. If the developer was able to sell emission reduction
credits from the project activity at an assumed price of US$ 7 dollars per tonne of CO2e, the additional
revenue generated by carbon sales would be sufficient to increase the financial viability of this project
(see Table in Step 2c above). In the absence of CDM, loan repayment capability is weakened creating a
potential cash flow crisis - the project has a large bank loan which does not meet the project’s full
investment needs. Carbon finance also bolsters the project against fluctuating electricity tariffs in light of
the market economy transformation. Construction of the project began in 2004 based on consideration of
the capability of the project to gain carbon finance.
Step 3 illustrates that the Jiaojiping project faced significant barriers including: high project risk
associated with access to financing, geological and hydrological risks, and ill-defined power purchase
agreements. A large scale run-of-river project in Sichuan Province conducted by an independent private
developer with limited capacity is not common practice given the province’s trend towards state-invested
large scale dam hydropower.
With the financial support of the CDM, gained through the approval and registration of the project
activity as a CDM activity, there will be attendant benefits and incentives derived from the project
activity additional to the financial benefit of the revenue obtained by selling CERs as documented in A.2.
It is therefore concluded that the proposed Jiaojiping Hydro Project is additional.
B.4. Description of how the definition of the project boundary related to the baseline
methodology selected is applied to the project activity:
>>
For the baseline determination, the project will account for the CO2 emissions from electricity generation
by fossil fuel power stations operating in the grid system, which will be displaced by the Project activity.
The spatial extent of the project boundary is defined as the project site and the plants connected to the
grid system to which the project will be connected. The electricity will be connected to the Huazhong grid
which is a regional grid in China including Jiangxi, Hunan, Hubei, Henan, Sichuan and Chongqing
provincial grids. The Huazhong grid exported 37.8 GWh6 electricity in 2004, which constituted only
0.01% of the grid’s total electricity generation in 2004. The Huazhong grid is therefore the appropriate
grid boundary for which to calculate the baseline emissions factor according to ACM0002, since it has
very low transmission with other electricity systems.
B.5. Details of baseline information, including the date of completion of the baseline study
and the name of person (s)/entity (ies) determining the baseline:
>>
The baseline study was concluded in 3 May 2006. The entity determining the baseline and participating in
the project as the Carbon Advisor is EcoSecurities Ltd., UK, listed in Annex 1 of this document.
The baseline study was prepared by: EcoSecurities Ltd., 21 Beaumont Street, Oxford, OX1 2NH.
Contact: Ruth Whittington, ruth.whittington@ecosecurities.com.
6
China Power Electric Yearbook 2005, p.474.
SECTION C. Duration of the project activity / Crediting period
C.1 Duration of the project activity:

>>
C.1.1. Starting date of the project activity:
>>
June 2004
C.1.2. Expected operational lifetime of the project activity:

>>
50 years
C.2 Choice of the crediting period and related information:
C.2.1. Renewable crediting period
C.2.1.1. Starting date of the first crediting period:

>>
August 2007 (estimated)
C.2.1.2. Length of the first crediting period:

>>
7 (seven) years.
C.2.2. Fixed crediting period:
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 project activity:
>>
The approved monitoring methodology ACM0002 “Consolidated monitoring methodology for zero-
emissions grid-connected electricity generation from renewable sources”, Version 5, 03 March 2006.
D.2. Justification of the choice of the methodology and why it is applicable to the project
activity:
>>
The chosen methodology is to be used in conjunction with baseline methodology ACM0002. The
proposed project activity meets all the applicability requirements, as follows:
• The grid connected power plant and relevant grid are clearly identified: the Jiaojiping project will
supply electricity to the Huazhong grid which is one of the the national grids of China – the
Central State Grid.
• The project is a renewable power plant: in the form of a large scale run-of-river hydro power
plant.
• The project does not involve switching from fossil fuel to renewable energy at the site of the
project activity.
• The electricity grid (Huazhong) to which the proposed project is to be connected is clearly
identified and information on the characteristics of this grid is publicly available.
D.2. 1. Option 1: Monitoring of the emissions in the project scenario and the baseline scenario
>>
D.2.1.1. Data to be collected in order to monitor emissions from the project activity, and how this data will be archived:
ID number Data Source of Data Measured (m), Recording Proportion How will the Comment
(Please use variable data unit calculated (c) frequency of data to data be
numbers to or estimated (e) be archived?
ease cross- monitored (electronic/
referencing paper)
to D.3)
Not applicable since no greenhouse gas will be emitted by the proposed project. The power density of the project, (given as capacity / flooded area) is shown
to be 8710 W/m2 (to the nearest whole W/m2). According to Annex 5 of EB 23, hydroelectric power plants with power densities greater than 10 W/ m2 can
use current approved methodologies and the project emissions from the reservoir may be neglected. Therefore ACM0002 is appropriate for this project
activity and confirms that there are no project emissions to be considered.
D.2.1.2. Description of formulae used to estimate project emissions (for each gas, source, formulae/algorithm, emissions units of CO2
equ.)
>>
Not applicable as project activity has no emissions.
D.2.1.3. Relevant data necessary for determining the baseline of anthropogenic emissions by sources of GHGs within the project
boundary and how such data will be collected and archived :
ID number Data Source of Data unit Measured (m), Recording Proportion How will the data Comment
(Please use variable data calculated (c), frequency of data to be be archived?
numbers to estimated (e), monitored (electronic/ paper)
ease cross-
referencing
to table
D.3)
1. EGy Electricity Project MWh Directly Hourly 100% Electronic Double check by receipt of sales.
supplied to proponent measured measured
the grid data and
monthly
recording
2.EFy CO2 China tCO2/M C At the 100% Electronic Calculated as the weighted sum of OM and BM
emission Electric Wh beginning emission factors. Since this will be established
factor of Power of each based on an ex-ante approach, it will only be
the grid Yearbook crediting calculated at the beginning of each crediting
period period.
3. OM EFy CO2 OM China tCO2/M C At the 100% Electronic Calculated as indicated in the relevant OM
emission Electric Wh beginning baseline method. Since an ex-ante approach is
factor Power of each used, it will only be calculated at the beginning
Yearbook crediting of each crediting period.
period
4. BM EFy CO2 BM China tCO2/M C At the 100% Electronic Calculated as indicated in the relevant BM
emission Electric Wh beginning baseline method. Since an ex-ante approach is
factor Power of each used, it will only be calculated at the beginning
Yearbook crediting of each crediting period.
period
5. F i y Amount of China Mass M At the 100% Electronic Data is not available on a plant specific basis,
each fossil Electric beginning therefore aggregate data by fuel type is used;
fuel Power of each see section D.2.1.4
consumed Yearbook crediting
by each period
power
source /
plant
6. COEF i CO2 IPCC 1996 tCO2/ma M At the 100% Electronic Since an ex-ante approach is used, it will only
emission ss beginning be determined at the beginning of each
coefficient of each crediting period.
of each crediting
fuel type period
7. GEN j/k/n , Electricity China MWh M At the 100% Electronic Data from the China Electric Yearbook will be
y generation Electric beginning used. Since an ex-ante approach is used, it will
of each Power of each only be determined at the beginning of each
power Yearbook crediting crediting period.
source/pla period Please note that the BM is determined on the
nt basis of a deviation from the methodology and
thus this variable does not need to be monitored
for this; see section D.2.1.4.
8 Identificati China text E At the 100% Electronic
The power sources will be determined on the
on of Electric beginning
basis of the China Electric Power Yearbook.
power Power of each
Since an ex-ante approach is used, it will only
source / Yearbook crediting
be determined at the beginning of each
plant for period
crediting period.
the OM
9 Identificati N/A N/A N/A N/A N/A N/A
on of
This will not apply to the project since the BM
power
is determined on the basis of a deviation from
source /
the methodology.
plant for
the BM
D.2.1.4. Description of formulae used to estimate baseline emissions (for each gas,
source, formulae/algorithm, emissions units of CO2 equ.)
The methodology will be applied using Option (a) of the Consolidated Methodology for Grid Connected
Projects (Simple Operating Margin). This is because low-cost must run resources constitute less than 50%
of total grid generation, detailed data to apply option (b) is not available, and detailed data to apply option
(c) is also unavailable. In addition, Option C (Dispatch Data Analysis) will not be used because even if
data was available, the costs of processing the data would be beyond the amount affordable by the project
developer.
a) Simple OM. The simple Operating Margin (OM) emission factor (EFOM,simple,y) is calculated as the
generation-weighted average emissions per electricity unit (tCO2/MWh) of all generating sources serving the
system, not including low-operating cost and must-run power plants. A three-year average, based on the most
recent fuel consumption statistics available at the time of PDD submission, is used. Detailed data on the
individual power plants connected to the grid is not available, therefore information by type of generating
source has been used – please refer to section B.2 for details.
EFOM, y = ∑Fi,j,y*COEFi,j / ∑GENj,y (1)
Where:
Fi,j,y is the amount of fuel i (in a mass or volume unit) consumed by relevant power sources j in years y,
j refers to the power sources delivering electricity to the grid, including low-operating cost and must-run
power plants, and including imports to the grid,
COEFi,j is the CO2 emissions coefficient of fuel i (tCO2/mass or volume unit of the fuel), taking into
account the carbon content of the fuels used by relevant power sources j and the percent oxidation of the
fuel in years y, and
GENj,y is the electricity (MWh) delivered to the grid by source j.
The CO2 emission coefficient is obtained as

COEFi, = NCVi * EF CO2, i * OXIDi (2)
Where:
NCVi is the net calorific value (energy content) per mass or volume unit of a fuel i,
OXIDi is the oxidation factor of the fuel
EF CO2, i is the CO2 emission factor per unit of energy of the fuel i.
To calculate the Build Margin (BM), the formulae should be the following according to the methodology:
Where:
EF_BM: Build Margin emission factor (tCO2e / MWh) and (3)

Where:
∑ F * COEF
i ,m
i ,m, y i ,m
EF _ BM y =
∑ GENm
j, y
Fi,j,y COEFi,j and GENj,y are analogous to the variables described for the simple OM method above for
plants m
m: refers to last additions power sources delivering electricity to the grid.
However, detailed data of power plants is not available in China currently. According to the EB’s answer
to DNV’s deviation request, use of capacity additions for estimating the build margin emissions factor for
grid electricity and use of weights estimated using installed capacity in place of annual electricity
generation are accepted.
The formulae of the deviation use of methodology could be expressed as: (4)
[
EFBM , y = EFfire , y − 2, y * CAPfire , y − 2, y / ∑ j CAPj , y − 2, y ]
Where:
CAP fire_y-n,y is the incremental installed capacity of fuel-fired power (MW) in y year compared to
that of y-2 year;
∑ CAP
j
j , y − 2, y is the aggregate incremental installed capacity of fuel-fired power (MW) in y year
compared to that of y-2 year;
Therefore,
[CAP fire , y − 2 , y / ∑ j CAP j , y − 2 , y ]

represents the share of incremental installed capacity of fuel-fired power in the whole incremental installed
capacity. Starting from year y, the difference of installed capacity between year y and year y-2 is calculated,
and then divided by the installed capacity of year y.
EFfire,y-2,y is the average emissions factor of fuel-fired power of the applicable electricity system in the
previous three years.
The calculation for value of EFfire,y is based on the average of standard coal consumption for fuel-fired power
generation in the previous three years, which is in accordance with the method to calculate OM by using
equation (1).
To get EFy with the combined margin (CM), the following equation is used: (5)
EF y = ω OM ∗ EF _ OM y + ω BM EF _ BM y
Where:
EF: baseline emission factor (tCO2e / MWh)
ωOM: Operation Margin weight, which is 0.5 by default
EF_OM: Operational Margin emission factor (tCO2e / MWh)
ωBM: Build Margin weight, which is 0.5 by default
EF_BM: Build Margin emission factor (tCO2e / MWh)
y: a given year
Then baseline emissions (BEy) are obtained as: (6)
BE y = GEN y ∗ EF y
Where:
BE: Baseline emissions (t CO2e)
GEN: Electricity supplied by the project to the grid (MWh)

y: a given year
D. 2.2. Option 2: Direct monitoring of emission reductions from the project activity (values
should be consistent with those in section E).
>>
Not applicable, as this will not be done.
D.2.2.1. Data to be collected in order to monitor emissions from the project activity, and how this data will be archived:
ID number Data Source of Data Measured (m), Recording Proportion How will the data Comment
(Please use variable data unit calculated (c), frequency of data to be archived?
numbers to estimated (e), be (electronic/
ease cross- monitored paper)
referencing
to table
D.3)
Not applicable
D.2.2.2. Description of formulae used to calculate project emissions (for each gas, source, formulae/algorithm, emissions units of CO2
equ.):
>>
Not applicable
D.2.3. Treatment of leakage in the monitoring plan
D.2.3.1. If applicable, please describe the data and information that will be collected in order to monitor leakage effects of the
project activity
ID number Data Source of Measured (m), Recording Proportion How will the data Comment
Data
variable data calculated (c) or frequency of data to be be archived?
unit
estimated (e) monitored (electronic/ paper)
Not applicable since there is no leakage.
D.2.3.2. Description of formulae used to estimate leakage (for each gas, source, formulae/algorithm, emissions units of CO2 equ.)
>>
According to ACM0002 the leakage of the proposed project (Ly) is 0. No sources of leakage have been identified.
D.2.4. Description of formulae used to estimate emission reductions for the project activity (for each gas, source, formulae/algorithm,
emissions units of CO2 equ.)
>>
ER y = BE y − PE y − L y
Where:
ER: Emission reduction (t CO2e)
PE: Project Emissions (t CO2e)
L: Leakage emissions (t CO2e)
y: a given year
D.3. Quality control (QC) and quality assurance (QA) procedures are being undertaken for data monitored
Data Uncertainty level of data Explain QA/QC procedures planned for these data, or why such procedures are not necessary.
(Indicate table and (High/Medium/Low)
ID number e.g. 3.-1.;
3.2.)
1. EGy Low This data will be directly used for calculation of emission reductions. It is highly accurate since it is measured
both by the operator as well as by the grid company that will acquire the electricity generated by the project. To
guarantee QC/QA, data from the operator will be double checked against receipts of electricity sales.
Others Low Default data (for emission factors) and grid statistics data will be used. All data sources are cited and come from
reputable sources.
D.4 Please describe the operational and management structure that the project operator will
implement in order to monitor emission reductions and any leakage effects, generated by the
project activity
>>
For details of the operational and management structure used for the monitoring of the project activity,
please see Annex 4.
D.5 Name of person/entity determining the monitoring methodology:

>>
The baseline study was concluded in April 2006. The entity determining the baseline and participating in
the project as the Carbon Advisor is EcoSecurities Ltd., UK, listed in Annex 1 of this document.
SECTION E. Estimation of GHG emissions by sources
E.1. Estimate of GHG emissions by sources:

>>
According to ACM0002, there are no expected project emissions related to the generation of electricity,
as generation is based on a renewable resource. Therefore PEY=0.
E.2. Estimated leakage:

>>
According to ACM0002, the leakage of the proposed project is not considered. No leakage is expected.
Therefore LY=0.
E.3. The sum of E.1 and E.2 representing the project activity emissions:
>>
The sum of E.1 and E.2 is therefore equal to zero. E1 + E2 = PEY + LY =0
E.4. Estimated anthropogenic emissions by sources of greenhouse gases of the baseline:

>>
>>Refer to Section D.2.1.4 for equations used to estimate baseline emissions. Follow the equation:,
Electricity supplied by the project to the grid (GEN) = 333,043 MWh

Baseline emission factor with combined margin (EF) = 0.791tCO2e / MWh
The baseline emissions are obtained by multiplying the generation of the project by the grid emissions
factor = 263,437 t CO2e
BE y = GEN y ∗ EF y
Where:
GEN: Electricity supplied by the project to the grid (MWh)
y: refers to a given year
BE y = ω OM ∗ EF _ OM y + ω BM ∗ EF _ BM y
Where:
ωOM: Operation Margin weight, which is 0.5 by default
EF_OM: Operational Margin emission factor (tCO2e / MWh)
ωBM: Build Margin weight, which is 0.5 by default
EF_BM: Build Margin emission factor (tCO2e / MWh)
y: refers to a given year
Using the approach above, and the data shown in Annex 3, the baseline emissions will be 263,437
tCO2e/year or 1,844,060 tCO2e for the 7-year crediting period.
E.5. Difference between E.4 and E.3 representing the emission reductions of the project activity:
>>
Given that E.3 is equal to zero, the emission reductions of project activity are equal to E.4.
E.6. Table providing values obtained when applying formulae above:

>>
Estimation
of project Estimation
activity of baseline Estimation
emission emission Estimation of emission
reductions reductions of leakage reductions
(tonnes of (tonnes of (tonnes of (tonnes of
Year CO2e) CO2e) CO2e) CO2e)
1 (Aug 2006 – Aug
2007) 263,437 0 0 263,437
2 ( Aug 2007 – Aug
2008) 263,437 0 0 263,437
3 (Aug 2008 – Aug
2009) 263,437 0 0 263,437
4 (Aug 2009 – Aug
2010) 263,437 0 0 263,437
5 (Aug 2010 – Aug
2011) 263,437 0 0 263,437
6 (Aug 2011 – Aug
2012 263,437 0 0 263,437
7 (Aug 2012 – Aug
2013) 263,437 0 0 263,437
Total (tonnes of
CO2e) 1,844,060 0 0 1,844,060
SECTION F. Environmental impacts
F.1. Documentation on the analysis of the environmental impacts, including transboundary

impacts:
According to clauses 13 and 19 of the Environmental Protection Law of the People's Republic of China,
the project entity must analyze the environmental impacts of project activities in China before exploiting
natural resources and beginning project construction. The project developer therefore commissioned the
Sichuan Hydropower Survey and Planning Research Institute to conduct the required environmental
impact assessment (EIA).
The Jiaojiping Hydro Project has received all necessary permits and an EIA has been completed. A
feasibility study has also been completed by the Sichuan Commission of Development and Reform.
Where impacts of the project were identified, mitigation measures were suggested and defined. The
project results in more positive environmental benefits than adverse impacts. The EIA highlights the
following with regards to the Jiaojiping Hydro Project:
Biodiversity and ecosystems

The upstream view will be altered as a result of the project. The diversion reroutes water away from the
natural river course, reducing the volume between the diversion and the point where the water is returned
to the river. Although water is returned to the river after being diverted, the intermediate and downstream
water level is intermittently affected by the project causing some effect on the water-living organisms
(varieties of fish) due to decreased habitat and feeding area. There are three ecologically sensitive areas
near the project but the project is not considered to present a concern for any of these areas. The project
developer will ensure that minimum water flows will be maintained, according to the EIA, therefore the
negative impacts are not considered to be significant.
Water quality impact assessment

During the construction stage the project may generate several waste streams. Therefore the
environmental management of the project includes the following water and waste management systems:
industrial waste water treatment, anthropogenic waste management system (including anti-seepage), and
garbage collection and its transportation to the Tianquan county landfill.
Atmospheric/air impact assessment

There are four construction sites associated with the project. Atmospheric/air impact assessment has
focused on the surrounding residential area as this is where the greatest impacts are felt.
Solutions: a showering system is to be installed to dampen and control dust/particulate matter.
Noise impact assessment

This has focused on the surrounding residential area because this is where the greatest impacts of project
construction are felt.
Solution: construction activity is banned in the evenings.
Social impact assessment

During construction, worker protection is enhanced to minimise any negative health impacts associated
with the project.
Solutions: There is an on-site health station. To prevent the spread of infectious diseases workers entering
the project site might be subject to a health check up. When it is deemed necessary, 10% of workers will
be selected randomly for checkups. There is also to be mosquito control, and, as stated above, waste water
and solid waste control.
Erosion impact assessment

There is land erosion in the project area which was occurring prior to the project activity. Project
construction could exacerbate this erosion for example through the movement onsite of construction-
related vehicles.
Solutions: additional erosion will be prevented through installation of effective monitoring and site
reclamation (re-vegetation).
The EIA states that the project will contribute to the development of the local economy and society, in
line with central government’s ‘Go-West’ economic development campaign and policies. The project will
also enhance the investment environment for the local economy. Both the EIA and feasibility studies note
that revenue generated from electricity sales will increase local residents’ living standards, improve
infrastructure and therefore make it a more attractive environment for investment.
F.2. If environmental impacts are considered significant by the project participants or the host
Party, please provide conclusions and all references to support documentation of an environmental
impact assessment undertaken in accordance with the procedures as required by the host Party:
>>
Despite those issues highlighted in the EIA the stakeholders generally feel positive towards the
construction of Jiaojiping project. With mitigation controls planned, and taking into consideration the
contribution made by the project to sustainable development for the local and national area, the project
will have an overall positive impact on the local and global environment. All negative environmental
impacts are subject to effective mitigation measures as described above.
SECTION G. Stakeholders’ comments
According to the requirement by the Measures for Operation and Management of Clean Development
Mechanism Projects in China, a survey on the local villagers and residents has been conducted. The
local government and stakeholders were invited to submit comments on the project activity.
G.1. Brief description how comments by local stakeholders have been invited and compiled:
>>
As part of the planning and environmental assessment of the project, a one page questionnaire was designed to
be easily filled in with the following sections:
1) Questions on:
• What is their opinion of the project activity’s (namely Jiaojiping Hydropower station) impact on
employment?
• What impacts do they think there will be on the local ecological environment and social life caused by
the project?
• Are there any negative impacts on their livelihoods during the construction of the project?
• What is the impact on local transportation?
• What is the impact on soil erosion?
• What is the impact on local vegetation?
• What would be the overall positive influence of the construction and operation of the Project?
• What would be the overall negative influence of the construction and operation of the Project?
• What is their attitude towards the construction of the Project?
• Do they support the construction of the Project?
2) Space for the respondents’ signature and date
101 questionnaires were sent to the local officials from Qingshi County and Zishi County; local residents,
related employees and members of the general public. Among them, 93% are farmers and 85% live near to the
project area. The survey received 100% participation (101 questionnaires returned out of 101). The survey
shows that the proposed project receives strong support from local people, 87% of people expressed their
support to the Project, and hoped the Project will start operation soon.
Furthermore, a proportion of local stakeholders have been invited to raise their concerns and provide
comments to additional questions on the CDM project activity for a period of 30 days, in addition to the
comments they provided in response to the initial consultation. EcoSecurities and the project proponent
were available to answer any doubts about the project during this period.
G.2. Summary of the comments received:

>>
The stakeholder consultation processes highlighted responses in the following areas:
• the need to minimise noise pollution associated with construction (the survey showed that 50% of
respondents were concerned about the noise pollution at the construction stage)
• the need to mitigate the effects of dust and particulate matter on farmers and the environment
• the need for protection and maintenance of the ecosystems, and water quality
• the need for lessening the negative impacts of construction on vegetation, soil retention and the
associated erosion – this was viewed as the main negative influence of the Project.
• Overall, respondents felt that the project has no adverse impact on the daily life of local people
• Some respondents felt that the project might decrease the family income in the short run, whilst in
the long run, the project will increase family revenue
• Overall, it was felt that the project will benefit the local environment and economic development
• Respondents considered that the project is likely to increase local employment opportunities
• Stakeholder consultees expressed support for the project
G.3. Report on how due account was taken of any comments received:
>>
Referring to these concerns, the developer has adopted mitigation methods which will be monitored
throughout the project construction stage:
• elimination of night construction in the fourth construction area - to mitigate noise pollution to
the residents.
• recreation of vegetation in material yard area after project construction to avoid increased soil
erosion in the area.
All comments received in the context of the environmental licensing and Operation permits processes
have been incorporated into the project design. The documentation is available to the public on request.
Annex 1
CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY
Project sponsor:
Organization: Sichuan Tianquan Jiaojiping Generation Co., Ltd.
Street/P.O.Box: No. 308 Shuncheng Road
Building: Building A, 37th Story Guanchen Tower
City: Chengdu
State/Region: Sichuan
Postfix/ZIP: 610010
Country: China
Telephone: 0086-28-86527002
FAX: 0086-28-86527758
FAX:
E-Mail: lljj719@sina.com
URL:
Represented by:
Title: Mr
Salutation:
Last Name: Rui
Last Name:
Middle Name:
First Name: Huang
Department:
Mobile: 13980911063
Direct FAX: 0086-28-86527758
Direct tel: 0086-28-82931111
Personal E-Mail:
Project Annex 1 sponsor and Carbon Advisor:

Organization: EcoSecurities Ltd.
Street/P.O.Box: 40/41 Park End Street
Building: First Floor, Park Central,
City: Oxford
State/Region: -
Postfix/ZIP: OX1 1JD
Country: United Kingdom
Telephone: 44 1865 202 635
FAX: 44 1865 251 438
E-Mail: uk@ecosecurities.com
URL: www.ecosecurities.com
Represented by:
Title: Director
Salutation: Dr.
Last Name: Moura Costa
Middle Name:
First Name: Pedro
Mobile:
Direct FAX:
Direct tel: 44 1865 297 483
Personal E-Mail: pedro@ecosecurities.com
Annex 2
INFORMATION REGARDING PUBLIC FUNDING
This project will not receive any public funding.
Annex 3
BASELINE INFORMATION
Table: Database used for combined margin emissions factor calculation.
Baseline information: Huazhong Grid (including Henan, Hubei, Hunan, Jiangxi, Sichuan, Chongqing).
Table A1: Operating Margin

A B C D E F G H I
Average
Generation in
Central China Average Fuel CO2 Emissio
Power Grid consumption Fuel CO2 Emission Emission Average ns Rate
(2002-2004) tSCE*/GWh Consumption Fuel Energy Value Factor Factor Emissions Total Included tCO2/M
Gwh (2002-2004) tSCE/year GJ/tSCE tCO2/GJ tCO2/tSCE tCO2/year Generation (2003) Wh
The General Code

for Average
Comprehensive carbon
Energy content for
China Consumption fuel (IPCC) *
Electric China Electric Calaulation Average
Power Power (Chinese National Oxidation
Yearbook Yearbook Standard GB2589- Factor (IPCC) MWh(From Table H/(A*1
2003- 2005 2001- 2005 A*B 81) * 44/12 D*E C*F A3 * 1000) 000)
Thermal 206,447 408 84,230,376 29.3 0.0927 2.716 228,778,967
Total 228,778,967 237,344,000 1.108
*SCE: Standard Coal Equivalent
Table A2: Parameters for CO2 Emission Factor tCO2/GJ

IPCC Values
tC/TJ for
Coking Coal
and Other
Sub-Bitumous
25.8 Coal 1.6 Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories: Workbook
Oxidation
0.98 factor 1.6 Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories: Workbook
Table A3
A B C D
Average Excluded
Generation Generation Generation Generation Excluded Included Generations
(2002) GWh (2003) GWh (2004) GWh 2002-2004 GWh Sources Generation GWh GWh
China Electric
Power China Electric Annex 3
Yearbook Power China Electric Baseline
2003, page Yearbook Power Yearbook Methdolog (=A) if
585 2004, page 709 2005, page 474 y (=A) if included excluded
thermal 200,347 240,839 270,846 237,344 237,344
hydro 112,440 126,448 169,094 135,994 X 135,994
nuclear
other
Total 373,338 237,344 135,994
Table A4: Build Margin

A B C D E F
Weighted Average
Installed Installed New Capacity Split of New Emissions Build Margin
capacity 2002 capacity 2004 additions Capacity Factor Emissions Factor
MW MW MW % tCO2/MWh tCO2/MWh
China Electric
Power China Electric
Yearbook Power
2003, page Yearbook Get from
593 2005, page 486 B-A Table A1 D*E
Hydro 27622.1 42484.1 14862 57.30% 0 0
Thermal 42727.2 53803.6 11076.4 42.70% 1.108 0.473
Nuclear 0 0 0 0 0 0
Other 0 0 0 0 0 0
Total/
%change 70349.3 96287.7 25938.4 36.87% 0.473
Table A5: Combined Margin

Units Equation Source
Estimate operating margin emissions

A rate tCO2/MWh Table A1 1.108
B Estimate build margin emissions rate tCO2/MWh Table A4 0.473
Estimate baseline combined margin

C emissions rate tCO2/MWh (A+B)/2 0.791
Annex 4
Monitoring Plan
This section details the steps taken to monitor on a regular basis the GHG emissions reductions
from the Jiaojiping Hydroelectric Project in China. The main components covered within the
monitoring plan are:
1. Parameters to be monitored, and how the data will be collected

2. The equipment to be used in order to carry out monitoring
3. Operational procedures and quality assurance responsibilities
The requirements of this Monitoring Plan are in line with the kind of information routinely
collected by companies managing run-of-river hydroelectric projects, so internalising the
procedures should be simple and straightforward. If necessary, the Monitoring Plan can be updated
and adjusted to meet operational requirements, provided that such modifications are approved by a
Designated Operational Entity during the process of verification.
Monitoring for the Jiaojiping Hydroelectric Project will start with the start of operation in August
2007 (estimated). The monitoring plan details the actions necessary to record all the variables and
factors required by the methodology ACM0002, as detailed in section D of the PDD. All data will
be archived electronically, and data will be kept for the full crediting period, plus two years.
This template shall not be altered. It shall be completed without modifying/adding headings or logo, format or
font.

\
Table 4a Data to be collected or used to monitor emissions reductions from the project activity.
Measured (m),
Proportion of data Comments
ID Number Data Variable Data Unit calculated (c) Monitoring Frequency
to be Monitored
or estimated (e)
Electricity
Directly Hourly measurement Data will be double checked by receipts
1. EGy supplied to the MWh 100%
of electricity sales.
measured and monthly recording
grid
CO2 emission tCO2/MW At the beginning of Calculated on the basis of the China
2.EFy c 100%
Electric Power Yearbook
factor of the grid h each crediting period
CO2 OM tCO2/MW At the beginning of Calculated on the basis of the China

3. OM EFy c 100%
emission factor h each crediting period
CO2 BM tCO2/MW At the beginning of Calculated on the basis of the China

4. BM EFy c 100%
emission factor h each crediting period
Amount of each
fossil fuel Due to unavailability of plant-
At the beginning of
5. F i y consumed by Mass m 100% specific data, aggregate data by fuel
each crediting period
each power type is used.
source / plant
CO2 emission
At the beginning of
6. COEF i coefficient of tCO2/mass m 100% IPCC (1996) values is used.
each crediting period
each fuel type

\
Data from the China Electric
Yearbook will be used. Since an ex-
ante approach is used, it will only be
determined at the beginning of each
Electricity
crediting period.
7. GEN j/k/n generation of At the beginning of
MWh m 100% Please note that the BM is
,y each power each crediting period
determined on the basis of a
source/plant
deviation from the methodology and
thus this variable needs not to be
monitored for this; see section
D.2.1.4.
The powers source will be determined on
Identification of the basis of the China Electric Power
At the beginning of
8 power source / Text e 100% Yearbook. Since an ex-ante approach is
each crediting period used, it will only be determined at the
plant for OM
beginning of each crediting period.
This will not apply to the project
Identification of
since the BM is determined on the
9 power source / N/A N/A N/A N/A
basis of a deviation from the
plant for BM
methodology.
Table 4b Equipment used to monitor emissions reductions from the project activity
Variables
Equipment Calibration procedures Procedure in case of failure
Monitored
Failure reported to equipment supplier and repairs carried
Equipment will be calibrated in line with out. If repair is not possible, equipment will be replaced by
1. EGy Electricity meter manufacturer’s requirements by an equivalent item within one month. Failure events will be
external company. recorded in the site events log book. Receipts from electricity
sales can be used to double check data.

\
Table 4c Operational procedures and responsibilities for monitoring and quality assurance of emissions reductions from the project activity (E =
responsible for executing data collection, R = responsible for overseeing and assuring quality, I = to be informed)
Project
On-site Operations Head of Maintenance
Task developer’s head EcoSecurities
technician manager / External company
office
Collect Data E R N/A N/A N/A
Enter data into

N/A E R N/A N/A
Spreadsheet
Make monthly and

N/A E E/R N/A I
annual reports
Archive data &

N/A E R N/A N/A
reports
Calibration/
I R I E I
Maintenance

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PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 02

CDM – Executive Board page 1

CLEAN DEVELOPMENT MECHANISM

A. General description of project activity

B. Application of a baseline methodology

C. Duration of the project activity / Crediting period

D. Application of a monitoring methodology and plan

E. Estimation of GHG emissions by sources

Annex 1: Contact information on participants in the project activity

Annex 2: Information regarding public funding

Annex 3: Baseline information

Annex 4: Monitoring plan

CDM – Executive Board page 2

SECTION A. General description of project activity

A.1 Title of the project activity:

A.2. Description of the project activity:

• Increases employment opportunities in the area where the project is located

CDM – Executive Board page 3

A.3. Project participants:

Further contact information of project participants is provided in Annex 1.

A.4. Technical description of the project activity:

A.4.1. Location of the project activity:

A.4.1.1. Host Party(ies):

A.4.1.2. Region/State/Province etc.:

A.4.1.3. City/Town/Community etc:

A.4.1.4. Detail of physical location, including information allowing the

CDM – Executive Board page 4

Figure 1. Geographical location of Jiaojiping hydropower station

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

A.4.3. Technology to be employed by the project activity:

CDM – Executive Board page 5

There is a flooded area of 8267m2, giving a power density of 8710 W/m2.

A.4.4. Brief explanation of how the anthropogenic emissions of anthropogenic greenhouse

CDM – Executive Board page 6

A.4.4.1. Estimated amount of emission reductions over the chosen crediting

Total estimated reductions (tonnes

A.4.5. Public funding of the project activity:

CDM – Executive Board page 7

SECTION B. Application of a baseline methodology

STEP 1. Calculate the Operating Margin emission factor(s) (EFOM,y)

CDM – Executive Board page 8

STEP 2. Calculate the Build Margin emission factor (EFBM,y)

STEP 3. Calculate the baseline emission factor EFy (Combined Margin)

CDM – Executive Board page 9

Operating Margin Emissions factor China Grid Yearbook 2003-2005

Step 1. Identification of alternatives to the project activity consistent

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

Sub-step 1b. Enforcement of applicable laws and regulations:

CDM – Executive Board page 10

Step 2. Investment Analysis

Sub-step 2a: Determine appropriate analysis method

Sub-step 2b: Option III – Application of benchmark analysis

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

with carbon without C

Sub-step 2d: Sensitivity analysis

A sensitivity analysis was conducted by altering the following parameters:

• Increase in project revenue (price of electricity sold to the grid);

CDM – Executive Board page 11

Scenario IRR (%) NPV (US$) (optional)

Step 3. Barrier Analysis

With respect to investment barriers:

Power Purchase Agreement