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ACTIVITIES IMPLEMENTED JOINTLY(AIJ)

List of Projects

USIJI Uniform Reporting Document:
Activities Implemented Jointly Under the Pilot Phase

A. Description of the AIJ project

1. Title of project: Aeroenergía S.A. Wind Facility

2. Host country: Costa Rica

3. Brief project description:

The Aeroenergía S.A. Wind Facility Project is a privately owned and operated 6.4 megawatt (MW) wind facility consisting of 16 wind turbines. The project is located near the town of Tejona in the Guanacaste province of Costa Rica. Electricity generated by the plant will be sold to the Costa Rican Institute of Electricity (ICE) to meet a portion of Costa Rica's energy demand. Because this generation will displace electricity that otherwise would have been generated by existing thermal plants, it reduces greenhouse gas (GHG) emissions from fossil fuel combustion.

Note: Although the information contained in this report is based on the USIJI project proposal and other material provided by the project developer, the developer has not yet reviewed this document.

4. Participants:

Name of Organization or Individual

Country

Aeroenergía S.A.

Costa Rica

Power Systems, Inc.

U.S.A.

Bluefields International

U.S.A.

EnergyWorks

U.S.A.

Micon A/S

Denmark

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

Aeroenergía S.A.

Name of organization (English)

Acronym (original language)

Acronym (English)

Department

Function(s) within the AIJ project activities

Project development, project administration

Street

Apartado. 1689-1000

City

San José

State

Post code

Country

Costa Rica

Telephone

011-506-221-3413

Fax

011-506-255-3410

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

Lechtman

First name, middle name

Salomón

Job title

General Manager

Direct telephone

011-506-227-4555

Direct fax

011-506-227-0816

Direct e-mail

genelec@sol.racsa.co.cr

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

Power Systems, Inc.

Name of organization (English)

(Same as above)

Acronym (original language)

Acronym (English)

Department

Function(s) within the AIJ project activities

Technical assistance

Street

12444 Breckenridge

City

Dallas

State

Texas

Post code

75230

Country

U.S.A.

Telephone

Fax

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

Viroslav

First name, middle name

Sam

Job title

General Manager

Direct telephone

Direct fax

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

Viroslav

First name, middle name

Joseph

Job title

Officer

Direct telephone

214-879-6555

Direct fax

214-350-6320

Direct e-mail

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

Bluefields International

Name of organization (English)

(Same as above)

Acronym (original language)

Acronym (English)

Department

Function(s) within the AIJ project activities

Project development, financing

Street

1000 Connecticut Avenue, NW; Suite 1200

City

Washington

State

District of Columbia

Post code

20036-5302

Country

U.S.A.

Telephone

Fax

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

Warner

First name, middle name

Guy G.

Job title

Partner

Direct telephone

202-331-8273

Direct fax

202-331-8878

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

EnergyWorks

Name of organization (English)

(Same as above)

Acronym (original language)

Acronym (English)

Department

Function(s) within the AIJ project activities

Street

8201 Corporate Drive, Suite 1200

City

Landover

State

Maryland

Post code

20785

Country

U.S.A.

Telephone

301-459-1874

Fax

301-459-2842

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

Eckel

First name, middle name

Jeffrey W.

Job title

President and CEO

Direct telephone

301-459-1874

Direct fax

301-459-2842

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

Micon A/S

Name of organization (English)

Acronym (original language)

Acronym (English)

Department

Function(s) within the AIJ project activities

Project development, technical support

Street

City

State

Post code

Country

Denmark

Telephone

Fax

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

5. Description of AIJ project activities

Item

Type of Project

Sector(s)

Energy

Primary activity(ies)

Alternative energy generation (wind)

Project Location

Country

Costa Rica

Exact location (city, state, region)

Tilarán, Guanacaste, Costa Rica

Key Dates and Current Stage of Project

Project starting date (month/year)

September 1996

Project ending date (month/year)

April 2017

Project lifetime (years)

21 years, 1 month (may be extended as useful life is expected to exceed 20 years)

Current stage of project

In progress

General Project Description and Technical Data

The Aeroenergía Windfarm Project is a privately owned and operated 6.4 MW wind facility consisting of 16 wind turbines. Each turbine consists of a round tower, 100 feet tall, with two generators of 400 kilowatts (KW) and 100 KW, and three upwind blades. The machine is stall-type and controls a constant speed, supplying different power levels depending on wind speed. The simplicity of the system, its advanced technology, and proven reliability will reduce project risks. The project facility became operational in May 1997.

Site-specific geological studies indicate the terrain is very stable. Windfarm operations are consistent with current land uses, primarily cattle-grazing.

Energy produced by the facility will be sold to ICE and will displace electricity that would have been generated by thermal fossil fuel-burning facilities. The net delivered output offered to ICE is expected to be from 27 to 31 gigawatthours (GWh) per year. An assumed output of 27 GWh is used to estimate the GHG benefits of the project.

Costa Rica is a particularly strong candidate for substituting wind power for fossil fuels in electricity generation because the country's wind resource is at its strongest during the time when reservoirs are lowest and Costa Rica relies more heavily on thermal production. Adding wind to its power source portfolio would allow ICE to maximize use of its wind and hydroelectric resources by reducing water flow over the dams when the wind is strong and the water is low, storing the water to be spilled when the wind strength falls off. This potential made Costa Rica a good choice for developing a wind electric project specifically intended to achieve GHG emission reductions.

6. Cost

(a) Explanation of methodology for calculating cost data

Methodology for Calculating Cost Data

The project developer estimated the capital cost of the project to be approximately $8.85 million. This estimate includes (1) facility costs associated with the actual physical plant and transmission/interconnections costs, and (2) non-facility costs such as legal and financing costs associated with project development. The project will be financed entirely through private sources of capital.

(b) Cost data-Project development

This information is not yet available.

(c) Cost data-Project implementation

The capital cost of the project is estimated to be $8.85 million. Additional information on project implementation cost is not yet available.

7. Monitoring and verification of AIJ project activities and results

Item

Party(ies) that will be monitoring project activities

Aeroenergía

Party(ies) that will be externally verifying project results

This information is not yet available.

Date when the monitoring plan became (or will become) operational (month/year)

This information is not yet available.

Types of data that will be collected

Total fossil fuel use for the generation of electricity, by fuel type

Description of Monitoring and Verification Activities and Schedule for Implementation

The Costa Rican Ministry of the Environment and Energy (MINAE-formerly MIRENEM), through its Office of Energy Policy (DSE), will make available, on an annual basis, data on Costa Rica's total fossil fuel use for the generation of electricity in the previous year. This information will be published within the first six months of each year. Aeroenergía, using conversion tables supplied by MINAE, will convert the DSE-supplied information to develop a total and accurate greenhouse gas displacement profile for the project.

Monitoring will take place on a regular and constant basis in accordance with the Aeroenergía Power Purchasing agreement with ICE. Aeroenergía will develop offset information annually by September, with technical assistance and data from MINAE and ICE.

The participants in this project agree to independent, external verification of the information presented in this proposal, excluding confidential business information. The participants welcome inspection by members of the Panel or qualified third-parties, to review the appropriateness of any procedures or methodologies utilized to determine GHG emission reductions.

B. Governmental approval

Item

Please check one of the following.

This report is a first report.

or

This report is an intermediate report.

or

This report is a final report.

Please check one of the following:

This report is a joint report. Letter(s) of approval of this report from the designated national authority of the other Party(ies) involved in the activity is(are) attached in Section J, Annex.

or

This report is a separate report.

Additional comments (if any):

C. Compatibility with, and supportiveness of, national economic development and socioeconomic and environmental priorities and strategies

Compatibility with Economic Development and Socioeconomic and Environmental Priorities

The ICE anticipates shortfalls in its ability to meet the demand for electricity as early as 1996. Because wind facilities can be constructed quickly, the project could be on line in time to help meet these shortfalls. In addition, according to René Castro S., Minister of MINAE, "the Government of Costa Rica considers this project a good candidate for joint implementation because it fulfills the following standards: local support for the project; environmental, financial, technical, and institutional feasibility; contribution to national sustainable development priorities; [and] consistency with existing Costa Rican laws and regulations."

D. Environmental, social/cultural, and economic impacts of the AIJ project

Non-Greenhouse-Gas Environmental Impacts of the Project

By displacing fossil fuel combustion, the project will reduce non-GHG local air pollutants, which will help to improve overall local and regional air quality.

Neither flora nor fauna in the area are expected to be adversely impacted by the construction or operation of the project. Road construction will not significantly affect the landscape. The project zone is not a route for migratory birds, nor a habitat for raptors, and therefore the risk of birds getting caught in the wind turbines is substantially reduced.

Social/Cultural Impacts of the Project

Residential patterns in the area are mainly dispersed houses in rural settings. No cultural remains or archeological structures are believed to be on the site.

Economic Impacts of the Project

The construction, operation, and maintenance of the facility will create jobs for Costa Ricans. The local economy will also benefit from improved roads and electricity transmission facilities. In addition, the project will help Costa Rica meet its growing demand for electricity.

E. Greenhouse gas impacts of the AIJ project

1. Scenario description

Item

Site Designation

Site number (order of presentation in this report)

1 of 1

Site name/designation

Aeroenergía S.A. Wind Facility

Project sector

Energy

Reference Scenario

Primary activity(ies)

Electricity generation from fossil fuels

Has the reference scenario changed since the last report? (If yes, explain any changes below.)

Yes

No

This is the first project report.

Description:

Thermal units in Costa Rica were originally designed to meet only peak demand, while hydroelectric systems were intended to meet base load demand (hydroelectric is preferred because it is half the cost of thermal generation). However, decreased reliability of hydroelectric plants resulting from El Niño drought conditions has forced ICE to rely more heavily on thermal units to meet base load demand. At the same time, energy demand in Costa Rica is growing at a rate of 7 to 9 percent annually. This rapid growth has put pressure on ICE to continue to expand its current capacity. In September 1994, the Minister of MINAE announced the goal to meet all electricity needs in Costa Rica with renewable energy sources by 2001. While this goal is intended to fulfill commitments under the Framework Convention on Climate Change (FCCC), the Biodiversity Convention, and Agenda 21, current energy demand and supply conditions suggest that such a phase-out may be delayed.

In light of ambiguities created by drought and potential conflicts between policy goals and actual utility expansion plans, the proposal provides a broad picture of future GHG emissions in Costa Rica by presenting two sets of reference case projections: one developed by ICE and USAID in 1992, and an "alternative" projection incorporating 1994 fossil fuel consumption data and the September 1994 Costa Rican government policy goals to phase-out fossil fuels. The "alternative" reference scenario is presented in this report simply because it leads to a lower estimate of net project benefits and, hence, is more conservative. The "alternative" reference scenario is based on the assumption that consumption of diesel and fuel oil for the electricity generation in Costa Rica will remain at 1994 levels through 1997 and then decline to zero by 2001.

Predicted Project Scenario

Primary activity(ies)

Alternative energy generation (wind)

Description:

The project site is located in a rural area, where the terrain consists of open fields and smooth ridgelines used primarily for cattle-grazing. Construction of a 6.4 MW wind facility at the site began in September 1996 and was completed in May 1997, at which time the plant became fully operational. The facility is expected to have a functional lifetime of at least 21 years. The project will offset electricity that would otherwise have been generated by existing thermal plants, thereby reducing GHG emissions from fossil fuel combustion. However, emissions in the project scenario occur only until 2001 because all fossil fuel-based generation is expected to be replaced by renewable energy resources by that year.

Actual Project

Primary activity(ies)

This information is not yet available.

Description:

This information is not yet available.

2. GHG emission/sequestration calculation methodology

GHG Emission/Sequestration Calculation Methodology

Site number

1 of 1

Project sector

Energy

Description of Calculation Methodology for the Reference Scenario

Using 1994 fossil fuel consumption data as a benchmark and the fossil fuel phase-out plan, the proposal generates an alternative reference scenario projection in which emissions fall to zero over the period from 1997 to 2001. The reference scenario is based on emissions from the consumption of diesel and #6 fuel oil used to power Costa Rica's fossil fuel generating plants. According to data provided to the project developer by MINAE, during 1994, these fossil fuel plants generated 829.8 GWh and emitted 861,843 t CO2. From this can be derived a 1994 national emissions factor for fossil fuel plants of 1039 t CO2/GWh (861,843 t CO2/829.8 GWh).

The proposal assumes that consumption of diesel and fuel oil will remain at 1994 levels until 1997. Based on the MINAE Minister's announced goal to phase out fossil fuel by 2001, fossil fuel consumption is expected to decline beginning in 1998 until it is totally eliminated by 2001. As the phase-out plan is implemented, emissions from fossil fuel consumption are expected to be reduced approximately 44 percent by 1998, 86 percent by 1999, 98.5 percent by 2000, and 100 percent by 2001. Note that reference scenario emissions for year 1 are estimated as 4/12 of 1994 levels because year 1 is defined as September to December 1996.

Description of Calculation Methodology for the Project Scenario

Because there are no emissions associated with wind energy electricity generation, emissions in the project scenario represent Costa Rican fossil fuel electricity generation that is not displaced by the project's generation. The estimation methodology calculates the displaced generation (i.e., net project benefits), not the remaining generation.

Net project benefits are the avoided emissions from displaced fossil fuel generation. Since the project facility will not be operational until May 1997, no net project benefits accrue in 1996. Beginning in 1997, net project benefits in a given year are estimated as the ratio of the plant's projected electricity generation (27 GWh) to annual fossil fuel electricity generation in Costa Rica for 1994 (829.8 GWh), multiplied by total projected emissions in a given year. Emission reductions, thus, decline annually until they reach zero in 2001 (based on annual percentage decreases in fossil fuel use anticipated with the total phase-out of fossil fuel plants). By calculating an annual reduction in net project carbon benefits based on the phase-out of fossil fuels, the project attempts to avoid double-counting emission reductions that may be claimed by other wind energy or hydroelectric projects in Costa Rica. Net project benefits between 1997 and 2010 are calculated as follows:

Year 1 (1996) (0 GWh/829.8 GWh)(861,843 t CO2)

Year 2 (1997) (27 GWh / 829.8 GWh)(861,843 t CO2) * 7/12

Year 3 (1998) (27 GWh / 829.8 GWh)(479,002 t CO2)

Year 4 (1999) (27 GWh / 829.8 GWh)(117,936 t CO2)

Year 5 (2000) (27 GWh / 829.8 GWh)(12,701 t CO2)

Years 6 - 20 (27 GWh / 829.8 GWh)(0 t CO2)

(2001-2010)

Emissions reductions for 1997 have been pro-rated to reflect the date at which the facility came on-line (late May, 1997). Annual project scenario emissions are calculated by subtracting annual net project benefits from annual reference scenario emissions.

Description of Calculation Methodology for the Actual Project

This information is not yet available.

3. GHG emission/sequestration data

(a) Reporting of GHG emissions/sequestration

Image

(b) Additional information on GHG emissions/sequestration

Indirect or Secondary GHG Impacts (Positive and Negative)

None identified.

Factors That Could Cause the Future Loss or Reversal of GHG Benefits

This information is not yet available.

Strategy for Reducing the Risk of Future Loss or Reversal of GHG Benefits

Because project benefits accrue only through the year 2000 and are extremely conservative given historical increases in fossil fuel consumption, the risk of loss or reversal of GHG benefits is very low.

F. Funding of the AIJ project

1. Identification of funding sources

(a) Funding sources for project development

This information is not yet available.

(b) Funding sources for project implementation

Funding Source Country of Funding Source Amount($US) Percent of Total Funding(%) Is This Funding Assured? (Y/N)

CABEI Central American Economic Integration Bank

Costa Rica

6,975,000

75

Aeroenergía Partners

Costa Rica

2,325,000

25

Total

9,300,000

100

2. Assessment of additional funding needs

Current or Planned Activities to Obtain Additional Funding

None.

G. Contribution to capacity building and technology transfer

Contribution to Capacity Building and Technology Transfer

The project also contributes to capacity building by expanding the application of renewable energy technologies, thereby reducing the reliance on fossil fuels.

H. Recent developments, technical difficulties, and obstacles encountered

Recent Project Developments

This information is not yet available.

Technical Difficulties and Other Obstacles Encountered

This information is not yet available.

I. Additional information

Additional Information

None.

J. Annex

1. Host country acceptance of the AIJ project

Country/Project Title Name, Title, and Government Agency of the Designated National Authority Date of Approval(day/month/year)

Costa Rica/Aeroenergía S.A. Wind Facility

René Castro S., Minister, Ministry of Natural Resources, Energy and Mines

26 July 1995

2. Letters of approval of this AIJ project report

See attached concurrence form.