Uniform Reporting Format:
Activities Implemented Jointly Under the Pilot Phase
List of
Projects
Description of project
A.1 Title of Project: Swiss Energy Efficiency Project (Bucina a.s., Zvolen)
- Document last modified: 10 March 2000 (DMS#161215.3)
- For further information on the project, see the report: Federal Office for Foreign Economic Affairs
(FOFEA), 1999: Project Appraisal SK FH 42 "Bucina Zvolen a.s.". Bern: FOFEA. The report is
available over the SWAPP web site (http://www.admin.ch/swissaij/pdf/in_fs_bucina.pdf).
A.2 Participants/actors:
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Item
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Please fill in if applicable
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Name of organization:
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Staatssekretariat für Wirtschaft
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Name of organization (English):
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State Secretariat for Economic Affairs
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Department:
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Swiss AIJ Pilot Program
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Acronym:
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Acronym (English):
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SWAPP
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Function within activity:
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Focal Point for Swiss AIJ Activities
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Street:
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Effingerstrasse 1
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Post code:
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3003
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City:
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Bern
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Country:
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Switzerland
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Telephone:
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Fax:
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WWW-URL
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http://www.admin.ch/swissaij
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Contact person (for this activity):
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-------------------------------------
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Surname:
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Enderlin
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First name, middle name:
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Martin
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Job title:
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SWAPP Program Manager
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Direct tel:
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+41 31 323 08 85
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Direct fax:
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+41 31 324 09 58
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Direct E-mail:
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swapp@seco.admin.ch
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Item
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Please fill in if applicable
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Name of organization:
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Staatssekretariat für Wirtschaft
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Name of organization (English):
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State Secretariat for Economic Affairs
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Department:
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Division Project Finance
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Acronym (English):
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seco/PFET
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Function within activity:
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Coordinator for project finance, Swiss Government
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Street:
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Effingerstrasse 1
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Post code:
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3003
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City:
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Bern
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Country:
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Switzerland
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Telephone:
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Fax:
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WWW-URL
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http://www.seco-admin.ch
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Contact person (for this activity):
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-------------------------------------
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Surname:
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Kuriger
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First name, middle name:
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Janine
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Job title:
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Program Manager
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Direct tel:
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+41 31 324 92 13
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Direct fax:
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+41 31 324 09 64
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Direct E-mail:
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janine.kuriger@seco.admin.ch
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Item
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Please fill in if applicable
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Name of organization (English):
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Ministry of Foreign Affairs of the Slovak Republic
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Department:
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International Economic Cooperation and Foreign Assistance
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Function within activity:
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Street:
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Hlboka cesta 2
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Post code:
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833 36
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City:
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Bratislava
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Country:
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Slovak Republic
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Telephone:
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Fax:
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E-mail:
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WWW-URL:
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Contact person (for this activity):
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------------------------------------------------
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Surname:
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Moravek
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First name, middle name:
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Stefan
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Job title:
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Director
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Direct tel:
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+421 7 5978 3561
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Direct fax:
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+421 7 5978 3579
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Direct E-mail:
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Item
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Please fill in if applicable
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Name of organization (English):
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Ministry of the Environment of the Slovak Republic
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Department:
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Air protection
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Function within activity:
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Street:
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Namestie L. Stura c. 1
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Post code:
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812 35
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City:
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Bratislava
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Country:
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Slovak Republic
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Telephone:
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+42 17 5956 22 20
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Fax:
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+42 17 5956 26 62
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E-mail:
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WWW-URL:
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Contact person (for this activity):
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------------------------------------------------
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Surname:
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Mojik
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First name, middle name:
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Ivan
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Job title:
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Director
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Direct tel:
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same as above
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Direct fax:
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Direct E-mail:
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Item
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Please fill in if applicable
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Name of organization (English):
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Ministry of the Environment of the Slovak Republic
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Department:
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Implementation of Environmental Projects
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Function within activity:
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Street:
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Namestie L. Stura c. 1
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Post code:
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812 35
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City:
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Bratislava
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Country:
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Slovak Republic
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Telephone:
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+421 7 5956 2400
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Fax:
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+421 7 5956 2511
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E-mail:
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WWW-URL:
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Contact person (for this activity):
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------------------------------------------------
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Surname:
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Kelbel
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First name, middle name:
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Frantisek
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Job title:
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Director
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Direct tel:
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Direct fax:
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Direct E-mail:
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Item
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Please fill in if applicable
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Name of organization (English):
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Ministry of the Environment of the Slovak Republic
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Department:
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Air, Water, Waste and Environmental Risks
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Function within activity:
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Street:
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Namestie L. Stura c. 1
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Post code:
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812 35
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City:
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Bratislava
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Country:
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Slovak Republic
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Telephone:
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Fax:
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WWW-URL:
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Contact person (for this activity):
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------------------------------------------------
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Surname:
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Zavadsky
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First name, middle name:
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Ivan
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Job title:
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Director
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Direct tel:
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Direct fax:
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Direct E-mail:
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Item
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Please fill in if applicable
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Name of organization:
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Bucina Zvolen a.s.
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Department:
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Function within activity:
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Private wood processing company, project host
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Street:
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Lucenecka cesta 1335/21
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Post code:
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960 96
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City:
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Zvolen
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Country:
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Slovakia
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Telephone:
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+421 855 530 1100
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Fax:
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+421 855 530 1121
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E-mail:
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bucina-tech@zv.sanet.sk
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WWW-URL:
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Contact person (for this activity):
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-------------------------------------
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Surname:
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Lispuch
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First name, middle name:
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Peter
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Job title:
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General Director
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Direct tel:
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+421 855 530 1900
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Direct fax:
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+421 855 530 1124
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Direct E-mail:
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peter.lispuch@bucina.sk
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Item
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Please fill in if applicable
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Name of organization:
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Ernst Basler + Partner AG
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Name of organization (English):
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Ernst Basler + Partners Ltd.
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Department:
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Energy Planning
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Acronym:
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EBP
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Acronym (English):
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EBP
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Function within activity:
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Consulting engineers, appraisal and AIJ studies
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Street:
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Zollikerstrasse 65
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Post code:
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8702
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City:
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Zollikon
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Country:
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Switzerland
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Telephone:
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+41 1 395 11 11
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Fax:
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+41 1 395 12 34
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E-mail:
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WWW-URL:
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Contact person (for this activity):
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-------------------------------------
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Surname:
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Füssler
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First name, middle name:
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Jürg
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Job title:
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Project Manager
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Direct tel:
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+41 1 395 16 57
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Direct fax:
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Direct E-mail:
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juerg.fuessler@ebp.ch
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A.3 Activity:
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Item
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Please fill in if applicable
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General description:
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Improvement of energy efficiency in the privately owned wood processing plant Bucina a.s. Project
components include:
- Installation of a natural gas-fueled turbine in the wood drying process for the
co-generation of electricity and heat
- Upgrade and extension of a energy control system for heat, lighting and wood processing
technology to decrease the overall heat and electricity demand
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Type of project:
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Energy efficiency
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Location:
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Bucina a.s. (wood processing company), City of Zvolen, Central Slovakia
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Activity starting date:
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2000
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Expected activity ending date:
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2008
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Stage of activity:
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mutually agreed
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Lifetime of activity if different from ending date:
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technical lifetime of turbine: 15 yrs
theoretical "crediting time": 8 yrs
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Technical data:
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turbine: gas turbine - generator set; 3.2MWe, 5.6MWth
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control system: Network of substations which measure and control the energy used in the
production process and for the operation of the buildings (heating, lighting), centralized data
management and consumption control
Details on the specific technology to be employed will not be available before procurement is
completed.
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A.4 Cost (to the extent possible):
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Item
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Year 0
(total investment cost)
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Year 1
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... 1)
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Year 7
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Year 8
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Cost of the project in US$:
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2 710 000 2)
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-465 000 3)
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-410 000 3)
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-1 444 000 4)
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AIJ component in US$:
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2 710 000 2)
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-465 000 3)
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-410 000 3)
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-1 444 000 4)
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US$ per avoided ton of CO2 equivalent 5):
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18.37
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-24.7
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-22.7
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-80.2
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1) Data for Years 2-6 are linearly interpolated between the values for Years 1 and 7. For
the purpose of brevity, these data are not shown in the table, but can be provided upon request.
2) Up-front investment in year 0 to purchase and install equipment. Investments in
turbine: 1.85 mio. USD from Switzerland (including 2 yr maintenance and engineering), 0.4 mio.
USD from Bucina (local); investments in control system: 0.46 mio. USD from Switzerland
(including maintenance and engineering), negligible investment from Bucina (local); total
investment: 2.31 mio. USD from Switzerland, 0.4 mio. USD from Bucina (local).
3) Annual reduction of costs to Bucina resulting from the project as compared to the
baseline, taking into account all operating & maintenance costs (but excluding the original
investment cost); because natural gas and electricity are saved through the project, the annual
incremental operating costs are negative and represent a financial benefit to Bucina.
4) Annual reduction of costs to plant operators resulting from the project as compared to
the baseline in Year 8, taking into account all operating & maintenance costs, as well as income
expected from salvation of the turbine after 8 years (US$ 1'042'000), assuming linear
depreciation.
5) In our view, this measure of costs is not the most appropriate. We therefore present a
calculation of the incremental abatement cost of the project in the following table:
Incremental abatement cost of the project over the theoretical 8-year "crediting time" of the
project
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turbine sub-project
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control system sub-project
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total project
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Incremental cost2) of the project in US$:
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-559 000 1)
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-1128 000 1)
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-1687 000 1)
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US$ per avoided ton of CO2 equivalent:
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-5.7 1)
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-22.6 1)
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-11.4 1)
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1) Negative values indicate a net financial benefit of the AIJ project to Bucina as compared
with the agreed baseline.
2) Calculated by subtracting the Net Present Value of the assumed baseline from the Net
Present Value of the AIJ project; key assumptions: theoretical "crediting time" = 8 yrs;
discount rate = 12%; linear depreciation of turbine (15-yr lifetime) and control system (8-yr
lifetime); fuel prices: electricity = actual price paid for grid electricity plus an escalation of
1%/yr after 2002, natural gas = actual price paid plus 3.44%/yr.
A.5 Mutually agreed assessment procedures:
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Describe the procedures, including name of organizations involved
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Procedures for monitoring, independent verification and reporting will be agreed in the form of a
"Monitoring & Verification Protocol", which remains to be drafted.
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B.1 For the activity:
B.2 This report is a joint report:
Yes. Confirmation of endorsement will be sent by the Slovakian authorities.
B.3 General short comment by the government(s) if applicable:
Slovakia - represented by the Ministry of Environment and the Ministry of Foreign Affairs - proposed to the
Swiss State Secretariat for Economic Affairs to finance an energy efficiency project in the private wood
processing company Bucina Zvolen a.s. as a Project in the framework of the pilot phase for activities
implemented jointly. The Bucina proposal was identified through the National Strategy Study on Greenhouse
Gas Reduction of the Slovak Republic, elaborated with the support of the Swiss Government in 1997-98 under
the World Bank's National AIJ/JI/CDM Strategy Studies Program.
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Describe (to the extent possible) how the activity is compatible with and supportive of national
economic development and socio-economic and environment priorities and strategies
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The project supports the Energy Strategy for the Slovak Republic up to 2005 (published in 1997),
the objectives of which include a reliable energy supply at acceptable cost and at the least
possible negative environmental impact and increased domestic energy production.
Other economic and socio-economic benefits include:
- the positive economical impact of the project on the company which will be strengthened by the
project and will be able to maintain its important role as a major employer in the region;
- the demonstration effect of the project which may enable other actors in Slovakia (and in other
Central and Eastern European countries) to implement similar projects for domestic electricity
production and increased energy efficiency in other locations in industry and in the public sector
from which, from the point of view of the national economy, the whole country could benefit;
- know-how transfer by joint project performance and a training program for operators.
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Item
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Please fill in
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Describe environmental benefits in detail:
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Both sub-projects contribute to:
- reduced air pollutant emissions (CO, SO2, dust)
- reduced GHG emissions
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Do quantitative data exist for evaluation of environmental benefits?
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Projected cumulative emission reductions (t/y)
SO2 CO particulate matter
turbine 98 34 4
control system 26 20 5
TOTAL 124 54 9
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Describe social/cultural benefits in detail:
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see Section C
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Do quantitative data exist for evaluation of social benefits?
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no
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Describe economic benefits in detail:
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see Section C
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Do quantitative data exist for evaluation of economic benefits?
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no
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E.1 Estimated emissions without the activity (project baseline):
The gas turbine was originally part of the EBRD energy project, which is used as the baseline for the
present project. Due to technical problems and the development of inflation in the Slovak republic, the
original fixed budget of the EBRD loan is no longer sufficient to cover all parts of the initially planned
EBRD project, which was confirmed in writing by the EBRD. In particular, the financing of the turbine would
have been cancelled and the turbine would not have been implemented by Bucina without Swiss investment, at
least for the next eight years.
By this time, the loan for the ongoing parallel EBRD project will have been paid off, and Bucina could ask
for a new loan for the investments in the turbine and the control system. Prior to that time, the
conditions of the EBRD loan prohibit Bucina from taking out additional loans, unless approved by the EBRD.
Thus, it is assumed that in the absence of the Swiss project, both sub-projects would be carried out with a
delay of 8 years (i.e. in 2008). The restriction of the project period to 8 years demonstrates clearly that
the opportunity for a significant emission reduction is only there if the project is implemented
immediately; if the project’s implementation is delayed, the associated GHG emission reduction
decreases rapidly and would become less attractive to potential investors.
Potential AIJ/JI projects are often considered to be environmental additional if they are more expensive
than the baseline, i.e. if their incremental costs are positive. Obviously, this approach considers only
part of the barriers of project implementation. In the present case, the company Bucina would not be able
to carry out the project in the absence of the Swiss assistance, because they would not be able to obtain
the approval of the EBRD for a commercial loan under current local interest rates, even though the project
is profitable. It is thus not the positive incremental cost of the project components, but the lack of
access to the necessary capital which determines the additionality of this project. Overcoming this
important barrier, and the expected significant environmental benefits, demonstrate the environmental
additionality of the project.
However, since AIJ/JI investments should not be used to subsidize profitable projects by private firms
(which would lead to perverse incentives), we adopted a financing model whereby the Swiss AIJ/JI investment
is made in the form of a grant, but because of the significant financial benefits that accrue as a result
of the AIJ/JI investment to Bucina, Bucina must repay the Swiss investment to a "counterpart
fund" under the auspices of the Slovak Government. The Slovak Government can reinvest this money in
other environmental protection projects, increasing the net environmental benefit of the project (these
additional benefits are not taken into account in calculating the environmental impact of the AIJ/JI
project).
The offsets calculation for the turbine sub-project is based on the replacement of the electricity
purchased from the grid by the electricity produced in the gas turbine. For the grid electricity, an
emission factor based on the mix of thermal power plants in Slovakia was used.
The offsets calculation for the control system sub-project is based on the assumption of a 10% reduction in
energy consumption in the Bucina plant. The resulting decrease in the consumption of electricity and
natural gas leads to the above mentioned emission reductions.
More details are available in the feasibility study, which can be downloaded from the SWAPP web site at
http://www.admin.ch/swissaij/pdf/in_fs_bucina.pdf
E.2 Estimated emissions with the activity:
Indicated project and baseline emissions do not include indirect emissions such as pre-combustion emissions
or leakage due to elasticities in demand and supply. The baseline emission projections indicated below are
based on a constant production output.
Summary table: Projected emission reductions
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GHG b)
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Year 1
(2001)
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... c)
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Year 5
(2005)
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Year 6
(2006)
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... c)
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Year 8
(2008)
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A) Turbine sub-project baseline scenario
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CO2 [t/a]
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69260
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69260
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67708
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67708
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B) Turbine sub-project activity scenario a)
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CO2 [t/a]
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56680
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56680
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55797
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55797
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C1) Effect of turbine sub-project ( B-A )
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CO2
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-12580
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-12580
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-11911
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-11911
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C2) Additional effect of control system
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CO2
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-6279
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-6279
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-6105
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-6105
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C) Total effect of project (C1+C2)
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CO2 [t/a]
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-18859
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-18859
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-18016
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-18016
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D) Cumulative effect
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CO2 [t]
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-18859
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-75436
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-93452
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-148300
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- Only CO2 is considered; CH4, N2O and others are neglected.
- The data for Years 2-4 are the same as for Year 1 and the data for Year 7 are the same as for Year 6
(excluding cumulative effect).
Comment: the small shift in the annual emissions between Year 5 and Year 6 is due to the assumed retirement
of units 3 & 4 of the power plant ENO B in Novaky and the resulting change in the emission factor for
grid electricity production with fossil fuels.
Summary table: Actual emission reductions
Not available, since project has not yet been implemented
-
F Bearing in mind that the financing of activities implemented jointly shall be additional to
financial obligations of Parties included in Annex II to the Convention within the framework of the
financial mechanism as well as to current official development assistance flows, please indicate:
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Source of project funding
including pre-feasibility phase
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Approximate Amount
(million US dollars)
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Swiss Government funding (grant) *
TURBINE
equipment cost (turbine)
maintenance / 2-year guarantee for turbine
engineering (7% of capital investment cost)
CONTROL SYSTEM
equipment cost (control system)
engineering (10% of capital investment cost)
TOTAL Swiss funding
|
- 1.85
1.60
0.14
0.11
0.46
0.42
0.04
2.31
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Slovak funding
LOCAL COSTS associated with turbine (installation, additional housing cost, transformator &
switch cell, gas line cost)
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* From the point-of-view of Switzerland, the Swiss funding is a grant. However, due to the profitability of
the project, Bucina only receives loan financing, of which US$ 2.16 mio (Swiss funding excluding
engineering costs) must be repayed into the Swiss-Slovak Counterpart Fund of the Slovak Government. This
"revolving fund" will be used by the Government of Slovakia to finance other energy efficiency
and environmental projects in Slovakia, which will lead to a multiplication of the effect of the Swiss
AIJ/JI investment beyond the emission reductions listed in this Uniform Reporting Format.
-
G Contribution to capacity building, transfer of environmentally sound technologies and know-how to
other Parties, particularly developing country Parties, to enable them to implement the provisions of
the Convention. In this process, the developed country Parties shall support the development and
enhancement of endogenous capacities and technologies of developing country Parties.
The use of a gas turbine for the drying processes in the wood processing industry is a new application for
Slovakia (although state-of-the-art in Western Europe). Also, comprehensive energy management and control
systems for entire plants are not common in Slovakia. The Swiss project will serve as a demonstration
project in the wood processing sector (accounts for 3% of GDP), as well as in other industrial sectors and
public installations. It will demonstrate the feasibility and the profitability of domestic industrial
co-generation and the increase in energy (and cost) efficiency gained by the factory-wide monitoring and
control of energy flows in the production processes.
The demonstration of the short pay-back period (3-4 years) of domestic industrial co-generation will make
these projects more attractive for possible financing institutions such as the EBRD, which may lead to an
additional multiplyer effect of the project.
-
H Additional comments, if any, including any practical experience gained or technical difficulties,
effects, impacts or other obstacles encountered
H.1 Any practical experience gained:
--
H.2 Technical difficulties:
--
H.3 Negative impacts and/or effects encountered:
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Item
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Please fill in
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Describe environmental negative impacts/effects in detail:
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--
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Do quantitative data exist for evaluation of environmental negative impacts/effects?
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no
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Describe social/cultural negative impacts/effects in detail:
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Potential for reduced employment in the Slovak coal sector (lowered demand for domestic
coal-generated electricity). The Slovak Government should consider adequate provisions to minimize
associated social hardships, notably in the coal mining sector.
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Do quantitative data exist for evaluation of social negative impacts/effects?
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no
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Describe negative economic impacts/effects in detail:
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--
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Do quantitative data exist for evaluation of economic negative impacts/effects?
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no
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H.4 Other obstacles encountered: --
H.5 Other:
