CC:INFO/AIJ: REPORT

Uniform Reporting Format:

Activities Implemented Jointly Under the Pilot Phase

A. Description of project

1) Title of project: Balvi (I), Boiler Conversion project

2) Participants/actors:

Item	Financier/Reporter	Co-reporter
Name of organisation(a):	Statens energimyndighet	Vides Aizsardzîbas un Regionâlâs Attîstîbas Ministrija
Name of organisation (English):	Swedish National Energy Administration	Ministry of Environmental Protection and Regional Development of the Republic of Latvia
Department:	Division for Eastern Europe- EAES Programme	Environmental Protection Department
Acronym:	STEM	VARAM
Acronym (English):	STEM
Function within activity:	Assigned by the Swedish Government for Implementation including financing arrangements.	Assigned by the Latvian Government for activities implemented jointly
Street:	Kungsgatan 43	Peldu Str. 25
Post code:	S-117 86	LV 1494
City:	Eskilstuna	Riga
Country:	Sweden	Latvia
Telephone:	+46 16 544 20 00	+371-7 026 508
Fax:	+46 16 544 22 64	+371-7 820 442
E-mail:	klas.tennberg@stem.se	erna@varam.gov.lv
WWW-URL:	http://www.stem.se
Contact person (for this activity):	-------------------------------------	-------------------------------------
Surname:	Knutsson	Apene
First name, middle name:	Gudrun	Ingrid
Job title:	Head of Section, Climate Investment Programme	senior official
Direct tel:	+46 16 544 20 72	+371-7 026 508
Direct fax:	+46 16 544 22 64	+371-7 820 442
Direct E-mail:	gudrun.knutsson@stem.se	erna@varam.gov.lv

	Borrower
Name of organisation(a):	Balvu Pilsetas Valde
Name of organisation (English):	Balvi City Municipality
Department:
Acronym:
Acronym (English):
Function within activity:	borrower
Street:	Brivibas Street 64
Post code:
City:	Balvi
Country:	Latvia
Telephone:	+371-(2)45 22088
Fax:	+371-(2)45 22242
E-mail:
WWW-URL:
Contact person (for this activity):
Surname:	Annuskans
First name, middle name:	Juris
Job title:	Chairman of the City Municipality
Direct tel:	+371 45 22830
Direct fax:	+371 45 222 42
Direct E-mail:

Item	Please fill in if applicable	Please fill in if applicable
Name of organization(a):	EKODOMA	ÅF International
Name of organization (English):	EKODOMA
Department:		AF – International, Malmö
Acronym:		ÅFI
Acronym (English):		AFI
Function within activity:	Local reporter	Technical support
Street:	Noliktavas 3-3	Stensjögatan 3
Post code:	LV 1010	S-217 65
City:	Riga	MALMÖ
Country:	LATVIA	SWEDEN
Telephone:	+371-7 323212	+46-40-37 50 00
Fax:	+371-7 323210	+46-40-13 03 69
E-mail:	ekodoma@bkc.lv
WWW-URL:	http://www.ekodoma.lv	http://www.af.se
Contact person (for this activity):	-------------------------------------	-------------------------------------
Surname:	Kass	Lindgren
First name, middle name:	Ilmars	Ulf
Job title:	project manager	project leader
Direct tel:	+371 7 323212	+46-40-37 50 97
Direct fax:	+372-7 323210	+46-40-13 03 69
Direct E-mail:	ilmars-eko@bkc.lv	Ulf.lindgren@pdn.af

a) Organisation includes: institutions, ministries, companies, non-governmental organisations, etc. involved in the activity, i.e. research institutes associated with the project, auditors, government agency closely following the activity.

3) Activity:

Item	Please fill in if applicable
General description:	Balvi is a middle-size town situated in eastern Latvia. There are many boiler plants and district heating networks in Balvi. On one side of the river there were two boiler plants with two networks. In one of them there were two DKVR 4-13 coal-fired boilers with annual energy production 12000 MWh. One of the boilers have been converted to biofuels firing.
Type of project:a)	fuel switching to renewable
Location (exact, e.g. city, region, state):	Balvi town Balvi district LATVIA
Activity starting date:	13. August 1993 (letter-of-intent)
In operation from:	December 1993
Expected activity ending date:	Loan expire date 31 December 2003
Stage of activity:b)	Complete
Lifetime of activity if different from ending date:c)	Expected technical lifetime is 15 years which means that the plant is expected to be in operation till 2009.
Technical data:d)	Conversion of a coal-fired DKVR 4-13 boiler to the use of wood chips through installation of a pre-furnace. Automatic fuel storage and flue gas cleaning equipment are also included in the project. The boiler output power after con-version is 2.4 MW and the estimated annual heat production amounts to 12 000 MWh.

a) For example, using Intergovernmental Panel on Climate Change (IPCC) classification: energy efficiency; renewable energy; fuel switching; forest preservation, restoration or reforestation; afforestation; fugitive gas capture; industrial processes; solvents; agriculture; waste disposal or bunker fuels.

b) Circle the appropriate option.

c) Methodological work will be required to define lifetime of activities.

Methodological work will be required to determine for each type of activity what the minimum data requirements are.

Lifetime of activity

Heat production plants (bio fuel)

25 years	New installation of all main equipment parts (fuel handling system, firing equipment and boiler) and modernisation of secondary equipment.
15 years	Conversion of existing boiler but new installation fuel handling system and firing equipment. Modernisation of secondary equipment.
10 years	Limited installation of new equipment (only one part of the three main parts, normally the firing equipment). Modernisation of other equipment.

Heat distribution systems and sub-stations

25 years	Pre-fabricated pipes and installations using certified contractors and supervisor according to EN norms and applicable district heating practise
15 years	Pre-fabricated pipes and installations without using certified contractors and supervisor
10 years	Modernisation of existing pipes.

Energy efficiency in buildings

25 years

Additional insulation roofs walls etc. with Scandinavian technology.

New installed heating systems.

15 years

Renovation and balancing of heating systems including thermostat valves.

10 years

Weather stripping windows, doors etc.

* if a combination of measures is done a reasonable lifetime for the project have to be calculated.

4) Cost (to the extent possible):

To the investment costs are referred the cost of the investment proper and the accumulated interest during the grace period, generally 2 years.

The AIJ/JI cost items are the costs for:

Technical assistance, a technical and administrative support from consultants, during the period from definition of the project till commissioning. These costs are paid by STEM.
Follow-up, an annual technical and economic follow-up by consultants, hired by STEM, of the operating results of the plant with the objective to improve on its techno-economic sustainability and its climate effect. The cost indicated is an average cost per project.
Reporting costs – i e costs in connection with the annual reporting of the project’s climate effects to UNFCCC. The cost indicated is an average cost per project.
Administration – average costs of STEM staff per project.
Difference in interest rates. STEM applies for its loans generally an interest rate corresponding to 6-month STIBOR (Stockholm InterBank Rate, in April 1999 3,0 %). Assuming a normal lending rate of 7 % means that this loan is associated with a cost of 4 % in relation to normal lending rate.

Investment/instalment = the borrower’s possible own financing of the investment, followed by the borrower’s repayment of the loan.

All costs in USD

Country		Balvi BC	1993	1994	1995	1996	1997	1998	1999
			0	1	2	3	4	5	6
	Investment	1. Loan/debt to STEM	262125	274625	298500	300250	313125	327875	324740
		2. Added costs	0	12500	23875	20375	12875	14750	5316
		3.Technical assistance	126250	0	0	0	0	0	0
	AIJ/JI	4. Follow up	0	8375	8750	10250	10625	2750	2834
A. Sweden	costs	5. Reporting costs	0	0	0	1063	0	0	930
		6. Administration	40000	0	0	0	0	0	0
		7. Difference in interest	4%	10985	11940	12010	12525	13115	12990
		8.Accum. costs for AIJ/JI	166250	185610	206300	229623	252773	268638	285391
		9.Total costs	428375	460235	504800	529873	565898	596513	610131
	Investment	1. Investment/amortization	0	0	0	18625	0	0	8451
Latvia	AIJ/JI	2. Reporting costs	0	0	0	0	0	0	0
		3. Other osts	0	0	0	0	0	0	0
	costs	4. Accum. costs for AIJ/JI	0	0	0	0	0	0	0
		5. Total costs	0	0	0	18625	18625	18625	27076
1 USD=	8	SEK

5) Mutually agreed assessment procedures:

Describe the procedures, including name of organizations involveda):

It is stated in agreement between STEM and Ministry of Environmental Protection and Regional Development of the Republic of Latvia that local organisation in Latvia, company EKODOMA is assigned for the data collection and evaluation of the climate effects of this project. After an initial work in cooperation with STEM’s assigned consultant, this local organisation would take the main responsibility the continued measuring for JI-reporting.

a) Please ensure that detailed contact information for all organizations mentioned is reported under

section A.2 above.

B. Governmental acceptance, approval or endorsement

Bearing in mind that all activities implemented jointly under this pilot phase require prior acceptance, approval or endorsement by the Governments of the Parties participating in these activities, which shall be shown as follows:

(a) In the case of joint reporting, the report is submitted by the designated national authority of one participating Party with the concurrence of all other participating Parties as evidenced by attached letters issued by the relevant national authorities;

(b) In the case of separate reporting, the reports are submitted separately by the designated national authority of each and every participating Party. Information will only be compiled once reports have been received from all participating Parties.

1) For the activity:

* Subsequent reports:

Third report . First report was submitted 1997.

2) This report is a joint report:

Yes, Agreement with designated national authority was signed 1997.

3) General short comment by the government(s) if applicable:

Yes, Agreement with Latvian Ministry of Environmental Protection and Regional Development was signed on March 1999. cf. Annex II, section B

C. Compatibility with and supportiveness of national economic development and socio-economic and environment priorities and strategies

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

The Swedish side considers that the project meets the following objectives in the Latvian Energy Law:

- efficient use of energy resources;

creation and usage of energy efficient technologies, fuel/energy consuming and diagnostic equipment, construction and insulation materials; energy flow metering and control devices, automated energy consumption control systems;

Latvia became a Party of the United nations Framework Convention on Climate Change (UN FCCC) in 1992.

In accordance with Kyoto Protocol to the UN FCCC on 10 December 1997, Latvia individually or jointly should ensure, that its aggregate anthropogenic CO₂ equivalent emissions of CO₂, CH₄, N₂O, HFCs, PFCs and SF₆ in 2008 - 2012 should be 8% below the 1990 level.

D. Benefits derived from the activities implemented jointly project

Whenever possible, quantitative information should be provided. Failing that, a qualitative description should be given. If quantitative information becomes available, it could be submitted using the update(s). (If the amount of quantitative information is too large, the source could be indicated.)

Item	Please fill in
Describe environmental benefits in detail:	Annual emissions reduction 5350 ton CO₂ 51 ton SO₂ 5.6 ton NO_x Boiler plant is firing sawmill waste which earlier was taken to forest
Do quantitative data exist for evaluation of environmental benefits?	Yes. Collected by EKODOMA
Describe social/cultural benefits in detail:	More stable energy supply. Improved working conditions, increased motivation. The boiler plant can use the waste from sawmill in neighbourhood. Improved trade balance.
Do quantitative data exist for evaluation of social benefits?	Yes.
Describe economic benefits in detail:	Decreased fuel costs approx. 3 USD/MWh.
Do quantitative data exist for evaluation of economic benefits?	Yes. Collected by EKODOMA

E. Calculation of the contribution of activities implemented jointly projects that bring about real, measurable and long-term environmental benefits related to the mitigation of climate change that would not have occurred in the absence of such activities

1) Estimated emissions without the activity (project baseline):

Present data reflect emission reductions using status quo (emissions in the period before the conversion to renewable fuel) for the baseline case. Calculations, according to the top-down method, for emissions from

different types of projects in the baseline case are being made. The changed calculation method will result in a change in emission reduction. The new data will be introduced as soon as available.

2) Estimated emissions with the activity:

Description of the scenario, including methodologies applied:

Emission reductions are calculated using the IPCC Guidelines, using the Carbon Emission Factor (CEF) for different types of fuel, using actual system efficiency. For boiler conversion, the decrease in emissions is

calculated in relation to the amount of fossil fuel replaced (status quo). For an energy efficiency project the decrease in emissions reflects the amount of fuel that is saved through the project. In the case that the

system uses renewable fuels, the reduction is calculated comparing the amount of fossil fuels that was used before the conversion to renewable fuels.

The comparison below is based upon that the base-line scenario represents a status quo solution.

Fill in the following tables as applicable:

Summary table: Projected emission reductions:

	GHG	Year 1 =1994	Year 2 =1995	Year 3 =1996	Year 4 =1997	Year 5 =1998	Year 6 =1999	...	Year 15
Energy production at plant based upon the baseline	(MWh/year)	9700	9700	9700	9700	9700	9700		9700
A) Project baseline scenario	CO2	6130	6130	6130	6130	6130	6130		6130
	CH4
	N2O
	other
B) Project activity scenarioa)	CO2	0	0	0	0	0	0		0
	CH4
	N2O
	other
C) Effect ( B-A )	CO2	-6130	-6130	-6130	-6130	-6130	-6130		-6130
	CH4
	N2O
	Other
D) Cumulative effect	CO2	-6130	-12260	-18390	-24520	-30650	-36780		-198000
	CH4
	N2O
	Other

a) Includes indirect GHG leakages.

Summary table: Actual emission reductions:

	GHG	Year 1 =1994	Year 2 =1995	Year 3 =1996	Year 4 =1997	Year 5 =1998	Year 6 =1999	..	Year 15
Factual energy production on biofuels/ saved energy (MWh/year)		10100	9600	11050	8740	8950	8450		9482*
A) Project baseline scenario	CO2	6600	6100	7000	4100	5700	5350		5808*
	CH4
	N2O
	other
B) Project activity scenarioa)	CO2	0	0	0	0	0	0		0
	CH4
	N2O
	other
C) Effect ( B-A )	CO2	-6600	-6100	-7000	-4100	-5700	-5350		-5808
	CH4
	N2O
	Other
D) Cumulative effect	CO2	-6600	-12700	-19700	-23800	-29500	-34850		-87215
	CH4
	N2O
	Other

* - average figure for previous full years of operation

a) Includes indirect GHG leakages. CO₂ emission level is 0 because only produced energy on bio fuels is taken into account.

F. Additionality 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 all sources of project funding.

Category of funding (For each source one line)	Amount (US dollars)
Loan from NUTEK/STEM	262.158
Grant from NUTEK/STEM for technical assistance	126.250

1 USD = 8,00 SEK

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

Transfer of environmentally sound technologies and know-how

Describe briefly

Schematically, the transfer of knowledge involves the following activities over time:

i) Technology transfer through NUTEK/

STEM's technical specialist during the implementation of the project.

ii) Technology transfer through cooperation between foreign supplier and local partner

iii) Conferences, seminars, documentation and training.

iv) Stimulate "net-working" for the exchange of experience between plant owners with similar problems, e. g. "bio-clubs"

i) technology transfer has taken place through NUTEK /STEM's technical specialist support to the local project leader and municipality as well as boiler plant staff.

ii) local companies took part in the project implementation phase (ground works, building, civil engineering works), the main contractor for the equipment delivery has been company HOTAB Eldningsteknik AB (Sweden)

iii) Special training courses for boiler house operators were arranged by the main contractor to give lessons on operation/maintenance of wood fuel burning plant. Translation of manuals and safety regulations for boiler operation.

The staff from the boiler plant has been invited to different seminars and workshops, documentation for training has been handed over. The following seminars in Latvia have been organized by support from STEM:

"Environmentally Adapted Energy Systems in Baltic States and Eastern Europe", Cesis, 23 November, 1994;
"Prospects for small boiler conversion to biofuel in Latvia", Rauna, March, 1996
"Possibilities for wood fuel utilization in Latvia", Broceni, 17 April, 1997;
"Waste wood for boiler houses", Liepa municipality, 5 June, 1998
presentation of book translated from Swedish to Latvian "Environmentally adapted local energy systems", author Niels Moe (STEM), seminars in Balvi, Jelgava, Saldus, 6-8 May, 1998

iv) Specialists of other boiler houses have visited the boiler plant, the staff has an exchange of experience with other boiler plants. The management was active in the "bio-club" established in 1994 and is now member of Bioenergy Association. Association was founded on December 1998 with the support from STEM and is aimed to closer relations among the plant owners, municipalities, equipment suppliers and consultants.

Endogenous capacity supported or enhanced:

Endogenous capacity

(Name of organization1)

Development (DEV) /

enhancement (ENH)

Describe briefly

Balvi boilerplant

SIA HOLM

(DEV)

ENH

Results from boiler conversion has been initiated to carry out a DH project to connect two networks and use the biofuel boiler more efficient.

New type of project for the local company.

1) Please ensure that detailed contact information for all organizations listed is reported under section A.2 above.

H. Additional comments, if any, including any practical experience gained or technical difficulties, effects, impacts or other obstacles encountered

Fill in as appropriate:

Any practical experience gained:

Heating company have new modern technology based on wood fuel utilization. It is possible to use different wood fuel: wood chips, sawdust, as well as residues from the wood processing companies that was dumped out before project realization. Heat production plant is delivering heat energy to the sawmill, which in turn is supplying boiler house with fuel.

Several seminars have been held in Balvi municipality about renewable energy, energy efficiency, etc.

AF-Energikonsult has made measurements on the mobile van laboratory for flue gas analysis and boiler house performance indicators.

Technical difficulties:

From the beginning boiler capacity was too big, but by connection of one of the part of town as well as increased load from sawmill charged the boiler capacity to the full. At the moment the boiler house have problems with heat metering at the consumers. It seems that flow in the network is too big that makes wrong readings of directly connected heat meters.

Effects encountered:

The project realization gave:

reduced fuel costs;

improved environment;

new working places for fuel supply, and plant operation;

reduced dependence from the imported fuel;

better economy for the local regional level;

cooperation between Baltic and Nordic countries;

involvement of local companies for project implementation;

ideas for new fuel conversion projects.

4) Impacts encountered:

Balvi municipality continues the started activities towards heating system rehabilitation. By help from the state investment programme they are replacing some parts of the district heating network pipelines with new pre-insulated pipes.

5) Other obstacles encountered:

Boiler plant has some organizational problems in the administration. Sometimes it is difficult to agree on fuel price from the sawmill, which in turn is getting heat from the plant. Sawmill has reasonable objections that heat they are getting does not correspond to parameters settled in agreement.

6) Other:

One of the first fuel conversion projects in Latvia from which was learned many good things and avoided mistakes for the next projects

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