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ACTIVITIES IMPLEMENTED JOINTLY(AIJ)

List of Projects

Uniform Reporting Format:

Activities Implemented Jointly Under the Pilot Phase

1. Governmental acceptance, approval or endorsement

• Date of this report: 23.05.2000
• This report is a (please underline)

First report

Interim report

Final report

• Please indicate hereafter which sections were modified since the last report

1. Summary of AIJ project

B.1. Title of project

Co-generation project in Adazi, Latvia

Co-generation project in Lielvarde, Latvia

B.2. Participants:

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

B.3. Activity summary

In Latvia two investments in energy source technology, using natural gas fired high efficiency boilers and small co-generation unit system, have been made hereby archiving a significant reduction of the emission of greenhouse gasses. The small scale cogeneration plants supply heat to the public district heating networks. The production facilities will also produce electricity for sales to Latvenergo.

B.3.1.1 General description: Adazi

The system is located in a building and it comprises one co-generator and two boilers. By means of a heat exchanger the heat is transferred into the district-heating network. The thermal power will be at least 3.6 Mw. The co-generator produces electrical power with a maximum of 350 kW. This electricity is delivered to the grid of Latvenergo. The thermal capacity of the co-generator is about 2 GJ / hr.

The co-generator is designed for ease of access and maintenance. It consist of the following parts:

• Gas engine. The gas engine complies with the current standards of emission, NO_x emission less than 140g/Gj.
• Generator: a brushless three phase generator supplied with a cos-phi controller current transformer in the terminal cabinet.

The boilers have a capacity of 1725 kW each. The chimney is designed on a basis of 10 % CO₂.

The system produces heat for the district heating network of Adazi. The produces electricity is delivered to Latvenergo. In case the circulation pumps of the heating network fail due to a black out, the co-generator will supply electricity to them. The system will be monitored by means of a telemetry system, which uses a telephone line.

B.3.1.2 General description: Lielvarda

The system is located in two containers, one comprises one co-generator and the other contains the two boilers. By means of a heat exchanger the heat is transferred into the district- heating network.

The contractual thermal output is 1.6 MW. The co-generator produces electrical power with a maximum output of 165 kW. This electricity is delivered to the grid of Latvenergo. The thermal capacity of the co-generator is 270kW.

The co-generator Zantec 165 is constructed in modular units on a special frame designed for ease of access and maintenance. It consists of the following parts:

• Gas engine type MAN. This gas engine complies with the current standards of emission, NO_x emission less than 140g/ GJ.
• Generator: Brushless Stamford three phase generators supplied with a cos-phi controller current transformer in the terminal cabinet.

Viessmann in Germany manufactures the boilers. These are two Paromat duplex boilers each with a capacity of 740 kW.

The system produces both heat and electricity. In case the circulation pumps of the heating network do not function due to absence of electrical power, the co-generator will supply electricity to these pumps.

The system will be monitored by means of a telemetry system using a telephone line.

B.3.2 Type of activity

The general direction of pilot phase activities of AIJ in Latvia comprises the following four types of projects:

• Use of renewable energy sources - wind energy as well as biomass;
• Environmentally adapted fuel use as energy resources by installation of small scale CHP;
• Energy efficiency projects in distribution side by rehabilitation of district heating systems;
• Energy efficiency improvement in end-users side by regulation of heat energy consumption and renovation of buildings.

The measures for energy efficiency improvement according with The Law on Energy of Latvia was focused on more effective technologies, fossil fuels replacing and switching and installation of small-scale co-generation systems. Parliament of Latvia corrected and accepted changes (no more double tariff of electricity generated in small scale cogeneration) in Law on Energy.in May 2001.

The Adazi and Lielvarda activities concern energy efficiency, fuel switching and small scale CHP technology.

B.3.3 Location (exact, e.g. city, region, state)

• Adazi, the plant is located in Adazi Municipality, about 20 km southward from Riga, in Latvia
• Lielvarde, the plant is located in Lievarde Municipality about 50 km south east from Riga, in Latvia

B.3.4 Stage of activity (please underline the appropriate option)

• Pre-feasibility study completed
• Feasibility study completed
• In start-up or construction phase (e.g. ensuring financing, construction of site, purchase of land, installation of new equipment)
• In operation (e.g. new windmill plant is connected, converted boiler reconnected, etc. and real, measurable and long-term GHG emission reductions or removals by sinks are generated)
• Completed (AIJ project activity no longer generates GHG reductions or removals by sinks or has been terminated)
• Suspended (Please indicate date when AIJ project activity is expected to resume, and give brief explanation of reasons for suspension (up to half a page)):

B.3.5 Lifetime

• Approval date:

  • Adazi: 2. June 1995

    Lielvarde: 2 June 1995

• Starting date (installation):

  • Adazi: October 1996

    Lielvarde: November 1998

• Ending date of installation(expected):

  • Adazi: October 1997

    Lielvarde: November 1997

• Ending date of installation (actual):

  • Adazi: October 1997

    • Lielvarde: November 1997

• Operational ending date:

  • Adazi: 2013

    Lielvarde: 2013

• Reasons for the choice of lifetime dates (Describe briefly (up to half a page)):

The investments required in any cogeneration system are quite considerable and, to justify the expenditure, it should have a fairly long operating life, between 10 and 25 years. As predicting the power and heat needs of any site over long periods is quite difficult, the feasibility of most projects is calculated over a shorter period, such as ten years.

Past experiences demonstrate that co-generation systems based on gas engines (as Adazi and Lielvarda) are very reliable when operated with properly planned maintenance. An availability of 95 % is considered realistic.

Major overhaul time is between 25,000 and 30,000 running hours for medium speed units (750 - 1,000 rpm).

With current operations being from 5,000 to 7,000 hours/year, service lifetime could be estimated between 10 and 15 years.

B.4 Determination of the baseline

B.4.1 Date of completing the baseline determination: May, 2001

B.4.2 Carried out by (name): Dagnija Blumberga

(please provide detailed contact information in annex 1)

B.4.3 Type of baseline methodology applied and described in detail in section E.1

(please underline the appropriate option(s))

• Project-specified by:

  • - Simulating a likely situation that would have existed without the project (0-alt)

    - Taking an actual reference case project

    - Other (Please specify (insert lines as needed)):

• Multi-project by using (please specify briefly):

B.4.4 Project boundary: degree of aggregation (Please underline)

• Global
• National
• Sectorial (please specify)
• Project
• Other (please specify)

1. General compatibility with and supportiveness of national economic development and socio-economic and environmental priorities and strategies

According to Latvian Energy National Programme in order to determine schedule of new power plant commissioning that fits within the national economy’s framework, feasibility of individual plants was analyzed based on the following criteria:

• projections of fuel prices;
• projections of imported electricity prices;
• projections of thermal energy prices;
• investment requirements and available financing sources.

Plant feasibility analysis for Adzi and Lielvarde was carried out taking into account that, besides the plant’s electricity costs that could be hedged against imported electricity prices or other supply alternatives, construction of new facilities will:

• reduce losses in transmission and distribution, as plants are located closer to power consumption centers;
• increase the systems reliability and reduce dependence on electricity imports;

Reliability in regard to energy supplies in Latvia’s circumstances was considered as an important factor.

Analysis indicates that construction of combined heat and power plants is technically and financially feasible in Adazi and Lielvarde, where thermal load is sufficiently dense and the pipeline networks are extensively developed. In this case CHPs would provide for:

• substantially better fuel utilization
• simultaneous heat and power generation
• urban environment improvement (as CHP construction would be connected with closing of a number of small, inefficient and environmentally harmful boiler plants).

Adazi and Lielvarda use natural gas as fuel. JSC Latvijas Gaze magisterial pipelines are linked with the gas supply systems of Russia, Byelorussia, Estonia and Lithuania. Supply with gas is regulated by the state; stability of deliveries is sufficiently high because of the possibility to store natural gas reserves in Incukalns gas storage site.

Partly due to the lack of clear legislation the installation of co-generation plants funded by the local government, private and foreign capital is delayed and so is the replacement of regional boiler houses with co-generation stations. This process should get stabilized with the adoption and implementation of the Law on Energy and Regulations No. 425 of the Cabinet of Ministers (October 31, 1998): "On the procedure of purchase of the surplus electrical energy generated by the co-generation stations"

Baltic sea region small scale CHP action started in summer 1998. Latvian representatives together with specialists from Lithuania, Estonia, Denmark, Sweden, Finland, Norway, Poland and Germany are involved. This action is led by Danish Energy Agency by support from EC DGXVII.

1. Environmental, economic and social and cultural impacts

   D.1 Environmental impact (positive and / or negative)

   The demand for improved environmental performance in power generation is a powerful pressure for the increased use of co-generation techniques. However, it is often quite difficult to calculate the actual cost benefits accruing from improved environmental performance, since it is difficult to evaluate in terms of money environmental impacts.

   Co-generation has the potential to significantly reduce the national quantity of fossil fuel burnt and, as fossil fuel consumption is reduced, the national emission of harmful greenhouse gases is also reduced.

   It is estimated that, where co-generation replaces the separate production of heat and electricity, carbon dioxide savings between 132 and 642 kilograms per 1 MWh of electricity can be achieved. However, savings are more likely to average around 300 kilograms per MWh. Therefore, the strategy of promoting co-generation as a way of reducing emissions of carbon dioxide as a step towards achieving the Kyoto targets for greenhouse gas reduction is very important.

   The Carbon Dioxide reduction achieved by Adazi and Lielvarda are shown later in this report

   However, it is not just carbon dioxide production that is affected by the switch from conventional power and heat generation to co-generation. If the conversion to co-generation includes a fuel switch to natural gas (from a solid fuel for istance) it is possible to make significant reductions in other harmful emissions like dust, particulate, SO₂ and NO_x.

   Finally CHPs yield as well as an improvement to the landscape, due to lower stacks

   D.2 Economic impact (positive and / or negative)

   Co-generation can reduce the cost of generating electricity for the consumer and it reduces energy dependence on electricity imports.

   Straightly connected to the CHP plants of Adazi and Lielvarde is the positive economical effect to the municipalities, indeed they are able to invest more in district existing network.

   Furthermore a positive economical impact turn from the reduction of the electrical energy losses in the electrical networks.

   D.3 Social and cultural impact (positive and / or negative)

   The green issues are rapidly growing in importance and they represent a significant parameter for evaluating the development level of a country. The environmental pressure to install co-generation system is increasing steadily. The society has a good feeling when are proposed initiatives that involve environment concerns, economic benefits and health safeguard. CHP technologies reflect all the above-mentioned points.

   Anyway at the moment do not exist quantitative date for evaluation of social benefits and cultural impact due to either Adazi or Lielvarde CHP’s.

1. Calculation of real, measurable and long-term environmental benefits related to the mitigation of climate change, that would not have occurred otherwise

E.1 Assumptions and characteristics of the baseline

E 1.1 Adazi

Calculation of baseline for Adazi has been realized for three components as follows:

• CO₂ emissions from electricity supply from CHP-1, tCO₂ /MWh el cons;
• CO₂ emissions from thermal energy generation from CHP-1, tCO₂/MWh th;
• CO₂ emissions from thermal energy from old boiler house in Adazi, tCO₂/MWh th.

E 1.1 Lielvarde

Calculation of baseline for Lielvarde has been realized for three components as follows:

• CO₂ emissions from electricity supply from CHP-1, tCO₂ /MWh el cons;
• CO₂ emissions from thermal energy generation from CHP-1, tCO₂/MWh th;
• CO₂ emissions from thermal energy from old boiler house in Lielvarde, tCO₂/MWh th.

E.1.1 Assumptions of the baseline and its project boundary:

Calculations are based on following assumptions:

1. Electricity produced in small scale CHP replace electricity production in Riga CHP –1, where boiler fuelled by peat and steam turbine are used. Riga CHP –1 represents the most expensive electricity produced. This assumption is based on following:

• Energy generation in Riga CHP – 1 had lower efficiency (77%);
• electricity generated in Riga CHP – 1 was more expensive in comparison with other sources and import.

2. Thermal energy produced in small scale CHP replace heat energy production generated in Riga CHP –1, by means of boiler fuelled by peat and steam turbine, according to ratio electricity/thermal energy, because electricity production in Riga CHP –1.

3. Thermal energy produced by boilers in small scale CHP is replace thermal energy generation in old boiler house in Adazi (fuelled natural gas with efficiency 80%) or in old boiler house in Lielvarde (fuelled by Light Oil).

4. Electricity production and losses in networks are taken into account by calculations and use of total efficiency of electrical system and use of specific indicator – GHG emissions related to electricity supplied to consumers tCO2/ GWh el.cons.

E.1.2 Describe the baseline

(please describe the baseline as well as effects occurring outside the project boundary (up to 1 page)):

E.1.2.1.

1. Energy efficiency of

CHP –1 77%

2. Electrical energy losses in electrical networks 21%

3. Data about electricity production

Data for assumptions are collected from Annual Reports of Latvenergo and Statistical Data from Reports of Ministry of Economy of Republic of Latvia "Economic Development of Latvia".

E.1.3 Reasons for selecting a baseline and its methodology

(Describe (up to 1 page)):

Letter of Intent signed in 1995. Baseline for calculations is selected on year 1995.

E.1.4 Calculation of values reported in "Baseline scenario" in table E.5.1 column (A):

E.2 Revision of the baseline for the project

E.2.1 Baseline revisions are planned (please underline): Yes / No

• (If Yes, please complete the remainder of section E.2.)

E.2.2 Revisions are planned at regular intervals (please underline): Yes / No

• If yes, please specify date of first revision and the length of the intervals:
  • First revision has been carried out on June 2001, next one will take place on June 2002
• If no, please explain revision schedule (up to half a page):

E.2.3 If a baseline revision is covered with this report, indicate

• Parameters changed in the revision(s) (e.g. Revision 1: energy demand, Revision 2: energy mix of the host grid):
  • The first baseline

E.2.3 If a baseline revision is covered … (continued)

• Date of last baseline revision: (DD/MM/YYYY) 01/06/2001
• Date of next baseline revision: (DD/MM/YYYY)

  • E.2.4 Describe briefly the nature of each revision including the calculation of the new set of values in ‘Baseline scenario’ in table E.5.2, column (A).

E.3 Assumptions and characteristics of the project scenario

No specific assumptions. Calculation is based on monitoring data.

E.3.1 Assumptions for the AIJ project activity and its boundary

Three components were calculated separately:

1. Electricty produced and transmitted (10% losses) to electricity consumer.

2. Thermal energy produced by cogeneration unit (electricity/thermal energy ratio is 0,7).

3. Thermal energy produced in boilers

E.3.2 Describe the project scenario

Please describe the baseline as well as effects occurring outside the project boundary (up to 1 page):

E 3.2.1 Baseline

The year 1995 has been chosen as the baseline because it corresponds with the approval date of the projects: Letter of Intent was signed. As baseline has been taken electricity and thermal energy (according to ratio electricity/thermal energy) produced into account Riga CHP-1 call TEC-1.

From CHP-1 has been calculated two coefficients as follows:

• CO₂ emissions from electricity, 0,484 tCO₂/MWh el cons;
• CO₂ emissions from thermal energy, 0,382 tCO₂/MWh th;

Thermal energy produced in boilers in Adazi and Lielvarde has been calculated from the substituted boiler houses of Adazi and Lielvarde:

• CO₂ emissions from thermal energy from old boiler house in Adazi, 0,263 tCO₂/MWh th
• CO₂ emissions from thermal energy from old boiler house in Lielvarde, 0,351 tCO₂/MWh th

Using these coefficients and the available date from the SSCHP in Adazi and Lielvarde about generated heat and electricity consumption the baseline has been formulated.

E 3.2.2Effect occurring outside

The projects in Adazi and Lielvarde benefit the Latvian economy and environment by investments in clean technology and technology transfer.

The introduction of new and efficient technologies, as small scale CHP plants, represent a wave of innovation for Latvia and aperture toward to sustainable energy use; therefore these projects have the effect of transferring knowledge and technology in Latvia, related to introduction of modern energy production systems.

The environment benefit from the use of efficient gas technology, since the national emission are reduced. Also the landscape is improved due the to lower stacks.

Under an economical point of view the projects of Adazi and Lielvarde will prevent difficulties those create market obstacles for future penetration of small scale co-generation in Latvia.

The introduction of CHPs benefit as well as the consumers expenses, whereas the prime cost upon both hot water and electricity furniture are decreased. Moreover a regular and stable delivery of heat and hot tap water for Adazi and Lielvarde citizens is guaranteed.

• E.3.3 Please explain why the AIJ project activity would not have taken place anyway

(Describe (up to 1 page)):

If not AIJ then would the project would have been carry out from someone else?

Adazi could change boilers with higher efficiency after three or five years.

Lielvarde could continue operation of boiler house fuelled by light oil

E.3.4 Calculation of values reported in ‘Project scenario’ in table E.5.1, column (B)

E.4 Scope and performance of the actual project

Describe changes with regard to the project scenario (see section E.3 above):

• E.5 Tables on real, measurable and long- term GHG emission reductions or removals by sinks (in CO 2 equivalent)

E. 5.1 Projected real, measurable and long- term GHG emission reductions or removals by sinks

(in metric tons of CO 2 equivalent a )

Insert rows as needed

^a Please convert values into global warming potentials, referring to annex 3 for conversion factors.

^b Including effects occurring outside the project boundary (leakage) as described in sections E.1.4, and E.3.4, as applicable

E 5.2 Revised projected real, measurable and long- term GHG emission reductions or removals by sinks

• Please prepare for each revision a table starting with the year of the baseline revision

Adazi

(in metric tons of CO 2 equivalent a )

Insert rows as needed

^a Please convert values into global warming potentials, referring to annex 3 for conversion factors.

^b Including effects occurring outside the project boundary (leakage) as described in sections E.1.4, and E.3.4, as applicable

E 5.3 Actual real, measurable and long- term GHG emission reductions or removals by sinks

E 5.3.1 Adazi

(in metric tons of CO 2 equivalent^a )

Insert rows as needed

^a Please convert values into global warming potentials, referring to annex 3 for conversion factors.

^b Includding effects occurring outside the project boundary (leakage) as described in sections E.1.4, E.2.4, E.3.4, and E.4, as applicable

^c Values that differ from those in table E.5.1 should be marked in bold

E 5.3.2 Lielvarde

(in metric tons of CO 2 equivalent^a )

Insert rows as needed

^a Please convert values into global warming potentials, referring to annex 3 for conversion factors.

^b Including effects occurring outside the project boundary (leakage) as described in sections E.1.4, E.2.4, E.3.4, and E.4, as applicable

^c Values that differ from those in table E.5.1 should be marked in bold

E.6 Mutually agreed assessment procedures

Please fill subsections as applicable to the AIJ project activity

E.6.1 Validation

• Has the project design been subject to an independent validation?

(Please underline): Yes/No

• If yes, what organization(s) is/are involved: Please indicate the type of

organization(s) (consultancy, accredited certification body, government body,

university, etc.), and provide their detailed contact information in annex 1 to this

report.

Ekodoma, Ltd, Consulting company, Noliktavas street 3 – 3, Riga, LV1010, Latvia

M.Sc.Ing. Andra Blumberga, phone 371 7323212, e-mail: ekodoma@bkc.lv

E.6.2 Monitoring

• Does the project have a monitoring plan? (Please underline): Yes / No
• Summarize briefly the key elements of the monitoring plan (i.e. which parameters are being monitored, with what frequency, providing sampling intensities if appropriate, methods and equipment; associated uncertainties, etc.) (not more than 1 page):

Monitoring of following data:

• hourly fuel consumption
• specially planned measurements of components of exhaust gases.

• Is the monitoring conducted by project proponents? (Please underline): Yes / No
• If no, which organization(s) is/are involved: Kindly indicate the type of organization(s): consultancy, accredited certification body, government body, university etc. and provide their detailed contact information in annex 1 to this report:

E.6.3 Verification

• Is the activity subject to independent verification (Please underline): Yes / No
• If no, is independent verification intended? (Please underline): Yes / No
• If yes, what organization(s) is/are involved: Please indicate the type of organization(s) (consultancy, accredited certification body, government body, university, etc.), and provide their detailed contact information in annex 1 to this report. Indicate the frequency of the assessments, how many assessments have taken place to date, and whether the assessment report(s) is/are publicly available if requested.

Accredited certification body : Price Waterhouse

• Summarize briefly the key elements of the verification activities: (Please describe issues such as criteria used; the project design; project implementation; assessment of the baseline; key project parameters being verified; the frequency of assessment/surveillance; sampling approach applied by the assessing organization) (up to one page):

E.6.4 Certification

Certification is not a formal requirement under the AIJ pilot phase. If the project has made provisions for third-party certification, please indicate the certification body and frequency of certification, and attach copies of the certification agreement or protocol(s):

E.6.5 Other form of mutually agreed assessment procedure (please specify):

E. 7 Cost (to the extent possible)

E.7.1 The cost information is (please underline):

• Partially provided below
• Not provided because the data are (Please underline):
  • - Not yet available

    - Classified as confidential

E.7.2 Project costs and revenues

Please list cost/revenue figures per year (insert rows as needed)

^a Enter I = incurred, P = projected

^b Use net present value method to calculate values. Please indicate here relevant assumptions on, inter alia, exchange rates, discount and interest rates:

1. Financing

F.1 Financial additionality

Note: The financing of AIJ 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 (ODA) flows (decision 5/CP.1). Please explain additionality in the context of this project (up to half a page).

F.2 Project development

* Total financing required (in thousand US$): 1.081.900

^a Enter: H = host country, I = investor country, O = other

^b Enter: 1 = Private sector contribution; 2 = Private sector loan; 3 = Public sector contribution;

4 = Public sector loan; 5 = NGO contribution; 6 = NGO loan; 7 = IGO contribution; 8 = IGO

loan; 9 = GEF funding; 10 = ODA funding. Contribution may refer to grants or in-kind

contributions (please specify):

F.3 Project implementation

* Total financing required (in thousand US$): 30.000

^a Enter: H = host country, I = investor country, O = other

^b Enter: 1 = Private sector contribution; 2 = Private sector loan; 3 = Public sector contribution;

4 = Public sector loan; 5 = NGO contribution; 6 = NGO loan; 7 = IGO contribution; 8 = IGO

loan; 9 = GEF funding; 10 = ODA funding. Contribution may refer to grants or in-kind

contributions (please specify) :

1. Contribution to capacity-building and the transfer of environmentally sound technologies and know-how

Note: Developed country Parties shall support the development and enhancement of endogenous capacities and technologies of developing country Parties in order to enable them to implement the provisions of the convention.

G.1 Identification of environmentally sound technology and know-how

• Name of manufacturer: different manufacturers
• Place of manufacture (country): the Netherlands
• Model names and numbers of equipment (where appropriate):
• Any other relevant key specific technology characteristics:
• Where applicable, name and location of provider and nature of training:

G.2 Characteristics of environmentally sound technology

The technology is (underline the option):

• At a research and development stage
• Being tested or demonstrated in similar conditions outside the host country
• At the initial stage of introduction into the world market
• At the initial stage of introduction into the host market
• Commercially available and deployed in the world market
• Commercially available and deployed in the host market
• Not characterized by the above options. Please describe:

G.3 Impact of the AIJ project on capacity-building and transfer of environmentally sound technology and know-how (up to two pages):

Small scale cogeneration plants in Adazi and Lielvarde started introduction with new technologies for electricity and thermal energy production. Two pilot CHPs in Latvia has involved and influenced actors from different levels: