CC:INFO/AIJ: REPORT

Uniform Reporting Format:

Activities Implemented Jointly Under the Pilot Phase

Annex I

A. Description of project

1) Title of project: Conversion of boiler in Paldiski

2) Participants/actors:

Item	Financier/Reporter	Co-reporter
Name of organisation(a):	Statens energimyndighet	Eesti Vabariigi Keskkonnaministeerium
Name of organisation (English):	Swedish National Energy Administration^(*	Ministry of the Environment of the Republic of Estonia
Department:	Secretariat for Climate Policy and International Co-operation	International Relations Department
Acronym:	STEM	EKM
Acronym (English):	STEM	MoE
Function within activity:	Assigned by the Swedish Government for implementation including financing arrangements.	Estonian Climate responsible Organisation
Street:	Kungsgatan 43	Toompuiestee 24
Post code:	BOX 310, S-631 04	10149
City:	Eskilstuna	Tallinn
Country:	Sweden	Estonia
Telephone:	+46 16 544 20 00	+372 62 62 800
Fax:	+46 16 544 22 64	+372 62 62 801
E-mail:	klas.tennberg@stem.se	min@ekm.envir.ee
WWW-URL:	http://www.stem.se	http://www.envir.ee
Contact person (for this activity):	-------------------------------------	-------------------------------------
Surname:	Knutsson	Kratovits
First name, middle name:	Gudrun	Andres
Job title:	Head of Section, Climate Investment Programme	Counsellor
Direct tel:	+46 16 544 20 72	+372 62 62 841
Direct fax:	+46 16 544 22 64	+372 62 62 845
Direct E-mail:	gudrun.knutsson@stem.se	andres@ekm.envir.ee

^(* From 1 January, 1998, the new Swedish National Energy Administration has taken over the responsibility for the Programme for an Environmentally Adapted Energy System in the Baltic region and Eastern Europe (EAES Programme) from NUTEK (Swedish National Board for Industrial and Technical Development).

	Borrower
Name of organisation(a):	OÜ Soojusenergia
Name of organisation (English):	Soojusenergia Ltd
Department:
Acronym:
Acronym (English):
Function within activity:	Project owner
Street:	Sadama 28
Post code:	76805
City:	Paldiski
Country:	ESTONIA
Telephone:	+372 6 790 212
Fax:	+372 6 790 211
E-mail:
WWW-URL:
Contact person (for this activity):	-------------------------------------
Surname:	Romanovskaja
First name, middle name:	Svetlana
Job title:	Head of the boilerhouse
Direct tel:	+372 6 741 209
Direct fax:	+372 6 790 211
Direct E-mail:

Item	Please fill in if applicable	Please fill in if applicable
Name of organization(a):	Sihtasutus Regionaalsed Energiakeskused	ÅF International
Name of organization (English):	Regional Energy Centres in Estonia	ÅF International
Department:	Võru office	ÅF - International Malmö
Acronym:	SA REK	ÅFI
Acronym (English):	REC	AFI
Function within activity:	Local reporter	Technical support
Street:	Liiva 12C	Stensjögatan 3
Post code:	65602, Võru P.O., BOX 43	S-217 65
City:	Võru	MALMÖ
Country:	ESTONIA	SWEDEN
Telephone:	+372 78 282 30	+46-40-37 50 00
Fax:	+372 78 282 31	+46-40-13 03 69
E-mail:
WWW-URL:	http://www.af.se/ens/english/rec	http://www.af.se
Contact person (for this activity):	-------------------------------------	------------------------------------
Surname:	Potter	Lindgren
First name, middle name:	Elmu	Ulf
Job title:	Consultant	project leader
Direct tel:	+372 78 282 30	+46-40-37 50 97
Direct fax:	+372 78 282 31	+46-40-13 03 69
Direct E-mail:	elmupotter@hot.ee	Ulf.lindgren@mlm.pdn.af.se

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:	Paldiski town is situated about 40 km west of Tallinn on a peninsula. In the former Soviet Union time it was a military town with a submarines harbour. At the present time the number of inhabitants is 4500. The heat is distributed from one boiler house. The heating system and distribution network was in extremely bad condition. The boiler house, firing mazout had old boilers witch could not be used for conversion. One new Russian DE 25-14 steam boiler has been installed for conversion and wood chips firing.
Type of project:a)	Fuel switching to biofuels
Location (exact, e.g. city, region, state):	Paldiski town Harju County Estonia
Activity starting date:	30. November 1994 (Letter of Intent)
In operation from:	March 1996
Expected activity ending date:	30.September 2005
Stage of activity:b)	completed
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 2011.
Technical data:d)	An mazout fired DE 25-14 boiler has been converted to biofuels firing through installation a pre-furnace. Automatic fuel storage, wood chips handling system, flue gas cleaning equipment and ash handling system are included in the project. Boiler type: DE 25-14 (steam) Boiler output: 6 MW Pre-furnace: Free standing with moving inclined grates Flue gas cleaning: Multi-cyclone <300 mg/Nm3 Fuel type: Wood chips, sawdust,bark, 35-55%RH Previous fuel : Mazout ( high-sulphur content heavy fuel oil) Estimated heat production from the wood fuel boiler: 25 000 MWh/year Total production of the boiler plant: 35 000 MWh/year

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.

The life time criteria has been arranged in different groups depending on type of implemented activities. This classification assumes a level of operation and maintenance which is normal

in western countries.

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 –Costs for seminars, handbooks, education (capacity building) and 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		Paldiski	1996	1997	1998	1999	2000
			0	1	2	3	4
	Investment	1. Loan/debt to STEM	580500	664305	695505	721433	759259
		2. Added costs	55000	28805	31200	25928	37826
		3.Technical assistance	57000	0	0	0	0
	AIJ/JI	4. Follow up	0	8500	2200	2267	2139
A. Sweden	costs	5. Reporting costs	0	850	0	744	301
		6. Administration	40000	0	0	0	0
		7. Difference in interest	4%	26572	27820	28857	30370
		8.Accum. costs for AIJ/JI	97000	132922	162942	194811	227622
		9.Total costs	732500	797227	858447	916243	986881
	Investment	1. Investment/Instalment	0	0	0	0	0
2. Estonia	AIJ/JI	2. Reporting costs	0	0	0	0	0
	costs	3. Other costs	0	0	0	0	0
		4. Accum. costs for AIJ/JI	0	0	0	0	0
		5. Total costs	0	0	0	0	0
1 USD=	10	SEK

5) Mutually agreed assessment procedures:

Describe the procedures, including name of organisations involveda):

Ministry of the Environment of Estonia is a central Estonian authority responsible on reporting of JI projects. This authority assigns a local institution, which is involved in to the evaluation of the climate effects of this project and takes the main responsibility to continue measuring, results collecting 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:

Fourth 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:

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 project meets the following objectives in the Estonian Energy Law, Estonian National Environmental Strategy, Estonian National Environmental Action Plan, Act on Sustainable Development and the Long-term Development Plan for the Estonian Fuel and Energy Sector:

- efficient and sustainable use of energy resources;

- to increase the share of renewable energy sources in the primary energy demand from present 8% to 13% to the year 2010;

- to reduce the environmental damage arising from fuel and energy production, transport, conversion and distribution;

- to create the reliable energy conservation system stimulating the implementation of energy conservation measures by consumers;

- creation and usage of energy efficient technologies, fuel/energy consuming and diagnostic equipment;

- stimulation of environmental awareness and environmentally friendly consumption patterns;

- to attract foreign investments for projects which ensure better use natural resources as well as environmental improvement;

- to develop co-operation between Baltic, Nordic and Central European countries

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: Projected: 2000 9191ton CO2 7713 ton CO2 148,1 ton SO2 124,3 ton SO2 12 ton NOx 10,1 ton NOx Improved silviculture Paldiski was until recently a Russian military base. The soil is heavily contaminated by oil spills which, absorbed with sawdust, the boiler plant can burn in wood chip boiler.
Do quantitative data exist for evaluation of environmental benefits?	No. Local measurements will be carried out later.
Describe social/cultural benefits in detail:	More stable energy supply. Improved working conditions, increased motivation More employment (fuel companies) Improved trade balance.
Do quantitative data exist for evaluation of social benefits?	Yes. Some reports have been produced
Describe economic benefits in detail:	Decreased fuel costs per energy production approx. 8,6 USD/MWh. Decreased import fuel costs approx. 180000 USD per year.
Do quantitative data exist for evaluation of economic benefits?	Yes. Some reports have been produced.

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):

Description of the baseline or reference scenario, including methodologies applied:

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.

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

Status quo data:

Fuel	Mazout
Fossil fuel boilers efficiency	0,75

Fill in the following tables as applicable:

Summary table: Projected emission reductions:

	GHG	Year 1 =1996	Year 2 =1997	Year 3 =1998	Year 4 =1999	Year 5 =2000	...	Year 15 =2010
Planned energy production on biofuels MWh/year		19200	25000	25000	25000	25000		25000
A) Project baseline scenario	CO2	7059	9191	9191	9191	9191		9191
	CH4	-
	N2O	-
	other	-
B) Project activity scenarioa)	CO2	0	0	0	0	0		0
	CH4	-
	N2O	-
	other	-
C) Effect ( B-A )	CO2	-7059	-9191	-9191	-9191	-9191		-9191
	CH4	-
	N2O	-
	Other	-
D) Cumulative effect	CO2	-7059	-16250	-25441	-34632	-43823		-135735
	CH4	-
	N2O	-
	Other	-

a) Includes indirect GHG leakages.

Summary table: Actual emission reductions:

	GHG	Year 1 = 1996	Year 2 = 1997	Year 2 = 1998	Year 2 = 1999	Year 2 = 2000	...	Year 15 =2010
Factual energy production on biofuels		9260	12690	12564	14957	20980		20980
A) Project baseline scenario	CO2	3404	4665	4619	5499	7713		7713
	CH4	-	-
	N2O	-	-
	other	-	-
B) Project activity scenarioa)	CO2	0	0	0	0	0		0
	CH4	-	-
	N2O	-	-
	other	-	-
C) Effect ( B-A )	CO2	-3404	-4665	-4619	-5499	-7713		-7713
	CH4	-	-	-
	N2O	-	-	-
	Other	-	-	-
D) Cumulative effect	CO2	-3404	-8070	-12689	-18188	-25901		-103033
	CH4	-	-	-
	N2O	-	-	-
	Other	-	-	-

a) Includes indirect GHG leakages.

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	77.4324
Grant from NUTEK for technical assistance	71.250

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 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"

Technology transfer has taken place through:

STEM technical specialist support to the local project leader and municipality;

Knowledge in negotiations to foreign companies;

Knowledge in managing and planning of industrial projects;

Transferring of environmental issues to the local parties;

Transferring of knowledge in operation and maintenance issue.

Personal from boiler plant has been invited to different seminars and work-shops and several presentations about company experience have made, documentation for training has been handed over.

There were arranged seminars through close cooperation between STEM and Estonian partners:

Environmentally Friendly Energy Systems in the Baltic Region and Eastern Europe - seminar in Tallinn , 14-15 Aprill, 1994;
Environmentally Friendly Energy Systems in the Baltic Region and Eastern Europe - seminar and workshops in Tartu , 25 November, 1994 (prepared information by topics in Estonian over than 150 pages);
EAES Programme District Heating Day in Vändra, 27 July, 1995;
Environmentally Adapted Local Energy Systems - seminar and presentation of translated into Estonian booklet "Environmentally Adapted Local Energy Planning" in Rakvere, 11 November, 1998 and in Tartu, 12 November, 1998.

iv)Activities have been supported by STEM to establish Estonian Biofuels Association: meetings representatives of plant owners and consultants were arranged in Haabneeme, Valga, Võru, Tartu, Pärnu and Viljandi. Boilerplant has been visited by specialist of other boilerplants, the staff has an exchange of experience with other boilerplants. Estonian Biofuels Association is established in 1998 ( mainly by "bio-club" and local experts).

Endogenous capacity supported or enhanced:

Endogenous capacity (Name of organization1)	Development (DEV) / enhancement (ENH)	Describe briefly
OÜ Soojusenergia	(DEV)	The boiler plant has got experience in handling biofuel equipment

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:

Good training and experience of the staff is necessary to operate biofuel boiler at full capacity. The motivation of the staff to learn is very important to get good results.

Is very important to control temperature in the prefurnace and the temperature gauge must be installed in the suitable place to avoid lining damages.

2) Technical difficulties:

The short brakes in the production had to made for cleaning of the boiler convective part tubes after 2-3 months operation time (the converted boiler is specially designed for burning oil and gas). The special opening is made for boiler cleaning.

There is replaced a lot of electrical components in the boiler electrical cabinet ( mainly components from Russian market are used to due lower price). Some components are not in the operation ( e.g. O₂ meter)

Solid particles ( ash, sand) stratify on the economizer surface especially during burning bark and the economizer must be cleaned very often.

There are problems with the combustion process adjustment, new combustion air fan is installed.

3) Effects encountered:

The increase of the oil price has motivated boiler house staff to operate more biofuel boiler. The heat production on biofuels has significantly increased in 2000.

4) Impacts encountered:

The experiences from EAES Programme projects have formed the basis for a new policy as respect to increasing renewable energy sources in the total energy balance of Estonia.

Reduced dependence on imported fuels.

5) Other obstacles encountered:

Lack of a strong national focal point to support and promote biomass energy activities.

There is lack of information about biofuels in Russian language and the local staff have not been very active in communication with specialists from another boilerplants.

The maintenance of the equipment must be improved, e.g. leaking hydro cylinders. The human factor is sometimes more important than technology and new equipment.

Some communication problems to purchase spare parts from foreign companies.

6) Other:

The staff of the boiler house have participated very closely in the project.

No subsidies to renewables, taxation policy is not in support of biofuel use.

Calculations of the volume of emissions of sulphur dioxide and nitrogen oxide in the section D are revised and new emissions values are calculated according to the Regulation No. 33 of 17. March 1999 of the Ministry of the Environment "The procedure and methods of determination of the volume of pollutants from combustion plants to the air".

In 2000 a research project was started with Det Norske Veritas with the aim to develop methods for simplifying the verification of JI-projects based on the experiences from the Swedish boiler conversion projects in the Baltic countries.

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