ACTIVITIES IMPLEMENTED JOINTLY(AIJ)
The uniform reporting format contained below is to be used in reporting on activities implemented jointly under the pilot phase. It is noted that the reporting should be consistent with decision 5/CP.1 and 8/CP.2 (reproduced in annexes I and II to this reporting format). The SBSTA notes that the uniform reporting format could possibly require revision in the light of experience gained and methodological work conducted under the pilot phase.
A. Description of project
A. 1) Title of project:
India: Integrated Agricultural Demand-Side Management AIJ Pilot Project
A. 2) Participants/actors:
Please fill in one table for each participant/actor. For individuals fill in as from item AFunction within activity".
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Item |
Please fill in if applicable |
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Name of organization(a): |
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Name of organization (English): |
Andhra Pradesh Electricity Board |
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Department: |
Distribution |
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Acronym (English): |
APSEB |
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Function within activity: |
Implementing entity. Responsible for all aspects of project implementation. |
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Street: |
Vidyut Soudha |
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Post code: |
500 082 |
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City: |
Hyderabad |
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Country: |
India |
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Telephone: |
+91-40-331-7659 |
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Fax: |
+91-40-332-4823 |
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E-mail: |
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Contact person (for this activity): |
--------------------------------------------------- |
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Surname: |
Rao |
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First name, middle name: |
M.V. Krishna |
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Job title: |
Member (Distribution) |
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Direct tel: |
+91-40-331-7659 |
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Direct fax: |
+91-40-332-4823 |
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Direct E-mail: |
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.
Please fill in one table for each participant/actor. For individuals fill in as from item AFunction within activity".
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Item |
Please fill in if applicable |
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Name of organization(a): |
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Name of organization (English): |
Ministry of Power, Government of India |
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Department: |
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Acronym: |
MoP |
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Acronym (English): |
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Function within activity: |
Counterpart agency and the Central (federal) Government Ministry responsible for project oversight. |
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Street: |
Shramshakti Bahvan, Rafi Marg |
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Post code: |
110 001 |
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City: |
New Delhi |
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Country: |
India |
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Telephone: |
+91-11-371-0271 |
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Fax: |
+91-11-371-1316 |
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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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Surname: |
Paul |
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First name, middle name: |
Dharam |
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Job title: |
Director |
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Direct tel: |
+91-11-371-5250 |
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Direct fax: |
+91-11-371-7519 |
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Direct E-mail: |
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.
Please fill in one table for each participant/actor. For individuals fill in as from item AFunction within activity".
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Item |
Please fill in if applicable |
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Name of organization(a): |
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Name of organization (English): |
Ministry of Environment and Forest, Government of India |
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Department: |
International Co-operation |
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Acronym: |
MoEF |
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Acronym (English): |
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Function within activity: |
National Focal Point. Responsible for approval of AIJ projects. |
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Street: |
Parayavaran Bhavan, CGO Complex, Lodi Road |
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Post code: |
110 003 |
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City: |
New Delhi |
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Country: |
India |
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Telephone: |
+91-11-436-1669 |
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Fax: |
+91-11-436-0678 |
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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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Surname: |
Bhat |
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First name, middle name: |
Jaivardhan R. |
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Job title: |
Joint Director |
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Direct tel: |
+91-11-436-3962 |
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Direct fax: |
+91-11436-0734 |
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Direct E-mail: |
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.
Please fill in one table for each participant/actor. For individuals fill in as from item AFunction within activity".
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Item |
Please fill in if applicable |
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Name of organization(a): |
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Name of organization (English): |
Ministry of Foreign Affairs, Government of Norway |
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Department: |
Department of Natural Resources and Environmental Affairs |
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Acronym: |
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Acronym (English): |
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Function within activity: |
Government authority responsible for committing financial resources for AIJ projects and approval of AIJ project agreements and reports. |
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Street: |
Victoria Terrasse, P.O. Box 8114, Dep |
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Post code: |
N-0032 |
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City: |
Oslo |
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Country: |
Norway |
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Telephone: |
+47-22-24-36-03 |
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Fax: |
+47-22-24-27-82 |
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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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Surname: |
Leiro |
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First name, middle name: |
Jostein |
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Job title: |
Head of Division |
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Direct tel: |
+47-22-24-36-08 |
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Direct fax: |
+47-22-24-27-82 |
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Direct E-mail: |
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.
Please fill in one table for each participant/actor. For individuals fill in as from item AFunction within activity".
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Item |
Please fill in if applicable |
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Name of organization(a): |
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Name of organization (English): |
The World Bank |
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Department: |
Environment |
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Acronym: |
ENV |
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Acronym (English): |
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Function within activity: |
Management and administration of the AIJ project on behalf of the Government of Norway. |
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Street: |
1818 H Street, N.W. |
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Post code: |
20433 |
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City: |
Washington DC |
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Country: |
U.S.A. |
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Telephone: |
+1-202-477-1234 |
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Fax: |
+1-202-477-6391 |
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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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Surname: |
Tandberg |
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First name, middle name: |
Eivind |
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Job title: |
Advisor |
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Direct tel: |
+1-202-473-9746 |
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Direct fax: |
+1-202-522-2130 |
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Direct E-mail: |
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.
A. 3) Activity:
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Item |
Please fill in if applicable |
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General description: |
Consumption of electricity by the agricultural sector in state of Andhra Pradesh in India presents a significant challenge for the Andhra Pradesh State Electricity Board (APSEB). This sector consumes a large proportion of the total electricity production, and is growing rapidly. At the same time, agricultural tariffs do not provide sufficient revenue to cover the cost of production and therefore not generating capital resources necessary for expansion of the power system. Further, a number of studies have indicated that there are significant cost effective opportunities to increase the efficiency of electricity usage both in terms of improving the efficiency of the distribution system, and in terms of increasing end use efficiency. In the context of climate change, the power sector is the largest sources of greenhouse gas emissions in India. This project will implement and evaluate a number of Integrated Agricultural demand side management and energy efficiency improvement options which are intended to help the APSEB respond to this challenge and to simultaneously reduce the greenhouse emissions from the power sector of Andhra Pradesh. The pilot project has been defined to encompass approximately 5800 pumpsets on 8 feeders in two geographically separate areas at a cost of $ US 4.60 Millions. An economic analysis indicates that the project will provide significant benefits to both the farmers who participate in the project and to the APSEB. In addition, the project is expected to result in reduction in carbon output of approximately 7500T of carbon per year with approximately 150,000 T of carbon abatement in the project lifetime. |
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Type of project(a) |
Energy efficiency and demand side management in agricultural water pumping |
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Location (exact, e.g. city, region, state): |
Karimnagar and Chittoor districts of Andhra Pradesh |
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Activity starting date: |
September 1998 |
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Expected activity ending date: |
August 2000 |
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Stage of activity:b) |
Mutually agreed |
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Lifetime of activity if different from ending date:c) |
Emission impact of this activity will be monitored beyond the period of implementation of the project. Monitoring and evaluation of the emission reduction will be conducted as outlined in the section on Monitoring and Evaluation. |
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Technical data:d) |
Provided in section E of this report. |
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.
d) Methodological work will be required to determine for each type of activity what the minimum data requirements are.
Detailed description of the activities and the project
Objectives:
Consumption of electricity by the agricultural sector in Andhra Pradesh presents a significant challenge for the Andhra Pradesh State Electricity Board (APSEB). This sector consumes a large proportion of the total electricity production, and is growing rapidly. At the same time, agricultural tariffs do not provide sufficient revenue to cover the cost of production and therefore not generating capital resources necessary for expansion of the power system. Further, a number of studies have indicated that there are significant cost effective opportunities to increase the efficiency of electricity usage both in terms of improving the efficiency of the distribution system, and in terms of increasing end use efficiency. This report recommends the implementation and evaluation of an Integrated Agricultural DSM project which is intended to help the APSEB respond to this challenge.
The project combines the following four technical measures in an integrated package to generate electricity savings and greenhouse gas emission reductions:
· improvements of the distribution system efficiency by converting from low voltage (LV) feeders to high voltage (HV) feeders.· reduction in system demand and line losses, as well as improved service to non-agricultural customers through the use of automated load control
· the provision of customer meters to provide information on energy consumption
· improvements in end use efficiency by replacement of pumpsets, and associated pipes and valves with efficient products
Due to the substantial differential in tariffs between industrial and agricultural customers, it is possible for these technical measures to pay for themselves through the resale of saved energy to industrial customers who otherwise face power cuts.
A pilot project is proposed to be undertaken in two areas in Andhra Pradesh to determine that this approach is:
· technically, economically and financially as an integrated project
· sustainable as a business proposition for the APSEB
· replicable by other Indian electric utilities
The pilot project has been defined to encompass approximately 5800 pumpsets on 8 feeders in two geographically separate areas of AP. The cost of this project is estimated at $ US 4.60 Millions. An economic analysis indicates that the project will provide significant benefits to both the farmers who participate in the project and to the SEB. The Benefit / Cost ratio exceeds 4:1, while the economic cost of the saved energy is less than 0.70 Rs / kWh (2 cents/kWh). By comparison, the equivalent cost of energy to the APSEB, as purchased from independent power producers, is approximately 2.25 Rs / kWh (over 6.4 cents/kWh). A financial analysis of the project indicates that if the saved energy can be resold to the High Tension (HT) industrial customers, the additional revenue is sufficient to repay the cost of the project within 4 years. If the energy is resold at the average rate to all metered customers (excluding agricultural customers), the cost will be repaid over 7 years. On this basis, the project is financially viable. The project is expected to result in reduction in carbon output of approximately 7500T of carbon per year with approximately 150,000 T of carbon abatement in the project lifetime.
To reiterate, the main objective of this project is to implement and evaluate an Integrated Agricultural Demand Side Management in APSEB on a pilot scale. To determine that it is technically, economically and may be financially feasible depending on institutional arrangements for implementation. In addition to the economic and financial benefits, DSM measures in the agricultural sector have significant potential to reduce greenhouse gases emissions.
Outline of Technology:
The proposed technological measures under this project for the following three components are:
HVDS component
- Restructuring of the existing low voltage distribution network to High voltage distribution network through installation of small capacity Amorphous core single phase transformers.
Load control
- Providing a VHF master station with computers, load management software and a one way VHF transmitter with controller at each 33/11 KV substation for control of agricultural pumps.
- Providing radio switch with contactor at the single phase distribution transformer for one way control of distribution transformer.
End-use efficiency
- Replacement of existing three phase motors with single phase motors of better efficiency and power factor.
- Replacement of high resistance foot valves and GI suction and delivery piping with low resistance foot valves and RPVC piping.
High Voltage Distribution System
High Voltage Distribution System (HVDS) is based on North American practice where three phase or single phase HV line is taken as near the load as possible and a distribution transformer of appropriate capacity is installed to feed one or small group of loads, such that the length of the LV lines is minimum or eliminated altogether. This system is best suited to meet the scattered loads of low load density, incident in developing countries like India.
Load Control
Control of agricultural pumpsets is very attractive as the loads are deferrable in nature and energy consumption is 49% of total energy sales. The important aspects to be considered for control of pumpsets are
- The tariff is highly subsidized. As such there is no incentive for energy conservation.
- The tariff is based on flat rate i.e. horse power of pumpset and irrespective of the quantum of energy consumed and time of energy usage. Hence there is no incentive for any load management.
- The pumpsets are situated in inaccessible locations and difficult to maintain the load control devices provided at customers premises.
- No public communication system is available covering these locations to implement the load management schemes in a cost effective manner.
- The distribution network is not suitable for use as a communication medium as the transmitted load control signals are attenuated at the joints in the network which are made manually.
End Use Efficiency Improvement
The following measures are recommended to be taken up under end use efficiency programme
- Rectification of pumpset valves and piping
- Replacement of existing three phase motors with new single phase motors
The survey conducted to measure the overall efficiency of agricultural pumpset installation have indicated that the efficiency is as low as 30%. The pilot project executed for energy efficiency improvement of agricultural pumpsets indicated 25% to 30% savings can be achieved by rectification of pumpsets. As a conservative estimate 20% increase in efficiency is assumed.
Sharing of benefits and crediting
Consistent with the objectives of Decision 5/CP.1 of the First Session of the Conference of the Parties in Berlin in 1995 establishing the pilot phase of AIJ, no emission credits from this project will be sought during the AIJ pilot phase. The World Bank’s Pilot AIJ Programme, like the Norwegian AIJ programme, is consistent with Decision 5/CP.1 and aims to, inter alia, generate experience among Parties which can inform decision of the Parties to the UNFCCC at a future session of the Conference of the Parties to evaluate the AIJ Pilot Phase.
It is proposed that this project be funded by the World Bank's Activities Implemented Jointly (AIJ) scheme for financial assistance as a grant to the APSEB. The World Bank initiated a three year program on AIJ in collaboration with the Government of Norway in April 1996. The World Bank Group’s AIJ Work Program aims to investigate this potential and clarify how AIJ and other environmental trading mechanisms can promote the interests of client countries. The major objectives of the program are summarised below:
Maximise learning about AIJ. The overall objective of the World Bank AIJ program is the maximisation of participation in, and learning value from, the AIJ pilot phase which is critical for establishing a long term basis for AIJ and other market mechanisms.
Promote the long-term objective of the Climate Change Convention. The ultimate objective of the Climate Change Convention is the stabilisation of greenhouse gas (GHG) concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system and the AIJ programme is designed to support this goal of the Convention.
Promote client country development. In order to meet their development needs, developing countries require additional financial and technological resources, as well as enhanced institutional and human capacity. The Bank’s AIJ Programme visualises the AIJ mechanism as a supplementary means of financial and technology transfer to developing countries.
Explore solutions to the methodological issues. One main challenge for AIJ pilot projects is the operationalization and practicality of AIJ projects. Means for estimating the emission abatement and other benefits of AIJ, for addressing AIJ-specific risks, as well as monitoring, verification, reporting and institutional requirements for AIJ measures will be explored in the pilot phase.
Promote partnerships and private sector expansion. AIJ pilot projects will contribute to increased co-operation among domestic and international players while creating innovative market mechanisms for global climate change mitigation.
A. 4) Cost (to the extent possible): in million US$
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Item |
1998 |
1999 |
2000 |
2001 |
... |
Year X |
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Cost of the project in US$: |
0.57 |
3.01 |
1.60 |
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AIJ component in US$: |
0.46 |
2.76 |
1.38 |
0.1 |
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US$ per avoided ton of CO2 equivalent: |
$ 5.6/T of C ($ 1.54/ T of CO2) |
1 US$ is approximately Rs 40
Describe briefly how costs are determined
The cost of the project is summarised below
in million US$
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Item |
Total Cost |
1998 |
1999 |
2000 |
2001 |
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HT Distribution |
1.47 |
0.147 |
0.882 |
0.441 |
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Distribution Automation |
0.81 |
0.081 |
0.486 |
0.243 |
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Meters |
0.28 |
0.028 |
0.168 |
0.084 |
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Pumpsets |
1.54 |
0.154 |
0.924 |
0.462 |
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Project Management |
0.3 |
0.03 |
0.18 |
0.09 |
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Evaluation |
0.2 |
0 |
0.05 |
0.05 |
0.1 |
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TOTAL COST |
4.6 |
0.46 |
2.76 |
1.38 |
The detailed analysis is contained in Section E of the report. Results are summarized below:
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Economic cost of the project |
1555 Rs Lakh (PV @ 8%) |
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Economic benefit of the project |
7039 Rs Lakh (PV @ 8%) |
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Cost benefit ratio |
4.50 |
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Economic cost of energy from the project (or cost of energy saved) |
0.69 Rs/KWH |
1 lakh = 100,000; 1 US$ is approximately Rs 40
The demand side measures proposed in the project would result in the saving of 180,000 kWh a year. This translates into over 7,740 tonnes of carbon saving a year and a total of over 149,000 tonnes of carbon over the life of the project.
The US$ 4.6 million grant financing from Norway through the World Bank’s AIJ Programme implies that the carbon abatement cost being paid to APSEB/GoI is about US$ 30 per tonne of carbon abated. The cost of the project to the APSEB, however, implies that the cost of energy saved is Rs 0.69/kWh . The cost to APSEB translates to Rs 226/TC or US$ 5.65 per tonne of carbon while it is paid US$ 30 per ton.
A. 5) Mutually agreed assessment procedures:
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Describe the procedures, including name of organizations involved): |
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Methodology of Tracking and Monitoring of GHGs The tracking and monitoring of GHGs will be closely related to the evaluation process developed for the technical and economic accomplishments of the project. Proposed Evaluation Process This description outlines a general approach to evaluation. Once the project has been approved and funded, one element of the project plan will be to develop a full evaluation design and to initiate data collection. This data collection will be carried out by independent third party entity. In addition, the Ministry of Environment and Forest of the Government of India has indicated its desire to undertake the verification of the data from time to time.
This will include obtaining the historic data on the loads attached to the feeders in question, as well as the consumption of all services on the feeder. At the same time, a second set of feeders should be selected to serve as a control group, and the same information collected on them. Once the basic data has been collected, models should be built of the loads on the lines, and the data should be reviewed to determine if there appears to be any trends, especially concerning changes in consumption levels for various classes of customers. At the same time, data must be collected on the level of line losses for the distribution feeders, as well as the data on the control group.
It will be necessary to collect data at the customer level before, during and after the conversion of the distribution system. If possible, a sampling of potential participants should be made prior to the detail planning of the project to determine their level of knowledge and their willingness to participate. This should also collect data on age of pumpsets (remaining life) and frequency and cost of rewinds. During the installation of the pumpsets, before and after measurements should be taken of the consumption of the pumpsets and of the volume of water delivered. Data may be collected on a census or sample basis, depending upon cost. Further, detail installation records are required for each site to document the equipment removed and the equipment installed, including data such as the number of feet of RPVC installed, and any problems encountered. Subsequent to the installation of the new equipment, follow up sampling of participants should be made to determine their satisfaction with the new pumps. This will provide information that can be used to adjust the program, and may provide "clues" to future problems.
After each feeder has been converted, preferably within 2 - 3 months, an initial check should be done of the actual loads on the feeder, and a comparison made with the estimates. While this data will not be statistically valid, it will provide an early indication of performance of the project. This review should include both the impact of End Use Efficiency and Distribution System Losses.
Approximately annually, an impact analysis should be done on the project. The first review will likely take longer than subsequent ones, as the methodological issues will be largely resolved after the first review. However, reviews must be performed for a number of years to determine the persistence of the savings, especially as the pumpsets start to require maintenance. During this annual review, the impact on GHG emissions must also be checked, as well as the financial performance of the project. |
a) Please ensure that detailed contact information for all organizations mentioned is reported under
section A.2 above.
B. Governmental acceptance, approval or endorsement
This is the first report for the project and the agreement between Norwegian Ministry of Foreign Affairs and the Ministry of Power, Government of India is attached to this report as Attachment 1. A letter of approval of the project as a AIJ project be the national focal point in India, the Ministry of Environment and Forest is provided as Attachment 2.
B. 2) This report is a joint report:
Letter from the Norwegian Ministry of Foreign Affairs indicating that this may be regarded as a joint report for the project is provided in Attachment 3.
B. 3) General short comment by the government(s) if applicable:
Not applicable
C. Compatibility with and supportiveness of national economic development and socioSeconomic and environment priorities and strategies
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Describe (to the extent possible) how the activity is compatible with and supportive of national economic development and socioSeconomic and environment priorities and strategies |
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National Benefits (Projected Quantitative Benefits) There are substantial socio-economic and development benefits from the project. While some of the development benefits can be quantified, others such as the economic benefits of the use of conserved energy and employment benefits of project implementation are more difficult to quantify even though they are known to exist. For instance, DSM projects result in 2 - 4 times more employment that providing the same amount of energy from conventional generation projects. The quantifiable benefits accrue to three groups: customers, and especially farmers who participate in the project; the APSEB; and society as a whole. While these benefits are described in detail later in this section and in the attached report, these are summarised below. The combined benefits of measures that the proposed project would implement include
The benefits to customers include
The APSEB will have the following quantifiable (see Section 6) benefits
The benefits from this project accrue to three groups: customers, and especially farmers who participate in the project; the APSEB; and society as a whole (Long-term benefits). A. Customer benefits These include:
· Provision of a new pumpset and piping. This will defer the farmers need to purchase a replacement
pumpset. This has been quantified by assuming that a pumpset has a life of 20 years. Hence 5% of the
pumpsets can be expected to be replace each year if this program had not occurred.
· Improved voltage control. This will reduce the need to rewind motors which would otherwise have experience burnout due to low voltages. Studies have indicated that, on average, motors are rewound once per year. · Increased flow of water. The changes in the foot valve and piping will likely result in an increased flow of water for the farmer. It is not clear whether the farmers will use more water or operate the pumps for a shorter period of time. This benefit has not been monetized. · Increased quality of service. Conversion of the distribution system to HV will result in fewer service interruptions due to failures of the line or transformers and fewer motor rewinds. This in turn may lead to increased crop yield. This benefit has not been monetized. B. APSEB Benefits These include:
· Freed system capacity and energy as a result of reduced losses on the LV distribution system, and
increased efficiency of the agricultural pumpsets. This energy will be available for resale to other
customers on the ABSEB system. The financial analysis in the next section details the assumptions regarding
the re-sale of the energy. This has been included in the line modeling and has been monetize.
· Freed distribution system capacity and energy as a result of reducing the loading on the 11 KV feeders that result from the implementation of distribution automation. With the current rostering approach, each feeder is fully loaded when providing service to that set of agricultural pumpsets. With distribution automation, the loading on the feeders will be reduced by approximately 50%, as only half the agricultural distribution transformers are energized at a time. This benefit has been included in the line loss modeling and monetized. · The freed distribution system capacity that results from the implementation of distribution automation will likely reduce system reinforcement costs as new customers are added to the feeders in the pilot area. The benefit has not been quantified or monetized. · Reduced pilferage of service. It is assumed that about 20% of the consumption of the agricultural load. With the advent of HV distribution, it will no longer be possible to tap into the system by directly connecting to the distribution line. However, it is assumed that the pilfered energy is used to operate pumpsets, and the majority of this load will remain on the feeders, but as connected agricultural customers. Therefore the benefit to the ABSEB is the revenue from additional agricultural customers rather than a higher level of revenue from resale of the energy to industrial customers. This benefit has been monetized. Societal Benefits In addition to the benefits that accrue to the customers and the APSEB, there are additional benefits that accrue to the broader society.
· Reduction in energy use: In the situation of shortage, it is assumed that the energy saved can be
utilized elsewhere. For the purposes of this project, it is assumed that the freed energy that is available
for resale is the equivalent of deferring new construction.
· Employment benefits. The project will result in the creation of short term jobs in the area for the implementation of the distribution system conversion to high voltage, the implementation of the distribution automation, and the manufacture and install of the pumpsets and pumpset rectification. In addition, to the extent that the farmers are better off as a result of the project, there should be employment benefits resulting from the spending of their additional income. Studies in North America and elsewhere indicate that DSM project will result in 2 - 4 times more employment that providing the same amount of energy from conventional generation projects. This has not been quantified or monetized. |
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.)
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Item |
Please fill in |
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Describe environmental benefits in detail: |
The demand side measures proposed in the project would result in the saving of 180,000 kWh a year. This translates into over 7,740 tonnes of carbon saving a year and a total of over 149,000 tonnes of carbon over the life of the project. The US$ 4.6 million grant financing from Norway through the World Bank’s AIJ Programme implies that the carbon abatement cost being paid to APSEB/GoI is about US$ 30 per tonne of carbon abated. The cost of the project to the APSEB, however, implies that the cost of energy saved is Rs 0.69/kWh (see Section E of the proposal). The cost to APSEB translates to Rs 226/TC or US$ 5.6 per tonne of carbon while it is paid US$ 30 per ton. In addition to the savings in CO2, the project will also result in significant reduction of particulate emissions. Other benefits would include reduction of emissions of oxides of sulphur and nitrogen. |
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Do quantitative data exist for evaluation of environmental benefits? |
Yes |
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Describe social/cultural benefits in detail: |
Feasibility and future adoption of technology in the sector of activity The project facilitates the widespread adoption of this technological option in the Indian power sector by fostering private sector involvement in the project. The project will test and validate innovative private sector financing and implementation mechanisms (such as ESCOs) in the delivery of agricultural demand side management services. It is envisaged that key components of the project will be developed and delivered by private sector ESCOs (Energy Service Companies). Components of the pilot DSM project that are likely to be implemented by ESCOs are a) Automated load control systems and b) Provision of meters and rehabilitation/modernization of motors-pumpset systems The ESCO will deliver, under a performance contract, turnkey DSM project including engineering, procurement, installation, operation and maintenance, measurement and verification of savings, performance guarantees and project financing. Technologies and systems offered would include low tension and high tension capacitors and switched capacitor panels for reactive power management, load management and monitoring systems; amorphous core transformers; single-phase motor systems , metering systems and efficient pumpsets. |
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Do quantitative data exist for evaluation of social benefits? |
No, the data does not exist to fully quantify all societal benefits. |
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Describe economic benefits in detail: |
The economic analysis reviews the impact of proceeding with the Integrated agricultural Demand Side Management project from the perspective of the overall economy. It may be noted that not all benefits can be monetized, and of necessity, are not included in this analysis although they are expected to provide economic benefits. The major benefits included in this analysis are:
· The freeing of electricity in the system due to the increased efficiency of the pumping systems and
the reduction of line losses in the distribution system. The marginal value of this energy has been
estimated at 2.25 Rs/kWh (the cost currently paid for new energy from independent power producers), and
increased by 20% to account for line loss to the 33KV substations.
· A reduction in the need for rewinding pumpset motors. Other studies have estimated that farmers spend an average of 1500 - 2000 Rs /yr on pumpset maintenance, including 800 -1000 Rs on motor rewinds. For the purpose of this analysis, it has been assumed that one rewind per year, with a value of 1000 Rs will be saved. · A reduction in the need to purchase replacement pumpsets during the analysis period. The expected life of a pumpset is about 20 years. This pilot will provide farmers with new pumpsets, and hence allows them to defer this expense. It is assumed that the cost of the pumpset to the farmer is 1100 Rs, and that without the program, 5% of the pumpsets would be replaced each year. Financial benefits. The financial analysis reviews the pilot project from the perspective of the ABSEB, and is intended to determine if this type of project is sustainable. The approach is to determine if the freed energy from the agricultural sector can be re-sold to the industrial or other sectors for sufficient funds to cover the costs of the project. Major assumptions:
· Currently all non-agricultural customers on these feeders receive limited hours of service due to
the rostering of agricultural pumpsets. Once the distribution system has been converted, they will receive
additional hours of service which may result in additional consumption. For the purpose of this analysis,
the additional consumption has been considered to be negligible, but this should be confirmed as part of
the project evaluation.
· The remaining energy is available for re-sale to other customers. This energy will be made available to HT customers, to HT and LT tension customers, or to all customers. The estimated resale rates are: 3 Rs; 2 Rs; and 1 Rs. |
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Do quantitative data exist for evaluation of economic benefits? |
Yes |
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
E. 1) Estimated emissions without the activity (project baseline):
Description of the baseline or reference scenario, including methodologies applied:
APSEB is a vertically integrated utility in-charge of generation, transmission and distribution of power in the state of Andhra Pradesh. Andhra Pradesh has an area of 275,000 sq.kms and a population of 66.5 millions. The A.P.S.E. Board has a installed capacity of 6397 MW comprising of. 2453 MW thermal, 2657 MW of Hydro, 100 MW of Gas, 2 .MW of wind, 897 MW share from the Central Sector Projects and 288 MW from private sector. The maximum demand met by the system is 5022 MW and 110 MkWh per day. The utility serves 9.74 million customers comprising of 7.0 million residential, 1.03 million commercial and others, 0.15 million industrial and 1.56 million agricultural consumers. The total energy sales is 23.4 GWH for the year 1995-96 and sector wise break-up is 7.8 GWH Industrial , 11.4 GWH Agricultural, 3.27 GWH residential and 0.93 GWH of commercial & others. The system demand is expected to go upto 13800 MW with the capacity addition of 6778 MW by the year 2002.
The average specific coal and oil consumption at the thermal generating plants in APSEB is 0.826 kg/kWh and 3 ml/kWh respectively for the year 1995-96.
The agricultural demand side management is proposed to be implemented in two typical areas. The Low Voltage Distribution System (LVDS) existing in these areas is converted into a High Voltage Distribution System (HVDS) with small capacity single phase distribution transformers. The small capacity single phase distribution transformers are grouped into two groups and extended supply to one group at a time by employing one way VHF radio communication. The end use efficiency is improved by replacing the existing three phase motors with single phase motors and the existing piping with less friction piping. The details of each of the components of the project are presented in the subsequent sections.
Growth of Agricultural Sector Energy and Demand
Agricultural Sector forms a major load of AP system. Out of the total sales of 23561.44 MkWh during 1995-96, the agricultural consumption accounts for 11398.59 MkWh (about 49% of total consumption). The growth of Agricultural services has been phenomenal and the number of customers increased from 156,500 in 1970 to 1,562,922 by 1996. In spite of the increase, heavy demand for new Agricultural services persist. In this scenario, regulation of energy supplied to the agricultural sector will have a greater bearing on the finances of APSE Board as this sector is heavily subsidized and flat rate tariff of Rs. 75 per horse-power per annum is collected from the agricultural consumers. Agricultural loads are deferrable loads without sacrificing the yield. As a result there load management techniques can bring down the peak system demand. In addition, there is a great possibility for energy savings by improving the pumpset efficiency on one hand and decreasing the system demand by grouping the agricultural pumps / transformers and extending supply to each group at a time. Improving the pumpset efficiency by providing a single phase new pumpset, providing a frictionless foot valves and piping alone is expected to result in energy savings up to 30%.
E. 2) Estimated emissions with the activity:
Description of the scenario, including methodologies applied:
The project would bring about measurable increases in energy efficiency in the agricultural pumpsets. This would be translated as reduction in GHG emissions as indicated below (However, the following calculations include energy savings from improvements in the transmission and distribution system).
Based on operational data, the average specific coal and oil consumption at the thermal generating plants in the ABSEB is 0.826 kg/kWh and 3 ml/kWh respectively for the year 1995-96. This is a composite number derived from overall consumption of both fuels and total generation. Hence, by this analysis, each kWh reduced results in a carbon reduction from both coal and oil.
Coal contain 50% carbon by weight while the conversion for oil has been estimated at 20% carbon by weight.
Assuming a 20 year life for this DSM project, the expected carbon reduction is shown in the following table.
|
Fuel |
Specific Consumption |
% Carbon |
Energy Saved |
Carbon Reduction |
|
Coal |
0.826 kg/kWh |
50.00% |
179.8 Lakh kWh |
7462 MT |
|
Oil |
3 ml/kWh |
20.00% |
179.8 Lakh kWh |
11 MT |
|
Annual Reduction |
7473 MT |
|||
|
20 Year Reduction |
1.5 Lakh MT |
I lakh = 100,000; MT = 1000 kilograms (kg)
(b) Potential GHG reduction in the sector of activity
Previous studies and the pre-feasibility study for this project (attached) indicate that 25 % to 40 % energy savings are possible in the rural agricultural groundwater pumping sector depending on the range of measures implemented and the implementation procedure (including institutional arrangements for implementation). For this possible range of outcomes, carbon dioxide reduction of 1.5 to 2.3 million tons per year is possible in the state of Andhra Pradesh itself. Estimates for national savings in India are believed to be in the range of 9.1 to 14.6 million tons per year.
Fill in the following tables as applicable:
E.2.1) Summary table: Projected emission reductions: (in tonnes)
|
GHG |
2000 |
2001 |
... |
2020 |
|
|
A) Project baseline scenario |
CO2 |
37,365 |
37,365 |
37,365 |
|
|
CH4 |
|||||
|
N2O |
6,035 |
6,035 |
6,035 |
||
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other |
|||||
|
B) Project activity scenarioa) |
CO2 |
29,892 |
29,892 |
29,892 |
|
|
CH4 |
|||||
|
N2O |
4,828 |
4,828 |
4,828 |
||
|
other |
|||||
|
C) Effect ( B-A ) |
CO2 |
7,473 |
7,473 |
7,473 |
|
|
CH4 |
|||||
|
N2O |
1,207 |
1,207 |
1,207 |
||
|
Other |
|||||
|
D) Cumulative effect |
CO2 |
7,473 |
14,946 |
1,494,600 |
|
|
CH4 |
|||||
|
N2O |
1,207 |
2,414 |
24,140 |
||
|
Other |
a) Includes indirect GHG leakages.
E.2.2) Summary table: Actual emission reductions:
Not applicable: project yet to be 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
|
Source of project funding including pre-feasibility phase (For each source one line) |
Amount (US dollars) |
|
Government of Norway |
4,600,000 |
The Government of Norway contributes US$ 4,600,000 to finance the project. The funds are from the Government of Norway Climate Change Fund established separate from, and in addition to, the development assistance account. The purpose of the AIJ funding is to demonstrate the potential of AIJ as a mechanism for the flow of additional resources. The AIJ financing made the project financially viable.
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
Describe briefly the transfer of environmentally sound technology and know-how including where appropriate the type of technology, terms, education, capacity building etc.
Current Status of Technology in India
While the project deals with technologies available in India, the synergy resulting from comprehensive design of a agricultural demand side management had not been attempted before. This is believed to be the innovative character of the project and it is expected that the comprehensive design of the measures would allow APSEB to evaluate different agricultural DSM measures (such as load segregation, high voltage distribution system, metering of agricultural connections, pumpset rectification, etc.) and the resultant savings. This would, in addition to demonstrating the synergy of the measures, help APSEB prioritize its own efforts in attempting to increase end-use efficiency of the agricultural sector.
Current Status of Technology in the World
Agricultural DSM as visualized in the current pilot has not been generally practiced world-wide and is due to factors that are unique to India. Furthermore, the integration of load management with HVDS and end-use efficiency is unprecedented.
The technology of load management however is well known and practiced by several Western utilities. For instance the Pacific Gas & Electric Company uses direct control shut-off of irrigation pumps through FM radio signals in California's central valley region. The project, known as the Ag-Interruptible program, currently has 540 pumps, ranging from 5 kW to 250 kW, representing over 15 MW of connected load on a direct control load management project. In comparison, the AP Agricultural DSM pilot project would involve 6000 pumpsets in two districts. The hardware proposed (switches, transformers, relays, radio communication equipment) is unique to the functions proposed for the pilot project. It also has to conform to harsh environmental standards.
Summarizing, the pilot project, would have to adapt current hardware and software available from international and local suppliers/manufacturers to the Indian situation.
Building capacity to address climate change
Climate change considerations are currently not required for project design or execution of the APSEB. There is, therefore, little experience with climate change an greenhouse gas emissions related issues within the APSEB. The expertise to incorporate these concerns exist and it is expected that some experience and capacity to incorporate such concerns will have been created by this project.
H. Additional comments, if any, including any practical experience gained or technical difficulties, effects, impacts or other obstacles encountered
- 1) Any practical experience gained:
Project Proposal Development Process
The project concept was identified by the APSEB. APSEB requested support for the project concept from the World Bank through Alternate Energy unit (ASTAE). Given the nature of the project and the request for grant financing for the project by APSEB, ASTAE, with the support and under the direction of South Asia Energy (SASEG), discussed the possible support for the project with the Environment Department under the World Bank’s AIJ Pilot Programme. Since the project concept was consistent with the World Bank’s AIJ Pilot programme, in principle approval was provided for further development of the proposal.
The APSEB organized a Bank sponsored project proposal development workshop in association with the Government of Norway, on July 4-5, 1997 in Hyderabad, India to inform a wider set of constituency from the utility, the Government of Andhra Pradesh and related agencies, the Government of India, its associated ministries and agencies and the non-government sector (including the private sector, academic and research organizations DSM practitioners) of the project. The Workshop was attended by 75 representatives from the Government, non-government and the private sector.
The feedback of the wide set of constituency strengthened the project design process and to determine its conformity to the criteria and philosophy of the Pilot Phase of the AIJ Programme. APSEB also viewed the workshop as an opportunity to incorporate all concerns with the project, including those in the context of the AIJ mechanism.
Recommendations and conclusions of the Workshop
There was a general agreement that energy efficiency in the agricultural sector of Andhra Pradesh and India was consistent with the long term sustainable developmental goals and needed to be urgently implemented in the context of reform of the utilities in Andhra Pradesh and elsewhere in India. While there were a number of suggestions for strengthening the proposed project, the participants felt that the project components and activities were appropriate for enhancing the efficiency (by at least 30% and maybe as much as 55%) of electricity use in the agricultural sector.
The suggestions for improvement of the project design included a closer examination of financial engineering aspects of the project to ensure that the DSM (demand-side management) measures were integrated technically, economically and financially and was sustainable as a business proposition for the APSEB and/or any other entity involved with the implementation of the measures. It was also felt that this would facilitate the design of agricultural DSM programs which were replicable by other Indian electric utilities.
H. 2) Technical difficulties:
Project yet to be implemented
H. 3) negative impacts and/or effects encountered:
|
Item |
Please fill in |
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Describe environmental negative impacts/effects in detail: |
This is an energy efficiency project. There are no negative impacts or effects associated with this project. |
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Do quantitative data exist for evaluation of environmental negative impacts/effects? |
Not applicable. |
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Describe social/cultural negative impacts/effects in detail: |
There are no anticipated negative impacts since this is an energy efficiency project. |
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Do quantitative data exist for evaluation of social negative impacts/effects? |
Not applicable. |
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Describe economic negative impacts/effects in detail: |
There are no anticipated negative impacts since this is an energy efficiency project. |
|
Do quantitative data exist for evaluation of economic negative impacts/effects? |
Not applicable/ |
H. 4) Other obstacles encountered:
Project is yet to be implemented.
- 5) Other:
None.
Attachments
Attachment 1 Letter of Agreement between Norwegian Ministry of Foreign Affairs and Ministry of Power, Government of India
Attachment 2: Letter of approval of the project as AIJ project from Ministry of Environment and Forests, Government of India.
Attachment 3: Letter from the Norwegian Ministry of Foreign Affairs indicating approval of this report as a joint AIJ report.