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ACTIVITIES IMPLEMENTED JOINTLY(AIJ)

List of Projects

USIJI Uniform Reporting Document:

Activities Implemented Jointly Under the Pilot Phase

A. Description of the AIJ project

1. Title of project: APS/CFE Renewable Energy Mini Grid Project, San Juanico, Baja California Sur

2. Host country: Mexico

3. Brief project description:

The APS/CFE Renewable Energy Mini Grid Project involves the development of a hybrid power supply system, utilizing solar, wind, and diesel capacity, to replace a 205-kW diesel generator in the town of San Juanico, Baja California Sur State (BCS State), Mexico. The project is being developed by two utilities in the United States--the Arizona Public Service Company (APS) and Niagara Mohawk Power Corporation (NMPC)--and the Comisión Federal de Electricidad (CFE), the national utility of Mexico. Electricity generated by the hybrid system will extend electrical service from the current 3 hours per day to 24 hours per day and displace electricity generated purely by diesel combustion and the associated greenhouse gas (GHG) emissions.

4. Participants:

Name of Organization or Individual Country

Comisión Federal de Electricidad (CFE)

Mexico

Arizona Public Service Company (APS)

U.S.A.

Niagara Mohawk Power Corporation (NMPC)

U.S.A.

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

Comisión Federal de Electricidad

Name of organization (English)

Federal Electricity Commission

Acronym (original language)

CFE

Acronym (English)

(Same as above)

Department

Rural Electrification (Distribution)

Function(s) within the AIJ project activities

Project Implementation

Street

Rio Atoyac 97-318, 06598

City

Mexico, D.F.

State

Mexico City

Post code

Country

Mexico

Telephone

011-525-229-4400, Ext. 2554

Fax

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

Gonzales

First name, middle name

Carlos

Job title

Professor, Jefe de La Unidad de Electrificacion

Direct telephone

011-525-229-4400, Ext. 2554

Direct fax

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

Arizona Public Service Company

Name of organization (English)

(Same as above)

Acronym (original language)

APS

Acronym (English)

(Same as above)

Department

Function(s) within the AIJ project activities

Project administration, project development

Street

P.O. Box 53999, M/S 8931

City

Phoenix

State

Arizona

Post code

85702-3999

Country

U.S.A.

Telephone

602-250-2734

Fax

602-250-3813

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

Mathai

First name, middle name

C.V.

Job title

Principal Scientist

Direct telephone

602-250-3569

Direct fax

602-250-3872

Direct e-mail

Cvmathai@apsc.com

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

Niagara Mohawk Power Corporation

Name of organization (English)

(Same as above)

Acronym (original language)

NMPC

Acronym (English)

(Same as above)

Department

Function(s) within the AIJ project activities

Project administration, project development

Street

300 Erie Boulevard West

City

Syracuse

State

New York

Post code

13202

Country

U.S.A.

Telephone

315-428-6572

Fax

315-428-3549

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

Smith

First name, middle name

Martin

Job title

Chief Environmental Scientist

Direct telephone

315-428-6151

Direct fax

315-428-3549

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

5. Description of AIJ project activities

Item
Type of Project

Sector(s)

Energy

Primary activity(ies)

Alternative energy generation (hybrid power system: solar, wind, and diesel)

Project Location

Country

Mexico

Exact location (city, state, region)

San Juanico, Baja California Sur

Key Dates and Current Stage of Project

Project starting date (month/year)

May 1998

Project ending date (month/year)

November 2028

Project lifetime (years)

30 years and 7 months

Current stage of project

In progress

General Project Description and Technical Data

The APS/CFE Mini Grid Project will develop solar (17 kW), wind (100 kW), and diesel (72 kW) capacity to displace the use of a 205-kW diesel generator. San Juanico, the project site, is a fishing village of 400 people in Baja California Sur that is not connected to the electric supply grid or expected to be connected in the forseeable future. The project will serve as a renewable energy demonstration project in Mexico.

The project facility is intended to meet the community’s average baseline energy demand of 423 kWh per day. The new facility may also serve to meet the power needs of a fish processing and storage plant (33 kWh per day) and the needs of a resort (43 kWh/day).

6. Cost

(a) Explanation of methodology for calculating cost data

Methodology for Calculating Cost Data

It is assumed that APS will purchase all necessary project equipment at wholesale prices, and where possible, APS will donate all the equipment to CFE. CFE will own the system and enter into a contract with the local governing authority to operate it. Tariffs and duties at the Mexican border are calculated at approximately 4 percent of equipment costs under the assumption that the BCS State government will intervene to reduce the normal 12 percent aggregate tariff. Costs for data acquisition equipment for system performance monitoring are not included, and will be supplied by the National Renewable Energy Laboratory (NREL).

(b) Cost data–Project development

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(c) Cost data—Project implementation

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7. Monitoring and verification of AIJ project activities and results

Item

Party(ies) that will be monitoring project activities

APS and CFE

Party(ies) that will be externally verifying project results

This information is not yet available.

Date when the monitoring plan became (or will become) operational (month/year)

December 1998

Types of data that will be collected

Quantity of diesel fuel consumed and power generated by the solar and wind components of the mini-grid system.

Description of Monitoring and Verification Activities and Schedule for Implementation

To monitor greenhouse gas emissions from the project, the developers plan to track the amount of diesel fuel consumed and the quantity of power generated by the mini-grid system. A schedule for monitoring project emissions has not yet been developed.

B. Governmental approval

Item

Please check one of the following.

This report is a first report.

or

This report is an intermediate report.

or

This report is a final report.

Please check one of the following:

This report is a joint report. Letter(s) of approval of this report from the designated national authority of the other Party(ies) involved in the activity is(are) attached in Section J, Annex.

or

This report is a separate report.

Additional comments (if any):

C. Compatibility with, and supportiveness of, national economic development and socioeconomic and environmental priorities and strategies

Compatibility with Economic Development and Socioeconomic and Environmental Priorities

This project supports the following goals of the national utility, the Comisión Federal de Electricidad (CFE): 1) to apply renewable energy technologies for electrifying remote villages; 2) to operate a hybrid power system as a sustainable business; 3) to contribute to environmental, economic, and social development in rural villages; and 4) to develop a project that can serve as a model for similar projects in Mexico.

This project also provides CFE with the opportunity to gain detailed technical knowledge of hybrid power systems and learn about the development and implementation of projects of this type. In addition, this project directly supports CFE’s mandate to electrify Mexico’s rural communities and President Ernesto Zedillo’s goal of electrifying all unelectrified rural communities by the year 2000. This project will help toward this goal because, according to CFE, rural areas in the region will not otherwise gain access to electrical service in the foreseeable future.

D. Environmental, social/cultural, and economic impacts of the AIJ project

Non-Greenhouse-Gas Environmental Impacts of the Project

Non-GHG environmental impacts that may result from this project include 1) reduced SO2 and particulate emissions resulting from combustion of fossil fuels, 2) minimal clearing of vegetation and some movement of soil to prepare the project site, 3) increased noise and visual pollution from the wind component of the project, and 4) potential diesel or battery fluid spills.

It should be noted that noise and visual pollution from wind systems have not raised concern at other Mexico hybrid system installations. In addition, developers intend to mitigate the potential for spills of hazardous materials through development of spill response procedures and return of used batteries to manufacturers for recycling.

Social/Cultural Impacts of the Project

Because the project will bring 24-hour power to San Juanico, there are several possible social and cultural benefits of the project, including improving the overall living standard in the community, increasing available schooling hours, and strengthening local public institutions.

Economic Impacts of the Project

This project may have several economic impacts, including providing power to industrial or household production operations, such as the currently nonoperational fish processing facility, and promoting development of tourism through creation of a more reliable infrastructure.

E. Greenhouse gas impacts of the AIJ project

1. Scenario description

Item
Site Designation

Site number (order of presentation in this report)

1 of 1

Site name/designation

San Juanico, Baja California Sur, Mexico

Project sector

Energy

Reference Scenario

Primary activity(ies)

Alternative energy generation (hybrid power system: solar, wind, and diesel)

Has the reference scenario changed since the last report? (If yes, explain any changes below.)

Yes

No

This is the first project report.

In the absence of the project, the developers assume that use of the 205-kW diesel generator would increase to 24 hours per day, generating 400-500 kWh and consuming approximately 410 liters of diesel fuel per day. Sufficient electricity would be produced to power the community of San Juanico, a fish processing and cold storage facility in the town, and a newly constructed resort near the town.

Predicted Project Scenario

Primary activity(ies)

Alternative energy generation (hybrid power system: solar, wind, and diesel)

The project will install 100 kW of wind capacity, 17 kW of solar capacity, and 72 kW of diesel capacity in the village of San Juanico, Baja California Sur, Mexico. This hybrid system is expected to operate for a minimum of 30 years. Electricity generated by the hybrid system will displace use of a 205-kW diesel generator currently utilized by the village. It is anticipated that the diesel component of the hybrid system will operate for 4 hours each day, consuming approximately 90 liters of diesel per day.

Actual Project

Primary activity(ies)

Alternative energy generation (hybrid power system: solar, wind, and diesel)

Project construction is in progress.

2. GHG emission/sequestration calculation methodology

GHG Emission/Sequestration Calculation Methodology

Site number

1 of 1

Project sector

Energy

Description of Calculation Methodology for the Reference Scenario

Estimates of hourly baseload demand for both the community and the fish plant are derived based on the assumption of availability of 24-hour power. Using a fuel efficiency curve for a 200-kW diesel generator, fuel consumption per hour is estimated and then summed to derive an estimate of daily fuel use. To estimate CO2 emissions per day, daily fuel use is multiplied by a CO2 emission factor of 2.7 kg CO2/liter. Annual emissions are calculated by multiplying daily emissions by 365.

It is anticipated that the fish plant would operate for only 28.5 percent of each year, therefore two different estimates of annual emissions are derived: one based on a scenario of power generation for the community, fish plant, and resort (= 442 t CO2/yr), and one based on a scenario of power generation for the community and resort alone (= 415 t CO2/yr). Each estimate of annual emissions is multiplied by the fraction of the year for which that scenario applies and then these estimates are summed to calculate total annual emissions [423 t CO2/yr = (442 t CO2/yr * 0.285) + (415 t CO2/yr * 0.715)]. Year 1 of the project extends from May 1998 through November 1998 (the construction phase of the project), therefore, reference scenario emissions during these seven months would total 247 t CO2 (= 423 t CO2 * 7/12). Years 2 through 31 of the project are full calendar years with emissions of 423 t CO2/yr.

Because 26 percent of the funding for this project is not additional (see section F.1.(b)), only 74 percent of reference scenario emissions are attributed to the USIJI project. Therefore, total reference case emissions over the 31-year life of the project are estimated to be 9,574 t CO2 [= 0.74 * ((247 t CO2/yr * 1 year)+ (423 t CO2/yr * 30 years))].

Description of Calculation Methodology for the Project Scenario

There are no GHG emissions associated with solar and wind power systems, however, the 72-kW diesel component of the hybrid power system would generate GHG emissions. The developers assume that the solar and wind components of the system will provide two-thirds of the energy produced. The diesel component will be operated when solar and wind resources are below set levels and the battery banks are fully discharged. Under those conditions, the diesel generator will operate at its optimum level, providing power to the grid, and any excess power will recharge the batteries back to full capacity. Accordingly, it is assumed that the diesel consumption will be, on average, 90 liters of fuel per day. Project GHG emissions are calculated by multiplying fuel consumption by a CO2 emission factor of 2.7 kg CO2/liter diesel fuel. Therefore, project GHG emissions for each full calendar year of the project would be 89 t CO2/yr (= 90 liters/day * 2.7 kg/liter * 365 days/year * 1 tonne/1,000 kgs). For the 7-month construction phase of the project, it can be assumed that project scenario emissions would be equal to reference scenario emissions, since the existing 205-kW generator would continue to run during this time. As discussed above, emissions during these 7 months would be equal to 247 t CO2.

Because 26 percent of the funding for this project is not additional (see section F.1.(b)), only 74 percent of project scenario emissions are attributed to the USIJI project. Total project scenario emissions over the 31-year operational life of the project are estimated to be 2,159 t CO2 [= 0.74 * ((247 t CO2/yr * 1 year)+ (89 t CO2/yr * 30 years))].

Description of Calculation Methodology for the Actual Project

Project construction is in progress. GHG benefits have not yet begun to accrue.

3. GHG emission/sequestration data

(a) Reporting of GHG emissions/sequestration

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(b) Additional information on GHG emissions/sequestration

Indirect or Secondary GHG Impacts (Positive and Negative)

If this project is successful, CFE may choose to develop hybrid power systems in other regions of Mexico that would have otherwise been powered with fossil fuel capacity.

Factors That Could Cause the Future Loss or Reversal of GHG Benefits

Benefits realized by the operation of the hybrid power supply system cannot be lost or reversed in future years. However, should the wind and solar components of the system provide less power than expected, reliance on the diesel component would increase, thereby increasing overall project GHG emissions and decreasing anticipated project GHG benefits.

Strategy for Reducing the Risk of Future Loss or Reversal of GHG Benefits

Adequate system maintenance will help to ensure that the wind and solar components operate at optimal performance. The project developers intend to train local community members in the proper operation and maintenance of the system and have developed a "preventative maintenance" plan that includes regular battery watering and regular inspections of the entire system. The wind turbines require blade maintenance every 3-5 years, inspections every 2 years, and other minor adjustments.

At this time, CFE intends to leave the 205-kW diesel generator in San Juanico to serve as a back-up to the hybrid power system.

F. Funding of the AIJ project

1. Identification of funding sources

(a) Funding sources for project development

Funding Source

Country of Funding Source

Amount

($US)

Percent of Total Funding

(%)

APS/NMPC

U.S.A. 62,235 46.1

U.S. DOE/AID

U.S.A. 35,640 26.4

CFE/Mexico

Mexico 37,125 27.5

Total

135,000 100

(b) Funding sources for project implementation

APS and NMPC have set aside $435,000 for the project. Sandia National Laboratories has committed to contribute $250,000 ($100,000 on behalf of USAID-Mexico City and $150,000 on behalf of DOE). The Government of BCS State and the local municipality have agreed to contribute $260,000.

It should be noted that only the funding from APS and NMPC (which equals approximately 40 percent of total funding) is considered additional by the USIJI Secretariat, therefore, the developer is attributing only 40 percent of total project benefits to the USIJI.

Funding Source

Country of Funding Source

Amount*

($US)

Percent of Total Funding

(%)

Is This Funding Assured? (Y/N)

APS and NMPC

U.S.A. 373,410 46.1 Y

Sandia National Laboratories (on behalf of USAID-Mexico City)

U.S.A. 85,050 10.5 Y

Sandia National Laboratories (on behalf of the USDOE)

Mexico 128,790 15.9 Y

Government of Baja California Sur State

Mexico 222,750 27.5 Y

Total

810,000 100

*This amount does not include staff time spent by APS during the past 3 years.

2. Assessment of additional funding needs

Current or Planned Activities to Obtain Additional Funding

The developers anticipate development of a tariff structure that will generate revenues sufficient to provide for "operational sustainability," meaning that revenues will cover labor and expenses for system operation, fuel, equipment maintenance and minor repair, and replacement of consumables, including the battery bank. The recommended tariff structure will be set by CFE, with analytical support available from NREL and APS.

G. Contribution to capacity building and technology transfer

Contribution to Capacity Building and Technology Transfer

The project will transfer large-scale hybrid power system technology to Mexico and, if successful, may give momentum to other hybrid power projects in the region.

H. Recent developments, technical difficulties, and obstacles encountered

Recent Project Developments

On May 18, 1998, APS and CFE joined the Governor of Baja California Sur State to publicly announce start of construction of the project.

Technical Difficulties and Other Obstacles Encountered

None to date.

I. Additional information

Additional Information

Project construction is expected to be completed by December 1998.

J. Annex

1. Host country acceptance of the AIJ project

Country/Project Title

Name, Title, and Government Agency of the Designated National Authority

Date of Approval(day/month/year)

APS/CFE Renewable Energy Mini Grid Project, San Juanico, Baja California Sur, Mexico

Dr. Carlos Gay, Coordinator of the Unit for International Cooperation and Agreement, National Ecology Institute (INE), Secretariat of the Environment, Natural Resources and Fisheries (SEMARNAP)

27 January 1998

2. Letters of approval of this AIJ project report

See attached letter of concurrence.