CC:INFO/AIJ: Valga I, Boiler conversion project

Uniform Reporting Format:

Activities Implemented Jointly Under the Pilot Phase

A. Description of project

1) Title of project: Valga I, Boiler conversion project

2) Participants/actors:

Please fill in one table for each participant/actor. For individuals fill in as from item Function within activity".

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
WWW-URL:	http://www.stem.se
Contact person (for this activity):	-------------------------------------	-------------------------------------
Surname:	Knutsson	Kratovits
First name, middle name:	Gudrun	Andres
Job title:	Senior officer	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).

Item	Borrower
Name of organisation(a):	AS Valga Soojus
Name of organisation (English):	Valga Soojus LTd
Department:
Acronym:
Acronym (English):
Function within activity:	Borrower
Street:	Pärna puiestee 15
Post code:	689206
City:	Valga
Country:	ESTONIA
Telephone:	+372 76 411 19
Fax:	+372 76 411 19
E-mail:
WWW-URL:
Contact person (for this activity):	-------------------------------------
Surname:	Piller
First name, middle name:	Toomas
Job title:	Manager
Direct tel:	+372 76 411 19
Direct fax:	+372 76 411 19
Direct E-mail:

Item	Please fill in if applicable	Please fill in if applicable
Name of organisation(a):	Võru Regionaalne Energiakeskus
Name of organisation (English):	Regional Energy Centres in Estonia Võru Regional Energy Centre	ÅF International AB
Department:
Acronym:	Võru REK
Acronym (English):	Võru REC
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 78 201 45	+46-40-37 50 00
Fax:	+372 78 201 45	+46-40-13 03 69
E-mail:		energikonsult@ens.af.se
WWW-URL:	http://www.af.se/ens/english/rec	http://www.af.se
Contact person (for this activity):	-------------------------------------	-------------------------------------
Surname:	Potter	Mårtensson
First name, middle name:	Elmu	Roland
Job title:	Consultant	Project leader
Direct tel:	+372 78 201 45	+46-40-37 51 04
Direct fax:	+372 78 201 45	+46-40-13 03 69
Direct E-mail:	elmu@regen.werro.ee	rmn@ens.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:	Valga town is the administrative and economic centre of Valga county, located in South Estonia. The number of inhabitants of Valga town is approx. 16000. There are several boiler plants and district heating networks. Most of the heat is produced in a boiler plant in the centre of the town. In this boiler plant there are 3 oil-fired DKVR 10-13 steam boilers, Which have been converted to hot water production in 1993. With oil firing the maximum output capacity is about 8 MW per unit. One of the boilers has been converted to wood chip firing.
Type of project:a)	Fuel switching to biofuels
Location (exact, e.g. city, region, state):	Valga town Valga county Estonia
Activity starting date:	10. August 1993 (Letter of Intent)
Expected activity ending date:	Loan expire date 31. December 2003
In operation from:	December 1993
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 2009.
Technical data:d)	An existing mazout fired DKVR 10-13 boiler has been converted to biofuels firing through installation a pre-furnace with fixed conical grates. Automatic fuel storage, wood chipper as well as flue gas cleaning are included in the project. Boiler type: DKVR 10-13 (hot water) Boiler output: 5MW Prefurnace: Free standing Flue gas cleaning: Multicyclone <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: 53 000 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.

d) 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		Valga I	1993	1994	1995	1996	1997	1998
			0	1	2	3	4	5
	Investment	1. Loan/debt to STEM	475000	493625	537000	469875	402750	335625
		2. Added costs	0	18625	43375	0	0	0
		3.Technical assistance	118750	0	0	0	0	0
	AIJ/JI	4. Follow up	0	8375	8750	10250	10625	2750
A. Sweden	costs	5. Reporting costs	0	0	0	0	1063	0
		6. Administration	40000	0	0	0	0	0
		7. Difference in interest	4%	19745	21480	18795	16110	13425
		8.Accum. costs for AIJ/JI	158750	186870	217100	246145	273943	290118
		9.Total costs	633750	680495	754100	716020	676693	625743
	Investment	1. Investment/Instalment	0	0	0	67125	67125	67125
2. Estonia	AIJ/JI	2. Reporting costs	0	0	0	0	0	0
	costs	3. Other costs	0	0	0	0	0	0
		4. Accum. costs for AIJ/JI	0	0	0	0	0	0
		5. Total costs	0	0	0	67125	134250	201375
1 USD=	8	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 organisations 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:

Second 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 and the Long-term Development Plan for the Estonian Fuel and Energy Sector:

- efficient 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.

- 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 emission reduction: Projected: 1998 9009 ton CO2 9963 ton CO2 138ton SO2 152 ton SO2 4 ton Nox 4 ton NOx Lower pollution in the centre town close to the boiler plant Improved silviculture
Do quantitative data exist for evaluation of environmental benefits?	Yes. Some measurements have been carried out at 1994.
Describe social/cultural benefits in detail:	More stable energy supply Improved working conditions, increased motivation More employment Improved trade balance
Do quantitative data exist for evaluation of social benefits?	Yes . Several reports has been produced SEI case study. Involved into "Surrey -project" in 1997.
Describe economic benefits in detail:	Decreased fuel costs per MWh Difference between energy price on fossil fuels and biofuels is approx. 3.5 USD/MWh
Do quantitative data exist for evaluation of economic benefits?	Yes. Several reports have been produced. SEI case study. Involved into "Surrey -project" in 1997.

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.

Fill in the following tables as applicable:

Summary table: Projected emission reduction s:

	GHG	Year1 =1993	Year2 =1994	Year 3 =1995	Year 4 =1996	Year 5 =1997
Planned energy production on biofuels, MWh		2800	25000	25000	25000	25000
A) Project baseline scenario	CO2	1009	9009	9009	9009	9009
	CH4	-	-	-	-	-
	N2O	-	-	-	-	-
	other	-	-	-	-	-
B) Project activity scenarioa)	CO2	0	0	0	0	0
	CH4	-	-	-	-	-
	N2O	-	-	-	-	-
	other	-	-	-	-	-
C) Effect ( B-A )	CO2	-1009	-9009	-9009	-9009	-9009
	CH4		-	-	-
	N2O		-	-	-
	Other		-	-	-
D) Cumulative effect	CO2	-1009	-10018	-19026	-28035	-37044
	CH4	-	-	-	-	-
	N2O	-	-	-	-	-
	Other	-	-	-	-	-

	GHG	Year 8 =1998	...	...	...	Year 15
Planned energy production on biofuels, MWh		25000				25000
A) Project baseline scenario	CO2	9009				9009
	CH4	-				-
	N2O	-				-
	other	-				-
B) Project activity scenarioa)	CO2	0				0
	CH4	-				-
	N2O	-				-
	other	-				-
C) Effect ( B-A )	CO2	-9009				-9009
	CH4	-				-
	N2O	-				-
	Other	-				-
D) Cumulative effect	CO2	-46053				-136140
	CH4	-				-
	N2O	-				-
	Other	-				-

Includes indirect GHG leakages

Summary table: Actual emission reductions :

	GHG	Year1 =1993	Year2 =1994	Year 3 =1995	Year 4 =1996	Year 5 =1997
Factual energy production on biofuels MWh		2438	21204	17208	15681	23631
A) Project baseline scenario	CO2	879	7641	6201	5651	8515
	CH4	-	-	-	-	-
	N2O	-	-	-	-	-
	other	-	-	-	-	-
B) Project activity scenarioa)	CO2	0	0	0	0	0
	CH4	-	-	-	-	-
	N2O	-	-	-	-	-
	other	-	-	-	-	-
C) Effect ( B-A )	CO2	-879	-7641	-6201	-5651	-8515
	CH4		-	-	-
	N2O		-	-	-
	Other		-	-	-
D) Cumulative effect	CO2	-879	-8519	-14720	-20371	-28886
	CH4	-	-	-	-	-
	N2O	-	-	-	-	-
	Other	-	-	-	-	-
	GHG	Year 6 =1998	...	...	...	Year 5
Factual energy pro-duc-tion on biofuels MWh		27649				27649
A) Project baseline scenario	CO2	9963				8515
	CH4	-				-
	N2O	-				-
	other	-				-
B) Project activity scenarioa)	CO2	0				0
	CH4	-				-
	N2O	-				-
	other	-				-
C) Effect ( B-A )	CO2	-9963				-9963
	CH4	-				-
	N2O	-				-
	Other	-				-
D) Cumulative effect	CO2	-38850				-138483
	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

506666 USD

Grant from NUTEK for technical assistants

126691 USD

1 USD = 7.50 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 NUTEKs technical specialist during the implementation of the project.

ii) Technology transfer through co-operation 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 projects;

Transferring of environmental issues to the local parties;

Transferring of knowledge in operation and maintenance issue;

Operation and maintenance software was introduced to the plant-owners.

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.

Boiler plant has been visited by specialist of other boilerplants, the staff has an exchange of experience with other boilerplants and was active in "bio-club". Estonian Biofuels Association is established in 1998 ( mainly by "bio-club" and local experts) and the company is a member.

Endogenous capacity supported or enhanced:

Endogenous capacity

Name of organisation1)

Development (DEV) /

enhancement (ENH)

Describe briefly

Valga Heating Co

(DEV)

The boiler plant has got an experience to handle biofuel firing equipment

1) Please ensure that detailed contact information for all organisations 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:

1) 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.

The company has in site logs chipping practice. During the last year the chipper has not been in operation, logs price is arised.

The wood chips storage building height must be bigger to not prevent unloading the trucks.

The operation of the prefurnace with fixed grates needs good trained and skilled staff.

2) Technical difficulties:

3) Effects encountered:

Execution of the follow up and monitoring activities to get feedback to the programme and for evaluation of the results of the different measures.

Consulting support from both Swedish and Estonian side, also after commissioning.

4) Impacts encountered:

5) Other obstacles encountered: Ash handling has caused stops. Improvements have been done and a higher efficiency is expected.

The plant has had a management problems because the management has been changed several times. It has taken time to develop normal operational practices. There have been heat production brakes resulted mainly of general operational problems.

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

6) Other:

From 1998 the wood-fuel is purchased according to the produced heat from converted boiler.

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

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