CDM PDD Caracol Knits v2

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 04 CDM Executive Board page 1

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CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-PDD)

Version 04

CONTENTS A. General description of project activity B. Application of a baseline methodology C. Duration of the project activity / Crediting period D. Application of a monitoring methodology and plan E. Estimation of GHG emissions by sources F. Environmental impacts G. Stakeholders comments

Annexes Annex 1: Contact information on participants in the project activity Annex 2: Information regarding public funding Annex 3: Baseline Information

Annex 4: Monitoring Plan Annex 5: Notation



SECTION A. General description of project activity A.1. Title of the project activity:

Caracol Knits Trigeneration Project. This is PDD version 1.0, completed on May 2006.

A.2. Description of the project activity: Caracol Knits Trigeneration Project consists of the installation of a generation unit of: electricity, heat and cold for their use in an existing textile industry in Honduras. The unit is composed, mainly, of the following equipment:

- one heavy fuel-oil engine + alternator unit, is in charge of transforming, with optimal yield, the energy contained in the fuel into mechanical energy for operating the alternator to produce electricity,

- one heat recovery boiler, recovers residual thermal energy of exhaust gases to produce steam, - two chiller units, recover residual thermal energy of the HT (High Temperature) water cooling

circuit to produce cold water.

The trigeneration unit is designed to supply all produced electrical energy to the textile industry. When the textile process stops or the requirement of production is less, the surplus generated electricity would be sold to the National Electrical Company.

By introducing this trigeneration system, the total amount of fossil fuel for the existing boilers and electricity for the existing chillers in the textil industry to produce the same amount of energy, would be reduced. Besides, the emissions resulting to produce electrical energy from the engine are less than importing electricity from the power grid, resulting in a significant reduction in CO2 emissions of 182,744.57 tons CO2-eq over 7 years.

A.3. Project participants:

Name of Party involved Private and/or public entity(ies) project participants

Kindly indicate if the Party involved wishes to be considered as project participant (Yes/No)

Honduras Caracol Knits S.A. de C.V. Yes Spain INGEMAS, S.A. Yes

A.4. Technical description of the project activity: A.4.1. Location of the project activity:



Figure 1: Honduras country area, showing location of Potrerillos A.4.1.1. Host Party (ies):

Honduras A.4.1.2. Region/State/Province etc.:

Department of Cortes A.4.1.3. City/Town/Community etc: Aldea El Caracol, Potrerillos A.4.1.4. Detail of physical location, including information allowing the unique identification of this project activity (maximum one page): Caracol Knits is located in Aldea El Caracol, Potrerillos, Cortes Department, in nor-occidental of the country (See Figure 1). The installation is located at 50 Km of San Pedro Sula, the industrial and economical focus of Honduras. A.4.2. Category (ies) of project activity: Sectors/Source categories: Non renewable source energy industry.



A.4.3. Technology to be employed by the project activity:

The essential element of the installation will be a reciprocating engine which will use heavy fuel-oil as fuel. The fuel is introduced directly in the combustion chamber through the injectors, mixing with the combustion air coming from the turbocompressor. During combustion, the production of some gases takes place, originating a pressure gradient which moves the air piston. This reciprocating movement becomes a shaft rotating movement, by a connecting rod-lever system, which activates the alternator rotor. This engine is MAN 12V48/60 model with the following features:

- Mechanical power 12,600 kW - Electrical power (on-site conditions) 12,260 kW - Engine speed 514 rpm

Besides this electrical energy, a residual thermal energy is produced in the cooling process of the mechanical parts of the reciprocating engine during its operation.

The engine is cooled by two independent water circuits. The low temperature (LT) circuit cools the air supply, the oil and the fuel injectors, whereas the high temperature (HT) circuit cools the cylinder heads and liners and the first refrigeration phase of the air supply.

Recovery Boiler

ExhaustedGases

WOUTHEAT

Engine

QIN WOUTELECTRICITY

Heavy Fuel Oil

WOUTCOLD High

Temperature Absorption

Chillers Water

Figure 2: Diagram of Trigeneration system with inputs and outputs

The high temperature (HT) cooling water will be used in two lithium bromide absorption chillers for production of cold water to be used in the textile plant. The main technical characteristics of these equipment are:

- Maximum power 2 x 400 t refrigeration - Water flow 403.7 m3/h



- Cold water temperature (inlet/outlet) 14C/8C

The cooling energy of the engine will be partially dissipated in the abovementioned consumption point. The rest will dissipate in the cooling towers and air coolers.

Other part of the residual thermal energy, in the form of exhaust gases, will be utilized in a waste heat boiler. The main data of waste heat boiler for steam production from engine exhaust gases are :

- Exhaust gases rate 87,800 kg/h - Gas temperatures (inlet/outlet) 338.5 C/195 C - Nominal steam production 5,563.63 kg/h (135 psia)

Part of this steam will be used for the own trigeneration in different circuits (lubricating oil, heavy fuel-oil and diesel). The rest will be sent for its consumption by the textile plant.

A.4.4. Brief explanation of how the anthropogenic emissions of anthropogenic greenhouse gas (GHGs) by sources are to be reduced by the proposed CDM project activity, including why the emission reductions would not occur in the absence of the proposed project activity, taking into account national and/or sectoral policies and circumstances:

The trigeneration system provides electricity, cold and heat to an industrial facility which does not need to purchase electricity from the power grid and consumes less fuel-oil. Considering the emissions factors of GHGs with and without the trigeneration system, there is a substantial reduction in GHG emissions. This is the result of three factors:

There is a reduction of emissions using heavy fuel-oil in the engine to produce electricity regarding the emissions using the electricity directly from the power grid reducing also the transmission and distribution losses

The residual thermal energy of the exhaust gases from engine reduces fuel consumption to produce steam.

The residual thermal energy of the HT water cooling system reduces electricity imported from the power grid to produce cold water.

A.4.4.1. Estimated amount of emission reductions over the chosen crediting period:

GHG emissions from project implementation are calculated in later sections of this PDD. The total estimated reductions for the project are 182,744.57 t CO2 in seven years.



YEAR Emissions Reductions

(t CO2eq/year) 2007 26,106.37 2008 26,106.37 2009 26,106.37 2010 26,106.37 2011 26,106.37 2012 26,106.37 2013 26,106.37

TOTAL 182,744.57

Table 1: Emissions reductions in 7 years period

A.4.5. Publics funding of the project activity: No funds from public national or international sources were used in any aspect of the proposed project.

SECTION B. Application of a baseline methodology B.1. Title and reference of the approved baseline methodology applied to the project activity: There is no approved UNFCCC-CDM baseline methodology for trigeneration project. Thus, a new methodology is proposed here. The new Baseline methodology is designated: Baseline Methodology for heavy fuel-oil Trigeneration

B.1.1. Justification of the choice of the methodology and why it is applicable to the project activity: The industrial plant, where the proposed trigeneration system is going to be installed, is a manufactured production of textile products. The plant currently purchases electricity from the power grid and purchases heavy fuel-oil to fulfill the requirements of the process.

The proposed project involves the installation of an engine which consumes heavy fuel-oil and supply electricity, heat and cold to the industrial plant.

The emissions reductions are those that are avoided at the industrial facility due to cold, heat and electricity supplied by the trigeneration system.

The fuel currently used by the industrial plant is heavy fuel-oil, which is also the fuel to be used

in the proposed trigeneration system. Thus the proposed project involves the use of heavy fuel-oil. The new methodology proposed is specifically designed for trigeneration system using heavy fuel-oil.



B.2. Description of how the methodology is applied in the context of the project activity:

To estimate emissions reductions, an estimation of annual operating hours in the trigeneration plant is considered.

For the estimation of baseline emissions, a baseline emission factor of the electricity is calculated as an average of the operating and build margin emission factor and a baseline emission factor of the heavy fuel-oil is taken from IPCC guidelines.

For the calculation of the Operating Margin Emission Factor, the Simple Operating Margin (OM) Method was applied due to the lack of information on Dispatch Data. The calculation of the Build Margin Emission Factor was completed using the emission factors of power plants whose capacity adds the 20% of the system generation.

To estimate project emissions, is used the emission factor of the heavy fuel-oil from IPCC guidelines.

The calculation of the emissions reductions also requires knowing the heat, cold and electricity output rates of the trigeneration and the efficiencies of the existing boilers and the existing chillers of the textile factory whose heat an cold output is going to be substituted by output from the trigeneration system. An upper limit of efficiencies is taken to be the most conservative estimation. The higher the efficiencies, the lower are the heavy fuel and electricity consumption and associated emissions. The resulting a priori estimates values are presented in the PDD, and also used to estimate emissions reductions.

The details of the calculation procedure and results, are shown in the spreadsheet model called CARACOL_KNITS_EMISSIONS.xls.

The monitoring procedure, rather than estimating annual operating hours of the trigeneration system, emissions reductions are determined by actual monitored heat, cold and electricity supplied by the trigeneration system to the industrial facility. Besides, the efficiencies of the existing boilers and chillers of the textile factory are fixed.

This procedure, to be used for determining and documenting project and baseline emissions and emissions reductions, form part of the monitoring and verification protocol. The actual procedure is formalized in another spreadsheet model called DATA.XLS.

The main difference between the procedures for a priori estimates and the actual, is in how the heat, cold and the electricity output of the trigeneration system are determined. Emission factors remain unchanged in the two procedures.

B.3. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered CDM project activity: The proposed project is additional, insofar as it faces and would need to overcome a number of barriers. In order to determine if the project activity is additional, it is going to be demonstrated by the Tool for the demonstration and assessment of additionality approved by the Executive Board.



In that document provides for a step-wise approach to demonstrate and assess additionality. These steps include:

Identification of alternatives to the project activity Investment analysis to determine that the proposed project activity is not the most

economically or financially attractive

Barriers analysis Common practice analysis Impact of registration of the proposed project activity as a CDM project activity.

In this section, we describe the steps mentioned previously and a general framework for demonstrating and assessing the additionality.

Step 0.Preliminary screening of project started after 1 January 2000 and prior to 31 December 2005

The Honduran Government undertook efforts to promote the Clean Development Mechanism (CDM) and the role of Honduras in the provision of low-cost emissions reductions. The Government has been very proactive in informing to the most important industries on the opportunities that this market has to offer. Therefore, it is clear that Caracol Knits were aware of the CDM incentives and included them in the planning of the expansion to its trigeneration facilities.

From the Country Survey Reports made of the Program of National CDM/JI Strategy Studies by the NSS Program, it is obtained a general description mentioned below about the current scenario in Honduras.

The major hurdles for the Kyoto Mechanisms in Honduras would be:

- a lack of local/regional financing sources to execute CDM projects.

The main barriers to participation of the private sector in the CDM project are:

- lack of capital to finance baseline study and Project Design Document

- lack of financing to execute investment project.

Step 1.Identification of alternatives to the project activity consistent with the current laws and regulations

Sub - Step 1a.Define alternatives to the project activity

The following scenarios may be considered as likely alternatives:

1. Industrial plant continues operating with the same equipment

2. Installation of a trigeneration system.



The first two scenarios correspond to a business-as-usual (BAU) scenario.

The trigeneration project provides the company with electricity and residual heat and cold for their industrial process. To obtain similar outputs to the ones provided by the CDM project activity, Caracol Knits had the alternative to use electricity from the grid to operate its facilities and to produce the same amount of cold and to use heavy fuel-oil as fuel for producing the same amount of heat in the textile process. This alternative would increase the emission of greenhouse gases to produce the same amount of energy due to its lower energy efficiency and to the consumption of energy produced by the State with a high usage of thermal plants.

Besides the difference on impact on the environment, there are other considerations that must be analyzed when comparing both alternatives. For example, the alternative to the project activity increases the dependency of the continuity of the electrical service by the State.

Sub Step 1b.Enforcement of applicable laws and regulations

The usage of heavy fuel-oil and electricity from the grid is in complete compliance with all applicable legal and regulatory requirements. The use of thermal electricity in the generation system is not only in compliance with regulations but also widespread and of increasing importance. We can conclude therefore that the proposed project activity is not the only alternative in compliance with regulations.

Step 3.Barrier Analysis

Sub-Step 3a.Identify barriers that would prevent the implementation of type of the proposed project activity.

Technological and Logistical Barriers

The technology used in the trigeneration project is not well known in Honduras except an only project: Elcatex High Efficiency Cogeneration Project and besides it is the first installation with this kind of engine (MAN). There are barriers of technological and logistical nature associated with its application since the equipment for the operation of the trigeneration system is not produced in Honduras, so it must be imported. This represents a problem to the project developer since they must depend on imports to set up and maintain the new facility. Besides, the new methodology demands a specific training to the technicians. Such training could not be payed without the incentives of the CDM.

Barriers due to prevailing practice

The project activity is not the first of its kind in Honduras, there is one trigeneration project activity of this type currently operational in the host country, but this project is not a CDM project. Caracol Knits decided to make the registration of the proposed project activity based on the procedures which are approved by the Executive Board. This project would be potential project proponents from new proposed project activities in this host country.

Investment Barriers

The process of funding a project such as the trigeneration project of Caracol Knits is a very challenging task. Honduras suffers from a weak local economy and local banks charge high interest rates, up to 33% for loans based in Lempiras and 15% for loans based in US dollars. Although there are



international banks that offer loans in Honduras, the process to get such loans is very long and complex, since those banks are generally not willing to lend into the country without significant levels of guarantees and secured hard currency.

As you can see in the below Table 2, Caracol Knits trigeneration project yields a return of 19.3%, without the revenues from CERs sale. When you compare this return to local benchmarks such as the passive rate of return of banks in Honduras, we could think that the trigeneration project is a better investment choice. To do a proper comparison of investments, we must not only compare returns but also risks associated with every investment. The alternative of leaving the money in the bank has low risk for a company and could give it an average return of 12%.

Investment (US$) 11,573,680 Annual Operating and Maintenance Costs (US$) 1,114,375 Heavy Fuel Oil Consumption Costs (US$) 6,086,111 Annual Incomes (US$) 10,915,127 WITHOUT CERs WITH CERs Annual Cash-Flow (US$) 2,360,104 2,663,983 IRR (%) 19.30 22.16 Pay-Back (Years) 5.08 4.56

Table 2. Feasibility Study

By undertaking the trigeneration project, Caracol Knits has also taken several additional risks as the technological and logistical risks mentioned above. In order to undertake this project, Caracol Knits should be compensated for the additional risks.

The Caracol Knits Trigeneration Project should, therefore, be compensated with any available source of additional return; this includes the revenue to be received from the sale of CERs. This will have a positive effect for the country beyond the evident reductions in GHG.

Step 4.Common Practice Analysis

Sub-Step 4a. Analyze other activities similar to the proposed project

This is the second trigeneration project installed in Honduras, the first with this kind of engine.

Sub-Step 4b. Discuss any similar options that are occurring

There is not more trigeneration projects participating in CDM.

Step 5.Impact of CDM Registration

The reliability of Honduras on thermal generation has increased dramatically in the past years and it is expected to increase, according to ENEEs generation expansion plans.

The usage of trigeneration technology to import less electricity from the grid and reduce the greenhouse gas emissions has a strong impact on the environment and the economy. With this trigeneration project, the contribution is the improvement of the process efficiency.

The implementation of the high efficiency modern systems is an unquestionable tool to reduce the cost and improve the reliability and quality the energetic supply, and at the same time reduce the pollution.



The revenues from the sale of the CERs would increase the projects Internal Rate of Return, thus making it possible for the project owner to be righteously compensated for the additional risk undertaken. The sale of the emission reductions will help diversify the income of Caracol Knits, a company with debts in dollars and business mainly in Lempiras. This hard currency revenue would help Caracol Knits hedge against depreciation/exchange rate risk.

Moreover, the registration might influence other textile producers in Honduras to set up new trigeneration plants. The registration of the proposed project activity will have a strong impact in paving the way for similar projects to be implemented in Honduras, especially in the important textile sector.

Once additionality is determined, the project and baseline scenarios correspond to the cases where the proposed trigeneration system is or is not installed.

Estimates of project and baseline emissions are determined by the model CARACOL_KNITS_EMISSIONS.xls considering a 7 years project lifetime, the values are summarized below:

PRO

JEC

T

TRIGENERATION 59,570.07 t CO2 eq./ year

COLD ENERGY SUBSTITUTED 9,428.07 t CO2 eq./ year

HEAT ENERGY SUBSTITUTED 8,537.23 t CO2 eq./ year

BA

SELI

NE

ELECTRICITY ENERGY SUBSTITUTED 67,789.21 t CO2 eq./ year

BASELINE 13.06 t CO2 eq./ year

LEA

KA

GE

PROJECT 91.14 t CO2 eq./ year

EMISSIONS REDUCTIONS 26,106.37 t CO2 eq./ year

Thus, project implementation implies substantial reduction in GHG emissions with respect to the baseline: 26,106.37 t CO2 eq. / year

B.4. Description of how the definition of the project boundary related to the baseline methodology selected is applied to the project activity:

The project boundary is the trigeneration system whose input is heavy fuel-oil and whose outputs are electricity, heat and cold supplied to an industry. Although the project is installed at the industrial site, the project boundary is strictly the trigeneration system.



Figure 3: Project boundary for heavy fuel-oil trigeneration system

Prior to project installation, and in the absence of the project, the plant acquires all of its electricity and cold requirements from the power grid and all of its heat requirements with heavy-fuel oil.

Once the project (trigeneration system) is installed, the plant acquires all of its electricity and a part of heat and cold requirements from the system. The remaining heat demand is met by existing boilers that operate with heavy fuel-oil and the remaining cold demand is met by existing electrical chillers that operate from the power grid.

Thus the emission reduction is determined by the electricity and fuel purchases by the industrial plant that are avoided as a result of electricity, heat and cold supplied from trigeneration system to the industrial plant.

The project emissions depend entirely on heavy fuel oil input to the trigeneration system, while the emissions avoided can be determined from heat, cold and electricity produced by the trigeneration system and used in the factory. Thus we need not only to estimate emissions associated with heavy fuel-oil consumption of the trigeneration system but also the emissions avoided at the industrial plant, because

TEXTILE FACTORY

HEAT

COLD

BOILER

CHILLER ELECTRICITY

FROM THE GRID

HEAVY

FUEL OIL

COLD

ELECTRICITY

HEAT

TRIGENERATION SYSTEM

Emissions of CO2, CH4 and N2O from fuel combustion

CO2 emissions from heavy fuel-oil transport

OM, BM

HEAVY FUEL-OIL

PROJECT BOUNDARY





of the heat, cold and electricity output of the trigeneration plant. The associated monitoring determines both project and baseline emissions.

B.5. Details of baseline information, including the date of completion of the baseline study and the name of person (s)/entity (ies) determining the baseline: Date of completing the final draft of this baseline section: May 2006 Name of person/entity determining the baseline: INGEMAS, S.A. SECTION C. Duration of the project activity / Crediting period C.1. Duration of the project activity: C.1.1. Starting date of the project activity: The project activities could be initiated at the beginning of 2007, once methodology has been approved and project has been validated. C.1.2. Expected operational lifetime of the project activity:

25 years. C.2. Choice of the crediting period and related information: C.2.1. Renewable crediting period

C.2.1.1. Starting date of the first crediting period:

The project is expected to be operating by the end of 2007. C.2.1.2. Length of the first crediting period:

7 years



C.2.2. Fixed crediting period: C.2.2.1. Starting date:

Not selected.

C.2.2.2. Length:

Not selected.

SECTION D. Application of a monitoring methodology and plan

D.1. Name and reference of approved monitoring methodology applied to the project activity: There is no methodology choice available in the UNFCCC website yet, but this project requires only a straightforward monitoring methodology. The project uses the monitoring methodology designated:

Monitoring Methodology for heavy fuel-oil Trigeneration

D.2. Justification of the choice of the methodology and why it is applicable to the project activity:

This methodology is applicable to heavy fuel-oil trigeneration project activities in an industrial process. It has been designed specifically for this type of project.

The document Monitoring Plan of this project presents the methods for collecting data, calculating GHG emissions reduction, and maintaining the documents to support monitoring and verification of the Project GHG emissions. A customized procedure was developed in the form of the Project GHG emission electronic worksheets (DATA.XLS), which must be used by project implementers.

Considering the project boundary, the following data need to be monitored in order to estimate project and baseline emissions, and emissions reductions:

Annual Heavy fuel-oil consumption by the trigeneration system (kg) (TFCFO) Net Annual electricity supplied by the trigeneration system (MWh) (TEO) Net Annual Cold supplied by trigeneration system (MWh) (TCO) Net Annual Heat supplied by trigeneration system (MWh) (THO)

These four parameters are monitored continuously while being recorded once a year.



Besides these monitored data, we need to estimate CO2, methane and nitrous oxide from heavy fuel-oil combustion in the trigeneration system, using a standard emissions factors. We also need to estimate emissions from heavy fuel-oil transportation as a leakage (external to project site), using a standard emissions factor.

D.2.1. Option 1: Monitoring of the emissions in the project scenario and the baseline scenario

This option is not applicable.

D.2.1.1. Data to be collected in order to monitor emissions from the project activity, and how this data will be archived: ID number (Please use numbers to ease cross-referencing to D.3)

Data variable

Source of data

Data unit

Measured (m), calculated (c) or estimated (e)

Recording frequency

Proportion of data to be monitored

How will the data be archived? (electronic/ paper)

Comment

D.2.1.2. Description of formula used to estimate project emissions (for each gas, source, formula/algorithm, emissions units of CO2 equ.)

This option is not applicable. D.2.1.3. Relevant data necessary for determining the baseline of anthropogenic emissions by sources of GHGs within the project boundary and how such data will be collected and archived :

ID number (Please use numbers to ease cross-referencing to table D.3)

Data variable

Source of data

Data unit

Measured (m),

calculated (c),

estimated (e),

Recording

frequency

Proportion of data

to be monitored

How will the data be archived? (electronic

/ paper)

Comment



D.2.1.4. Description of formula used to estimate baseline emissions (for each gas, source, formula/algorithm, emissions units of CO2 equ.)

This option is not applicable. D. 2.2. Option 2: Direct monitoring of emission reductions from the project activity (values should be consistent with those in section E). D.2.2.1. Data to be collected in order to monitor emissions from the project activity, and how this data will be archived:

ID number

(Please use numbers to ease cross-referencing

to table D.3)

Data variable Source of data

Data unit

Measured (m), calculated (c), estimated (e),

Recording frequency


How will the data be archived? (electronic/

paper) Comment

1 TFCFO

Annual heavy Fuel-Oil

Consumption in the Trigeneration

Kg. Fuel m Year 100% Electronic (spreadsheet)

2 TEO

Trigeneration system net Electricity

Output capacity

MWh m Year 100% Electronic (spreadsheet)

3 TCO Trigeneration Cold Output

Rate MWh c Year 100% Electronic (spreadsheet)

4 THO Trigeneration Heat Output

Rate MWh c Year 100% Electronic (spreadsheet)

D.2.2.2. Description of formula used to calculate project emissions (for each gas, source, formula/algorithm, emissions units of CO2 equ.):

The project emissions are produced by the heavy fuel-oil combustion in the trigeneration system. These emissions will be represented as the multiplication of an emissions factor by energy consumption, which depends on the heavy fuel-oil consumption in the trigeneration system.

PROJECT DESIGN DOCUMENT FORM (CDM-PDD) - Version 04 CDM Executive Board page 17


Summing up, the emissions are proportional to the heavy fuel-oil consumption in the trigeneration system, which is monitored. These emissions will be:

1. CO2 actual emissions from heavy fuel-oil combustion (t CO2/year)

The CO2 actual emissions from heavy fuel oil combustion, PECO2 (t CO2/year) are determined by the following expression:

22 * COFOCO EFTECPE = (D.1) where: TECFO: actual energy trigeneration consumption (MWh/year) EFCO2: CO2 emission factor of heavy fuel-oil (t CO2/MWh, net calorific value basis)

2. CH4 methane actual emissions from heavy fuel oil combustion (tCH4/year) The project methane actual emissions from heavy fuel oil combustion, PECH4 (t CH4/year) are

determined by the following expression:

34 10* MEFTECPE FOCH = (D.2)

where: TECFO = actual energy trigeneration consumption (MWh/year)

MEF = methane emission factor for heavy fuel-oil combustion (kg CH4/MWh, net calorific value basis)

In units of carbon dioxide equivalent, PECH4.EQ (t CO2 eq/year) 44.4 * CHCHEQCH GWPPEPE = (D.3) where: GWP (CH4) = global warming potential of methane = 21 3. N2O actual emissions from heavy fuel-oil combustion (t N2O/year)

The project N2O actual emissions from heavy fuel oil combustion, PEN2O (t N2O/year) determined by the following expression:



32 10* NEFTEC

PE FOON = (D.4)

where: TECFO = actual energy trigeneration consumption (MWh/year)

NEF = nitrous oxide emission factor heavy fuel-oil combustion (kg N2O/MWh, net calorific value basis)

In units of carbon dioxide equivalent, PEN2O , EQ (t CO2 eq/year) ONONEQON GWPPEPE 22.2 *= (D.5) where: GWP (N2O) = global warming potential of nitrous oxide = 310

Total project actual emissions are given by the sum of the components analyzed above:

PEtotal= PECO2 + PECH4,EQ + PEN2O,EQ (D.6)

Baseline actual emissions depend on heat, cold and electricity output from the trigeneration system that is supplied to the industrial plant. By considering baseline and project emissions, emissions reductions are determined in a straightforward manner.

The staff responsible for project monitoring should complete the electronic worksheets on a yearly basis (DATA.XLS). The spreadsheet automatically provides annual totals in terms of GHG reductions achieved through the implementation of the trigeneration system.

The monitoring methodology is highly compatible with the New Baseline Methodology termed Baseline Methodology for Heavy Fuel-oil Trigeneration. A monitoring methodology must be compatible with the baseline methodology used.

D.2.3. Treatment of leakage in the monitoring plan

D.2.3.1. If applicable, please describe the data and information that will be collected in order to monitor leakage effects of the project activity ID number (Please use numbers to ease cross-referencing to table D.3)

Data variable

Source of data Data unit

Measured (m), calculated (c) or estimated (e)

Recording frequency


How will the data be archived? (electronic/ paper)

Comment

5 BT Baseline No c year 100% paper



Trucks trucks/year

6 PT Project Trucks

No trucks/yea

r

m year 100% paper

7 D Distance

km m year 100% paper

We need to calculate emissions from heavy fuel-oil transportation as a leakage (external to project site), using a standard emissions factor.

D.2.3.2. Description of formula used to estimate leakage (for each gas, source, formula/algorithm, emissions units of CO2 equ.)

To calculate the leakage emissions from heavy fuel-oil transportation, using a standard emissions factor, we consider the trucks emissions.

The baseline leakage emissions must be calculated as it follows:

310** DEFDBTBLE = (D.7)

BLE Baseline Leakage Emissions (t CO2eq/year) BT Baseline Trucks (No trucks/year) D Distance between sources fuel to project situation (km) DEF Diesel Emissions Factor (kg CO2/km)

And the Project leakage emissions are calculated with the formula mentioned below:

310** DEFDPTPLE = (D.8)

PLE Project Leakage Emissions (t CO2eq/year) PT Project Trucks (No trucks/year)

D.2.4. Description of formula used to estimate emission reductions for the project activity (for each gas, source, formula/algorithm, emissions units of CO2 equ.)

To determine reductions emissions for the project activity, the used formula is consistent with the formula outlined in the description of the baseline methodology.

( ) ( )PLEPEBLEBEBEBEER TOTALELECchELECTOTAL ++++= , (D.9)



D.3. Quality control (QC) and quality assurance (QA) procedures are being undertaken for data monitored Data (Indicate table and ID number e.g. 3.-1.; 3.2.)

Uncertainty level of data (High/Medium/Low)

Explain QA/QC procedures planned for these data, or why such procedures are not necessary.

1 Low These data will be directly used for calculation of emissions reductions



4

Low These data will be directly used for calculation of emissions reductions

5


6



D.4. Please describe the operational and management structure that the project operator will implement in order to monitor emission reductions and any leakage effects, generated by the project activity

Besides the measured parameters or calculated from measured parameters named in this Monitoring Methodology, there are two parameters which affect the calculation of emission reduction.

The methodology and monitoring proposed to calculate emissions reduction are affected by the efficiencies of the chillers and the boilers of the textile plant. The values of these efficiencies used to the calculation were supplied by Caracol Knits and they are fixed for all crediting period.

D.5 Name of person/entity determining the monitoring methodology:

INGEMAS SECTION E. Estimation of GHG emissions by sources E.1. Estimate of GHG emissions by sources: The figures below compare the current situation (1) for heat, electricity and cold supply to the industrial plant with the situation (2) after the trigeneration system has been installed. As in baseline section B.4., the project boundary is shown by the dashed line in Figure 3.

(1) Baseline



Figure 4: Baseline diagram

TEXTILE FACTORY

HEAT

COLD

BOILER

CHILLER ELECTRICITY

FROM THE GRID

HEAVY

FUEL OIL



OM, BM



(2) Project line

Figure 5: Project diagram

The project emissions are associated with the heavy fuel-oil combustion. This emission contains CO2, CH4 and N2O GHG emissions.

310*860* FOFO

FONCVPAFC

PAEC = (E.1)

PAFCFO Annual heavy Fuel-oil Consumption of the trigeneration (Kg fuel)

PAECFO Annual Energy Consumption of heavy fuel-oil in the trigeneration (MWh) NCVFO Net Calorific Value of heavy fuel-oil (kcal/kg)

TEXTILE FACTORY

HEAT

COLD

BOILER

CHILLER ELECTRICITY

FROM THE GRID

HEAVY

FUEL OIL

COLD

ELECTRICITY

HEAT

TRIGENERATION SYSTEM



OM, BM

HEAVY FUEL-OIL


PROJECT BOUNDARY




a) CO2 Project Emissions:

22 * COFOCO EFPAECPE = (E.2)

PECO2 CO2 Project Emissions from heavy fuel-oil combustion in the Trigeneration System (t CO2/year)

PAECFO Energy Consumption of heavy fuel-oil in the trigeneration (MWh/year) EFCO2 CO2 Emissions Factor of heavy fuel-oil = 77.4 (t CO2/TJ, Net Calorific Value basis) = 0.279 t CO2/MWh (Source IPCC) b) CH4 Project Emissions:

34 10* MEFPAECPE FOCH = (E.3)

PECH4 CH4 Project Emissions from heavy fuel-oil combustion in the Trigeneration System (t CH4/year) MEF = Methane Emission Factor for heavy fuel-oil combustion = 3.0 (kg CH4/TJ, Net Calorific Value basis) = 0.011 kg CH4/MWh (Source IPCC) In units of carbon dioxide equivalent, PECH4.EQ (t CO2 eq/year)

44.4 * CHCHEQCH GWPPEPE = (E.4) GWP (CH4) = global warming potential of methane = 21

c) N2O Project Emissions:

32 10* NEFPAEC

PE FOON = (E.5)

PEN2O N2O Project Emissions from heavy fuel-oil combustion in the Trigeneration System (t N2O /year) NEF = nitrous oxide emission factor heavy fuel-oil combustion = 0.3 (kg N2O/TJ, Net Calorific Value basis) =0.001 kg N2O/MWh (Source IPCC)

In units of carbon dioxide equivalent, PEN2O.EQ (t CO2 eq/year)

ONONEQON GWPPEPE 22.2 *= (E.6) GWP (N2O) = global warming potential of nitrous oxide = 310



Using the formulas explained above, project emissions were calculated and summarized in the table below:



PAECFO PECO2 PECH4 PECH4,EQ PEN2O PEN2O,EQ PETOTAL

Year Year Annual Energy Consumption

of heavy Fuel-Oil in the trigeneration (MWh)

t CO2 emissions/year

t CH4 emissions/year

t CO2 eq. emissions/year

t N2O emissions/year

t CO2 eq. Emissions/year

Total t CO2 eq. Emissions/yea

r 1 2007 213,450.35 59,450.19 2,31 48.41 0.23 71.46 59,570.07 2 2008 213,450.35 59,450.19 2,31 48.41 0.23 71.46 59,570.07 3 2009 213,450.35 59,450.19 2,31 48.41 0.23 71.46 59,570.07 4 2010 213,450.35 59,450.19 2,31 48.41 0.23 71.46 59,570.07 5 2011 213,450.35 59,450.19 2,31 48.41 0.23 71.46 59,570.07 6 2012 213,450.35 59,450.19 2,31 48.41 0.23 71.46 59,570.07 7 2013 213,450.35 59,450.19 2,31 48.41 0.23 71.46 59,570.07

Table 3: Estimated Project Emissions

E.2. Estimated leakage:

The estimated leakage emissions proceed from heavy fuel-oil transportation. We consider the trucks emissions using the Diesel Emission Factor DEF (kgCO2/km) from IPCC. The estimated project leakage emissions are showed in the table below:

PT PLE

Year Year Project Heavy Duty

Diesel Trucks (No.trucks/year)

t CO2 eq emissions/year

1 2007 644 91.14 2 2008 644 91.14 3 2009 644 91.14 4 2010 644 91.14 5 2011 644 91.14 6 2012 644 91.14 7 2013 644 91.14

Table 4: Estimated project leakage emissions



E.3. The sum of E.1 and E.2 representing the project activity emissions:

Project emissions are the sum of heavy fuel-oil combustion and project leakage emissions. The table below showed the total project emissions:

PETOTAL PLE PE

Year Year Project Leakage Total Project Emissions

(t CO2/year) 1 2007 59,570.07 91.14 59,661.21 2 2008 59,570.07 91.14 59,661.21 3 2009 59,570.07 91.14 59,661.21 4 2010 59,570.07 91.14 59,661.21 5 2011 59,570.07 91.14 59,661.21 6 2012 59,570.07 91.14 59,661.21 7 2013 59,570.07 91.14 59,661.21

TOTAL 417,628.46

Table 5: Total Estimated Project Emissions E.4. Estimated anthropogenic emissions by sources of greenhouse gases of the baseline:

The baseline is associated with the heavy fuel-oil combustion to produce heat and with the supply from the grid of the electricity to consumption in the plant and in the electric chillers to produce cold. The formula to calculate the baseline emissions due to heavy fuel-oil consumption are the same as used in the project, are showed below:

a) CO2 Baseline Emissions:

bb

COFOCO e

EFABHCBE,

22

*= (E.7)

BECO2 CO2 Baseline Emissions from heavy fuel-oil combustion (t CO2/year) ABHCFO Annual Baseline Heat Consumption (MWh) EFCO2 CO2 Emissions Factor of heavy fuel-oil (t CO2/TJ, Net Calorific value basis) = 77.4 (t CO2/TJ) = 0.279 t CO2/MWh (Source IPCC) eb,b existing Boiler Efficiency Baseline

b) CH4 Baseline Emissions:

3,

4 10**

bb

FOCH e

MEFABHCBE = (E.8)

BECH4 CH4 Baseline Emissions from heavy fuel-oil combustion (t CH4/year)



MEF = Methane Emission Factor for heavy fuel-oil combustion = 3.0 (kg CH4/TJ, Net Calorific value basis) = 0.011 kg CH4/MWh (Source IPCC) In units of carbon dioxide equivalent, BECH4.EQ (t CO2 eq/year)

GWP (CH4) = global warming potential of methane = 21

c) N2O Baseline Emissions:

44.4 * CHCHEQCH GWPBEBE = (E.9)

3,

2 10**

bb

FOON e

NEFABHCBE =

ONONEQON GWPBEBE 22.2 *

(E.10)

BEN2O N2O Baseline Emissions from heavy fuel-oil combustion (t N2O /year) NEF = nitrous oxide emission factor heavy fuel-oil combustion = 0.3 (kg N2O/TJ, Net Calorific value basis) = 0.001 kg N2O/MWh (Source IPCC)

In units of carbon dioxide equivalent, BEN2O.EQ (t CO2 eq/year) = (E.11) GWP (N2O) = global warming potential of nitrous oxide = 310



The table below shows the result of baseline emissions due to the heavy fuel-oil combustion to produce heat:

ABHCFO BECO2 BECH4 BECH4,EQ BEN2O BEN2O,EQ BETOTAL

Year Year

Annual Baseline Heat consumption

(MWh)

t CO2 emissions/yea

r

t CH4 emissions/yea

r

t CO2 eq. emissions/yea

r

t N2O emissions/yea

r

t CO2 eq. emissions/yea

r

Total t CO2 eq. Emissions/yea

r

1 2007 30,590.45 8,520.05 0.33 6.94 0.03 10.24 8,537.23 2 2008 30,590.45 8,520.05 0.33 6.94 0.03 10.24 8,537.23 3 2009 30,590.45 8,520.05 0.33 6.94 0.03 10.24 8,537.23 4 2010 30,590.45 8,520.05 0.33 6.94 0.03 10.24 8,537.23 5 2011 30,590.45 8,520.05 0.33 6.94 0.03 10.24 8,537.23 6 2012 30,590.45 8,520.05 0.33 6.94 0.03 10.24 8,537.23 7 2013 30,590.45 8,520.05 0.33 6.94 0.03 10.24 8,537.23

TOTAL 59,760.63

Table 6: Estimated Baseline Emissions from heavy fuel-oil combustion.



For the calculation of baseline emissions due to electricity, a baseline emissions factor BEFELEC was calculated as an average of the operating margin (BEFOM) and the build margin (BEFBM). This calculation of OM and BM was done in the CARACOL_KNITS_EMISSIONS.xls using the most recent data of Honduras National Interconnected System obtained from the national dispatch center.

The Operating Margin is calculated by Simple Operating Margin Method. We do not have the data of the 3 years, therefore the data of the available last year are used.

The Simple OM Emission Factor (BEFOM) is calculated as the generation-weighted average emissions per electricity unit (t CO2eq/MWh) of all generating sources serving the system, not including low-operating cost and must-run power plants:

=j

j

jijiji

OM GEN

COEFFBEF ,

,, * (E.12)

where:

Fi,j is the amount of fuel i (MWh / year)consumed by relevant power sources j ; j refers to the power sources delivering electricity to the grid, not including low-operating cost and must-run power plants, and including imports to the grid COEFi,j is the CO2 emission coefficient of fuel i (t CO2 / MWh), taking into account the carbon content of the fuels used by relevant power sources j and the percent oxidation of the fuel GENj is the electricity (MWh/year) delivered to the grid by source j.

The CO2 emission coefficient COEFi is obtained as:

COEFi = EFCO2,i OXIDi (E.13)

where: OXIDi is the oxidation factor of the fuel i (see page 1.29 in the 1996 Revised IPCC Guidelines for default values) EFCO2,i is the CO2 emission factor per unit of energy of the fuel i.

The obtained BEFOM value is 0.75 (see CARACOL_KNITS_EMISSIONS.xls).

The Build Margin Emission Factor (BEFBM) as the generation-weighted average emission factor (t CO2eq/MWh) of a sample of power plants m, as follows:

=m

m

mimimi

BM GEN

COEFFBEF ,

,, * (E.14)

where: Fi,m COEFi,m and GENm are analogous to the variables described for the simple OM method above for plants m.



To calculate the Build Margin emission factor BEFBM ex-ante,we have to base on the most recent information available on plants already built for sample group m at the time of PDD submission. In our case, the sample group m consists of the power plants capacity additions in the electricity system that comprise 20% of the system generation and that have been built most recently.

Power plant capacity additions registered as CDM project activities should be excluded from the sample group m.

The obtained BEFBM value is 0.72 (see CARACOL_KNITS_EMISSIONS.xls)

To calculate the baseline emission factor BEELEC as the weighted average of the Operating Margin emission factor (BEFOM) and the Build Margin emission factor (BEFBM):

BMBMOMOMELEC BEF * w BEF * wBEF += (E.15)

where the weights wOM and wBM, by default, are 50% (i.e., wOM = wBM = 0.5), and BEFOM and BEFBM are calculated as described above and are expressed in tCO2eq/MWh.

The obtained BEFELEC value is 0.74 (see CARACOL_KNITS_EMISSIONS.xls)

Once the baseline emissions factor from electricity grid to supply the plant and the chillers is obtained, the baseline emissions are calculated with the following formula:

ELECELEC BEFABECBE *= (E.16) BEELEC - Emissions from Electricity supply to plant, those is offset by output from trigeneration system (t CO2eq/year) ABEC- Estimated Trigeneration system net Annual Electricty Output capacity (MWh) BEFELEC- Baseline Emissions Factor for electricity generation (t CO2eq/MWh, Electricity Mix)

To calculate the baseline emissions from electricity supply to chillers, that is offset by output from trigeneration system, the formula below must be applied:

bche

ETCOABCEC,

= (E.17)

ETCO- Estimated Trigeneration Cold Output Rate (MWh) ABCEC Annual Baseline Cold Electricity Consumption (MWh) ech,b electrical Chiller Efficiency - Baseline

ELECELECch BEFABCECBE *, = (E.18) BEch,ELEC - Emissions from Electricity supply to chillers, those is offset by output from trigeneration system (t CO2eq/year)



ABCEC Annual Baseline Cold Electricity Consumption (MWh) BEFELEC- Baseline Emissions Factor for electricity generation (t CO2eq/MWh, Electricity Mix)

ABCEC ABEC BEFELEC BEELEC+BEch,ELEC

Year Year Annual Baseline Cold Electricity Consumption (MWh/year)

Estimated Trigeneration system net Annual Electricity

Output capacity (MWh/year)

CO2 factor emissions

(t CO2eq/MWh)

CO2 emissions (t CO2eq/year)

1 2007 12,740.64 91,607.04 0.74 77,217.28 2 2008 12,740.64 91,607.04 0.74 77,217.28 3 2009 12,740.64 91,607.04 0.74 77,217.28 4 2010 12,740.64 91,607.04 0.74 77,217.28 5 2011 12,740.64 91,607.04 0.74 77,217.28 6 2012 12,740.64 91,607.04 0.74 77,217.28 7 2013 12,740.64 91,607.04 0.74 77,217.28

Table 7: Estimated Baseline Emissions from electricity supply

The estimated baseline leakage emissions proceed from heavy fuel-oil transportation. We consider the trucks emissions using the Diesel Emission Factor DEF (kgCO2/km) from IPCC.

The estimated baseline leakage emissions are showed in the table below:

BT BLE

Year Year

Baseline Heavy Duty

Diesel Trucks (No trucks)

t CO2 eq emissions/yea

r

1 2007 92 13.06 2 2008 92 13.06 3 2009 92 13.06 4 2010 92 13.06 5 2011 92 13.06 6 2012 92 13.06 7 2013 92 13.06

Table 8: Estimated Baseline Leakage emissions

Baseline emissions are the sum of heavy fuel-oil combustion, the electricity emissions and baseline leakage emissions due to the heavy fuel-oil in trucks transport. The table below showed the total project emissions:

BETOTAL BEELEC +BEch,ELEC BLE BE



Year Year Heavy Fuel-oil Electricity Leakag

e

Total Baseline Emissions

(t CO2eq/year) 1 2007 8,537.23 77,217.28 13.06 85,767.57 2 2008 8,537.23 77,217.28 13.06 85,767.57 3 2009 8,537.23 77,217.28 13.06 85,767.57 4 2010 8,537.23 77,217.28 13.06 85,767.57 5 2011 8,537.23 77,217.28 13.06 85,767.57 6 2012 8,537.23 77,217.28 13.06 85,767.57 7 2013 8,537.23 77,217.28 13.06 85,767.57

TOTAL 600,372.99

Table 9: Total Estimated Baseline Emissions

E.5. Difference between E.4 and E.3 representing the emission reductions of the project activity:

The emissions reductions are calculated as the difference between baseline and project emissions, taking into account any adjustments for leakage. The formula used to estimate the emission reduction from this CDM project activity is a simple equation:

)()( , PLEPEBLEBEBEBEER TOTALELECchELECTOTAL ++++= (E.19)



E.6. Table providing values obtained when applying formula above:

Caracol Knits Trigeneration Project will displace electricity from the grid and decrease the heavy fuel-oil consumption, reducing the GHG emissions with the high efficiency trigeneration process. The result of the emissions reductions are showed in the table below:

The ex post calculation of baseline emission rates may only be used if propoer justification is provided. Notwithstanding, the baseline emission rates shall also be calculated ex ante and reported in the CDM-PDD. The result of the application of the formulae above shall be indicated using the following tabular format.

Year

Estimation of project activity

emissions (tones of CO2e)

Estimation of baseline emissions (tonnes of

CO2e)

Estimation of leakage

(tonnes of CO2e)

Estimation of emission

reductions (tonnes of

CO2e) 2007 59,570.07 85,767.57 91.14 26,106.37 2008 59,570.07 85,767.57 91.14 26,106.37 2009 59,570.07 85,767.57 91.14 26,106.37 2010 59,570.07 85,767.57 91.14 26,106.37 2011 59,570.07 85,767.57 91.14 26,106.37 2012 59,570.07 85,767.57 91.14 26,106.37 2013 59,570.07 85,767.57 91.14 26,106.37 Total (tonnes of CO2e)

416,990.48 600,372.99 637.98 182,744.59

Table 10: Total Emission Reduction



SECTION F. Environmental impacts F.1. Documentation on the analysis of the environmental impacts, including transboundary impacts: >> F.2. If environmental impacts are considered significant by the project participants or the host Party, please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party: >> SECTION G. Stakeholders comments >> G.1. Brief description how comments by local stakeholders have been invited and compiled: >> G.2. Summary of the comments received: >> G.3. Report on how due account was taken of any comments received: >>



Annex 1CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY

Organization: Ingemas S.A. Street/P.O.Box: Avda. Jos Garca Bernardo, 340, 33203 Building: Ingemas City: Gijn State/Region: Asturias Postfix/ZIP: Country: Spain Telephone: +34 985 13 15 16 FAX: + 34 985 13 09 60 E-Mail: [email protected] URL: http://www.ingemas.com/inicio.html Represented by: Laura Fernndez Title: PhD. Mining Engineer Salutation: Technical advisor Last Name: Soto Middle Name: Fernndez First Name: Laura Department: Sales Department Mobile: Direct FAX: + 34 985 13 09 60 Direct tel: +34 985 13 15 16 Personal E-Mail: [email protected]

Organization: Caracol Knits, S.A. de C.V. Street/P.O.Box: Caracol Building: City: Potrerillos State/Region: Corts Postfix/ZIP: Country: Honduras Telephone: (504) 230 - 5444 FAX: (504) 230 - 5422 E-Mail: [email protected] URL: Represented by: Daniel Roberto Facuss Title: President Salutation: Project sponsor Last Name: Middle Name: Facuss First Name: Daniel Roberto Department: Mobile: Direct FAX: Direct tel: Personal E-Mail:



Annex 2

INFORMATION REGARDING PUBLIC FUNDING

No funds from public national or international sources were used in any aspect of the proposed project.

Annex 3



BASELINE INFORMATION

For detail, please see CARACOL_KNITS_EMISSIONS.xls.

Emissions factor for electricity supplied from the grid

Electricity supplied from the trigeneration system to the industrial plant reduces the amount of electricity that the plant needs to acquire from the grid. The emissions reductions corresponding to this reduced acquisition depends on the emissions factor for electricity supplied from the grid. This emissions factor, which only applies in the baseline emissions calculation is determined in this Annex.

The emissions of GHG for electricity supply from the grid to any point of consumption depend on the emissions factor for electricity generation, as well as transmission and distribution losses.

The emissions factor for electricity generation is based on an economic dispatch analysis of Honduras National Interconnected System (SIN), which provides electricity to the region where the proposed project is located. The basic data and results of the dispatch analysis are provided below.

Consumption forecast on the National Interconnected System (SIN)

The consumption forecast and annual average growth of the electricity for the next seven years are shown in Table 3.1.

YEAR ELECTRICITY SALES (MWh)

NET CONSUMPTION

(MWh)

LOAD FACTOR

(%)

TOTAL DEMAND

(MWh)

YEAR PERIOD

2007 5,034 6,539 65.01 1,158.8 2006-2007 2008 5,332 6,863 65.01 1,217.7 2007-2008 2009 5,644 7,221 65.01 1,280.6 2008-2009 2010 5,957 7,575 65.01 1,342.9 2009-2010 2011 6,277 7,925 65.01 1,404.5 2010-2011 2012 6,613 8,289 65.01 1,468.5 2011-2012 2013 6,961 8,662 65.01 1,534.3 2012-2013

Table 3.1.Consumption Forecast in Honduras (Data obtained from ENEE)

Projected Generation Units

The generation units considered for the operation of SIN, correspond to the information of ENEE contained in yearly statistics are as follow:

PROJECTS 2007 2008 2009 2010 2011 2012 2013



El Cisne 0.7 San Carlos 2.3 Cortecito 3.2 Suyapa 8.5 San Juan 6.1 Texiguat 3.4 Cangrejal 40 Diesel medium speed 160 80

Patuca 3 100 Tabln 18.6 Coal Plant (PFBC) 500

Patuca 2 270 TOTAL 6,2 18 200 180 18,6 500 270

Table 3.2.Projected Generation Units (Data obtained from ENEE)

On the other hand, we collected the Hydrothermal Plan from 2007 to 2013. The dispatch analysis we applied is rather simple and straightforward.

HYDROTHERMAL PLAN 2007 2013

YEAR PROJECT ADDITION/RETIRED MW

2007 La Puerta R -10

2008 Gas Turbine A 100

2009 Cangrejal

Gas Turbine

A

A

40.2

200

2010 Santa Fe R -5

Patuca 2 A 270

Elcosa R -80

Lufussa I R -39.5

2011

ROM R -82

2013 Combinated Cycle

Gas Turbine

A

A

250

100

Table 3.3.Thermal Plan by ENEE (Data obtained from ENEE)

The participation of fossil fuel in the total electrical generation will be the most important source.



The emissions factor for electricity generation can be determined from a combined margin of the Operating Margin and Build Margin emission factor of the electricity generation in Honduras in 2004.

Plant Identification Fuel Type Year online Generation (GWh/year)

Rio Blanco Hydro Sept. 2004 8.00 La Esperanza Hydro June 2004 1.90 Babilonia Hydro May. 2004 17.75 La Nieve Hydro 2002 1.20 Nacaome Hydro 2002 16.20 El Coyolar Hydro 2000 0.00 Santa Mara del Real Hydro 1986 6.00 Zacapa Hydro 1994 0.01 Caaveral Hydro 1964 149.82 El Cajn Hydro 1985 702.39 El Nspero Hydro 1982 29.69

HYD

RO

Rio Lindo Hydro 1971 467.49 Tres Valles Biomass April 2004 5.04 Aysa Biomass 1998 1.30 Aguan Biomass 2002 1.80 La Grecia Biomass 2002 36.80 Lean Biomass 2002 1.80 B

IOM

ASS

Eda Biomass 1998 0.00 Laeisz Naco Bunker Aug. 2004 7.62 Lufussa III Bunker Aug. 2004 407.21 Elcatex Bunker June 2004 60.38 Enersa Bunker March 2004 534.35 Laeisz Tocontn Bunker Feb. 2004 15.41 Nacional de Ing (LP+CTE) Bunker 2002 144.09

Laeisz Miraflores Bunker 2002 132.90 Cemcol La Puerta Bunker 2002 270.19 Emce II Bunker 1999 380.68 Lufussa II Bunker 1999 460.93 Emce I Bunker 1984 470.88 Ampac Bunker 1994 0.10 Elcosa Bunker 1994 421.96

Die

sel M

otor

s / B

unke

r

Santa Fe Diesel 1994 1.46 La Puerta Mex Diesel Gas T. 1994 3.44 Lufussa I Diesel Gas T. 1995 66.59

Gas Turb.

La Puerta Diesel Gas T. 1970 7.79 Total 4,833.16

Table 3.4.Electricity generation in Honduras in 2004 (ENEE 2004)



To calculate the Operating Margin emission factor (BEFOM,) is calculated as the generation-

weighted average emissions per electricity unit (t CO2eq/MWh) of all generating sources serving the system, not including low-operating cost and must-run power plants:

=j

j

jiji

OM GEN

jCOEFiFBEF ,

, ,* (3.1)

where:

Fi,j is the amount of fuel i (MWh / year) consumed by relevant power sources j; j refers to the power sources delivering electricity to the grid, not including low-operating cost and must-run power plants, and including imports to the grid COEFi,j is the CO2 emission coefficient of fuel i (t CO2 /Mwh), taking into account the carbon content of the fuels used by relevant power sources j and the percent oxidation of the fuel GENj is the electricity (MWh/year) delivered to the grid by source j.

The CO2 emission coefficient COEFi is obtained as:

COEFi = EFCO2,i OXIDi (3.2)

where: OXIDi is the oxidation factor of the fuel i (see page 1.29 in the 1996 Revised IPCC Guidelines for default values) EFCO2,i is the CO2 emission factor per unit of energy of the fuel i.

OXIDdiesel 0.99 IPCC Table 1-6 EFdiesel (tC/TJ) 20.20 IPCC Table 1-1 EF diesel (t CO2/TJ) 74.07 OXIDbunker 0.99 IPCC Table 1-6 EFbunker (tC/TJ) 21.10 IPCC Table 1-1 EFbunker (tCO2/TJ) 77.37

Table 3.5.IPCC guidelines values



Plant Identification Fuel Type

Generation in 2004

(GWh/year)

Fuel Consumption (GWh/year)

Emissions (t CO2/year)

Laeisz Naco Bunker 7.62 20.58 5,675.91 Lufussa III Bunker 407.21 1,100.57 303,478.60 Elcatex Bunker 60.38 163.19 44,998.88 Enersa Bunker 534.35 1,444.19 398,230.37 Laeisz Tocontn Bunker 15.41 41.64 11,482.24 Nacional de Ing (LP+CTE) Bunker 144.09 389.44 107,386.19

Laeisz Miraflores Bunker 132.90 359.19 99,045.23 Cemcol La Puerta Bunker 270.19 730.24 201,362.15 Emce II Bunker 380.68 1,028.86 283,703.83 Lufussa II Bunker 460.93 1,245.75 343,511.05 Emce I Bunker 470.88 1,272.66 350,931.62 Ampac Bunker 0.10 0.26 71.55 Elcosa Bunker 421.96 1,140.44 314,472.69

Die

sel M

otor

s / B

unke

r (Ef

f=0,

37)

Santa Fe Diesel 1.46 3.95 1,042.39

La Puerta Mex Diesel Gas T. 3.44 12.75 3,366.30

Lufussa I Diesel Gas T. 66.59 246.61 65,102.73

Gas Turb.

(Eff=0,27)

La Puerta Diesel Gas T. 7.79 28.85 7,616.47

Total 3,385.97 9,229.18 2,541,478.20 Operating Margin 0,75

Table 3.6.Power Plants included in the determination of the Operating Margin

The Build Margin (BEFBM) emission factor as the generation-weighted average emissions factor (t CO2eq/MWh) of a sample of power plants m, as follows:

=m

m

mimimi

BM GEN

COEFFBEF ,

,, * (3.3)

where: Fi,m ,COEFi,m and GENm are analogous to the variables described for the simple OM method above for plants m.

To calculate the Build Margin emission factor BEFBM ex-ante, we have to base on the most recent information available on plants already built for sample group m at the time of PDD submission. In our case, the sample group m consists of the power plants capacity additions in the electricity system that comprise 20% of the system generation and that have been built most recently.



Power plant capacity additions registered as CDM project activities should be excluded from the sample group m.

Plant Identificatio

n

Fuel Type

Generation in 2004

(GWh/year)

Fuel Consumption

(GWh/year) Emissions

(t CO2/year) Rio Blanco Hydro 8.00 0.00 0.00 La Esperanza Hydro 1.90 0.00 0.00 Babilonia Hydro 17.75 0.00 0.00 Tres Valles Biomass 5.04 0.00 0.00 Laeisz Naco Bunker 7.62 20.58 5,675.91 Lufussa III Bunker 407.21 1,100.57 303,478.60 Elcatex Bunker 60.38 163.19 44,998.88 Enersa Bunker 534.35 1,444.19 398,230.37 Total 1,042.25 2,728.53 752,383.76 Build Margin 0.72

Table 3.7.Power Plants included in the determination of the Build Margin

To calculate the baseline emission factor BEELEC as the weighted average of the Operating Margin emission factor (BEFOM) and the Build Margin emission factor (BEFBM):

BMBMOMOMELEC BEF * w BEF * wBEF += (3.4)

where the weights wOM and wBM, by default, are 50% (i.e., wOM = wBM = 0.5), and BEFOM and BEFBM are calculated as described above and are expressed in tCO2eq/MWh.

The obtained BEFELEC value (see CARACOL_KNITS_EMISSIONS.xls) is:

0.74 t CO2eq/MWh



Annex 4

MONITORING PLAN

General Quality Control System for Trigeneration Project The purpose of the quality control system is to obtain reliable data that will be used for the calculation of emission reduction. For this kind of project, it is important to note that the DOE will be in charge of auditing only the part of the quality management system linked to the CDM project. The final responsibility for monitoring, verification, and quality control will be of Caracol Knits, S.A. of C.V. If the company has quality control system, they need to adapt their procedures or create new ones that contemplate those that are detailed below. If the company does not have a quality control system, it should implement procedures in order to ensure correct data measurement for this kind of project. A unique format for the procedure does not exist. Each company will develop its own procedure according to the size of the project.

Procedure for measuring heavy fuel-oil consumption in the engine

The company has a procedure for measuring heavy fuel-oil consumption in the engine. The general procedure includes the following items:

Equipment Heavy fuel-oil consumption will be measured at an appropriate measuring station. This station shall have a mass meter with calibration certificate issued by the factory. These measurements will be displayed and recorded in the local control panel.

Verification and Calibration of meter The equipment needs to be calibrated in accordance with the procedures established by the companys quality management system. A Test Procedure provided by the meter manufacturer may be used, and shall include a certified reference meter. A procedure shall be performed at least once every 5 years.

Internal Audit

The person in charge of the project has to conduct annual internal audits, checking the above mentioned procedure, in order to ensure its compliance. Thus, the company shall have an internal audit procedure, which will be evaluated by the DOE.



Procedure for measuring of electricity, heat and cold delivered to the textile plant

o Equipment

Electricity: The measurement of electricity will be carried out according to National Regulations in force. The new installation has a power meter in the outlet of the Trigeneration (after the selfconsumers of the Trigeneration) and another power meter which will measure the exported power to the grid. Heat: To know the heat energy, we will use: - a flow measurement of the exported steam to the textile plant - efficiency value of the existing boilers (fixed value for all crediting period)

Cold: To know the cold energy, we will use: - a flow measurement of the exported cooling water to the textile plant - the temperatures of this water in the inlet and in the outlet - efficiency value of the existing chillers (fixed value for all crediting period)

o Verification and calibration of meters

The equipment need to be calibrated in accordance with the procedures established by the companys quality management system. The procedures will follow the same guidelines as heavy fuel-oil consumption measurement, being made by the same Unit System. The employees using these meters will receive prior training.

o Internal Audit The person in charge of the project has to conduct annual internal audits checking all the procedures mentioned above, in order to ensure their compliance. Therefore, the company will have an internal audit procedure, which will be evaluated by the DOE.

Procedure for measuring the leakage To know the emissions due to transport of fuel, we need to collect: - Number of trucks used to transport consumed heavy fuel oil in the engine - Travelled distance for each truck



Annex 5

NOTATION

ABCEC Annual Baseline Cold Electricity Consumption MWh

ABEC Annual Baseline Electricity Consumption of the trigeneration MWh

ABFCFOAnnual Consumption of heavy fuel-oil

of Baseline kg

ABHCFO Annual Baseline Heat Consumption MWh

AOH Annual Operating Hours of trigeneration h/year

BE Total Baseline Emissions t CO2eq/year

BEch,ELECEmissions from electricity supply to

chillers t CO2eq/year

BECH4Baseline methane Emissions from

heavy fuel-oil combustion t CH4/year

BECH4,EQCO2 Equivalent Baseline Emissions

from CH4 emissions t CO2 eq/year

BECO2CO2 Baseline Emissions from heavy

fuel-oil combustion t CO2 /year

BEELECBaseline Emissions for electricity

generation t CO2 eq/year

BEN2OBaseline N2O Emissions from heavy

fuel-oil combustion t N2O/year

BEN2O,EQCO2 Equivalent Baseline Emissions

from N2O emissions t CO2 eq/year

BETOTALTotal Baseline Emissions from heavy

fuel-oil combustion t CO2 eq/year

BEFBMBaseline Emissions Factor Build

Margin t CO2 eq/MWh

BEFELECBaseline Emissions Factor combinated

by OM and BM t CO2 eq/MWh

BEFOMBaseline Emissions Factor Operating

Margin t CO2 eq/MWh

BLE Baseline Leakage Emissions t CO2 eq/year BT Baseline Trucks No. trucks/year

COEFi,jCO2 Emissions Coefficient of fuel i by

relevant power sources j t CO2/MWh

COEFi,mCO2 Emissions Coefficient of fuel i by

relevant power sources m t CO2/MWh

D Distance between sources fuel to project situation km

DEF Diesel Emissions Factor kg CO2/km eb,b existing Boiler Efficiency -Baseline

ech,b electrical Chiller Efficiency - Baseline

EF Emissions Factor of Transport fuel t CO2eq/MWh

EFCO2CO2 Emissions Factor of heavy fuel-oil

combustion 0,279 t CO2/MWh, NCV (from

IPCC)



ER Total Emissions Reductions t CO2 eq/year

ETCO Estimated Trigeneration Cold Output rate MWh

Fj,jAmount of fuel i consumed by relevant

power sources j MWh/year

Fi,mAmount of fuel i consumed by relevant

power sources m MWh/year

GENjElectricity delivered to the grid by

source j MWh/year

GENmElectricity delivered to the grid by

source m MWh/year

GWPCH4 Global Warming Potential of CH4 21 for Kyoto Protocol GWPN2O Global Warming Potential of N2O 310 for Kyoto Protocol

LEYLeakage Emissions from heavy fuel-oil

transport t CO2 eq/year

NCVFO Net Calorific Value of heavy Fuel-Oil kcal/kg

NEF N2O factor Emissions fo heavy fuel-oil combustion 0,001 kg N2O/MWh, NCV (from

IPCC)

MEF Methane Emissions Factor for heavy fuel-oil combustion 0,011 kg CH4/MWh, NCV (from

IPCC) OXIDi Oxidation Factor of fuel i

PAECFOProject Annual Energy Consumption of

heavy fuel-oil MWh

PAFCFOProject Annual heavy fuel-oil

Consumption Kg fuel

PE Total Project Emssions t CO2 eq/year

PECH4CH4 Project Emissions from heavy fuel-

oil combustion in the trigeneration system

t CH4/year

PECH4,EQCO2 Equivalent Project Emissions from

CH4 emissions t CO2 eq/year

PECO2CO2 Project Emissions from heavy fuel-


t CO2/year

PEN2ON2O Project Emissions from heavy fuel-


t N2O/year

PEN2O,EQCO2 Equivalent Project Emissions from

N2O emissions t CO2 eq/year

PETOTALTotal Project Emissions from heavy

fuel-oil combustion t CO2 eq/year

PLE Project Leakage Emissions t CO2 eq/year PT Project Trucks No. trucks/year Q Transportation Energy Quantity MWh/year TC Heavy fuel-oil Trucks capacity l

TCO Trigeneration Cold Output rate MWh/year THO Trigeneration Heat Output Rate MWh/year

TEO Trigeneration Electricity Output capacity MWh/year

TECFOTrigeneration Energy heavy Fuel-Oil

Consumption MWh/year

TFCFOTrigeneration heavy Fuel-Oil

Consumption Kg/year



wOM, wBM weights (as default) 0,5

CDM PDD Caracol Knits v2

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