Korindo Biomass v02 2 - Compa

PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) - Version 03
CDM Executive Board
CLEAN DEVELOPMENT MECHANISM

PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD)
Version 03 - in effect as of: 22 December 2006
CONTENTS
A.
General description of the small scale project activity
B.
Application of a baseline and monitoring methodology
C.
Duration of the project activity / crediting period
D.
Environmental impacts
E.
Stakeholders comments
Annexes
Annex 1: Contact information on participants in the proposed small scale project activity
Annex 2: Information regarding public funding
Annex 3: Baseline information
Annex 4: Monitoring Information
Annex 5: Sustainable Development
CDM Executive Board
Revision history of this document
Version
Number
01
02
Date
Description and reason of revision
21 January
2003
8 July 2005
Initial adoption
03
22 December
2006
The Board agreed to revise the CDM SSC PDD to reflect

guidance and clarifications provided by the Board since
version 01 of this document.
As a consequence, the guidelines for completing CDM SSC
PDD have been revised accordingly to version 2. The latest
version can be found at
<http://cdm.unfccc.int/Reference/Documents>.
The Board agreed to revise the CDM project design
document for small-scale activities (CDM-SSC-PDD), taking
into account CDM-PDD and CDM-NM.
CDM Executive Board
SECTION A. General description of small-scale project activity

A.1
Title of the small-scale project activity:
Title:
Version:
Date:
A.2.
Korindo Biomass Power Plant, Indonesia

1.0
01/02/2012
Description of the small-scale project activity:
The Korindo Biomass Power Plant, Indonesia (the project activity) undertaken by P.T. Korintiga
Hutani (the Project Developer, or hereafter referred to as KTH). P.T. Korintiga is 70% owned by
Korindo Group and 30% by Oji Paper Co., Ltd1., and involves the construction of a 7.3 MW biomass
based power plant in a Greenfield chipping mill in Kumai, Central Kalimantan, Indonesia. The chipping
mill main products are wood chips, saw wood, veneer and wood pallets The biomass power plant will
generate electricity through the combustion of bark waste, mainly a mix of Acacia Mangium and
Eucalyptus Pellita bark residues from the chipping mill, producing mainly wood chips, saw wood, veneer
and wood pallets. The chipping mill and project activity will commission in 2013 and uses wood from
the Project Developers own plantation.
The proposed project activity comprises the installation of a boiler and steam turbines with 7.3 MW of
installed capacity. The net power generation would be at 6.5 MW, where approximately 4.5 MW2 will be
used by the chipping mill and the remaining supplied to the Central Kalimantan Grid.
. In the absence of the project activity, electricity would be purchased from Perusahaan Listrik Negara
(PLN ,State Electricity Company). In the post-project scenario, renewable electricity generated from
biomass power plant will displace this more carbon-intensive grid sourced electricity and will result in a
reduction in greenhouse gas (GHG) emissions of approximately 59,974 tCO2e equivalent per annum.
The construction of the project activity is estimated to start in March 2012 and it is expected to
commission in September 2013.
The implementation of this project activity would contribute towards sustainable development of the
region in the following ways, as stipulated by the government of the Republic of Indonesia:
1.
Sustainable development
The project will contribute to use of sustainable renewable energy sources in a highly efficient
manner, in line with the countrys development policy of renewable energy. This will lead to greater
self-sufficiency of fuel for the energy sector. Currently national fuel oil is subsidized and the project
will directly lead to reduction of subsidised fuel oil consumed, thus reducing the countrys
dependency on fossil fuel.
The biomass energy system is imported by Dohwa Engineering Co.,Ltd Korea, a Korean company.
The project leads to technology transfer and knowledge transfer from Korea to Indonesia to facilitate
Oji Paper teams up with Korindo for Indonesian Plantation Investment, RISI publication, 22/02/2010
Chip Mill Plant Mass balance and power requirement
CDM Executive Board
local manufacturing of high efficient biomass boilers. Being able to provide such technology locally,
the project will ensure local employment and reduce the dependency on foreign expenditures.
2.
Environment and Natural Resources

The proposed project will result in significant emission reductions of Greenhouse Gases (GHGs)
over the commitment period. In addition, the project will result in improving biomass waste
management in the Host Country. No additional resources will be used. The project will be able to
generate renewable electricity resource which will increases diversity and security of energy supply.
The biomass is a biomass residue from the chipping mill process and the project contributes to
conservation of natural resources and sustainable use of biomass waste that would otherwise be
disposed left to decay.
Sustainable development and conservation practices are also carried out at the plantation where
timber is sourced from for the chipping process. The AMDAL (Environmental Impact Assessment)
for the plantation of 1998 (when the purchase of land was completed by the Korindo group) refers to
the condition of land as degraded before the purchase by the Korindo Group.
The plantation is under a process of certification for the Global Forest and Trade scheme under
WWF. The Appraisal was completed in October 2011 and the draft report was made available. The
certification is under the Korindo Group subsidiary PT Korintiga Hutani.
3.
Economic and social development

The proposed project will result in the creation of new jobs and new economic activities by creating
new employment opportunities during the construction of the biomass power plant and during the
operation and maintenance of the facility. Additional staff are planned to be contracted for the
operation of the monitoring equipment required by the carbon emission reduction project. The
proposed project activity will demonstrate that innovative solutions can be applied for the
management of biomass waste creating a dynamic sector of economic activity in the Host Country
that could have positive employments effects. In addition, the generation of electricity through the
biomass power plant will ease the strain on the Host Country dependent on fossil fuel.
4.
Economic sustainability
The project is expected to develop the energy related industries such as promoting local wood
product manufacturer/processor to increase energy efficiency of the plant and make use of
agricultural waste or renewable biomass.
The project will lead to economic sustainability; as the fuel source is a sustainable, indigenous
resource, this reduces fuel imports and negative impacts on the foreign exchange. The project also
has a positive impact on the economic performance of the wood manufacturing sector as their energy
production will become more reliable, efficient and eliminate risks of fluctuating oil prices or other
fuel prices; this enables a more economically reliable production in general.
5.
Transfer of technology
CDM Executive Board
The proposed project activity utilises agro biomass residues for power generation, this will
encourage the adoption of clean technologies for power generation and would bring participation
from the private sector to promote such technologies. The project activity in a small way will also
contribute to energy security in the country.
The proposed project activity will result in technology and know-how transfer in the Host Country.
The project will utilize modern technology adapted to the local conditions. This technology will be
imported from the Republic of Korea. The successful design and operation of such a facility will
encourage local enterprises, local authorities and financing institutions to support entrepreneurial
activities in the waste management sector at a regional and national level.
A.3.
Project participants:
Name of Party involved (*)

((host) indicates a host
Party)
Private and/or public entity(ies)

Project participants (*)
(as applicable)
Kindly indicate if the Party

involved wished to be considers as
project participant
(Yes/No)
Indonesia (host)
PT. Korintiga Hutani
No
The Nordic Environment Finance

Corporation (NEFCO) in its
FinlandSweden
No
capacity as Fund Manager to the
NEFCO Carbon Fund (NeCF)
(*) In accordance with the CDM modalities and procedures, at the time of making the CDM-PDD public
at the stage of validation, a Party involved may or may not have provided its approval. At the time of
requesting registration, the approval by the Party(ies) involved is required.
The carbon purchaser is the Nordic Environment Finance Corporation NEFCO in its capacity as Fund
Manager to the NEFCO Carbon Fund (NeCF)
NEFCO Carbon Fund (NeCF)
NEFCO, the Nordic Environment Finance Corporation, is a multilateral risk capital institution financing
environmental projects in Central and Eastern Europe, with an emphasis on the Russian Federation and
Ukraine. Its purpose is to facilitate the implementation of environmentally beneficial projects in the
neighbouring region, with transboundary effects that also benefit the Nordic region. Today, NEFCO
manages funds in an aggregate of approximately 470 million. NEFCO is located in Helsinki, Finland.
The NEFCO Carbon Fund (NeCF) was established as a Public Private Partnership in April 2008, to
provide financial assistance to projects by purchasing emission reduction credits from projects under the
JI and CDM mechanisms. The NEFCO Carbon Fund (NeCF) has the Danish Energy Agency, DONG
Energy, Eesti Energia, the Industrialisation Fund for Developing Countries (Denmark), Ministries of
Environment and Foreign Affairs of Finland, Etel-Pohjanmaan Voima Oy (Finland), Kymppivoima Oy
(Finland), GDF Suez, the Norwegian Finance Ministry and NEFCO itself, as participants in the fund. The
total available resources are ca. 165 million.
CDM Executive Board
NEFCO is the Fund Manager of the NeCF, and has been authorised by the governments investing in the
NeCF to participate on their behalf in actions leading to the generation, transfer and acquisition of CERs
under Article 12 of the Kyoto Protocol.
A.4.
Technical description of the small-scale project activity:

A.4.1. Location of the small-scale project activity:
A.4.1.1.
Host Party(ies):
A.4.1.2.
Region/State/Province etc.:
Indonesia
Central Kalimantan
A.4.1.3.
City/Town/Community etc:
Kumai
A.4.1.4.
Details of physical location, including information allowing the
unique identification of this small-scale project activity :
The project site is located in Desa Natai Peramuan, Kelurahan Kumai Hulu, Kecamatan Kumai,
Kabupaten Kotawaringin Barat, Central Kalimantan. Indonesia.
The GPS coordinates for the project site are: 111 49 19.46 E, 2 36 21.20 S.
CDM Executive Board
Figure 1: Location of project site
Figure A.1: Project location
CDM Executive Board
A.4.2. Type and category(ies) and technology/measure of the small-scale project activity:
(1) Types and categories of the small-scale project activity
In accordance with Appendix B of the simplified modalities and procedures for small-scale CDM project
activities (SSC M&P), the proposed project activity falls under the following types and categories.
The capacity of the proposed CDM project is 7.3 MW, which is below the capacity limit of 15 MW as
outlined in section ID of Appendix B of the simplified modalities for small scale CDM project activities.
The biomass power plant will be connected to the grid and the electricity produced by the plant will
displace existing fossil fuel generated electricity utilized within the factory. Any excess electricity
produced will be exported to the Central Kalimantan Grid.
As the generated electricity is included in the project boundary; the applicable methodology is AMS-I.F.
The relevant type and category is shown below.
Type I
Category F
Reference
:
:
:
Renewable Energy Projects

Renewable energy generation for captive use and mini-grid
Version 02, EB 61, Scope 1
As the maximum electricity generating capacity is limited by its design and construction, there is no
possibility of exceeding the limits of small-scale project activities during the crediting period and the
project activity will remain as a small scale project activity.
(2) Technology of the small-scale project activity

The project activity is designed to generate carbon-neutral electricity using biomass residues from the
debarking process of timber. The biomass residue produced consist primarily of Acasia Mangium and
Eucalyptus Pellita bark. The boiler technology applied is of a water-tube boiler, with a capacity of 34
tonnes per hour of superheated steam, and a turbo-generator with a capacity of 7,300 kW.
The fuel undergoes the following processes for combustion; pre-drying, degassing, main combustion, and
burning-out, each with individually controlled air supply. The boiler is designed with a reciprocating stepgrate stoker combustion technology, with 4-6 individual air zones, for firing barks with very high
moisture content. Superheated steam of 45kg/mm2 @ 440C from the bark fired boiler expands through
the steam turbine to generate electricity at the main terminal. The steam turbine is a extractioncondensing turbine with a multistage impulse design.
This system will generate 7.3MW gross power and the net power generation would be at 6.5 MW, where
approximately 4.5 MW will be used by the chipping mill and the remaining supplied to the Central
Kalimantan Grid.
The biomass power plant technology is designed in Korea and the main boiler and turbo-generators, are
supplied by well-known Korean, USA and German manufacturers. All equipment are designed in
accordance with international industry guidelines and meet the national environmental and safety
requirements.
CDM Executive Board
Table A.1: Summary of Equipments3

Power Boiler
Power Boiler capacity (at 100% load)
Steam pressure at super heater outlet
Steam temperature at super heater outlet
Turbo Generator
Steam pressure at the TG inlet
Steam temperature at the TG inlet
Generator Voltage
Energy production
Gross power
Auxiliary consumption
Net power
A.4.3
34 TPH
45 Kg/cm2
440 C
43 Kg/cm2
435 C
6.6 kV
7.3 MW
0.8 MW
6.5 MW
Estimated amount of emission reductions over the chosen crediting period:

Annual estimation of emission
reductions in tonnes of CO2e
59,974
59,974
59,974
59,974
59,974
59,974
59,974
59,974
59,974
59,974
599,740
10
Years
*2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total estimated reductions (tonnes of CO2e)
Total number of crediting years
Annual average over the crediting period of estimated
59,974
reductions (tonnes of CO2e)
*The 1st year of crediting is the date of commissioning on 01/06/2013 or date of registration, whichever
is later.
A.4.4. Public funding of the small-scale project activity:
There is no public funding for this project.
A.4.5. Confirmation that the small-scale project activity is not a debundled component of a
large scale project activity:
KTH Biomass Fired Power Plant Proposal Specification from DOHWA Engineering Co. Ltd., Doc No. DCEKTH-PS-001, dated June 2011.
CDM Executive Board
Based on the information provided in Appendix C of the Simplified Modalities and Procedures for SmallScale CDM project activities4, the project is not a part of any large-scale project or program and is not a
debundled component of a large project activity.
The project participants have not registered or are not applying to register any other small-scale CDM
project activity:
With the same project participants;

In the same project category and technology/measure; and
Registered within the previous 2 years; and
Whose project boundary is within 1 km of the project boundary of the project at the closest
point.
http://cdm.unfccc.int/Projects/pac/howto/SmallScalePA/sscdebund.pdf
10
CDM Executive Board
SECTION B. Application of a baseline and monitoring methodology

B.1.
Title and reference of the approved baseline and monitoring methodology applied to the
small-scale project activity:
AMS-I.F. Renewable Electricity Generation for Captive Use and Mini Grid (Version 02, EB 61).
B.2
Justification of the choice of the project category:
The proposed project activity is eligible to utilise AMS-IF. Renewable Electricity Generation for Captive
Use and Mini Grid (Version 02; EB 61) as it meets all of the applicability conditions of the methodology
as described in Table B.1 below.
Table B.1: Applicability conditions for AMS-I.F.
#
1
Applicability conditions
This category comprises renewable energy
generation units, such as photovoltaic, hydro,
tidal/wave, wind, geothermal and renewable
biomass that supply electricity to user(s). The
project activity will displace electricity from
an electricity distribution system that is or
would have been supplied by at least one
fossil fuel fired generating unit i.e. in the
absence of the project activity, the users
would have been supplied electricity from
one or more sources listed below:
(a) A national or a regional grid (grid
hereafter);
(b) Fossil fuel fired captive power
plant
(c) A carbon intensive mini-grid.
Project Scenario
The proposed project activity uses combustion of
biomass residues to generate electricity. The
electricity generated displaces electricity that
otherwise would have been sourced from the
Central Kalimantan Grid for use on-site/locally
by the chipping mill with. Excess electricity to be
exported to the Central Kalimantan Grid. In the
absence of project activity, the electricity would
be purchased from Central Kalimantan Grid,
which is operated by PLN (State Electricity
Company).
For the purpose of this methodology, a mini- In the absence of project activity, the electricity
grid is defined as small-scale power system would be imported from Central Kalimantan Grid
with a total capacity not exceeding 15 MW
(i.e. the sum of installed capacities of all
generators connected to the mini-grid is equal
to or less than 15 MW) which is not
connected to a national or a regional grid.
Project activities supplying electricity to a

national/regional grid or supplying electricity
to an identified consumer facility via
national/regional grid shall apply AMS-I.D.
11
The proposed project activity displaces grid

electricity consumption and captive fossil fuel
electricity generation at the user end, with excess
electricity being exported to the grid. Therefore
CDM Executive Board
Project Scenario
Project activities supplying electricity to AMS-I-D and AMS-I-A are not applicable.
household users located in off grid areas shall
apply AMS-I.A.
Hydro power plants with reservoirs that The proposed project activity is not a hydropower
satisfy at least one of the following plant and therefore this requirement is not
conditions are eligible to apply this applicable.
methodology:
The project activity is implemented in an

existing reservoir with no change in the
volume of reservoir;
The project activity is implemented in an
existing reservoir, where the volume of
reservoir is increased and the power
density of the project activity, as per
definitions given in the Project Emissions
section, is greater than 4 W/m2;
The project activity results in new
reservoirs and the power density of the
power plant, as per definitions given in
the Project Emissions section, is greater
than 4 W/m2.
For biomass power plants, no other biomass According to Annex 18 of EB 23, the definition
other than renewable biomass are to be used of renewable biomass is based on either one of
in the project plant
the five conditions spelt out. One of the
conditions that meet the requirements of this
project activity is :
4. The biomass is a biomass residue and the use
of that biomass residue in the project activity
does not involve a decrease of carbon pools,
in particular dead wood, litter or soil organic
carbon, on the land areas where the biomass
residues are originating from.
The biomass used in this project activity is a
residue or waste streams from a chipping mill
facility, and therefore qualifies as renewable
biomass.
This methodology is applicable for project

activities that (a) install a new power plant at
a site where there was no renewable energy
power plant operating prior to the
implementation of the project activity
(Greenfield plant); (b) involve a capacity
12
The project complies with option (a); installation

of a new power plant at a site where there was no
renewable energy power plant operating prior to
the implementation of the project activity
(Greenfield plan).
CDM Executive Board
addition, (c) involve a retrofit of (an) existing
plant(s); or (d) involve a replacement of (an)
existing plant(s).
In the case of project activities that involve There is no capacity addition in the Project as it is
the addition of renewable energy generation a Greenfield project.
units at an existing renewable power
generation facility, the added capacity of the
units added by the project should be lower
than 15 MW and should be physically
distinct from the existing units.
In the case of retrofit or replacement, to The project is not a retrofit or replacement

qualify as a small-scale project, the total project. This is a Greenfield project.
output of the retrofitted or replacement unit
shall not exceed the limit of 15 MW.
If the unit added has both renewable and nonrenewable components (e.g., a wind/diesel
unit), the eligibility limit of 15 MW for a
small-scale CDM project
10
Combined heat and power (co-generation) The project does not involve combined heat and
systems are not eligible under this category.
power systems.
11
If electricity and/or steam/heat produced by

the project activity is delivered to a third
party i.e. another facility or facilities within
the project boundary, a contract between the
supplier and consumer(s) of the energy will
have to be entered that ensures that there is
no double counting of emission reductions.
13
Project Scenario
The proposed project activity does not involve

non-renewable components. The installed
capacity of the project activity is 7.3 MW which
is less than the eligibility limit of 15MW for
small scale CDM project activities.
The electricity generated from the project activity

will be supplied to the chipping mill that belongs
to the same project owner.
CDM Executive Board
B.3.
Description of the project boundary:
In line with the guidance in Appendix B of the simplified modalities and procedures for small-scale
CDM project activities the boundary encompasses the physical, geographical site of the renewable
generation source.
The project boundary is shown in Figure B.1 below:
Figure B.1: Project boundary
Project
Project Boundary
Boundary
Wood Bark residue from

Biomass
chipping mill
Wood Bark residue from
chipping mill
Biomass Power Plant

Biomass Power Plant
Excess power exported to grid
Excess power exported to grid
Chipping Mill
Power
Chipping Mill
Biomass waste
Power
Project Boundary
Biomass waste
Project Boundary
14
Central
Kalimantan Grid
Central
Kalimantan Grid
CDM Executive Board
B.4.
Description of baseline and its development:
Baseline Electricity Generation

In the absence of the proposed project activity, electricity that will be generated by the proposed project
activity would have otherwise been generated by the operation of grid connected power plants, and by the
addition of new generation sources.
As per paragraph 14 of AMS-I.F. (Version 02; EB61) the baseline emissions are the product of the
electrical energy baseline EGBL,y expressed in MWh of electricity produced by the renewable generating
unit multiplied by the grid emission factor. The emission factor is calculated in accordance with
paragraph 12, option (a), as a Combined Margin, consisting of the combination of Operating Margin and
Build Margin according to the procedures prescribed in the Tool to calculate the emission factor for an
electricity system (Version 02.2.0, EB61),which are outlined in detail in Section B6 and Annex 3 of the
PDD.
There are no national and/or sectoral policies or regulations that give comparative advantages to more
emissions-intensive technologies or fuels over less emissions-intensive technologies or fuels; or national
and/or sectoral policies or regulations that give comparative advantages to less emissions-intensive
technologies over more emissions-intensive technologies prior to decision 17/CP.7, 11 November 2001.
In November 2009, a feed-in-tariff mechanism was introduced that allows for small scale (<10MW)
renewable energy projects to supply electricity to the grid at preferential tariffs. This is considered as an
E- policy; national and/or sectoral policies or regulations that give comparative advantages to less
emissions-intensive technologies over more emissions-intensive technologies. The project activity has
conservatively taken into account the feed-in-tariff in determination of the baseline and financial model,
although it was an E- policy later than decision 17/CP.7, 11 November 2001, and need not be taken into
account in accordance with paragraph 7. 6 (b) of EB22, Annex 3.
B.5.
Description of how the anthropogenic emissions of GHG by sources are reduced below
those that would have occurred in the absence of the registered small-scale CDM project activity:
In accordance with Attachment A to Appendix B of 4/CMP.1 Annex II, and Annex 34 of EB35,
additionality of the project activity is demonstrated based on the following barriers:
1. Investment barrier
2. Barrier due to prevailing practice
1. Investment Barrier
An investment analysis is used to demonstrate the investment barrier and prove that the project activity is
not economically or financially feasible in the absence of the revenue from the sale of Certified Emission
Reductions. The likelihood of development of this project, as opposed to the continuation of current
activities is determined by comparing the Project IRR of the project with a suitable benchmark. The
appropriate benchmark value representing the minimum required return to justify the financial viability is
determined according to the Tool for demonstration and assessment of additionality (Ver 06Version
6.0.0, EB 65) and the Guidelines on the assessment of investment analysis, (VerVersion 05, EB 62).
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CDM Executive Board
The selected benchmark is the Weighted Average Cost of Capital as on 03/06/2011, the date the board
decided to pursue the proposed project activity. The use of a Weighted Average Cost of Capital as a
benchmark is appropriate for comparison to a Project IRR as stipulated in the Guidelines on the
Assessment of Investment Analysis which states Local commercial lending rates or weighted average
costs of capital (WACC) are appropriate benchmarks for a project IRR. The Project IRR represents
maximum rate that could be paid for the funds employed without loss to the project, while the Weighted
Average Cost of Capital represents the opportunity cost of the capital.
Parameters used in the financial assessment are not subject to the project developers perception of risk
involved in the project activity but based on standard returns for comparable investments. The benchmark
approach applied is the same as what any third party local or foreign investor in a similar economic
situation in the Host Country would apply as a benchmark for similar renewable energy power plant
investments with a similar risk profile.
The WACC is calculated as follows:
r
= Wd x Kd x (1-T) + We x Ke
Where:
r
= WACC
Wd
= Percentage of debt
We
= Percentage of equity
Kd
= Average cost of debt
Ke
= Average cost of levered equity
T
= Applicable corporate tax rate
A value of 35% equity and 65% debt is applied as the long-termproposed capital structure for this
project. The applicable corporate tax rate in Indonesia is 25% (Indonesia tax guide 20105)
The average lending rate for debt in the year 2010 is sourced from Central Bank of Indonesia6 . The
averageinvestment lending rates by Central Bank of Indonesia for May 2010 till May 20117 averaged at
6.57%. This valueof 12.0% is applied as the average cost of debt (Kd)
A default value for expected Return on Equity of 12.50% for Energy Industries (Group 1, Sectoral Scope
1), in the Host Country, Indonesia is applied as defined in Appendix A of Guidelines on the Assessment
of Investment Analysis. As the proposed project activity is financed by both debt and equity, the levered
Return on Equity given the projects capital structure is calculated according to the following equation: 8
ROEL = ROEU + D/E x (1-T) x (ROEU-RF), and ROEL = Ke
5
Indonesia Tax Guide 2010, pg 10. http://www.deloitte.com/assets/DcomIndonesia/Local%20Assets/Documents/Tax%20guide%202010.pdf

6
Bank Sentral Republik Indonesia (Central Bank Indonesia), Average lending rate for Jan 2010 to June 2011
http://www.bi.go.id/web/en/Moneter/BI+Rate/Data+BI+Rate/
7
Bank Sentral Republik Indonesia (Central Bank Indonesia)

http://www.bi.go.id/web/en/Moneter/BI+Rate/Data+BI+Rate/
8
http://pages.stern.nyu.edu/~igiddy/capstr.htm
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CDM Executive Board
Where:
ROEL = Expected return on equity, due to a leveraged capital structure
ROEU = Expected return on equity, default value of 12.50% from Appendix A of Guidelines on
the Assessment of Investment Analysis
D/E
= 65% / 35%
T
= 25%
RF
= Risk free rate, default value of 3% from Appendix A of Guidelines on the Assessment
of Investment Analysis
ROEL = 25.7%.
The WACC is calculated as:
r
= Wd x Kd x (1-T)
+ We x K e
= 65% x 6.5712.0% x (1-25%) + 35% x 25.7%

= 3.25.9 %
+ 9.0%
= 12.214.9%
The benchmark level for the project activity is determined as 12.214.9%.
Project IRR of the Proposed Project Activity
The project IRR of the proposed project activity without the additional revenue from the sale of CERs is
3.16.9% which is lower than the nominated benchmark.
The key technical and financial parameters used to calculate the project IRR are shown in Table B.2
below.
Table B.2: Key technical and financial parameters used in the calculation of the Project IRR
Description
Electricity Generation
Installed capacity
Units
MW
Generation capacity
MW
Project lifetime
Years
No. working days Days
operating in a year
Daily operating hours
Hours/day
Operating hours in a
year
Annual gross power
generation
Nett power generation
Hours
kWh
kWh
Value
Data Source
7.30 Technical Specification, June 2011, Section

8.2 Steam Turbine Generator, pg 23
6.50 Technical Specification, June 2011, Section
8.2 Steam Turbine Generator, pg 23
20
302 Calculated as : 365 Days - 52 Sundays
11 Public Holidays
24 Calculated conservatively as continuous
operations per day.
7,248 Calculated based on number of working
days per year and total hours per day
52,910,400 Calculated based on Installed capacity of
7.3MW and total operation hours per year
47,112,000 Calculated based on net generation capacity
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CDM Executive Board
Electricity sold to PLN

from KTH
kWh
14,496,000
Electricity sold to KTB

from PLN
Electricity Export Tariff
(KTH sales to PLN)
kWh
32,616,000
IDR/kWh
1,170853
Electricity Import Tariff

(PLN sales to KTH)
IDR/kWh
7361,020
Project Costs
Total Initial Capital
Cost
Refurbishment Cost (at
the end of 10 years)
Operation and
Maintenance Cost
Financing Term
Debt
Equity
USD
Loan Term
Tax
Corporate Income Tax
22,860,000 Refer to "Detailed Project & OM Costs"

tabEstimated
4,500,000 Refer to "Detailed Project & OM Costs"
tabEstimated
2,646,170632, Refer to "Detailed Project & OM Costs"
717 tabEstimated
USD
USD
%
%
Effective Loan Interest

Rate
of 6.5MW and total operational hours per

year.
Calculated based on power generated by the
biomass power plant minus the chip mill
consumption.
Calculated based on 4.5MW usage for plant
(Chip Mill Plant Design)
PT Perusahan Listrik Negara (PT PLN)
meeting minutes with project director date
18/11/11Feed-in Tariff Regulations
(Peraturan Menteri ESDM 31 Tahun 2009)
Request for electrical installation from PT
PLN, dated 04/04/2011 (Doc 1.1 )Tariff
Regulations (Category I-3 Industrial Tariff
Group)
%
Years
%
65%
35%
Bank Sentral Republik Indonesia (Central
Bank Indonesia)
6.57
http://www.bi.go.id/web/en/Moneter/BI+Ra
te/Data+BI+Rate/
10
25.00% Indonesia Tax Guide 2010, pg 10.
http://www.deloitte.com/assets/DcomIndonesia/Local%20Assets/Documents/Tax
%20guide%202010.pdf
Construction and Operation Lifetime Detail

Construction Period
Depreciation
Heavy Equipment and
Mobile
Non-permanent
Construction
Investment Analysis
Period
Months
1218 Technical Specification, June 2011, Chap

15, pg 174, Project master schedule. Board
Approval
Years
8 Indonesian Pocket Tax Book 2011, PWC

pg 41-43
10 Indonesian Pocket Tax Book 2011, PWC
pg 41-43
20 Default Value from Guidelines on the
Assessment of Investment Analysis
Years
Years
18
CDM Executive Board
The project IRR has been calculated based on a full technicalproject lifetime of 20 years. It is assumed
that the fair value of the asset at the end of the 20 years operational life is zero, in accordance with local
accounting regulations as the assets have fully devalued, as the investment period is equal to the technical
lifetime of the equipment. This is in line with the Guidelines on the Assessment of Investment Analysis
(Version 05 ; EB 62) as follows
a) Investment period = expected technical lifetime, therefore no fair value is included. (para 3)
b) The fair value in accordance with local accounting regulations = 0, (para 4)
c) Book value of the asset = 0, and the reasonable expectation of the potential profit or loss on the
realization of the assets = 0. (para 4)"
The resulting project IRR and the benchmark rate is summarised in Table B.3.
.
Table B.3: Summary of Project Financial Analysis
Project IRR
3.16.9%
Value
Benchmark
12.214.9%
1.1. Sensitivity Analysis:

Parameters which have an impact greater than 20% on the total costs or revenues of the project are
included in a sensitivity analysis. The sensitivity analysis examines the potential effects of variables on
the resulting financial indicator in order to evaluate the potential feasibility of the project. The variation
that would need to occur in variables for the project IRR to meet or exceed the benchmark level of
12.214.9% is determined. The results are presented in the table below.
Table B.4: Sensitivity Analysis
Scenario
i) Increase in electricity tariff for power
sold to PLN, or increase in amount
exported to grid
ii) Increase in electricity tariff for power
purchased from PLN (Cost saving from
displacement of electricity imported from
grid)
ii) Increase in net power generation
iii) Decrease in capital costs

iv) Decrease in operational costs
Required change
84.4145.2%
59.454.0%
2544.7%
-4846.0%
-60.379.4%
Change in Value
Increase from 1,170IDR853
IDR/kWh
to 2,158091 IDR/kWh
Increase from 7351,020 IDR/kWh
to 1,172571 IDR/kWh
Increase net power generation from

47.1 GWh to 59.24GWh68.19
GWh
Reduce from USD 22.86 million to
USD 11.8912.35 million
Reduced from USD 2.6563 million
per annum to USD 1.050.54
million per annum
Such variations are unlikely to occur and are discussed in detail below:
19
CDM Executive Board
i. Increase in electricity tariff for power sold to grid

One of the sources of revenue for the project would be excess power sold to grid. The project would
need to achieve a 84.4145% higher tariff than expected (i.e. Increase from 1,170853 IDR/kWh to
2,158091 IDR/kWh) in order to reach the benchmark IRR target of 12.214.9%. The electricity tariff
for power sold to the grid is fixed as per meeting minutes between the Project Director and PT PLN
dated 18/11/2011 at IDR1,170/kWh, and is unlikely to increase by more than 84145%
ii. Increase in electricity tariff for power purchased from PLN (Cost saving from displacement of
electricity imported from grid)
In absence of the project activity, the chipping mill would have purchased power from the grid. As
per Decree No. 70,20109, attachment 4, the power purchased from PLN is fixed for the amount used
for industries and it is unlikely the tariff will increase in excess of 5954% from 735average of 1,020
IDR/kW to 1,172571 IDR/kWh
iii. Increase in electricity generation
The electricity requirement of the chipping mill is approximately 32.6 GWh/year. This is the amount
of grid electricity displaced by the project activity and the remaining 2MW or 14.5GWh is sold to
grid. The annual generation is calculated based upon maximum generation at 7,248 hours per year, or
302 days@24 hours, which also takes into account potential downtimes. To achieve the benchmark
the plant would need to operate 9,11410,488 hours per year, or 380437 days per year, which is not
possible.
iv. Decrease in investment costs
A 4846% reduction in Investment costs not a reasonable variation that can be justified, for a similar
level of output. This is appropriate as all costs have been taken conservatively and represents the
actual and reasonable market rates based on contracts and/or proposals from suppliers.
Therefore, it is unlikely that the total investment cost will be 4846% less than anticipated.
v.
Decrease in operational costs

The Project IRR reached the benchmark with a 60.379% decrease in the operation cost. Annual
operating cost includes property tax/insurance, maintenance and spare parts, electricity, and other
miscellaneous costs. It is highly unlikely that the annual operational cost can be reduced significantly
by more than 6079%
Based on the above investment analysis, it can be concluded that the project activity is not financially
feasible without the revenue from Certified Emission Reductions, and is therefore additional.
Early Consideration of CDM

The Project is not financially attractive and therefore the project developer considered CDM to be a vital
component needed in order to build the project, from an early stage of project planning The project
developer assessed the CDM potential of the project, which led to a quantification of the likely revenues
that could accrue from registration as a CDM project. This led to the signing of the Contract Agreement
9
Regulation of the Ministry and Mineral Resources No 07, Year 2010 on Electricity Tariff prepared by PT PLN
(Persero).
20
CDM Executive Board
for Supply and Erection of KTH Biomass FPP 21/07/2011, hence referred to as the start date of the
project activity in accordance with the CDM Glossary of Terms..
Table B.6: Timeline of the Project
Event
Date
Grid connection master plan for 2010-2019 from the Ministry of

Energy and Natural Resource on availability of grid connected
electricity.
Local Stakeholders Meeting
Environmental Impact Analysis report for cultivation of forestry wood
for own use. (Ref No. 522/323/VII/2010)
Board Meeting for CDM consideration
Board approval to pursue the proposed project activity
Proposal Specification by DOHWA for KTH Biomass FPP (No:DCEKTH-PS-001, Rev.03)
Project Idea Note Completed by SIG Clean Energy Investment Pte
Ltd
Contract Agreement for Supply and Erection of KTH Biomass FPP
(NO.KTH-DEC-002)
Contract Agreement for EPC of Biomass FPP Project
Boiler order confirmation by Sookok Corporation (No.SKE-20110916-001)
PO by DOHWA Engineering to Sookok Corporation for Turbine
Generator (No.KTH-PO-M-002)
Steam Turbine Generator order confirmation by Sookok Corporation
(No.SNME/0926/11)
Agreement between Perenia and NEFCO for development of the
project activity as a CDM project
Application for electrical installation (No.882/04/APRY/2011)
Prior consideration posted on UNFCCC website
Prior consideration posted on Indonesian DNA website
21
08/07/2010
10/08/2010
12/2010
02/05/2011
03/06/2011
06/2011
01/07/2011
21/07/2011
12/09/2011
16/09/2011
20/09/2011
26/09/2011
22/11/2011
24/11/2011
24/11/2011
28/11/2011
CDM Executive Board
B.6.
Emission reductions:
B.6.1. Explanation of methodological choices:
Renewable electricity generation for captive use and mini-grid (as per AMS-I.F.)
The proposed project activity will generate renewable electricity from combustion of biomass residues.
This electricity will displace the import of electricity from the grid. Therefore emission reductions have
been calculated using AMS-I.F. (Version 02; EB 61).
Baseline Emissions
As per AMS-I.F (Version 02; EB 61), the baseline emissions for other system are the product of amount
electricity displaced with the electricity produced by the renewable generating unit and an emission
factor.
BE y EGBL , y * EFCO2 , y
(1)
Where:
BEy
EGBL,y
Baseline emissions in year y (tCO2)

Quantity of net electricity displaced as a result of the implementation of the CDM project
activity in year y (MWh)
Emission factor (tCO2/kWh). Emission factor of a grid shall be calculated as per
procedures provided in AMS-I.D.
EFCO2,y
The baseline emission factor is published by the Ministry of Energy and Mineral Resources10. The Grid
emission factor for South and Central Kalimantan is 1.273 tCO2/MWh and is available on the National
Committee on CDM webpage .
The EFCO2,y is determined ex-ante for the fixed crediting period.
Project Activity Emissions
As per AMS-I.F (Version 02; EB 61) paragraph 20, CO2 emissions from on-site consumption of fossil
fuels due to the project activity shall be calculated using the latest version of the Tool to calculate project
or leakage CO2 emissions from fossil fuel combustion (Ver 02 ; EB41) (Tool).
The CO2 emissions from fossil fuel combustion (in this case, diesel) in process j (in this case diesel
generators) are calculated based on the quantity of fuels combusted and the CO2 emission coefficient of
those fuels, as follows:
PE FC,j,y =
FCi,j,y * COEFi,y
Where:
10
South and Central Kalimantan Grid Emission factor , Ministry of Energy and Mineral Resources, Indonesia.
http://pasarkarbon.dnpi.go.id/web/index.php/komnasmpb/read/19/faktor-emisi-jaringan-listrik-kalimantan-dansulawesi-2009.html
22
CDM Executive Board
PE FC,j,y
Are the CO2 emissions from fossil fuel combustion in process j (back up diesel generator)
during the year y (tCO2/yr);
Is the quantity of fuel type I (Diesel) combusted in process j during the year y (mass or
volume unit/yr);
Is the CO2 emission coefficient of fuel type i in year y (tCO2/mass or volume unit)
Are the fuel types combusted in process j during the year y
FCi,j,y
COEFi,y
i
The Tool provides for two options to calculate the CO2 emission coefficient, COEFi,y:
Option A, where the CO2 emission coefficient, COEFi,y is calculated based on the chemical
composition of fossil fuel type i; or
Option B, where the CO2 emission coefficient, COEFi,y is calculated based on the net calorific
value and CO2 emission factor of the fuel type i.
Option B has been selected as the data required to utilize Option A is not readily available.
The CO2 emission coefficient COEFi,y is thus calculated as follows:
COEFi,y = NCV i,y * EF CO2 i,y
Where:
COEF i,y
NCV i,y
EF CO2,i,y
i
Is the CO2 emission coefficient of fuel type i in year y (tCO2/mass or volume unit)
Is the weighted average net calorific value of the fuel type i in year y (GJ/mass or volume
unit)
Is the weighted average CO2 emission factor of fuel type i in year y (tCO2/GJ)
Are the fuel types combusted in process j during the year y
As combustion of diesel by the back-up generators is expected to be negligible, PEFF,y is assumed to be

zero for the purpose of the ex-ante emission reduction calculations. Actual project emission due to
combustion of diesel will be monitored.
As this project activity is a biomass power plant, the project activities are zero.
PEy = 0
Leakage Emissions
I. Leakage due to transfer of energy generating equipment
As per AMS-I.F (Version 02; EB 61) paragraph 21 leakage is equal to zero unless the energy generating
equipment is transferred from another activity. This is a Greenfield project activity, hence no energy
generating equipments are transferred from another activity.
23
CDM Executive Board
II. Leakage due to use of biomass

Paragraph 17 of Attachment C to Appendix B11 for selected small scale methodologies; General
guidance on leakage in biomass project activities (Version 03; EB 47) states that Competing use of
biomass are not relevant, where the biomass is generated as part of the project activity.
As detailed in Annex 5 of the PDD, the biomass waste used in the power plant will be sourced entirely
from the chipping mill, which belongs to the same project developer. Based on mass balance
calculations, the annual requirement of the biomass power plant is approximately 86,131 tons of bark
waste per year based on the installed capacity of the boiler, operational hours and moisture content of the
bark waste.
The chipping mill has a capacity of processing 1.7 million tonnes of wood per year, and generating 10%
or 171,000 tonnes bark waste per year. The bark waste produced is in excess of the requirements of the
boiler capacity. Also, all of the wood residues are generated from the process, and wood used in the
chipping mill is from the mills own plantation, there is no competing used of the biomass waste. Since
the biomass power plant and the chipping mill are both Greenfield projects, the biomass waste would not
have been used anywhere else.
Therefore, leakage assessment for competing use of biomass is not relevant as the biomass waste used in
this project activity is waste bark residues entirely from the chipping process.
III. Leakage due to transportation of biomass to the plant site
The biomass power plant is located within the chipping mill facility and all the biomass waste used in the
power plant is from the chipping mill. Biomass residues are not transported.
On this basis, LEy = 0
Emission Reductions
Emission reductions from grid connected renewable electricity generation are estimated ex ante using
AMS-I.F (Version 02; EB 61) as follows:
ER,y = BEy - PEy - LEy
Where:
ERy
BEy
PEy
LEy
Emission reduction in year y (tCO2e)

Baseline emissions in year y calculated as per equation 1 (tCO2e)
Project emissions in year y (tCO2e)
Leakage emissions in year y (tCO2e)
11
EB47 Annex 28, Version 03, Indicative Simplified Baseline and Monitoring Methodologies for selected smallscale CDM project activity categories, General Guidance on leakage in biomass project activities.
24
CDM Executive Board
B.6.2. Data and parameters that are available at validation:

Data / Parameter:
Data unit:
Description:
Source of data used:
Value applied:
Justification of the
choice of data or
description of
measurement methods
and procedures
actually applied :
Any comment:
EFCO2,grid,y
tCO2/MWh
Emission factor for PLN grid (South and Central Kalimantan)
National Committee on CDM, Ministry of Energy and Mineral Resources12
1.273
Calculated based on the Tool to calculate the emission factor for an electricity
system
Data / Parameter:
Data unit:
Description:
NCVi,y
Tj/Gg
Weighted average net calorific value of diesel in year y
In accordance with the Tool to calculate project or leakage CO2 emissions from
fossil fuel combustion (Version 02, EB 41) data will be sourced from IPCC
default values as provided in Table 1.2 of Chapter 1 of Vol. 2 (Energy) of the
2006 IPCC Guidelines on National GHG Inventories. The default value at the
upper limit of the uncertainty at a 95% confidence Interval has been applied.
43.3
According to the Tool to calculate project or leakage CO2 emissions from fossil
fuel combustion (Version 02, EB 41).
Value applied:
choice of data or
description of
measurement methods
and procedures
actually applied :
Any comment:
The value applied is fixed ex-ante.
Data / Parameter:
Data unit:
Description:
EFCO2,i,y
tCO2/GJ
Weighted average CO2 emission factor of diesel in year y
In accordance with the Tool to calculate project or leakage CO2 emissions

from fossil fuel combustion (Version 02, EB 41), data will be sourced from the
IPCC default values provided in table 1.4 of Chapter 1 of Vol. 2 (Energy) of the
2006 IPCC Guidelines on National GHG Inventories. The default value at the
upper limit of the uncertainty at a 95% confidence Interval has been applied
0.0748
Value applied:
12
http://pasarkarbon.dnpi.go.id/web/index.php/komnasmpb/read/19/faktor-emisi-jaringan-listrik-kalimantan-dansulawesi-2009.html (as of 2009)
25
CDM Executive Board
choice of data or
description of
measurement methods
and procedures
actually applied :
Any comment:
Data / Parameter:
Data unit:
Description:
Value applied
choice of data or
description of
measurement methods
and procedures actually
applied :
Any comments
B.6.3
According to the Tool to calculate project or leakage CO2 emissions from fossil
fuel combustion (Version 02, EB 41).
Moisture content of the biomass

%
Moisture content of the biomass (wet basis)
Lab test certificate
50
The ex-ante moisture content was determined in the laboratory using a standard
test method.
Ex-ante calculation of emission reductions:
Emission reductions due to displacement of electricity

Emission reductions due to the displacement of electricity are calculated by multiplying the net quantity
of increased electricity generated with biomass residues as a result of the project activity (EGBl,y) with the
CO2 baseline emission factor for the electricity displaced due to the project (EFCO2)
BE y EGBL , y * EFCO2 , y
Where:
BEy
EGBL,y
EFCO2,y
Baseline emissions in year y (tCO2)

Quantity of net electricity displaced as a result of the implementation of the CDM project
activity in year y (MWh)
Emission factor (tCO2/kWh). Emission factor of a grid shall be calculated as per
procedures provided in AMS-I.D.
Table B.7: Descriptions of parameters
BEy = EGBL,y * EFCO2

Parameter
BECO2,y
Value
59,974
Unit
tCO2/year
EGBL,y
47,122
MWh/year
Source
Baseline emissions in year y
Quantity of net electricity produced as a result of the
implementation of the project activity in year y. Based on 6.5
MW net power generation capacity of the biomass fired power
plant.
26
CDM Executive Board
EFCO2,grid,y13
1.273
tCO2/MWh
http://pasarkarbon.dnpi.go.id/web/index.php/komnasmpb/read/
19/faktor-emisi-jaringan-listrik-kalimantan-dan-sulawesi2009.html (as of 2009)
Project emissions
As outlined in Section B.6.1, the project activity, PEy is equal to zero.
Leakage emissions
As outlined in Section B.6.1, the project activity, LEy is equal to zero.
Emission reductions
Total emission reductions from the proposed project activity are estimated ex ante using AMS-I.F.
(Version 02; EB61) as follows:
ERy, = BEy - PEy - LEy
Parameter
ERy
BEy
PEy
LEy
13
Value
Description
59,974 Emission reduction in year y (tCO2e)
59,974 Baseline emissions in year y calculated
as per equation 1 (tCO2e)
0 Project emissions in year y (tCO2e)
0 Leakage emissions in year y (tCO2e)
Grid Emission Factor (EFCO2,grid,y) for the project is determined ex-ante
27
Source
Calculated
Calculated
Calculated
Calculated
CDM Executive Board
B.6.4
Summary of the ex-ante estimation of emission reductions:

Estimation of
project activity
emissions (tonnes
of CO2 e)
Years
Estimation of
baseline emissions
(tonnes of CO2e)
Estimation
of leakage
(tonnes of
CO2 e)
Estimation of
emission
reductions
(tonnes of CO2
e)
59,974
59,974
59,974
59,974
59,974
59,974
59,974
59,974
59,974
59,974
*2013
0
59,974
0
2014
0
59,974
0
2015
0
59,974
0
2016
0
59,974
0
2017
0
59,974
0
2018
0
59,974
0
2019
0
59,974
0
2020
0
59,974
0
2021
0
59,974
0
2022
0
59,974
0
Total (tonnes of
0
599,740
0
599,740
CO2)
*The 1st year of crediting is the date of commissioning on 01/06/2013 or date of registration, whichever
is later.
B.7
Application of a monitoring methodology and description of the monitoring plan:

B.7.1
Data and parameters monitored:
Data / Parameter:
Data unit:
Description:
Source of data to be
used:
Value of data applied
Description of
measurement methods
and procedures to be
applied:
QA/QC procedures to
be applied:
Any comment:
EGBL,y
MWh/year
Quantity of net electricity displaced in year y
Metered on site
Data / Parameter:
Data unit:
Description:
used:
Qbiomass,y
Ton/y
Quantity of biomass consumed in year y
47.1
Measured continuously by on-site electricity meter(s). Data will be recorded
continuously and aggregated monthly.
The meters will undergo maintenance/calibration as per manufacturers
specification, but at least once every three years.
Plant records
86,97686,131 (As received basis); 42,889 (Air dry basis)
28
CDM Executive Board
Description of
measurement methods
applied:
Mass based measurements will be adopted. Adjustments would be made for

Moisture content in order to determine the quantity of dry biomass. The
quantity of biomass shall be measured in batches for the bark waste.
If other type of biomass fuel besides bark waste is consumed, each shall be
monitored separately. Amount of biomass consumed shall be recorded monthly.
QA/QC procedures to
be applied:
The measurements will be cross checked with an annual energy balance that is
based on purchased quantities like sales receipts and stock changes. Further
checks will be conducted on the consistency of measurements ex post with
annual data on energy generation, fossil fuels and biomass used and the
efficiency of energy generation as determined ex ante.
Any comment:
The data will archived for the entire crediting period and 2 years post crediting
period.
Data / Parameter:
Data unit:
Description:
NCVbiomass,k,y
Kcal/kg
Net calorific value of bark waste.
used:
Description of
measurement methods
applied:
QA/QC procedures to
be applied:
Any comment:
Lab test certificate

2,184 (50% as received) Dry 4386 (Average of Acacia and Ecly) 2,184
Measurement of the NCV is based on dry biomass. The data will be measured
in laboratories according to relevant national/international standards.
Measurement shall be taken quarterly, taking at least three samples for each
measurement. The average value in the first year, shall be used for the rest of
the crediting period.
The consistency of the measurements shall be checked by comparing the
measurement results with relevant data sources (e.g. values in the literature,
values used in the national GHG inventory) and default values by the IPCC. If
the measurement results will differ significantly from previous measurements
or other relevant data sources, additional measurements shall be conducted.
If other types of biomass are used, they would be monitored separately
NCV is 2,184 (dry basis) and 4,386 Kcal/kg (Wet basis)
Data / Parameter:
Data unit:
Description:
FCi,j,y
m3/yr
Quantity of diesel combusted in diesel generators during the year y.
used:
Value of data:
Description of
measurement methods
Onsite measurements
0
Diesel consumption will be measured using a flow meter or ruler gauge
attached to the diesel storage tank in order to determine the volume of diesel
29
CDM Executive Board
applied:
QA/QC procedures to
be applied:
Any comment:
B.7.2
consumed.
The flow meter or ruler gauge will be calibrated at least once every three years
and all measurements will be recorded and retained. The calibrations will be
undertaken at standard operating conditions.
Metered fuel consumption quantities will be cross-checked with available
purchase invoices from the financial records, as described in section B.7.2.
Diesel consumption is expected to be negligible as the generators are only used
during emergencies and start up.
Description of the monitoring plan:
The purpose of the monitoring plan is to ensure that the required data is monitored, recorded and stored
appropriately to enable the calculation of the emission reductions achieved by the proposed project
activity. P.T. Korintiga Hutani is responsible for the implementation of the monitoring plan.
Project Management Team
(Project Director)
CDM Management Team

(CDM Project Manager)
Operations and Maintenance

Team
(Shift Supervisor)
Table B.8: CDM monitoring responsibilities

Position
Project
Director
Outline of Responsibilities
CDM
Project
manager
Overall management of the CDM monitoring and to achieve both

the commercial goal and environmental goal.
Ensures ongoing compliance with the CDM monitoring plan.
Review the monitoring report prepared by the CDM Project
Manager for Management discussion and final approval.
Provides support on data management and assessing any
discrepancies or non-conformance.
Setting up Standard Operating Procedure and training plans for
Operations and maintenance Team.
Responsible for the completeness and reliability of the data.
Responsible for carrying out meter calibration.
30
Reporting
Reports to Project
management
team and the
Board
of
Directors for P.T.
Korintiga Hutani
Reports to the
Project Director
CDM Executive Board
Shift
Supervisor
(Shift Based)
Reviews and approves quarterly Metered Net Electricity

Generation reports.
Calculates Emission Reductions.
Prepares the CDM Monitoring Report.
Operation of the overall power plant
Reports to the
Conducting sampling and checking test results
CDM
Project
Responsible for monitoring measurements, and ensuring that Manager
meters are functioning correctly.
Supervises meter calibration requirements and preparation of the
Meter Calibration Report.
Oversees the collection, recording and storage of data.
Proposed Monitoring Provisions

Training
All individuals that are to be involved in the CDM monitoring process will receive appropriate training to
be conducted under the direction of P.T. Korintiga Hutani. The training will provide an overview of the
CDM and will cover all elements of the monitoring plan in detail. A copy of the project monitoring plan
will be made accessible to all training participants.
A record of all training undertaken will be included within the CDM Monitoring Report for each
monitoring period.
Quality Assurance and Quality Control

The CDM Management team mentioned above will ensure proper and timely calibration as scheduled for
applicable monitoring instrumentation in accordance with the manufacturers specification of system,
data acquisition and storage. The responsible person will also undertake regular follow ups to ensure data
measured is consistent.
Emergency Preparedness
The project activity is not expected to result in any emergency that can result in substantial emissions.
The proposed project activity will develop the necessary provisions for emergency preparedness to deal
with any unforeseen events such as fire or an electrical blackout.
An emergency management procedure will be developed that will outlines steps to be followed to
quantify emission reductions in the event of equipment or meter failures.
Uncertainty in Data and Data Management
Some uncertainties may result due to malfunction of meters, calibration issues and wrong data collection
(gaps in manual log sheets, human errors by plant operators, electronic recording system failure, etc.).
The operator is expected to put best efforts to prevent such errors, however regular internal checks shall
rectify any such uncertainty in the monitored data.
31
CDM Executive Board
In the situation where an emergency causes unintended emissions, attempts will be to quantify these
emissions and summarized in a discrete section of the Monitoring Report.
The management of data records shall be kept both in soft copy and hard copy format with proper archive
system by the CDM management team. All data should be electronically archived for a period of two
years from the end of the crediting period.
B.8
Date of completion of the application of the baseline and monitoring methodology and the
name of the responsible person(s)/entity(ies)
Date of completion of the baseline development: 01/02/2012
Company Name:
Email Address:
Contact Address
Head Office:
Telephone Number:
Fax Number:
Perenia Pty Ltd

cdm@pereniacarbon.com
Level 7, 111 Pacific Highway
North Sydney, NSW 2060
Australia
+61 2 9926 1700
+61 2 9926 1799
Perenia Pty Ltd is not a project participant.
32
CDM Executive Board
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:
21/07/2011
(Signing of Contract Agreement for Supply and Erection of KTH Biomass FPP (NO.KTH-DEC-002)
C.1.2. Expected operational lifetime of the project activity:
20 years 0 month14
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:
C.2.1.2.
Length of the first crediting period:
Not applicable
Not applicable
C.2.2. Fixed crediting period:
C.2.2.1.
Starting date:
01/06/2013 or the date of registration, whichever occurs later.

C.2.2.2.
Length:
10 years 0 month
14
http://www.rcogenasia.com/other-resources/frequently-asked-questions/
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SECTION D. Environmental impacts

D.1.
If required by the host Party, documentation on the analysis of the environmental impacts
of the project activity:
The project activity has already completed the AMDAL in December 2010 which was consequently
approved by the Provincial Environmental Impact Management Agency.
The biomass waste used in the project activity is from the chipping mill. Feed material for the chipping
mill is from the plantation belonging to the same project owner. The plantation is also under a process of
certification for the Global Forest and Trade scheme under WWF. The appraisal was completed in
October 2011 and the draft report was made available. The certification is under the Korindo Group
company PT Korintiga Hutani. Environmental impacts possibly caused by the project activity are
analyzed as follows:
1.
Impact on Micro Climate

During the construction process, land clearing will increase the atmospheric temperature and
decrease air humidity. This is caused by the opening of land for the chipping mill. The impact
occurred due to project activity is very small and insignificant, and would have occurred anyway due
to construction of the chipping mill.
2.
Ambient Air Impact

Operation of power plant with biomass-fired boiler could potentially have an impact on air quality.
Combustion of biomass in power plant will generate waste-containing gases such as CO, SO2, NO2,
Cl2 and elevate the level of dust in ambient air. Gas emissions from the operation of power plant flue
gases contain particulates and scatter in the air moving freely in all directions thus expanding the
impact outside of the project boundary. Waste and flue gas dust concentration also fluctuates
according to frequency of activity, climatic conditions, the direction and speed of wind, and during
transitions between night and day.
To minimize levels of contaminants that degrade the quality of air, PT.KH may apply the following
approaches; using components for the power plant capable of not exceeding the quality standards
emission, ensuring that the emissions dust collector is equipped with emission control and safety
devices, installation of gauges on the stack emissions monitoring to ensure accuracy, and planting of
trees and shrubs.
3.
Impact on Water Quality
4.
The domestic wastewater will be treated by using aerobic pond before being discharged to river. PT.
KTH will do the recycle of water cooling. Water then will be used again for cooling process.
Therefore the impact on water usage of the project activity is small.
\
Impact on Noise
There will be an increase in noise due to the operation of the power plant. Operation of power plant
with biomass-fired boiler has the potential to cause impacts to noise caused by generators. The range
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of noise levels that occur during these activities will decrease the quality of the environment. High
noise levels as a result of the project activity engine generators and wood processing machines may
cause some impact on recipients, such as hearing loss and difficulty sleeping.
However, the noise arising as a result of the activity will only be potentially felt by the project
workers. Outside the project area little disruption is expected due to noise because the settler
populations are quite far from the noise source. Disruption felt by workers due to noise can be easily
resolved. This noise can be reduced by using protective equipment (ear plugs) for workers, periodical
maintenance of the equipment, machineries, tools and other components of the power plant in order
to maintain low noise levels, planting trees around the power plant site and installing silencers on the
building of the power plant.
5.
Impact on Public Health

Once the power plant is operational, negative impacts on air quality if not managed properly can lead
to health problems, in particular will increase the number of patients with respiratory disorders which
is the most common health problem suffered by the village community in Keluharan Kumai Hulu
and Desa Mulya Jadi. This condition if not managed properly may lower the quality of public health.
The same measures for addressing air quality can be easily implemented by PT. KH, hence minimal
impact towards public health is expected.
The project activity is in compliance to applicable regulations and, as a small power plant, negative
environmental impacts are expected to be minimal.
D.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:
Environmental impacts are not considered significant by the project participants or the Host Party.
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SECTION E. Stakeholders comments

E.1.
Brief description how comments by local stakeholders have been invited and compiled:
An AMDALA public consultation forum15 was conducted by PT. Korintiga Hutani on 10th August 2010,
in Balai Kelurahan Kumai Hulu Kecamatan Kumai Kabupaten Kotawaringin Barat. The project developer
sent invitation letters to the various identified stakeholders and the public were informed of the forum via
notices in the local newspapers. Finally, in order to remind the local residents on the forum, banners were
displayed at the local settlements.
The meeting extensively discussed the development of the biomass power plant and use of biomass bark
residue from the chipping mill , forest cultivation, and potential use of energy generated. After the forum,
an advert was placed in the local newspapers on 17th August 201016, announcing that the AMDAL for the
project was open for public comment for a limited time.
Forty four (44) people attended the public consultation forum. The participants were invited to comment
on the project during this event.
E.2.
Summary of the comments received:
Overall, no negative comments or concerns were raised during the stakeholder meeting. Most of the
questions raised were concerning land clearance and overall impact on jobs and global warming. The
following summarises the comments received during the stakeholder meeting :
E.3.
The community welcomed this project in their area and hope it will help to improve job
opportunities and standard of living in the area.
Will the land clearance for building and operation of the mill and power plant harm the
environment / cause water pollution. Are there any guidelines set up to control this?
Report on how due account was taken of any comments received:
The management of PT Korintinga Hutani responded to the comments by assuring that job position for
the locals will be created to run the day to day operations of the mill and biomass power plants. Other
opportunities may exist in setting up small provision shops, transport, food outlets for the employees
located at the site.
PT Kotintiga Hutani is required to follow the environmental guidelines set up by the Environmental
Monitoring Plan and assures the stakeholders that the guidelines are followed during the construction and
operation phase of the mill and biomass plant.
No other comments were received after the stakeholder meetings that required further actions.
15
Stakeholder meeting documents and attendance sheet (Doc 8.7 Meeting for initial environmental analysis Dec
2010)
16
Advert highlighting EIA open for public comments
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Annex 1
CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY
Organization:
Street/P.O.Box:
Building:
City:
State/Region:
Postfix/ZIP:
Country:
Telephone:
FAX:
E-Mail:
URL:
Represented by:
Title:
Salutation:
Last Name:
Middle Name:
First Name:
Department:
Mobile:
Direct FAX:
Direct tel:
Personal E-Mail:
Organization:
Street/P.O.Box:
Building:
City:
State/Region:
Postfix/ZIP:
Country:
Telephone:
FAX:
E-Mail:
URL:
Represented by:
Title:
Salutation:
Last Name:
Middle Name:
First Name:
Department:
Mobile:
PT. Korintiga Hutani

Wisma Korindo, Jl. MT. Haryono Kav. 62,
Wisma Korindo
Jakarta
12780
Indonesia
+62 811 962 8927
+62 21 7976388
kwangyul@kwangyul.com or kwangyul@korindo.co.id
www.korindo.co.id
Senior Advisor
Mr.
Peck
Kwangyul
Management
+62 811 962 8927
+60 84 313328+62 21 7976388
+60 84 320200+62 21 7975959 ext 334
kwangyul@kwangyul.com
Nordic Environment Finance Corporation (NEFCO in its capacity as Fund
Manager to the NEFCO Carbon Fund (NeCF)
Fabianinkatu 34, P.O. Box 249, Fl-00171
-34
Helsinki
FI-00171
Finland
+358(0)10618003 10 618 003
+358(0)9630976 9 630 976
www.nefco.org/cff
Ash Sharma
Vice President, Head, Carbon Finance and Funds Unit .
Mr.
Sharma
Ash
+358 10 618 644
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CDM Executive Board
Direct FAX:
Direct tel:
Personal E-Mail:
+358 9 630 976

-+ 358 10 618 644
ash.sharma@nefco.fi
38
CDM Executive Board
Annex 2
INFORMATION REGARDING PUBLIC FUNDING
The financial plan for the project does not involve public funding from annex 1 countries
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Annex 3
BASELINE INFORMATION
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Annex 4
MONITORING INFORMATION
Please refer to section B.7
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Annex 5
General Guidance on leakage in biomass project activities.
Parameter
Boiler Output Steam
Energy
Boiler Steam Flow
Feedwater Energy
Boiler efficiency
Energy required at boiler
input from biomass
waste
Fuel Lower Heating
Value as received
Energy Production Calculation

Main Assumption
Units
Value
Source
kcal/kg
788.6
Heat Balance Diagram, Section 7.1, Technical
Specification
t/h
34.17
Specification
kcal/kg
135.4
Specification
%
86%
Section 8.1 ,Technical Specification , June
2011, (DCE_KTH_PS_001)
kcal/hr
25,953,307
Calculated
kcal/kg
2,184
Biomass waste
energyrequired at boiler
input (as received basis)
Power output
kg/hr
11,883
MW
7.3
Mill operational hours

per year
Biomass waste per
annum, dryas receive
(wet) basis
Biomass waste per
annum, wetair dry basis
Specific Fuel
Consumption
Electrical Efficiency
hr/yr
7,248
Ton/yr
86,131
Ton/yr
42,889
Ton/MWh
1.63
24.2%
Based on 50% Moisture content - as received

(Section 8.1, Boiler performance data,
Technical Specification)
Calculated

Specification
Calculated based on total mill operational
hours per annum
Calculated based on dryas received wood bark
waste and 2,184 kcal/kg as received LHV
Calculated based on 50% moisture air dry
basis
Calculated
Calculated
Theoretical Mass balance of biomass availability

Main Assumption
Units
Value
Source
BDT / T/hr
236
As Per Project Design
Parameter
Debarking Process
Capacity
Total wood used per year BDTT/yr
Bark Shavings from
Debarking Process
BDT / T/hr
1,710,528
24
42
Calculated based on mill operational hours

per year
Based on chip mill mass balance diagram
(10% of total wood processed.17%)
CDM Executive Board
Total Bark residue

BDTT/yr
available
Total bark waste required BDTT/yr
in boiler as recieved
basis
Excess bark waste
BDTT/yr
173,952
86,131
87,821
Based on mill operating hours per year and

50% moisture as received
Based on boiler capacity, mill operation
hours, and 50% moisture as received
Calculated
http://www.globalwood.org/tech/tech_wood_weights.htm
Unit conversion
1 GMT (Green Matric
Tonne) =
1.3262 m3 (Wood residues for chips, shavings, sawdust and bark)
1 BDT (Bone Dry
Tonne) =
2.6525 m3 (Wood residues for chips, shavings, sawdust and bark)
43

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PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) - Version 03

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CLEAN DEVELOPMENT MECHANISM

General description of the small scale project activity

Application of a baseline and monitoring methodology

Duration of the project activity / crediting period

PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) - Version 03

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Revision history of this document

Description and reason of revision

The Board agreed to revise the CDM SSC PDD to reflect

PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) - Version 03

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SECTION A. General description of small-scale project activity

Title of the small-scale project activity:

Korindo Biomass Power Plant, Indonesia

Description of the small-scale project activity:

Chip Mill Plant Mass balance and power requirement

PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) - Version 03

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Environment and Natural Resources

Economic and social development

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Name of Party involved (*)

Private and/or public entity(ies)

Kindly indicate if the Party

PT. Korintiga Hutani

The Nordic Environment Finance

PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) - Version 03

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Technical description of the small-scale project activity:

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Figure 1: Location of project site

Figure A.1: Project location

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Renewable Energy Projects

(2) Technology of the small-scale project activity

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Table A.1: Summary of Equipments3

Estimated amount of emission reductions over the chosen crediting period:

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With the same project participants;

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SECTION B. Application of a baseline and monitoring methodology

Justification of the choice of the project category:

Project activities supplying electricity to a

The proposed project activity displaces grid

PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) - Version 03

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The project activity is implemented in an

This methodology is applicable for project

The project complies with option (a); installation

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In the case of retrofit or replacement, to The project is not a retrofit or replacement

If electricity and/or steam/heat produced by

The proposed project activity does not involve

The electricity generated from the project activity