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Main reasons for delay and rejection of CDM projects during registration and issuance

Workshop on Enhancing the Regional Distribution of CDM Projects in Asia and the Pacific
Kathmandu, Nepal. 7 September 2011

Mr. Miguel Naranjo Firstname Lastname, Job Title UNFCCC secretariat, programme SDM/ OSD

REGISTRATION

Introduction
Previous Completeness Checks are now separated in two stages:

Completeness Check: completeness and consistency of the documents


Information and Reporting Check: compliance with the VVM and EB48 Annex 60 Guidelines on completeness check of requests for registration

7 days

23 days

14 days

14 days

SN preparation

Period to Request for Review

CC finalized
Commencement

I&R Check finalized

A: Automatic Registration C: Request for Review

COMPLETENESS CHECK

Source: Information note on the results of the completeness checks (1 February 2011 30 April 2011)

Main issues raised during CC


Issues related to Modalities of Communication: Example 1: Two focal points are appointed with the same sole role. Example 2: No party is mentioned in the Annex 1 of the MoC.

Use of an expired version of the methodology (please refer to paragraph 14 of EB48


Annex 60 for extensions of the validity period of the methodology) Replicable spreadsheets:

Example 1: Existence of debugs or circular references.


Example 2: Sensitivity analysis is not replicable. Example 3: Some rows/cells in the spreadsheets provided do not contain formulas (only typed figures), most of the time in the calculation of the income tax

Inconsistencies (mainly related to PPs and Parties) Documents submitted without any translation Bundling form not provided

INFORMATION AND REPORTING CHECK

Source: Information note on the results of the completeness checks (24 October 2010 31 January 2011)

Main issues raised during I&R Check

Investment analysis - Validation of input values: Example 1: No explanation on the application of annual escalation to O&M cost and not to other input values.

Example 2: No validation of each component of the project and/or O&M costs.


Example 3: Validation on why no salvage value was considered is missing. Example 4: No justification of investment breakdown and electricity schedule is provided.

Common practice analysis Example 1: The list of the similar activities considered (including their details) is not provided in the PDD.

Main issues raised during I&R Check

Baseline: Example 1: The Validation Report does not validate the baseline assumptions or does not contain the values of such parameters. Example 2: Evidence of the assessment of the elimination of the alternatives to the baseline scenario is not provided. Example 3: Assessment on the increase in capacity for Small Scale projects is not provided. Applicability condition of the methodology Monitoring Example 1: Monitoring parameters are not in line with the methodology or tools.

Issues related to closure of CARs

REVIEW STAGE

Registration 19 (9%) 1 (0%)


Additionality

55 (25%)

Application of baseline methodology Application of the monitoring methodology Project description

142 (66%)

Source: Appendix 2 (Annex 2 to Annotations to the agenda of EB) Monitoring period from 1 January to 20 June 2010

Main issues raised during the Review stage


Additionality

7 (5%) 11 (8%)

10 (7%)

Prior consideration Investment analysis Barrier analysis Common practice analysis

114 (80%)

Application of baseline methodology


8 (15%) 4 (7%) Project boundary

Baseline identification 20 (36%)

Algorithms and/or formulae to determine emission reductions Compliance with applicability conditions

23 (42%)

Main issues raised during the Review stage


Investment analysis: Example 1: Simple cost analysis is not applicable as there is evidence that the project activity generate some revenues. Example 2: Suitability of input values at the time of investment decision not validated.

Example 3: Input values not cross-checked against independent sources


(contracts/quotations/purchase orders/price indexes/appropriate literature)

Barrier analysis (project-specific)

Example 1 - Investment barrier: The financial situation of the PP and its difficulty to
receive loan is not confirmed. Example 2 - Technological barrier : Training cost (or other resources) have a direct impact on the financial returns of the project activity and were not assessed by investment

analysis.
Example 3 - Prevailing practice: No information was provided on whether there are industries with similar or comparable technologies to the project activity that have installed similar technologies in the country/region and how the application of the technology differs

between such industries and the projects sector.

Main issues raised during the Review stage


Continuing and real actions: Example 1: The type of evidence used to justify the gap between the project starting date and the commencement of validation is not appropriate or has not been justified (i.e.

termination contracts, minutes of meetings).


Example 2: The specific CDM deliverables and/or actions carried out under the different consultancy agreements is not explained (in cases where more than one consultant is involved) Baseline: Example 1: The baseline scenario does not take into account the projected increase in (processing) capacity in line with General Guidance for SSC methodologies

Example 2 Investment comparison: Different construction period, investment


breakdown and schedule and amount of electricity generation is considered for the baseline and project scenarios but they are not justified.

ISSUANCE

COMPLETENESS CHECK

Projects Rejected at CC (step 1) = 40/429 = 9%

2% 17% 65% 15%

Source: Information note on the results of the completeness checks (1 February 2011 30 April 2011) A total of 429 submissions for Issuance were made.

Main issues raised during CC


Inconsistency of Information: The documents submitted are not internally and mutually consistent (EB48 - Annex 68 paragraph 7(b)). Example 1: In the monitoring line diagram for Line II (page 13 of the monitoring report), the

tag number for the monitoring equipment of "P_HNO3" is stated as 322-FT-2-513 whereas
page 43 of the monitoring report states 322-FT-512 inconsistency. Example 3: The deviation number I-DEV0XXX stated by the DOE in page 5 of verification report refers to another project activity.

Example 4: The default value has only been applied from 01/02/2008 till 01/09/2008 for Site 2
in the Excel spreadsheet whilst the monitoring report Table B5 states that the default value has been applied from 01/02/2008 till 20/10/2008. Example 5: The verification report states that the calorific value of Diesel is monitored from

the latest CEA CDM data base and is in line with the registered PDD while the monitoring
report states that the value is taken from IPCC as per registered PDD. The signed form contains inconsistent number of CERs as compared to the verified value.

Main issues raised during CC


Other issues: Some spreadsheets are missing Inconsistencies between diagrams and monitoring instruments

Different grid name or grid conection in different documents


Different grid emission factor in different documents

INFORMATION AND REPORTING CHECK

Projects Rejected at I&RC (step 2) = 39/429 =

15%

24% 27% 10%

9%

5% 5%

Source: Information note on the results of the completeness checks (1 February 2011 30 April 2011)
A total of 429 submissions for Issuance were made.

Main issues raised during the I&RC (step 2)


Calibration information not provided: The verification report does not contain information on how the DOE verified the calibration of monitored equipments with the calibration requirements.

Calibration Delay:
The verification report does not contain an assessment on how the DOE verified the calibration delay of monitoring equipments against the requirements of EB52, Annex 6 The information on calibration of monitoring instruments reported is not in accordance with

that specified by the monitoring methodology/ monitoring plan.


Calibration Frequency Requirement: The verification report does not contain information on how the DOE verified the calibration

frequency of monitored equipments with the calibration requirements.


Calibration Information not provided and no explanation for increase of ERs: The monitoring report and excel file provided do not contain clear information on monitoring

instruments and related calibration.

Main issues raised during the I&RC (step 2)


Incomplete Monitored Parameters: The verification report does not list each parameter required by the monitoring plan and clearly state how the DOE verified the information flow (from data generation,

aggregation, to recording, calculation and reporting) for these parameters including the
values in the monitoring reports (VVM 1.2. para 206). The MR does not contain all parameters required to be monitored as per the monitoring plan/applied methodology (EB48 - Annex 68 paragraph 10 (a) (iii)). Compliance with the monitoring plan / revised monitoring plan: The VR does not have a statement on whether the monitoring has been carried out in accordance with registered or the accepted revised monitoring plan (VVM v.1.2 para 203). Cross-checking with other sources: The Verification Report does not indicate how the information provided in the monitoring report has been cross-checked with other sources (VVM v.1.2 para 208 (b)).

Main issues raised during the I&RC (step 2)


Inappropriate Calculation of ERs: The monitoring report does not contain the formulae for Baseline Emissions and/or Project Emissions and/or emission reductions calculations, including reference to formulae and

methods used.
The emission reductions spreadsheet does not contain the formulae of calculation.

No sufficient explanation for Increase of ER:

The MR does not contain an explanation of any significant increase of actual emission reduction
claimed in the monitoring period in relation to the estimated in the registered PD.

Review Stage: Issuance


Reasons for Review of Request for Issuance

Sourced from Appendix 2 (Annex 2 to Annotations to the agenda of EB61) Monitoring period from 1 Jan- 30 June 2010

Main issues raised during the Review stage


Implementation of Project Activity:

MR & VR does not mention reasons for higher PLF than the one in the registered PDD The DOE has not requested either approval or notification of changes from project design, if there is a permanent change in the plant load factor from the PDD.

Turbines model number and capacity are different from those described in the registered

PDD.

Main issues raised during the Review stage


Assessment of data and calculation of greenhouse gas emission reductions: The DOE to clarify how it verified that there were no leakage emissions due to electricity consumption from Site A considering that the MR indicated that this site was in operation during the monitoring period even though there was no gas generation. How DOE checked that the calibration of the 7 individual meters was done following the Guidance for SSC project activities.

The DOE shall clarify how it confirmed that the guidelines for small scale project activities
which require recalibration of meters at least once in three years was complied with considering that after the initial calibration of the meters.

Incorrect IPCC values.

Inconsistent input values.

Main issues raised during the Review stage


Compliance of the monitoring plan with the monitoring methodology:
The DOE is required to clarify how it verified that the calibration of all measurement instruments, except for the HFC23 flow-meter, was done according with the requirements from the methodology (i.e., monthly frequency). The DOE is required to clarify how it verified the reported values of electricity consumed from the grid by the clinker production and by the blended cement grinding units as the existing electricity-meter, located in the main feeder, monitors the total electricity imported. The methodology requires the measurement of the volume of auxiliary fuel Qi used by the project activity to determine project emissions. Since the project emissions had been calculated in respect of the steam supplied to de-oxygenation process rather than measured, the DOE is requested to clarify: 1) how it verified that the monitoring of project emissions is in accordance with the methodology and, 2) if they were not monitored in accordance with the methodology why the DOE did not submit a request for deviation.

THANK YOU
Regional Meeting of the DNA Forum for Asia and the Pacific
Kathmandu, Nepal. 5 September 2011

Mr. Miguel Naranjo


UNFCCC secretariat SDM programme