Programmatic CDM Feasibility Study for Electrical Power Saving at Locomotive Factories in China

Global Environment Centre Foundation(GEC)

Reports of CDM/JI Feasibility Studies

Title of Feasibility Study (FS)Programmatic CDM Feasibility Study for Electrical Power Saving at Locomotive Factories in China
FYFY 2009
Main Implementing EntityMitsubishi Research Institute, Inc.
FS Partner(s)-
Location of Project ActivityChina
Summary of FS ReportSummary(PDF 118KB)
Description of Project ActivityBased on the "CDM Feasibility Study for Waste Electricity Utilization at a Locomotive Plant in China" undertaken in FY2008, this project conducts programmatic CDM for locomotive manufacturing and repairing plants in 5 places in China. At the moment, the electricity generated in the performance test before shipping diesel generating unit is lost by water rheostat. By this project, the electricity is recovered by the inverter installed with Japanese technological guidance and the recovered electricity is utilized in the factories. It replaces a part of the electricity purchased from the network. It is estimated that 14,215tCO2 average per year and 142,147tCO2/year in 10 years from 2011 to 2020 will be reduced in the 5 places in total. For some factories, waste heat and waste gas generated in testing diesel generating unit are also able to be utilized, so we will consider registering it as CDM as well. While each factory practices individual CDM program activities (CPAs) under programmatic CDM, Energy Service Company (ESCO) will be a Coordinating/Managing Entity of Program of Activities (PoA) and will conduct the project together with the factories. The facilities will be installed at the factories around June-December in 2010.
Targeted GHGCO2
Category of Project ActivityOthers (Energy Efficiency)
Duration of Project Activity/ Crediting Period1June 2010 - 31 May 2030/ 1January 2011 - 31December 2020
Methodology to be appliedRevised ACM0012
Baseline ScenarioEach locomotive factory and the grid from which each locomotive factory purchases electricity will be the project boundary.
It is highly probable that the baseline scenario without this project will be the current system (waste electricity is lost by water rheostat). Use of electricity other than from the grid is impossible at baseline. In China, there is no similar project recovering and using waste electricity in locomotive factories. This PoA is the first challenge. The senior companies of the factories are Chinese state enterprises. So, they are given the energy saving target (The energy consumption rate should be reduced by 20% by 2010 below 2005 levels) from State-owned Assets Supervision and Administration Commission of the State Council, but there is no benchmark for specific machines. Therefore, it is voluntary to conduct the project. The factories have poor knowledge and experiences of energy saving. They are inactive to introduce because the IRR of the system for recovering waste electricity is low.
Demonstration of AdditionalityThe additionality of the project is proved by "Tool for the demonstration and assessment of additionality". Basically, it is proved by the investment analysis.
The targets of this research are the 5 factories. The profitability of a representative factory is calculated as a sample here. The investment means the system installation cost, the income is the sales of recovered electricity (from each factory to ESCO) and there will be other maintenance fee every year. The calculation base and cash flow are shown on the back page of this summary. The IRR of the factory (for 10 years) is calculated as below.
  • Without credit 8.0%
  • With credit 11.2%
Form now on, we will investigate the details of the profitability of the 5 factories including the main factory, and will prove that additionality of the CDM can be guaranteed at all the factories.
Estimation of GHG Emission Reductions14,215tCO2/year
Monitoring PlanAccording to ACM0012, direct measure of the amount of waste energy is necessary. It is planned to introduce a sensor for measuring.
Environmental Impact AnalysisThis project sets up the energy saving system in the factories and it is similar with the third category of Chinese environmental impact assessment law. When it fits in the third category, the governmental approval is not necessary, but we need to report according to the environmental effect registration table. It is thought that the negative environmental impact by this project does not exist or is avoidable.
Project FeasibilityA Japanese company and a Chinese company have jointly established a new company. It is a company established for promoting energy saving operation, so they share mutual interest with factories. The targeted factories which carry on the individual CDM program activities (CPAs) based on the programmatic CDM have agreed on conducting CDM practices.
Pollutants Emissions ReductionRegarding SO2 and NOx, together with CO2, baseline and project emission was estimated and the annual emission reduction by conducting the project will be calculated. Baseline emission was calculated based on the measured data of waste electricity at the factories and the fuel-specific grid emission factors. The project emission was set to be zero because waste electricity is utilized. Thus, it gives the reduction of 487tSO2 and 175tNOX in 10 years.
Contribution to Sustainable Development in Host CountryThe project contributes to the improvement of energy security in China because it enables to make effective use of energy. In addition, the amount of coal consumption is reduced as coal fired power generation of the network is replaced. So, it will result in reducing CO2 emission,