Feasibility Study of a Small-Scale Hydropower CDM Project in Lam Dong Province, Viet Nam

Global Environment Centre Foundation(GEC)

Reports of CDM/JI Feasibility Studies

Title of Feasibility Study (FS)Feasibility Study of a Small-Scale Hydropower CDM Project in Lam Dong Province, Viet Nam
FYFY 2009
Main Implementing EntityHokkaido Electric Power Co., Inc. (HEPCO)
FS Partner(s)HDM; Institute of Energy in Viet Nam (IE); Local CDM consultant; and a Designated Operational Entity (DOE)
Location of Project ActivityViet Nam (Lam Dong Province)
Summary of FS ReportSummary (PDF173KB)
Description of Project ActivityThe project is the construction of a hydro power plant that is able to generate 4MW in Lam Dong Province, Viet Nam and the connection to the grid owned by Electricity of Viet Nam (EVN) to sell the generated power.
Targeted GHGCO2
Category of Project ActivityRenewable Energy (Hydropower)
Duration of Project Activity/ Crediting Period2011-2040 (30 years)/ 2011-2031 (7x3=21 years)
Methodology to be appliedAMS-I.D. (Version 14)
Baseline ScenarioSince the project is a hydro power plant that is able to generate 4 MW to sell it to the electric power grid of Viet Nam, approved small-scale methodology, AMS-I.D "Grid connection renewable electricity generation (version 14)" is applied. The baseline scenario is to supply electric power generated in the project via the electric power grid in Viet Nam. The power generation facility and the electric power grid in Viet Nam are inside the project boundary.
Demonstration of AdditionalitySince it is a small-scale CDM project, additionality is demonstrated with the Attachment A to Appendix B of the simplified modalities and procedures for small scale CDM project activities.
The major barrier of the project is the financial barrier categorized in other barriers. It is demonstrated by using the benchmark analysis.
We decided to use 13.125%, which is the maximum commercial lending rate based on the Civil Code of Viet Nam, as the most suitable benchmark.
IRR of the project is 10.23% with no CDM revenue, which is lower than the benchmark of 13.125%. Thus, there is an investment barrier in the project if there is no CDM revenue.
Estimation of GHG Emission Reductions11,000tCO2/year
Monitoring PlanThe monitoring item of the project is power output supplied to the electric power grid. The output is calculated by the electricity meter to be installed in the substation that is a connecting point with the grid. A back-up electricity meter is also installed. The measured values are crosschecked with the receipt for selling electricity to EVN. The power output is measured continuously and the record is stored monthly in writing and in electronic data. All records are stored for at least two years after the completion of the first credit period.
Environmental Impact AnalysisVietnamese guidelines require hydropower plants with a reservoir capacity of 1,000,000m3 or more to perform an EIA. Since the reservoir capacity of the project is 127,000m3, an EIA does not have to be performed, although an Environmental Protection Commitment is required to be produced. The commitment was produced in July 2007 and approval from relevant entities and local people was obtained. There is no other negative indirect impact.
Project FeasibilitySince the project owner and a local bank have concluded a loan agreement and the construction has begun, it is highly likely to be completed for commercialization.
Pollutants Emissions ReductionThe project is a hydropower project. The assessment method for reduction of such emissions as SOx, NOx, and dust by the grid thermal power generation is described in the co-benefit quantitative assessment manual. However, the results of the hearing with the EVN revealed that, although thermal power plants in Viet Nam are subject to regulations on the emissions of such gases as SOx, NOx, and dust (TCVN7440:2005), they do not measure them, because they are not obliged to report it. Thus, it is difficult to make assessment based on the quantitative co-benefit assessment.
Contribution to Sustainable Development in Host CountryThe project implementation creates employment and construction of the access road improves access to neighboring farmland.