Feasibility Study for Wind Power and Co-generation CDM Projects Using Jatropha Oil in Galapagos Islands, Ecuador | CDM/JI | Global Environment Centre Foundation (GEC)

Reports of CDM/JI Feasibility Studies

Title of Feasibility Study (FS)	Feasibility Study for Wind Power and Co-generation CDM Projects Using Jatropha Oil in Galapagos Islands, Ecuador
FY	FY 2009
Main Implementing Entity	Mitsubishi UFJ Securities Co., Ltd.
FS Partner(s)	Energías Renovables para Galcpagos (ERGAL); Ministerio de Electricidad y Energía Renovable (MEER); Ministro de Agricultura, Ganadería, Acuacultura y Pesca (MAGAP); and Instituto Nacional Autónomo de Investigaciones Agropecuarias (INIAP)
Location of Project Activity	Ecuador (Galapagos Islands)
Summary of FS Report	Summary(PDF 251KB)
Description of Project Activity	The project activity is to install a 6.75MW wind power plant and 5MWe co-generation plant using biofuel (Jatropha oil) on the Baltra Island, one of the 13 main islands, for power generation to displace diesel generators of a mini-grid on the neighboring Island of Santa Cruz, and by doing so, contribute to the reduction of greenhouse gases from the islands. The Project will be implemented under the "Zero Fossil Fuel for the Galapagos Islands" initiative of the Ecuadorian government that aims to mark its departure from petroleum dependency to protect its fragile ecosystem of the Galapagos while improving air and land pollution caused by the existing power station on Santa Cruz. Heat generated by the co-generation plant will be supplied to a newly installed desalination plant. The wind power plant will be installed in two stages (2.25MW for the first phase and 4.5MW for the second phase), while the co-generation plant will be installed during the second phase of the wind power plant.
Targeted GHG	CO2
Category of Project Activity	Renewable Energy (Wind Power + Other Sources)
CDM/JI	CDM
Duration of Project Activity/ Crediting Period	Wind power: 2010-2030 (project implementation)/ 2011-2017 (one renewal) Co-generation: 2011-2027 (project implementation)/ 2013-2019 (one renewal)
Methodology to be applied	AMS-I.C. (revised from Version 16 or after) AMS-I.D. (Version 15)
Baseline Scenario	Wind power: The baseline scenario is continuation of CO2 emissions from existing diesel-generated power plant in Santa Cruz Island that will be displaced by the Project. Baseline emissions are calculated by multiplying the electricity generated by the wind power plant with the emission factor of diesel oil in accordance with AMS-I.D.. Co-generation: The Project will install a co-generation plant to generate electricity using Jatropha oil as fuel. Generated electricity will complement wind power generated electricity and be supplied to the mini-grid of Santa Cruz Island. Thermal energy will be supplied to the newly established desalination plant. In accordance with "Combined tool to identify the baseline scenario and demonstrate additionality", the baseline scenario is continuation of CO2 emissions from the existing diesel power plant in Santa Cruz and CO2 emissions from a new diesel-powered boiler at the desalination plant. Baseline emissions for power generation through co-generation are calculated by multiplying the electricity generated (difference between total electricity demand and electricity generated by wind power) by the emission factor of diesel. Baseline emissions for thermal energy generation are calculated by multiplying the total thermal energy supplied adjusted by general boiler efficiency that would be used in the absence of the Project with the emission factor of diesel oil.
Demonstration of Additionality	Common barriers for wind power and co-generation projects: 1) Financial difficulty of the Ecuadorean government As Ecuador needs to import petroleum products despite it being petroleum producing nation, the economy is burdened with significant cost. Subsidy policy and fall in crude oil price in 2009 have exacerbated fiscal balance. Moreover, the country is experiencing a serious energy crisis due to water shortage. As a result, the budget is being rearranged to fund major power projects in the mainland. Under these financial and political circumstances, it is extremely unclear whether sufficient public funding can be secured for renewable energy projects in the Galapagos Islands. 2) Barrier in infrastructure development in Galapagos Islands Inconvenience caused by the location as remote islands are significant barriers in implementing the project, including difficulty to secure bare minimum logistics and lack of basic service provision as well as various restrictions for the purpose of environmental protection. Barriers particular to wind power project: 3) Shortage of wind turbine supply and price hike Due to recent boost in the wind market worldwide, there is currently an excess demand for wind turbines. Very few manufacturers have shown interest in producing small turbines, such as 1MW or less in case of the Project, and the lack of interest by manufacturers has slowed down the tender process. In addition to the unfavorable geographical conditions, various restrictions due to ecosystem protection have made power plant development technologically difficult. Barriers particular to co-generation project: 4) Escalation of Jatropha oil price caused by speculators There is a price escalation risk because it is possible that some large-scale Jatropha oil producers will speculate with expectation of increase in Jatropha oil demand.
Estimation of GHG Emission Reductions	Wind power: 11,177tCO2/year (annual average) Co-generation: 10,321tCO2/year (annual average)
Monitoring Plan	Wind power: AMS-I.D. requires monitoring of net electricity supply to the grid and the sold value. Co-generation: AMS-I.C. requires measurement of electricity and heat generated as well as biomass and fossil fuel consumption. The draft revised version of the Methodology also proposes following additional monitoring items associated with biofuel with reference to AMS-III.T. (i) Plant oil consumption by project activities (ii) Oil content of seeds and amount of plant oil produced per crop source per production location. The extent of the area where plant oil is produced should be consistent with the yield of the cultivation and/or harvesting and the plant oil extraction, if they are from a plantation (iii) The energy use (electricity and fossil fuel) for the production of plant oil and the amount of fertilizer applied for the cultivation of plant oil per crop source per production location. The occurrence of shift of pre-project activities and the competing uses of biomass shall be monitored and verified. (iv) NCV of plant oils are determined based on direct measurements of a representative sample (v) Emissions from the transportation of biomass or biofuel (vi) The contract between the producer and the user of the plant oil (project participants) states clearly who is entitled to claim emission reductions resulting from its consumption, if the producer and the user of the plant oil are not the same. (vii) Final waste treatment and/or use and/or disposal site (viii) Emissions from the transportation of waste.
Environmental Impact Analysis	Wind power: Studies involving environmental impact assessment (EIA) for the wind power project have already been conducted and were given approved by the Ministry of Environment in August 2009. The environmental license has also been issued. The biggest issue for the wind power project has been the impact of its construction and building site location on the ecosystem of the Galapagos Islands. Particularly, locations and flying heights of birds, bats and terrestrial iguanas have been studied in detail. The results of these studies have been carefully considered in the EIA and a detailed post-implementation monitoring plan of environmental indicators has been developed with advices from Galapagos National Park Authority. Co-generation: Currently, studies for the EIA are under preparation. As the co-generation plant will be built near the storage station, the possibility of significant environmental impact regarding biofuel handling is to be considered. One of the predicted environmental impacts is the impact of construction on the ecosystem. Reptiles of Baltra Island (especially terrestrial iguanas) are endangered species and a detailed monitoring plan similar to the one for wind power will be required.
Project Feasibility	For the wind power project, the bidding has already begun and project implementation is already in sight. With regards to the co-generation project, bidding is expected to take place after the completion of EIA. In order to secure additional funding with CDM taken into consideration, further consultation with local partners will be held towards the realization of the Phase 1 activity.
Pollutants Emissions Reduction	The co-benefit gained in the Project is reduction of air pollutant emission from the power plant in Santa Cruz Island caused by the use of diesel oil as fuel. In the project scenario, it is estimated that the operation of the wind power plant will reduce the emissions of SOx, NOx, dust and CO2by 50% in 2011 and 2012 and subsequently reduce them to zero when 6 generators cease operation.
Contribution to Sustainable Development in Host Country	Evaluation of ecosystem destruction risk in host country: The Project will reduce transport of diesel oil by ship and enable a risk mitigation of ecosystem destruction caused by accidents involving vessels. Additional CO2 reduction by decrease in fuel consumption by land transport in Santa Cruz Island: The Project will eliminate land transport of petroleum products between Santa Cruz shore and Puerto Ayora leading to reduction of GHG emissions from transport fuel usage. Improvement of soil contamination in Santa Cruz Island: By reducing diesel oil consumption in Santa Cruz, the Project will contribute to preventing soil contamination cause by fuel seepage from aging storage tanks where diesel oil is currently stored. Improvement of water pollution in Santa Cruz Island: By eliminating soil contamination, its potential impact on the reservoir for water supply will be mitigated. Supply of desalinated water: Water is one of the infrastructures in the Island of Santa Cruz that require immediate improvement for Galapagos residents who are subject to consuming brackish water instead of fresh water. Supply of desalinated water will significantly improve the quality of life for local residents and tourists. Economic contribution to Manabi farming area: The raw material for biofuel used in the Project will be harvested from Jatropha hedges growing in Manabi region where standard of living is low. As Jatropha has no market value to date, locals hold big expectations for the Project. It is hoped that by using Jatropha strategically, it can become a trigger to bring about improvement of quality of life in the local communities as well as creation of job opportunities.