HUNAN CDM PROJECT SERVICE CENTER
——P. R. China – Changsha Landfill Gas to Electricity Project
PROJECT IDEA NOTE
(NO.2005-007)
A. Project description, type, location and schedule
Name of Project: P. R. China – Changsha Landfill Gas to Electricity Project
Date submitted: 2005-12-12
Technical summary of the project
Objective of the project
The objective of this project is to collect and use
the methane from Changsha municipal solid waste
landfill site to generate electricity and interconnected to
the grid, so that part of the coal-fired electricity could be
displaced, with that greenhouse gas emission from the
landfill site and from the coal-fired electricity generation
plant can be decreased.
Project description and
Changsha municipal solid waste landfill site is
proposed activities
located at Qiaoyi Town, Wangcheng County, Changsha
(including a technical
City, Hunan Provience, P. R. China. With a total
description of the project) capacity of 40.1 million m3, Cahngsha municipal landfill
site is operated to be used for a minimum of 30 years
(2003-2032). The landfill site has been running from
May 2003, and more than 2,000,000 tones of solid
waste have been filled into it by the end of 2005. At the
present time, the daily disposal rate of solid waste is
about 2000 tones per day. With an emission ratio of
1500 m3/h from the landfill site, more than 4500 tones
of methane will be exhaled directly into atmosphere
every year.
In order to productively use the landfill gas, 2
electricity generators with an installed capacity of 1 MW
have been installed in the landfill site. But the electricity
generation project is difficult to run because of the
tremendous investment for the equipment, high running
cost and low electricity grid price. And the collection
and usage of landfill gas are not enforced in China for
the moment. Thus most of the landfill gas is emitted into
the atmosphere openly.
In order to decrease greenhouse gas emission, the
project of collection and utilization the landfill gas for
power generation at Changsha Municipal Solid Waste
Landfill site is proposed under the support from CDM
project. The proposed activities includes:
1. Building of the landfill gas collection system;
1
HUNAN CDM PROJECT SERVICE CENTER
——P. R. China – Changsha Landfill Gas to Electricity Project
2. Building of the flaring system of the landfill gas (to
decrease the surplus gas emission)
3. Building of the landfill gas power generation
equipment.
For the construction of the 3 sections above,
collecting pipeline system and the power generation
equipment will increase with the quality of municipal
solid waste disposal and landfill gas generation
increasing. The income from CERs can be a
complement to the need of the sequential investment.
Technology to be
employed
Project developer
Name of the project
developer
Organizational category
Other function(s) of the
project developer in the
project
Summary of the relevant
experience of the project
developer
Address
Landfill gas collection system:
A vertically driven gas well system will be
constructed to extract the landfill gas as it is produced.
Gas will be drawn from the wells through pipes to
extraction equipment from where the gas will be used
for electricity generation, with any surplus gas being
flared. This technology is used in a number of landfill
sites all over the world
Energy generation technology:
A routine feedstock for spark ignition engine
generators will be installed in this project. The system
can be commercially procured from multiple
international firms through a competitive bid process.
Such equipment is now commonly and successfully
used in many parts of the world, including the
industrialized countries in North America, Europe, and
Asia, and has been successfully applied in other
developing countries.
Changsha Municipal Solid Waste Treatment Limited
Company
e. Non Govemental Organization
a. Sponsor
b.Operational Entity under the CDM
Changsha Municipal Solid Waste Treatment
Limited Company is an innovative and successful
designer/operator/manager of Changsha landfills. The
current state of the art at Changsha landfill site includes
methane collection and flaring and power generation is
comparable to that found in the industrialized world. But
it’s the first time to apply and manage a CDM project.
Changsha Municipal Solid Waste Treatment
2
HUNAN CDM PROJECT SERVICE CENTER
——P. R. China – Changsha Landfill Gas to Electricity Project
Limited company, Qiaoyi Town, Wangcheng County,
Hunan Province
Post Office Box: 410202
P.R. China
Peng Yong
Tel. 86-731-843-3718 Fax: 86-731-843-3711
Contact person
Telephone / fax
E-mail and web address, if
any
Project sponsors
(List and provide the following information for all project sponsors)
Name of the project
Changsha Municipal Solid Waste Treatment
sponsor
Limited Company
Organizational category
Non Governmental Organization
Address (include web
Changsha Municipal Solid Waste Treatment
address, if any)
Limited company, Qiaoyi Town, Wangcheng County,
Hunan Province
Post Office Box: 410202
P.R. China
Main activities
Changsha Municipal Solid Waste Treatment
Limited company take charge of the application of the
CDM project. And it is also the investor for the landfill
gas collection, power generation system construction.
Summary of the financials
Type of the project
Greenhouse gases targeted
Type of activities
Field of activities
Energy supply
Waste management
Location of the project
Region
Country
City
Brief description of the
location of the plant
Take 1500m3/hour purifying equipment for example:
Total investment (including the face-lifting expense of
vehicle): Total investment: US$42.50 million, Annual
cost: US$3.35 million; CERs Revenue: US$1.32million.
CH4
Abatement
Waste management—CH4 capture
The project would switch from coal derived
electricity to landfill gas derived electricity.
CH4 capture
East Asia & Pacific
People’s Republic of China
Changsha City, Hunan Province
Changsha Municipal Solid Waste Landfill Site
located in a valley of Qiaoyi Town, Wangcheng County,
about 20km form Changsha City, and about 7 km from
Qiaoyi Town. The initial electricity generation facilities
have been constructed by the landfill site where
methane collection and flaring exists. The sites are well
3
HUNAN CDM PROJECT SERVICE CENTER
——P. R. China – Changsha Landfill Gas to Electricity Project
equipped to receive the proposed electricity generation
systems and there are no adverse technical or
environmental issues envisioned that would inhibit the
projects from proceeding.
Expected schedule
Earliest project start date
The earliest start-up would be June, 2006.
Estimate of time required
Time required for financial commitments: 2 months
before becoming
Time required for legal matters: 2 months
operational after approval of
Time required for negotiations: 1 months
the PIN
Time required for construction: 3 months
Expected first year of CER
delivery
2007
Project lifetime
More than 30 years.
Current status or phase of
Negotiation stage
the project
Feasibility study has been finished.
Current status of the
Letter of No Objection is available.
acceptance of the Host
Country
The position of the Host
The Host Country is a party to the UNFCCC and
Country with regard to
ratified KP in 2002.
the Kyoto Protocol
B. Expected environmental benefits
Estimate of Greenhouse
Gases abated (in metric
tons of CO2-equivalent)
Annual CO2 emission reducing: 0.22 million tCO2equivalent
Up to and including 2012: 1.32 million tCO2equivalent
Up to a period of 10 years: 2.20 million tCO2equivalent
Up to a period of 7 years: 1.54 million tCO2equivalent
Up to a period of 14 years: 3.08 million tCO2equivalent
Baseline scenario
The proposed CDM project is based on two
complementary activities as follows:
●Landfill gas will be collected and combusted or
burnt. Because more than 50% of the landfill gas is
CH4, the proposed CDM project can decrease the
greenhouse gas emission by conversing CH4 to CO2. At
the present time, landfill gas combustion is not enforced
in China. For most of the landfill sites, landfill gas is
releasing into atmosphere without limit.
●The generation and supply of electricity derived
from landfill gas to the regional grid, a certain amount of
4
HUNAN CDM PROJECT SERVICE CENTER
——P. R. China – Changsha Landfill Gas to Electricity Project
coal-fired power will be displaced, thus CO2 emission
could be decreased by these activities. Most of the
electricity in China is derived from coal. Therefore, the
baseline will base on coal-fired generation capacity.
Without the propose CDM project, coal-fired power
capacity will be dispatched to meet the municipal
needs, which results in a great amount of CO2 emission
into atmosphere.
According to the development plan of Changsha
Solid Waste Landfill Site, the landfill will run until 2032,
more than 40 million tones of solid waste will be
disposed here. The proposed CDM project will
decrease methane emission capacity up to 0.28 million
tone, which is equivalent to 5.94 million tones of CO2. In
a word, the quantity of the greenhouse emission
abatement due to this project greatly exceeds that of
the delivered.
Specific global & local
environmental benefits
Which guidelines will be
applied?
Local benefits
Global benefits
Environment Protection Law of People's Republic of
China;
Cleaner Production Promotion Law of People's
Republic of China;
Renewable Energy Law of People's Republic of China;
Overall Planning of Urban Development of Changsha;
The Management Method of the Project of Clean
Development Mechanism（National Development and
Reform Commission, Department of Science and
Technology，Department of Foreign Affairs,
Department of Finance）;
The Bulletin about Organizing and Implementing the
Industrialization of High Technology of Renewable
Energy and New Energy（National Development and
Reform Commission）.
The local environmental benefits would include
reduced coal-fired power plant emissions (sulfur oxides,
nitrogen oxides, particulates), reduced adverse coal
mining impacts (dust and acid mine drainage), reduced
adverse coal transport impacts, hence an improvement
in air quality and in the overall quality of the
environment.
There will be a direct reduction of carbon
emissions to the atmosphere through the productive
use of the landfill gas. The impact will be measurable
5
HUNAN CDM PROJECT SERVICE CENTER
——P. R. China – Changsha Landfill Gas to Electricity Project
and it is an enhancement of the already progressive
measures of China in collecting the landfill methane
and flaring it to reduce the impact from that of methane
to the less impacting carbon dioxide.
Socio-economic aspects
1. The productive use of the landfill gas collected will
What social and economic improve the financial situation of Changsha Municipal
effects can be attributed to Solid Waste Treatment Limited company, which helps
the project and which would to provide the environmental safeguards that assure the
not have occurred in a
safety of the local population and that will not adversely
comparable situation
effects the value of the land holdings surrounding the
without that project?
landfill sites.
2. The project can also significantly reduce the
odors associated with landfills and the risk of explosion.
3. Implementing such projects at the landfills will
send a clear signal to the local population and to the
world community that the environment is really very
important in China and is being dealt with in the best
way possible.
Which guidelines will be
Technical Specification of Municipal Waste Sanitary
applied?
Landfill（CJJ17-2004）;
Emission Standards for Odor Pollutants（GB1454493）
Integrated Emission Standards of Air Pollutants （
GB16297-1996）;
Standard for Pollution Control on the Municipal Solid
Waste Landfill（GB16889—97）;
Standard of Noise at Boundary of Industrial
Enterprises（GB12348-1990）;
Technical Standard for Environmental Monitoring of
Municipal Waste Landfill site（CJ/T3037-95）
The construction and running of the CDM item will
What are the possible direct bring some employment for the landfill sites.
effects (e.g., employment
The economic benefit from the CER can partly
creation, capital required,
compensate the company’s payout.
foreign exchange effects)?
What are the possible other
The sensitivity of the local population to the
effects? For example:
environmental impacts of landfills will have been
responded to in a very positive and visible way that will
 training/education
build good community relationships, and also set a high
associated with the
environmental standard which may be followed in an
introduction of new
processes, technologies appropriate manner for others.
and products and/or
 the effects of a project
6
HUNAN CDM PROJECT SERVICE CENTER
——P. R. China – Changsha Landfill Gas to Electricity Project
on other industries
Environmental strategy/
priorities of the Host
Country
Chinese government adopted a formal Energy
Policy that exploitation and using clean or renewable
energy are encouraged in future years. The
implementation of these landfill gas projects is therefore
in full accord with the new Renewable Energy policy,
thus it can get the powerful support from Chinese
government.
C. Finance
Total project cost
estimate
Development costs
Installed costs
Other costs
Total project costs
Sources of finance to be
sought or already
identified
Equity
Debt – Long-term
Debt - Short term
Not identified
CDM contribution sought
CDM contribution in
advance payments. (The
quantum of upfront
payment will depend on the
assessed risk of the project
by the World Bank, and will
not exceed 25% of the total
ER value purchased by the
World Bank for the project.
Any upfront payment will be
discounted by a factor
considered appropriate by
the World Bank for the
project.)
Indicative CER Price
(subject to negotiation
and financial due
diligence)
Total Emission Reduction
Purchase Agreement
(for 20 MW total)
US$ 2.5 million
US$ 38 million
US$ 2.0 million
US$ 42.5 million
Changsha municipal solid waste landfill site: US$: 12.5
million
US$ 12.5 million
None
None
US$ 30 million
None
No advance payment is envisaged in the project.
7 US$ per ton of CO2 is the indicative price subject to
confirmation and negotiation.
Annual CO2 emission reducing: 0.22 million tCO2-
7
HUNAN CDM PROJECT SERVICE CENTER
——P. R. China – Changsha Landfill Gas to Electricity Project
(ERPA) Value
A period until 2012 (end of
the first budget period)
A period of 10 years
A period of 7 years
A period of 14 years (2 * 7
years)
If financial analysis is
available for the proposed
CDM activity, provide the
forecast financial internal
rate of return for the project
with and without the CER
revenues. Provide the
financial rate of return at the
expected CER price above
and US$3/ tCO2e.
equivalent
Up to and including 2012: 1.32 million tCO2-equivalent
Up to a period of 10 years: 2.20 million tCO2-equivalent
Up to a period of 7 years: 1.54 million tCO2-equivalent
Up to a period of 14 years: 3.08 million tCO2-equivalent
US$ 9.24 million
US$ 15.4 million
US$ 10.78 million
US$ 21.56 million
Financial Return on the Total Investment
CER-6US$/ tCO2e
IRR (%)
Without CER revenue 4.49
With
CER revenue 9.78
8