Case Study: Gemina rice husk
project, Nicaragua
(Scenario Analysis and Small-Scale
Simplified Methodologies)
Carbon Finance Unit
The World Bank
22 October 2002
www.CarbonFinance.org
(Revised by CCIC, 17 July 2003)
Contents
• Introduction to the Gemina Rice Husk Project,
Nicaragua
• Elements of the baseline
• Applicability of the Meth Panel’s recommendations
for simplified methodologies for Small-Scale CDM
projects
Introduction to the Gemina project I
• Current practice
– Gemina Rice and Flour Mill Rice produces
18,000 tons of rice husk yearly, increasing to
25,000 tons after expansion in 2003
– Rice husks are dumped in open piles
– Periodic burning of piles to reduce volume
• Rice husk to electricity project
– Construction of ~1.6 MW power plant
– Plant consumes 2.75 t rice husk per hour
– Ash used to substitute for cement
Introduction to the Gemina project II
• Technology: Conventional boiler/steam
turbine
– Rice husks are fed to the combustor and burned
to produced to produce heat
– Steam generated is passed to steam turbine
which drives an electrical generator
• Rice Husk Power Plant
– To cover electricity demand for rice and
flourmill complex
– And sell the excess electricity to third parties
Introduction to the Gemina project III
• Main sources of emission reductions
– Displacement of electricity from fossil fuel
– Methane reduction from avoided rice husk
decomposition
– CO2 reduction from substitution of cement
• Yearly reductions 2003-2012 (low/optimal)
CO2 energy
7,418 / 11,144 t CO2e
Methane from husks
2,338 / 2,338 t CO2e
CO2 cement
0 / 2,712 t CO2e
•Projected reduction 21 years: 212,395 t CO2e (low)
Elements of the Baseline I
• Baseline
– Electricity would otherwise be produced using
fossil fuels
– Dumping of waste husks from Gemina rice mill
in open piles
• Gemina project is small-scale
– Renewable energy component less than
15MW
– Rice husk power plant directly emits less
than 15,000 t CO2e
If biomass is counted as renewable
energy direct emissions from the project
Elements of the Baseline II
• Approach for calculating baseline emissions
selected by Gemina
– Marrakech Accord 48 a): Existing or historical
emissions, as applicable
• Justification of selected approach
– 48 a) defines Business-as-usual as baseline
scenario
– PCF interpretation: BAU can be justified by
(a) using historic or current information (control
group) or
(b) showing that barriers impede other options.
especially relevant for small scale investments
Elements of the Baseline III
Barriers to investment identified for Gemina
a) Regulatory barriers to access the market for electricity
- Smallest block of electricity that can be offered on the
Nicaragua wholesale market is 5 MW (Gemina 1.6
MW)
b) Competitive disadvantage of non-traditional projects
- Lack of precedents regarding integration of small
generators of renewable energy created problems with
concessionaire
c) Limited access to credit
- Gemina could not attract financing due to inter alia
absence of long-term PPA, high country risk for
Nicaragua
Elements of the Baseline IV
•
Indicator for restrictive nature of identified
barriers:
– Gemina rice husk generator is first-of-a-kind
technology in all Central America
•
PCF assistance to overcome the barriers
– Carbon purchase agreement is secure revenue stream
– World Bank involvement may trigger the interest of
other financial institutions
Applicability of Meth Panel’s recommendation
for simplified methodologies I
•
•
Gemina project (1.6 MW power plant) falls under
category I. D. “Renewable Electricity Generation
for a Grid”
Recommended simplified methodology:
– Technology/Measure:
• 25. Biomass combined heat and power (cogeneration) systems that supply electricity to a grid
– Boundary:
• 26. Physical, geographical site of the renewable
generation source
Applicability of Meth Panel’s recommendation
for simplified methodologies II
•
Recommended simplified methodology:
– Baseline:
• 28. For a system where all fossil fuel fired
generating units use fuel oil or diesel oil, the
baseline is the annual kWh generated by the
renewable unit times an emission coefficient for a
modern diesel generating unit of the relevant
capacity operating at optimal load
– Leakage:
• 30. If the renewable energy technology is new
equipment being installed for the first time, no
leakage calculation is required.
Applicability of Meth Panel’s recommendation
for simplified methodologies III
•
Recommended simplified methodology:
– Monitoring:
• 31. Shall consist of metering the electricity
generated by the renewable technology. In the case
of co-fired plants, the amount of biomass input and
its energy content shall be monitored.