cheves pdd

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03 .1. CDM – Executive Board page 1

This template shall not be altered. It shall be completed without modifying/adding headings or logo, format or font.

CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-PDD)

Version 03 - in effect as of: 28 July 2006

CONTENTS A. General description of project activity B. Application of a baseline and monitoring methodology C. Duration of the project activity / crediting period D. Environmental impacts E. Stakeholders’ comments

Annexes Annex 1: Contact information on participants in the project activity Annex 2: Information regarding public funding Annex 3: Baseline information

Annex 4: Monitoring plan



SECTION A. General description of project activity A.1 Title of the project activity: Cheves Hydro Power Project, Peru Version 1 27/11/2007

A.2. Description of the project activity : The Cheves Hydro Power Project, Peru (hereafter, the Project) developed by Empresa de Generación Eléctrica Cheves S.A. (hereafter referred to as the Project Developer) is a new, run-of-river hydroelectric power project in the provinces of Oyon and Huaura in Peru (hereafter referred to as the “Host Country”). Total installed capacity of the Project will be 168 MW, consisting of two 84 MW turbines, with a predicted power generation of 836,800 MWh per annum. A transmission line 76 km long will transport the electricity to the grid. The purpose of the project is to utilize the hydrological resources of the Huaura and Checras tributaries in the area where they meet in the Huaura River. The hydrological resources will be utilized by a run-of-river hydroelectric power plant, with peaking, to generate zero emissions energy for the Peruvian National Electric Interconnected System (SEIN) of Peru (hereafter referred to as the Grid). The electricity currently generated by the grid is relatively carbon intensive, with a simple adjusted operating margin emission factor of 0.664 tCO2/MWh and a build margin emission factor of 0.304 tCO2/MWh. The project is therefore expected to reduce emissions of greenhouse gases by an estimated 400,857 tCO2e per year during the first crediting period. The project will contribute to sustainable development of the Host Country. Specifically, the project: • Will increase employment opportunities in the area where the project is located temporarily during

the three-year construction phase (up to 1000 people will be employed for the construction of the project, secures jobs in the construction sector)

• Will improve some access roads to the work areas associated with the construction phase, which may provide better accessibility for tourism (for thermal baths in the area) and better opportunities for export of fruit products, such as peaches, from the area

• Enhances the local investment environment and therefore improves the local economy • Diversifies the sources of electricity generation in Peru, important for meeting growing energy

demands and the transition away from diesel and coal-supplied electricity generation • Makes greater use of hydroelectric renewable energy generation resources for sustainable energy

production • Will use a portion of CER revenue to develop micro-projects to support sustainable development in

the region; these projects will be chosen and designed in collaboration with the local communities.



A.3. Project participants:

Name of Party involved (*) ((host) indicates a host Party)

Private and/or public entity(ies) project participants (*) (as applicable)

Kindly indicate if the Party involved wishes to be considered as project participant (Yes/No)

Peru (host) Empresa de Generación Eléctrica Cheves S.A. No

Norway SN Power Invest AS. No

(*) In accordance with the CDM modalities and procedures, at the time of making the CDM-PDD public at the stage of validation, a Party involved may or may not have provided its approval. At the time of requesting registration, the approval by the Party(ies) involved is required.

Further contact information of project participants is provided in Annex 1. A.4. Technical description of the project activity: A.4.1. Location of the project activity: The project is located near the town of Churin, in the districts of Pachangara, Andajes and Navan in the province of Oyon, and in the districts of Checras and Pacho in the province of Huaura; department of Lima, Peru. The location is about 150 km north of Lima. A.4.1.1. Host Party(ies): Peru A.4.1.2. Region/State/Province etc.: Province Oyon: Districts Pachangara, Andajes and Navan Province Huaura: Districts Checras and Pacho A.4.1.3. City/Town/Community etc: Cities: Churin and Sayan Communities: Huacho sin pescado; Andajes; Navan; San Pedro de Tongos; San Pablo de Ayaranga; San Juan de Huacar and Muzga A.4.1.4. Detail of physical location, including information allowing the unique identification of this project activity (maximum one page): The exact location of the project is defined using Universal Transverse Mercator coordinates (PSAD56) for zone 18L. Project components and locations Intake Tributary Huaura: N 8 802 700 E 293 900 Regulatory Reservoir Checras: N 8 800 300 E 294 200 Powerhouse: N 8 796 000 E 285 100



Entrance to powerhouse access tunnel: N 8 796 400 E 284 350 Point of discharge: N 9 794 000 E 282 750 Compensatory Pond Picunche: N 8 787 100 E 276 200

Left: View westward along the Huaura River taken from nearby the planned location of the entrance to the powerhouse access tunnel

Right: Peru. White star indicates the approximate location of the project (Image credit: Google Earth)

A.4.2. Category(ies) of project activity: According to Annex A of the Kyoto Protocol, this project fits in Sectoral Category 1, Energy Industries (renewable/non renewable). A.4.3. Technology to be employed by the project activity : The Project uses well established hydro power generation technology for electricity generation and transmission. The Project is a new, run-of-river hydropower project, with peaking, with a total installed capacity of 168 MW (consisting of two 84 MW turbines). The Project consists of the following main components: - Intake from Huaura River - Checras Reservoir (only daily regulation, for peaking) - Tunnels - Underground Powerhouse - Transmission System - Picunche Pond (to compensate variation in river flow resulting from the daily peaking process for

downstream agriculture)



The flow of the rivers Huaura and Checras will be captured separately. A regulatory reservoir for hourly regulation will be located in a favorable location in the Checras River to permit peaking of electricity generation and to increase the plant factor during the peaking time. - Intake from Huaura River & Tunnels Water of the Huaura River will be captured at an intake. The intake will consist of a diversion weir 35 m wide and 6 m high from the river bottom, an intake window leading to a conduction tunnel 2,530 m long, and other components for the secure function of the intake. The conduction tunnel leads to an outflow structure at one side of the Checras regulatory reservoir. The outflow structure will also be connected to a low pressure duct through the Checras dam that will supply water to the powerhouse when the Checras reservoir is cleaned of deposits via its radial floodgates. - Checras Reservoir & Tunnels The flow of the Checras River will be captured in the regulatory reservoir Checras. The reservoir will be operated in order to produce electricity at the times of peak demand. A concrete dam will be erected, 21 m high and 140 m wide at its crest, which is at 2170 msl. The dam will have three radial floodgates of the reservoir and at one side a spillway floodgate and spillway. Downstream of the reservoir, the water intake will be constructed leading to a conduction tunnel 9690 m long leading to the powerhouse. The design water flow will be 33m3/s and a water head of 600 m.. - Underground Powerhouse The powerhouse will be located underground in a constructed cave and will consist of two Pelton vertical axis turbines, each with 84 MW capacity. The transformers and switchgear substation will be located in a parallel cave. An equilibrium chimney will be connected to the headrace tunnel. A 960 m access tunnel to the powerhouse cave will be built off of the main road between Churin and Sayan cities. After passing through the powerhouse, water is discharged back to the Huaura River. The water discharge tunnel will be 3,290 m long and lead to a discharge structure in the Huaura River - Transmission System A 220 kV simple circuit transmission line will be constructed. It will be 76 km long and transport electricity from the powerhouse to the Huacho substation. - Picunche Pond Downstream of the water discharge on the Huaura River, the Picunche compensatory pond will be created. Downstream of this pond, the water flow in the Huaura River will be the same as it was prior to the existence of the project as a result of the compensatory regulation provided by the pond. A barrier will be constructed, 155 m long and 11.5 m high. 120 m will be an earth barrier and the remaining length will be in concrete with three radial floodgates and two flat operational floodgates. The project will take advantage of the existing floodplain of the Huaura River at this point to locate the compensatory pond.



The main technical parameters of the proposed project are shown in the Table below.

Table Main technical parameters of the proposed project

Value Source Installed capacity (MW) 168 Feasibility study Operating time yearly (hour) 8424 Feasibility study* Expected annual power generation (MWh) 836,800 MWh Feasibility study pg

148* Water head (m) 600 Feasibility study* Design flow (m3/s) 33 Feasibility study* Parasitic Power loss (%) 1% Estimated

*Feasibility study: Central Hidroelectrica Cheves, Estudio de Factibilidad, Informe Final; Julio Bustamente y Asociados EIRL Norconsult, March 2007. The Project will start construction in 2008 after CDM is taken into account in financial closure of the project1. The total construction period is estimated to be 30-36 months. The project will start operation in 2011 at the earliest.

A.4.4 Estimated amount of emission reductions over the chosen crediting period:

Table A.4.4 Estimated amount of emission reductions over the chosen crediting period Year Annual estimation of

emission reductions in tonnes of CO2e

2011 400,857

2012 400,857

2013 400,857

2014 400,857

2015 400,857

2016 400,857

2017 400,857

Total estimated reductions (tonnes of CO2e)

2,805,999

Total number of crediting years 7

Annual average over the crediting period of estimated reductions (tonnes

of CO2e)

400,857

1 Financial closure is expected to be reached at the middle of 2008 once CDM has been taken into account.



Refer to section B.6.3 for further details on the quantification of GHG emission reductions associated with the project. A.4.5. Public funding of the project activity: The project will not receive any public funding from Parties included in Annex I of the UNFCCC.



SECTION B. Application of a baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the project activity : ACM0002 / Version 06: “Consolidated baseline methodology for grid-connected electricity generation from renewable sources”, 19/05/2006 The tool for demonstration and assessment of additionality: the approved methodology of “the tool for demonstration and assessment of additionality”, Version 03, in effect as of EB 29. B.2 Justification of the choice of the methodology and why it is applicable to the project activity: The Methodology of ACM0002 (Version 6) is chosen and applicable to the proposed project due to the following reasons: Applicability condition Justification Applies to electricity capacity additions from New hydro electric power projects with reservoirs having power densities greater than 4 W/m2

The Project is a new, renewable electricity generation plant, in the form of a run-of-river hydroelectric plant, with peaking2. On the scale of a day, the flow out of the reservoir is equal to the flow into the reservoir. The flow in the river downstream of the project is the same as the historical flow of the river, which is controlled by the Ministry of Agriculture via large reservoirs upstream of the project. Two bodies of water will be created for the run-of-river hydropower project to allow for power peaking: the Regulatory reservoir Checras and the Compensatory pond Picunche. The volume and area of the Checras reservoir at the ordinary maximum water level are 580,000 m3 and 72,000 m2, respectively. The Compensatory pond Picunche will form behind a barrier 11.5 m high and 155 m long. Its volume will be 414,286 m3 and the maximum area of this pond will be 100,000 m2. The power density for this configuration is 976 W/ m2.

This methodology is not applicable to project activities that involve switching from fossil fuels to renewable energy at the site of the project activity

The proposed project is not an activity that involves switching from fossil fuels to renewable energy at the site of the project activity. There is currently no electricity generation in the future location of the project activity.

The geographic and system boundaries for the relevant electricity grid can be clearly identified and information on the

The Project is a grid-connected hydropower project which is connected with the national power grid, SEIN Peru; the SEIN is clearly identified and information on the

2 http://www.dnr.state.mn.us/waters/surfacewater_section/stream_hydro/sideeffects.html



characteristics of the grid is available characteristics of this grid is publicly available from COES3, the Committee of Economical Operation of the System (of electricity of Peru)

On the basis of the above reasons, the applicability criteria stated in ACM0002 (Version 6) are met. B.3. Description of the sources and gases included in the project boundary Source Gas Included? Justification / Explanation

CO2 Included According to ACM0002 only CO2 emissions from electricity generation should be accounted for.

CH4 Excluded According to ACM0002

Bas

elin

e

Grid electricity production

N2O Excluded According to ACM0002

CO2 Excluded

CH4 Excluded

Pro

ject

A

ctiv

ity

Hydro electric electricity production

N2O Excluded

As the power density of the project is more than 10 W/m2 no greenhouse gas emissions from the project have to be considered according to ACM0002

B.4. Description of how the baseline scenario is identified and description of the identified baseline scenario: As the project does not modify or retrofit existing electricity generation facilities the baseline scenario is the following: Electricity delivered to the grid by the project would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources, as reflected in the combined margin (CM) calculations in B.6.1. Table B.4: Key Information and Data Used to Determine the Baseline Scenario Variable Unit Source Simple Adjusted Operating Margin Emissions factor

0.664 tCO2/MWh Calculated, see Annex 3

Build Margin Emissions Factor 0.304 tCO2/MWh Calculated, see Annex 3 Combined Margin Emissions Factor

0.484 tCO2/MWh Calculated, see Annex 3

Generation of the project in year y 836,800 MWh Feasibility study pg 1484 In the absence of the project electricity will continue to be generated by the existing generation mix operating in the grid.

3 http://www.coes.org.pe/coes/index.asp 4 Central Hidroelectrica Cheves, Estudio de Factibilidad, Informe Final; Julio Bustamente y Asociados EIRL Norconsult, March 2007.



Two alternatives to the project scenario are considered: Alternative 1: The proposed project activity without CDM: construction of a new hydroelectricity generation plan with installed capacity of 168 MW connected to the national grid, implemented without considering CDM revenues. Alternative 2: Continuation of the current situation. Electricity will continue to be generated by the existing generation mix operating in the grid. For the full assessment of alternatives see section B.5, which follows the most recent version of the tool for the demonstration and assessment of additionality. B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered CDM project activity (assessment and demonstration of additionality): The following steps are used to demonstrate the additionality of the project according to the latest version of the “Tool for the demonstration and assessment of additionality” agreed by the Executive Board (Version 3, EB 29):

Step 1. Identification of alternatives to the project activity consistent with current laws and regulations

Sub-step 1a. Define alternatives to the project activity: Two alternatives to the project scenario are considered: Alternative 1: The proposed project activity without CDM: construction of a new hydroelectricity generation plant with an installed capacity of 168 MW connected to the local grid, implemented without considering CDM revenues. Alternative 2: Continuation of the current situation. Electricity will continue to be generated by the existing generation mix operating in the grid. Sub-step 1b. Consistency with appropriate laws and regulations: Alternative 1 is consistent with all relevant laws and regulations, as demonstrated by the permissions received from the relevant authorities (also listed in section D.1).

Document Modificación al Contrato de Concesión No. 187-2001

General Concession for the power station

Source Ministry of Energy and Mines (Ministerio de Energía y Minas, MEM) and the Empresa de Generación Eléctrica Cheves S.A.

Permit for use of the water resource

Document Resolución Administrativa No. 0179/2005-GRL.DRA/ATDRH, Autorización para el uso del recurso hídrico con fines de ejecución de obras hidroeléctricas



Source Regional Directorship of Agriculture of the Regional Government of Lima (Dirección Regional de Agricultura, Gobierno Regional de Lima) and the Ministry of Agriculture of Peru (Ministerio de Agricultura)

Document Resolución Ministerial No. 504-2006-MEM/DM Approved Environmental Impact Assessment, Hydropower Project Source Ministry of Energy and Mines (MEM)

Document Certificado de Inexistencia de Restos Arqueológicos No. 2006-589

Proof of Inexistence of Archaeological Remains

Source National Institute of Culture of Peru (Instituto Nacional de Cultura, INC)

Alternative 2 does not raise any issues with existing laws and regulations. Step 2. Investment Analysis Sub-step 2a: Determine appropriate analysis method According to the “Tool for the demonstration and assessment of additionality (version 03)”, three options can be applied to conduct the investment analysis. These are the simple cost analysis (Option I), the investment comparison analysis (Option II) and the benchmark analysis (Option III). Since this project will generate financial/economic benefits other than CDM-related income, through the sale of generated electricity, Option I (Simple Cost Analysis) is not applicable. According to the Additionality Tool, if the alternative to the CDM project activity does not include investments of comparable scale to the project, then Option III must be used. The project developer is a company of SN Power, a growing international hydropower company that is a commercial investor, developer and operator of hydropower projects in emerging markets. SN Power is a Norwegian limited company that draws its expertise from a long-tradition of hydropower in Norway, and its core staff includes experienced Norwegian hydropower engineers5. So, the project developer does not have alternative and comparable investment choices to the hydropower project in question. Given that the project developer does not have alternative and comparable investment choices, benchmark analysis (Option III) is more appropriate than investment comparison analysis (Option II) for assessing the financial attractiveness of the project activity. Sub-step 2b: Option III – Application of benchmark analysis The likelihood of the development of this project, as opposed to the continuation of the purchase of grid electricity from the current electricity generation mix (i.e. its baseline), will be determined by comparing the project IRR (without carbon) with benchmark rates applicable to a local investor, i.e. those provided by national authorities, local banks, or investment bonds in the Host Country. The benchmark chosen in this case is an IRR of 10.54%. This is appropriate since it is the credit-risk free government bond rate,

5 http://www.snpower.no/About_SN_Power



3.6%, taken as the average overnight rate of Peru’s Central Bank6 for 1/2004-9/2007, plus a calculation of the total country risk premium, 6.94%, determined by independent financial expert Prof. Aswath Damodaran, Professor of Finance at Stern School of Business, New York University7 (6.94% + 3.6% = 10.5%). Sub-step 2c: Calculation and comparison of financial indicators The financial indicator was calculated using the following inputs. All currency in US$. Investment year 2008 First operational year of project 2011 Project lifetime (years) 50 Total Installed capacity (MW) 168 Estimated plant factor (%) 56.8% Number of operating hours per year 8424 Parasitic Power Loss (%) 1% REVENUE I) Electricity Generation Tariff (US$/MWh) 31.5 Rate of increase and evolution of tariff (US$) 0 COSTS & INVESTMENT a) Investment** Investment (US$) Civil Works 96,198,270 Investment (US$) Equipment-related 67,793,882 Investment (US$) Intangibles 9,399,608 Investment (US$) Development 5,000,000 VAT 19% b) Operational costs Insurance Costs ($/MW installed) 50 Wheeling costs (% of gross sales) 1.5% Annual operating and maintenance (% of capital costs) 1.5% DEPRECIATION Depreciation Civil Works 3% Depreciation Equipment 10% Depreciation Other 20% Income Tax 30% IRR 7.62% Benchmark IRR 10.5%

The IRR is more than 2 percentage points below the benchmark IRR for a project of this type. Sub-step 2d: Sensitivity analysis A sensitivity analysis was performed to vary the two most important parameters which could be expected to vary and affect the financial indicator. The electricity tariff of the base case (US$31.5, “base case” result from feasibility study analysis, p 39) was varied down and up by 10% (US$28.35 and US$ 34.65).

6 Banco Central de Reserva del Peru, updated data available on website at http://www.bcrp.gob.pe/bcr/index.php 7 http://pages.stern.nyu.edu/~adamodar/New_Home_Page/ , "New data"/ "Risk Premiums for Other Markets"



The initial investments were varied up and down by 10%, reflecting a realistic range of possible variation according to the feasibility assessment. Resulting Indicator values:

Tariff Investment IRRBase Case Base Case 7.62%Base Case +10% 6.92%Base Case -10% 8.41%

-10% Base Case 6.84%-10% +10% 6.15%-10% -10% 7.62%+10% Base Case 8.33%+10% +10% 7.62%+10% -10% 9.25%

In each case examined, the financial indicator is below to well below the threshold value of 10.54%. Thus, the CDM project activity is unlikely to be financially attractive. “If after the sensitivity analysis it is concluded that the proposed CDM project activity is unlikely to be the most financially attractive (as per step 2c para 8a) or is unlikely to be financially attractive (as per step 2c para 8b), then proceed to Step 4 (Common practice analysis)

Step 4. Common Practice Analysis Sub-step 4a. Analyse other activities similar to the proposed activity: The development of hydropower projects greatly relies on the hydrological resources available. The existing hydropower plants similar to the proposed activity in Peru, not undertaken as CDM projects, are shown in Table below.

Table Existing Hydro Power Stations of Peru

Name of power plant Installed Capacity

(MW) Operation

date Operating

hours Project

Owner/Operator Central Hidroelectrica Yuncan

130 2005 6930 EGECEN/ENERSUR

Data source: http://www.power-technology.com/projects/yuncan/

Sub-step 4b Discuss any similar options that are occurring The one similar project in Peru is the 130 MW Yuncan hydropower station, which began operation in 2005. The timeline of this project is as follows: - May 1976 to August 1978 – Feasibility study - April 1981 to August 1982 – Detailed Design - July 1996 to July 1998 – Revision of detailed design - June 1998 to August 2002 – Construction supervision - Early 2005 – Start of operation



The Yuncan project is owned by the EGECEN public company and is located the in the region of Pasco (Peru) and was financed 75% by a loan from the JBIC (Japan Bank for International Cooperation) and 25% from local funds8. The Yuncan project shows essential distinctions from the Cheves project because first, it was developed at a time when CDM was not an option as part of a financing package. The project was developed by the government. The project required development aid from JBIC for its financing. The Cheves project, on the other hand, will be developed by the private sector with financing from private sources, and in this case carbon finance and participation in the CDM alleviate the difficulties in securing a complete finance package. Similar activities are observed, but essential distinctions between the project activity and similar activities can reasonably be explained. In conclusion the proposed project shall be deemed to be additional according to ACM0002. B.6. Emission reductions:

B.6.1. Explanation of methodological choices: According to the latest version of ACM0002, the Grid is selected as the project boundary, as:

• The Grid is the national (largest) grid definition is used by default in the absence of guidance from the Designated National Authority

The SEIN Grid is therefore determined as the project boundary. For new hydroelectric projects with reservoirs, the project boundary includes the physical site of the plant as well as the reservoir area. The baseline emissions factor (EFy) is calculated as the average of the operating margin emissions factor and the build margin emissions factor. The data used to calculate the grid emissions factor comes from reliable and publicly accessible statistics from COES. The methodology will be applied using Option (b) of the Consolidated Methodology for Grid Connected Projects (Simple Adjusted Operating Margin). This is because low-cost must run resources constitute more than 50% of total grid generation, and detailed data to apply option (c) is unavailable. In addition, Option C (Dispatch Data Analysis) will not be used, because even if data were available the costs of processing the data would be beyond the amount affordable by the project developer. a) Simple Adjusted OM emission factor. The simple adjusted Operating Margin (OM) emission factor (EFOM,simple,y) is a variation on the simple OM, which is calculated as the generation-weighted average emissions per electricity unit (tCO2/MWh) of all

8 http://www.power-technology.com/projects/yuncan/



generating sources serving the system, where the power sources are separated in low-cost/must-run power sources (k) and other power sources (j). A three-year average, based on the most recent fuel consumption statistics available at the time of PDD submission, is used.

( )∑

∑

∑

∑ ×+

×−=

kyk

kikiyki

y

jyj

jijiyji

yyadjustedsimpleOM GEN

COEFF

GEN

COEFFEF

,

,,,,

,

,,,,

,_, 1 λλ (4)

Where: Fi,j,y the amount of fuel i (in a mass or volume unit) consumed by relevant power sources j in years

y, j refers to the power sources delivering electricity to the grid, including low-operating cost and

must-run power plants, and including imports to the grid, COEFi,j the CO2 emissions coefficient of fuel i (tCO2/mass or volume unit of the fuel), taking into

account the carbon content of the fuels used by relevant power sources j and the percent oxidation of the fuel in years y, and

GENj,y the electricity (MWh) delivered to the grid by source j. Fi,k,y the amount of fuel i (in a mass or volume unit) consumed by relevant power sources k in years

y, k refers to the power sources delivering electricity to the grid, including low-operating cost and

must-run power plants, and including imports to the grid, COEFi,k the CO2 emissions coefficient of fuel i (tCO2/mass or volume unit of the fuel), taking into

account the carbon content of the fuels used by relevant power sources k and the percent oxidation of the fuel in years y, and

GENk,y the electricity (MWh) delivered to the grid by source k. λy the number of hours per year for which low cost/must run sources are on the margin over 8760

hours per year The CO2 emission coefficient is obtained as

iiCOii OXIDEFNCVCOEF ⋅⋅= ,2 (2)

Where: NCVi net calorific value (energy content) per mass or volume unit of a fuel i, the country-specific

value OXIDi the oxidation factor of the fuel, IPCC default value EF CO2, i the CO2 emission factor per unit of energy of the fuel i, IPCC default value EFOM,y= 0.664 For the detailed information, please see the Annex 3. b) BM emission factor



The build margin is calculated by using data on fuel consumption and generation of individual plants in the grid in 2006.

∑∑ ⋅

=ym

miymi

yBM GEN

COEFFEF

,

,,,

, (9)

Where: Fi,m,y the amount of fuel i (in a mass or volume unit) consumed by relevant power sources m in

years y M the power sources delivering electricity to the grid, including low-operating cost and must-run

power plants COEFi,m the CO2 emissions coefficient of fuel i (tCO2/mass or volume unit of the fuel), taking into

account the carbon content of the fuels used by relevant power sources m and the percent oxidation of the fuel in years y

GENm,y the electricity (MWh) delivered to the grid by source m Option 1 is chosen, to calculate the Build Margin emission factor ex-ante, based on the most recent information available on plants already built for sample group m at the time of PDD submission. The sample group m is constituted by the power plant capacity additions in the electricity system that comprise 20% of the system generation and that have been built most recently. Therefore, the Build Margin emission factor EFBM,y of the SEIN Grid is calculated to be 0.304 tCO2/MWh. The detailed data are listed in the annex 3. EFBM,y= 0.304 For the detailed information, please see the Annex 3. c) Combined margin emission factor. To get EFy with the combined margin (CM), the following equation is used:

yBMBMyOMOMy BMEFEFEF ,, _⋅+⋅= ωω =0.5* 0.664+0.5* 0.304= 0.484 (9)

Where:

EF: baseline emission factor (tCO2e / MWh) ωOM: Operation Margin weight, which is 0.5 by default EFOM,y: Operational Margin emission factor (tCO2e / MWh) ωBM: Build Margin weight, which is 0.5 by default EFBM.y: Build Margin emission factor (tCO2e / MWh) y: a given year

Then baseline emissions (BEy) are obtained as:

yyy EFGENBE ∗= (10)



Where: BE: Baseline emissions (t CO2e) GEN: Electricity supplied by the project to the grid (MWh) EF: baseline emission factor (tCO2e / MWh) y: a given year

B.6.2. Data and parameters that are available at validation:

Data / Parameter: F i,j,y

Data unit: gallons, thousand cubic feet, short tons Description: The amount of fuel i consumed by relevant power source j in years y. Source of data used: COES, http://www.coes.org.pe/coes/ Value applied: See Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied :

Official released statistic; publicly accessible

Any comment:

Data / Parameter: GENj,y

Data unit: MWh Description: The electricity generation by source j in year y Source of data used: COES, http://www.coes.org.pe/coes/ Value applied: See Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied :

Official released statistic; publicly accessible

Any comment:



Data / Parameter: NCV i

Data unit: KJ/kg, TJ/t

Description: The net calorific value (energy content) per mass or volume unit of a fuel i. Source of data used: IPCC Value applied: See Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied :

2006 IPCC Guidelines for national greenhouse gas inventories

Any comment:

Data / Parameter: EFCO2,j

Data unit: tC/tfuel Description: The CO2 emission factor per unit of mass of the fuel i. Source of data used: 2006 IPCC Guidelines for national greenhouse gas inventories Value applied: See Annex 3 Justification of the choice of data or description of measurement methods and procedures actually applied :

IPCC default value

Any comment:

Data / Parameter: OXID i

Data unit: % Description: The oxidation factor of the fuel Source of data used: 2006 IPCC Guidelines for national greenhouse gas inventories Value applied: 100% for all fuels Justification of the choice of data or description of measurement methods and procedures actually applied :

IPCC default value

Any comment:

B.6.3 Ex-ante calculation of emission reductions:

The ex-ante emission reductions calculations are as follows:



Where:

ER: Emission reduction (t CO2e) BE: Baseline emissions (t CO2e) PE: Project Emissions (t CO2e) L: Leakage emissions (t CO2e) y: a given year

According to ACM0002 no project emissions have to be taken into consideration as the power density exceeds 10 W/m2. Therefore there are no emissions to consider that may have arisen from such a flooded area. Therefore,

0=yPE

According to ACM0002, the leakage of the proposed project is not considered. No leakage is expected. Therefore, 0=yL .

Therefore: BEERy = y

Refer to Section B.6.1. for equations used to estimate baseline emissions.

yyy EFGENBE *=

Where:

BE: Baseline emissions (t CO2e) GEN: Electricity supplied by the project to the grid (MWh) EF: baseline emission factor (tCO2e / MWh) y: refers to a given year

For this ex-ante estimate, GENy is considered to be equal to the total predicted MWh generated by the facility minus 1% of that total, which is subtracted to account for parasitic energy loss onsite. Thus, GENy is estimated as (836,800 MWh – 8,368 MWh) = 828,432 MWh/yr electricity supplied to the grid. Baseline emission factor with combined margin EFy is as calculated in section B.6.1 and equals 0.484 tCO2e/MWh. Therefore using the approach above, and the data shown in Annex 3, the baseline emissions will be 400,857 tCO2e/year or 2,805,999 tCO2e for the 7-year crediting period. Please see the table below for a summary of the values used and the results of the calculation.

yyyy LPEBEER −−=



B.6.4 Summary of the ex-ante estimation of emission reductions:

YearEstimation of project

activity emissions (tonnes of CO2e)

Estimation of baseline emissions (tonnes of

CO2e)

Estimation of leakage (tonnes of

CO2e)

Estimation of overall emission reductions

(tonnes of CO2e)2011 0 400,857 0 400,8572011 0 400,857 0 400,8572013 0 400,857 0 400,8572014 0 400,857 0 400,8572015 0 400,857 0 400,8572016 0 400,857 0 400,8572017 0 400,857 0 400,857

Total (tCO2e) 0 2,805,999 0 2,805,999 B.7 Application of the monitoring methodology and description of the monitoring plan: The monitoring methodology to be used by the project activity is the one prescribed by the approved consolidated monitoring methodology ACM0002 Version 06, which requires monitoring of the electricity generation from the proposed project activity.

B.7.1 Data and parameters monitored:

(Copy this table for each data and parameter) Data / Parameter:

Electricity quantity (EGy) Data unit: MWh Description: Electricity supplied to the grid by the project Source of data to be used:

Directly measured

Value of data applied for the purpose of calculating expected emission reductions in section B.5

828,432 MWh/yr

Description of measurement methods and procedures to be applied:

Meter location Electricity supplied to the grid by the Project will be measured using electric meters at two places:

1) Substation Huacho (main meter) 2) Substation at Cheves underground powerhouse (onsite meter)

Frequency Measurement will be recorded at least every 15 minutes, and the measurements will be processed on a monthly basis for the purpose of invoicing.



Data recording Data will be monitored at a distance in real time via Ethernet communication between the main meter and onsite meter and the internal network of corporate data of the project developer. Measurement will be recorded at least every 15 minutes. Data archiving The data will be archived in electronic form in .xls (MS Excel) format. The archived files will be stored in the servers of the project developer in Lima. A Backup copy will be stored in the operational computers at the production center.

QA/QC procedures to be applied:

Accuracy of measurements The electric meters must comply with the requirements of COES and RLCE (The law of electricity concessions): (a) use electronic technology, (b) capacity to register readings at least every 15 minutes, (c) accuracy better than or equal to 0.2%. Meter calibration The main meter and the onsite meter will be maintained and calibrated according to the procedure described in the NTP ISO 9001. The Chief of Maintenance (Jefe de Mantenimiento, JMA) will have responsibility for meter verification and calibration. Double check & backup data Double check measurements of the main meter by receipts of sales In the case of main meter failure, data from the onsite meter shall be used as backup. Staff training The JMA will be responsible for ensuring that all staff involved in monitoring of the CDM project has proper training to monitor, measure, and prepare reports of monitoring.

Any comment: Data will be kept for 2 years after the crediting period

B.7.2 Description of the monitoring plan: Monitoring of the parameter EGy , is described in the table in section B.7.1. A figure of the monitoring scheme follows below. The responsibility for the described measurement methods and procedures is described below.



Figure: Locations of electricity meters The responsibility for executing monitoring methods and procedures is as follows: Responsibility for measuring and measurements

All records Chief of Commercialization (Jefe de Comercialización, JCO), supported by Technician specialized in instrumentation and measurements

Daily records

Operational Coordinator (el Responsable de Coordinación Operativa, RPC)

Responsibility for archiving, Lima

Monthly records JCO

Responsibility for archiving, production site

All records Shift Operators (Operadores de Turno, OPE)

B.8 Date of completion of the application of the baseline study and monitoring methodology and the name of the responsible person(s)/entity(ies) The baseline study and the monitoring methodology were concluded on 27 November 2007. The persons responsible for the application of the baseline and monitoring methodology to the project activity are the following: Jessica Wade-Murphy EcoSecurities B.V. Kettingstraat 21-A 2511 AM The Hague Netherlands +31 (0)70 365 4749

To Paramonga To Zapallal

Substation Huacho 220 kV

Cheves Powerhouse

Onsite Meter

Main Meter

Electricity Meters



Please note that neither the person named nor EcoSecurities is a project participant in this project Detailed baseline information is attached in Annex 3.



SECTION C. Duration of the project activity / crediting period C.1 Duration of the project activity: C.1.1. Starting date of the project activity: 15 July 2008 (financial closure) C.1.2. Expected operational lifetime of the project activity: 50 years 0 months C.2 Choice of the crediting period and related information: C.2.1. Renewable crediting period C.2.1.1. Starting date of the first crediting period: 1 March 2011 C.2.1.2. Length of the first crediting period: 7 years 0 months C.2.2. Fixed crediting period: C.2.2.1. Starting date: Not applicable C.2.2.2. Length: Not applicable

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 02 CDM – Executive Board page 25


SECTION D. Environmental impacts D.1. Documentation on the analysis of the environmental impacts, including transboundary impacts: The project has all the necessary permissions and environmental permits. These include:

Document Modificación al Contrato de Concesión No. 187-2001

General Concession for the power station

Source Ministry of Energy and Mines (Ministerio de Energía y Minas, MEM) and the Empresa de Generación Eléctrica Cheves S.A.

Document Resolución Administrativa No. 0179/2005-GRL.DRA/ATDRH, Autorización para el uso del recurso hídrico con fines de ejecución de obras hidroeléctricas

Permit for use of the water resource

Source Regional Directorship of Agriculture of the Regional Government of Lima (Dirección Regional de Agricultura, Gobierno Regional de Lima) and the Ministry of Agriculture of Peru (Ministerio de Agricultura)

Document Resolución Ministerial No. 504-2006-MEM/DM Approved Environmental Impact Assessment, Hydropower Project Source Ministry of Energy and Mines (MEM)

Document Certificado de Inexistencia de Restos Arqueológicos No. 2006-589

Proof of Inexistence of Archaeological Remains

Source National Institute of Culture of Peru (Instituto Nacional de Cultura, INC)

Environmental Impacts, summarized from approved EIA Approved EIA: Modification of Environmental Impact Assessment Hydropower Station Cheves I, SVS Ingenieros S.A., January 2006 In general, environmental impacts are deemed light or moderate (EIA page 5.10). Where impacts of the project were identified, mitigation measures were suggested and defined. The EIA highlights the following with regards to the Project, as shown in the table below (sections 5 and 6 of the EIA).

Identified Impact Measures taken Erosion - Erosion related to reservoir

creation - Erosion related to river flow

The erosion impact will be brief, as the erosion is expected to stabilize once the ponds are filled. The construction activities will follow technical specifications to control erosion.

River Flow - Lower flow in riverbed between

capture and final release - Downstream of project

A “caudal ecologico” (ecological flow) for the River Huaura has been established, 1.0 m3/s, which will be maintained as a minimum at all times through regulation at the Huaura intake (0.47 m3/s) and Checras pond (0.53 m3/s). The



ecological flow is designed to cover the existing water use in the length of river between the intakes and the discharge. Any agricultural application will thus be unaffected. In the dry season the average river flow is 13.68 m3/s. The compensatory pond Picunche will ensure that that river flow downstream of the project is the same as it was prior to the existence of the project.

Water quality - Increased water turbidity - Pollution of river from newly

created earth/excavation piles - Turbidity with reservoir purges - Water quality could be affected

by liquid effluents used in maintenance of the powerhouse

Water quality may change to include more particulate matter (earth and stones) because of erosion during construction & the filling of the ponds. Special deposits for excavated material have been designated so that this material is not left on the river banks and subject to falling into the river and affecting water quality. All waste created during construction will be collected and disposed of properly. Reservoir purges will take place only infrequently at programmed times during the rainy season to minimize this impact. In all phases of the project, the environmental management plan describes how responsible management of liquid effluents will be used to avoid contaminating river water.

Air quality - Reduced because of increased

dust during construction

To the extent possible, the excavated materials and roads will be sprinkled to decrease dust. Burning of wastes and bushes will be prohibited.

Scenery - Visual aesthetic will change with

the project infrastructure (Checras dam, most notably)

- Changes in water levels - Creation of excavation piles

Specific locations of excavation piles have been designated so these effects will be localized. The zones around the construction will be rehabilitated once the construction phase ends. Construction of the walls across the Checras River and the Huaura River is an unavoidable component of the project and will change the scenery, but the benefits are deemed to outweigh any negative effects of the change.

Agriculture

The land area is arid and has little vegetation and almost no agricultural use. Only a very small area of land with agricultural use will inundated, by the pond Picunche. A “Plan de Relaciones Comunitarias” (Plan of Community Relations) has been drawn up and approved as part of the EIA, and describes how the project developer will work with the community to address and resolve any such issues.

Catastrophic events - Failure of retaining wall at

Checras reservoir

A contingency plan was developed and approved as part of the EIA to respond to such an unlikely occurrence.

Procedure for the end of the project The “Plan de Abandono”, Plan of Abandonment, was developed and approved as part of the EIA to describe the procedures for de-commissioning the project.

Further Environmental Impact Study The project developer also commissioned an additional, non-required EIA for the Cheves project to account even more exhaustively for any potential environmental impacts of the project. This



study conforms to the World Bank environmental and social safeguard policies and guidelines. The details of the EIA are as follows: Estudio de Impacto Ambiental del Proyecto Central Hidroeléctrica Cheves I, Walsh Perú S.A., DATE 2007. D.2. If environmental impacts are considered significant by the project participants or the host Party, please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party: With mitigation controls planned as part of the project construction and EIA process, and the contribution made by the project to sustainable development for the local and national area, the project is expected to have an overall positive impact on the local and global environment. All negative environmental impacts are subject to mitigation measures as described above.



SECTION E. Stakeholders’ comments E.1. Brief description how comments by local stakeholders have been invited and compiled: Comments by local stakeholders were invited and compiled in the following way. Two stakeholder consultation meetings were planned to receive and respond to stakeholder comments. Local stakeholders were invited to attend the meetings by the following several means: (1) 15 to 21-Aug-2007, Radio announcement in “Radiodifusora Morena de Churin” (2) 16 to 21-Aug-2007, Radio announcement in Radiodifusora JCR EIRL de Huaura (3) 19 and 21-Aug-2007, newspaper announcement, Diario El Trome (4) 16 to 20-Aug-2007, Invitation letters distributed by personnel of SN Power Peru Holding SRL. List of Stakeholders Invited: By Radio and newspaper announcements: Community members from the city of Churin and surrounding communities By Invitation letter: Organization Title Name CONAM Presidente Consejo Directivo Sr. Manuel Ernesto Bernales

Alvarado FONAM Directora Sra. Julia Justo Ministerio de Energía y Minas Directora General de Asuntos

Ambientales Energéticos Srta. Iris Cárdenas

Ministerio de Energía y Minas Director General de Electricidad

Sr. Jorge Aguinaga Díaz

Ministerio de Energía y Minas Director de Concesiones Eléctricas

Sr. Mardo Mendoza

Ministerio de Energía y Minas Director Regional del Energía y Minas

Sr. Antonio Cuadra Vega

OSINERG Presidente Consejo Directivo Sr. Alfredo Dammert Lira CESEL Ingenieros Gerencia de Hidráulica e

Irrigaciones Sr. Virgilio Dávila Dávila

Gobierno Regional de Lima Presidente del Gobierno Regional Lima

Sr. Nelson Chui Mejía

Universidad Nacional José Faustino Sánchez Carrión

Rector Sr. Carlos Miguel Chuquilín Terán

Municipalidad Provincial de Huaura

Alcalde Lic. Pedro Julio Zurita Paz

Ministerio del Interior Gobernador Provincial Sr. Cecilio Albino Rossel Cámara de Comercio Presidente Sr. Licitación Gabino

Veramendi Municipalidad Provincial de Huaura

Gerente de Desarrollo Humano Sr. Ángel Ayvar Díaz

Municipalidad Provincial de Asesor de Alcaldía Sr. Walter Humán Rodríguez



Huaura Municipalidad Distrital de Checras - Maray

Alcalde Sr. Héctor Pizarro Medina

Municipalidad Distrital de Checras - Maray

Teniente Alcalde Sr. Cirilo José Carrera Julca

Poder Judicial Juez de Paz Sr. Jesús Pacheco Mendoza Gobernación de Checras Gobernador Sr. Moisés Suzano Medina Comunidad de Tongos Presidente de la Comunidad Sr. Ronal Huertas Mendoza Comunidad de Tongos Teniente Gobernador Sr. Ever Adriano Bustamante Comunidad de Tongos Vice-Presidente Sr. Antonio Trujillo

Bustamante Comunidad de Tongos Secretario Sr. Máximo Flores Comunidad de Tongos Tesorero Sr. Eusebio Chirre Pizarro Municipalidad Distrital de Paccho

Alcalde Sr. Jaime Floriano Granado Mejía

Gobernación Gobernador Sr. Eder Pacheco Mejía Municipalidad Provincial de Paccho

Regidor de Obra Sr.Raúl Claro Gaspar

Municipalidad Provincial de Paccho

Regidor de Proyecto de Desarrollo Urbano

Sr. Pablo Chaupis Cayetano

Comunidad de Ayaranga Presidente de la Comunidad Sr. Cirilo Cerna Chaupis Comunidad de Ayaranga Presidente de la Junta de

Regantes Sr. Adolfo Serna Bustamante

Comunidad de Ayaranga Secretario Sr. Wilmer Serna La Torre Comunidad de Ayaranga Poblador Sr. Visitación Guerrero

Cayetano Comunidad de Ayaranga Poblador Sr. Luís Guerrero Cayetano Comunidad de Ayaranga Pobladora Sra. Hilda Serna Bustamante Comunidad de Ayaranga Directivo de la Junta de

Regantes Sr. Ramiro Morin Bustamante

Comunidad de Huacar Presidente de la Comunidad Sr. Faustino Cóndor Gómez Gobernación Gobernador Sr. Serapio Rivera Cóndor. Comunidad de Huacar Secretario Sr. Cilo Retuerto Velásquez Comunidad Campesina Presidente Sr. Alfredo Saúl Felles calvos Comunidad Campesina Fiscal Sr. Ernesto Alfredo Gómez

Cóndor Comunidad Campesina Vice-Presidente Sr. Oscar Damián Ferrer Comunidad Campesina Vocal Sr. Cristian Liberato Carmín Comunidad Campesina Secretario Sr. Daniel Carmín Leandro Municipalidad Provincial de Oyón

Alcalde Sr. Manuel Delgado Altez

Gobernación de la Provincia de Oyón

Gobernador Sr. Alejandro Vizurraga Andrade

Ministerio de Agricultura Jefe encargado Sr. Dionisio Alberto Egusquisa Poder Judicial Juez de Investigación

Preliminar Sr. Hernán Gutiérrez Marroquí

Municipalidad Provincial de Oyón

Regidor Sr. Juan Cruz Toribio




Gerencia de Desarrollo Urbano y Rural

Ing. César Delgado


Gerencia de Desarrollo Urbano y Rural

Ing. Luis Efio

Municipalidad Provincial de Pachangará

Alcalde Sr. Marco Justo Ugarte Huaman

Gobernación Gobernador Sr. José Fernando Rodríguez Ramírez

Poder Judicial Juez de Paz Srta. Carmen Prieto Castro Ministerio de Agricultura Jefe Encargado Sr. Eduardo Robles Tello PRONAMACH Jefe Ing. Homero Chaccha Córdoba ONG CEDRUM Jefe Sr. Tomas Quispe Murga Gobernación Teniente Gobernadora Srta. Amalia Violeta Santillán

Pérez ONG CEDRUM Jefe de Proyecto Sr. Carlos Gonzáles Sifuentes Comunidad de Huacho s/p Presidente de la Comunidad Sr. Catalino Chaupis Rosales Comunidad de Huacho s/p Vice - Presidente Sr. Marino Villena Galarza Comunidad de Huacho s/p Secretario Sr. Asunción Guavil Comunidad de Huacho s/p Fiscal Sr. Juan Evangelista Municipalidad Provincial de Andajes

Alcalde Sr. Antonio Bernabé Conejo

Gobernación Gobernador Sr. Floiran Arce Poder Judicial Juez de Paz Sr. Joel Dimas Jirón Municipalidad Provincial de Andajes

Teniente Alcalde Sr. Carlos Espinosa

Comunidad de Andajes Presidente de la comunidad Sr. Olidario Zúñiga Comunidad de Andajes Presidente de Regantes Sr. Faustino Zúñiga Herminio Torres Chirre Natividad Fuentes Rivera

Chirre Mayor PNP - Comisaría

Churín Alfredo Marquez Muñoz

The two meetings were convened as follows: (1) 21-Aug-2007, 20:30-23:00, Community Hall, Community of Ayaranga, Paccho District, Huaura Province (2) 22-Aug-2007, 12:00-14:00, Parochial Salon “San Pancracio”, Churin, Pachangara District, Oyon Province List of Attendees Ayaranga: 60 community members and other stakeholders attended the meeting (Annex) Churin: 64 community members and other stakeholders attended the meeting (Annex) The meetings convened for the stakeholder consultation included a brief presentation including a description of the project by the Project Developer; a presentation on climate change, the CDM and the project’s contribution to greenhouse gas mitigation by a representative of EcoSecurities; and a question and answer session.



The stakeholder meetings were filmed. The videos are available from the project participant upon request. E.2. Summary of the comments received: 21-Aug-2007, 20:30-23:00, Community Hall, Community of Ayaranga, Paccho District, Huaura Province a) Community members were concerned about the effects of climate change on their agricultural activities producing peaches b) Community members expressed concern that the project would affect their water supply from the Huaura River for their agricultural activities? 22-Aug-2007, 12:00-14:00, Parochial Salon “San Pancracio”, Churin, Pachangara District, Oyon Province a) Which communities will be served by electricity from project? b) Will thermal baths next to the Huaura River be affected? c) How will the local community benefit from the project? E.3. Report on how due account was taken of any comments received: The project developer responded to the concerns of the local stakeholders during the stakeholder consultation meetings. Furthermore, the project developer, Cheves S.A. is ultimately responsible for ensuring that the communities’ concerns are met through the “Plan of Community Relations”. Ayaranga: a) EcoSecurities explained that it is difficult to predict the effects of climate change at the local level, and that the CDM project as part of a global effort to prevent dangerous climate change. b) The project developer explained that the project has been designed so that an “ecological flow” will always supply the necessary water between the intake and outlet of the Cheves project. c) The project developer explained that the project location is far a way of the Community’s agricultural activities:

• The Project is located between the 2 168 masl and 1 548 masl, while • The community’s agricultural activities are located above 2 300 masl.

Furthermore, an agricultural engineer (Eng. Mery Martel Ortiz) has been contracted by Cheves S.A. to work with the communities to make sure that their agricultural activities are improved with contribution of Cheves SA as a part of the “Plan of Community Relations”.

Churin: a) The project developer explained that Cheves project will deliver electricity to the Huacho Substation (connected to the national grid and primarily Lima). Electricity distribution activity is not part of the Cheves’s authorizations, because Cheves S.A. is a generation company and by law is not allowed to distribute electricity. b) The project developer explained that so far, studies have suggested that the thermal baths would not be affected since their water supply is different from that of the project. The thermal baths will be monitored during the project and the topic will be re-evaluated if any changes occur. c) The project developer explained that the primary way the local community would benefit is from the jobs that will be created temporarily during the construction phase of the project. Up to



1000 workers will be needed for a time period of up to 3 years. Also, the additional benefits will be:

• Easement payments • Land purchase agreements • Energetic canon Payment for resource use (water) • Assess tax (municipality income that will be distributed with the local towns and

communities) • Communities contribution program (during construction and specially after the beginning

of commercial operation of Cheves project, based on sharing the CDM income)



Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY Project developer:

Organization: Empresa de Generación Eléctrica Cheves S.A. Street/P.O. Box: Av. Camino Real No. 456 Building: Edificio Torre Real, Piso 7 City: San Isidro, Lima State/Region: - Postfix/ZIP: - Country: Peru Telephone: +51 1 2112622 or +51 1 2112689 FAX: +51 1 2112526 E-Mail: [email protected]

URL: www.cahua.com.pe Represented by: Title: Engineer Salutation: Mr. Last Name: Ormeño Durand Middle Name: - First Name: Alejandro Department: -

Mobile: +51 1 93521803

Direct FAX: +51 1 7053299 Direct tel: +51 1 7053300 Personal E-Mail: [email protected]



Project Annex 1 participant:

Organization: SN Power Invest AS Street/P.O.Box: Lilleakervn. 6, PB 200 Lilleaker Building: - City: Oslo State/Region: - Postfix/ZIP: 0216 Country: Norway Telephone: + 47 24 06 86 20 FAX: - E-Mail: - URL: www.snpowerinvest.com Represented by: Title: - Salutation: Ms. Last Name: Kjelaas Middle Name: - First Name: Kristine Mobile: - Direct FAX: - Direct tel: + 47 24 06 86 20 Personal E-Mail: [email protected]



Annex 2

INFORMATION REGARDING PUBLIC FUNDING This project will not receive any public funding.



Annex 3 BASELINE INFORMATION

Emission Factor for the Peruvian SEIN grid

BaselineEFgrid,OM-adj,y

[tCO2/MWh] Load [MWh]2004 0.711 21,903,089 2005 0.648 23,001,485 2006 0.637 24,762,820

Total MWh (2004-2006)= 69,667,395 EFOM, simple-adj EFBM,2006

0.664 [tCO2/MWh] 0.304

wOM = 0.5wBM = 0.5Default EFCM [tCO2/MWh]

0.484

Default weights

Fuel consumption and electricity generation data for the years 2004, 2005 and 2006 follow. Additional information: Year of entrance into service “1996” signifies during 1996 or in the years prior 1996. The Build Margin cohort includes all new power stations that entered the grid since 1997 with exception of the CDM project “Santa Rosa” (2006). The original fuel data are presented here in the following units:

Fuel Type Fuel Units

Gas/diesel oil gallons Residual fuel oil gallons Natural gas (dry) thousand cubic feet

Other bituminous coal short tons



year of

dataPower

Company Power StationYear in Service

Generation (MWh)

Fuel type 1 Quantity 1

Fuel type 2 Qty 2

Fuel type 3 Qty 3

Fuel type 4 Qty 4

Fuel type 5 Qty 5

2006ELECTRICA SANTA ROSA SantaRosa(1) 2006 6510 0 0 0 0 0

2006 ENERSUR Chilca(4) 2006 89494 gas 874561.9 0.0 0 0 0

2006 ENERSUR Yuncan 2005 838970 0 0 0 0 0

2006MINERA CORONA Huanchor 2002 132930 0 0 0 0 0

2006ELECTROPERU

TumbesMAK1,MAK2 2001 42378 D2 111760.0 R6 2360742.0 0 0 0

2006 EDEGEL Chimay 2000 894240 0 0 0 0 0

2006 EDEGEL Yanango 2000 213540 0 0 0 0 0

2006 SAN GABAN SanGabán 2000 769480 0 0 0 0 0

2006 EGASA MollendoTG1,TG2 1999 8711 D2 796411.0 0.0 0 0 0

2006 EGESUR Calana 1999 8922 D2 73910 R6 521698 0 0 0

2006 EEPSA MalacasTGN4 1998 517100 gas 5687758.9 D2 0.0 0 0 0

2006 EGASA MollendoMirrlees 1998 58893 D2 156835.0 R500 3525135.0 0 0 0

2006 ENERSUR IloTG1,TG2 1998 8690 D2 731333.7 0.0 0 0 0

2006 TERMOSELVA TG1Aguaytía 1998 606375 gas 7224030.3 0.0 0 0 0

2006 TERMOSELVA TG2Aguaytía 1998 541596 gas 6429254.8 0 0 0 0

2006 CAHUA GallitoCiego 1997 152320 0 0 0 0 0

2006 ETEVENSA(5) TGVentanillaD2 1997 12115 D2 0.0 0.0 0 0 0

2006 ETEVENSA(5)TGVentanillaGN+CC 1997 1755337 gas 14882864.3 0.0 0 0 0

2006 CAHUA Arcata 1996 35650 0 0 0 0 0

2006 CAHUA Cahua 1996 284020 0 0 0 0 0

2006 CAHUA Pariac 1996 25030 0 0 0 0 0

2006 EDEGEL Callahuanca 1996 549860 0 0 0 0 0

2006 EDEGEL Huampaní 1996 227240 0 0 0 0 0

2006 EDEGEL Huinco 1996 992520 0 0 0 0 0

2006 EDEGEL Matucana 1996 841420 0 0 0 0 0

2006 EDEGEL Moyopampa 1996 521580 0 0 0 0 0

2006 EGASA Charcani 1996 988520 0 0 0 0 0

2006 EGEMSA Herca 1996 0 0 0 0 0 0

2006 EGEMSA Machupicchu 1996 740370 0 0 0 0 0

2006 EGENOR CañóndelPato 1996 1482290 0 0 0 0 0

2006 EGENOR Carhuaquero 1996 538590 0 0 0 0 0

2006 EGESUR Aricota 1996 37840 0 0 0 0 0

2006ELECTROANDES Malpaso 1996 209670 0 0 0 0 0

2006ELECTROANDES

Oroya-Pachachaca 1996 116940 0 0 0 0 0

2006ELECTROANDES Yaupi 1996 782560 0 0 0 0 0

2006ELECTROPERU Mantaro 1996 5532250 0 0 0 0 0

2006ELECTROPERU Restitución 1996 1756410 0 0 0 0 0

2006 CAHUA GDPacasmayo 1996 5868 D2 455112.4 R6 0.0 0 0 0

2006 EDEGEL TGSantaRosaUTI 1996 200250 gas 2254780.9 D2 1436167.6 0 0 0



2006 EDEGELTGSantaRosaWTG 1996 534779 gas 5820867.2 D2 947662.4 0 0 0

2006 EEPSA MalacasTG1 1996 19920 gas 328354.9 D2 0.0 0 0 0



2006 EGASA Chilina 1996 26131 D2 303137.1 R500 1129671.9 R500 425646.0 D2 0.0 D2 44387.0

2006 EGEMSA Dolorespata 1996 322 D2 27808 0.0 0 0 0

2006 EGENOR GDChiclayoOeste 1996 25382 D2 189248.0 R6 1544800.0 0 0 0

2006 EGENOR GDPaita 1996 4043 D2 328382.0 0.0 0 0 0

2006 EGENOR GDPiura 1996 3777 D2 111285.9 0.0 0 0 0

2006 EGENOR Piura1Residual 1996 28646 R6 2153716.5 0.0 0 0 0

2006 EGENOR TGPiura 1996 24420 D2 129333.0 R6 2497838.0 0 0 0

2006 EGENOR TGChimbote 1996 7713 D2 834690.0 0.0 0 0 0

2006 EGENOR TGTrujillo 1996 5276 D2 574698.0 0.0 0 0 0

2006 EGENOR GDSullana 1996 6646 D2 526844.0 0.0 0 0 0

2006 EGENOR TV Trupal 1996 0 0.0 0 0 0

2006 EGESUR Moquegua 1996 0 0.0 0 0 0

2006ELECTROPERU Yarinacocha 1996 73767 R6 4613887.0 D2 2880.0 0 0 0

2006 ENERSUR IloCatkato 1996 829 D2 57410.1 0.0 0 0 0

2006 ENERSURIloTV1,TV2,TV3,TV4 1996 430380 R500 20100205.7 D2 997.8 0 0 0

2006 ENERSUR Ilo2TV1 1996 880977 D2 177241.3 coal 344517.3 0 0 0

2006 SANGABAN Bellavista 1996 696 D2 58224.2 0.0 0 0 0

2006 SANGABAN Taparachi 1996 1789 D2 139078.6 0.0 0 0 0

2006 SANGABAN Tintaya 1996 0 D2 0 0.0 0 0 0

2006 SHOUGESA Cummins 1996 952 D2 65853.0 0.0 0 0 0

2006 SHOUGESASanNicolásTV1,TV2,TV3 1996 104990 R500 9484381.2 0.0 0 0 0

2005ELECTRICA SANTA ROSA SantaRosa(1) 2006 0 0 0 0 0 0

2005 ENERSUR Chilca(4) 2006 0 0.0 0.0 0 0 0

2005 ENERSUR Yuncan 2005 250483.984 0 0 0 0 0

2005MINERA CORONA Huanchor 2002 141634.561 0 0 0 0 0

2005ELECTROPERU

TumbesMAK1,MAK2 2001 50576.7528 D2 112810.0 R6 2753474.0 0 0 0

2005 EDEGEL Chimay 2000 799345.062 0 0 0 0 0

2005 EDEGEL Yanango 2000 177574.907 0 0 0 0 0

2005 SAN GABAN SanGabán 2000 754317.808 0 0 0 0 0

2005 EGASA MollendoTG1,TG2 1999 2019.85907 D2 198053.0 0.0 0 0 0

2005 EGESUR Calana 1999 86297.1591 D2 127538.0 R6 5160639.0 0 0 0

2005 EEPSA MalacasTGN4 1998 404480.844 gas 4416367.2 D2 6974.0 0 0 0

2005 EGASA MollendoMirrlees 1998 78297.1085 D2 137796.0 R500 4812745.0 0 0 0

2005 ENERSUR IloTG1,TG2 1998 2723.00107 D2 231914.6 0.0 0 0 0

2005 TERMOSELVA TG1Aguaytía 1998 700404.284 gas 8013883.6 0 0 0 0



2005 TERMOSELVA TG2Aguaytía 1998 590658.864 gas 6874269.8 0 0 0 0

2005 CAHUA GallitoCiego 1997 132201.976 0 0 0 0 0

2005 ETEVENSA(5) TGVentanillaD2 1997 5536.8 D2 434340.2 0 0 0 0

2005 ETEVENSA(5)TGVentanillaGN+CC 1997 1861367.5 gas 17798817.7 0 0 0 0

2005 CAHUA Arcata 1996 29773.3917 0 0 0 0 0

2005 CAHUA Cahua 1996 286371.095 0 0 0 0 0

2005 CAHUA Pariac 1996 30553.753 0 0 0 0 0

2005 EDEGEL Callahuanca 1996 546705.09 0 0 0 0 0

2005 EDEGEL Huampaní 1996 234083.317 0 0 0 0 0

2005 EDEGEL Huinco 1996 1016839.28 0 0 0 0 0

2005 EDEGEL Matucana 1996 819481.297 0 0 0 0 0

2005 EDEGEL Moyopampa 1996 533106.968 0 0 0 0 0

2005 EGASA Charcani 1996 665639.373 0 0 0 0 0

2005 EGEMSA Herca 1996 0 0 0 0 0 0

2005 EGEMSA Machupicchu 1996 748176.835 0 0 0 0 0

2005 EGENOR CañóndelPato 1996 1539791.42 0 0 0 0 0

2005 EGENOR Carhuaquero 1996 477522.352 0 0 0 0 0

2005 EGESUR Aricota 1996 109066.269 0 0 0 0 0

2005ELECTROANDES Malpaso 1996 177723.732 0 0 0 0 0

2005ELECTROANDES

Oroya-Pachachaca 1996 116619.293 0 0 0 0 0

2005ELECTROANDES Yaupi 1996 752919.386 0 0 0 0 0

2005ELECTROPERU Mantaro 1996 5116272.17 0 0 0 0 0

2005ELECTROPERU Restitución 1996 1644634.79 0 0 0 0 0

2005 CAHUA GDPacasmayo 1996 4819.30398 D2 140157.4 R6 233452.9 0 0 0

2005 EDEGEL TGSantaRosaUTI 1996 7059.284 gas 0 D2 717618.8 0 0 0

2005 EDEGELTGSantaRosaWTG 1996 418910.931 gas 4300296.7 D2 1300439.2 0 0 0

2005 EEPSA MalacasTG1 1996 54446.202 gas 917338.6 D2 0.0 0 0 0



2005 EGASA Chilina 1996 26850.6952 D2 251836.6 R500 1063332.4 R500 591136.0 D2 0.0 D2 132266.0

2005 EGEMSA Dolorespata 1996 56.613191 D2 5620.1 0.0 0 0 0

2005 EGENOR GDChiclayoOeste 1996 19759.4548 D2 79513.0 R6 1309688.3 0 0 0

2005 EGENOR GDPaita 1996 3268.8535 D2 260368.0 0.0 0 0 0

2005 EGENOR GDPiura 1996 2064 D2 149595.0 0.0 0 0 0

2005 EGENOR Piura1Residual 1996 23158.301 R6 1584581.0 0 0 0 0

2005 EGENOR TGPiura 1996 15167.8021 D2 88756.0 R6 1456920.0 0 0 0

2005 EGENOR TGChimbote 1996 689.6576 D2 108336.0 0 0 0 0

2005 EGENOR TGTrujillo 1996 204.236 D2 26237.0 0 0 0 0

2005 EGENOR GDSullana 1996 4576.83 D2 358618.0 0 0 0 0

2005 EGENOR TV Trupal 1996 0 R6 0.0 0 0 0 0

2005 EGESUR Moquegua 1996 0 0.0 0 0 0 0



2005ELECTROPERU Yarinacocha 1996 72453.842 R6 4490327.0 D2 5084.0 0 0 0

2005 ENERSUR IloCatkato 1996 1457.34373 D2 96948.5 0.0 0 0 0

2005 ENERSURIloTV1,TV2,TV3,TV4 1996 464842.93 R500 23360489.9 D2 44741.9 0 0 0

2005 ENERSUR Ilo2TV1 1996 830880.58 D2 128429.1 coal 315031.4 0 0 0

2005 SANGABAN Bellavista 1996 913.611598 D2 71861.5 0 0 0 0

2005 SANGABAN Taparachi 1996 1916.31092 D2 148805.7 0 0 0 0

2005 SANGABAN Tintaya 1996 0 D2 0.0 0 0 0 0

2005 SHOUGESA Cummins 1996 768.48006 D2 52769.5 0 0 0 0

2005 SHOUGESASanNicolásTV1,TV2,TV3 1996 107116.732 R500 9231862.5 0 0 0 0

2004ELECTRICA SANTA ROSA SantaRosa(1) 2006 0

2004 ENERSUR Chilca(4) 2006 0

2004 ENERSUR Yuncan 2005 0

2004MINERA CORONA Huanchor 2002 130532.227

2004ELECTROPERU

TumbesMAK1,MAK2 2001 35874.0977 D2 163252.0 R6 1887072.0

2004 EDEGEL Chimay 2000 938018.76

2004 EDEGEL Yanango 2000 205609.302

2004 SAN GABAN SanGabán 2000 789300.098

2004 EGASA MollendoTG1,TG2 1999 1489.05328 D2 182,576.0

2004 EGESUR Calana 1999 106492.156 D2 104,088.0 R6 6,389,731.0

2004 EEPSA MalacasTGN4 1998 455330.696 gas 5114285.5 D2 0.0

2004 EGASA MollendoMirrlees 1998 120223.067 D2 104,365.0 R500 7,277,421.0

2004 ENERSUR IloTG1,TG2 1998 2561.24671 D2 225,738.7

2004 TERMOSELVA TG1Aguaytía 1998 543584.038 gas 6144968.0

2004 TERMOSELVA TG2Aguaytía 1998 586728.382 gas 6951913.1

2004 CAHUA GallitoCiego 1997 25958.5494

2004 ETEVENSA(5) TGVentanillaD2 1997 479111.937 D2 34050306.0

2004 ETEVENSA(5)TGVentanillaGN+CC 1997 486305.215 gas 4797234.9

2004 CAHUA Arcata 1996 36850.8318

2004 CAHUA Cahua 1996 278612.406

2004 CAHUA Pariac 1996 64306.1458

2004 EDEGEL Callahuanca 1996 547827.501

2004 EDEGEL Huampaní 1996 213674.317

2004 EDEGEL Huinco 1996 861567.959

2004 EDEGEL Matucana 1996 748396.646

2004 EDEGEL Moyopampa 1996 518265.352

2004 EGASA Charcani 1996 864239.531

2004 EGEMSA Herca 1996 1938.34776

2004 EGEMSA Machupicchu 1996 718467.806

2004 EGENOR CañóndelPato 1996 1446184.04

2004 EGENOR Carhuaquero 1996 592442.851

2004 EGESUR Aricota 1996 96241.7764

2004ELECTROANDES Malpaso 1996 134147.002



2004ELECTROANDES

Oroya-Pachachaca 1996 84719.5327

2004ELECTROANDES Yaupi 1996 824079.776

2004ELECTROPERU Mantaro 1996 4965836.24

2004ELECTROPERU Restitución 1996 1605781.82

2004 CAHUA GDPacasmayo 1996 26326.6697 D2 290192.0 R6 1669429.7

2004 EDEGEL TGSantaRosaUTI 1996 27693.802 gas 0 D2 2641771.5

2004 EDEGELTGSantaRosaWTG 1996 224102.218 gas D2 18236246.5

2004 EEPSA MalacasTG1 1996 32312.1798 gas 537761.2 D2 0.0



2004 EGASA Chilina 1996 49899.7467 D2 452,722.1 R500 2,337,354.9 R500 489,980.0 D2 0.0 D2 155,398.0

2004 EGEMSA Dolorespata 1996 133.367928 D2 11,111.00

2004 EGENOR GDChiclayoOeste 1996 52012.8543 D2 983023.0 R6 2566343.8

2004 EGENOR GDPaita 1996 5227.6245 D2 411712.0

2004 EGENOR GDPiura 1996 5579.81 D2 2397395.0

2004 EGENOR Piura1Residual 1996 59841.5518 R6 2096463.0

2004 EGENOR TGPiura 1996 297.0689 D2 34455.0 R6 0.0

2004 EGENOR TGChimbote 1996 3540.7242 D2 392735.0

2004 EGENOR TGTrujillo 1996 996.86 D2 107867.0

2004 EGENOR GDSullana 1996 13432.1687 D2 1033624.0

2004 EGENOR TV Trupal 1996 252.54 R6 42825.0

2004 EGESUR Moquegua 1996 487.068298 D2 36,823.0

2004ELECTROPERU Yarinacocha 1996 106903.575 R6 6712686.9 D2 5084.0

2004 ENERSUR IloCatkato 1996 715.945651 D2 48,443.1

2004 ENERSURIloTV1,TV2,TV3,TV4 1996 655068.207 R500 37,698,948.6 D2 29,902.9

2004 ENERSUR Ilo2TV1 1996 993563.239 D2 138,211.1 coal 359,479.5

2004 SANGABAN Bellavista 1996 401.62491 D2 31,281.30

2004 SANGABAN Taparachi 1996 440.634393 D2 33,887.80

2004 SANGABAN Tintaya 1996 1420.734 D2 104,451.90

2004 SHOUGESA Cummins 1996 3130.96992 D2 209896.7

2004 SHOUGESASanNicolásTV1,TV2,TV3 1996 62743.427 R500 5454447.0



Determination of Lambda Dispatch data available in the spreadsheet that accompanies this PDD

Lambda2006 0.0063926942005 0.0034246582004 0.002853881

2004

0

500

1000

1500

2000

2500

3000

3500

131

262

393

412

4515

5618

6721

7824

8928

0031

1134

2237

3340

4443

5546

6649

7752

8855

9959

1062

2165

3268

4371

5474

6577

7680

87

Hourly LoadLCMR

2005

-

500

1,000

1,500

2,000

2,500

3,000

3,500

131

262

393

412

4515

5618

6721

7824

8928

0031

1134

2237

3340

4443

5546

6649

7752

8855

9959

1062

2165

3268

4371

5474

6577

7680

8783

9887

09

Hourly LoadLCMR



2006

0

5001000

1500

2000

25003000

3500

4000

1

798

1595

2392

3189

3986

4783

5580

6377

7174

7971

hours

MW Hourly Load (MW)

LCMR



Annex 4

MONITORING INFORMATION

Monitoring plan described in Section B.7

cheves pdd

Documents

estudio de factibilidad

ministerio de agricultura

official released statistic

asociados eirl norconsult

ministerio de energa

yuncan huanchor tumbesmak1

comunidad de huacho

common practice analysis