Feasibility Studies with the Aim of Developing a Bilateral Offset Credit Mechanism FY2011 Studies for Project Exploration and Planning Feasible Study on Renovation of Exiting Hotel to Eco-hotel in Off-grid Area of Kenya New Energy and Industrial Technology Development Organization (NEDO) NTT Data Institute of Management Consulting, Inc. Fuji Electric Co., Ltd. Mpata International Inc.
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Feasible Study on Renovation of Exiting Hotel to Eco … Study on Renovation of Exiting Hotel to Eco-hotel in Off-grid Area of Kenya 29 th February, 2012 NTT Data Institute of Management
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Feasibility Studies with the Aim of Developing a Bilateral Offset Credit Mechanism FY2011
Studies for Project Exploration and Planning
Feasible Study on Renovation of Exiting Hotel to Eco-hotel in Off-grid Area of Kenya
New Energy and Industrial Technology Development Organization (NEDO)NTT Data Institute of Management Consulting, Inc.
Fuji Electric Co., Ltd.Mpata International Inc.
Feasible Study on Renovation of Exiting Hotel to Eco-hotel in Off-grid Area of
Kenya
29th February, 2012
NTT Data Institute of Management Consulting, Inc.Fuji Electric Co., Ltd.
Mpata International Inc.
Feasibility Studies with the Aim of Developing a Bilateral Offset Credit Mechanism FY2011
Organizer in Kenya(to bundle small credits and sell)
“Mpata Model” ⇒ Other hotels in the Masai Mara National Reserve. Then to other national parks (There are 2,500 hotels in off-grid area in Kenya).We need to establish a suitable methodology of MRV and how to bundle small credits from various types of hotels.
After calculating the power consumption in the Club, we found that a 200 kW-size PV generation system was an ideal plan.This plan can supply almost all of the electric power needed for the Club during off seasons. It can supply 80% of the total power consumption.
The 200 kW PV generation system could reduce;63,700 litter of Diesel consumptionand170 ton/year of CO2 emission
But, an an initial investment required to install 200 kW plan would beOver 200 million KSh
KSh 1 = ¥1 = $1.25
Practical plan would be introducing a PV generation system of 5kW to 10 kW .5kW to 10 kW model could be applicable to other hotels/lodges in off-grid are of Kenya (also see next chapter).After depreciation, the system can be expanded and optimized when necessary to achieve ideal amount of PV generation system.
In Kenya, some tented-camps have already introduced PV generation systems (3.5 to 10 kW) that recoup the initial investment within three to five years.
The model plan would be the 5kW to 10 kW PV generation systems.
The obstacle to introducing these models lies in finance. Offering financial support for low interest rates is essential to the introduction of models.
The size of the hotels in the lists is are largest in number in the National Reserves and National Parks of Kenya PV generating systems are around 10kW and the pay back period are around 3 to 5 years.
Facility name Room type
PV generation systemHours of power generation by diesel generat
OtherOutputInitial
installation cost (KES)
Payback period
KAREN BLIXEN CAMP
Tent lodge(22 guest rooms) 9 kW 10MM 3 years 2 hours/day Installed 5 years
ago
SANCTUARY OLONANA
Tent lodge(14 guest rooms) 8kW 9 hours/day
ELEPHANT PEPPER CAMP
Tent lodge(9 guest rooms) 3.5 kW 2.4MM 5 years
(planned)6 to 8 hours/month (equivalent to 15 minutes/day)
In general, these hotels have accepted foreign investment and/or finance when installing their PV generation systems.According to one contracting company in Nairobi, the interest on a loan is
about 20% in Kenya, indicating that raising funds is very difficult in the country.
PV Panels in KAREN BLIXEN CAMP, 9kW
It is essential not only promoting Japanese PV generating system, but also offering financial support.
Practically, the loan at low interest rates would meet local needs.
A methodology for BOCM can be referred to for small-scale CDM and/or PoA and methodologies being deliberated at the UNFCCC.
Concerning monitoring methodologies, since hotels in off-grid areas have no electricity meters, their exact power consumption "before introduction" cannot be measured.
The appropriate methodology is measuring the "after introduction“ or exact power supplied by renewable energy.
When setting a baseline per hotel, Paragraph 8 (b) Option 2 is applied, among the baseline calculation formulas for renewable energy conversion in 1-A of CDM small-scale methodologies.
E BL,Ren,y = Σi EGi,y/(1-l)Where:E BL,Ren,y : Annual energy baseline of renewable energy consumption (kWh)Σi : The sum over the group of i renewable energy technologiesEGi,y : The estimated annual output of the renewable energy technologies of the group of i
renewable energy technologies installed (kWh) l : Average technical distribution losses (20%)
Based on the above formula, the baseline emissions per Club are calculated. Paragraph 9 of the baseline CO2 emissions calculation formula in 1-A of the methodologies is applied.
BECO2,y = EBL,Ren,y × EF CO2
Where:BECO2,y : CO2 emissions (kg-co2) in the baseline in year y EF : CO2 emissions factor of diesel fuel (0.8 kg CO2-e/kWh)
NM073 under deliberation proposes new additionality tests for rural electrification projects. According to the proposal, since Kenya is classified as a Low Income Country (LIC) and its rural electrification rate is below 12%, the country has additionality.
In addition, in case of introducing a 10 kW system into other Hotels within the range of 500 hotels, 10 kW systems will amount to less than 5 MW. Then, the project is eligible for the exemption of additionality tests of micro scale CDM. If a project of this size were first installed, it would be able to win international understanding without demonstrating additionality in detail.
The Government of Kenya puts special emphasis on the following considerations in the identification of NAMAs:
• Priority mitigation actions in key economic sectors with demonstrated deviation from business as usual emission levels
• Policy measures and tools aimed at implementing NAMAs and in meeting the objectives of the country’s sustainable development strategy
• The co-benefits of implementing mitigation actions• Support needed for the implementation of NAMAs (costed NAMAs)• Putting in place a national system for measurement, reporting and
Complement NamaWe should propose the BOCM as it complements NAMA policy of Kenya.Efforts are needed to develop additional climate change measures for the
tourism business, the major industry in Kenya, to NAMA in order for Hotels to seek generation of bilateral offset credit.
Non-LDC, but LIC or LMIC as a partner of BOCMNon-LDC, but still considered as Low Income Countries (LIC) or Lower Middle Income Countries (LMIC) in Africa and other parts of the world have the problem. Finding purchasers of credits after 2013 will not be easy. Thus, non-LDC but LIC or LMIC are considered ideal partners to promote negotiations over BOCM. In Africa, the list below shows the 12 non-LDC but LIC or LMIC
These are future issues of this project;1. Continuous survey at the Club2. Further Study of other Hotels3. Setting up an organizing body 4. Approach to the Government
Concerning surveying the possibilities for energy saving, electricity meters will be installed on the generators, major electric equipment and guest rooms of the Club.
Concerning wind power generation, we will survey patterns of wind throughout the year while bearing in mind the installation of small wind generators in future.
We would like to introduce a PV generation model system to the Club on an experimental basis and conduct additional surveys at the facilities.
– a 5 to 10 kW-size PV generation model system primarily made in Japan will be installed.
– This model system will collect data covering actual costs (initial investment cost, running cost), electricity generated, amount of solar radiation and meteorological data.
We would like to survey the present conditions of hotels and lodges that are located in other national reserves and parks and conduct a feasibility study in anticipation of introducing renewable energy into those hotels and lodges.
A local survey of hotels that may introduce renewable energy, etc. in the future shall be continued. First, a feasibility study for introducing renewable energy into hotels and other accommodations located in the Masai Mara National Reserve will be promoted.
We also would like to formulate a model plan targeting tent lodges, the largest segment of the market.
Concerning wind power generation, we will survey patterns of wind throughout the year while bearing in mind the installation of small wind generators in future.
As discussed earlier, if a 5- to 10-KW renewable energy system is introduced into 2,500 Hotels, the amount of credits generated will reach from 10,625 to 21,250 tons.
Under the current market price, if the credits per ton can be sold at 10 euros(=1,200 yen), the total credits obtained would be from 12,900,000 yen to 25,800,000 yen (1 yen = 1 KSh).
Thus, an agreement with each of the Hotels shall be concluded prior to payment of a portion of the amount to each of the Hotels.
A body shall be set up (or entrusted) that promotes some other method (offering low-interest finance or appropriating such portion to premiums on the insurance for quality assurance of panels).
We would like to share information on NAMA with the Kenyan Government to utilize BOCM as early as possible.
We would like to approach the Ministry of Tourism and the Kenya Tourist Board (KTB) in the coming survey and continue to survey the actual situations of other hotels in Kenya.We also seek the possibility to develop climate change measures in the tourism. If such measures would be added in the list of NAMA, this project could create credits under the BOCM.