Confidential Presentation Material Do Not Copy

2012 METI JCM FS Program

Promoting Rehabilitation of Hydro Power Plants to Mitigate Climate Change in Indonesia

February 21th, 2013

1) Project Overview Overview of JCM FS on HPP Rehabilitation

z Rehabilitation of PLNs, IP, PJB hydro power plants (HPPs) in Indonesia. z Improved power generation and cost savings by rehabilitation of turbines and generators at aging and inefficient hydro power plants. z Pilot case studies at Saguling, Soedirman, and Sutami HPPs in FY2011. z Further investigation and planning for rehabilitation at Saguling, and survey of 13 additional HPPs in Indonesia to identify priority in FY2012. z Development of a new MRV* methodology based on the power generation efficiency factor. z Joint development of proposals for policy/ institutional measures for promoting HPP rehabilitation.
* Measuring, Reporting and Verifying Confidential
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1) Project Overview Images of HPP Rehabilitation

Stator core/coil Runner Guide vane Control system, Governor, AVR

Before After
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1) Project Overview Efficiency Improvement and Output Increase

Reduction of efficiency due to wear on sealing faces and erosion of blade faces during longstanding Operation 1.5%

New concept runner

2.5%

Relative turbine efficiency

1.0

Conventional runner Efficiency improvement Conventional runner (after longstanding operation) Power increase

4%

2%

0.8

( Improvement of cavitation )
0.5
Relative turbine output

1.0

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1) Project Overview Site Inspection

z Investigated 15 HPPs for rehabilitation and developed proposals. (Saguling, Soedirman, and Sutami HPPs were investigated in FY2011)
Investigated in FY2011

Target Hydro Plant Saguling HPP* West Java Small hydro near Saguling Riam Kanan HPP BiliBili HPP East Java Cikalong HPP Lamajan HPP Bengkok HPP

Sutami HPP (1) Sengguruh HPP Wlingi HPP Lodoyo HPP Selorejo HPP Mendalan HPP Siman HPP Wonorejo HPP Tulungagung HPP

Soedirman HPP
* Saguling HPP was investigated in FY2012 study also.

Initial year of operation 1985,1986 1961 1924,1934 1923 1973 2005 1973,1976 1988 1978,1979 1984 1973 1929,1955 1931,1955 2002 1993 1988

Installed capacity 175 MW * 4units 7 MW * 3 units 7 MW * 3 units 1 MW * 3 units 10 MW * 3units 6 MW * 1, 14MW * 1 35 MW * 3units 15 MW * 2 units 27 MW * 2units 5 MW * 1 Units 5 MW * 1 Units 6 MW * 4 Units 4 MW * 3 Units 7 MW * 1 Units 9 MW * 2 Units 60 MW * 3 Units

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2) Reference Scenario Setting Reference Scenario

Reduced efficiency from long operation Original Relative turbine efficiency After rehabilitation (after operation)

1.0

=Project scenario
Before rehabilitation

=Reference scenario
BaU (after longer operation)

0.8 0.5
Relative turbine output

1.0

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3) Monitoring Method Project Boundary and Monitoring Points

Site boundary Project boundary

Reservoir

Water flow Electricity flow Monitoring points

Turbine Generator Grid 2. Quantity of water used for power generation 1. Quantity of net electricity generated Other power plants

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3) Monitoring Method Monitoring Data, Frequency, Method and Scheme

Monitoring data ID Description
1 Quantity of net electricity generated fed into in year y Quantity of water for generation in year y GHG emission factor of the grid in year y

Unit
MWh

Frequency
Monthly

Measurement/Archive
z Measured by power meter z Archived electronically. z Measured by water flow meter z Archived electronically. z Annual default value provided by host country, d verified by a third party.

2 3

m3 tCO2/ MWh

Monthly Yearly

Monitoring scheme
General manager Operation & maintenance department head Operator Electricity meter Operator Water flow meter
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4) MRV Methodology Eligibility Criteria

Condition 1 Existing hydroelectric power station with output of one MW or more is rehabilitated. Condition 2 The rehabilitated hydroelectric power station is connected to the grid. Condition 3 When the rehabilitated hydroelectric power station has a reservoir, power density is larger than two in 4W/m. Condition 4 After the project implementation, amount of electricity generation and water consumption can be monitored. Condition 5 The rehabilitated equipments used in the project is not diverted from other activities. Condition 6 When there are rehabilitated equipments substituted by rehabilitation activities, those equipments are not diverted to other activities. Condition 7 New backup power supplies are not installed with the rehabilitation activities. Condition 8 (Only when using the Calculation Method 1). The rehabilitation is not implemented within the past twenty years, and water turbine is rehabilitated. Condition 9 (Only when using the Calculation Method 2). The rehabilitated hydroelectric power station has a power generation operation record for five years or more.

Proposed eligibility criteria identifies the technology used in and the sector of subject projects and eliminates the possibility of leakage.
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4) MRV Methodology Calculation Methods

The data of amount of water and a production of electricity is held (for the past 5 years). No Calculation Method 1: Conservative default values

Yes

No

Calculation using a project specific value is performed.

Yes

Calculation Method 2: Project specific values

Either a simple calculation method using conservative default values or a sophisticated calculation method using project specific values can be selected.
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4) MRV Methodology Calculation for GHG Emission Reductions

ER
y

= BE

PE

LE

LE PE BE
y

= 0 ( default = 0 ( default

) )

= EG

Add , y

EF co 2 , y
A conservative default value for the efficiency improvement rate is provided for Calculation Method 1.
historical

EG Add , y = GFAdd , y WQ PJ , y GF = GF PJ , y ( GF historical + )

Add , y

High generation efficiency as a results of the rehabilitation

Low generation efficiency before the rehabilitation

GFPJ , y =

EG PJ , y WQ PJ , y

GFhistorical =
n

EGbeforePJ ,beforey WQbeforePJ ,beforey

1 n
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4) MRV Methodology Definitions of Parameters

Parameter Description
z Emission reduction in year y (tCO2e/y) z Baseline emissions in year y (tCO2e/y) z Project emissions in year y (tCO2e/y) z Default value is 0. Since this methodology is available for the rehabilitation for the hydropower station whose power density is less than 4 W/m2, CH4 from its reservoir is neglected z Leakage emissions in year y (tCO2e/y)

Parameter

Description

ER y BE y
PE y

LE y EG

z Default value is 0. z Quantity of net electricity generation fed into the grid as a result of the PJ , y rehabilitation in year y (MWh/y) z Quantity of net electricity generation EGbeforePJ ,beforey fed into the grid before the rehabilitation in year y (MWh/y) z Additional quantity of net electricity Add , y generation compared before the rehabilitation in year y (MWh/y)

z GHG emission factor of the grid in year y (tCO2e/y) z Quantity of water for generation as a result of the rehabilitation in year y (m3/y) of water for generation WQbeforePJ ,beforey z Quantity before the rehabilitation in year y (m3/y) z Generation efficiency factor as a result of the rehabilitation in year y PJ , y (MWh/m3) z Annual average historical generation efficiency factor before the historical rehabilitation (MWh/m3)

EFco 2 , y WQ PJ , y

GF

GF

GF Add , y

EG

historical

z Historical data for at least 5 years is needed z Additional generation efficiency factor compared historical in year y (m3/MWh) z Standard deviation of the annual average historical generation efficiency factor before the rehabilitation (MWh.m3)
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4) MRV Methodology Default Values for Calculation Method 1

Tentative default value Premises for tentative default value
z According to a study of rehabilitated 40 HPPs in Japan, simple and weighted averages of improvement rates were 5.5% and 4.5% respectively. z When standard deviation is taken into account, the improvement rate was 1.1%. z Based on Toshibas experience, at least 2.5% improvement can be expected when water turbine over 20 years is rehabilitated. z Suggested by DNPI

Efficiency improvement rate

1.1% to 2.5%

GHG emission factor of the grid

EF of each grid published by DNPI

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5) GHG Emission Reduction GHG Emission Reduction of Saguling HPP Rehabilitation

ERy [tCO2e/y] = { GFPJ,y (GFhistorical + historical ) } [MWh/m3] x WQPJ,y [m3/y] x EFco2,y [tCO2e/MWh]

Assumptions: (1) Improvement in Generation efficiency: +4% GFPJ,y [MWh/m3] = (1+0.04) x GFhistorical [MWh/m3] (2) Historical generation efficiency: Average for the past 5years* (3) Quantity of water: Average for the past 5 years* (4) Grid : JAMALI EFco2,y [tCO2e/MWh] = 0.891** [tCO2e/MWh]

ERy [tCO2e/y] = { 0.943767 ( 0.907469 + 0.009429 ) } [kWh/m3] / 1,000 [MWh/kWh] x 2,840,555,678 [m3/y] x 0.891 [tCO2e/MWh] = 68,005 [tCO2e/y]
* 2007-2011 ** National Council on Climate Change(NCCC) Confidential
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5) GHG Emission Reduction GHG Reduction Potential through HPP Rehabilitation

Target Hydro Plant Saguling HPP Cikalong HEPP West Java Small hydro Lamajan HEPP near Saguling Bengkok HEPP Riam Kanan HPP BiliBili HEPP East Java Sutami HPP Sengguruh HEPP Wlingi HPP Lodoyo HEPP Selorejo HEPP Mendalan HEPP Siman HEPP Wonorejo HEPP Tulungagung HEPP Jawa Tengah Sudirman Total Installed capacity 175 MW * 4units 7 MW * 3 units 7 MW * 3 units 1 MW * 3 units 10 MW * 3units 6 MW * 114MW *1 35 MW * 3units 15 MW * 2 units 27 MW * 2units 5 MW * 1 Units 5 MW * 1 Units 6 MW * 4 Units 4 MW * 3 Units 7 MW * 1 Units 9 MW * 2 Units 60.3 MW * 3 Units GHG Emission Reduction each Improvement rate* 4.5% 4.0% 2.5% 1.1% 68,005 68,005 68,005 68,005 561 2,295 2,040 1,275 561 2,295 2,040 1,275 80 327 291 182 801 3,278 2,914 1,821 2,185 11,475 3,278 5,901 546 546 2,623 1,311 765 1,967 19,771 126,568 1,943 10,200 2,914 5,246 485 485 2,331 1,165 680 1,748 17,574 120,061 1,214 6,375 1,821 3,278 303 303 1,457 728 425 1,092 10,984 100,538 534 2,805 801 1,442 133 133 641 320 187 480 4,832 82,316

*Each level of reduction effect is assumed as same as Saguling HPP *. Improvement rate: Saguling HPP:4%, the other HPP: each default value ) Confidential
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6) Moving Forward Rehabilitation Plans and Scale of Investment

HPP Saguling HPP (Total) Saguling HPP (1 unit) Installed capacity Rehabilitation plan Improvement Efficiency Output Scale of investment

Soedirman HPP

Sutami HPP

Lamajan HPP

New runner design. 175MW * 4 Replacement of runners and related turbine parts. New runner design. Replacement of runners and 175MW related turbine parts. New runner design. Replacement of runners and 60.3MW * 3 related turbine parts. Modifications of some vanes and valves. New runner design. Replacement of runners and 36MW * 3 related turbine parts. Modifications of some vanes and valves. Consolidation of 3 units to 2 units. 6.52MW * 3 Replacement of turbines, generators, and others.

+4% +2% 34 million USD (+28MW) (+14MW) +4% +2% 10 million USD (+7MW) (+3.5MW)

+2% +1% 19 million USD (+4.8MW) (+2.4MW)

+5% (+5.4MW)

- 15 million USD

+21.4MW -

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6) Moving Forward Example of Project Implementation Time Frame

Year1 Year2 Year3 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 Contract

zModel Test

zDesign zProcurement zManufacturing zTest 36 month zTransportation

zConstruction z Trial run and adjustment

Completion

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